Wednesday, May 27, 2009

Exploding Debt Threatens America

Exploding Debt Threatens America

By John Taylor

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Standard and Poor’s decision to downgrade its outlook for British sovereign debt from “stable” to “negative” should be a wake-up call for the US Congress and administration. Let us hope they wake up.

Under President Barack Obama’s budget plan, the federal debt is exploding. To be precise, it is rising – and will continue to rise – much faster than gross domestic product, a measure of America’s ability to service it. The federal debt was equivalent to 41 per cent of GDP at the end of 2008; the Congressional Budget Office projects it will increase to 82 per cent of GDP in 10 years. With no change in policy, it could hit 100 per cent of GDP in just another five years.

“A government debt burden of that [100 per cent] level, if sustained, would in Standard & Poor’s view be incompatible with a triple A rating,” as the risk rating agency stated last week.

I believe the risk posed by this debt is systemic and could do more damage to the economy than the recent financial crisis. To understand the size of the risk, take a look at the numbers that Standard and Poor’s considers. The deficit in 2019 is expected by the CBO to be $1,200bn (€859bn, £754bn). Income tax revenues are expected to be about $2,000bn that year, so a permanent 60 per cent across-the-board tax increase would be required to balance the budget. Clearly this will not and should not happen. So how else can debt service payments be brought down as a share of GDP?

Inflation will do it. But how much? To bring the debt-to-GDP ratio down to the same level as at the end of 2008 would take a doubling of prices. That 100 per cent increase would make nominal GDP twice as high and thus cut the debt-to-GDP ratio in half, back to 41 from 82 per cent. A 100 per cent increase in the price level means about 10 per cent inflation for 10 years. But it would not be that smooth – probably more like the great inflation of the late 1960s and 1970s with boom followed by bust and recession every three or four years, and a successively higher inflation rate after each recession.

The fact that the Federal Reserve is now buying longer-term Treasuries in an effort to keep Treasury yields low adds credibility to this scary story, because it suggests that the debt will be monetised. That the Fed may have a difficult task reducing its own ballooning balance sheet to prevent inflation increases the risks considerably. And 100 per cent inflation would, of course, mean a 100 per cent depreciation of the dollar. Americans would have to pay $2.80 for a euro; the Japanese could buy a dollar for Y50; and gold would be $2,000 per ounce. This is not a forecast, because policy can change; rather it is an indication of how much systemic risk the government is now creating.

Why might Washington sleep through this wake-up call? You can already hear the excuses.

“We have an unprecedented financial crisis and we must run unprecedented deficits.” While there is debate about whether a large deficit today provides economic stimulus, there is no economic theory or evidence that shows that deficits in five or 10 years will help to get us out of this recession. Such thinking is irresponsible. If you believe deficits are good in bad times, then the responsible policy is to try to balance the budget in good times. The CBO projects that the economy will be back to delivering on its potential growth by 2014. A responsible budget would lay out proposals for balancing the budget by then rather than aim for trillion-dollar deficits.

“But we will cut the deficit in half.” CBO analysts project that the deficit will be the same in 2019 as the administration estimates for 2010, a zero per cent cut.

“We inherited this mess.” The debt was 41 per cent of GDP at the end of 1988, President Ronald Reagan’s last year in office, the same as at the end of 2008, President George W. Bush’s last year in office. If one thinks policies from Reagan to Bush were mistakes does it make any sense to double down on those mistakes, as with the 80 per cent debt-to-GDP level projected when Mr Obama leaves office?

The time for such excuses is over. They paint a picture of a government that is not working, one that creates risks rather than reduces them. Good government should be a nonpartisan issue. I have written that government actions and interventions in the past several years caused, prolonged and worsened the financial crisis. The problem is that policy is getting worse not better. Top government officials, including the heads of the US Treasury, the Fed, the Federal Deposit Insurance Corporation and the Securities and Exchange Commission are calling for the creation of a powerful systemic risk regulator to reign in systemic risk in the private sector. But their government is now the most serious source of systemic risk.

The good news is that it is not too late. There is time to wake up, to make a mid-course correction, to get back on track. Many blame the rating agencies for not telling us about systemic risks in the private sector that lead to this crisis. Let us not ignore them when they try to tell us about the risks in the government sector that will lead to the next one.

Home prices fall at record pace in first quarter

Home prices fall at record pace

Prices are at levels not seen since the end of 2002, index shows

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National home prices are at levels not seen since the end of 2002, but a closer look at data released Tuesday shows the worst may be over for some cities.

The Standard & Poor’s/Case-Shiller National Home Price index reported home prices tumbled by 19.1 percent in the first quarter compared to the first quarter last year, the largest drop in its 21-year history. Home prices have fallen 32.2 percent since peaking in the second quarter of 2006.

In cities across the country home prices varied dramatically, depending on affordability, foreclosure activity and the local economy. The bottom may be in sight in some markets, but nationally home values are expected to decline — though at a slower pace — for the rest of the year.

“We continue to believe that it is unlikely that we are anywhere near a bottom in nationwide home prices,” according to Joshua Shapiro, chief U.S. economist for MFR Inc.

It’s hard to believe it could get much worse for homeowners in Detroit. Homes there are worth what they sold for in 1995. And while that’s good news for homebuyers, the implosion of the auto industry and economic fallout means fewer buyers have the money to qualify for a mortgage.

“I feel like houses here are free,” said Detroit area real estate agent Rose Marie Jouan with Re/Max Showcase Homes. Her house that she sold in 2004 for $200,000 is on the sales block, bank-owned, for $86,000.

In Phoenix and Las Vegas, where prices have plunged by half since their peaks, home values have receded to levels not seen since the beginning of the real estate boom. Phoenix prices are at early 2001 levels and Las Vegas values hover at mid-2002 prices.

Home values in Charlotte, N.C., Portland, Ore., and Seattle are steady at 2005 prices, the best showing of all 20 cities in the Case-Shiller report. All three were some of the last to fall into the housing slump.

The Case-Shiller report offered other hopeful signs the worst may be over for some cities. Denver prices posted an increase over February, while Dallas prices were flat.

Separately, Case Shiller said its 20-city index of home prices fell by 18.7 percent from the year before, and the 10-city index lost 18.6 percent. However, the rates of decline slowed in March, the second straight month they didn’t set record price drops.

Still, there are no signs home prices nationally have hit bottom.

“We see no evidence that a recovery in home prices has begun,” said David M. Blitzer, chairman of the S&P index committee.

All 20 cities showed monthly and annual price declines, with nine setting annual records. Fifteen cities posted double-digit drops and Phoenix, Las Vegas and San Francisco recorded declines of more than 30 percent.

Minneapolis posted a 6.1 percent decline from February to March, the biggest monthly drop on record for any metros in the indexes. Ron Peltier, chairman and chief executive of HomeServices of America, attributed the drop to a jump in distressed sales in March.

Economists will get a look at April housing data Wednesday when the National Association of Realtors releases sales data for previously owned homes, and on Thursday when the Commerce Department puts out numbers for sales of newly built homes. Economists surveyed by Thomson Reuters expect existing home sales to rise 2 percent from March to April, while new home sales are forecast to rise by 1.1 percent.

The Next Leg Down

The Next Leg Down

By Mike Whitney

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Collapsing home prices and credit markets continue to put downward pressure on consumer spending, forcing the Federal Reserve to take even more radical action to revive the economy. Last week, Fed chief Ben Bernanke raised the prospect of further monetizing the debt by purchasing more than the $1.75 trillion of Treasuries and mortgage-backed securities (MBS) already committed. The announcement sent shock-waves through the currency markets where skittish traders have joined doomsayers in predicting tough times ahead for the dollar. Foreign central banks have been gobbling up US debt at an impressive pace, adding another $60 billion in the last three weeks alone. That's more than enough to cover the current account deficit and put the greenback on solid ground for the time-being. But with fiscal deficits ballooning to $3 trillion in the next year alone, dwindling foreign investment won't be enough to keep the dollar afloat. Bernanke will be forced to either raise interest rates or let the dollar fall hard.

Export-led nations are looking for an edge to revive flagging sales by keeping their currencies undervalued. But the strong dollar is making it harder for Bernanke to engineer a recovery. He'd like nothing more than to see the dollar tumble and reset at a lower rate. That would reduce the debt-load for homeowners and businesses and send consumers racing back to the shopping malls and auto showrooms. Perception management is a big part of stimulating the economy. That's why the financial media has been air-brushing articles that focus on deflation and shifting the attention to inflation. It's an effort to kick-start consumer spending by convincing people that their money will be worth less in the future. But deflation is still enemy number one. Rising unemployment, crashing home prices, vanishing equity and tighter credit; these are all signs of entrenched deflation.

Bernanke faces three main challenges to put the economy back on track. He must remove the hundreds of billions in toxic assets from the banks balance sheets, reignite consumer spending to offset the sharp decline in aggregate demand, and fix the wholesale credit-mechanism that provides 40 percent of the credit to the broader economy. Treasury Secretary Timothy Geithner has taken over the distribution of the remaining TARP funds, and created a new program, the Public-Private Investment Partnership (PPIP), for purchasing toxic mortgage-backed assets. The PPIP will provide up to 94 percent "non-recourse" government loans for up to $1 trillion of assets which are worth less than half of their original value at today's prices. The Treasury's plan is an attempt to keep asset prices artificially high so that the losses will not be realized until they've been shifted onto the taxpayer. Here's how John Hussman of Hussman Funds summed up Geithner's PPIP:

"From early reports regarding the toxic assets plan, it appears that the Treasury envisions allowing private investors to bid for toxic mortgage securities, but only to put up about 7% of the purchase price, with the TARP matching that amount - the remainder being "non-recourse" financing from the Fed and FDIC. This essentially implies that the government would grant bidders a put option against 86% of whatever price is bid. This is not only an invitation for rampant moral hazard, as it would allow the financing of largely speculative and inefficiently priced bids with the public bearing the cost of losses, but of much greater concern, it is a likely recipe for the insolvency of the Federal Deposit Insurance Corporation, and represents a major end-run around Congress by unelected bureaucrats.

