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The Capitalists Are Afraid
By Chris Hedges

Capitalists seek to maximize profits and reduce the cost of labor. This sums up capitalism at its core. It is defined by these immutable objectives. It is not about democracy. It is not, as has been claimed, about wealth creation for the working class. It has nothing to do with freedom. Those capitalists, especially in corporations, who are not able to increase profits and decrease the cost of labor, through layoffs, cutting wages, destroying unions, offshoring, outsourcing or automating jobs, are replaced. Personal ethics are irrelevant. Capitalists are about acquisition and exploitation.

Capitalists go to absurd lengths to lie about capitalism's true nature. It is why Business Roundtable's most recent version of its Principles of Corporate Governance, signed by 181 major CEOsincluding the heads of Amazon, General Motors and Chevron, all three of which paid no federal income tax in 2018rivals the doublespeak of the worst totalitarian regimes of the 20th century.


If maximizing profit means turning the oceans into dead zones, filling the atmosphere with carbon emissions and toxins that render the climate unfit for humans, pumping chemicals and waste into the soil, water, air and food supply that ensure that cancer is an epidemic, buying off elected officials and judges to serve the exclusive interests of capital and privatizing social services, including health care, transportation, education and public utilities, to gouge the public, that is the price of business. If reducing the cost of labor means forcing workers to remain unorganized and abolishing work, health and safety regulations, if it means moving industry overseas where foreign workers toil like 19th-century serfs, if it means suppressing wages at home to force an impoverished population into debt peonage, that is the price of business.

It is not accidental that the United States now has the worst income inequality since the 1920s. This was engineered by the capitalist class. But what Business Roundtable's Aug. 19 statement reveals is that the capitalists are frightened they have been found out. Capitalism free of external restraints and with no internal restraints will pillage and exploit a captive population until it rises up in fury. It is such an eruption that today's capitalists worry is on the horizon.
Capitalism, because it is such a socially destructive force, saturates the media landscape with advertising to misinform and manipulate the public. It uses its vast wealth to buy up the press, domesticate universities, nonprofits and think tanks and demonize and muzzle its critics. It funds pseudo-intellectuals and pseudo-economists who tirelessly propagate the ideology of neoliberalism, the belief that transferring wealth upward into the hands of the ruling oligarchs is beneficial to society. It forms global monopolies that prey on the public. It wages endless wars in its quest for profit. It equates anti-capitalist agitation with terrorism, meaning, for example, that anyone in the U.S. who attempts to photograph or film the savagery and cruelty of industrial agricultureone of the primary causes of carbon emissionscan be charged under terrorism acts. And when its pyramid schemes, frauds and financial bubbles collapse, it loots the national treasury and leaves taxpayers with the bill. (In the U.S. economic crisis of 2008, corporations gobbled up $4.6 trillion in public money.)
Capitalism, as Karl Marx understood, if unregulated and unfettered, is a revolutionary force. It first creates a mafia economy, as Karl Polanyi wrote, and then a mafia government. It was the greed of the capitalist class that turned our cities in decaying hulks and impoverished more than half the country. It was the greed of the capitalist class that set us on a course of ecocide. It was the greed of the capitalist class that created the mechanisms of internal repression, including police that function as rogue paramilitary units in our internal colonies, wholesale surveillance of the public, a vastly expanded system of mass incarceration and the agencies, including the National Security Agency, Homeland Security and the FBI, that spy on the public to thwart resistance. It was the greed of the capitalist class that dismantled the democratic institutions of the United States. It was the greed of the capitalist class that gave us Donald Trump. This disdain for the common good and democracy makes these capitalists traitors.
Jamie Dimon, chairman and CEO of JPMorgan Chase and chairman of Business Roundtable, conceded in the press release containing the "Statement on the Purpose of a Corporation" that "the American dream is alive, but fraying." He assured us, however, that "major employers are investing in their workers and communities because they know it is the only way to be successful over the long term. These modernized principles reflect the business community's unwavering commitment to continue to push for an economy that serves all Americans."
Alex Gorsky, chairman of the board and chief executive officer of Johnson & Johnson and chair of the Business Roundtable Corporate Governance Committee, added that the statement "affirms the essential role corporations can play in improving our society."
Darren Walker, the president of the Ford Foundation, called the statement "tremendous news" and said it would "result in shared prosperity and sustainability for both business and society."
The sententious and self-congratulatory passages in the statement can be summed up by the opening paragraphs:

Americans deserve an economy that allows each person to succeed through hard work and creativity and to lead a life of meaning and dignity. We believe the free-market system is the best means of generating good jobs, a strong and sustainable economy, innovation, a healthy environment and economic opportunity for all.
Businesses play a vital role in the economy by creating jobs, fostering innovation and providing essential goods and services. Businesses make and sell consumer products; manufacture equipment and vehicles; support the national defense; grow and produce food; provide health care; generate and deliver energy; and offer financial, communications and other services that underpin economic growth.

Capitalists such as Dimon (net worth $1.4 billion), whose company has paid more in regulatory fines than any other in America, and Gorsky, whose corporation was charged with helping fuel Oklahoma's opioid crisis and then ordered by a court to pay $572 million in restitution in that state, would, in a functioning democracy, be in prison. Johnson & Johnson, Purdue Pharma, Pfizer and McKesson together are responsible for the deaths of many thousands of Americansmore than 130 people died every day in the U.S. from opioid-related drug overdoses in 2016 and 2017, according to the federal government.
The financial crimes of Dimon alone are numerous and notorious. They include underwriting fraudulent securities in the years leading up to the 2008 financial crash, overcharging members of the military on mortgages and mortgage refinancing transactions, overcharging customers for overdraft fees, manipulating bidding on California and Midwest electricity markets, overcharging homeowners for flood insurance, billing customers for nonexistent credit card monitoring services, charging minorities higher rates and fees on mortgages than those paid by white borrowers and failing to pay overtime to company workers.
So, what is this statementwhich is equivalent to Al Capone insisting the mob ran a benevolent society in Chicagoabout?
It is about the capitalists running scared. They know the reigning ideology of neoliberalism no longer has any credibility. Its lies have been exposed. They know the ruling institutions, including the legislative, executive and judicial branches of government, are dysfunctional and despised. They know the media, Wall Street and the big banks are distrusted and hated. They know the criminal justice system, which criminalizes poverty and legalizes corporate fraud, is a sham. They know social mobility is, in effect, nonexistent. And, most importantly, they know that the financial system, built on the scaffolding of trillions lent to them by the government at marginal interest rates, is not sustainable and will trigger another recession, if not a depression. They also know they are to blame.
The capitalists are determined to protect their wealth. They are determined, and probably able, to block left-leaning candidates Elizabeth Warren and Bernie Sanders from obtaining the Democratic nomination for president. But they are also aware that politicians such as Hillary Clinton, Nancy Pelosi, Chuck Schumer and Joe Biden who have spent their careers serving corporate power are harder and harder to sell to the electorate. The mendacity and hypocrisy of the Democratic Party are evident in the presidency of Barack Obama, who ran as an outsider and reformer in the wake of the 2008 financial meltdown. Obamawhom Cornel West called "a black mascot for Wall Street"callously betrayed the party's base. Actions by him, Clinton and other Democratic leaders after the 2008 financial debacle opened the door for the demagogue Donald Trump, who, although a con artist and inveterate liar, was astute enough to tell voters, especially from the white working class, what they wanted to hear.
Business Roundtable's August statement is a pathetic attempt to reframe the capitalists' roles in society, to give these corporate grifters gentler, kinder faces. It will not work. The capitalists have the power to destroy, but no longer to create. And out of their relentless destruction, which they are incapable of halting, will come the social unrest they fear and monstrosities more terrifying than Donald Trump.

Quote:Conjuring Up the Next Depression




During the financial crisis of 2008, the world's central banks, including the Federal Reserve, injected trillions of dollars of fabricated money into the global financial system. This fabricated money has created a worldwide debt of $325 trillion, more than three times global GDP. The fabricated money was hoarded by banks and corporations, loaned by banks at predatory interest rates, used to service interest on unpayable debt or spent buying back stock, providing millions in compensation for elites. The fabricated money was not invested in the real economy. Products were not manufactured and sold. Workers were not reinstated into the middle class with sustainable incomes, benefits and pensions. Infrastructure projects were not undertaken. The fabricated money reinflated massive financial bubbles built on debt and papered over a fatally diseased financial system destined for collapse.


What will trigger the next crash? The $13.2 trillion in unsustainable U.S. household debt? The $1.5 trillion in unsustainable student debt? The billions Wall Street has invested in a fracking industry that has spent $280 billion more than it generated from its operations? Who knows. What is certain is that a global financial crash, one that will dwarf the meltdown of 2008, is inevitable. And this time, with interest rates near zero, the elites have no escape plan. The financial structure will disintegrate. The global economy will go into a death spiral. The rage of a betrayed and impoverished population will, I fear, further empower right-wing demagogues who promise vengeance on the global elites, moral renewal, a nativist revival heralding a return to a mythical golden age when immigrants, women and people of color knew their place, and a Christianized fascism.


The 2008 financial crisis, as the economist Nomi Prins points out, "converted central banks into a new class of power brokers." They looted national treasuries and amassed trillions in wealth to become politically and economically omnipotent. In her book "Collusion: How Central Bankers Rigged the World," she writes that central bankers and the world's largest financial institutions fraudulently manipulate global markets and use fabricated, or as she writes, "fake money," to inflate asset bubbles for short-term profit as they drive us toward "a dangerous financial precipice."


"Before the crisis, they were just asleep at the wheel, in particular, the Federal Reserve of the United States, which is supposed to be the main regulator of the major banks in the United States," Prins said when we met in New York. "It did a horrible job of doing that, which is why we had the financial crisis. It became a deregulator instead of a regulator. In the wake of the financial crisis, the solution to fixing the crisis and saving the economy from a great depression or recession, whatever the terminology that was used at any given time, was to fabricate trillions and trillions of dollars out of an electronic ether."


The Federal Reserve handed over an estimated $29 trillion of this fabricated money to American banks, according to researchers at the University of Missouri. Twenty-nine trillion dollars! We could have provided free college tuition to every student or universal health care, repaired our crumbling infrastructure, transitioned to clean energy, forgiven student debt, raised wages, bailed out underwater homeowners, formed public banks to invest at low interest rates in our communities, provided a guaranteed minimum income for everyone and organized a massive jobs program for the unemployed and underemployed. Sixteen million children would not go to bed hungry. The mentally ill and the homelessan estimated 553,742 Americans are homeless every nightwould not be left on the streets or locked away in our prisons. The economy would revive. Instead, $29 trillion in fabricated money was handed to financial gangsters who are about to make most of it evaporate and plunge us into a depression that will rival that of the global crash of 1929.


Kevin Zeese and Margaret Flowers write on the website Popular Resistance, "One-sixth of this could provide a $12,000 annual basic income, which would cost $3.8 trillion annually, doubling Social Security payments to $22,000 annually, which would cost $662 billion, a $10,000 bonus for all U.S. public school teachers, which would cost $11 billion, free college for all high school graduates, which would cost $318 billion, and universal preschool, which would cost $38 billion. National improved Medicare for all would actually save the nation trillions of dollars over a decade."


An emergency clause in the Federal Reserve Act of 1913 allows the Fed to provide liquidity to a distressed banking system. But the Federal Reserve did not stop with the creation of a few hundred billion dollars. It flooded the financial markets with absurd levels of fabricated money. This had the effect of making the economy appear as if it had revived. And for the oligarchs, who had access to this fabricated money while we did not, it did.


