Tuesday, May 25, 2010

U.S. Economic Expansion: Global Wars and the U.S. Industrial and Economic Might


Both the First World War and the Second World War managed to eliminate any economic rivalry or challenge to U.S. corporations. While Europe and Asia were ravaged by war, the U.S. inversely grew economically. U.S. industrial might grew by leaps and bounds, while the industrial capacities of Europe and Asia were destroyed by both Allied and Axis sides in the Second World War and by the Allies and the Central Powers in the First World War.

2. By the end of the the Second World War, the U.S. literally owned half the global economy through loans, American foreign investment and war debts.

3. U.S. economic expansion and the American export boom were unprecedented in the scale that took place during the period from 1910-1950, all of which was tied to the Eurasian warscape.

4. Also, it was also only the U.S. that had the economic resources to rebuild the economies and industrial capacities of Europe and Asia, which it did with strings attached. These strings involved favourable treatment of U.S. corporations, preferential trade with the U.S., and the setting up of U.S. branch plants.

5. 1945 was the beginning of Pax Americana. Even much of the foreign aid provided by the U.S. government (with the approval of Congress), to facilitate the reconstruction of European states, flowed back into the private bank accounts of the owners of U.S. corporations, because American firms were awarded many reconstruction-related contracts.

6. War had directly fuelled the industrial might of the United States, while eliminating other rivals such as the Japanese who were a major economic threat to U.S. markets in Asia and the Pacific.

7. Just to show the extent of the American objectives to handicap their economic rivals one should look at the handling of Japan from 1945 till about October 1, 1949. After the surrender of Tokyo to the U.S. on the U.S.S. Missouri and the start of the American occupation and administration of Japan, the Japanese economy began to rapidly decline because of the calculated neglect of the U.S. through the office of the Supreme Commander of the Allied Powers (SCAP). In economic terms, the Japanese case was initially very similar to that of Anglo-American occupied Iraq.

8. In late-1949 all this began to change. Almost overnight, there was literally a complete change, or a flip-flop, in U.S. policy on Japan. It was only after October 1, 1949 when the People's Republic of China was declared by Mao Zedong and the Communist Party of China that the U.S. began to allow Japan to recover economically, so as to use it as a counter-weight to China. As a side note, in a case of irony, the quick change in American policy regarding Japan allowed the U.S. to overlook the Japanese policy of not allowing foreign investment, which is one of the reasons for the economic success of Japan and one of the reasons why the financial elites of Japan form part of the trilateral pillar of the global economy along with the elites of the U.S. and Western Europe.

The “Open Doors” Policy of the Anglo-American Establishment

Anglo-American elites also made it clear that they wanted a global policy of “open doors” through the 1941 Atlantic Charter, which was a joint British and American declaration about what post-war international relations would be like.

It is very important to note that the Atlantic Charter was made before the U.S. even entered the Second World War.

The events and description above was the second clear phase behind the start of modern neo-liberal globalization; the first phase was the start of the First World War.

In both wars the financial and corporate elite of the U.S., before the entry of the U.S. as a combatant, had funded both sides through loans and American investment, while they destroyed one another. This included the use of middlemen and companies in other countries, such as Canada.

The creation of the U.S. Federal Reserve in 1913, before the First World War and the U.S. domestic (not foreign, because of the regulations of other states) de-coupling of the gold standard from the U.S. dollar in 1933, before the Second World War, were required beforehand for the U.S. domination of other economies.

Both were steps that removed the limits and restraints on the number of U.S. dollars being printed, which allowed the U.S. to invest and loan money to the warring states of Europe and Asia.

In reality, the Cold War did not start because of Soviet aggression, but because of a long-standing historic impulse by Anglo-American elites to encircle and control Eurasia.

Today this policy, which existed before the First World War and helped spark the Second World War, has not changed and Anglo-American elites, such as Zbigniew Brzezinski, still talk about partitioning Russia, the successor state of the Soviet Union.

Mahdi Darius Nazemroaya is a Research Associate for the Centre for Research on Globalization (CRG) specilizing in geo-politics and strategic issues.)


Wednesday, May 19, 2010

The Big Hoax about Paper Money

Let me share with you an interesting article by Matthias Chang, depicting the big hoax regarding the "apparent supremacy " of the paper money called "US Dollar".