Make no mistake - we are selling off our future and the future of our children to prevent the bondholders of U.S. financial corporations from taking losses. We are using public funds to protect the bondholders of some of the most mismanaged companies in the history of capitalism, instead of allowing them to take losses that should have been their own. All our policy makers have done to date has been to squander public funds to protect the full interests of corporate bondholders. Even Bear Stearns bondholders can expect to get 100% of their money back, thanks to the generosity of Bernanke, Geithner and other bureaucrats eager to hand out the money of ordinary Americans." (John Hussman, "The Fed and Treasury - Putting off Hard Choices with Easy Money, and Probable Chaos, hussmanfunds.com)

The second part of the Fed's plan is to fix the wholesale credit-mechanism, which means restoring the securitization markets where pools of loans are transformed into securities and sold to investors. Until Bernanke is able to lure investors back into purchasing high-risk debt-instruments comprised of student loans, mortgage securities, auto loans and credit card debt, the credit markets will continue sputter and growth will be flat. Structured-debt creates the asset base which is leveraged though traditional loans or complex derivatives. Credit expansion maximizes profit, inflates asset prices and establishes the structural framework for shifting wealth to financial institutions via speculative asset bubbles. This is the basic financial model that US banks and financial institutions hope to export to the rest of the industrial world to ensure a greater portion of global wealth for themselves and a stronger grip on the political process.

Bernanke's Term Asset-backed Securities Loan Facility (TALF) provides up to $1 trillion in non recourse loans to financial institutions willing to buy AAA-rated debt-instruments backed by consumer and small business loans. So far, the response has been tepid at best. For all practical purposes, the market is still frozen. Bernanke knows that there will be no recovery unless the credit markets are functioning properly. He also knows that the TALF won't succeed unless he provides guarantees for the underlying collateral, which is loans that were made to applicants who have no means for paying them back. Bernanke's guarantees will cost the taxpayer billions of dollars without any assurance that his plan will even work. It's a complete fiasco.

From the Federal Reserve Bank of San Francisco Economic Letter, "US Household Deleveraging and Future consumption Growth" by Reuven Glick and Kevin J. Lansing:

"More than 20 years ago, economist Hyman Minsky (1986) proposed a "financial instability hypothesis." He argued that prosperous times can often induce borrowers to accumulate debt beyond their ability to repay out of current income, thus leading to financial crises and severe economic contractions.

Until recently, U.S. households were accumulating debt at a rapid pace, allowing consumption to grow faster than income. An environment of easy credit facilitated this process, fueled further by rising prices of stocks and housing, which provided collateral for even more borrowing. The value of that collateral has since dropped dramatically, leaving many households in a precarious financial position, particularly in light of economic uncertainty that threatens their jobs.

Going forward, it seems probable that many U.S. households will reduce their debt. If accomplished through increased saving, the deleveraging process could result in a substantial and prolonged slowdown in consumer spending relative to pre-recession growth rates. Alternatively, if accomplished through some form of default on existing debt, such as real estate short sales, foreclosures, or bankruptcy, deleveraging could involve significant costs for consumers, including tax liabilities on forgiven debt, legal fees, and lower credit scores. Moreover, this form of deleveraging would simply shift the problem onto banks that hold these loans as assets on their balance sheets. Either way, the process of household deleveraging will not be painless. (The Federal Reserve Bank of San Francisco Economic Letter, "US Household Deleveraging and Future consumption Growth" by Reuven Glick and Kevin J. Lansing) http://www.frbsf.org/publications/economics/letter/2009/el2009-16.html)

The economy is in the grip of deflation. Commercial banks are stockpiling excess reserves (more than $850 billion in less than a year) to prepare for future downgrades, write-offs, defaults and foreclosures. That's deflation. Consumers are cutting back on discretionary spending; driving, eating out, shopping, vacations, hotels, air travel. More deflation. Businesses are laying off employees, slashing inventory, abandoning plans for expansion or reinvestment. More deflation. Banks are trimming credit lines, calling in loans and raising standards for mortgages, credit cards and commercial real estate. Still more deflation. Bernanke has opened the liquidity valves to full-blast, but consumers are backing off; they're too mired in debt to borrow, so the money sits idle in bank vaults while the economy continues to slump.

In an environment where businesses and consumers are rebuilding their balance sheets and paying off debt, there's only one option; inflation. Bernanke will keep interest rates will stay low while increasing monetary and fiscal stimulus. The ocean of red ink will continue to rise. Still, the systemwide contraction will persist despite the Fed's multi-trillion dollar lending programs, quantitative easing (QE) and Treasury buybacks. The "Great Unwind" is irreversible; the era of limitless credit expansion is over.

David Rosenberg, chief economist and strategist at Gluskin Sheff & Associates, believes that the equities markets have undergone a "gargantuan short-cover rally" and that stocks will retest the March 9th low, which was a 12 year low for the S&P 500 Index. Rosenberg said he doesn't expect the economy to recover in the second half of the year.

"I'm seeing no revival of consumer spending in the second quarter," Rosenberg said. (Bloomberg)

The conditions that supported the explosive growth of the last decade no longer exist. The credit markets are in a shambles, the banking system is hanging by a thread, and the consumer is out of gas. Traders are clinging to the slim hope that the worst is over, but they could be mistaken. There's probably another leg down and it will be more vicious than the last.

The Global Struggle Against U.S. Military Posts

Chalmers Johnson on the Cost of Empire

By Chalmers Johnson

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In her foreword to The Bases of Empire: The Global Struggle Against U.S. Military Posts,” an important collection of articles on United States militarism and imperialism, edited by Catherine Lutz, the prominent feminist writer Cynthia Enloe notes one of our most abject failures as a government and a democracy: “There is virtually no news coverage—no journalists’ or editors’ curiosity—about the pressures or lures at work when the U.S. government seeks to persuade officials of Romania, Aruba or Ecuador that providing U.S. military-basing access would be good for their countries.” The American public, if not the residents of the territories in question, is almost totally innocent of the huge costs involved, the crimes committed by our soldiers against women and children in the occupied territories, the environmental pollution, and the deep and abiding suspicions generated among people forced to live close to thousands of heavily armed, culturally myopic and dangerously indoctrinated American soldiers. This book is an antidote to such parochialism.

Catherine Lutz is an anthropologist at Brown University and the author of an ethnography of an American city that is indubitably part of the American military complex: Fayetteville, N.C., adjacent to Fort Bragg, home of the John F. Kennedy Special Warfare School (see “Homefront, A Military City and the American Twentieth Century,” Beacon Press, 2002). On the opening page of her introduction to the current volume, Lutz makes a real contribution to the study of the American empire of bases. She writes, “Officially, over 190,000 troops and 115,000 civilian employees are massed in 909 military facilities in 46 countries and territories.” She cites as her source the Department of Defense’s Base Structure Report for fiscal year 2007. This is the Defense Department’s annual inventory of real estate that it owns or leases in the United States and in foreign countries. Oddly, however, the total of 909 foreign bases does not appear in the 2007 BSR. Instead, it gives the numbers of 823 bases located in other people’s countries and 86 sites located in U.S. territories. So Lutz has combined the foreign and territorial bases—which include American Samoa, the District of Columbia, Guam, Johnston Atoll, the Northern Marianas Islands, Puerto Rico, the Virgin Islands, and Wake Island. Guam is host to at least 30 military sites and Puerto Rico to 41 bases.

Combining the two numbers is a good idea. Some of the most deplorable conditions in the American military empire exist in U.S. territories, notably in Puerto Rico, where the citizens fought a long battle to stop the naval bombardment of Vieques Island, and in Guam, where the government plans to relocate more than 8,000 Marines from Okinawa together with a $13 billion expansion of Air Force and Navy facilities. The result will be an almost 15 percent increase in Guam’s population, which will significantly exceed the capacity of the island’s water and solid-waste systems. (See “U.S. Military Guam Buildup Spurs Worry over Services,” San Diego Union-Tribune, April 12, 2009.) In the book under review here, Lutz also includes an essay on the state of Hawaii, with its 161 military installations (in 2004) covering 6 percent of the state’s land area (22 percent of the state’s most densely populated island, Oahu). The military is easily Hawaii’s largest polluter, including the secret use of depleted uranium ammunition at the Shofield range, evidence of which was uncovered in 2006.

It should be noted that the BSR for fiscal 2008 has been available since the summer of last year and it somewhat alters Lutz’s figures. It gives details on 761 bases in other people’s countries and 104 U.S. territories, which produces a Lutz total of 865. Such small variations from year to year have been typical of the American empire throughout the Cold War. Some 865 bases located in all the continents except Antarctica is not only a staggeringly large number compared even with the great empires of the past, but one the U.S. clearly cannot afford given its severely weakened economic condition.

Nonetheless, there has been no public discussion by the Obama administration over starting to liquidate our overseas bases or beginning to scale back our imperialist presence in the rest of the world. One must also remember that the BSR is an official source that often conflicts with other reports on the numbers of American military personnel located all over the world. It omits many bases that the Department of Defense wants to conceal or play down, notably those in Iraq, Afghanistan and Israel. For example, just one of the many unlisted bases in Iraq, Ballad Air Base, houses 30,000 troops and 10,000 contractors, and extends across 16 square miles with an additional 12-square-mile “security perimeter.”

One other subject that Lutz touches on in her introduction and that cries out for a book-length study is the political machinations that every American embassy and military base on earth engages in to undermine and change local laws that stand in the way of U.S. military plans. For years the United States has interfered in the domestic affairs of nations to bring about “regime change,” rig elections, free American servicemen who have been charged with extremely serious felonies against local civilians, indoctrinate the local officer corps in American militarist values (as at the Western Hemisphere Institute for Security Cooperation at Fort Benning, Ga.), and preserve and protect the so-called Status of Forces Agreements that the United States imposes on all nations with U.S. bases. These SOFAs give our troops extraterritorial privileges such as freedom from local laws and from passport and travel regulations, and they absolve the U.S. from a country’s anti-pollution requirements, noise restrictions and environmental laws.

Mapping U.S. Power

The first essay in Lutz’s collection is by one of the few genuine veterans of military base studies, Joseph Gerson, the New England director of programs for the American Friends Service Committee. He is the editor (along with Bruce Birchard) of “The Sun Never Sets: Confronting the Network of U.S. Military Bases” (Boston: South End Press, 1991). His essay on “U.S. Foreign Military Bases and Military Colonialism: Personal and Analytical Perspectives” is particularly good on the hypocrisy and opportunism that imperialism imposes on our foreign policy, regardless of our intentions. For example, he notes, in the words of the American Declaration of Independence, the “abuses and usurpations” that King George III of England imposed on us though his “standing armies kept among us, in times of peace.”

Today the “abuses and usurpations” of American standing armies “include more than rape, murder, sexual harassment, robbery, other common crimes, seizure of people’s lands, destruction of property, and the cultural imperialism that have accompanied foreign armies since time immemorial. They now include terrorizing jet blasts of frequent low-altitude and night-landing exercises, helicopters and warplanes crashing into homes and schools and the poisoning of environments and communities with military toxins; and they transform ‘host’ communities into targets for genocidal nuclear as well as ‘conventional’ attacks.” When it comes to opportunism, Gerson notes that the Navy’s Indian Ocean tsunami relief operations of 2005 helped open the way for U.S. forces to return to Thailand and for greater cooperation with the Indonesian military.

