#MassMobilization of Americans to #AudittheFed #ReclaimtheRepublic

Campaign for Liberty
Dear Tired Old Man,

What an incredible victory you and other Campaign for Liberty members made possible for Audit the Fed in the U.S. House in September!

Today, I want to update you on what Campaign for Liberty has been doing since that victory to pour pressure on the Senate to finally hold a vote during its upcoming Lame Duck session.

Last week, I publicly called on Senate Majority Leader Harry Reid to act on Audit the Fed immediately upon his return to Washington in November, writing in a letter to him that “support for transparency at our nation’s central bank is stronger than ever.”

My staff also sent a similar letter from me to Senator Reid’s colleagues asking them to urge Senator Reid to hold the vote.

Rare’s Kurt Wallace interviewed C4L Vice President of Policy Norm Singleton and Vice President of Programs Matt Hawes for a podcast where they discussed why Audit the Fed is needed and why the issue has made such significant progress.

Through C4L’s website and social media, we’ve been reaching thousands of Americans about sending calls, emails, and more to the Senate demanding action.



One of our Facebook images

We’ve also started sending a series of emails to specific states turning up pressure on senators whose vote could be the key to victory in the Senate.

And yesterday, Rare ran an op-ed from me concerning the Fed, its effect on the American people and our economy, and our Audit effort.

My staff has also created a variety of materials to help you get the word out on what Audit the Fed is, the damage the Fed has done, and why we must take action.

These include:

• A flier you can hand out at events and around your neighborhood.

• A fact sheet on the Fed and our Audit you can also hand out and even use when calling your elected officials’ offices to build pressure or radio talk shows to spread the word.

• An update of an Audit the Fed F.A.Q. my congressional office originally created in 2012 so you can answer some of the most common questions we’ve encountered on Audit the Fed.

You can find links to my letter to Senator Reid, my op-ed, Norm and Matt’s podcast interview, and our downloadable materials here.

In addition to empowering our own members with information and tools to promote Audit the Fed, these efforts allow us to reach new audiences with our message of sound money.

I hope you’ll visit our website and use these materials to recruit your family and friends to this cause!

Stay tuned for more information on other ways C4L is putting the heat on the Senate and how you can help us obtain a vote on Audit the Fed!

For Liberty,

Ron Paul
Chairman

P.S. It’s time for the Senate to act on Audit the Fed.

If you can today, I hope you’ll consider chipping in $5 or $10 to help C4L mobilize Americans on Audit the Fed and our other efforts to reclaim the Republic and restore the Constitution.

Thank you for supporting Campaign for Liberty!

