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Editor’s Comment:
Guest Writer: Ellen Brown
Ellen is an attorney and the author of eleven books, including Web of Debt: The Shocking Truth About Our Money System and How We Can Break Free. Her websites are webofdebt.com and ellenbrown.com. She is also chairman of the Public Banking Institute.
How the Goldman Vampire Squid Just Captured Europe
By Ellen Brown, Truthout | News Analysis
The Goldman Sachs coup that failed in America has nearly succeeded in Europe – a permanent, irrevocable, unchallengeable bailout for the banks underwritten by the taxpayers.
In September 2008, Henry Paulson, former CEO of Goldman Sachs, managed to extort a $700 billion bank bailout from Congress. But to pull it off, he had to fall on his knees and threaten the collapse of the entire global financial system and the imposition of martial law; and the bailout was a one-time affair. Paulson’s plea for a permanent bailout fund – the Troubled Asset Relief Program or TARP – was opposed by Congress and ultimately rejected.
By December 2011, European Central Bank President Mario Draghi, former vice president of Goldman Sachs Europe, was able to approve a 500 billion euro bailout for European banks without asking anyone’s permission. And in January 2012, a permanent rescue funding program called the European Stability Mechanism (ESM) was passed in the dead of night with barely even a mention in the press. The ESM imposes an open-ended debt on EU member governments, putting taxpayers on the hook for whatever the ESM’s eurocrat overseers demand.
The bankers’ coup has triumphed in Europe seemingly without a fight. The ESM is cheered by euro zone governments, their creditors and “the market” alike, because it means investors will keep buying sovereign debt. All is sacrificed to the demands of the creditors, because where else can the money be had to float the crippling debts of the euro zone governments?
There is another alternative to debt slavery to the banks. But first, a closer look at the nefarious underbelly of the ESM and Goldman’s silent takeover of the ECB….
The Dark Side of the ESM
The ESM is a permanent rescue facility slated to replace the temporary European Financial Stability Facility and European Financial Stabilization Mechanism as soon as member states representing 90 percent of the capital commitments have ratified it, something that is expected to happen in July 2012. A December 2011 YouTube video titled “The shocking truth of the pending EU collapse!” originally posted in German, gives such a revealing look at the ESM that it is worth quoting here at length. It states:
The EU is planning a new treaty called the European Stability Mechanism, or ESM: a treaty of debt…. The authorized capital stock shall be 700 billion euros. Question: why 700 billion?… [Probable answer: it simply mimicked the $700 billion the US Congress bought into in 2008.][Article 9]: “,,, ESM Members hereby irrevocably and unconditionally undertake to pay on demand any capital call made on them … within seven days of receipt of such demand.” … If the ESM needs money, we have seven days to pay…. But what does “irrevocably and unconditionally” mean? What if we have a new parliament, one that does not want to transfer money to the ESM?…
[Article 10]: “The Board of Governors may decide to change the authorized capital and amend Article 8 … accordingly.” Question: … 700 billion is just the beginning? The ESM can stock up the fund as much as it wants to, any time it wants to? And we would then be required under Article 9 to irrevocably and unconditionally pay up?
[Article 27, lines 2-3]: “The ESM, its property, funding and assets … shall enjoy immunity from every form of judicial process…. ” Question: So the ESM program can sue us, but we can’t challenge it in court?
[Article 27, line 4]: “The property, funding and assets of the ESM shall … be immune from search, requisition, confiscation, expropriation, or any other form of seizure, taking or foreclosure by executive, judicial, administrative or legislative action.” Question: … [T]his means that neither our governments, nor our legislatures, nor any of our democratic laws have any effect on the ESM organization? That’s a pretty powerful treaty!
