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I to the conspiracy theorists that say the government intentionally created this crisis and the will consolidate the banking industry and their power and will come in and pose as the saviors when it fully runs its course. Obama is the frontman who is supposed to get the people to restore their trust and faith in government. Apparently the bankers that control the politicians did this same thing in WW1 and WW2. So we are seeing this same scenario unfold now. It is amazing time to be alive.

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Our Beautiful America Makes Anarchy
I don't understand your statement. It makes no sense. How could a president create an anarchy, an absence of any form of political authority? I suppose he could resign. But, then another person would just take over the government, making the act pointless and meaningless.

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it means no rhyme nor reason. It means that because of Amerika and its avarice, we have, like Hiranyaksa, depleted all the resources of the planet. The only thing left is PRETENDING to manage the mess, to hold off the hoards. But money is worthless because false paper has flooded the world market, $62,000,000,000,000. The entire world economy equals about $60,000,000,000,000. This leaves the whole planet 2 trillion in debt with no ability to repay.

 

Artificial measures will be enacted, just as they have been since ronald (AKA 666) reagan decided to make the war machine, and the cronies who run the show, a valid economy.

 

When the bough breaks the cradle will fall, then we become animals without our present human disguises. If you thought ahead, and have guns and ammo and plenty of canned tomato soup and powdered milk (I was tellin ya back when Y2K was big to stock up on cinnamon, white sugar, salt and pepper, stuff to make pond scum and earth worms taste good), then ya get to have everyone walking up your trail, because all they have is guns and ammo. And a big cookin pot for their zombie disciples.

 

mad mahawks way beyond lavadrome

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Okay? That's all nice and good and all, but I still don't see how a president could possibly make an anarchy.

 

Leaders of governments can't make an absence of government. It's a contradiction in terms.

 

I guess you really did mean to make 'no rhyme' or use 'your reasoning abilities'.

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Okay? That's all nice and good and all, but I still don't see how a president could possibly make an anarchy.

 

Leaders of governments can't make an absence of government. It's a contradiction in terms.

 

I guess you really did mean to make 'no rhyme' or use 'your reasoning abilities'.

 

 

United States Government officials are frontmen for the federal reserve shadow government. They are television personas met to cater to the psychological needs of the population and to keep the population distracted while behind the scenes powerful banking families continually collapse and rebuild economies with the ultimate goal of conditioning all humans to be their slaves and work for them for nothing. Maybe they are not technically creating anarchy but the whole thing is still diabolical.

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United States Government officials are frontmen for the federal reserve shadow government. They are television personas met to cater to the psychological needs of the population and to keep the population distracted while behind the scenes powerful banking families continually collapse and rebuild economies with the ultimate goal of conditioning all humans to be their slaves and work for them for nothing. Maybe they are not technically creating anarchy but the whole thing is still diabolical.
It still isn't comparable to an anarchy. Just because someone dislikes the way their country is run doesn't mean they can make a reasonable comparison to unrelated types of government they also dislike.

 

For example, I dislike the Bush Administration. I also dislike theocracies and monarchies. However, I would never equate the Bush Administration with a theocratic monarchy. That would make no sense, as that is obviously not the type of government that runs the United States.

 

Similarly, it is irrational to compare the United States under Obama to an anarchy, as that is not the form of government - rather, lack-thereof - the United States will live under if it has some type of government official running it.

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Technically you are right but I think Mahak might be predicting that things are going to break down so bad that people will lose faith and no longer acknowledge the authority of the US government so it could descend into anarchy at least temporarily. Not saying this is gonna happen as only God knows the future. Its like when you play that game Civilization and you change government styles the civilization goes into anarchy for awhile.

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Technically you are right but I think Mahak might be predicting that things are going to break down so bad that people will lose faith and no longer acknowledge the authority of the US government so it could descend into anarchy at least temporarily. Not saying this is gonna happen as only God knows the future. Its like when you play that game Civilization and you change government styles the civilization goes into anarchy for awhile.

I suppose that makes sense. People have built up such a hype on Obama, who can say what and how they would feel if things don't turn out as they think they will?

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Some economists and prognosticators are predicting America will break up into regions like the Soviet Union. I think this is possible if the economy becomes so bad people are homeless and hungry and big government isn't there to take care of them but who knows for sure maybe Obama will pull us out of this.

 

I am not optimistic about Obama or any of the current crop of politicians because all they are doing now is trying to eventually create another credit bubble to perpetuate the fraud, false wealth, illusion and war machine that the USA has been operating under since the beginning of the military industrial complex. Kennedy was probably the only president that understood the real root of these problems.

 

It seems like in history that these highly centralized Empires end up falling so it doesn't seem like a big stretch to see America have a big fall.

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Okay? That's all nice and good and all, but I still don't see how a president could possibly make an anarchy.

 

Leaders of governments can't make an absence of government. It's a contradiction in terms.