Is the Fed Preparing To Asset-strip Local Government? Bizarre New Rules

From Web of Debt Blog
Posted on  by Ellen Brown

In an inscrutable move that has alarmed state treasurers, the Federal Reserve, along with the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency, just changed the liquidity requirements for the nation’s largest banks. Municipal bonds, long considered safe liquid investments, have been eliminated from the list of high-quality liquid collateral. assets (HQLA). That means banks that are the largest holders of munis are liable to start dumping them in favor of the Treasuries and corporate bonds that do satisfy the requirement.
Muni bonds fund the nation’s critical infrastructure, and they are subject to the whims of the market: as demand goes down, interest rates must be raised to attract buyers. State and local governments could find themselves in the position of cash-strapped Eurozone states, subject to crippling interest rates. The starkest example is Greece, where rates went as high as 30% when investors feared the government’s insolvency. Sky-high interest rates, in turn, are the fast track to insolvency. Greece wound up stripped of its assets, which were privatized at fire sale prices in a futile attempt to keep up with the bills.
The first major hit to US municipal bonds occurred with the downgrade of two major monoline insurers in January 2008. The fault was with the insurers, but the taxpayers footed the bill.  The downgrade signaled a simultaneous downgrade of bonds from over 100,000 municipalities and institutions, totaling more than $500 billion. The Fed’s latest rule change could be the final nail in the municipal bond coffin, another misguided move by regulators that not only does not hit its mark but results in serious collateral damage to local governments – maybe serious enough to finally propel them into bankruptcy.
Why this unprecedented move by US regulators? It is not because municipal bonds are too risky, since corporate bonds with lower credit ratings are accepted under the new rules. Nor is it that the stricter standard is required by the Basel Committee on Banking Supervision (BCBS), the BIS-based global regulator agreed to by the G20 leaders in 2009. The Basel III Accords set by the BCBS are actually more lenient than the US rules and do not include these HQLA requirements. So what’s going on?
From the Inscrutable, Unaccountable Fed
The rule change was detailed by Pam Martens and Russ Martens in a September 4th article titled “The Fed Just Imposed Financial Austerity on the States.” They write that on September 3rd:
The Federal regulators adopted a new rule that requires the country’s largest banks – those with $250 billion or more in total assets – to hold an increased level of newly defined “high quality liquid assets” (HQLA) in order to meet a potential run on the bank during a credit crisis. In addition to U.S. Treasury securities and other instruments backed by the full faith and credit of the U.S. government (agency debt), the regulators have included some dubious instruments while shunning others with a higher safety profile.
Bizarrely, the Fed and its regulatory siblings included investment grade corporate bonds, the majority of which do not trade on an exchange, and more stunningly, stocks in the Russell 1000, as meeting the definition of high quality liquid assets, while excluding all municipal bonds – even general obligation municipal bonds from states with a far higher credit standing and safety profile than BBB-rated corporate bonds.
This, rightfully, has state treasurers in an uproar. The five largest Wall Street banks control the majority of deposits in the country. By disqualifying municipal bonds from the category of liquid assets, the biggest banks are likely to trim back their holdings in munis which could raise the cost or limit the ability for states, counties, cities and school districts to issue muni bonds to build schools, roads, bridges and other infrastructure needs. This is a particularly strange position for a Fed that is worried about subpar economic growth.
Not Sufficiently Liquid?
In a September 3rd press release, Federal Reserve Governor Daniel K. Tarullo stated that while “most state and municipal bonds are not sufficiently liquid to serve the purposes of HQLA in stressed periods . . . the liquidity of some state and municipal bonds is comparable to that of the very liquid corporate bonds that can qualify as HQLA.” [Cite] Criteria were being developed, he said, for considering these assets. But “it is important to get this final rule adopted now, so that the largest banks can begin to prepare for its implementation on January 1.” In the meantime, muni bonds are in limbo, and it appears that most will still not be accepted as HQLA.
The regulators consider stocks to be more liquid than muni bonds because they are readily traded on the stock market. But as the Martens’ note, stock markets can be quite inaccessible in a crisis. Quoting from the Fed’s own archives on the crash of 1987:
Market makers in the over-the-counter market were not obligated to maintain an orderly market and many withdrew from trading. Delays in processing trades resulted in investors receiving prices very different from what they expected. Many brokers did not answer their phones, leaving investors unable to reach them. Erratic price movements and quotes resulted in frequent lock-ups in the electronic trading system used in the over-the-counter market.
In any case, switching the banks’ holdings from muni bonds to corporate bonds or Treasuries is liable to have little effect in a crash. The stricter rules are supposed to be a defense against bank runs; but in a major derivatives bust and bail-in, the available collateral will go first to the derivatives claimants, through a massive concession to financial institutions in the Bankruptcy Reform Act of 2005. (See my earlier article here.) The FDIC and the depositors are both liable to be out of luck, no matter what form the collateral takes.
The Martens’ conclude:
That the Fed and its regulatory cohorts have to resort to this implausible plan – which crimps the ability of states and localities to raise essential funds to operate – in a strained effort to pretend that they’ve found a means of avoiding another massive bailout of Wall Street in a crisis, is just further proof that the only way to seriously deal with too-big-to-fail banks is to restore the Glass-Steagall Act and break up these complex creatures before they strike again.
Gordon Gekko Goes Muni?
The rule change may not have much effect in a crash, but where it will have a major effect is on the cost of credit, which will increase for municipal governments and decrease for corporate and financial institutions. The result will be to further shift power and financial resources from the public sector to the private sector.
Why would regulators dangerously jeopardize state and local government budgets in this way? Skeptical observers speculate that the intent is to Detroit-ize municipal governments, so that assets can be stripped as is being done in that imperiled city. The international bankers got away with asset-stripping Greece. Why not make the US itself a wholly-owned subsidiary of private banking interests?
If that seems far-fetched, consider what is happening with Argentina, which has been forced into bankruptcy by a US court to satisfy the exaggerated claims of certain hold-out vulture funds. IMF regulators have discussed establishing an international bankruptcy court that could strip a country such as Argentina of its assets, including prime sections of real estate, to pay off the nation’s creditors.
In the US, there is already a trend to force state and municipal governments into austerity measures, if not outright bankruptcy, in order to eliminate labor unions, pension obligations and social services. Bankruptcies can be involuntary, forced by the creditors who caused them. Detroit is the US model. Michigan’s Constitution protects pensions, so the emergency manager appointed by the governor could not unilaterally cut those funds. But in a municipal bankruptcy, a judge would decide the fate of city workers’ pensions, making it an attractive option for banking interests. The oligarchs have long had their eyes on the massive sums represented by the pension funds.
Public Banks to the Rescue?
Whatever the explanation for the Fed’s game-changing move, the vulnerability of state and local governments to unpredictable and unaccountable federal regulators is another strong argument in favor of forming publicly-owned banks. Why be under the thumb of an erratic privately-owned central bank manipulated by Wall Street megabanks now caught in multiple frauds?
Like Eurozone countries, US states cannot print their own currencies. But unlike Eurozone countries, they can borrow from their own public banks, which can create money as credit on their books just as private banks do.
At least, they could if they had their own banks. Only one state – North Dakota – has currently taken advantage of that option. North Dakota is also the only state to have escaped the 2008 credit crisis, sporting a budget surplus every year since then. It has the lowest unemployment rate in the country, the lowest default rate on credit card debt, and one of the lowest foreclosure rates.
True, North Dakota also has oil. But the 2008 crisis happened before oil and gas had made a significant impact on state revenues; and the state was posting a budget surplus all during that period. Other oil and gas states are not doing so well.
Globally, 40% of banks are publicly owned; and they are largely in the BRIC countries – Brazil, Russia, India and China. These countries also escaped the credit crisis largely unscathed.
If state and municipal governments want to protect themselves from the fate of Greece and Detroit, they would do well to follow North Dakota’s lead and form their own publicly-owned banks. And time is of the essence, if they hope to beat the rush before the first US Cyprus-style bail-in consumes the collateral that local governments are counting on to protect their multi-billions in deposits.
_________
Ellen Brown is an attorney, founder of the Public Banking Institute, and author of twelve books, including the best-selling Web of Debt. In The Public Bank Solution, her latest book, she explores successful public banking models historically and globally. Her 200+ blog articles are at EllenBrown.com.

The Bank of International Settlements; The Shadow Government of Central Banks

The article below is an excellent summary of modern central banking and it’s involvement with economic wars.  It leaves out some very important facts about its origins, which go back to Hjalmar Schacht, President of the Reichsbank and Minister of Economics under Adolph Hitler.  The BIS was used to handle all the gold and assets stolen from pillaged countries, but I digress.

Written by Bruno de Landevoisin of  the STEALTHFLATION blog.
The Bank for International Settlements, otherwise known as the BIS, should more aptly be named the Bank for International division and domination.  It’s clearly an institution with global reach, whose hidden covert purpose is to impose the financial globalist’s agenda on all sovereign nation states.  The luminous photo below is of their luxurious Headquarters.
Ten times a year, once a month except in August and October, a small group of well dressed men arrives in Basel, Switzerland. Carrying elegant overnight bags and stylish brief cases, they discreetly check into the Euler Hotel, across from the railroad station.  They come to this quiet city from places as disparate as Tokyo, Paris, Brasília, London, and Washington, D.C., for the regular meeting of the most exclusive, secretive, and powerful supranational club in the world.
Each visiting member has his own office at the club, with secure telephone lines to his home country.  These elite international bankers are fully serviced by a permanent staff of about 300, including chauffeurs, chefs, guards, messengers, translators, stenographers, secretaries, and researchers. Also at their disposal are a brilliant research unit, well equipped medical facility and deep underground bunker, as well as a secluded country club with tennis courts and a swimming pool, a few kilometers outside of Basel.
Undoubtedly, we have all heard of this all important international organization, but how many of us really know much about it, or even understand its intended purpose.  The only thing that I knew about this powerful global entity was that it is often described as the Central Bank of Central Banks.  Clearly, we all need to know more, let’s constructively begin with some benign elementary historical background transcribed from Investopedia, and also lay out the venerable institution’s specific functions & mission statement, directly from the BIS website itself.images (2)
Founding and brief History of the BIS:
 Founded in 1930, the Bank for International Settlements is the oldest global financial institution and operates under the auspices of international law. But from its inception to the present day, the role of the BIS has been ever-changing, as it adapts to the dynamic global financial community and its needs. The BIS was created out of the Hague Agreements of 1930 and took over the job of the Agent General for Repatriation in Berlin. When established, the BIS was responsible for the collection, administration and distribution of reparations from Germany – as agreed upon in the Treaty of Versailles.
After World War II, the BIS turned its focus to the defense and implementation of the World Bank’s Bretton Woods System. Between the 1970s and 1980s, the BIS monitored cross-border capital flows in the wake of the oil and debt crises, which in turn led to the development of regulatory supervision of internationally active banks. More recently, it has concentrated its efforts on the global financial stability and capital reserve requirement accords. The BIS has also emerged as an emergency “funder” to nations in trouble, coming to the aid of countries such as Mexico and Brazil during their debt crises in 1982 and 1998, respectively. In cases like these, where the International Monetary Fund is already in the country, emergency funding is provided through the IMF structured program.