Some two decades ago, it was decided by the global financial elites that the framework for the global economy shall consist of:

1) A global derivative-based financial system, controlled by the US Federal Reserve Bank and its associate global banks in the developed countries.

2) The re-location from the West to the East in the production of goods, principally to China and India to “feed” the developed economies.

The entire system was built on a simple principle, that of a FED-controlled global reserve currency which will be the engine for growth for the global economy. It is essentially an imperialist economic principle.

Bernanke’s candid remark that, “the US government has a technology, called the printing press (or today, its electronic equivalent), that allows it to produce as many US dollars as it wishes at essentially no cost”.

This is the crux of the problem!

The financial architects at Goldman Sachs had a master plan – to dominate the global financial system. The means to achieve this financial power was the Shadow Banking System, the lynchpin being the derivative market and the securitization of assets, real and synthetic.

I have talked to so many economists and when asked what is the crux of the present financial problem, they all respond in unison, “it is the global imbalances... the West consumes too much while the East saves too much and consumes not enough”. This is exemplified by the huge US trade deficits on the one part and China’s massive surpluses on the other.

Incredible wisdom and almost everyone echoes this mantra. The recent concluded APEC Summit was no different. This mantra was repeated as well as the call for freer trade between trading nations.

This is a grand hoax. All the current leaders on the world’s stage are corrupted to the rotten core and as such have no interest to call a spade a spade and expose the inherent contradictions within the existing financial system.

The new game:
The financial architects at Goldman Sachs had a master plan – to dominate the global financial system.

The next level of the game:
The next level of the game was reached when the toilet paper reserve currency literally went virtual – through the simple operation of a click of the mouse in the computers of the global banks.

The leaders of China, Japan and the oil producing countries of the Middle East are all cursing and pissing about the current situation, but they don’t have the courage of their convictions to spell it out to their countrymen that they have been conned by the financial spin masters from the Fed acting on the instructions from Goldman Sachs.

Tell me which leader would dare admit that they have exchanged the nation’s wealth for toilet papers?

What kept the ability of the US to maintain its military might and outspend the Soviet Union was the right to print toilet paper currency and the acceptance of the US dollar by her allies as the world’s reserve currency.

When losses are in the US$ trillions and whatever assets / capital remaining are in the US$ billions, we have a huge problem – a financial black-hole.

The preferred remedy by the financial masterminds at Goldman Sachs was to create another hoax – that if the big global banks were to fail triggering a systemic collapse, there would be Armageddon. These “too big to fail” banks must be injected with massive amount of virtual monies to recapitalize and get rid of the toxic assets on their balance sheet. The major central banks in the developed countries in cahoots with Goldman Sachs sang the same tune. All sorts of schemes were conjured to legitimize this bailout.

In essence, what transpired was the mere transfer of monies from the left pocket to the right pocket, with the twist that the banks were in fact helping the Government to overcome the financial crisis.

The Fed and key central banks agreed to lend “virtual monies” to the “too big to fail” global banks at zero or near zero interest rate and these banks in turn would “deposit” these monies with the Fed and other central banks at agreed interest rates. These transactions are all mere book entries. Other “loans” from the Fed and central banks (again at zero or near zero interest rates) are used to purchase government debts, these debts being the stimulus monies needed to revive the real economy and create jobs for the growing unemployed. So in essence, these banks are given “free money” to lend to the government at prior agreed interest rates with no risks at all. It is a hoax!

These “monies” are not even the dollar bills, but mere book entries created out of thin air.

So when the Fed injects US$ trillions into the banking system, it merely credits the amount in the accounts of the “too big to fail” banks at the Fed.

When the system is applied to international trade, the same modus operandi is used to pay for the goods imported from China, Japan etc.

Should a bankrupt country (the US) be allowed to use money created out of thin air to pay for goods produced with the sweat and tears of hardworking citizens of exporting countries? Adding insult to injury, the same dollars are now purchasing a lot less than before.

So what is the use of being paid in a currency that is losing rapidly its value?

If we go by what Bernanke has been preaching and practising, it means more toilet paper currency will be created to repay the debts.

(Author: Matthias Chang)