[Article 30]: “Governors, alternate Governors, Directors, alternate Directors, the Managing Director and staff members shall be immune from legal process with respect to acts performed by them … and shall enjoy inviolability in respect of their official papers and documents.” Question: So anyone involved in the ESM is off the hook? They can’t be held accountable for anything? … The treaty establishes a new intergovernmental organization to which we are required to transfer unlimited assets within seven days if it so requests, an organization that can sue us but is immune from all forms of prosecution and whose managers enjoy the same immunity. There are no independent reviewers and no existing laws apply? Governments cannot take action against it? Europe’s national budgets in the hands of one single unelected intergovernmental organization? Is that the future of Europe? Is that the new EU – a Europe devoid of sovereign democracies?
The Goldman Squid Captures the ECB
Last November, without fanfare and barely noticed in the press, former Goldman executive Mario Draghi replaced Jean-Claude Trichet as head of the ECB. Draghi wasted no time doing for the banks what the ECB has refused to do for its member governments – lavish money on them at very cheap rates. French blogger Simon Thorpe reports:
On the 21st of December, the ECB “lent” 489 billion euros to European Banks at the extremely generous rate of just 1% over 3 years. I say “lent,” but in reality, they just ran the printing presses. The ECB doesn’t have the money to lend. It’s Quantitative Easing again.The money was gobbled up virtually instantaneously by a total of 523 banks. It’s complete madness. The ECB hopes that the banks will do something useful with it – like lending the money to the Greeks, who are currently paying 18% to the bond markets to get money. But there are absolutely no strings attached. If the banks decide to pay bonuses with the money, that’s fine. Or they might just shift all the money to tax havens.
At 18 percent interest, debt doublesin just four years. It is this onerous interest burden – not the debt itself – that is crippling Greece and other debtor nations. Thorpe proposes the obvious solution:
Why not lend the money to the Greek government directly? Or to the Portuguese government, currently having to borrow money at 11.9%? Or the Hungarian government, currently paying 8.53%. Or the Irish government, currently paying 8.51%? Or the Italian government, who are having to pay 7.06%?
The stock objection to that alternative is that Article 123 of the Lisbon Treaty prevents the ECB from lending to governments. But Thorpe reasons:
My understanding is that Article 123 is there to prevent elected governments from abusing Central Banks by ordering them to print money to finance excessive spending. That, we are told, is why the ECB has to be independent from governments. OK. But what we have now is a million times worse. The ECB is now completely in the hands of the banking sector. “We want half a billion of really cheap money!!” they say. OK, no problem. Mario is here to fix that. And no need to consult anyone. By the time the ECB makes the announcement, the money has already disappeared.
At least if the ECB was working under the supervision of elected governments, we would have some influence when we elect those governments. But the bunch that now has their grubby hands on the instruments of power are now totally out of control.
Goldman Sachs and the financial technocrats have taken over the European ship. Democracy has gone out the window, all in the name of keeping the central bank independent from the “abuses” of government. Yet, the government is the people – or it should be. A democratically elected government represents the people. Europeans are being hoodwinked into relinquishing their cherished democracy to a rogue band of financial pirates, and the rest of the world is not far behind.
Rather than ratifying the draconian ESM treaty, Europeans would be better advised to reverse Article 123 of the Lisbon treaty. Then, the ECB could issue credit directly to its member governments. Alternatively, euro zone governments could re-establish their economic sovereignty by reviving their publicly owned central banks and using them to issue the credit of the nation for the benefit of the nation, effectively interest free. This is not a new idea, but has been used historically to very good effect, e.g. in Australia through the Commonwealth Bank of Australia and in Canada through the Bank of Canada.
Today, the issuance of money and credit has become the private right of vampire rentiers, who are using it to squeeze the lifeblood out of economies. This right needs to be returned to sovereign governments. Credit should be a public utility, dispensed and managed for the benefit of the people.
To add your signature to a letter to parliamentarians blocking ratification of the ESM, click here.
Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud | Tagged: bailout, bankruptcy, borrower, Ecb, Ellen Brown, ESM, EU collages, European Central Bank, European Financial Stabilization Mechanism, European Stability Mechanism, Federal reserve, foreclosure offense, forgery, fraud, Goldman Sachs, Henry Paulson, housing market, housing prices, Lender Liability, Mario Draghi, Mortgage, mortgage meltdown, mortgages, permanent bailout fund, predatory lending, securitization, TARP, Troubled Asset Relief Program, Truthout |
@ J.A. see short version: http://www.youtube.com/watch?v=0Zs2SeVOnNA
“state of the international credit crisis from the gals down at the beauty parlor”
It isn’t just gals down at the beauty parlor these days…..we should be so lucky if the beauty parlors (going out of business) and the beautiful people were talking about the international credit crisis….keep the education flowing please. Just hope the 99% can afford the beauty parlor again one day.
PLEASE stop with the sarcastic attacks…
Oh yeah—SAE –please be sure to get a thorough report posted on the state of the international credit crisis from the gals down at the beauty parlor–im sure everybody is on the edge of their seats waiting for that insight—too bad i just dont have time to listen to those keen economic analyses either
and for the mole cheering section—I was appalled by that cover up of the mistaken affidavit —the motion to purge simply makes the affidavit and cover up—–look like admission of guilt from an press investigative perspective—-and a bit like maybe obstruction of justice????if the bae docs also disappear—the emails are party admissions in the right circumstances—-the emails and that false aff was there long enough that im sure there are quite a few florida depositions in planning by now–who’s head is going to roll—somebody with an inside story to tell? or maybe it was deliberate to get the whistleblower money? that set of docs tends to prove intentional “fraud upon the court” –should be interesting to see if that judge goes along with it with the spotlights turned up and feds watching
This ignores the interplay between the federal reserve and the ECB. Example: some italian bank buys italian govt bonds paying say 5% interest —–puts the bonds up as collateral for a 1% 2 yr loan from ECB–which really was used to buy the bonds in the 1st place. The italian bank books the spread as income and builds capital to weather the coming storm–or make people feel better–induce people to quit putting money under the mattress.
The ECB then takes the Italian govt bonds that it received as collateral —and puts those bonds up as collateral with the US federal reserve—which loans euros that it buys from us banks to the ECB—and also dollars to cover dollar-denominated transactions.
The germans dont care—-they are not guaranteeing the whole–just a piece of a piece–just that part that its own banks are on the hook for–the federal reserve is in effect guaranteeing the periphery debt—-but since we are already printing $1.3 trillion a year to cover US govt spending 50 cents of every dollar spent is now printed–plus what is going to the banks for casino operations and other speculation—the 500 billion plus US share is lost in the rounding–the Obama admin made a big deal about not contributing to the 700 billion promised by IMF early this week—but basically obama just said as they used to when united way went door to door—“we gave at the federal reserve” so the IMF money [promises] comes from places like Myanmar-haiti argentina etc–nice joke—-its the us propping up the failed eu perphery —-thru backdoor taxes on our bread–oil etc–thats why prices keep going up while wages are flat to down—-printing presses
ok im not listening anymore so go ahead and post 500 one liners sae–too bad ill miss enraged npv etc—-i would have liked to hear their take but you win–i lost my right to hear
The Secret of Oz – Winner, Best Docu of 2010
This is the best history of money documentery that I have found. It’s two hours long, but it explains how we got where were are, and what needs to be done.
http://youtu.be/swkq2E8mswI
It should be shone in every classroom in America.
It has been said that ” If the people understood the monatiary system, there would be a revolutition tomorrow”.
This will help you understand it, pass it on to your friends.
• Assignment of Trade (AOT) – A transaction used primarily in the mortgage-backed
securities (MBS) to be announced (TBA) market, where the obligation to fulfill an existing
forward trade is assigned by one of the counterparties to a third party. Typically the third
party is an investor and the party assigning the trade is a loan originator who then sells
loans to that investor that will fulfill the obligation represented by the assigned trade.