The BIS has also functioned as trustee and agent. For example, from 1979 to 1994, the BIS was the agent for the European Monetary System, which is the administration that paved the way for a single European currency. Today, the BIS has become the central bank of central banks. The Bank now represents the interests of nearly all of the world’s central bank institutions, and manages a significant share of their reserves, including gold holdings. The organization now serves and presides over 60 central banks worldwide. Accordingly the BIS requires the capital/asset ratio of central banks to be above a prescribed minimum international standard, for the protection of all central banks involved.
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In broad outline, the BIS pursues its mission by:
  • Promoting discussion and facilitating collaboration among central banks.
  • Supporting dialogue with other authorities that are responsible for promoting financial stability.
  • Conducting research on policy issues confronting central banks and financial supervisory authorities.
  • Acting as a prime counterparty for central banks in their financial transactions.
  • Serving as an agent or trustee in connection with international financial operations.   
Der-BIZ-Turm-in-Basel-Hauptquartier-der-Bank-fuer-internationalen-Zahlungsausgleich-Archiv-
Now that we are up to speed on the BIS’s alleged “raison d’etre”, and fully indoctrinated in the organization’s whitewashed history, self proclaimed mission statement and assumed functions, let’s expose the true nature of this supposedly benign bastion of banking balance.  Trust me, they are anything but the modest measured men of monetary moderation and management they purport to be.  This odious institution is nothing but a conceited cunning cabal of carnivorous cannibals bent on global financial domination, who deftly deploy dreaded debt disbursements the world over. They will stop at nothing to achieve their ends, absolutely nothing.
To fully comprehend the self-serving nature of the BIS, one has to understand that it is an autocratic institution run by a very select group of the highest ranking bankers on the planet, representing both private banking interests, as well as those of the vast worldwide network of central banks that are ultimately owned by those same private commercial & financial interests.  It is important to note that these top flight international bankers have intentionally organized themselves, so as not to be directed by their own national governments for the crucial decisions and actions they take.  In effect, they are a supranational organization, controlled by an elite group of men, who preside over most of the world’s financial and monetary systems of exchange which regulate and facilitate most of the globe’s commerce.
The supreme inner club is made up of the half-dozen powerful central bankers at the apex of a privately devised international monetary system.  Their dictate, which enshrines the inner club from the rest of the lessor BIS members, is the firm belief that central banks should act independently of their home governments.  Their controlling organization is at the epicenter of global finance, and has inherently become increasingly connected and indispensable over time by design.  A glaring early example of their self-serving grandiosity can be found in their despicable double dealings before the outbreak and during the hostilities of the World Wars.
The following passage, by well-respected financial historian Adam LeBor, details the nefarious activities of Thomas McKittrick, a former president of the BIS:
The BIS was founded in Basel in 1930, where it is still headquartered today. Ostensibly set up as part of the Young Plan to administer German reparations payments for WWI, its real purpose was detailed in its statutes: to “promote the cooperation of central banks and provide additional facilities for international financial operations.” The establishment of the BIS was the culmination of the central bankers’ decades-old dream to have their own bank powerful, independent, and free from interfering politicians and nosy reporters.
Under the terms of the founding treaty, the bank’s assets could never be seized, even in times of war. Most felicitous of all, the BIS was self-financing and would be in perpetuity. Its clients were its own founders and shareholders, the central banks. The BIS, boasted Gates McGarrah, an American banker who served as its first president, was “completely removed from any government or political control.” McKittrick’s involvement with the BIS began in 1931, when he joined the German Credits Arbitration Committee, which adjudicated disputes involving German commercial banks. One of the other two members was Marcus Wallenberg, of Sweden’s Enskilda Bank, who taught McKittrick about the intricacies of international finance. Marcus and his brother Jacob were two of the most powerful bankers in the world. During the war, the Wallenberg brothers used Enskilda Bank to play both sides and harvest enormous profits.