John Lindsay-Poland’s essay “U.S. Military Bases in Latin America and the Caribbean” is informed by his extensive background in organizing and supporting struggles for the closure and environmental cleanup of U.S. military bases in Panama and Puerto Rico. His essay is comprehensive and historically detailed, although it appears to have been completed in late 2007 or early 2008 and some of the information has been overtaken by recent events. Ecuadorian President Rafael Correa has refused to renew our lease on Manta Air Base when it expires in November 2009; and the U.S. Army’s 2005 attempt to woo Paraguay flopped. After the Americans are expelled from the Manta base in November the only physical facilities of the U.S. military in South America will be in Colombia.

In 2005 and 2006, the United States tried to seduce Paraguay into giving the U.S. a permanent base by sending several hundred soldiers to provide medical assistance and dig wells. As it turned out, these ancient ploys did not work. Suspicions of the American military’s motives were aroused throughout the cone of South America, and the local population pronounced itself fully capable of digging wells unassisted by foreign troops. Lindsay-Poland notes that the “medical attention [in Paraguay] was one-time only, and … U.S. personnel handed out unlabeled medicines indiscriminately, regardless of the differences in medical conditions.”

David Heller and Hans Lammerant have contributed one of the most useful essays in the volume on “U.S. Nuclear Weapons Bases in Europe.” Information on this subject is scarce and the U.S. press is frightened of reporting what little is available for fear of raising a taboo topic. Heller has been actively involved with anti-nuclear and anti-militarist campaigns in Britain, Belgium and other European countries since the early 1990s. Lammerant has long supported the Belgian branch of War Resisters International.

They reveal that there are today still an estimated 350 to 480 free-fall B-61-type tactical nuclear weapons in the territories of the NATO allies, compared with a maximum of 7,300 land, air, and sea-based nuclear weapons based in Europe in 1971. The bombs are housed at eight air bases in six NATO countries, all of which enjoy Bechtel-installed Weapons Storage and Security Systems, type WS-3. These devices are vaults installed in the floors within a “protective aircraft shelter” and allow for the arming of bombs and aircraft inside hangars, offering high degrees of secrecy and (supposedly) security. Heller and Lammerant note that the weapons based in Europe are “secret, deadly, illegal, costly, militarily useless, politically motivated, and deeply, deeply unpopular.” Before they were all withdrawn, ground-launched nuclear missiles were based at Greenham Common and Molesworth in Britain, Comiso in Italy, Florennes in Belgium, and Wuescheim in the former West Germany. Pershing II missiles were based at Schwaebisch-Gmuend, Neu Ulm, and Waldheide-Neckarsulm in West Germany.

One of the themes stressed by Catherine Lutz as editor of this book is the prominent role played by women and women’s organizations in resisting American military imperialism over the years. All of the chapters offer details on the contributions of women to anti-base resistance activities, particularly in the case of the nuclear bases in Europe. Following the U.S. decision to station nuclear weapons at Greenham Common in the south of England, local women created “Women for Life on Earth” and maintained a constant presence in front of the base from 1981 to 2000 (even though the nuclear weapons were secretly removed in 1991).

Heller and Lammerant conclude their essay with details on the early-warning radars, anti-missile bases, military hubs to support operations in Africa, and facilities extant or being constructed at Thule in Greenland, Vardo in Denmark, the Czech Republic, Poland, and Vicenza in northern Italy. On March 17, 2009, the Czech government rejected a proposal by the Pentagon to install a U.S. military radar base in the Czech Republic because the lower house of the Czech parliament seemed certain to vote against it.

Tom Engelhardt’s contribution, “Iraq as a Pentagon Construction Site,” is a cobbled-together version of two essays first published on TomDispatch, of which Engelhardt is editor. All source citations have been removed from the Lutz version, but readers can consult the original essays—“A Basis for Enduring Relationships in Iraq,” Dec. 2, 2007, and “Baseless Considerations,” Nov. 4, 2007.

The essays are tours de force on the construction of probably permanent American military bases in occupied Iraq and of the massive fortress—- as large as the Vatican—in the Green Zone of Baghdad that is the “American Embassy.” Engelhardt’s work is a model of how to glean information from the public press on subjects that the American military is trying to keep secret. This is the best research we have to date on the bases in Iraq and the billions of dollars that flowed into the coffers of Halliburton Corp. to build them. (Truth in reporting: Engelhardt is the editor of all three of my books in the Blowback Trilogy.)

Global Resistance

Roland G. Simbulan’s “People’s Movement Responses to Evolving U.S. Military Activities in the Philippines” is a detailed analysis of how the United States has tried to get back into its former colony after the Philippine Senate voted on Sept. 16, 1991, to close all American military facilities and ordered U.S. troops to withdraw. Simbulan is a professor at the University of the Philippines and he played an active role in the “people’s power” movement that overthrew the dictatorship of Ferdinand Marcos and led to the 1991 rejection of the bases treaty.

Simbulan is justified in calling his country’s active protests against the Americans and their domestic lackeys “the most vibrant social movement in Southeast Asia,” but he is at pains to stress that the Americans are unreconciled to their colonial defeat. They continue with unabated creativity to invent “visiting forces agreements” aimed at restoring the U.S. troops’ old extraterritorial privileges and “joint military exercises” against domestic criminal gangs such as the Abu Sayyaf bandits in Mindanao and other Islamic provinces of the southern Philippines.

After the attacks of Sept. 11, 2001, the U.S. has also tried to overstate the threat of Islamic radicalism in the Philippines, even though there has been a slow-burning insurgency by indigenous Muslims for over 20 years, and it has pressured the Philippine government to abandon the anti-nuclear weapons provisions of its 1987 constitution. Americans may also be implicated in a clandestine campaign of selective killings of political activists, peasant and trade union leaders, human rights workers, lawyers and church people “in a pattern that was strikingly similar to that of Operation Phoenix”—the terrorist exercise run by the CIA in Vietnam that took the lives of some 30,000 suspected members of the National Liberation Front. Simbulan has written an important analysis of why the Philippines seems unable to get out from under the shadow of the United States despite the victories of “people power” almost 20 years ago.

David Vine’s and Laura Jeffrey’s article entitled “Give Us Back Diego Garcia: Unity and Division Among Activists in the Indian Ocean,” is a lively treatment of the seemingly hopeless efforts of the indigenous people of the island of Diego Garcia to obtain some measure of justice. In 1964, they were expropriated and forcibly expelled by the British government at the insistence of the U.S. Navy so that it could turn the entire island into an American military base.

This essay builds on Vine’s important monograph “Island of Shame: The Secret History of the U.S. Military Base on Diego Garcia,” Princeton University Press, 2009. Vine is a professor of anthropology at American University in Washington, D.C. Jeffrey holds a postdoctoral fellowship in anthropology at the University of Edinburgh. She has carried out ethnographic fieldwork among the Chagossians, the exiled people of Diego Garcia, now living in Mauritius and the United Kingdom.

In 1960, U.S. government officials secretly approached their British counterparts about acquiring the tiny island of Diego Garcia in the middle of the Indian Ocean as a site for a military base. By 1964, the United Kingdom agreed to detach Diego Garcia and the rest of the surrounding Chagos archipelago from its colony Mauritius and several island groups from colonial Seychelles to create a strategic military colony, the British Indian Ocean Territory. In a flagrant violation of human rights, Britain then removed the native inhabitants of Diego Garcia and Chagos, dumping them in Mauritius and Seychelles, 1,300 miles away, where they live today in abject poverty.

By 1973, the United States had completed the nucleus of a super-secret base that would grow faster than any other U.S. base since the Vietnam War. After the attacks of 9/11, the United States used Diego Garcia’s twin parallel runways, each over two miles in length, to launch its fleet of B-1, B-2, and B-52 bombers in its assault on Afghanistan, and its 2003 “shock and awe” campaign against Iraq. Diego Garcia also became the site of a secret CIA detention and torture facility for suspected terrorists.

According to John Pike, who runs the military analysis Web site GlobalSecurity.org, Diego Garcia lies at the center of American imperialist plans in case the nations of East Asia should decide that they have had enough of American military forces based on their territories. According to Pike, “[Diego Garcia] is the single most important military facility we’ve got.” The military’s goal, Pike says, is that “we’ll be able to run the planet from Guam and Diego Garcia by 2015, even if the entire Eastern Hemisphere has drop-kicked us from bases on their territory.” With characteristic hypocrisy, the Pentagon has named the Diego Garcia base “Camp Justice.”

Environmental Issues

Environmental and health issues have become the most important new focus in the long-standing conflicts between the U.S. military and civilian communities. Chief evidence is the victory of popular mobilization and civil disobedience against the Navy’s 60-year-long bombing of Vieques, a 51-square-mile island municipality six miles off the southeast coast of the U.S. territory of Puerto Rico. Katherine T. McCaffrey’s expert treatment of the four-year-long movement to force an end to the bombing of Vieques is one the most important pieces in Lutz’s anthology. The bombing of a Caribbean island inhabited by 10,000 American civilians also exposed Puerto Rico’s lack of sovereignty and the second-class status of its residents within the U.S. polity. Emphasis on environmental issues overcame the Puerto Ricans’ traditional reluctance to politicize their plight and created a broad popular movement that mobilized women and caused the Catholic and Protestant churches to join hands.

On April 19, 1999, the Vieques movement was further strengthened and united when it acquired a martyr. Two U.S. Navy F-18 jet aircraft traveling at supersonic speeds accidentally dropped two 500-pound bombs on the compound that the Navy used to survey the shelling. A civilian security guard, David Sanes, who was patrolling the area, was knocked unconscious and subsequently bled to death. The result was that civilians occupied the site for more than a year, causing the Navy to move its bombing range to North Carolina. Given their access to the site, the occupiers also discovered that the Navy was using depleted uranium ammunition on Vieques. In May 2003, the Navy was finally forced off the island. McCaffrey concludes, “After decades of secrecy surrounding its activities, the military is emerging as the single largest polluter in the United States, single-handedly producing 27,000 toxic-waste sites in this country.”

From Vieques, mobilization based on environmental and health concerns spread to the Navy-controlled island of Kahoolawe in Hawaii, where it was equally successful in forcing the Navy to pull out. Kahoolawe had been occupied and bombed by the U.S. Navy since the outbreak of World War II. Kyle Kajihiro’s essay “Resisting Militarization in Hawaii,” touches on this and other military issues in Hawaii. Kajihiro is the American Friends Service Committee’s program director in Hawaii, who since 1996 has been active in the Hawaiian sovereignty movement. His article is less a scholarly analysis of the popular protests against the huge military presence in Hawaii than a well-informed, impassioned brief for the rights of the Kanaka Maoli (native Hawaiians). Kajihiro also points out that for the first time since World War II, tourism is now a bigger part of the Hawaiian economy than the military installations. His essay is a valuable contribution to the comparatively small literature on the problems of militarism within the United States.

