This article was first posted here on 18 December 2008.
Many aspects of the so-called “bailout” of the corrupt banking system of the US and the UK, and probably most other countries as well, have never been properly explained or subjected to close scrutiny.
For example, Goldman Sachs, the US investment bank, went cap in hand to the US government for a life-support share of the bailout fund and received the equivalent of £6.5 billion. Now we hear that this bank is paying bonuses to its London staff totaling some £4.3 billion, almost two thirds of what it has taken from the US taxpayer, supposedly to enable it to simply survive.
What does this tell us? Well, it tells me, for one, that the people who run this bank live on another planet. How can any institution receive a huge amount of public money from the taxpayer on the grounds that otherwise it will fold and carry thousands of other organisations down with it, and then just a few weeks later pay out two thirds of that huge amount to its key employees as a bonus for doing so well?
Apart from being morally repugnant, it just doesn’t add up, does it? Especially when you consider that the US government itself is bankrupt, in debt to the tune of so many trillions of dollars that it is virtually impossible to calculate or comprehend the true amount.
So why does a bankrupt organisation (the US government) give billions of dollars that it doesn’t have to another organisation that then fritters most of the money away on bonuses? And in a time when the rest of us are having to tighten our belts and cut costs wherever possible.
The truth is that the international money power that owns and controls the world’s central banks (Federal Reserve, Bank of England, etc) love weak and bankrupt governments. In the credit boom of the last ten or fifteen years it was becoming a little bit too easy for western governments. Perhaps they weren’t doing everything the way the private banking families wanted them to. They were beginning to get just a little bit out of control.
So what does the money power do? Naturally it pulls the rug from under the credit boom by cutting off further credit to its agents and apparatchiks (the big banks like Goldman Sachs, Lehman Bros, etc) and precipitates the credit crunch. Before long these big banks and major corporations like Ford, Chrysler and General Motors are begging the government for bailout money to survive.
The social and economic cost of allowing these institutions to go under is too high, so the government has to mortgage its future even more by lending or granting billions of dollars to them. This means borrowing even more from the central bank (Federal Reserve). The government is now tied even more securely to international finance.
It has to either restrict public spending, thereby worsening the crisis immediately and risking social and racial unrest. Or it must increase public spending to try and spend its way out of recession, thereby plunging itself into even more unprecedented levels of debt that will take forever to repay and making the situation much worse in the long term. This applies, of course, not just to the US government, but to all western governments.
So the credit crunch means hard times for everyone except the very people who caused it in the first place. The private families, the close-knit group of around 6,000 people who really rule the world (see “Superclass” by David Rothkopf, available from Amazon) have never had it so good.
Read the truth about international finance and the money power by downloading our free guide, the classic “Promise To Pay” by Dr R. McNair Wilson, from our home page.
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