2011-07-16180202In May 1939 McKittrick was offered the position of president of the BIS, which he readily accepted. As head of the BIS, headquartered in Basel, from 1940 to 1946, McKittrick played a crucial role in abetting Hitler’s war—and, at the same time, in revealing details about his Nazi colleagues to his friends in Washington, D.C. On McKittrick’s watch, the BIS willingly accepted looted Nazi gold, carried out foreign exchange deals for the Reichsbank, and recognized the Nazi invasion and annexation of conquered countries. By doing so, it also legitimized the role of the national banks in the occupied countries in appropriating Jewish-owned assets. Indeed, the BIS was so indispensable to the overall Nazi project that the vice-president of the Reichsbank, Emil Puhl, who was later tried for war crimes, once referred to the BIS as the Reichsbank’s only “foreign branch.” In the closing months of the war, as American GIs fought their way across Europe, McKittrick was arranging deals with Nazi industrialists to guarantee their profits after the Allied victory.
Additionally, the following indictment from Wikipedia:
As a result of Nazi collaboration allegations, at the Bretton Woods Conference held in July 1944, Norway proposed the “liquidation of the Bank for International Settlements at the earliest possible moment”. This resulted in the BIS being the subject of a disagreement between the American and British delegations. The liquidation of the bank was supported by other European delegates, as well as the United States (including Harry Dexter White, Secretary of the Treasury, and Henry Morgenthau),[6] but opposed by John Maynard Keynes, head of the British delegation. Fearing that the BIS would be dissolved by President Franklin Delano Roosevelt, Keynes went to Morgenthau hoping to prevent the dissolution, or have it postponed, but the next day the dissolution of the BIS was approved. However, the liquidation of the bank was never actually undertaken.[7] In April 1945, the new U.S. president Harry S. Truman and the British government suspended the dissolution, and the decision to liquidate the BIS was officially reversed in 1948.
Fast forward to Today.  Would the very same elite banking interests not be behind the destabilization and financing of multiple military conflicts sprouting up all over the globe?  After all, the U.S. just finished squandering over $3 trillion endlessly tussling with a fanatical bunch of burka wearing nomads in the sparse mountains of Afghanistan for well over a decade.  In the end, what, and who the hell was all of that money really for?  Might it be supranational bank financing concerns funneling their central bank issued easy money government treasury funding directly into the military industrial complex.
MENA, after years of relative calm imposed by despotic regimes often legitimized by Western commercial interests, suddenly, all at once, seemingly out of nowhere, rose up in a spontaneous combustion of political awareness, the so called Arab Spring, which has brought as much disillusionment as promise.  What was really behind this?  While Syria, on the other hand, has been in a perpetual state of war due to ISIS insurgents supported by the U.S., Saudi Arabia, and Israel.  Iraq is on the verge of complete disintegration as the same western organized ISIS move in on Baghdad.  Libya is erupting, with American, British and French embassy’s being swiftly evacuated.  What gives?  Are all of these simultaneous regional conflicts simply a sheer coincidence? Further war financing requirements perhaps.
The Hamas / Israel connection has certainly duped many, even though it is historical fact that the creation of Hamas itself was funded and supported by covert elements of the Israel government.  Why did Israel put money and arms at the disposal of Muslim extremist groups like Hamas and ISIS, only to enter into brutal conflict with them later?  Again, are the international bankers involved here as well?  Why bother with inflation when you can create DeathFlation!
The Ukraine crisis is only further intensifying after the attack on Malaysian flight MH17. In just the past week, the EU has instituted serious economic and financial sanctions, fighting has become even more fierce in the ethnic Russian speaking regions, and Russia itself has been accused of firing heavy artillery into the war zone.Ukraine-Protest_Horo-1-e1392750277144 Moreover, the U.S. now claims that Russia has demonstrably violated the terms of the Intermediate Range Nuclear Forces treaty.  Astonishingly, assistant Secretary of State, Victoria Nuland recently proudly trumpeted that U.S. sponsored NGOs (Non Governmental Organizations) had spent over $5 billion fomenting political protest on the ground in Kiev, in order to destabilize and ultimately overthrow the former president of Ukraine, Victor Yanukovych.  Again, who or what institution actually facilitated the financing of such an excessive amount of funds, and why?
Is it simply the usual bane of proxy war profiteering which is underway, or is something more sinister also a foot here.  Is the western central bank hegemonic monetary system attempting to further assert itself on the arising and defiant BRICS?  Moreover, since all out military conflict is no longer a viable option, due to assured mutual destruction from imposing nuclear arsenals, another most effective avenue for global domination would be via strategic financial and economic power.  Is this what the international banking cabal is now seizing upon?
21aPic1B2102124325_zz_anthems-cover-2007-smallA significant example of a BIS sponsored strategic global economic initiative, orchestrated by its self-serving megalomaniac banking power brokers, was its behind the scene’s role in devising and pushing forward the concept for a European Union with a single common currency.   It established a new role for itself in the postwar world, first as the financial mechanism for American efforts to rebuild Europe, and then for the accelerating project of European unification.  Some believe that the trans-national vision of a modern Europe ruled by mandarins in Brussels and Basel was originally hatched and concocted in a secret meeting held at the Bank for International Settlements.
Clearly, the driving force behind the financial engineering ambitions of the elite global bankers at the BIS has always been the same.  Namely; to further establish themselves as the indispensable international financial body, whose ultimate authority supersedes any national jurisdiction, thereby interminably dismantling and diminishing the sovereignty of the individual nation states.  In other words, they consolidate their subjugation of the local citizenry by championing the benefits of economies of scale which only globalization can achieve, and, of course, that only their financial frameworks can administer.
The UN, EU, NAU, IMF, WBC, CFR, NATO, WTO, OECD, WHO, and a myriad other IGOs (Intergovernmental organizations), all use much the same modus operandi as the BIS to expand their dominion.  In the end, it’s mostly about their self-seeking interests, entitled importance and institutional aggrandizement.  Throughout history, elite groups of men have always attempted to subjugate the masses, this is no different.  The once magnificent self determined Republic of the United States, for the people of the people, must stop these globalists dead in their tracks, before their self-serving hubris and unrelenting drive for hegemony brings unsuspecting Americans down to their knees.
Carroll Quigley, the renown academic historian, in his monumental tome Tragedy and Hope published in 1966, clearly identified the underlying scheme of this scourge. images (1) Having studied the rise and fall of civilizations, Quigley found the explanation of disintegration in the gradual transformation of social “instruments” into “institutions”, that is, transformation of social arrangements functioning to meet real social needs into social institutions serving their own purposes regardless of real social needs.
Many discerning Americans are certainly aware of the prevalence of the false Left/Right paradigm in American politics which is clearly driven by the buying off of politicians via an army of private lobbyists on behalf of avaricious corporate institutions and demanding special interest groups.  There is also a solid case to be made that our multinational banking institutions directly serve to promote this debilitating duplicitous demagoguery.  The once esteemed news networks have also degenerated into a cronyism cesspool of unabashed corporatism, no longer reporting news, but rather dishing out distilled disinformation and various valueless vicissitudes. Institutional disintegration indeed, Mr. Quigley was flat out dead right back in 66′!
Professor Carroll Quigley directed his poignant prescient prose specifically at the Bank for International Settlements:
“The Power of financial capitalism had a far reaching plan, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalistic fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world’s central banks, which were themselves private corporations. Each central bank sought to dominate its government by its ability to control treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence co-operative politicians by subsequent rewards in the business world.”
banksters6The ominous premise of this lengthy piece is precisely why the United States should become increasingly alarmed as these globalists continue to extend their supremacy.  Just as the once proud independent self governing sovereign nation states of Europe have become subservient to an autocratic international banking class, which promptly imposed a common currency, and is now actively crafting a fiscal union to complete its ascendancy and authority, the United States also is a prime target in the cross hairs of these very same avaricious financial oligarchs.
Make no mistake, the likes of the BIS, IMF, IFC, OECD and the World Bank are on a maniacal maraudering mission to subvert the existing U.S. monetary system, via a crafty and cunning central bank, in our very own complicit Federal Reserve.
In my view, this is the only valid explanation as to why we are systematically being driven off a fiscal and monetary cliff, almost as if we were preforming a national financial and economic Hari Kari ritual.  At this point, they have mandated a market cataclysm and deliberately determined the dollar’s demise. To be sure, the BIS and IMF are waiting in the wings with a new global means of exchange based on an archetype of the presently established SDR mechanism.
Why else would the BIS be stating the following today regarding the FED’s current monetary measures?
“The temptation to postpone adjustment can prove irresistible, especially when times are good and financial booms sprinkle the fairy dust of illusory riches. The consequence is a growth model that relies too much on debt, both private and public, and which over time sows the seeds of its own demise. To return to sustainable and balanced growth, policies need to go beyond their traditional focus on the business cycle and take a longer-term perspective – one in which the financial cycle takes centre stage…They need to address head-on the structural deficiencies and resource misallocations masked by strong financial booms and revealed only in the subsequent busts. The only source of lasting prosperity is a stronger supply side. It is essential to move away from debt as the main engine of growth.”
images (3)Ask yourselves, if Janet Yellen sits on the Board of Directors of the BIS, why have she and all her 21st century predecessors been conducting a brazen, unproven, uncharted and surely precarious monetary policy with complete abandon, that totally contradicts the sage and proven advice, judiciously laid out above, by the very institution which is central to monitoring, regulating and advising on global central bank direction.
Something stinks here, it just doesn’t add up. Is our Federal Reserve, whose top leadership also happens to be elite members of the BIS banking cabal club, actually double dealing here?  Setting us up for a great fall, so the financial globalists can come sweeping in to our rescue, installing themselves as our monetary overlords?  Far fetched, you say? Remember, this is well within their past predatory precepts, and typical of their self-serving Modus Operandi!
If  we can’t convince you, perhaps the view of billionaire hedge-fund legend Paul Singer will:
We were astounded to learn that the board of the BIS is comprised of none other than the heads of the major central banks of the developed world! Yes – Yellen, Draghi, et al! So, these central bankers are simultaneously failing to tell their respective governments that (1) monetary policy has done enough; (2) monetary policy is causing massive risks and distortions; and (3) political leaders must grab the reins and make structural changes, these same central bankers are authorizing BIS reports that will enable them to say, after the coming multifactor crisis, that they told us about the risks. 