The essay by Ayse Gul Altinay and Amy Holmes, “Opposition to the U.S. Military Presence in Turkey in the Context of the Iraq War,” is important for three reasons. First, there is very little published on the bases in Turkey; second, Incirlik Air Base on the outskirts of Adana, Turkey, is the largest U.S. military facility in a strategically vital NATO ally; and third, the decision on March 1, 2003, of the Turkish National Assembly not to deploy Turkish forces in Iraq nor to allow the United States to use Turkey as an invasion route into Iraq was one of the Bush administration’s greatest setbacks. Public opinion polls in January 2003 revealed that 90 percent of Turks opposed U.S. imperialism against Iraq and 83 percent opposed Turkey’s cooperating with the United States. Nonetheless, major U.S. newspapers either ignored or trivialized Turkey’s opposition to U.S. war plans.

Altinay is a professor of anthropology at Sabanci University, Turkey, and the author of “The Myth of the Military Nation: Militarism, Gender, and Education in Turkey” (Palgrave Macmillan, 2004). Holmes is a doctoral candidate in sociology at the Johns Hopkins University and has written extensively on American bases in Germany and Turkey.

Turkey is not an easy place to do research on American bases. Some 41 percent of bilateral agreements between the U.S. and Turkey between 1947 and 1965 were secret. It was not known that the U.S. had stationed missiles on Turkish territory until the U.S. promised to remove them in return for the USSR’s withdrawing its missiles from Cuba. Incirlik became even more central to U.S. strategy after 1974. In that year, Turkey invaded Cyprus and the United States imposed an arms embargo on its ally. As a result, Turkey closed all 27 U.S. bases in the country except for one, Incirlik. As Altinay and Holmes write, “It is difficult to overemphasize the importance of the Incirlik Air Base for U.S. power projection in the Middle East, particularly since the early 1990s; for more than a decade, the entire Iraq policy of the United States hinged on Incirlik.”

My choice of the best article in the Lutz volume is Kozue Akibayashi’s and Suzuyo Takazato‘s “Okinawa: Women’s Struggle for Demilitarization.” The persecution of the native population of the island of Okinawa, Japan’s most southerly and poorest prefecture, by the American occupiers and the Japanese government since at least the Battle of Okinawa in 1945 has been told often and is reasonably well known in mainland Japan and among the U.S. armed forces. Akibayashi and Takazato expertly retell the essence of the story here, but what makes the article a standout is their emphasis on the mistreatment of Okinawan women and girls and their theoretically sophisticated conclusions.

Akibayashi is a researcher at the Institute for Gender Studies of Ochanomizu University in Tokyo. Takazato is one of the best-known activists in the struggle of Okinawan women to escape the threat of sexual violence by American military personnel. She is an elected member of the City Council in Naha, the capital of Okinawa, and one of the founders of Okinawa Women Act Against Military Violence, which was created in the wake of the gang rape on Sept. 4, 1995 of a 12-year-old Okinawa schoolgirl by two U.S. Marines and a sailor. The purpose of Takazato’s organization was to prevent a recurrence of attacks by the U.S. military on Okinawan women and to protect the young victim of Sept. 4 from unwanted publicity. The organization subsequently created the Rape Emergency Intervention Counseling Center in Okinawa, and has worked to end the U.S. military occupation of the island chain. Unfortunately, despite heroic efforts to get American military commanders to enforce discipline among their troops and strong representations to the Japanese government to take an interest in the plight of the Okinawans, little has changed. This has led Akibayashi and Takazato to two significant conclusions.

(1) “Integral elements of misogyny infect military training. …The military is a violence-producing institution to which sexual and gender violence are intrinsic. … The essence of military forces is their pervasive, deep-rooted contempt for women, which can be seen in military training that completely denies femininity and praises hegemonic masculinity.”

(2) “The OWAAMV [Okinawa Women Act Against Military Violence] movement illustrates from a gender perspective that ‘the protected,’ who are structurally deprived of political power, are in fact not protected by the militarized security policies; rather their livelihoods are made insecure by these very policies. The movement has also illuminated the fact that ‘gated’ bases do not confine military violence to within the bases. Those hundred-of-miles-long fences around the bases are there only to assure the readiness of the military and military operations by excluding and even oppressing the people living outside the gated bases.”

These two propositions—misogyny in the official education of American troops and hypocrisy in describing the benefits to locals of foreign military bases—are significant. I believe that they should inform future research on the American empire around the world to see if they can be verified in many different contexts and to further develop their various implications. Meanwhile, these erudite essays should cause Americans to reflect on the nature of U.S. imperialism just at the point where it is most probably starting to decline due to economic constraints and popular exhaustion with the wars and deaths it has caused.

Supreme Court: Suspects Can Be Interrogated Without Lawyer

Supreme Court: Suspects can be interrogated without lawyer

By JESSE J. HOLLAND

Go To Original

The Supreme Court on Tuesday overturned a long-standing ruling that stopped police from initiating questions unless a defendant's lawyer was present, a move that will make it easier for prosecutors to interrogate suspects.

The high court, in a 5-4 ruling, overturned the 1986 Michigan v. Jackson ruling, which said police may not initiate questioning of a defendant who has a lawyer or has asked for one unless the attorney is present. The Michigan ruling applied even to defendants who agreed to talk to the authorities without their lawyers.

The court's conservatives overturned that opinion, with Justice Antonin Scalia saying "it was poorly reasoned."

Under the Jackson opinion, police could not even ask a defendant who had been appointed a lawyer if he wanted to talk, Scalia said.

"It would be completely unjustified to presume that a defendant's consent to police-initiated interrogation was involuntary or coerced simply because he had previously been appointed a lawyer," Scalia said in the court's opinion.

Scalia, who read the opinion from the bench, said the decision will have "minimal" effects on criminal defendants because of the protections the court has provided in other decisions. "The considerable adverse effect of this rule upon society's ability to solve crimes and bring criminals to justice far outweighs its capacity to prevent a genuinely coerced agreement to speak without counsel present," Scalia said.

The Michigan v. Jackson opinion was written by Justice John Paul Stevens, the only current justice who was on the court at the time. He and Justices David Souter, Stephen Breyer and Ruth Bader Ginsburg dissented from the ruling, and in an unusual move Stevens read his dissent aloud from the bench. It was the first time this term a justice had read a dissent aloud.

"The police interrogation in this case clearly violated petitioner's Sixth Amendment right to counsel," Stevens said. Overruling the Jackson case, he said, "can only diminish the public's confidence in the reliability and fairness of our system of justice."

The Obama administration had asked the court to overturn Michigan v. Jackson, disappointing civil rights and civil liberties groups that expected President Barack Obama to reverse the policies of his Republican predecessor, George W. Bush.

The Justice Department, in a brief signed by Solicitor General Elena Kagan, said the 1986 decision "serves no real purpose" and offers only "meager benefits." The government said defendants who don't wish to talk to police don't have to and that officers must respect that decision. But it said there is no reason a defendant who wants to should not be able to respond to officers' questions.

Eleven states also echoed the administration's call to overrule the 1986 case.

The decision comes in the case of Jesse Jay Montejo, who was found guilty in 2005 of the shooting death of Louis Ferrari in the victim's home on Sept. 5, 2002.

Montejo was appointed a public defender at his Sept. 10, 2002 hearing, but never indicated that he wanted the lawyer's help. Montejo then went with police detectives to help them look for the murder weapon. While in the car, Montejo wrote a letter to Ferrari's widow incriminating himself.

When they returned to the prison, a public defender was waiting for Montejo, irate that his client had been questioned in his absence. Police used the letter against Montejo at trial, and he was convicted and sentenced to death. He appealed, but the Louisiana Supreme Court upheld the conviction and sentence.

The Supreme Court sent the case back for a determination of whether any of Montejo's other court-provided protections, like his Miranda rights, were violated.

The case is Montejo v. Louisiana, 07-1529.

France Opens Military Base in Persian Gulf

France opens military base in UAE despite Iranian concerns

Go To Original

Facility in UAE to safeguard shipping lines, fight piracy and compete with Britain and the US for influence in the Gulf

Nicolas Sarkozy today opened France's first permanent military base in the Gulf region, in a symbolic move to show his new tough line on Iran and to compete with Britain and the US for military and commercial influence in the area.

The Abu Dhabi base in the United Arab Emirates is the first foreign military installation built by France for 50 years and its first ever base outside French or African soil. It is a landmark in the long-running repositioning of French foreign policy – recently accelerated by Sarkozy – to shift geopolitical concerns away from an emphasis on Africa and further east towards the Arab world.

It is the first time that France has installed a military operation in a country where it has never been colonial master. The base, dubbed Peace Camp, was built in record time – less than 18 months. Its 500 troops and major naval and air operations will safeguard shipping lanes and reinforce the fight against piracy off the Somalian coast, but primarily send a warning message to Iran, which Sarkozy has taken a new tough stance over in recent years, heightened by concerns over Tehran's nuclear programme.

Tehran bristled last year when France announced it was building the camp 220km (137 miles) from the Iranian coast. At today's inauguration in the Emirates, Sarkozy said the base was the beginning of a long-term French engagement in the region, and not a question of "targeting" a particular country but safeguarding France's "friends" in the Emirates. He told the official Emirates news agency WAM that France was on the Emirates' side if its security was ever threatened. "Through this base, the first in the Middle East, France is ready to shoulder its responsibilities to ensure stability in this strategic region," he said.

Opposition to the base in France has included centrist leader Francois Bayrou, who said France risked being dragged into war in the region.

The US remains the major foreign military presence in the Gulf with key air bases, logistics operations and the headquarters of the 5th Fleet in Bahrain. But Elysee officials on Sarkozy's two-day visit to the region said that the French base would allow France to act in case of attacks in the region.

Sarkozy's visit to the Emirates combined his trademark double role as statesman and salesman. Flanked by ministers and business leaders, he was also seeking to raise France's commercial profile in the Emirates, the world's third-largest oil exporter, and win key defence contracts and nuclear energy deals. The UAE is already a faithful buyer of French arms – now Sarkozy is pressuring its leadership to sign a €6bn to €8bn deal to purchase French Rafale fighter jets, which are yet to find a foreign buyer anywhere in the world. He also wants to secure French contracts for two major civil nuclear reactors in the region. But in both cases deals are far from being signed and there is heavy competition from the US.