The Fed cut interest rates to near zero. Some central banks in Europe instituted negative interest rates, meaning they would pay borrowers to take loans. The Fed, in a clever bit of accounting, even permitted distressed banks to use these no-interest loans to buy U.S. Treasury bonds. The banks gave the bonds back to the Fed and received a quarter of a percent of interest from the Fed. In short, the banks were loaned money at virtually no interest by the Fed and then were paid interest by the Fed on the money they borrowed. The Fed also bought up worthless mortgage assets and other toxic assets from the banks. Since Fed authorities could fabricate as much money as they wanted, it did not matter how they spent it.


"It's like going to someone's old garage sale and saying, I want that bicycle with no wheels. I'll pay you 100 grand for it. Why? Because it's not my money,' " Prins said.


"These people have rigged the system," she said of the bankers. "There is money fabricated at the top. It is used to pump up financial assets, including stock. It has to come from somewhere. Because money is cheap there's more borrowing at the corporate level. There's more money borrowed at the government level."


"Where do you go to repay it?" she asked. "You go into the nation. You go into the economy. You extract money from the foundational economy, from social programs. You impose austerity."


Given the staggering amount of fabricated money that has to be repaid, the banks need to build greater and greater pools of debt. This is why when you are late in paying your credit card the interest rate jumps to 28 percent. This is why if you declare bankruptcy you are still responsible for paying off your student loan, even as 1 million people a year default on student loans, with 40 percent of all borrowers expected to default on student loans by 2023. This is why wages are stagnant or have declined while costs, from health care and pharmaceutical products to bank fees and basic utilities, are skyrocketing. The enforced debt peonage grows to feed the beast until, as with the subprime mortgage crisis, the predatory system fails because of massive defaults. There will come a day, for example, as with all financial bubbles, when the wildly optimistic projected profits of industries such as fracking will no longer be an effective excuse to keep pumping money into failing businesses burdened by debt they cannot repay.


"The 60 biggest exploration and production firms are not generating enough cash from their operations to cover their operating and capital expenses," Bethany McLean writes of the fracking industry in an article titled "The Next Financial Crisis Lurks Underground" that appeared in The New York Times. "In aggregate, from mid-2012 to mid-2017, they had negative free cash flow of $9 billion per quarter."


The global financial system is a ticking time bomb. The question is not if it will explode but when it will explode. And once it does, the inability of the global speculators to use fabricated money with zero interest to paper over the debacle will trigger massive unemployment, high prices for imports and basic services, and a devaluation in which the dollar will become nearly worthless as it is abandoned as the world's reserve currency. This manufactured financial tsunami will transform the United States, already a failed democracy, into an authoritarian police state. Life will become very cheap, especially for the vulnerableundocumented workers, Muslims, poor people of color, girls and women, anti-capitalist and anti-imperialist critics branded as agents of foreign powerswho will be demonized and persecuted for the collapse. The elites, in a desperate bid to cling to their unchecked power and obscene wealth, will disembowel what is left of the United States.

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PLA Strategist: The U.S. Uses Its Dollar to Dominate the World