 

I guess you really did mean to make 'no rhyme' or use 'your reasoning abilities'.

 

Because there is a difference between a diplomat and a statesman.

The former pretends to act and the latter acts.

 

The absence that Mahak is speaking is in terms of the pristine responsibility that a President should take and not mere actions which leads to fruitless results.

 

There is a big difference in doing and doing what should be done.

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Because there is a difference between a diplomat and a statesman.

The former pretends to act and the latter acts.

 

The absence that Mahak is speaking is in terms of the pristine responsibility that a President should take and not mere actions which leads to fruitless results.

 

There is a big difference in doing and doing what should be done.

 

 

 

That is a good point and well said.

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United States Government officials are frontmen for the federal reserve shadow government. They are television personas met to cater to the psychological needs of the population and to keep the population distracted while behind the scenes powerful banking families continually collapse and rebuild economies with the ultimate goal of conditioning all humans to be their slaves and work for them for nothing. Maybe they are not technically creating anarchy but the whole thing is still diabolical.

I need to learn more about the Federal Reserve. I share AM's view about a shadow government. Someone is keeping the American people fixated on the dog and pony show of modern politics as a misdirection of attention exactly like a stage magician working a crowd.

 

It just may be the Federal Reserve and some others. We will probably find Uncle Scrooge directing the whole show.

 

60poster05.jpg

 

No surprise to us though. We have been told the material world is the world of exploitation. Big animal eats the small animal and then passes stool while keeping an eye out for the next victim.

 

We are also guilty of the same mentality, more or less at any one given time. Who can imagine the crimes we have committed against others in lifetimes stretching back through time immemorial.

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I just remembered something I heard this week on Coast to Coast AM. The guest was taking about the Federal reserve and brought out a very interesting fact.

 

(i hope i remember correctly as I was nearly asleep as I heard this.)

 

Two presidents increased money flow directly to the American economy, by-passing the FR and the need to pay them interest. One was John Kennedy (JFK) and the other was Abraham Lincoln. Both were assasinated soon thereafter.

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I just remembered something I heard this week on Coast to Coast AM. The guest was taking about the Federal reserve and brought out a very interesting fact.

 

(i hope i remember correctly as I was nearly asleep as I heard this.)

 

Two presidents increased money flow directly to the American economy, by-passing the FR and the need to pay them interest. One was John Kennedy (JFK) and the other was Abraham Lincoln. Both were assasinated soon thereafter.

 

 

Yep, these heavy hitting British and European banking families have been in control of the US Government and bypassing the Constitution and anytime a president has tryed to live up to the Constitution they have been knocked off. It is not a coincidence in my opinion. I used to think these conspiracy theories were crazy but when you trace back the history its all there in my opinion.

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Because there is a difference between a diplomat and a statesman.

The former pretends to act and the latter acts.

 

The absence that Mahak is speaking is in terms of the pristine responsibility that a President should take and not mere actions which leads to fruitless results.

 

There is a big difference in doing and doing what should be done.

It doesn't matter if he just sits and makes no change whatsoever. He is still a government official who is officially running the government.

 

Another thing, anarchy is the lack of any sort of governmental order whatsoever. Even if we go with your interpretation - that the president elect might not do anything, making it some sort of unofficial anarchy - it still isn't an anarchy. America will still have Congress under Obama. It will still have a House of Representatives and a Senate. It will still have state governments and courts.

 

So, no matter how you feel about Obama, America, I'm almost certain, will not be an anarchy within four years time. That is, unless you think that Congress will be abolished, the Senate will be abolished, the House of Representatives will be abolished, all state governments will be abolished, and all courts in the United States will be shut down.

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Police state before anarchy.

 

 

True. That is what the phony war on drugs and the phony war on terror is all about. The establishment of a police state. It will get really scary if they start bringing in foreign military and mercenaries to act as a police force. Then you know we are completely screwed at that point.

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Michael Nield "Police State Planning" chapter 7:

http://www.policestateplanning.com/chapter_7.htm

 

 

THE ECONOMY

 

7.1 THE FUNCTION OF POVERTY

 

The standard of living of the average American has to decline...

- Paul Volcker, Chairman of The Federal Reserve, New York Times, 18 October 1979, p.1, Volcker Asserts U.S Must Trim Living Standard.

 

'Money is power'. Well, to be precise, it's the gap between the rich and poor that counts. The objective of the elite is to maintain the capitalist structure as it is with one vital difference. There will be no middle class in the New World Order. Under public-private partnership, the middle class, free markets, and consumer choice will be replaced with a neo-feudal society in which the Money Trust dictates to an impoverished populace through a supranational technocracy. This is international socialism, run for the benefit of the financial elite who own the economy and control the emerging continental Politburos. The polite name for it is 'The Third Way', but less deferential commentators call it 'corporate fascism'. The corporations need government to restrict consumer choice in the market place, allowing the cartel to determine what we can buy, sell, or even do in our own homes. The 'Third Way' is the path to utopia for our self-appointed philosopher kings, advocated by the likes of Bill Clinton, Tony Blair, and Gerhard Schroder - their senior political puppets. There is no difference between ostensibly right and left wing political parties about the eventual destination, even if they appear to be travelling at different speeds towards it.