When France expands its international sphere of influence culture is always a major factor. Today Sarkozy also officially launched the opening of building works on the Louvre Abu Dhabi, an unprecedented project to build a museum and loan works from French museums to the Gulf state. The museum, competing with a neighbouring Guggenheim outpost, is expected to be finished in 2012 or 2013. The Sorbonne university has already cemented Gulf links and France is heavily investing in cultural initiatives on French language-teaching in the region.

Bilderberg Plan for 2009: Remaking the Global Political Economy

The Bilderberg Plan for 2009: Remaking the Global Political Economy

From May 14-17, the global elite met in secret in Greece for the yearly Bilderberg conference, amid scattered and limited global media attention. Roughly 130 of the world’s most powerful individuals came together to discuss the pressing issues of today, and to chart a course for the next year. The main topic of discussion at this years meeting was the global financial crisis, which is no surprise, considering the list of conference attendees includes many of the primary architects of the crisis, as well as those poised to “solve” it.

The Agenda: The Restructuring of the Global Political Economy

Before the meeting began, Bilderberg investigative journalist Daniel Estulin reported on the main item of the agenda, which was leaked to him by his sources inside. Though such reports cannot be verified, his sources, along with those of veteran Bilderberg tracker, Jim Tucker, have proven to be shockingly accurate in the past. Apparently, the main topic of discussion at this year's meeting was to address the economic crisis, in terms of undertaking, “Either a prolonged, agonizing depression that dooms the world to decades of stagnation, decline and poverty ... or an intense-but-shorter depression that paves the way for a new sustainable economic world order, with less sovereignty but more efficiency.” Other items on the agenda included a plan to “continue to deceive millions of savers and investors who believe the hype about the supposed up-turn in the economy. They are about to be set up for massive losses and searing financial pain in the months ahead,” and “There will be a final push for the enactment of Lisbon Treaty, pending on Irish voting YES on the treaty in Sept or October,”[1] which would give the European Union massive powers over its member nations, essentially making it a supranational regional government, with each country relegated to more of a provincial status.

Shortly after the meetings began, Bilderberg tracker Jim Tucker reported that his inside sources revealed that the group has on its agenda, “the plan for a global department of health, a global treasury and a shortened depression rather than a longer economic downturn.” Tucker reported that Swedish Foreign Minister and former Prime Minister, Carl Bildt, “Made a speech advocating turning the World Health Organization into a world department of health, advocating turning the IMF into a world department of treasury, both of course under the auspices of the United Nations.” Further, Tucker reported that, “Treasury Secretary Geithner and Carl Bildt touted a shorter recession not a 10-year recession ... partly because a 10 year recession would damage Bilderberg industrialists themselves, as much as they want to have a global department of labor and a global department of treasury, they still like making money and such a long recession would cost them big bucks industrially because nobody is buying their toys.....the tilt is towards keeping it short.”[2]


After the meetings finished, Daniel Estulin reported that, “One of Bilderberg’s primary concerns according to Estulin is the danger that their zeal to reshape the world by engineering chaos in order to implement their long term agenda could cause the situation to spiral out of control and eventually lead to a scenario where Bilderberg and the global elite in general are overwhelmed by events and end up losing their control over the planet.”[3]


On May 21, the Macedonian International News Agency reported that, “A new Kremlin report on the shadowy Bilderberg Group, who this past week held their annual meeting in Greece, states that the West’s financial, political and corporate elite emerged from their conclave after coming to an agreement that in order to continue their drive towards a New World Order dominated by the Western Powers, the US Dollar has to be ‘totally’ destroyed.” Further, the same Kremlin report apparently stated that, “most of the West’s wealthiest elite convened at an unprecedented secret meeting in New York called for and led by” David Rockefeller, “to plot the demise of the US Dollar.”[4]

The Secret Meeting of Billionaires

The meeting being referred to was a secret meeting where, “A dozen of the richest people in the world met for an unprecedented private gathering at the invitation of Bill Gates and Warren Buffett to talk about giving away money,” held at Rockefeller University, and included notable philanthropists such as Gates, Buffett, New York Mayor Michael Bloomberg, George Soros, Eli Broad, Oprah Winfrey, David Rockefeller Sr. and Ted Turner. One attendee stated that, “It wasn’t secret,” but that, “It was meant to be a gathering among friends and colleagues. It was something folks have been discussing for a long time. Bill and Warren hoped to do this occasionally. They sent out an invite and people came.” Chronicle of Philanthropy editor Stacy Palmer said, “Given how serious these economic times are, I don't think it's surprising these philanthropists came together,” and that, “They don't typically get together and ask each other for advice.” The three hosts of the meeting were Buffet, Gates and David Rockefeller.[5] [See: Appendix 2: Bilderberg Connections to the Billionaire’s Meeting].



Bilderberg founding member David Rockefeller, Honourary Chairman of the Council on Foreign Relations, Honourary Chairman and Founder of the Trilateral Commission, Chairman of the Council of the Americas and the Americas Society, former Chairman and CEO of Chase Manhattan.

At the meeting, “participants steadfastly refused to reveal the content of the discussion. Some cited an agreement to keep the meeting confidential. Spokesmen for Mr. Buffett, Mr. Bloomberg, Mr. Gates, Mr. Rockefeller, Mr. Soros and Ms. Winfrey and others dutifully declined comment, though some confirmed attendance.”[6] Reports indicate that, “They discussed how to address the global slump and expand their charitable activities in the downturn.”[7]


The UK newspaper The Times reported that these “leading billionaires have met secretly to consider how their wealth could be used to slow the growth of the world’s population,” and that they “discussed joining forces to overcome political and religious obstacles to change.” Interestingly, “The informal afternoon session was so discreet that some of the billionaires’ aides were told they were at ‘security briefings’.” Further, “The billionaires were each given 15 minutes to present their favourite cause. Over dinner they discussed how they might settle on an ‘umbrella cause’ that could harness their interests,” and what was decided upon was that, “they agreed that overpopulation was a priority.” Ultimately, “a consensus emerged that they would back a strategy in which population growth would be tackled as a potentially disastrous environmental, social and industrial threat,” and that, “They need to be independent of government agencies, which are unable to head off the disaster we all see looming.” One guest at the meeting said that, “They wanted to speak rich to rich without worrying anything they said would end up in the newspapers, painting them as an alternative world government.”[8]

The Leaked Report

Bilderberg investigative reporter Daniel Estulin reportedly received from his inside sources a 73-page Bilderberg Group meeting wrap-up for participants, which revealed that there were some serious disagreements among the participants. “The hardliners are for dramatic decline and a severe, short-term depression, but there are those who think that things have gone too far and that the fallout from the global economic cataclysm cannot be accurately calculated if Henry Kissinger's model is chosen. Among them is Richard Holbrooke. What is unknown at this point: if Holbrooke's point of view is, in fact, Obama's.” The consensus view was that the recession would get worse, and that recovery would be “relatively slow and protracted,” and to look for these terms in the press over the next weeks and months.


Estulin reported, “that some leading European bankers faced with the specter of their own financial mortality are extremely concerned, calling this high wire act "unsustainable," and saying that US budget and trade deficits could result in the demise of the dollar.” One Bilderberger said that, “the banks themselves don't know the answer to when (the bottom will be hit).” Everyone appeared to agree, “that the level of capital needed for the American banks may be considerably higher than the US government suggested through their recent stress tests.” Further, “someone from the IMF pointed out that its own study on historical recessions suggests that the US is only a third of the way through this current one; therefore economies expecting to recover with resurgence in demand from the US will have a long wait.” One attendee stated that, “Equity losses in 2008 were worse than those of 1929,” and that, “The next phase of the economic decline will also be worse than the '30s, mostly because the US economy carries about $20 trillion of excess debt. Until that debt is eliminated, the idea of a healthy boom is a mirage.”[9]


According to Jim Tucker, Bilderberg is working on setting up a summit in Israel from June 8-11, where “the world’s leading regulatory experts” can “address the current economic situation in one forum.” In regards to the proposals put forward by Carl Bildt to create a world treasury department and world department of health under the United Nations, the IMF is said to become the World Treasury, while the World Health Organization is to become the world department of health. Bildt also reaffirmed using “climate change” as a key challenge to pursue Bilderberg goals, referring to the economic crisis as a “once-in-a-generation crisis while global warming is a once-in-a-millennium challenge.” Bildt also advocated expanding NAFTA through the Western hemisphere to create an American Union, using the EU as a “model of integration.”


The IMF reportedly sent a report to Bilderberg advocating its rise to becoming the World Treasury Department, and “U.S. Treasury Secretary Timothy Geithner enthusiastically endorsed the plan for a World Treasury Department, although he received no assurance that he would become its leader.” Geithner further said, “Our hope is that we can work with Europe on a global framework, a global infrastructure which has appropriate global oversight.”[10]

Bilderberg’s Plan in Action?

Reorganizing the Federal Reserve

Following the Bilderberg meeting, there were several interesting announcements made by key participants, specifically in regards to reorganizing the Federal Reserve. On May 21, it was reported that US Treasury Secretary Timothy Geithner “is believed to be leaning heavily towards giving the Federal Reserve a central role in future regulation,” and “it is understood that the Fed would take on some of the work currently undertaken by the US Securities and Exchange Commission.”[11]


On Wednesday, May 20, Geithner spoke before the Senate Banking Committee, at which he stated that, “there are important indications that our financial system is starting to heal.” In regards to regulating the financial system, Geithner stated that, “we must ensure that international rules for financial regulation are consistent with the high standards we will be implementing in the United States.”[12]



US Treasury Secretary Timothy Geithner, former President of the Federal Reserve Bank of New York


Bloomberg reported that, “The Obama administration may call for stripping the Securities and Exchange Commission of some of its powers under a regulatory reorganization,” and that, “The proposal, still being drafted, is likely to give the Federal Reserve more authority to supervise financial firms deemed too big to fail. The Fed may inherit some SEC functions, with others going to other agencies.” Interestingly, “SEC Chairman Mary Schapiro’s agency has been mostly absent from negotiations within the administration on the regulatory overhaul, and she has expressed frustration about not being consulted.”