[Editor's Note: In April, Qiao Liang, a People's Liberation Army (PLA) Major-General, gave a speech at a book study forum of the Chinese Communist Party's (CCP's) Central Committee and government office. Qiao is the PLA strategist who co-authored the book, "Unrestricted War."In his speech, Qiao explained that he has been studying finance theories and concluded that the U.S. enforces the dollar as the global currency to preserve its hegemony over the world. The U.S. will try everything, including war, to maintain the dollar's dominance in global trading. He also discussed China's strategy, to rise as a super power, amid the U.S.'s containment.
The following are excerpts from his speech.] [1]
I. The Situation Surrounding China and the Secret of the U.S. Dollar Index Cycle
A. The First Financial Empire in History
People working on economics or in the finance field are probably more suited to talk about this topic. I will discuss this topic from the [national] strategy angle.
On August 15, 1971, when the U.S. dollar stopped being pegged to gold, the dollar ship threw away its anchor, which was gold.
Let's take a step back. In July 1944, to help the U.S. to take over the currency hegemony from the British Empire, President Roosevelt pushed for three world systems: the political system the United Nations; the trade system the General Agreement on Tariffs and Trade (GATT), which later became the World Trade Organization (WTO); and the currency financial system the Bretton Woods system.
The Americans' desire was to establish the U.S. dollar's hegemony over the world via the Bretton Woods system. However, from 1944 to 1971, the dollar didn't gain that power. What blocked the dollar? It was gold.
When the Bretton Woods system was set up, the U.S. promised the world that the U.S. dollar would be pegged to gold while every other country's currency could peg to the dollar. One ounce of gold was fixed at US$35. With this promise, the U.S. couldn't do anything according to its own will. In other words, the Americans couldn't print an unlimited number of dollars. Whenever it printed a dollar bill, it had to add one additional ounce of gold into its treasury as a reserve.
The U.S. made that promise to the world because it held eighty percent of the world's gold reserve at that time. The Americans thought that, with that much gold in hand, it was enough to support the U.S. dollar's creditability.
However, it was not that simple. The U.S. stupidly got involved in the Korean War and the Vietnam War, which cost it dearly. The Vietnam War especially cost US$800 billion. The cost became so much that the U.S. couldn't bear it. Based on the U.S.'s promise, every time it spent US$35, it meant a loss of one ounce of gold.
By August 1971, the Americans had about 8,800 tons of gold left. They knew they were in trouble. Other people continued creating new trouble for them. For example, French President De Gaulle didn't trust the U.S. dollar. He asked the French Finance Minister and Central Bank President and was told that France had about US$2.3 billion dollars in reserve. He told them to sell all of that for gold. Some other countries followed suit.
Thus, on August 15, 1971, then U.S. President Nixon announced that the U.S. stopped pegging the dollar to gold. It was the beginning of the collapse of the Bretton Woods system, and also a way in which the Americans cheated the world. However, the world didn't realize it.
People trusted the U.S. dollar because it was supported by gold. The U.S. dollar had been the international currency, the settlement currency, and the reserve currency for over 20 years. People were used to the dollar. When the U.S. dollar suddenly lost its tie to gold, it then, in theory, became a pure piece of green paper. Why did people still use it?
In theory people could stop using it., Bbut in practice what would people use for international settlement? Currency is a measure of value. If people stopped using the U.S. dollar, was there any other currency they trusted?
Thus, the Americans took advantage of people's inertia and forced the Organization of the Petroleum Exporting Countries (OPEC) to accept the U.S. condition that the world's oil trade must settle in U.S. dollars. Previously, oil trades were settled in any international currency, but, since October 1973, settlement was limited to the U.S. dollar only.
After unpegging from precious metal, the Americans linked their dollar to oil. Why? The Americans were very clear: people might dislike the U.S. dollar, but they could not live without energy. Every country needed development and thus needed to consume energy. In this way, the need for oil translated into the need for the U.S. dollar. For the U.S., this was a very smart move.
Not many people had a clear understanding of this at the time. People, including economists and financial experts, didn't realize that the most important thing in the 20th century was not World War I, World War II, or the disintegration of the USSR, but rather the August 15, 1971, disconnection between the U.S. dollar and gold.
Since that day, a true financial empire has emerged, the U.S. dollar's hegemony has been established, and we have entered a true paper currency era. There is no precious metal behind the U.S. dollar. The government's credit is the sole support for the U.S. dollar. The U.S. makes a profit from the whole world. This means that the Americans can obtain material wealth from the world by printing a piece of green paper.
This has never happened in the world before. Throughout mankind's history there have been many ways for people to obtain wealth: an exchange with currency, gold, or silver, or using war to grab things (however, war is very costly). When the U.S. dollar became just a piece of green paper, the cost for the U.S. to make money became extremely low.
Without the restriction of gold, the U.S. can print dollars at will. If they keep a large amount of dollars inside the U.S., it will certainly create inflation. If they export dollars to the world, the whole world is helping the U.S. to deal with its inflation. That's why inflation is not that high in the U.S.
However, once the U.S. exports its dollar to the world, it doesn't have much money. If it continues to print money, the U.S. dollar will keep devaluating, which is not good for the Americans. Therefore, the U.S. Federal Reserve is not, as some people have imagined, a central bank that prints money irresponsibly. The Federal Reserve knows what "restriction" means. From its establishment in 1913 through 2013, the Federal Reserve only printed US$10 trillion.
This may lead people to criticize China's Central Bank, which has printed 120 trillion yuan (around US$20 trillion using an exchange rate of 6.2 yuan per dollar) since 1954. Actually this does not mean China is printing money without any restriction either. Since its opening up, China has earned a lot of U.S. dollars and also a large amount of dollars has flown into China as investments.
China's foreign currency control prevents the U.S. dollar from circulating in China. When the U.S. dollar comes, for circulation in China, China's Central Bank has to print a corresponding amount of renminbi instead.
However, a foreign investor can withdraw its money out of China after making money. Also we need to spend our foreign reserves to buy energy, products, and technology. As a result, a large amount of U.S. dollars has flown out of China, but a corresponding amount of renminbi has stayed in China. You can't destroy those renminbi, so China ends up with more renminbi than its foreign reserve.
China's Central Bank admitted that it overprinted 20 billion yuan. This huge amount all stayed in China. This is a topic that I will discuss later why we should make the renminbi an international currency.
B. The Relationship between the U.S. Dollar Index Cycle and the Global Economy
The U.S. avoided high inflation by letting the dollar circulate globally. It also needs to restrain the printing of dollars to avoid a dollar devaluation. Then what should it do when it runs out of dollars?
The Americans came up with a solution: issuing debt to bring the dollar back to the U.S. The Americans started to play a game of printing money with one hand and borrowing money with the other hand. Printing money can make money. Borrowing money can also make money. This financial economy (using money to make money) is much easier than the real (industry-based) economy. Why will it bother with manufacturing industries that have only low value-adding capabilities?
Since August 15, 1971, the U.S. has gradually stopped its real economy and moved into a virtual economy. It has become an "empty" economy state. Today's U.S. Gross Domestic Product (GDP) has reached US$18 trillion, but only $5 trillion is from the real economy.
By issuing debt, the U.S. brings a large amount of dollars from overseas back to the U.S.'s three big markets: the commodity market, the Treasury Bills market, and the stock market. The U.S. repeats this cycle to make money: printing money, exporting money overseas, and bringing money back. The U.S. has thus become a financial empire.
Many people think that imperialism stopped after the U.K. became weak. Actually, the U.S. has conducted a hidden imperialism through the U.S. dollar and has made other countries its financial colony. Today, many countries, including China, have their own sovereignty, Constitution, and government, but they are dependent on the U.S. dollar. Their products are measured in dollars and they have to hand over their material wealth to the U.S. in exchange for the U.S. dollar.
This can be seen clearly in the cycle of the U.S. dollar index over the past 40 years. Since 1971, when the U.S. started to print money freely, the U.S. dollar index has been dropping in value. For ten years, the index has kept going down, indicating that it was overprinted.
Actually, it was not necessarily a bad thing for the world when the U.S. dollar index went down. It meant an increase in the supply of dollars and a large outflow of dollars to other countries. A lot of U.S. dollars went to Latin America. This investment created the economic boom in Latin America in the 1970s.
In 1979, after flooding the world with U.S. dollars for nearly 10 years, the Americans decided to reverse the process. The U.S. dollar index started climbing in 1979. Dollars flew back to the U.S. and other regions received fewer dollars. Latin America's economy boomed due to an ample supply of dollar investment, but this suddenly stopped as its investments dried up.
The Latin American countries tried to save themselves.
Argentina, which once had its per capita GDP among the ranks of the developed countries, was then the first to drop into a recession. Unfortunately, then Argentine President Galtieri, who came to power through a military coup, chose to use a war to solve the problem. He turned his eyes toward the Malvinas Islands (which the British called the Falkland Islands), which are 400 miles away from Argentina. These islands had been under British rule for over 100 years. Galtieri decided to take them back.
Of course, he couldn't take on a war without the U.S.'s blessing. He sent an intermediary to inquire about the U.S.'s opinion. U.S. President Reagan answered it lightly: it was between you and the U.K.; the U.S. had no position and would stay neutral. Galtieri took it as acquiescence by the U.S. He started the war and took over the islands with ease. The Argentinians were crazy.
However, then U.K. Prime Minister Margaret Thatcher claimed that they would absolutely not accept it and forced the U.S. to speak out. Reagan tore off his neutral mask, issuing a statement to blame Argentina for the invasion and to stand by the U.K. The British dispatched a task force with an aircraft carrier, travelling 8,000 miles, to take the Malvinas Islands back.
At the same time, the U.S. dollar appreciated and international capital flew back to the U.S. just as the U.S. wished. When the Malvinas Islands War started, investors around the world concluded that a regional crisis had started in Latin America and the Latin American investment environment would deteriorate. So investors withdrew their capital from there. The Federal Reserve, at the same time, announced an increase in interest rates, which further accelerated the withdrawal of capital from Latin America.
The Latin American economy dropped to the bottom. The capital leaving there went to the U.S.'s three big markets. It gave the U.S. the first bull market since the dollar had been unpegged from gold. The U.S. dollar index jumped from 60 to 120, a 100 percent increase.
The Americans didn't stop after making big money from their bull market. Some took the money they just made and went back to Latin America to buy the good assets whose prices had just fallen to the ground. The U.S. harvested handsomely from Latin America's economy.
If this had happened only once, it could be argued as a small probability event. As it has occurred repeatedly, it indicates an intended pattern.
In 1986, after the first "ten years of a weak U.S. dollar following six years of a strong dollar," the U.S. dollar index started to decline again. Ten years later, in 1997, the dollar index started climbing. This time, the strong dollar also lasted for six years.
During the second ten-year weak U.S. dollar cycle, U.S. dollars went mainly to Asia. What was the hottest investment concept in 1980s? It was the "Asian Tigers." Many people thought it was due to Asians' hard work and how smart they were. Actually the big reason was the ample investment of U.S. dollars.
When the Asian economy started to prosper, the Americans felt it was time to harvest. Thus, in 1997, after ten years of a weak dollar, the Americans reduced the money supply to Asia and created a strong dollar. Many Asian companies and industries faced an insufficient money supply. The area showed signs of being on the verge of a recession and a financial crisis.
A last straw was needed to break the camel's back. What was that straw? It was a regional crisis. Should there be a war like the Argentines had? Not necessarily. War is not the only way to create a regional crisis.
Thus we saw that a financial investor called "Soros" took his Quantum Fund, as well as over one hundred other hedge funds in the world, and started a wolf attack on Asia's weakest economy, Thailand. They attacked Thailand's currency Thai Baht for a week. This created the Baht crisis. Then it spread south to Malaysia, Singapore, Indonesia, and the Philippines. Then it moved north to Taiwan, Hong Kong, Japan, South Korea, and even Russia. Thus the East Asia financial crisis fully exploded.
The camel fell to the ground. The world's investors concluded that the Asian investment environment had gone south and withdrew their money. The U.S. Federal Reserve promptly blew the horn and increased the dollar's interest rate. The capital coming out of Asia flew to the U.S.'s three big markets, creating the second big bull market in the U.S.
When the Americans made ample money, they followed the same approach they did in Latin America: they took the money that they made from the Asian financial crisis back to Asia to buy Asia's good assets which, by then, were at their bottom price. The Asian economy had no capacity to fight back.
The only lucky survivor in this crisis was China.
C. Now, It Is Time to Harvest China
It was as precise as the tide; the U.S. dollar was strong for six years. Then, in 2002, it started getting weak. Following the same pattern, it stayed weak for ten years. In 2012, the Americans started to prepare to make it strong. They used the same approach: create a regional crisis for other people.
Therefore, we saw that several events happened in relation to China: the Cheonan sinking event, the dispute over the Senkaku Islands (Diaoyu Islands in Chinese), and the dispute over Scarborough Shoal (the Huangyan Island in Chinese). All these happened during this period. The conflict between China and the Philippians over Huangyan Island and the conflict between China and Japan over the Diaoyu Islands, might not appear to have much to do with the U.S. dollar index, but was it really that case? Why did it happen exactly in the tenth year of the U.S. dollar being weak?
Unfortunately, the U.S. played with too much fire [in its own mortgage market] earlier and got itself into a financial crisis in 2008. This delayed the timing of the U.S. dollar's hike a bit.
If we acknowledge that there is a U.S. dollar index cycle and the Americans use this cycle to harvest from other countries, then we can conclude that it was time for the Americans to harvest China. Why? Because China had obtained the largest amount of investment from the world. The size of China's economy was no longer the size of a single county; it was even bigger than the whole of Latin America and about the same size as East Asia's economy.
Since the Diaoyu Islands conflict and the Huangyan Island conflict, incidents have kept popping up around China, including the confrontation over China's 981 oil rigs with Vietnam and Hong Kong's "Occupy Central" event. Can they still be viewed as simply accidental?
I accompanied General Liu Yazhou, the Political Commissar of the National Defense University, to visit Hong Kong in May 2014. At that time, we heard that the "Occupy Central" movement was being planned and could take place by end of the month. However, it didn't happen in May, June, July, or August.
What happened? What were they waiting for?
Let's look at another time table: the U.S. Federal Reserve's exit from the Quantitative Easing (QE) policy. The U.S. said it would stop QE at the beginning of 2014. But it stayed with the QE policy in April, May, June, July, and August. As long as it was in QE, it kept overprinting dollars and the dollars price couldn't go up. Thus, Hong Kong's "Occupy Central" should not happen either.
At the end of September, the Federal Reserve announced the U.S. would exist from QE. The dollar started going up. Then Hong Kong's "Occupy Central" broke out in early October.
Actually, the Diaoyu Islands, Huangyan Island, the 981 rigs, and Hong Kong's "Occupy Central" movement were all bombs. The successful explosion of any one of them would lead to a regional crisis or a worsened investment environment around China. That would force the withdrawal of a large amount of investment from this region, which would then return to the U.S.
Unfortunately, this time the American's opponent was China. China used "Tai chi" movements to cool down each crisis. As of today, the last straw to break the camel's back has yet to occur and the Camel is still standing.
The camel didn't break. Therefore, the Federal Reserve couldn't blow its horn to increase the interest rate, either. The Americans realized that it was hard for them to harvest China, so they looked for an alternative.
Where else did they target? Ukraine, the connection between the EU and Russia. Of course there were some problems under Ukraine President Yanukovych's administration, but the reason that the Americans picked it was not simply because of his problem. They had three goals: teach a lesson to Yanukovych who didn't listen to the U.S., prevent the EU from getting too close to Russia, and create a bad investment environment in Europe.
Thus, a "color revolution," took place, which the Ukrainians themselves appeared to have led. The U.S. achieved its goal unexpectedly: Russian President Putin took over Crimea. Though the Americans did not plan it, it gave the Americans better reasons to pressure the EU and Japan to join the U.S. in sanctioning Russia, adding more pressure to the EU's economy.
Why did the Americans do this? People tend to analyze it from the geo-political angle, but rarely the capital angle. After the Ukraine crisis, statistics showed over US$1 trillion in capital left Europe. The U.S. got what it wanted: if it couldn't get dollars out of China, it would get dollars out of Europe.
However, the next step didn't occur as the Americans planned. The capital out of Europe didn't go to the U.S. Instead, it went to Hong Kong.
One reason was that the global investors preferred China, which claimed the world's number one economic growth rate, despite the fact that its economy started to cool down. The other reason was that China announced that it would implement the Shanghai-Hong Kong Stock Connect. Investors over the world wanted to get a handsome return through the Shanghai-Hong Kong Stock Connect.
In the past, Western capital was cautious about entering China's stock market. A key reason was China's strict foreign currency control: you can come in freely but you can't get out at will. After the Shanghai-Hong Kong Stock Connect, they could invest in Shanghai's market from Hong Kong and leave immediately after making a profit. Therefore, over US$1 trillion stayed in Hong Kong.
This is why the hand behind "Occupy Central" has kept planning a comeback and has not wanted to stop. The Americans need to create a regional crisis for China, to get the money back to the U.S.
Why does the U.S. economy rely so desperately on capital flowing back to its market? It is because, since 1971, the U.S. has given up producing real products. They called the real economy's low-end or low-value-creating manufacturing industries garbage industries or sunset industries and transferred them to developing countries, especially China. Besides the high-end industries, such as IBM and Microsoft, that it kept, 70 percent of its people moved to finance and financial services industries. The U.S. has completely become a hollow state which has little real economy to offer investors a big return.