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We wonder who from the Fed authorized the report, and why they haven’t shared these harsh views of Fed policy in the FOMC meeting minutes or the endless public speeches by Fed officials. It is duplicitous for the Fed to authorize the views in the BIS report yet keep quiet about them elsewhere. But then, the Fed has never accepted much responsibility for the 2008 crisis, despite its decisions to keep interest rates artificially low for an extended period of time, to do a poor job of regulating the banking system and to abet Fannie and Freddie in their utter irresponsibility. History rhymes. The Fed has created the fuel for another crisis, seems to know it judging by the BIS report, and yet is covering itself with an “I told you so” report from the BIS rather than changing course.
In closing, the following list identifies the current Board of Directors who preside over the Bank for International Settlements today, see if you recognize any of these supranational scoundrels.
The BIS Board of Directors:
Chairman: Christian Noyer, Paris Mark Carney, London Agustín Carstens, Mexico City Luc Coene, Brussels Jon Cunliffe, London Andreas Dombret, Frankfurt am Main Mario Draghi, Frankfurt am Main William C Dudley, New York Stefan Ingves, Stockholm Thomas Jordan, Zurich Klaas Knot, Amsterdam Haruhiko Kuroda, Tokyo Ann Le Lorier, Paris Stephen S Poloz, Ottawa Raghuram Rajan, Mumbai Jan Smets, Brussels Alexandre A Tombini, Brasília Ignazio Visco, Rome Jens Weidmann, Frankfurt am Main Janet L Yellen, Washington Zhou Xiaochuan, Beijing
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  The Globalists are indeed on the move……………

July 24, 2014: House Committee on Oversight and Government Reform will be marking-up Ron Paul’s #AuditTheFed bill

Campaign for Liberty

Dear Thomas Jefferson,

Tomorrow, the House Committee on Oversight and Government Reform will be marking-up Ron Paul’s Audit the Fed bill (H.R. 24), which was introduced in this Congress by Representative Paul Broun.

This is a major step toward getting House and Senate floor votes on Audit the Fed this year.

And it is a tribute to the efforts of Campaign for Liberty members like you!

But we cannot drop our guard!

Although Campaign for Liberty staff has heard that the Committee intends to mark up a clean bill, some members have tried to amend the bill in the past to water down the audit.

If we can secure victory in the committee, we can then turn up the pressure to get a last-minute vote on Audit the Fed before the August recess.

Another win in the House would greatly help us force Harry Reid to finally schedule a Senate vote on Audit the Fed before the fall election.

So please, call Rep. Jackie Speier at (202) 225-3531 and tell your representative to do all they can to make sure the House passes a clean Audit the Fed bill before the August recess!

If your representative is on the Oversight and Government Reform Committee, ask them to vote against any amendment that would water down Audit the Fed or attach unrelated issues to it.

Note: Campaign for Liberty is supporting one amendment, offered by committee Chairman Darrell Issa, to remove redundant language from H.R. 24.

You can see the list of Committee members here.

At the beginning of this Congress, many political observers predicted that with C4L Chairman Ron Paul no longer serving in Congress, Audit the Fed wouldn’t get anywhere.

But you proved them wrong!

Immediately after Georgia Representative Paul Broun introduced Audit the Fed, C4L members began flooding the House with petitions, emails, and phone calls demanding their representative support the bill.

And you helped make history.

Because of your actions, Audit the Fed obtained the support of a majority of cosponsors for the third Congress in a row!

But now is no time to rest on our laurels. You can bet the Fed and the well-heeled lobbyists for the Big Banks and Wall Street firms that benefit from Fed secrecy will keep fighting us tooth and nail to foil our attempts to get a vote on Audit the Fed.

And once we get it through the House, we are going to need all the resources we can muster to turn the heat up even more on Harry Reid and wavering senators to get a vote in the Senate.