It was reported that “Treasury Secretary Timothy Geithner was set to discuss proposals to change financial regulations last night at a dinner with National Economic Council Director Lawrence Summers [who was also present at Bilderberg], former Fed Chairman Paul Volcker [also at Bilderberg], ex-SEC Chairman Arthur Levitt and Elizabeth Warren, the Harvard University law professor who heads the congressional watchdog group for the $700 billion Troubled Asset Relief Program.”[13] The Federal Reserve is a privately owned central bank, owned by its shareholders, consisting of the major banks the make up each regional Fed bank (the largest of which is JP Morgan Chase and the Federal Reserve Bank of New York). This plan would essentially give a privately owned bank, which has governmental authority, the ability to regulate the banks that own it. It’s the equivalent of getting a Colonel to guard a General to whom he is directly answerable. Talk about the fox guarding the hen house. It is literally granting ownership over the financial regulator to the banks being regulated.


As Market Watch, an online publication of the Wall Street Journal, reported, “The Federal Reserve, created nearly 100 years ago in the aftermath of a financial panic, could be transformed into a different agency as the Obama administration reinvents the way government interacts with the financial system.” Referring to Geithner’s Senate appearance, it was reported that, “Geithner was also grilled on the cozy relationships that exist between the big banks and the regional Federal Reserve banks. Before Geithner joined the administration, he was president of the New York Fed, which is a strange public-private hybrid institution that is actually owned and run by the banks.” In response, “Geithner insisted that the private banks have no say over the policies of the New York Fed, but he acknowledged that the banks do have a say in hiring the president, who does make policy. The chairman of the New York Fed, Stephen Friedman, was forced to resign earlier this month because of perceived conflicts of interest due to his large holdings in Goldman Sachs.”[14]

The IMF as a Global Treasury


The Bilderberg agenda of creating a global treasury has already been started prior to the Bilderberg meeting, with decisions made during the G20 financial summit in April. Although the G20 seemed to frame it more in context of being formed into a global central bank, although it is likely the IMF could fill both roles.

Following the G20 meeting at the beginning of April, 2009, it was reported that, “The world is a step closer to a global currency, backed by a global central bank, running monetary policy for all humanity,” as the Communiqué released by the G20 leaders stated that, “We have agreed to support a general SDR allocation which will inject $250bn (£170bn) into the world economy and increase global liquidity,” and that, “SDRs are Special Drawing Rights, a synthetic paper currency issued by the International Monetary Fund that has lain dormant for half a century.” Essentially, “they are putting a de facto world currency into play. It is outside the control of any sovereign body.”[15] [See Appendix 2: Creating a Central Bank of the World]

Following the Bilderberg meeting, “President Obama has asked Congress to authorize $100 billion in loans to the International Monetary Fund (IMF) to help create a $500 billion global bailout fund,” which would give the IMF the essential prerogative of a global treasury, providing bailouts for countries in need around the world. Further, “the bill would allow the IMF to borrow up to $100 billion from the U.S. and increase the U.S. fiscal contribution to the IMF by $8 billion.” Elaborating on the program, it was reported that, “World leaders began on the global bailout initiative, called the New Arrangement for Borrowing (NAB), at the G-20 summit in early April. The president agreed at that time to make the additional funds available.” Obama wrote that, “Treasury Secretary Geithner concluded that the size of the NAB is woefully inadequate to deal with the type of severe economic and financial crisis we are experiencing, and I agree with him.”[16]


With the G20 decision to increase the usage of IMF Special Drawing Rights (SDRs), forming a de facto world currency, it was recently reported that, “Sub-Saharan Africa will receive around $10 billion from the IMF in Special Drawing Rights (SDRs) to help its economies weather the global financial crisis,” and that, “As part of a $1.1 trillion deal to combat the world economic downturn agreed at April's G20 summit, the IMF will issue $250 billion worth of SDRs, which can be used to boost foreign currency reserves.”[17]


Recent reports have also indicated that the IMF’s role in issuing SDRs goes hand in hand with the Bilderberg discussion on the potential collapse of the US dollar, and, “Transforming the dollar standard into an SDR-based system would be a major break with a policy that has lasted more than 60 years.” It was reported that, “There are two ways in which the dollar’s role in the international monetary system can be reduced. One possibility is a gradual, market-determined erosion of the dollar as a reserve currency in favor of the euro. But, while the euro’s international role – especially its use in financial markets – has increased since its inception, it is hard to envisage it overtaking the dollar as the dominant reserve currency in the foreseeable future.” However, “With the dollar’s hegemony unlikely to be seriously undermined by market forces, at least in the short and medium-term, the only way to bring about a major reduction in its role as a reserve currency is by international agreement.” This is where the SDRs come into play, as “One way to make the SDR the major reserve currency relatively soon would be to create and allocate a massive amount of new SDRs to the IMF’s members.”[18] This is, interestingly, exactly what is happening with Africa and the IMF now.


Former IMF Managing Director Jacques de Larosière recently stated that the current financial crisis, “given its scope, presents a unique opening to improve institutions, and there is already a danger that the chance might be missed if the different actors cannot agree to changes by the time economic growth resumes.” He is now an adviser with BNP Paribas, a corporation highly represented at Bilderberg meetings, and he was head of the Treasury of France when Valéry Giscard d’Estaing was President of France, who is a regular of the Bilderberg Group.[19]

The Guardian Covers Bilderberg

The British paper, the Guardian, was the only major mainstream news publication to provide ongoing coverage of the Bilderberg meeting over the weekend. His first columns were satirical and slightly mocking, referring to it as, “A long weekend at a luxury hotel, where the world's elite get to shake hands, clink glasses, fine-tune their global agenda and squabble over who gets the best sun loungers. I'm guessing that Henry Kissinger brings his own, has it helicoptered in and guarded 24/7 by a CIA special ops team.”[20] However, as the weekend dragged on, his reporting took a change of tone. He reported on the Saturday that, “I know that I'm being followed. I know because I've just been chatting to the plainclothes policemen I caught following me,” and he was arrested twice in the first day of the meetings for attempting to take photographs as the limousines entered the hotel.[21]


He later reported that he wasn’t sure what they were discussing inside the hotel, but that he has “a sense of something rotten in the state of Greece,” and he further stated, “Three days and I've been turned into a suspect, a troublemaker, unwanted, ill at ease, tired and a bit afraid.” He then went on to write that, “Bilderberg is all about control. It's about "what shall we do next?" We run lots of stuff already, how about we run some more? How about we make it easier to run stuff? More efficient. Efficiency is good. It would be so much easier with a single bank, a single currency, a single market, a single government. How about a single army? That would be pretty cool. We wouldn't have any wars then. This prawn cocktail is GOOD. How about a single way of thinking? How about a controlled internet?,” and then, “How about not.”


He makes a very astute point, countering the often postulated argument that Bilderberg is simply a forum where people can speak freely, writing: “I am so unbelievably backteeth sick of power being flexed by the few. I've had it flexed in my face for three days, and it's up my nose like a wasp. I don't care whether the Bilderberg Group is planning to save the world or shove it in a blender and drink the juice, I don't think politics should be done like this,” and the author, Charlie Skelton, eloquently stated, “If they were trying to cure cancer they could do it with the lights on.” He further explained that, “Bilderberg is about positions of control. I get within half a mile of it, and suddenly I'm one of the controlled. I'm followed, watched, logged, detained, detained again. I'd been put in that position by the "power" that was up the road.”[22]


On Sunday, May 17, Skelton reported that when he asked the police chief why he was being followed, the chief responded asking, “Why you here?” to which Skelton said he was there to cover the Bilderberg conference, after which the chief stated, “Well, that is the reason! That is why! We are finished!”[23] Do reporters get followed around and stalked by police officers when they cover the World Economic Forum? No. So why does it happen with Bilderberg if all it is, is a conference to discuss ideas freely?


On the Monday following the conference, Skelton wrote that, “It isn't just me who's been hauled into police custody for daring to hang around half a mile from the hotel gates. The few journalists who've made the trip to Vouliagmeni this year have all been harassed and harried and felt the business end of a Greek walkie-talkie. Many have been arrested. Bernie, from the American Free Press, and Gerhard the documentarian (sounds like a Dungeons and Dragons character) chartered a boat from a nearby marina to try to get photos from the sea. They were stopped three miles from the resort. By the Greek navy.” As Skelton said himself, “My dispatches on the 2009 conference, if they mean anything at all, represent nothing more acutely than the absence of thorough mainstream reporting.”[24]


Skelton’s final report on Bilderberg from May 19, showed how far he had gone in his several days of reporting on the meeting. From writing jokingly about the meeting, to discovering that he was followed by the Greek State Security force. Skelton mused, “So who is the paranoid one? Me, hiding in stairwells, watching the pavement behind me in shop windows, staying in the open for safety? Or Bilderberg, with its two F-16s, circling helicopters, machine guns, navy commandos and policy of repeatedly detaining and harassing a handful of journalists? Who's the nutter? Me or Baron Mandelson? Me or Paul Volker, the head of Obama's economic advisory board? Me or the president of Coca-Cola?”


Skelton stated that, “Publicity is pure salt to the giant slug of Bilderberg. So I suggest next year we turn up with a few more tubs. If the mainstream press refuses to give proper coverage to this massive annual event, then interested citizens will have to: a people's media.”


Amazingly, Skelton made the pronouncement that what he learned after the Bilderberg conference, was that, “we must fight, fight, fight, now – right now, this second, with every cubic inch of our souls – to stop identity cards,” as, “It's all about the power to ask, the obligation to show, the justification of one's existence, the power of the asker over the subservience of the asked.” He stated that he “learned this from the random searches, detentions, angry security goon proddings and thumped police desks without number that I've had to suffer on account of Bilderberg: I have spent the week living in a nightmare possible future and many different terrible pasts. I have had the very tiniest glimpse into a world of spot checks and unchecked security powers. And it has left me shaken. It has left me, literally, bruised.” Pointedly, he explains that, “The identity card turns you from a free citizen into a suspect.”[25]

Who was there?

Royalty



Queen Beatrix of the Netherlands, the largest shareholder in Royal Dutch Shell

Among the members of the Bilderberg Group are various European monarchs. At this years meeting, Queen Beatrix of the Netherlands was present, who happens to be the largest single shareholder in Royal Dutch Shell, one of the world’s largest corporations. She was joined by one of her three sons, Prince Constantijn, who also attended the meeting. Prince Constantijn has worked with the Dutch European Commissioner for the EU, as well as having been a strategic policy consultant with Booz Allen & Hamilton in London, a major strategy and technology consulting firm with expertise in Economic and Business Analysis, Intelligence and Operations Analysis and Information Technology, among many others. Prince Constantijn has also been a policy researcher for RAND Corporation in Europe. RAND was initially founded as a global policy think tank that was formed to offer research and analysis to the US Armed Forces, however, it now works with governments, foundations, international organizations and commercial organizations.[26] Also present among European Royalty was Prince Philippe of Belgium, and Queen Sofia of Spain.