Real power, then, is achieved when the ruling class controls the material essentials of life, granting and withholding them as if they were privileges, as George Orwell reflected:

 

From the moment when the machine first made its appearance it was clear to all thinking people that the need for human drudgery, and therefore to a great extent for human inequality, had disappeared. If the machine were used deliberately for that end, hunger, overwork, dirt, illiteracy, and disease could be eliminated within a few generations But it was also clear that an all-around increase in wealth threatened the destruction... of a hierarchical society. In a world in which everyone worked short hours, had enough to eat, lived in a house with a bathroom and a refrigerator, and possessed a motorcar or even an airplane, the most obvious and perhaps the most important form of inequality would already have disappeared. If it once became general, wealth would confer no distinction. Such a society could not long remain stable. For if leisure and security were enjoyed by all alike, the great mass of human beings who are normally stupefied by poverty would become literate and would learn to think for themselves; and when once they had done this, they would sooner or later realize that the privileged minority had no function, and they would sweep it away. In the long run, a hierarchical society was only possible on a basis of poverty and ignorance... It is deliberate policy to keep even the favoured groups somewhere near the brink of hardship because a general state of scarcity increases the importance of small privileges and thus magnifies the distinction between one group and another... The social atmosphere is that of a besieged city, where the possession of a lump of horseflesh makes the difference between wealth and poverty.

 

The difference between riches and poverty is often the difference between pleasure and pain. Orwell concluded this idea in the torture episode at the end of 1984.

 

How does one man assert his power over another, Winston?' By making him suffer. Obedience is not enough. Unless he is suffering, how can you be sure that he is obeying your will and not his own? Power is in inflicting pain and humiliation... Progress in our world will be progress towards more pain.(1)

 

In The Creature from Jekyll Island, G. Edward Griffin discusses the relationship between 1984 and The Report From Iron Mountain: On the Possibility and Desirability of Peace by Leonard Lewin. It has never been established whether or not this report published in 1966 was written by a U.S. government think tank or if it was an elaborate political satire. On 26 November,1967, the report was reviewed in the book section of the Washington Post by Herschel McLandress, which was the pen name for Harvard professor John Kenneth Galbraith. Galbraith, who also had been a member of the Council on Foreign Relations, said that he knew firsthand of the report's authenticity because he had been invited to participate in it. Although he was unable to be part of the official group, he was consulted from time to time and had been asked to keep the project a secret. Furthermore, while he doubted the wisdom of letting the public know about the report, he agreed totally with its conclusions. For the purposes of Griffin's comparison, it makes no difference whether it is a satire. The report credits Orwell for many of its ideas and it is a blueprint for what has occurred since. Importantly, it agreed with Orwell's view that poverty is a prerequisite for a hierarchical society:

 

The continuance of the war system must be assured, if for no other reason, among others, than to preserve whatever quality and degree of poverty a society requires as an incentive, as well as to maintain the stability of its internal organization of power.

 

The economic destruction of the world's middle class is well advanced. Personal debt, bankruptcies, and unemployment are soaring while investments are destroyed in the stock-market and incomes decline. Like Manchurian Candidates, the Western middle class have played their essential part in creating the techno-bureaucracy of the new feudalism which will enslave them. This chapter describes seven significant methods being used to reduce living standards around the world. These are: 1. money supply and taxation; 2. free trade; 3.free movement of labour; 4. environmentalism; 5. wars; 6. the criminal justice system; and 7. disease.

 

7.2 MONETARY AND FISCAL POLICY

 

Stock cultivates land; stock employs labour. A tax which tended to drive away stock from any particular country, would so far tend to dry up every source of revenue, both to the sovereign and to the society.

- Adam Smith, The Wealth of Nations

 

THE BURDEN OF TAXATION

 

In 1900 the combined national and local tax burden in the U.S. was a mere 5.7% of income. By year 2000 it reached an all time high of 33%. (2) The U.K.'s tax burden has grown from 8.5 % of GDP in 1900 to 31% in 1963 and to a peak of 39% in 1982. It is now around 38%.(3)(4) The E.U.'s tax burden now averages 40.5%.(5)

The burden of taxation on middle income bracket families has grown in line with the overall increase. In 1958 the median two-earner American family ($68,605) paid 17.9% of its income in taxes. In 1998 that percentage was 37.6 % in 1998. In year 2000, taxes claimed a greater share of the median two-income family's income (39.0 percent) than food (8.9 percent), clothing (3.9 percent), housing (15.9 percent), and transportation (6.9 percent), combined.(6)The U.S now has the same household taxation levels as Britain reached at the end of the 1970s and where they remain today: between 35 and 40% of household income.(7)