The Americans have no choice but to open the door of the virtual economy, which is its three big markets. It wants to get the money from the world into these three markets so that it can make money. Then it can use that money to harvest other countries.
The Americans only have this one way to survive now. We call it the U.S.'s national survival strategy. The U.S. needs a large amount of capital flowing back to sustain its daily life and its economy. If any country blocks that capital flow, it is the enemy of the U.S.
II. Whose Lunch Will China Take If China Rises Quickly?
A. Why Did the Birth of the Euro Lead to a War in Europe?
On January 1, 1999, the euro was officially born. Three months later, NATO started its war against Yugoslavia. Many people thought the U.S. and NATO fought the war to stop the Milosevic administration's genocide of the Albanians, a scary humanitarian tragedy. After the war, this was soon proved to be a lie. The Americans acknowledged it was a setup, done jointly by the CIA and the Western media. The goal was to attack the Federal Republic of Yugoslavia.
However, was the Kosovo War really to attack the Federal Republic of Yugoslavia? The Europeans first overwhelmingly believed in this theory. However, after this 72-day war, they found they had been cheated.
When the euro was first created, the Europeans had a lot of confidence. The euro's exchange rate to the U.S. dollar was 1:1.07. After 72 days of bombing, the Europeans found something was not right: Their euro was ruined. The euro lost 30 percent of its value; one euro could only get 0.86 dollars. The Europeans realized that they had been cheated. This was why later, when the U.S. insisted on having a war with Iraq, France and Germany were strongly against it.
Some people say that the Western democratic countries don't fight among themselves. It is true that, since World War II, the Western countries haven't fought among themselves, but that does not mean they do not have any military conflicts or economic or financial wars among themselves.
The Kosovo War was an indirect financial war that the Americans fought against the euro. On the surface it was against Yugoslavia, but the euro got the real hit. This was because the birth of the euro touched the U.S. dollar's lunch. Before, the U.S. dollar was used to commanding 80 percent of the international transaction market. It dropped to 60 percent of the market. The euro cut a big pie from the dollar.
The European Union (EU), a US$27 trillion economy when formed, surpassed the economy of the North American Free Trade Area (FTA) with a size of US$24-25 trillion, becoming the world's largest economic zone. For such a large economy, of course the EU didn't want to use the dollar to handle its trades, so it created the euro. The introduction of the euro took away one third of the dollar's settlement business as of now, 23 percent of the world trade is settled in euros.
In the beginning, the Americans were not vigilant about the euro. It was a bit late when they found out that it would challenge the dollar's hegemony. So the U.S. needed a way to press down the EU and the euro, as well as other possible challengers.
B. What Is the U.S. Trying to Balance with Its "Asia-Pacific Rebalance" Strategy?
China's rise made China the new challenger [to the dollar's global dominance]. The fights over the Diaoyu Islands and the Huangyan Island were the U.S.'s latest attempt to suppress its challenger.
Though these two political events around China's border didn't cause a large amount of capital to flee out of China, the Americans achieved their partials goals two of China's efforts died. At the beginning of 2012, China, Japan, and South Korea were close to reaching an agreement on the negotiation of the Northeast Asia FTA. In April 2012, China and Japan had also reached a preliminary agreement on currency exchange and on holding each other's national debts. However, the conflict over the Diaoyu Islands and Huangyan Island occurred, blowing away the FTA and the currency exchange.
A few years later, China finally finished the negation with South Korea on the bilateral FTA, but it does not have much significance. Why? The original Northeast Asia FTA, once established, would include China, Japan, South Korea, Hong Kong, Macao, and Taiwan. It would be the third largest economy in the world, with a size of over US$20 trillion. Furthermore, it would likely expand south to integrate with the ASEAN FTA, forming the East Asia FTA. That would become the largest economy in the world, with a magnitude of over
US$30 trillion in size.
We can further imagine that the East Asia FTA could continue expanding: adding India and South Asia in the south, the five Central Asian countries in the north, and the West Asia countries (part of the Middle East) in the west. This Asia FTA would then have a scale surpassing US$50 trillion, more than the EU and U.S. combined. For such a big FTA, would it use the euro or the dollar to settle its internal trade? Of course not. This meant that the Asian Dollar would be born.
I think, if indeed there is an Asia FTA, we should promote the renminbi to be the primary currency of Asia, just as the U.S. dollar first became the currency of North America and then the currency of the world. Pushing the renminbi to the international stage is far more than what we talked about previously with the "Renminbi going abroad" or letting the renminbi play a role in the "One Belt, One Path." It will, along with the dollar and the euro, share the world.
If the Chinese could think of this, couldn't the Americans think of it? When the Americans announced that they would shift their focus to the East, they pushed the Japanese to create an issue over the Diaoyu Islands and they supported the Philippines to have a confrontation with China over the Huangyan Island. We can't be so naive as to think this was just caused by the right-wing Japanese or by the Philippines President Aquino.
It was the Americans' deep and careful thought to prevent the renminbi from being a challenger to the dollar. The Americans were very clear about what they were doing. If the Northeast Asia FTA were formed, with its chain reaction, the renminbi, the euro, and the dollar each would claim one third of the world trading market. Then for the U.S., would it still have the currency hegemony if it had only one third of it? Without a real economy, if it were to lose its currency hegemony, how could the U.S. remain as the world's dominator?
Once one understands this, he will know why, behind every one of China's problem, the U.S. is there. The U.S. is preventing China's "trouble" [to the U.S.] up front. Thus it has created troubles for China everywhere. What does the U.S. try to "rebalance" in the Asia-Pacific? Does it really want to play the role of balancer between China and Japan, China and the Philippines, and China and other countries? Of course not. It has only one goal in mind: nullify the trend of China's rise.
III. The Secret That the U.S. Military Is Fighting for the Dollar
A. The Iraq War and Whose Currency Was Used for Oil Trades
People all say that the strength of the U.S. is based on three pillars: currency, technology, and military force. Actually today we can see that the real backbone of the U.S. is its currency and military force. The backing of its currency is its military force.
Every country in the world spends a large amount of money when it has a war. The U.S., however, is unique. It can also make money while spending money on a war. No other country can do that.
Why did the Americans fight a war in Iraq? Many people would answer, "For oil." However, did the Americans truly fight for oil? No. If they indeed fought for oil, why didn't they take a single barrel of oil out of Iraq? Also, the crude oil price jumped to US$149 a barrel after the war from a pre-war price of $38 a barrel. The American people didn't get a low oil price after its army occupied Iraq.
Therefore, the U.S. fought the war not for oil, but for the dollar. Why? The reason was simple. To control the world, the U.S. needed the whole world to use the dollar. It was a great move in 1973 to force Saudi Arabia and other OPEC countries to install the dollar as the settlement currency for oil trades.
Once you understand that, you can understand why the U.S. fought a war in an oil producing country. The direct result of fighting a war in an oil producing country was to increase the price oil. Once the oil price shot up, the demand for the dollar also went up.
For example, if you had US$38, you could buy a barrel of crude oil before the war. After the war, the price went up over four times to $149. Your $38 could only get you a quarter of a barrel. How could you get the other three quarters? You had to use your products and resources to trade the Americans for dollar. Then the U.S. government could openly, legitimately print more dollars. This was the secret.
I also want to tell everyone, the U.S.'s war in Iraq was not only for that goal. It was also to keep the dollar's hegemony. Saddam didn't support terrorists or Al-Qaeda, nor did it have weapons of mass destruction. But why was he still hung? It was because he played a game between the U.S. and EU. After the euro was created in 1999, he announced that Iraq's oil trade would be settled in euros. This angered the Americans, especially when many other countries followed suit. Russian President Putin, Iranian President Ahmadinejad, and Venezuelan President Hugo Chavez all made the same announcement. How could the Americans accept this?
Some people may think what I said was a fairy tale. Let's take a look at what the America did after it won the Iraq War. Before they arrested Saddam, the Americans rushed to form the temporary Iraqi government. The first order that the temporary government published was to announce that the Iraqi oil trade switched from the euro back to the dollar for settlement. This showed that America was fighting for its dollar.
B. The Afghanistan War and the Net-flow of Capital
Someone may say, "I can see that [the Americans fought] the Iraq War for the dollar. Afghanistan does not produce oil. Then it shouldn't be for the dollar that the Americans fought the Afghanistan War. Also the war was after the September 11 attack. The whole world knew it was to revenge the Al-Qaeda and punish the Taliban which supported the Al-Qaeda."
Was that true? The Afghanistan War started a month after September 11. It started in a rush. By the middle of the war, American used up all of its cruise missiles. As the war continued, the U.S. Defense Department had to open its nuclear weaponry. It took out 1,000 nuclear cruise missiles, replaced the nuclear warheads with conventional warheads, and fired another 900 cruise missiles to win the war. Obviously the Americans were not ready for this war. Why did they rush into it?
That's because the Americans couldn't wait any longer. Their financial life was in big trouble. In the early 21st Century, as a country without real material producing industries, to keep it running at the current level, the U.S. needed to have a net inflow of US$700 billion from other countries every year. After the September 11 event, the global investors showed great concern about the investment environment in the U.S. As a result, US$300 billion fled from the U.S.
This forced the U.S. to fight a war quickly to stop the fleeing. It was not only to punish the Taliban and Al-Qaeda, but also to rebuild the global investors' confidence. After the first cruise missiles exploded in Kabul, the Dow Jones index jumped up 600 points in one day. The capital that left the U.S. started to flow back. By the end of 2001, US$400 billion came back to the U.S. This showed again that the Afghanistan War was fought for the dollar and for capital.
C. Why Will the Prompt Global Strike System Replace Aircraft Carriers?
Many Chinese have great hope for China's aircraft carrier. They have seen aircraft carrier's importance in the past and China's Liaoning ship let China join the rank of owners of aircraft carriers.
However, though the aircraft carrier is still a symbol for a major power in the world, it is now only a symbol.
That is because the aircraft carrier is a product of the logistics era. When Great Britain was at its peak, it pushed for global trade it sent its products to the world and took back the world's resources so it needed a strong navy to ensure safety over the water. The creation of the aircraft carrier also served to control the ocean and the sea path. At that time the saying was, "Logistics is the key." Whoever controlled the ocean controlled the flow of global wealth.
Now capital is the key. A few strokes on a computer keyboard can move billions or even trillions [of dollars] of capital from one location to another. An aircraft carrier can keep up with the speed of logistics, but it can't keep up with the flow of capital. It is thus unable to control global capital.
Then today, what measure can keep up with the direction, speed, and volume of the flow of global capital over the Internet? American is developing a huge prompt global strike system that will allow it to hit any capital-concentrated region with ballistic missiles, supersonic planes, and cruise missiles that travel at five or ten times sonic speed. The U.S. claims that it can hit any place on the earth in 28 minutes. No matter where capital is, as long as the Americans do not want it to be there, its missiles can go there in 28 minutes and drive the capital out. This is why the prompt global strike system will inevitably replace aircraft carriers.
Of course, the aircraft carrier also has its own value, such as safeguarding the sea path or conducting a humanitarian mission. It is a good platform over the sea.
IV. The "Air Sea Battle" Will Not Solve the U.S.'s Problem
America brought up the concept of "Air Sea Battle" when designing responses to China's rise. It was first introduced in 2010. As a war concept, it meant jointly combining the powers of the air force and the navy when fighting against China. The creation of this concept showed that the American military was getting weaker. In the past, the U.S. thought that it could use either air strikes or the navy to strike China. Now it finds that the use of only one source does not provide it with military superiority over China. It needs to join the two forces together. That's how this "air sea battle" concept came into being.
The Americans think that China and the U.S. won't get into a war in the next ten years. After studying China's military development, the Americans realize that the U.S.'s current military capability does not guarantee itself an advantage over China's strengths, such as China's ability to attack aircraft carriers and to destroy space systems. Therefore, the U.S. needs to spend another ten years to develop a more advanced battle system to offset China's advantage.
It may mean that the U.S. has moved the timetable of a war with China to ten years from now. Though there may not be a war for ten years, we must prepare ourselves for it. If we don't want a war to happen in ten years, we need do get our things done within the next ten years, including preparing for war.
V. The Strategic Meaning of the "One Belt, One Road" Strategy
The Americans like basketball and boxing. Boxing shows the American's typical nature of respecting power: a direct hit with full strength and the hope of knocking the opponent out. Everything is straightforward.
The Chinese are quite the opposite. Chinese prefer ambiguity and "using softness to conquer strength." One doesn't seek to knock his opponent out, but he will defuse all of his opponent's attacks. Chinese like Tai-chi, which is a higher level of art then boxing.
The "One Belt, One Road" strategy reflects this philosophy.
Throughout history, whenever a great power rises, there is a corresponding globalization movement. This means that globalization is not a phenomenon that has continued from the past all the way to the present; rather it belongs to a great power. The Roman Empire had its own globalization. The Qin Dynasty in China (around 200 B.C.) had its own globalization.
Every globalization was initiated by a rising empire. And that globalization was also limited by the empire's own strength. The farthest location that the empire's power could influence and its transportation means could reach defined the boundary of its globalization. Therefore, in today's view, both the Roman Empire's globalization and the Qin Dynasty's globalization were only considered to be a regional expansion. "Globalization" on today's terms started with the British Empire. The U.S. continued the British trade globalization for a while. Then it switched to U.S. dollar globalization.
China's "One Belt, One Road" is not simply to join the global economic system, which is a globalization under the U.S. dollar. As a rising super power, the "One Belt, One Road" strategy is the beginning of China's own globalization. It is a necessary globalization process that a super power must have during the phase of its rise.
"One Belt, One Road" is the best super power strategy that China can bring up at this moment, because it is a counter measure to the U.S. strategy of shifting focus to the East.
Someone may ask: "A counter measure should be in the opposite direction of the force coming toward you. How can you turn your back on the U.S.?" (The U.S. is pressing China from the east over the Pacific Ocean, but China turns its back on the pressure and moves to the west.) That's right. The "One Belt, One Road" strategy is China's indirect counter to the U.S. shift to the East. China turns its back on the U.S. [to avoid direct confrontation]. You pressure me [from the east], I walk to the west, not because I want to avoid you, nor because I am afraid of you, but rather because this is a smart move to defuse the pressure you bring to me.
The "One Belt, One Road" strategy does not require the two paths happen in parallel. It should have priorities. Sea power is still China's weakness, so we can focus on the land path first. The "One Belt" is the primary direction. This also means that we need to revisit the importance of the army.
Some people say that China's army is the best in the world. It is true if it is inside China: the Chinese army will beat whoever invades China's land. The problem is that China's army may not have the capability to go outside China to fight and win a war?
I talked about this issue last year at the Global Times annual meeting. I said that America chose a wrong opponent when it chose China as its opponent and pressured China. The real threat to the U.S. in the future is not China, but rather the U.S. itself. The U.S. will bury itself. That's because it has not yet realized that a big era is coming and the financial capitalism that the U.S. represents will reach its peak and then start falling. On the one hand, the U.S. has already taken full advantage of benefits that capital generates. On the other hand, via the technological innovation that the U.S. leads, the U.S. pushes the Internet, big data, and cloud computing to an extreme. These tools will eventually become the forces that end financial capitalism.
Taobao.com and tmall.com, both under the Alibaba company, registered 50.7 billion yuan (US$8.2 billion) in sales on November 11, 2014. A few weeks later, the total Internet sales plus the in-store sales in the U.S. market in the three-day Thanks-giving weekend was only 40.7 billion yuan (US$6.6 billion). The 50.7 billion yuan is only the sales for one-day on Alibaba, not including 163.com, qq.com, jd.com, and other online stores in China, nor including any physical store sales.
All Alibaba's sales were done via Alipay (an electronic payment system). What does Alipay mean? It means that currency is out of the trade platform. The U.S. hegemony is based on its dollar. What is the dollar? It is a currency. In the future, when we stop using currency to complete sales, the traditional currency will be useless. Will the empire that is established on currency still exist? That is the question that the Americans should think about.
3D printing also represents a future direction. It will create fundamental change to the human production process. When the production process changes and the trading process changes, the world will go through a fundamental change. History shows that these two changes, not other factors, are the real cause for society's change.
Today's capital may disappear when currency disappears. When the production method changes along the line of 3D printing, the human world will step into a new social mode. At that time, China and the U.S. will stand at the same starting line of the Internet, big data, and cloud computing. The competition at that time will depend on who will be the first to step through this new door, not on who will press the other down. From this point of view, I say that the U.S. has chosen the wrong opponent.
America's real opponent is itself and this change. America has shown a surprising slowness in realizing this point. That is because America has too much invested in keeping its hegemonic position. It does not want to share power with other countries, nor does it want to step together with others into the new social door behind which there are still many things unknown to us.
Endnotes:
[1] China Publication Online, "Qiao Liang: The U.S.'s Strategy of Shifting Focus to the East and China's Strategy of Going to the West China's Strategic Choice in the Game between China and the U.S.," April 15, 2015.
http://www.chuban.cc/dshd/jqjt/201504/t2...65579.html.
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Quote:Just 8 men own same wealth as half the world