Private Bankers


As usual, the list of attendees was also replete with names representing the largest banks in the world. Among them, David Rockefeller, former CEO and Chairman of Chase Manhattan, now JP Morgan Chase, of which he was, until recently, Chairman of the International Advisory Board; and still sits as Honourary Chairman of the Council on Foreign Relations, Chairman of the Board of the Americas Society and Council of the Americas, Honourary Chairman of the Trilateral Commission, which he founded alongside Zbigniew Brzezinski; also a founding member of the Bilderberg Group, prominent philanthropist and is the current patriarch of one of the world’s richest and most powerful banking dynasties.


Also present was Josef Ackermann, a Swiss banker who is CEO of Deutsche Bank, also a non-executive director of Royal Dutch Shell; Deputy Chairman of Siemens AG, Europe’s largest engineering corporation; he is also a member of the International Advisory Council of Zurich Financial Services Group; Chairman of the Board of the Institute International of Finance, the world’s only global association of financial institutions; and Vice Chairman of the Foundation Board of the World Economic Forum.[27]


Roger Altman was also present at the Bilderberg meeting, an investment banker, private equity investor and former Deputy Treasury Secretary in the Clinton Administration. Other bankers at this years meeting include Ana Patricia Botin, Chairman of the Spanish bank, Banco Español de Crédito, formerly having worked with JP Morgan; Frederic Oudea, CEO and newly appointed Chairman of the Board of French bank Societe Generale; Tommaso Padoa-Schioppa, an Italian banker and economist, formerly Italy’s Minister of Economy and Finance; Jacob Wallenberg, Chairman of Investor AB; Marcus Wallenberg, CEO of Investor AB; and George David, CEO of United Technologies Corporation, who also sits on the board of Citigroup, member of the Business Council, the Business Roundtable, and is Vice Chairman of the Peterson Institute for International Economics. [For more on the Peterson Institute, see: Appendix 1]


Canadian bankers include W. Edmund Clark, President and CEO of TD Bank Financial Group, also a member of the board of directors of the C.D. Howe Institute, a prominent Canadian think tank; Frank McKenna, Deputy Chairman of TD Bank Financial Group, former Canadian Ambassador to the United States, former Premier of New Brunswick; and Indira Samarasekera, President of the University of Alberta, who is also on the board of Scotiabank, one of Canada’s largest banks.

Central Bankers

Of course, among the notable members of the Bilderberg Group, are the world’s major central bankers. Among this years members are the Governor of the National Bank of Greece, Governor of the Bank of Italy, President of the European Investment Bank, James Wolfensohn, former President of the World Bank, and Nout Wellink, on the board of the Bank for International Settlements (BIS).[28] Jean-Claude Trichet, the President of the European Central Bank was also present.[29] There is no indication that the Governor of the Federal Reserve, Ben Bernanke was present, which would be an odd turn of events, considering that the Federal Reserve Governor is always present at Bilderberg meetings, alongside the President of the Federal Reserve Bank of New York, William C. Dudley. I have contacted the New York Fed inquiring if Dudley visited Greece or went to any meetings in Greece between May 14-17, or if another senior representative from the New York Fed went in his stead. I have yet to get a response.

The Obama Administration at Bilderberg



National Security Adviser General James Jones

The Obama administration was heavily represented at this years Bilderberg meeting. Among the attendees were Keith B. Alexander, a Lieutenant General of U.S. Army and Director of the National Security Agency, the massive spying agency of the United States; Timothy Geithner, US Treasury Secretary and former President of the Federal Reserve Bank of New York; Richard Holbrooke, the Obama administration’s special envoy for Afghanistan and Pakistan; General James Jones, United States National Security Advisor; Henry Kissinger, Obama’s special envoy to Russia, longtime Bilderberg member and former Secretary of State and National Security Advisor; Dennis Ross, special advisor for the Persian Gulf and Southwest Asia to Secretary of State Hillary Clinton; David Patraeus, Commander of CENTCOM, (U.S. Central Command, in the Middle East), Lawrence Summers, Director of the White House's National Economic Council, former Treasury Secretary in the Clinton administration, former President of Harvard University, former Chief Economist of the World Bank; Paul Volcker, former Governor of the Federal Reserve System and Chair of Obama’s Economic Recovery Advisory Board; Robert Zoellick, former Chairman of Goldman Sachs and current President of the World Bank;[30] and Deputy Secretary of State James Steinberg.[31]

Other Notable Names

Among many others present at the meeting are Viscount Étienne Davignon, former Vice President of the European Commission, and Honourary Chairman of the Bilderberg Group; Francisco Pinto Balsemão, former Prime Minister of Portugal; Franco Bernabè, CEO of Telecom Italia and Vice Chairman of Rothschild Europe; Carl Bildt, former Prime Minister of Sweden; Kenneth Clarke, Shadow Business Secretary in the UK; Richard Dearlove, former head of Britain’s Secret Intelligence Services (MI6); Donald Graham, CEO of the Washington Post Company; Jaap De Hoop Scheffer, Secretary-General of NATO; John Kerr, member of the British House of Lords and Deputy Chairman of Royal Dutch Shell; Jessica Matthews, President of the Carnegie Endowment for International Peace; Richard Perle of the American Enterprise Institute; Romano Prodi, former Italian Prime Minister; J. Robert S. Prichard, CEO of Torstar Corporation and President Emeritus of the University of Toronto; Peter Sutherland, former Director General of the General Agreement on Tariffs and Trade (GATT), first Director General of the World Trade Organization (WTO), and is currently Chairman of British Petroleum (BP) and Goldman Sachs International as well as being a board member of the Royal Bank of Scotland, Chairman of the Trilateral Commission, Vice Chairman of the European Roundtable of Industrialists, and longtime Bilderberg member; Peter Thiel, on the board of directors of Facebook; Jeroen van der Veer, CEO of Royal Dutch Shell; Martin Wolf, Associate Editor and Chief Economics Commentator of the Financial Times newspaper; and Fareed Zakaria, US journalist and board member of the Council on Foreign Relations.[32] There were also some reports that this years meeting would include Google CEO Eric Schmidt, as well as Wall Street Journal Editor Paul Gigot,[33] both of whom attended last years meeting.[34]

Conclusion

Clearly, it was the prerogative of this year’s Bilderberg meeting to exploit the global financial crisis as much as possible to reach goals they have been striving toward for many years. These include the creation of a Global Treasury Department, likely in conjunction with or embodied in the same institution as a Global Central Bank, both of which seem to be in the process of being incorporated into the IMF.


Naturally, Bilderberg meetings serve the interests of the people and organizations that are represented there. Due to the large amount of representatives from the Obama administration that were present, US policies revolving around the financial crisis are likely to have emerged from and serve the interests of the Bilderberg Group. Given the heavy representation of Obama’s foreign policy establishment at the Bilderberg meeting, it seemed surprising to not have received any more information regarding US foreign policy from this year’s meeting, perhaps having to do with Pakistan and Afghanistan.


However, the US recently decided to fire the general who oversaw the Afghan war, being replaced with “Lt. Gen. Stanley McChrystal, a former Green Beret who recently commanded the military's secretive special operations forces in Iraq.”[35] From 2003 to 2008, McChrystal “led the Pentagon's Joint Special Operations Command (JSOC), which oversees the military's most sensitive forces, including the Army's Delta Force,” and who Pulitzer-Prize winning investigative journalist Seymour Hersh singled out as the head of VP Cheney’s “executive assassination wing.”[36]


So, given these recent changes, as well as the high degree of representation Obama’s foreign policy establishment held at Bildebrerg this year, there were likely to have been some decisions or at least discussion of the escalation of the Afghan war and expansion into Pakistan. However, it is not surprising that the main item on the agenda was the global financial crisis. Without a doubt, the next year will be an interesting one, and the elite are surely hoping to make it a productive one.


APPENDIX 1: Bilderberg Connections to the Billionaire’s Meeting

Peter G. Peterson, one of the guests in attendance at the secret billionaires meeting, was the former United States Secretary of Commerce in the Nixon administration, Chairman and CEO of Lehman Brothers, Kuhn, Loeb Inc., from 1977 to 1984, he co-founded the prominent private equity and investment management firm, the Blackstone Group, of which he is currently Senior Chairman, and in 1985, he became Chairman of the Council on Foreign Relations, taking over when David Rockefeller stepped down from that position. He founded the Peterson Institute for International Economics and was Chairman of the New York Federal Reserve Bank from 2000-2004. The Peterson Institute for International Economics is a major world economic think tank, which seeks to “inform and shape public debate,” from which, “Institute studies have helped provide the intellectual foundation for many of the major international financial initiatives of the past two decades: reform of the International Monetary Fund (IMF), adoption of international banking standards, exchange rate systems in the G-7 and emerging-market economies, policies toward the dollar, the euro, and other important currencies, and responses to debt and currency crises (including the current crisis of 2008–09).” It has also “made important contributions to key trade policy decisions” such as the development of the World Trade Organization, NAFTA, APEC, and East Asian regionalism.[37]


It has a prominent list of names on its board of directors. Peter G. Peterson is Chairman of the board; George David, Chairman of United Technologies is Vice Chairman, as well as being a board member of Citigroup, and was a guest at this year’s Bilderberg meeting; Chen Yuan, Governor of the China Development Bank and former Deputy Governor of the People’s Bank of China (China’s central bank); Jessica Einhorn, Dean of Washington's Paul H. Nitze School of Advanced International Studies (SAIS) of the Johns Hopkins University, former Visiting Fellow of the International Monetary Fund (IMF), former Managing Director of the World Bank, and currently on the board of Time Warner and the Council on Foreign Relations; Stanley Fischer, Governor of the Central Bank of Israel, former Vice President at the World Bank, former Managing Director at the IMF, former Vice Chairman of Citigroup, and has also been a regular participant in Bilderberg meetings; Carla A. Hills, former US Trade Representative, and was the prime negotiator of NAFTA, she sits on the International Advisory Boards of American International Group, the Coca-Cola Company, Gilead Sciences, J.P. Morgan Chase, member of the Executive Committee of the Trilateral Commission, Co-Chair of the Council on Foreign Relations, and played a key part in the CFR document, “Building a North American Community,” which seeks to remodel North America following along the lines of the European Union, and she has also been a prominent Bilderberg member; David Rockefeller also sits on the Peterson Institute’s board, as well as Lynn Forester de Rothschild; Jean-Claude Trichet, President of the European Central Bank, who is at every Bilderberg meeting; Paul A. Volcker, former Governor of the Federal Reserve System, regular participant of Bilderberg meetings, and current Chair of Obama’s Economic Recovery Advisory Board.