 

HIGH LABOUR TAXES

 

One of the most confounding economic trends in the United States during the past 20 years has been the relative stagnation of workers' real wages. One of the primary reasons for flat wages is that taxes and other government mandates on employers have been expanding steadily, crowding out worker take-home pay. Combined Federal Income taxes and payroll taxes increase the average cost of employing a manufacturing worker by 28%.(cool.gif

In Europe the situation is even worse, but due to the rigidity of the labour market it has caused high unemployment rather than driving wages down. In 1970, the tax-to-GDP ratio of the E.U. was similar to America but then it grew by 8 percentage points largely due to an expansion of the welfare state. The tax hike was largely imposed upon labour. The average effective tax rate on labour is about 10 percentage points higher in Europe than in the U.S. with the exception of the U.K, Ireland and Portugal whose rates are similar. The average effective tax rate imposed on labour in 1997 reached 38% compared to 24% in the U.S. This largely accounts for the high unemployment rate.(9)

 

THE HIDDEN TAX: INFLATION

 

Inflation is another form of taxation. It is an indirect tax therefore it falls as heavily on the poor as it does on the rich. In the early stages of inflation, the business class actually benefits from the easy credit. The government causes inflation by going into debt therefore is one of the major collectors of this tax. As described at the beginning of this book, the central bank prints money for the government to borrow. As John Maynard Keynes explained:

 

Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some... The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.

- John Maynard Keynes, The Economic Consequences of the Peace, 1919, Ch. 6

 

Alan Greenspan elaborates:

 

Stripped of its academic jargon, the welfare state is nothing more than a mechanism by which governments confiscate the wealth of the productive members of a society to support a wide variety of welfare schemes. A substantial part of the confiscation is effected by taxation. But the welfare statists were quick to recognize that if they wished to retain political power, the amount of taxation had to be limited and they had to resort to programs of massive deficit spending, i.e., they had to borrow money, by issuing government bonds, to finance welfare expenditures on a large scale... The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit.... As the supply of money (of claims) increases relative to the supply of tangible assets in the economy, prices must eventually rise. Thus the earnings saved by the productive members of the society lose value in terms of goods. When the economy's books are finally balanced, one finds that loss in value represents the goods purchased by the government for welfare or other purposes with the money proceeds of the government bonds financed by bank credit expansion.

- Alan Greenspan, Gold and Economic Freedom, The Objectivist, July 1966 (10)

 

This new money can be expanded up to ten times when it passes through commercial banks therefore their private borrowers are also tax collectors as Congressman Ron Paul suggests:

 

An astute stock investor or home builder can make millions in the boom phase of the business cycle, while the poor and those dependent on fixed incomes can't keep up with the rising cost of living.(11)

 

The inflationary effect of lending is exacerbated when borrowers get into trouble and the debts are "rolled over", "re-scheduled" and eventually "bailed out". A non-performing loan causes inflation because the freshly printed money injected into the economy via the borrowing corporations and individuals has not been accompanied by a sufficient increase in production to keep up repayments. There have been some major corporate bailouts in the U.S. amounting to billions of dollars: Penn Central railroad and Lockheed in 1970, Commonwealth Bank of Detroit 1972, New York City 1975, Chrysler 1978, First Pennsylvania Bank of Philadelphia 1979 and Chicago's Continental Illinois in 1982. All of these were saved from bankruptcy by Congress acting as lender of last with the guarantee of freshly printed money from the Fed. This is inflationary not just in the final stage where money is sourced from the Fed but in the first, second and all the other intermediary stages on the way to default. (12)

The main event in the bail-out Super Bowl has not been played at home. It's the game between Third World governments and the IMF/World Bank. All of these non-performing loans to foreign governments cause domestic inflation when the new money eventually returns to our shores in exchange for our products and services. Loans to most Third World governments started to fail by 1982. By 1983 third world governments owed $300 billion to banks and $400 billion to western governments.(13)

In preparation for the bail-out phase of the international lending Super Bowl, the U.S. central bank was brought onto the field in 1980, when Congress passed the Monetary Control Act authorizing the Fed to print money for foreign governments.(14) Since then, the size of bailout packages has become mind-boggling.

Mexico is just one example of the IMF/World Bank Third World bailout system. In 1982 it owed $85 billion to the banks, an inflationary loss to the American taxpayer which is being sustained to this day by central banks who initially made new loans and eventually underwrote almost the entire debt. In 1982 the IMF organized a $4.5 billion loan from Western central banks, and in 1989, a further $7.5 billion. This is the roll-over and reschedule play, whose purpose is to enable interest payments to continue on the original non-performing commercial loans and prevent them going into default and bankrupting the commercial banks. However the day of reckoning inevitably arrives: Mexico could no longer afford even the interest payments. On 31 January 1995, President Clinton, acting independently of Congress, authorized a $50 billion package of loan guarantees: $20 billion from the U.S Exchange Stabilization Fund, $17.8 billion from the IMF, $10 billion from the Bank of International Settlements and $3 billion from commercial banks.(15)