Assignments of trade are frequently used to avoid having to make delivery of securities
into, or receive delivery of securities from, a TBA trade. The process has been
formalized by the Securities Industry and Financial Markets Association (SIFMA).
• FNMA – The Federal National Mortgage Association (FNMA), commonly known as
Fannie Mae, was set up as a stockholder-owned corporation chartered by Congress in
1968 as a government-sponsored enterprise (GSE), but founded in 1938 during the
Great Depression. The corporation’s purpose is to purchase and securitize mortgages in
order to ensure that funds are consistently available to the institutions that lend money to
home buyers. The term also is used as an abbreviated way to refer to a security issued
by the FNMA and secured by a pool of federally insured and conventional mortgages.
• FNMA Net Required Yield – This is the FNMA base mortgage rate, net of servicing value
that is used to calculate the price that FNMA will pay for cash delivery for various
delivery periods.
• FHLMC – The Federal Home Loan Mortgage Corporation, commonly known as Freddie
Mac, is the brother agency of Fannie Mae. FHLMC operates similarly to FNMA and
issues securities that are secured by a pool of conventional home mortgages. Freddie
Mac creates liquidity in the residential mortgage market by guaranteeing, purchasing,
securitizing, and investing in home loans. Freddie Mac was created in 1970 as part of
the Federal Home Loan Bank System and was initially chartered to serve the housing
liquidity needs of member banks. This role has been expanded since the agency’s
inception.
Mortgage – The transfer of an interest in property (or the equivalent in law – a charge) to
a lender as a security for a debt – usually a loan of money. While a mortgage in itself is
not a debt, it is the lender’s security for a debt. It is a transfer of an interest in land (or the
equivalent) from the owner to the mortgage lender, on the condition that this interest will
be returned to the owner when the terms of the mortgage have been satisfied or
performed. In other words, the mortgage is a security for the loan that the lender makes
to the borrower.
TBA – A term used to describe a forward mortgage-backed securities trade. Pass-
through securities issued by Freddie Mac, Fannie Mae and Ginnie Mae trade in the TBA
market. The term TBA is derived from the fact that the actual mortgage-backed security
that will be delivered to fulfill a TBA trade is not designated at the time the trade is made.
The securities are “to be announced” 48 hours prior to the established trade settlement
date.
Hedge – Making an investment to reduce the risk of adverse price movements in an
asset. Normally, a hedge consists of taking an offsetting position in a related security,
such as a futures contract. Investors use this strategy when they are unsure of what the
market will do. A perfect hedge reduces your risk to nothing
Freddies Mac – Serious problems READ CAREFULLY –
For help with your mortgage, contact your lender and let them know you would like to pursue assistance through the federal Making Home Affordable program.
1.
(Your lender is the company to which you make your mortgage payments, and may also be referred to as a mortgage servicer.) Your lender can help you determine if you are eligible for the Making Home Affordable Program. Also, you can explore your eligibility for Making Home
Affordable programs by visiting MHA’s Web site and answering a series of questions that will
help you determine your next step.
Freddies Mac – Serious problems RaAD CAREFULLY –
For help with your mortgage, contact your lender and let them know you would like to pursue assistance through the federal Making Home Affordable program.
1.
(Your lender is the company to which you make your mortgage payments, and may also be referred to as a mortgage servicer.) Your lender can help you determine if you are eligible for the Making Home Affordable Program. Also, you can explore your eligibility for Making Home
Affordable programs by visiting MHA’s Web site and answering a series of questions that will
help you determine your next step.
The European countries are in for a shock when this passes, and it will pass. With a continuous, unlimited supply of cash they’ll buy every corrupt politician they need to make sure it passes. That’s how it’s done here in the good ole’ USA!!! Need a Judge – buy one, need a State Attorney – buy one, need to run the White House – Buy a President.