Honourary Directors of the Peterson Institute include Bilderbergers Alan Greenspan, former Chairman of the Board of Governors of the Federal Reserve System, a prime architect of the current crisis; Frank E. Loy, former Under Secretary of State for Global Affairs, and is on the boards of Environmental Defense, the Pew Center for Global Climate Change, Resources for the Future, and Population Services International; George P. Shultz, former US Secretary of State in the Reagan administration, President and Director of Bechtel Group and former Secretary of the Treasury.[38]

APPENDIX 2: Creating a Central Bank of the World

Jeffrey Garten, Undersecretary of Commerce for International Trade in the Clinton administration, former Dean of the Yale School of Management, previously served on the White House Council on International Economic Policy under the Nixon administration and on the policy planning staffs of Secretaries of State Henry Kissinger and Cyrus Vance of the Ford and Carter administrations. He also was a managing director of Lehman Brothers and the Blackstone Group, is also a member of the Council on Foreign Relations. As early as 1998, Garten wrote an article for the New York Times in which he advocated the creation of a global central bank.[39]


Amid the current financial crisis, Garten wrote an article for the Financial Times in which he advocated for “the establishment of a Global Monetary Authority to oversee markets that have become borderless,” acting as a global central bank.[40] In late October, Garten wrote an article for Newsweek in which he said that world “leaders should begin laying the groundwork for establishing a global central bank.”[41]


Three days after the publication of Garten’s Newsweek article, it was reported that, “The International Monetary Fund may soon lack the money to bail out an ever growing list of countries crumbling across Eastern Europe, Latin America, Africa, and parts of Asia, raising concerns that it will have to tap taxpayers in Western countries for a capital infusion or resort to the nuclear option of printing its own money.” Further, “The nuclear option is to print money by issuing Special Drawing Rights, in effect acting as if it were the world's central bank.”[42]

[For a detailed look at the moves to create a global central bank, regional currencies, a global reserve currency and a world governing body, see: Andrew G. Marshall, The Financial New World Order: Towards a Global Currency and World Government: Global Research, April 6, 2009]

Endnotes

[1] CFP, Annual Elite Conclave, 58th Bilderberg Meeting to be held in Greece, May 14-17. Canadian Free Press: May 5, 2009:
http://canadafreepress.com/index.php/article/10854

[2] Paul Joseph Watson, Bilderberg Wants Global Department Of Health, Global Treasury. Prison Planet: May 16, 2009:
http://www.infowars.com/bilderberg-wants-global-department-of-health-global-treasury/

[3] Paul Joseph Watson, Bilderberg Fears Losing Control In Chaos-Plagued World. Prison Planet: May 18, 2009:
http://www.prisonplanet.com/bilderberg-fears-losing-control-in-chaos-plagued-world.html

[4] Sorcha Faal, Bilderberg Group orders destruction of US Dollar? MINA: May 21, 2009:
http://macedoniaonline.eu/content/view/6807/53/

[5] Kristi Heim, What really happened at the billionaires' private confab. The Seattle Times: May 20, 2009:
http://seattletimes.nwsource.com/html/thebusinessofgiving/2009244202_what_really_happened_at_the_bi.html

[6] A. G. Sulzberger, The Rich Get … Together (Shhh, It Was a Secret). The New York Times: May 20, 2009:
http://cityroom.blogs.nytimes.com/2009/05/20/the-rich-get-together-shhh-it-was-a-secret/

[7] Chosun, American Billionaires Gather to Discuss Slump. The Chosun Ilbo: May 22, 2009:
http://english.chosun.com/site/data/html_dir/2009/05/22/2009052200772.html

[8] John Harlow, Billionaire club in bid to curb overpopulation. The Sunday Times: May 24, 2009:
http://www.timesonline.co.uk/tol/news/world/us_and_americas/article6350303.ece

[9] Press Release, Investigative Author, Daniel Estulin Exposes Bilderberg Group Plans. PRWeb: May 22, 2009:
http://www.prweb.com/releases/Bilderberg_Group_Meeting/Daniel_Estulin/prweb2453144.htm

[10] James P. Tucker Jr., BILDERBERG AGENDA EXPOSED. American Free Press: June 1, 2009:
http://www.americanfreepress.net/html/bilderberg_2009_179.html

[11] James Quinn, Tim Geithner to reform US financial regulation. The Telegraph: May 21, 2009:
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/5359527/Tim-Geithner-to-reform-US-financial-regulation.html

[12] Greg Menges, U. S. Secretary of the Treasury Timothy F. Geithner speech before the Senate Banking Committee. Examiner: May 20, 2009:
http://www.examiner.com/x-8184-Boston-Investing-Examiner~y2009m5d20-U-S-Secretary-of-the-Treasury-Timothy-F-Geithner-speech-before-the-Senate-Banking-Committee

[13] Robert Schmidt and Jesse Westbrook, U.S. May Strip SEC of Powers in Regulatory Overhaul. Bloomberg: May 20: 2009:
http://www.bloomberg.com/apps/news?pid=20601087&sid=a18ctNv3FDcw

[14] Rex Nutting, Fed could be completely retooled, Geithner says. Market Watch: May 20, 2009:
http://www.marketwatch.com/story/fed-could-be-completely-retooled-geithner-says

[15] Ambrose Evans-Pritchard, The G20 moves the world a step closer to a global currency. The Telegraph: April 3, 2009:
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/5096524/The-G20-moves-the-world-a-step-closer-to-a-global-currency.html

[16] Marie Magleby, Obama Wants U.S. to Loan $100 Billion to Global Bailout Fund. CNS News: May 20, 2009:
http://www.cnsnews.com/public/content/article.aspx?RsrcID=48329

[17] Joe Bavier, Sub-Saharan Africa to receive $10 bln in SDRs-IMF. Reuters: May 25, 2009:
http://www.reuters.com/article/latestCrisis/idUSLP336909

[18] Onno Wijnholds, The Dollar’s Last Days? International Business Times: May 18, 2009:
http://www.ibtimes.com/articles/20090518/dollar-rsquolast-days.htm

[19] MATTHEW SALTMARSH, Former I.M.F. Chief Sees Opportunity in Crisis. The New York Times: May 22, 2009:
http://www.nytimes.com/2009/05/23/business/global/23spot.html?ref=global

[20] Charlie Skelton, Our man at Bilderberg: in pursuit of the world's most powerful cabal. The Guardian: May 13, 2009:
http://www.guardian.co.uk/world/2009/may/13/in-search-of-bilderberg

[21] Charlie Skelton, Our man at Bilderberg: They're watching and following me, I tell you. The Guardian: May 15, 2009:
http://www.guardian.co.uk/world/2009/may/15/bilderberg-charlie-skelton-dispatch

[22] Charlie Skelton, Our man at Bilderberg: I'm ready to lose control, but they're not. The Guardian: May 15, 2009:
http://www.guardian.co.uk/world/2009/may/15/bilderberg-charlie-skelton-dispatch1

[23] Charlie Skelton, Our man at Bilderberg: 'You are not allowed to take pictures of policemen!' The Guardian: May 17, 2009:
http://www.guardian.co.uk/world/2009/may/17/charlie-skelton-bilderberg

[24] Charlie Skelton, Our man at Bilderberg: Fear my pen. The Guardian: May 18, 2009:
http://www.guardian.co.uk/world/2009/may/18/bilderberg-charlie-skelton-dispatch

[25] Charlie Skelton, Our man at Bilderberg: Let's salt the slug in 2010. The Guardian: May 19, 2009:
http://www.guardian.co.uk/news/blog/2009/may/19/bilderberg-skelton-greece

[26] Dutch Royal House, Work and official duties. Prince Constantijn:
http://www.koninklijkhuis.nl/english/content.jsp?objectid=18215

[27] Deutsche Bank, Management Board. Our Company:
http://www.db.com/en/content/company/management_board.htm

[28] InfoWars, Bilderberg 2009 Attendee List (revised). May 18, 2009:
http://www.infowars.com/bilderberg-2009-attendee-list/

[29] Demetris Nellas, Greek nationalists protest Bilderberg Club meeting. AP: May 14, 2009:
http://www.google.com/hostednews/ap/article/ALeqM5jep_nbEq1srzJHFQ8fRGNQO3P38QD987H3200

[30] InfoWars, Bilderberg 2009 Attendee List (revised). May 18, 2009:
http://www.infowars.com/bilderberg-2009-attendee-list/

[31] MRT, Top US official arrives in Greece. Macedonian Radio and Television: May 15, 2009:
http://www.mrt.com.mk/en/index.php?option=com_content&task=view&id=6112&Itemid=28

[32] InfoWars, Bilderberg 2009 Attendee List (revised). May 18, 2009:
http://www.infowars.com/bilderberg-2009-attendee-list/

[33] WND, Google joins Bilderberg cabal. World Net Daily: May 17, 2009:
http://worldnetdaily.com/index.php?fa=PAGE.view&pageId=98469

[34] Adam Abrams, Are the people who 'really run the world' meeting this weekend? Haaretz: May 14, 2009:
http://www.haaretz.com/hasen/spages/1085589.html

[35] YOCHI J. DREAZEN and PETER SPIEGEL, U.S. Fires Afghan War Chief. The Wall Street Journal: May 12, 2009:
http://online.wsj.com/article/SB124206036635107351.html

[36] M.J. Stephey, Stan McChrystal: The New U.S. Commander in Afghanistan. Time Magazine: May 12, 2009:
http://www.time.com/time/politics/article/0,8599,1897542,00.html

[37] PIIE, About the Institute. Peterson Institute for International Economics:
http://www.petersoninstitute.org/institute/aboutiie.cfm

[38] PIIE, Board of Directors. Peterson Institute for International Economics:
http://www.petersoninstitute.org/institute/board.cfm#52

[39] Jeffrey E. Garten, Needed: A Fed for the World. The New York Times: September 23, 1998:
http://www.nytimes.com/1998/09/23/opinion/needed-a-fed-for-the-world.html

[40] Jeffrey Garten, Global authority can fill financial vacuum. The Financial Times: September 25, 2008:
http://www.ft.com/cms/s/7caf543e-8b13-11dd-b634-0000779fd18c,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F7caf543e-8b13-11dd-b634-0000779fd18c.html&_i_referer=http%3A%2F%2Fwilliamnotes.wordpress.com%2F2008%2F09%2F30%2Fgarten-on-a-global-monetary-authority%2F

[41] Jeffrey Garten, We Need a Bank Of the World. Newsweek: October 25, 2009: http://www.newsweek.com/id/165772

[42] Ambrose Evans-Pritchard, IMF may need to "print money" as crisis spreads. The Telegraph: October 28, 2009:
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/3269669/IMF-may-need-to-print-money-as-crisis-spreads.html