Joseph Stiglitz declared one of the functions of the central bank /IMF/WorldBank to be a banker's welfare system. In relation to the $95 billion bailout package during the 1997 Asian crisis:

 

The money served another function: it enabled the countries to provide dollars to the firms that had borrowed from western bankers to repay the loans. It was thus, in part, a bailout to the international banks as much as it was to the country.(16)

 

Whilst the commercial banks profit from the interest rates, which are often vastly inflated for debtor governments, the Western taxpayer pays off the loans through inflation at home. This system is designed to go on forever, draining the West of its wealth in order to build socialist dictatorships abroad and enrich the banking elite. The total foreign debt of low and middle income countries rose from $1.4 trillion in 1990 to $2.3 trillion in 2001.(17)

To summarize inflation: There are three bands of thieves who work as a cartel. The central banks acting as lender of last resort have enabled the commercial banks and the government to expand the money supply at our cost by increasing government deficit spending, sustaining non-performing loans and bailing out major corporate failures. Since 1971 when Nixon destroyed the last remnants of the Gold Standard, the U.S. national debt has increased from $408 billion to $6.8 trillion, a 1600% increase. In 1971, M3 money supply was $776 billion; today it stands at $8.9 trillion, a 1100% increase. During that time the dollar has lost almost 80% of its purchasing power.(18) In addition to all the other state and federal taxes, the hapless taxpayer has paid another 5% per year in inflation.(19)

A 1999 UK Parliamentary report shows that inflation in Britain accelerated after WWII. The pre-war annual inflation rate was about 2.5% and the post -war rate averaged 6%. Over the whole century, the Pound lost 98.5% of its purchasing power.(20) It is no coincidence that during this period the gap between rich and poor and the size of government has grown significantly.

 

DEPRESSIONS: MONETARY AND FISCAL TIGHTENING

 

In Globalization and its Discontents, Joseph Stiglitz describes how the contractionary policies of the IMF exacerbated the 1997 east Asia crisis. In any economic downturn, there is a standard government response: stimulate demand by either cutting taxes, increase expenditures, or loosen monetary policy. The IMF pushed exactly the opposite course. By continuing to advocate contractionary policies the IMF caused the contagion to spread from one country to the next as exports decreased. The IMF monetary remedy was to impose interest rate hikes of more than 25%, throwing fuel onto the fire.(21) This had the effect of driving even more capital out of the country as it pushed companies towards bankruptcy. Furthermore it imposed restructuring in the banking sector which closed down any banks with significant non-performing loans. In Indonesia, sixteen private banks were closed which caused a run on the remaining private banks and a retreat of capital to the state run banks. The effect on the Indonesian banking system and the economy was disastrous.(22) Riots followed when welfare, especially food and fuel subsidies for the poor, were cut back. Businessmen and their families were targeted. This exacerbated the retreat of capital out of the country since riots do not restore business confidence.

According to Greg palast's interviews with Stiglitz, "IMF riots" were virtually written into the 111 conditionalities formulated at the end of the 1980s. One of the IMF condionalities on Ecuador was to raise the price of cooking gas by 80% at the same time as they were cutting back pensions and laying off government workers. Poor Andean Indians came down from the hills and set fire to cars in the capital bringing troops onto the streets.(23) In Argentina, when the banks put their interest rates up to 21-70%, the government had to change the law against loan-sharking because the banks would have been in breach of it.

Stiglitz laments that deepening a recession not only causes more pain today but also more pain tomorrow. An economy which has a deep recession may grow faster as it recovers, but it never makes up for lost time. The deeper today's recession, the lower income is likely to be twenty years from now.(24)

The IMF was not the first to use fiscal tightening as a weapon of economic warfare. In 1920-21, America went through an agricultural depression. This was caused solely by the monetary policy of the Government and Federal Reserve. The farmers had borrowed large amounts of money to buy land at the instance of the government. They had become very prosperous. However, with an eye on closing down the smaller banks in the South West, the Wall St. controlled Fed decided to drastically cut credit in May 1920. Unable to keep up repayments, thousands of farmers were bankrupted and brought down their local banks with them. G. Edward Griffin describes this episode as "Country-Duck Dinner in New York."(25) However, this was just the starter before the main course. At the behest of the Wall St. Money Trust, the Open Market Committee was formed in 1922, to coordinate the purchase of Treasury bonds by the twelve regional Reserve banks. From 1923 onwards low interest rates caused new money to flood into the economy causing a massive speculative boom on the stock market. By 1929, half of retail transactions were on credit.(26) On 9 August 1929, the Fed started selling Treasury bonds in the open market and reversed its easy credit policy. It raised interest rates on loans to commercial banks to 6% and the money supply rapidly contracted; speculators who had borrowed money to purchase shares could no longer keep up repayments to their brokers. The pin had been inserted. On 29 October 1929, an avalanche of selling on Wall Street wiped out millions of investors. The bankers and their preferred clients had exited the market long before only to re-enter at rock bottom and devour stock like sharks in a feeding frenzy. Some of the greatest fortunes in America were made in this fashion.