With many of Reid’s Senate cronies already feeling the heat from the ObamaCare disaster, they may not want to continue to help Reid do the banksters’ bidding by blocking a bill that has twice passed the House of Representatives and is supported by nearly 75% of the American people.

As you can see, we may have our best chance yet to get Audit the Fed voted on in the Senate!

But first, we must win in the House, so please call your representative today.

Tell them to support a clean vote on Audit the Fed.

If your representative is on the House Committee on Oversight and Government Reform, urge them to oppose any amendments that would water down or weaken support for Audit the Fed by adding unrelated issues to the bill.

And if you can, please support C4L’s efforts to pass Audit the Fed with your most generous contribution of $50, $30, $20, or even $10 to help us make a final push in the House and carry our momentum into the Senate.

In Liberty,

Norm Singleton
Vice President of Policy

P.S. Thanks to the hard work of Campaign for Liberty members like you, Audit the Fed (H.R. 24) is moving in the U.S. House! Tomorrow, the House Committee on Oversight and Government Reform will mark up H.R. 24 – a huge step toward getting a House floor vote.

So please, call Rep. Jackie Speier at (202) 225-3531 and ask your representative to do all they can to make sure the House votes on a clean version of Audit the Fed before the August recess.

And if your representative is on the Oversight and Government Reform Committee, tell them to oppose any amendment that would water down Audit the Fed or attach unrelated issues to it.

Note: Campaign for Liberty is supporting one amendment, offered by committee Chairman Darrell Issa, to remove redundant language from H.R. 24.

Audit the Fed Bill (HR24) MUST BE VOTED ON!

Campaign for Liberty

Dear Thomas Jefferson,

Your representative needs to hear from you immediately on Audit the Fed. 

Thursday, the Financial Services Committee will hold its long-overdue hearing called “Legislation to Reform the Federal Reserve on Its 100-Year Anniversary.” 

As you know, Ron Paul’s Audit the Fed bill would bring much-needed transparency to the Federal Reserve System so the American people can finally begin to learn what it is doing to our money. 

But H.R. 24, the “Federal Reserve Transparency Act,” didn’t even make the agenda

That’s why I need you to contact Rep. Jackie Speier at (202) 225-3531

Urge your representative to bring up Audit the Fed at the hearing and request a markup on H.R. 24 as a standalone bill from Committee Chairman Jeb Hensarling. 

Then, after you’ve called them, if you haven’t yet done so be sure and sign your petition to House Leadership and your senators urging them to pass Audit the Fed now! 

Politicians always listen better when they’re running for office. 

And as we get closer to the fall elections, they’ll be listening even more intently. 

Polling shows Audit the Fed is supported by nearly 75 percent of the American people. 

For the third Congress in a row, this legislation has been cosponsored by a majority of the House of Representatives

In July 2012, when Audit the Fed last received a vote on the floor of the House, it passed overwhelmingly under suspension of the rules by a vote of 327-98. 

It’s time for the House to act and place the ball in Harry Reid’s court so Americans can see just who really is blocking transparency at the Federal Reserve. 

That’s why I hope you’ll urge your representative to request that H.R. 24 receive a markup in the Financial Services Committee from Chairman Jeb Hensarling and be referred to the House floor for a standalone vote. 

Then be sure to sign your petition telling House Leadership and your senators to Audit the Fed now! 

Campaign for Liberty’s efforts to Audit the Fed rely on the grassroots action of supporters like you. 

Together, we’ve dragged the Fed out of the shadows and relative obscurity that it operated in for nearly a century.

Now is the time to increase the spotlight on the Federal Reserve System. 

Please take action today! 

In Liberty,

Tim Shoemaker 
Director of Legislation 

P.S. This week, the Financial Services Committee will hold its long overdue hearing called “Legislation to Reform the Federal Reserve on Its 100-Year Anniversary,” but H.R. 24, the “Federal Reserve Transparency Act” isn’t even on the agenda! 

That’s why I need you to contact Rep. Jackie Speier at (202) 225-3531

Urge your representative to bring up Audit the Fed at the hearing and request a markup on H.R. 24 as a standalone bill from Committee Chairman Jeb Hensarling. 

Then, after you’ve called them, if you haven’t yet done so be sure and sign your petition to House Leadership and your senators urging them to pass Audit the Fed now! 

All the Presidents Bankers by Nomi Prins

This will be my next read for sure!  Listen to the Jack Blood show interview.  In the 2nd half he interviews Nomi Prins.  Amazing amount of information is covered in less than 1 hour.

 Buy on Amazon

The Jack Blood Show – April 14 2014

April 14, 2014 by   
Filed under Archive

Who rules America?

All the Presidents’ Bankers is a groundbreaking narrative of how an elite group of men transformed the American economy and government, dictated foreign and domestic policy, and shaped world history.

Culled from original presidential archival documents, All the Presidents’ Bankers delivers an explosive account of the hundred-year interdependence between the White House and Wall Street that transcends a simple analysis of money driving politics—or greed driving bankers.

Prins ushers us into the intimate world of exclusive clubs, vacation spots, and Ivy League universities that binds presidents and financiers. She unravels the multi-generational blood, intermarriage, and protégé relationships that have confined national influence to a privileged cluster of people. These families and individuals recycle their power through elected office and private channels in Washington, DC.

All the Presidents’ Bankers sheds new light on pivotal historic events—such as why, after the Panic of 1907, America’s dominant bankers convened to fashion the Federal Reserve System; how J. P. Morgan’s ambitions motivated President Wilson during World War I; how Chase and National City Bank chairmen worked secretly with President Roosevelt to rescue capitalism during the Great Depression while J.P. Morgan Jr. invited Roosevelt’s son yachting; and how American financiers collaborated with President Truman to construct the World Bank and IMF after World War II.

Prins divulges how, through the Cold War and Vietnam era, presidents and bankers pushed America’s superpower status and expansion abroad, while promoting broadly democratic values and social welfare at home. But from the 1970s, Wall Street’s rush to secure Middle East oil profits altered the nature of political-financial alliances. Bankers’ profit motive trumped heritage and allegiance to public service, while presidents lost control over the economy—as was dramatically evident in the financial crisis of 2008.

This unprecedented history of American power illuminates how the same financiers retained their authoritative position through history, swaying presidents regardless of party affiliation. All the Presidents’ Bankers explores the alarming global repercussions of a system lacking barriers between public office and private power. Prins leaves us with an ominous choice: either we break the alliances of the power elite, or they will break us.

Will Democrats Stand With Rand and Support #AuditTheFed?