Published: 16 January 2017
Eight men own the same wealth as the 3.6 billion people who make up the poorest half of humanity, according to a new report published by Oxfam today to mark the annual meeting of political and business leaders in Davos.


Oxfam's report, An economy for the 99 percent', shows that the gap between rich and poor is far greater than had been feared. It details how big business and the super-rich are fuelling the inequality crisis by dodging taxes, driving down wages and using their power to influence politics. It calls for a fundamental change in the way we manage our economies so that they work for all people, and not just a fortunate few.


New and better data on the distribution of global wealth particularly in India and China indicates that the poorest half of the world has less wealth than had been previously thought. Had this new data been available last year, it would have shown that nine billionaires owned the same wealth as the poorest half of the planet, and not 62, as Oxfam calculated at the time.


Winnie Byanyima, Executive Director of Oxfam International, said:


"It is obscene for so much wealth to be held in the hands of so few when 1 in 10 people survive on less than $2 a day. Inequality is trapping hundreds of millions in poverty; it is fracturing our societies and undermining democracy.


"Across the world, people are being left behind. Their wages are stagnating yet corporate bosses take home million dollar bonuses; their health and education services are cut while corporations and the super-rich dodge their taxes; their voices are ignored as governments sing to the tune of big business and a wealthy elite."


Oxfam's report shows how our broken economies are funnelling wealth to a rich elite at the expense of the poorest in society, the majority of whom are women. The richest are accumulating wealth at such an astonishing rate that the world could see its first trillionaire in just 25 years. To put this figure in perspective you would need to spend $1 million every day for 2738 years to spend $1 trillion.


Public anger with inequality is already creating political shockwaves across the globe. Inequality has been cited as a significant factor in the election of Donald Trump in the US, the election of President Duterte in the Philippines, and Brexit in the UK.


Seven out of 10 people live in a country that has seen a rise in inequality in the last 30 years. Between 1988 and 2011 the incomes of the poorest 10 percent increased by just $65 per person, while the incomes of the richest 1 percent grew by $11,800 per person 182 times as much.


Women, who are often employed in low pay sectors, face high levels of discrimination in the work place, and who take on a disproportionate amount of unpaid care work often find themselves at the bottom of the pile. On current trends it will take 170 years for women to be paid the same as men.


An Economy for the 99 percent' also reveals how big business and the super-rich are fuelling the inequality crisis. It shows how, in order to maximize returns to their wealthy shareholders, big corporations are dodging taxes, driving down wages for their workers and the prices paid to producers, and investing less in their business.


Oxfam interviewed women working in a garment factory in Vietnam who work 12 hours a day, 6 days a week and still struggle to get by on the $1 an hour they earn producing clothes for some of the world's biggest fashion brands. The CEOs of these companies are some of the highest paid people in the world. Corporate tax dodging costs poor countries at least $100 billion every year. This is enough money to provide an education for the 124 million children who aren't in school and fund healthcare interventions that could prevent the deaths of at least six million children every year.


The report outlines how the super-rich use a network of tax havens to avoid paying their fair share of tax and an army of wealth managers to secure returns on their investments that would not be available to ordinary savers. Contrary to popular belief, many of the super-rich are not self-made'. Oxfam analysis shows over half the world's billionaires either inherited their wealth or accumulated it through industries which are prone to corruption and cronyism.


It also demonstrates how big business and the super-rich use their money and connections to ensure government policy works for them. For example, billionaires in Brazil have sought to influence elections and successfully lobbied for a reduction in tax bills while oil corporations in Nigeria have managed to secure generous tax breaks.


Byanyima said: "The millions of people who have been left behind by our broken economies need solutions, not scapegoats. That is why Oxfam is setting out a new common sense approach to managing our economies so that they work for the majority and not just the fortunate few."


"Governments are not helpless in the face of technological change and market forces. If politicians stop obsessing with GDP, and focus on delivering for all their citizens and not just a wealthy few, a better future is possible for everyone."


Oxfam's blueprint for a more human economy includes:


Governments end the extreme concentration of wealth to end poverty. Governments should increase taxes on both wealth and high incomes to ensure a more level playing field, and to generate funds needed to invest in healthcare, education and job creation.


Governments cooperate rather than just compete. Governments should work together to ensure workers are paid a decent wage, and to put a stop to tax dodging and the race to the bottom on corporate tax.


Governments support companies that benefit their workers and society rather than just their shareholders. The multi-billion Euro company Mondragon, is owned by its 74,000 strong workforce. All employees receive a decent wage because its pay structure ensures that the highest paid member of staff earns no more than 9 times the amount of the lowest paid.


Governments ensure economies work for women. They must help to dismantle the barriers to women's economic progress such as access to education and the unfair burden of unpaid care work.


Oxfam is also calling on business leaders to play their part in building a human economy. The World Economic Forum has responsive and responsible leadership as its key theme this year. They can make a start by committing to pay their fair share of tax and by ensuring their businesses pay a living wage. People around the global can also join the campaign at http://www.evenitup.org.

Quote:I venture that few outside the Russian Federation will even know the name of Anatoly Chubais, today the CEO of a Russian high-tech company called Rusnano. Following the high-profile November 15 arrest of Prime Minister Dmitry Medvedev's Minister of Economics, Alexei Ulyukaev, on charges of accepting at least $2 million in bribes in a state privatization involving Rosneft and Bashneft energy companies, the spotlight has turned to the company of Anatoly Chubais, Boris Yeltsin's 1990s privatization czar, today CEO of state-owned Rusnano,.[1] If charges are formally brought against Chubaisundeniably one of the most hated of the Yeltsin-era kleptocrat "reformers" who worked with the CIA during the 1990's to plunder Russian state assets worth hundreds of billions for just penniesit will signal that Putin feels in a strong enough position to purge the pro-free market liberal mafia that still holds a lock grip on the development of the Russian economy.

On 16 November, the day after the dramatic arrest of Ulyukaev, state prosecutors and police raided the offices of Chubias' Rusnano. [2] Notable about the reports of the prosecutors' questioning Chubais and other top officers at Rusnano, is the fact that several have fled Russia in recent months to avoid prosecution.[3] To the present, Chubais remains, and vehemently claims innocence.

In my view, there is vastly more at stake here than the innocence or guilt of Chubais. This move, if combined with the arrest of Ulyukaev, signals a major cleanup of corrupt elements who, beginning even before 1991, organized to sell Russia to the CIA and Western speculators like George Soros. Some history that has generally been blacked out in the West about the true role of Anatoly Chubais and the Yeltsin Presidency are instructive to also understand the irrational rage of Washington and US banks and oligarchs directed at Putin and at everything he does to re-establish Russian sovereignty and stability.

CIA's Yeltsin Democracy' Coup

The rape of Russiathe Russian nation, the Russian state, the Russian peoplebeginning the end of the 1980's, was a coup d'état engineered by the US Central Intelligence Agency along with rogue and not so rogue networks directed by former CIA Director, then President, George Herbert Walker Bush and continued by Bush's successor, Bill Clinton. Western accounts of what took place inside the Russian Federation during the Yeltsin years of the 1990's speak of "Russian mafia," or "Russian Organized Crime." Never do they mention or even hint that those Russians who plundered their own country were organized and paid, made rich by the West, to be more precise, by the Old Boy CIA networks loyal to former CIA Director and then US President, George Herbert Walker Bush.

What took place in the 1990's under the Russian Presidency of Boris Yeltsin was described by one knowledgeable US insider, Mortimer Zuckerman, a member of the New York Council on Foreign Relations and owner of US News & World Report as, "the largest giveaway of a nation's wealth in history." The giveaway or more precisely said, theft, was done through outright theft, currency war and a fraudulent loans-for-company stock shares program that Anatoly Chubais directed. [4]

The Bush Sr. Administration's attack on post-communist Russia, dubbed "Operation Hammer," had four distinct covert elements. The CIA would secretly finance the August 1991 Generals' coup against Soviet leader Mikhail Gorbachev. They would use their secret financial war-chest to destabilize the Ruble. They used corrupted Russian Gosbank national bank officials to organize the theft of the country's official gold reserves, most all of it. Then they began a systematic takeover of strategic energy, raw materials and military state industries in the Soviet Union via IMF-dictated privatization operations that were run by Yeltsin's Finance Minister, Yegor Gaidar and his close associate responsible for state privatization, Anatoly Chubais. Gaidar and Chubais worked in league with Harvard's Jeffrey Sachs and other friends of billionaire hedge fund speculator, George Soros in the literal rape of Russia as one insider described it.[5]

As the rogue ex-KGB generals and their hand-picked protégés looted the gold reserves of the now defunct Soviet Union, as well as the significant financial assets of the now-banned Communist Party, all with the blessing and complicity of Boris Yeltsin and his inner circle, the Bush CIA Old Boys were ready to launch the next phase, systematic takeover of strategic energy, raw materials and military state industries in the Soviet Union via IMF-dictated privatization operations that were run by Yeltsin's Finance Minister, Yegor Gaidar, and his accomplice, Anatoly Chubais.