Today, consumers in the U.K. and U.S. hold record levels of debt. These extreme debt ratios make us very vulnerable to the manoeuvres used in the past. Figures from the U.K. Office for National Statistics showed that consumers now owed an average of £5,330 ( about $8500) in unsecured debt, which excludes mortgages.(27)

 

CONCLUSION

 

Fiscal and monetary policy has been used by the bankers to redistribute wealth to themselves and the corporations they control as well as to national governments. Whilst taxation policy is overt, a hidden transfer of wealth is achieved by monetary policy- the public endure inflation whilst the debtor governments grow in size and the bankers grow rich collecting interest on the loans that cause it. The fleecing of the Western taxpayer accelerated during the post-War period, with the creation of the IMF/World bank.

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7.3 FREE TRADE AGREEMENTS

 

GATT/WTO

 

On 1 January 1995, The World Trade Organization replaced The Global Agreement on Tariffs and Trade (GATT) which had regulated global trade tariffs since 1947.(28) Three months before, Sir James Goldsmith, a British billionaire,gave a speech to the U.S. senate in which he warned about the effect global free trade would have on Western employment and wage levels.(29) Goldsmith argued that GATT and the theories on which it is based were flawed. If implemented, it would impoverish and destabilize the industrialized world while at the same time cruelly ravaging the third world. The principle of global free trade is that anything can be manufactured anywhere in the world to be sold anywhere else. That means that these new entrants into the world economy are in direct competition with the workforces of developed countries. In most developed countries, the cost to an average manufacturing company of paying its workforce is an amount equal to between 25 percent and 30 per cent of sales. If such a company decides to maintain in its home country only its head office and sales force, while transferring its production to a low-cost area, it will save about 20 percent of sales volume. For every French employee, a company could have recruited 47 Vietnamese. Many economists believe that the growth in service industries will compensate for lost jobs in manufacturing. However even service industries will be subjected to substantial transfers of employment to low-cost areas.

On the other hand, the real cost to consumers of cheaper goods will be that they will lose their jobs, get paid less for their work and have to face higher taxes to cover the social cost of increased unemployment. According to figures published by the U.S. Department of Labor, since 1973 real hourly and weekly earnings, in inflation-adjusted dollars, have already dropped respectively by 13.4 per cent and 19.2 per cent, and that was before the 1995 GATT negotiations known as the Uruguay Round. If 4 billion people enter the same world market for labour and offer their work at a fraction of the price paid to people in the developed world, it is obvious that such a massive increase in supply will reduce the value of labour. Organized labour will lose practically all its negotiating power.

Regional free trade zones should only be established between countries with similar levels of economic development. The 1957 Treaty of Rome between France, Germany, Italy, Belgium, the Netherlands and Luxembourg created the European Economic Community, the largest free market in the world. Within the EEC, there would be no tariffs, no barriers, and a free and competitive market. Trade with nations outside the EEC would be subject to a single tariff. This concept was known as community preference. In other words, priority would be given to European jobs and industry. About twenty years ago, quietly, the technocrats who run Europe started to alter this fundamental principle and move progressively towards international free trade. Ever since, unemployment in Europe has swollen despite growth in GNP. The 1992 Treaty of Maastricht enshrines this change and makes global free trade one of the fundamental principles on which the new Europe is to be built.

Regarding the economic success of Hong Kong, South Korea and Taiwan, special economic concessions granted by the West combined with their cheap and skilled labour made them successful. Over the past thirty years the balance of trade between these countries and the West has resulted in a transfer of tens of billions of dollars to them. However, a balance of trade in monetary terms can disguise huge job losses because, as Mr Goldsmith noted, he could employ 47 Vietnamese for the price of one Frenchman.

 

JOB LOSSES DUE TO NAFTA

 

The U.S. has lost millions of manufacturing jobs due to a growing trade deficit over the past three decades. This trend accelerated when The North Atlantic Free Trade Agreement (NAFTA) was signed by the U.S., Canada and Mexico, designed to remove tariff barriers over a fifteen year period. NAFTA eliminated 766,030 actual and potential U.S. jobs between 1994 and 2000 because of the rapid growth in the net U.S. export deficit with Mexico and Canada. The majority of the job losses were in the manufacturing sector so workers who found jobs in the service sector are paid on average 23% less. Almost all new American jobs being created are in this sector and wages in the manufacturing sector are kept down due to the threat of job relocation overseas. The growth in U.S. trade and trade deficits has put downward pressure on the wages of "unskilled" (i.e., non-college-educated) workers in the U.S., especially those with no more than a high school degree. This group represents 72.7% of the total U.S. workforce and includes most middle and low wage workers. A large body of economic research has concluded that trade is responsible for at least 15-25% of the growth in wage inequality in the U.S. (U.S. Trade Deficit Review Commission 2000, 110-18).(30)(31) In some areas of the U.S. the loss of manufacturing jobs to Mexico has caused disturbing levels of poverty. Since George Bush won Ohio in the 2000 presidential elections, the state has lost one in six of its manufacturing jobs. A string of local factories have relocated to Mexico in the last two years. Two million of the state's 11 million population resorted to food charities in 2002, an increase of more than 18% from 2001.(32)