They should.  Many Democrats supported Occupy during the 2011-2012 American Spring which resulted in very little.  Now, RINO (that is not an insult but a compliment) Senator Rand Paul is supporting the 2014 Federal Reserve Transparency Act, otherwise known as #AuditTheFed.

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More to come but here is the letter from Ron Paul seeking support for #AudittheFed:

http://fedup100.org/blog/support-hr24-to-auditthefed-in-2014

#AuditTheFed Close to Majority in the House

As we push to pass 200 and get a majority (218) to sign on the bill once again, I hope you’ll sign your petition to your U.S. Representative today. 

The House version of Audit the Fed (H.R. 24) stands at 195 cosponsors, just 23 short of a majority.

If you’ve already signed it, please forward it to family and friends so we can mobilize as many Americans as possible and keep building our momentum! 

For more information on why our nation can’t afford to wait any longer to Audit – and then END – the Fed, please see my original email below. 

In Liberty,

Ron Paul 
Chairman 



Campaign for LibertyDear Andrew,

“Monetary morphine.” 

That’s how some are now referring to the Fed’s risky and unprecedented print-now, ask-questions-later policies. 

As a doctor, I can tell you morphine is one of the most dangerous and addictive substances known to man. First, just a little of the opiate masks a patient’s pain. But then, addicts crave more and more until overdoses result in death.

Andrew, the Fed has tried hard to mask many of our economic problems for years now. But today, the first cracks are starting to appear in what I believe will be nothing less than a Federal Reserve-created, global financial meltdown

And every second Congress waits to finally audit and EXPOSE the Federal Reserve – the first step toward finally ENDING the Fed once and for all – the problems get bigger and bigger

That’s why it’s critical you sign your Audit the Fed petition right away. 

As you’ll see, this petition urges your U.S. Representative to do everything in their power to achieve a standalone, roll call vote on the Audit the Fed bill (H.R. 24), including cosponsoring it if they haven’t yet done so. 

As Senate Majority Leader Harry Reid showed us during Fed Chair Janet Yellen’s confirmation fight – when he blatantly broke Senate rules rather than allow so much as a vote on Audit the Fed – he’ll resort to any dirty trick in the book to stop you and me

But the truth is, there’s never been any defense in Washington, D.C. against a tidal wave of angry Americans DEMANDING political action – or politicians’ hides. 

That’s exactly why I’m counting on your action today to help me create that tidal wave of outrage before it’s too late



You see, just recently, news broke that Wall Street bigwigs, including George Soros’ investment firm, held off-the-record private meetings with Fed officials, where they urged a new round of Fed “intervention” to prop up Europe. 

Apparently, the TRILLIONS in bailouts and secret loans the Fed has issued to overseas banks in recent years aren’t working. 

Now, some foreign banks are fearing old-fashioned panics and demanding depositors show proof of need just to withdraw “large amounts” of their own money! And I’m afraid it’s only a matter of time until this madness reaches our shores. 

Today the U.S. dollar acts as the world’s “reserve currency” – the currency most often used in international trading. 

This has encouraged our federal government’s monetary morphine high, enabling Congress to spend like drunken sailors as U.S. dollars – even when printed out of thin air – stay in demand around the globe

But as foreign economies crumble and stop needing U.S. dollars – and the Federal Reserve continues to print money like there’s no tomorrow – I truly fear an all-out, global financial catastrophe resulting in the collapse of the U.S. dollar

And our massive and growing $17.3 TRILLION national debt could end up wiping out every last shred of American wealth.

That’s why your action today is so critical



If you and I can FORCE Congress to Audit the Fed, the American people will finally see that the Federal Reserve System leads to: 

*** Ever-expanding Big Government boondoggles like “ObamaCare.” 

Now that politicians have figured out the Fed will just create money out of thin air to pay the bills if taxing and borrowing can’t make ends meet, the floodgates are wide open for even more of the statists’ utopian plans; 

*** Constant economic crises

The housing crisis and the resulting chaos is just one example of an economic bubble created by centrally planned interest rates and money manipulation; 

*** The destruction of the middle class

As fuel, food, housing, medical care, and education costs soar, everyone who is NOT on the government dole is forced to make do with less as the value of their money sinks; 

*** Currency destruction

History shows us that riots, violence, and full-scale police states can result when people finally realize their money isn’t worth the paper it’s printed on and REFUSE to accept it. 

That’s why it’s so important you help me turn up the heat on Congress today

I know that despite an outpouring of action by the American people during Janet Yellen’s confirmation hearing, Senator Reid flat-out REFUSED to allow a vote on Audit the Fed

But luckily for him, my ability to participate in the fight was limited by federal law. 

As a former Member of Congress, I was restricted on what I could say and do regarding legislation and grassroots mobilization for one year after leaving office. For example, I couldn’t even directly ask you to call Congress for or against a piece of legislation. 

But those restrictions were lifted on January 4. 

And with so much at stake, I’m more determined than ever to FORCE Congress to act on auditing the Federal Reserve

Without an audit, I’m afraid there could be no stopping the economic calamity you and I both sense roaring at us like a freight train. 

The good news is your action is proven to work. 

Just ten years ago, discussion of the Federal Reserve was limited almost solely to libertarian academics and a few of us in Congress. 

Today, it’s a MAJOR national political issue – one supported by nearly 75% of the American people. 

And it’s your action in support of Campaign for Liberty that put it there



Thanks to your help, my Audit the Fed bill passed the U.S. House with an incredible bipartisan three-fourths majority in 2012. And if you and I can create another massive tidal wave of action in 2014, I’m convinced there will be no stopping us

But there’s no time to waste. You and I have a LOT of work to do. 

And it all starts in the House. 

Today, the House version of Audit the Fed (H.R. 24) stands at 195 cosponsors, just 23 short of a majority

If you and I can pressure a majority of House members to cosponsor Audit the Fed, pressure will dramatically increase on the House Leadership to schedule a vote. 

I’m confident, once a vote is scheduled, the bill will sail through the House yet again. 

At that point, will Senator Reid and President Obama really be able to say “NO” to holding a vote? 

Well, 2014 is an election year. 

As I mentioned earlier, Audit the Fed is supported by nearly 75% of the American people. 

“Thanks” to ObamaCare, NSA spying, and a host of other issues, the political winds are already blowing against President Obama and Senator Reid. 

If they want to add Audit the Fed to the mix, it’ll be their political funeral in 2014

The American people are FED UP with Big Government politicians trying to run their lives. 