In November 1991, Chubais became a minister in the Yeltsin Cabinet where he managed the portfolio of Rosimushchestvothe Committee for the Management of State Property, which Yeltsin decreed to be the agency responsible for devising Russia's privatization of the state companies. Gaidar and Chubais worked in league with George Soros, the Wall Street speculator and funder of the CIA front, National Endowment for Democracy. Soros in turn brought Harvard's Jeffrey Sachs, architect of the Polish "economic shock therapy," and other American "friends," to the Yeltsin circles.

George Soros and his Open Society Foundations had been linked to the CIA by Chinese intelligence and others. His Open Society institutions "coincidentally" appeared in every situation where the CIA's National Endowment for Democracy front and the US State Department sought regime change to a pro-Washington government. Already back in 1987, while Gorbachev still headed the Soviet Union, Soros took advantage of the regime's efforts to reform and open cautiously to the West by founding his Open Society Institute in Moscow. There he could give money to key researchers and others to support "market economy" research. [6]

All actions of Yeltsin were guided by his CIA and rogue KGB handlers, notably KGB Generals Filipp Bobkov, Alexei Kondaurov and Yeltsin's personal bodyguard, General Alexander Korzhakovthe cabal who, in coordination with George Bush Sr. and his CIA Old Boys described, staged the phony KGB "coup" attempt against Gorbachev that propelled Yeltsin, with support of mainstream Western media, as the "champion of democracy." In December 1991, four months after, Yeltsin, then President of the Russian Soviet Federative Socialist Republic, the largest federated "republic" within the Soviet Union, met with the presidents of Ukraine and Belarus and signed what was called the Belavezha Accords declaring the dissolution of the USSR that had formally existed since 1922. It was the key note in the US-backed coup to open up the rape of Russia. By then Gorbachev had been utterly discredited and resigned.

Russia's Shock Therapy, Harvard and CIA

As part of the dissolution agreement, Russia took title to all state assets of the former USSR, now non-existent, as well as assuming all foreign debts of the USSR. Yeltsin was told to make a 32-year-old friend of George Soros named Yegor Gaidar his Economics Czar. Gaidar, who formally was made Finance Minister of the new Russian Federation in February 1992, made another young economist, Anatoly Chubais, his privatization head.

Gaidar was taken to Poland to study the Polish "Shock Therapy" model, the process that had been introduced by George Soros' young Harvard economist protégé, Jeffrey Sachs. Back in Moscow, Yegor Gaidar, using the Polish example of Sachs, convinced Yeltsin to "let prices rise to increase supply and to scrap trade barriers so that foreign commodities could begin to fill store shelves."

It was a lie. The Soviet economy was self-sufficient in everything except perhaps bananas and coffee. The shops were full until Yeltsin announced in November 1991 the exact date when price controls were to be lifted, December 31 of that year. Shop-owners hid their goods waiting for the announced profit bonanza of price decontrol. Shops were suddenly empty. Within a week of the Yeltsin speech, rationing was imposed on Muscovites. [7]

Gaidar was instructed by the US Treasury from the new Clinton Administration that took office in January 1993. The key person at Treasury for the ensuing Gaidar-Chubais looting of Yeltsin's Russia was a former Harvard economist named Lawrence Summers. Summers used the powerful influence of the US Treasury Department to get International Monetary Fund dollars to the cash-hungry Yeltsin government, telling Yeltsin and Gaidar that Russia must open itself to unrestricted imports if they wanted to receive IMF and other Western loans.

Gaidar soon delivered a policy that served the demands of Washington and of the KGB's new banking oligarchs around Mikhail Khodorkovsky's Menatep Bank and others. Under the Gaidar decrees, Russian manufacturing was to go bankrupt in the face of unrestricted foreign competition, but domestic banking, such as Menatep, controlled by the rogue KGB generals and the CIA-tied Western banks, was to be protected from competition. [8]

After the November 1992 US election victory of Bill Clinton, Larry Summers, the new US Treasury Deputy Secretary responsible for Russia "reforms," also a former Harvard economics professor, brought a group of his former Harvard colleagues including George Soros's Polish Shock Therapy adviser, Jeffrey Sachs, and economics professor, Andrei Shleifer, to Moscow under the auspices of their Harvard Institute for International Development (HIID). The Sachs-Schleifer-Summers triangle essentially orchestrated all key aspects in the implementation of Gaidar-Chubais "shock therapy" in the early 1990's Yeltsin years. [9]

In 1991, Summers had been chief economist at the World Bank, where Summers named his former Harvard student, Schleifer, a Russian-American, as World Bank "adviser" to the Yeltsin government. Soon after Summers became Deputy Treasury Secretary in the Clinton Administration in 1993, Schleifer would join Jeffrey Sachs' Harvard Institute for International Development (HIID) as the head of their Moscow operations.

HIID was cleverly chosen by Summers as the key advisory agency to work with Gaidar and Chubais to organize the colossal looting known as Russian privatization. Summers, from his Washington Treasury office, named all key actors in the Chubais privatization rape of Russia in the early 1990's. They were what could be called a Harvard mafia. Summers hired David Lipton from Harvard, a former consulting partner of Jeffrey D. Sachs & Associates, to be his Deputy Assistant Treasury Secretary for Eastern Europe and the Former Soviet Union. Sachs was named Director of HIID in 1995. His HIID received USAID grants for the institute's "work" in Russia. [10]

The USAID was known as a CIA front agency, keeping the CIA role of regime change and such hidden behind the veil of a charitable US Government agency spending for economic development. It was a key money link for the directing of every step of the Chubais privatization operations through the Summers-Sachs Harvard Boys. [11]

Harvard was a clever choice to be the CIA hands-on operator for the Chubais privatization. CIA monies via a Harvard University front gave an aura of impartial academic respectability and of plausible deniability that the CIA was responsible. Shleifer, a Russian-born émigré, and protégé of Summers, was already a tenured professor of economics at Harvard in his early 30s. He became Sachs' head of HIID's Russia project, based in Moscow. Then Summers brought in yet another Harvard Boy, another former World Bank consultant for Summers named Jonathan Hay. In 1991, while at Harvard Law School, Hay had also become a senior legal adviser to the Chubais GKI state privatization agency. In the following year 1992, Hay was made HIID's general director in Moscow. Hay assumed vast powers over contractors, policies and program specifics. He not only controlled access to the Chubais circle but was its spokesperson. [12]

Both Jonathan Hay and Andrei Schleifer were identified later as CIA agents.

Vladimir Putin in an April 2013 annual dialogue with Russian citizens, though he discreetly did not name the names, referenced Hay and Schleifer as identified CIA agents working with Chubais and Gaidar in the criminal Russian privatization. Putin said: "We learned today that officers of the United States' CIA operated as consultants to Anatoly Chubais. But it is even funnier that upon returning to the US, they were prosecuted for violating their country's laws and illegally enriching themselves in the course of privatization in the Russian Federation. " [13]

In 2006 US District Court in Boston had fined Hay and Schleifer them personally $2 million and Harvard University $26.5 million for fraud and embezzlement of government funds for private enrichment. That same year 2006 Summerswho by then had become Harvard President was forced to resign on revelation of his role in the Moscow HIID scandals. Berofr he had managed to get Schleifer an endowed Harvard Professor chair. Hay later resurfaced as founder of the Ukraine branch of the Polish "free market" Centre for Social and Economic Research (CASE) during the CIA coup d'etat in Kiev in 2014. [14]

The criminal Russian privatization of invaluable state assets that Hay and Schielfer created together with Anatoly Chubais and Yegor Gaidar after 1992 was done to the last detail by Chubais in cooperation with his new American advisers. When the announcement of the proposed "vouchers-for-shares" privatization received cold response from Russians, already reeling from the economic shock of price liberalization, Hay and Schleifer arranged for slick US Public Relations experts from Burston-Marsteller and the Sawyer Miller Group to devise an ad campaign to be aired on the TV channels of the newly-created Russian oligarchs to convince Russians to accept the program.

Chubais as head of the state GKI state property agency issued 150 million "vouchers" to each and every citizen. In turn, they could invest their voucher in a small share in a Russian privatized state company or shop, or sell it at an established market price pegged to the US dollar, of course. As most Russians were then concerned when if ever the next pension payment would be paid, or where jobs could be found in the collapsing industrial economy that was a predictable result of the Sachs-Harvard-Chubais Shock Therapy, millions simply sold their vouchers for some cash. It was an insane idea if Chubais and Gaidar cared about the economic future of the Russian Federation. It was brilliant if they wanted to create billionaire dollar oligarchs, which is just what they did.

Vouchers could be bought or sold on every street corner in Russia at the start in June 1992. They were traded at the new unregulated Moscow commodity exchanges set up by Harvard's Jonathan Hay with the USAID monies channeled via HIID. Unregulated (deliberately a decision of Gaidar, Chubais and their Harvard CIA advisers) voucher investment funds sprung up everywhere to gather citizens' vouchers in the millions. The ruble was domestically made convertible to the US dollar on the advice of the Sachs HIID team. In the twenty months the voucher-for-shares program lasted, the price swung from a high of $20 to a low of $4 a voucher. As they were made freely tradeable, it was ripe for the billionaire oligarchs around Yeltsin who already had huge cash hoardes to buy them up, just what they did. [15]

Nearly six hundred voucher funds obtained 45 million vouchers. The largest, calling itself First Voucher, collected 4 million vouchers. [16]

At the stated price for the vouchers, Chubais and his Harvard Boys had valued the entire Russian economywhich included the world's largest nickel company, some of the world's largest oil and gas companies including Sibneft and Gazprom, RUSAL, the world's largest aluminum companyat a total that was less than the market value of the US General Electric company. The face value of each voucher was 10,000 rubles which Chubais promoted by lying to the public, stating one voucher would be sufficient to buy two or even three Volga cars.