 

WHITE COLLAR JOB LOSSES

 

A study by Forrester Research predicts that U.S. companies will transfer 3.3 million service jobs overseas by 2015, compared with just 102,000 jobs shifted in 2000. The job exports are predominantly in the areas of information technology (including software and product development), customer service, back-office accounting and sales.(33) On 10 August 2003, USA Today warned that white collar workers are going to experience the devastating job losses that occurred in manufacturing in the previous thirty years. Almost any professional job that can be done long distance is suddenly up for grabs. Jobs done by financial analysts, architectural drafters, telemarketers, accountants, claims adjusters, home loan processors and others at higher levels of the labour food chain are being farmed out to workers in other countries. "We're not just talking about call-center jobs, but all kinds of jobs," says Deloitte Consulting analyst Christopher Gentle. "It doesn't leave any part of the corporation untouched." Major U.S. companies, including such giants as IBM, Microsoft and Procter & Gamble, are leading the pack. Tens of thousands of jobs already have been shipped out, and analysts project that millions more will go -- just as the fragile economy attempts a rebound. "We see it as a threat to America's middle-class work force, in terms of wages and benefits," says Marcus Courtney, president of Washington Alliance of Technology Workers in Seattle. "The service sector is not immune to the forces of globalization. We're talking about highly skilled, best-paying jobs. It's raising the concern of workers."(34)

In the U.K., HSBC Bank just announced that it is shipping 4000 back office jobs from the U.K. to Asia. By 2006, that will have increased to 7000, 13% of its current U.K. workforce.(35)

 

7.4 OPEN BORDERS

 

Whilst free-trade allows capital to travel to developing countries in search of cheap labour, lax immigration controls have allowed cheap labour to travel to the West in search of capital.

The immigrant population in the United States has increased to 33 million, a five percent increase in the last two years. The new Census Bureau data show that immigrants account for 11.8 percent of the U.S. population. In California 27% of the population are foreign born. The immigrant population in the U.S. is now larger than the entire population of Canada.(36) 9 million Mexicans make up 30% of these foreign born residents. Over a third of them are illegals.(37)

 

BLUE COLLAR WORKERS

 

Throughout the economic boom of the 90s, when the unemployment rate got as low as 3.9 percent, economists marveled at the U.S. economy's ability to grow jobs without sparking wage-led inflation. Many speculated that the waves of low-paid immigrants had created a "safety valve," keeping average wages low enough for the economy to grow without an increase in prices. An article in the Labor Department's "Monthly Labor Review" has laid out just how important those foreign-born workers were for the U.S economy: foreign-born workers earned about 75.6 cents for every dollar earned by the native born in 2000.(38) Economic theory suggests that immigration that is complementary to the native workforce can boost wages all round. The most extreme example is Middle East countries that have oil but no oil expertise, so importing oil industry workers from the West makes the locals rich. In contrast, substitute workers are likely to reduce the wages of those they compete with in the labour market while boosting the profits of the owners of capital. However, the lower cost of production associated with cheaper labour makes goods cheaper and keeps wage inflation down. George Borjas, professor of political economy at Harvard University, an authority on the economics of migration, is sceptical of claims that immigration boosts wages when it goes beyond meeting skills shortages. "I find very sizeable negative effects of immigration on wages," he says. "The numerical effect is strong and the statistical significance is strong. It will turn the economics of migration on its head."(39)

The National Academy of Sciences estimates that approximately 44 percent of wage depression among low-skilled Americans ( 70% of workforce) during 1980-1994 was due to immigration. Also an estimated 1,880,000 American workers are displaced from their jobs every year by immigration.(40)(41)

The American food and agriculture system has become dependent on foreign-born workers, a substantial number of whom are illegals. Until 15 or 20 years ago, meatpacking plants in the United States were staffed by highly paid, unionized employees who earned about $18 an hour, adjusted for inflation. Today, the processing and packing plants are largely staffed by low-paid non-union workers from Mexico and Guatemala. Many of them start at $6 an hour. A few years ago, the Immigration and Naturalization Service estimated that about 25 percent of meatpacking workers in the Midwest were probably illegals.(42) A government study estimated that nearly 40 percent of farm labourers are illegals.