Because they had been allowed by the Bush CIA networks that controlled the financial side of the Yeltsin mafia to be the first Russians with big money, the select Yeltsin oligarchs were able to buy up hundreds of thousands of vouchers and redeem them for entire industries, which would later be stripped and sold. Although they were supposedly acting on behalf of the state, the bank auctioneers of oligarch-owned banks rigged the process. This was how Bank Menatep's Mikhail Khodorkovsky got a 78 percent share of ownership in Yukos, worth about $5 billion, for a mere $310 million. It was how Boris Berezovsky got Sibneft, another oil giant, worth $3 billion, for about $100 million. [17]

Using his connections, Khodorkovsky was able to purchase several factories in investment tenders, and large blocks of shares in timber, titanium, pipe, and copper smelting. In total, he gained control of more than one hundred companies before getting Yukos. In the auctions, based on the number of total vouchers that were circulated, the entire Russian industrial system, mines, oil companies, factories, had a total value of under $12 billion. [18]

Under pressure from Parliament, Chubais agreed to prohibit voucher sale of state companies to foreign investors. There were, however, two notable exceptions Chubais made. In 1995, in the wake of the Yeltsin Referendum victory financed by Soros, the Harvard Management Company (HMC), which invests the university's large endowment, and George Soros, who brought Harvard's Sachs to Chubais, were the only foreign entities allowed to participate. Both HMC and Soros became major shareholders in Novolipetsk, Russia's second-largest steel mill, and Sidanko Oil, with reserves exceeding those of Mobil. HMC and Soros also invested in Russia's high-yielding, IMF-subsidized domestic GKO bond market. And in 1997 he bought 24% of Sviazinvest, the telecommunications giant, together with Uneximbank's Vladimir Potanin, the nominal spokesman of the new Russian oligarchs. At one point Soros stated he had invested $2.5 billion in such Russian assets for the dirt-cheap prices Chubais had deliberately set. [19]

Soros to the Yeltsin Rescue

This left many Russian citizens feeling cheated, royally screwed, furious as their dreams of a promised share in "capitalist private property" vanished, along with their savings, during the Central Bank hyperinflation money printing, another part of George H W Bush's Operation Hammer. By 1993 the pressures from all sides including the Duma were dramatically rising. The population was demanding action. The Supreme Soviet, the upper house, was drafting a bill that would freeze the entire privatization process. The opposition was becoming so great that Chubais ultimately had to rely largely on Yeltsin's presidential decrees, not parliamentary approval, for implementation. The Harvard HIID's Moscow man, the CIA's Jonathan Hay and his HIID associates, drafted many of the decrees. USAID's Walter Coles, whose office funded the Chubais privatizations via HIID admitted, "If we needed a decree, Chubais didn't have to go through the bureaucracy." [20] Russia's nascent efforts to establish some form of parliamentary democracy or even checks on dictatorial Presidential power were of little interest to Washington officials or to Chubais and his cabal around Yeltsin.

The Soros Yeltsin Referendum

At that point, as opposition threatened to get out of hand, Yeltsin felt forced to agree to a national referendum on the entire privatization process. The date was to be April 25, 1993.

The referendum contained four yes/no questions: (1) do you support Yeltsin, (2) do you support Yeltsin's economic policy, (3) do you want early elections for President, and (4) do you want early elections for parliament? [21]

Facing sure defeat, Chubais, likely on advice from his Harvard mentors, arranged to secretly meet with US billionaire George Soros. Soros agreed to finance on behalf of Yeltsin the Referendum campaign. Soros funneled $1 million, a huge sum on Russia at the time, to offshore accounts set up for Chubais to use to buy media exposure. Yeltsin survived by a slim 52% and privatization of major Russian industrial companies went forward. [22] Yeltsin was giving the Crown Jewels and much more to a cabal of CIA-backed Russian oligarchs as well later to Soros himself.

From Washington, Summers at Treasury architected the Chubais-Gaidar privatization with Jeffrey Sachs and Andrei Schleifer serving to directly convey the plans to their Yeltsin economic advisers. The Chubais-Washington privatization of Russian assets was a theft on a scale unprecedented in any nation, even in wartime. From 1992 to 1994, ownership of 15,000 firms was transferred from state control largely to the new billionaire oligarchs such as Khodorkovsky and Berezhovsky via the Chubais-Washington voucher program.

Oligarchs Buy Yeltsin Re-election

By 1996, with the Russian economy deep into hyperinflation, Yeltsin faced certain defeat in scheduled elections. The head of the Communist Party, Gennadi Zyuganov, promising a return to stability, was far ahead in the polls. Some of Yeltsin's close advisers ever suggested canceling the elections and declaring a de facto dictatorship. By then Yeltsin's daughter, Tatyana Borisovna Yumasheva, had become her father's closest adviser, together with Berezhovsky, Guzinsky and the other USAID and CIA-made oligarchs. Russian media labeled the clique controlling Russia, especially after Yeltsin's heart attack that year, "The Family," as in mafia family, not blood family, though with daughter Tatyana the de facto Capo di tutti capi of the family owing to her influence over the President. [23]

Following the Russian Communist Party success in the December 1995 parliamentary or Duma elections, the International Monetary Fund made an extraordinary $10.2 billion loan to the Yeltsin government in which $1 billion was secretly intended by Washington for the campaign to keep Yeltsin President in the 1996 elections. Tape recordings of conversations between Clinton and Yeltsin later made public, showed that in return, among other favors, Yeltsin would exempt longtime Clinton supporter and campaign donor, Arkansas-based Tyson Chicken's exports to Russiathen a $700 million annual businessfrom a threatened 20% tariff increase. [24]

Berezhovsky and Guzinsky, the Washington-backed new Russian oligarchs, fearing loss of their stolen billions to the opposition communists, formed what they called the "Group of Seven," which included Berezovsky, Gusinsky, Khodorkovsky, Potanin, Vinogradov, Smolensky, and Friedman. With aid of US Madison Avenue spin doctors, the Group of Sevenwhich owned the two major TV stations with the third still state owned, and as well major press ran a US-style media campaign assault, at the same time blocking Zyuganov from buying media time. Yeltsin posters carried the slogan, "Choose with Your Heart." Another ad featured Yeltsin family photos, while Yeltsin in TV spots recalled events in his childhood: as an athlete, a rebel, a father, and a grandfather. All the while, sentimental music… [25]

The oligarchs hired Anatoly Chubais, the man responsible for creating their fortunes, as Yeltsin's campaign manager. He created a private fund called the Center for the Protection of Private Property and received $5 million from the Group of Seven for the campaign. Fake newspapers were created and printed stories claiming discovery of secret minutes of a Communist Party leadership meeting where Zyuganov was alleged to have said, "We will not be able to give the people anything that we promised." Gaidar's re-election fund also funneled hundreds of thousands of dollars, a fortune in the time of hyperinflation of the ruble, to major journalists to write fraudulent articles in praise of Yeltsin and discrediting Zyuganov. [26]

The fact that the oligarchs had a near monopoly on Russian TV and print media made it possible to tilt the vote to Yeltsin 54%. The Russian Corporate Politburo was now firmly in the saddle, with Yeltsin and Chubais their horses. [27]

The human cost of the US-imposed Russian Shock Therapy brought by Anatoly Chubais, Yegor Gaidar together with George Soros, Jeffrey Sachs and a stable of CIA-linked financial and legal operators such as Jonathan Hay and Andrei Schleifer, was beyond belief. Between 1991 and 1997, Russian GDP the value of all goods and services that Russia produces collapsed by 83%. Farm production declined 63% as state support for agriculture ended and cheap US imports such as Tyson chickens replaced their domestic production. Industrial and other investment decreased 92%. More than 70,000 factories were closed down. That led to Russia producing 88% fewer tractors, 76% fewer washing machines, 77% less cotton fabric, 78% fewer TV-sets and on and on. In a country without unemployment under the Soviet era, 13 million people lost their jobs. Those who still had work had their wages cut in half. The average life span for men had been shortened by six years, down to the same level as in India, Egypt or Bolivia. Alcoholism became epidemic as depression and unemployment spread among the population. It was a shock indeed, the kind of shock a country experiences only in a major war. The average life span had decreased, in just a few years, to the same level as in India, Egypt and Bolivia. [28]

The fact that Anatoly Chubais is now under enormous pressure and likely to be prosecuted is about far more than corruption of a corporate director. It goes to the heart of the corrupt circles that have tried since the ascent of Vladimir Putin in December 1999 to resume the Wall Street rape of Russia, so far without success. For them Putin is the symbol of that defeat. For the vast majority of Russians who lived through the rape of their country in the 1990's, Anatoly Chubais is the symbol of that devastation and destruction.

1. The Moscow Times, Fearing Criminal Prosecution, Chubais Allies Flee Russia, The Moscow Times, 29 November, 2016, http://www.themoscowtimes.com ↑
   
2. RAPSI, Police raid Moscow office of Rusnano corporation, 16 November, 2016, http://rapsinews.com/news/20161116/277151707.html. ↑
   
3. Fearing Criminal Prosecution Chubais Allies Flee Russia Report, July 22, 2015 , https://themoscowtimes.com/news/fearing-...port-48465. ↑
   
4. Mort Zuckerman, cited in email from Karon von Gerhke-Thompson to the author, 14 August, 2011. ↑
   
5. E.P. Heidner, Collateral Damage US Covert Operations and the Terrorist Attacks on September 11, 2001, https://wikispooks.com/w/images/d/db/Col...part_1.pdf. ↑
   
6. Sebastian Mallaby, More Money than God: Hedge Funds and the Making of the New Elite, Council on Foreign Relations, New York, 2010, p. 212. ↑
   
7. Anne Williamson, Testimony Before the Committee on Banking and Financial Services of the United States House of Representatives September 21, 1999, http://www.thebirdman.org/Index/Others/O...conomy.htm. ↑
   
8. Ibid. ↑
   
9. Janine R. Wedel, The Harvard Boys Do Russia, The Nation, May 14, 1998 , https://www.thenation.com/article/harvar...do-russia/ ↑
   
10. Ibid. ↑
    
11. Mark Ames, The murderous history of USAID the US Government agency behind Cuba's fake Twitter clone, April 8, 2014, https://pando.com/2014/04/08/the-murdero...ter-clone/. ↑
    
12. Janine R. Wedel, op. cit. ↑
    
13. Ibid. ↑
    
14. Vladimir Putin, Direct Line with Vladimir Putin April 25, 2013 , http://en.kremlin.ru/events/president/news/17976. ↑
    
15. David E. Hoffman, The Oligarchs: Wealth and Power in the New Russia, New York, Public Affairs Press, Chapter 8, p. 193. ↑
    
16. Ibid., p. 197. ↑
    
17. Marshall I. Goldman, Putin and the Oligarchs, Foreign Affairs, November/December, 2004, http://www.cfr.org/world/putin-oligarchs/p7517 ↑
    
18. David E. Hoffman, op. cit., p.202. ↑
    
19. Janine R. Wedel, op. cit. ↑
    
20. Ibid. ↑
    
21. David E. Hoffman, op. cit., p.202. ↑
    
22. Ibid. ↑
    
23. Wikipedia, Tatyana Yumasheva. ↑
    
24. Anne Williamson, Testimony…,op. cit ↑
    
25. David E. Hoffman, op. cit., p. 345. ↑
    
26. Ibid, p. 345. ↑
    
27. Ibid., p. 327. ↑
    
28. Dan Josefsson, Shock Therapy: The Art of Ruining a Country, 1 April, 1999, http://josefsson.net/artikelarkiv/51-sho...untry.html
    

Quote:

The Euro Is Murdering Europe

Column: Economics
Region: Europe



The Euro is murdering the nations and economies of the EU quite literally. Since the fixed currency regime came into effect, replacing national currencies in transactions in 2002, the fixed exchange rate regime has devastated industry in the periphery states of the 19 Euro members while giving disproportionate benefit to Germany. The consequence has been a little-noted industrial contraction and lack of possibility to deal with resulting banking crises. The Euro is a monetarist disaster and the EU dissolution is now pre-programmed as just one consequence. Those of you familiar with my thoughts on the economy will know I feel the entire concept of globalization, a term which was popularized under the presidency of Bill Clinton to glamorize the corporativist agenda that had just come into being with creation of the World Trade Organization in 1994, is fundamentally a destructive rigged game of the few hundred or so giant "global players. Globalization destroys nations to advance the agenda of a few hundred giant, unregulated multinationals. It's based on a disproven theory put forward in the 18th Century by English free trade proponent David Ricardo, known as the Theory of Comparative Advantage, used by Washington to justify removing any and all national trade protectionism in order to benefit the most powerful "Global Players," mostly US-based.The faltering US project known as Trans-Pacific Trade Partnership or the Trans-Atlantic Trade and Investment Partnership, is little more than Mussolini on steroids. The most powerful few hundred corporations will formally stand above national law if we are foolish enough to elect corrupt politicians that will endorse such nonsense. Yet few have really looked closely at the effect that surrender of currency sovereignty under the Euro regime is having.

Collapse of Industry

The nations of what today is misleadingly known as the European Union follow a concept ratified by a then-far-smaller number of European memberstwelve versus 28 states todayof what had been the European Economic Community (EEC). A European version of giganto-mania appeared during the EEC Commission presidency of French globalist politician Jacques Delors when he unveiled what was called the Single European Act in February 1986.Delors overturned the principle established by France's Charles de Gaulle, the principle which de Gaulle referred to as "Europe of the Fatherlands." De Gaulle's concept of the European Economic Communitythen six nations including France, Germany, Italy and the Benelux threewas one in which there would be periodical meetings of the premiers of the six Common Market nations. There, with elected heads of states, policies would be formulated and decisions made. An assembly elected from members of national parliaments would review the actions of the ministers. De Gaulle viewed the Brussels EEC bureaucracy as a purely technical administrative body, subordinate to national governments. Cooperation should be based on the "reality" of state sovereignty. Supranational acquisition of power over individual nations of the EEC was anathema for de Gaulle, rightly so. As with individuals so with nationsautonomy is basic and borders do matter.Delors' Single Act proposed to overturn that Europe of the Fatherlands through radical reforms to the EEC aimed at the destructive idea that the diverse nations, with diverse histories, cultures and diverse languages, could dissolve borders and become a kind of ersatz United States of Europe, run top down by unelected bureaucrats in Brussels. It in essence is a Mussolini-style corporativist or fascist vision of a non-democratic, non-responsible European bureaucracy controlling populations arbitrarily, answerable only to corporate influence, pressure, corruption.It was an agenda developed by the largest multinationals of Europe, whose lobby organization was the European Roundtable of Industrialists (ERT), the influential lobby group of Europe's major multinationals (by personal invitation only) such as Swiss-based Nestle, Royal Dutch Shell, BP, Vodafone, BASF, Deutsche Telekom, ThyssenKrupp, Siemens and other giant European multinationals. The ERT, not surprisingly, is the major lobby in Brussels pushing adoption of the TIPP trade deal with Washington.The ERT was a major driver for the 1986 Delors Single Act proposals that led to the Frankenstein Monster called the European Union. The idea of the EU is creation of a top-down central unelected political authority that would decide the future of Europe without democratic checks and balances, at heart a truly feudal notion.The concept of a single United States of Europe, dissolving national identities that went back more than a thousand years or more, can be traced back to the 1950's when the Bilderberg Meeting of 1955 in Garmisch-Partenkirchen, West Germany, first discussed the creation out of the six member nations of the European Coal and Steel Community of "a common currency, and…this necessarily implied the creation of a central political authority." De Gaulle was not present.The project to create a monetary union was unveiled at a 1992 EEC conference in Maastricht, Holland following the unification of Germany. France and Italy, backed by Margaret Thatcher's Britain, forced it through over German misgivings in order to "contain the power of a unified Germany." British Tory press railed against Germany as an emerging "Fourth Reich," conquering Europe economically, not militarily. Ironically, this is what has very much de facto emerged from the structures of the Euro today. Because of the Euro, Germany economically dominates the entire 19 Eurozone countries.The problem with the creation of the European Monetary Union (EMU) prescribed in Maastricht Treaty is that the single currency and the "independent" European Central Bank were launched without being tied to a political single legal entity, a genuine United States of Europe. The Euro and the European Central Bank is a supranational creation without answerability to anyone. It was done in absence of a genuine organic political union such as that created when 13 states, with common English language and following a commonly-fought war of independence from Great Britain, created and adopted the Constitution of the United States of America. In 1788 the delegates from the 13 states agreed to establish a republican form of government grounded in representing the people in the states, with separation of powers between the legislative, judicial and executive branches. Not so the EMU.The EU bureaucrats have a cute name for this disconnect between unelected central bank officials of the ECB controlling the economic destiny of the 19 member states with 340 million citizens of the so-called Eurozone. They call it the "democratic deficit." That deficit has grown gargantuan since the 2008 global financial and banking crisis and the emergence of the not-sovereign European Central Bank.

Collapse of Industry

The creation of the Euro single currency since 1992 has put the Euro member states into an economic strait-jacket. The currency value cannot be changed to boost national exports during economic downturns such as that experienced since 2008. The result has been that the largest industrial power in the Eurozone, Germany, has benefited from the stable euro while weaker economies on the periphery of the EU, including most notably, France, have endured catastrophic consequences to the rigid Euro rate.In a new report, the Dutch think-tank, Gefira Foundation, notes that French industry has been contracting since the adoption of the euro. "It was not able to recover after either of the 2001 or 2008 crises because the euro, a currency stronger than the French franc would be, has become a burden to France's economy. The floating exchange rate works like an indicator of the strength of the economy and like an automatic stabilizer. A weaker currency helps to regain competitiveness during a crisis, while a stronger currency supports consumption of foreign goods."The study notes that because of this currency strait-jacket, ECB's policy has created a Euro too high versus other major currencies to enable France to maintain exports since the economic downturn of 2001. The Euro has led to increased imports into France and because France had no exchange rate flexibility, her industry "could not regain international competitiveness in the world's market after the 2001 crisis, so its industry has been slowly dying ever since." They lost the economic stabilizing tool of a floating exchange rate.Today, according to the Eurostat, industry makes up 14.1% of the French total gross value added. In 1995 it was 19.2%. In Germany it is 25.9%. Most striking has been the collapse of a once-vibrant French car industry. Despite the fact that world car production almost doubled from 1997 to 2015 from 53 million to 90 million vehicles annually, and while Germany increased its car production by 20% from 5 to 6 million, from the time France joined the Euro in 2002, French car production almost halved from nearly 4 million to less than 2 million.

Euro Bail-in Laws

The same Euro strait-jacket is preventing a serious reorganization of troubled banks across the Eurozone since the 2008 crisis. The creation of the supra-national, non-sovereign European central Bank has made it impossible for member countries of the Eurozone to resolve their banking problems created during the excesses of the pre-2008 period. The case of Italy with its request to make a state bailout of its third-largest bank, Monte dei Paschi, is exemplary. Though draconian layoffs and closings have for the moment eased panic, Brussels refused to permit a $5 billion Italian state rescue of the bank, instead demanding the bank revert to a new EU banking law called "Bail in." While they may not yet dare to implement bail-in just yet in Italy, it is EU law and will certainly be the instrument of choice by the unelected Eurogroup when the next banking crisis hits.Bail-in, while it sounds better than taxpayer bailout, actually requires that a bank's depositors be robbed of their deposits to "rescue" a failed bank, if Brussels or the unelected Eurogroup decides such a bail-in of deposits is needed after bank bond holders and stock holders and creditors have not been able to meet the losses. This bail-in confiscation was applied in Cyprus banks in 2013 by the EU. Depositors there with over €100,000 either lost 40% of their money.If you are a depositor in, say, Deutsche Bank, and the stock shares are tanking, as they have been, and legal troubles threaten their existence, and the German government refuses to talk bailout, but rather leaves the bank to potential bail-in, you can be sure every depositor with an account over €100,000 will begin to look to other banks, worsening the crisis for Deutsche Bank. Then all other remaining depositors would be vulnerable to bail-in as was initially proposed by the Eurogroup for Cyprus banks.

Surrender of monetary sovereignty

Under the Euro and the rules of Eurogroup and ECB, decisions are no longer sovereign but central, taken by not-democratically appointed faceless bureaucrats like Holland Finance Minister, Jeroen Dijsselbloem, President of Eurogroup. During the Cyprus bank crisis Dijsselbloem proposed confiscating all depositor money, big or small, to recapitalize the banks. He was forced to back down at the last minute, but it shows what is possible in the coming EU bank crisis that is pre-programmed by the defective Euro institution and its fatally flawed ECB.Under current Eurozone rules, effective January, 2016, EU national governments are prohibited from taxpayer rescue of their banks, preventing orderly resolution of bank liquidity problems until too late. Germany has adopted a bank bail-in law as have other EU governments. The new bail-in rules are the result of a bureaucratic directive from the unelected, faceless bureaucrats of the EU Commission known as the EU Bank Recovery and Resolution Directive ("BRRD").In 1992 when Swedish banks went into insolvency as a real estate bubble popped, the state stepped in with Securum, a bad-bank/good bank rescue. The bankrupt banks were temporarily nationalized. Non-performing real estate loans in billions were put into the state corporation, Securum, the so-called bad bank. The risk-addicted bank directors were dismissed. The nationalized banks, minus bad loans, were allowed, under state management, to resume lending and return to profit before being reprivatized as the economy improved. The non-performing real estate became again profitable as the economy recovered over several years, and after five years the state could sell the assets for a total net profit and liquidate Securum. Taxpayers were not burdened.

ECB Prevents Bank Resolutions

Now, as the EU faces a new round of bank solvency crises with banks like Deutsche Bank, Commerzbank and major banks across the Eurozone facing new capital crises, because the EU lacks a central taxation power, no flexible tax-payer or bank nationalization is possible. New national bank rules adjusted to local circumstances are not possible. Measures to give troubled banks time such as allowing a temporary moratorium on foreclosures and repossessions if people fall behind on their payments, outsourcing national electronic payment system to commercial banks, are not possible.The EuroZone has no central fiscal authority, so such solutions cannot be implemented. Banking system problems are only being solved by monetary authorities, by the insane ECB policy of negative interest rates, so-called Quantitative Easing where the ECB buys endless billions of Euros in dodgy corporate and state debt with no end in sight, and in the process making insurance companies and pension funds insolvent.The answer is definitely not that proposed by the kleptocratic George Soros and others, namely to give the unelected Brussels super-state the central fiscal power to issue Brussels Euro bonds. The only possible solution short of destroying the economies of the entire Eurozone in the coming next European bank solvency crisis, is to dismantle the Frankenstein Monster called the European Monetary Union with its ECB and common currency.The individual countries in the 19 country Euro Zone do not form what economists call an "optimum currency area," never did. The economic problems of a Greece or Italy or even France are vastly different from those of Germany, or of Portugal or Spain.In 1997 before his death, one of my least-favorite economists, Milton Friedman, stated, "Europe exemplifies a situation unfavorable to a common currency. It is composed of separate nations, speaking different languages, with different customs, and having citizens feeling far greater loyalty and attachment to their own country than to a common market or to the idea of Europe." On that, I have to say, he was right. It's even more so the case today. The Euro and its European Central Bank are murdering Europe as effectively as the Second World War did, only without the bombs and rubble.
http://journal-neo.org/2016/11/12/the-eu...ng-europe/

Quote:The Royal Bank of Scotland killed or crippled thousands of businesses during the recession as a result of a deliberate plan to add billions of pounds to its balance sheet, according to a leaked cache of thousands of secret documents.

The RBS Files revealed today by BuzzFeed News and BBC Newsnight lay bare the secret policies under which firms were pushed into the bank's feared troubled-business unit, Global Restructuring Group (GRG), which chased profits by hitting them with massive fees and fines and by snapping up their assets at rock-bottom prices.
The internal documents starkly contradict the bank's public insistence that GRG acted as an "intensive care unit" for ailing firms, tasked with restructuring their loan agreements to "help them back to health".