 

WHITE COLLAR WORKERS

 

Immigration has also suppressed wages of white collar workers because U.S immigration has granted huge numbers of working visas. More than 100,000 American computer programmers are unemployed but when those who are underemployed or working in other jobs because they cannot find programming jobs, the total grows to about half a million. At the same time, more than 450,000 H-1B visa workers are employed as programmers in the United States.(43)

I.T. companies are subcontracting thousands of jobs to outsourcing companies such as Tata, Infosys Technologies, and Wipro Technologies, the three largest Indian software servicing companies, who can provide Indian employees who will work for a third of the wages.(44) Furthermore a 2001 National Research Council report found that H-1Bs have an adverse impact on overall wage levels. The Independent Computer Consultants Association reports that the use of cheaper foreign labour has forced down the hourly rates of U.S. consultants by as much as 10 to 40 percent.(45)

 

BY DESIGN NOT BY ACCIDENT

 

None of this has come about by chance: Since 1986, Congress has passed 7 amnesties for illegal aliens. The 1986 Immigration Reform and Control Act (IRCA) gave amnesty - legal forgiveness - to all illegal aliens who had successfully evaded justice for four years or more or were illegally working in agriculture. As a result, 2.8 million illegal aliens were admitted as legal immigrants to the United States. Amnesties to date total 3,356,021.(46) Cheered on by editorials in the The Wall St Journal,(47) President of Mexico Vincente Fox, is currently negotiating a blanket amnesty of millions of Mexican workers.(48) Republicans and Democrats are proposing different pieces of legislation which, if all passed, would give amnesty to all 8-11 million illegals. This is one of many steps being taken to merge Mexico and the U.S. as a prelude to a Pan-American Union from Alaska to Chile.(49)

 

UK

 

Research indicates that, on current trends, we can now expect a net inflow of at least 2 million non E.U. citizens per decade.(50) Total net Immigration from outside the E.U. has more than trebled in the past five years and is still rising. Each year nearly a quarter of a million people come to live in Britain.(51)

However this is nothing compared to the problem looming from the newly enlarged E.U. The floodgates for cheap labour opened on 1st May 2004 when 10 former Eastern Bloc countries join the E.U. making their 73 million citizens eligible to work anywhere within the EEA. Created in 1992 The European Economic Area (EEA) consists of the 15 member states of the European Union (EU) plus Norway, Iceland and Liechtenstein. There is free movement of people, goods and services within the area. So long as nationals of the countries are exercising their freedoms under these the various treaties, they are not strictly subject to immigration control, and may work or set up in business without restriction. These rights extend also to members of the households of EEA nationals accompanying them to the U.K.. 13 countries have applied to become new members: 10 of these countries -Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, the Slovak Republic, and Slovenia joined on 1st May 2004. They are currently known by the term "acceding countries". Bulgaria and Romania hope to do so by 2007, and Turkey is currently negotiating its membership.(52)

The E.U. estimates that around 335,000 people will migrate each year from Eastern Europe after the barriers to free movement come down, including 100,000 workers. This may be a deliberate understatement of the tidal wave of cheap labour which is about to demolish wage levels in Western Europe.(53)

Another revolution is quietly taking place in another aspect of immigration aimed directly at the middle class. The Government has been clamping down on illegal immigration but massively expanding legal migration for skilled workers, most noticeably through expanding the work permit scheme to about 200,000 people this year. David Blunkett, the Home Secretary, has said he is proud to have produced the largest work permit programme of any country. These workers will be able to bring their families and, on past form, most will be accepted for settlement after 4-5 years if they so wish. This massive expansion of the work permit scheme therefore represents a major new avenue of immigration. The Government has also set up the Highly Skilled Migrant Programme, which has so far brought in 3,000 of the of the world's brightest and best. The scheme makes it easier for foreign students to carry on working in the U.K. after their course finishes. No doubt many will come from poor countries and will accept significantly lower salaries than native workers.(54)(55)

The effect of immigration policy on the labour market is the same as in the U.S.. While the highly skilled in London enjoy wages up to 80 per cent higher than the national average, a recent report by Incomes Data Services showed that shelf-fillers in London suffer wages 10 per cent below the national average. Immigration has pushed unemployment 2 per cent higher than it would otherwise be. National unemployment has been at just over 5 per cent for two years now, and in London, where most immigrants live, unemployment is the second highest in the UK at 6.6 per cent.(56) Britain's top labour economist, Professor Richard Layard of London School of Economics, who helped to design Labour's welfare to work programme, stated in a letter to the Financial Times:

 

There is a huge amount of evidence that any increase in the number of unskilled workers lowers unskilled wages and increases the unskilled unemployment rate. If we are concerned about fairness, we ought not to ignore these facts. Employers gain from unskilled immigration. But the unskilled do not.(57)

 

CONCLUSION

 

The elite have promoted free trade and open borders with full knowledge of their destructive consequences. Poor workers are glad to work for higher wages either by migrating to the West or by working in the new steel factory at home. This analysis has not addressed their plight, which is already well documented, but has shown the serious damage to employment and wage levels in the West.

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