And more and more now understand Federal Reserve banksters aren’t running our economy anywhere but into the ground. 

That’s why it’s so important you sign your petition IMMEDIATELY

My hope is to contact up to 12 million Americans from coast-to-coast to generate additional petitions to Congress. 

That alone will dramatically turn up the heat on Congress to take action. But I’m not going to stop there. 

In fact, I’ve instructed Campaign for Liberty staff to craft a $500,000 Internet, email, and TV mobilization campaign. 

Not only that, but it seems just about every other day, I get a call from another news network asking for an interview. 

Now that my restrictions have been lifted, I’m going to come after the Fed with everything I have

But I’m just one man. And I know what it’s like to stand alone. 

For almost 40 years, I’ve fought to restore constitutional principles in America. 

I’ve warned about the dangers of the Fed. 

Today, as much as I hate to see it, my predictions are coming true

But I know I’m not alone any more. The support of good folks like you who are willing to take action to save our beloved Republic gives me hope. 

So won’t you please sign the petition to your U.S. Representative at once



And, if you can, please agree to your most generous contribution

Campaign for Liberty doesn’t have the money in the bank to fund everything that needs to be done. 

And I know without money, all our best-laid plans are nothing but words on paper. So I’m counting on you to help me turn up the pressure on Congress. 

Won’t you please agree to a generous contribution of $30

I know I’m asking you to stretch. 

But I also know you understand just how important it is we finally Audit the Fed and FORCE our federal government to give up its addiction to “monetary morphine.” 

Of course, if $30 is just too much, please give what you can. 

Perhaps you can give $20 or $10? 

Regardless of what you can give, please act right away. 

Please sign your petition and agree to your most generous contribution of $30, $20, $10, or whatever you can afford IMMEDIATELY

In Liberty,

Ron Paul 
Chairman 

P.S. Every second Congress waits to finally audit and EXPOSE the Federal Reserve – the first step toward finally ENDING the Fed once and for all – the problems get bigger and bigger

Now that my legal restrictions have been lifted, allowing me to turn up the pressure on Congress higher than ever,Campaign for Liberty is doubling down on its efforts to Audit the Fed before the Federal Reserve destroys every last shred of American wealth

That’s why it’s critical you sign your petition to your U.S. Representative and make your most generous contribution of $30, $20, or at least $10 TODAY

The Banker Commodity Cartel: Koch, JP Morgan Chase, and Goldman Sachs

The story of how JPMorgan, Goldman and the rest of the Too Big To Fails and Prosecutes, cornered, monopolized and became a full-blown cartel – with the Fed’s explicit blessing – in the physical commodity market is nothing new to regular readers: to those new to this story, we suggest reading of our story from June 2011 (over two and a half years ago),  “Goldman, JP Morgan Have Now Become A Commodity Cartel As They Slowly Recreate De Beers’ Diamond Monopoly.” That, or Matt Taibbi’s latest article written in his usual florid and accessible style, in which he explains how the “Vampire Squid strikes again” courtesy of the “loophole that destroyed the world” to wit: “it would take half a generation – till now, basically – to understand the most explosive part of the bill, which additionally legalized new forms of monopoly, allowing banks to merge with heavy industry. A tiny provision in the bill also permitted commercial banks to delve into any activity that is “complementary to a financial activity and does not pose a substantial risk to the safety or soundness of depository institutions or the financial system generally.”Complementary to a financial activity. What the hell did that mean?… Fifteen years later, in fact, it now looks like Wall Street and its lawyers took the term to be a synonym for ruthless campaigns of world domination.
Some key excerpts:
Today, banks like Morgan Stanley, JPMorgan Chase and Goldman Sachs own oil tankers, run airports and control huge quantities of coal, natural gas, heating oil, electric power and precious metals. They likewise can now be found exerting direct control over the supply of a whole galaxy of raw materials crucial to world industry and to society in general, including everything from food products to metals like zinc, copper, tin, nickel and, most infamously thanks to a recent high-profile scandal, aluminum. And they’re doing it not just here but abroad as well: In Denmark, thousands took to the streets in protest in recent weeks, vampire-squid banners in hand, when news came out that Goldman Sachs was about to buy a 19 percent stake in Dong Energy, a national electric provider. The furor inspired mass resignations of ministers from the government’s ruling coalition, as the Danish public wondered how an American investment bank could possibly hold so much influence over the state energy grid.
The motive for the Kochs, or anyone else, to hoard a commodity like oil can be almost beautiful in its simplicity. Basically, a bank or a trading company wants to buy commodities cheap in the present and sell them for a premium as futures. This trade, sometimes called “arbitraging the contango,” works best if the cost of storing your oil or metals or whatever you’re dealing with is negligible – you make more money off the futures trade if you don’t have to pay rent while you wait to deliver.
So when financial firms suddenly start buying oil tankers or warehouses, they could be doing so to make bets pay off, as part of a speculative strategy – which is why the banks’ sudden acquisitions of metals-storage companies in 2010 is so noteworthy.
These were not minor projects. The firms put high-ranking executives in charge of these operations. Goldman’s acquisition of Metro was the project of Isabelle Ealet, the bank’s then-global commodities chief. (In a curious coincidence commented upon by several sources for this story, many of Goldman’s most senior officials, including CEO Lloyd Blankfein and president Gary Cohn, started their careers in Goldman’s commodities division.)
Then there are the political connections:
In 2010, a decade after the Rich pardon, Holder was attorney general, but under Barack Obama, and two Rich-created firms, along with two banks that have been major donors to the Democratic Party, all made moves to buy up metals warehouses. In near simultaneous fashion, Goldman, Chase, Glencore and Trafigura bought companies that control warehouses all over the world for the LME, or London Metals Exchange. The LME is a privately owned exchange for world metals trading. It’s the world’s primary hub for determining metals prices and also for trading metals-based futures, options, swaps and other instruments.
“If they were just interested in collecting rent for metals storage, they’d have bought all kinds of warehouses,” says Manal Mehta, the founder of Sunesis Capital, a hedge fund that has done extensive research on the banks’ forays into the commodities markets. “But they seemed to focus on these official LME facilities.”
The JPMorgan deal seemed to be in direct violation of an order sent to the bank by the Fed in 2005, which declared the bank was not authorized to “own, operate, or invest in facilities for the extraction, transportation, storage, or distribution of commodities.”The way the Fed later explained this to the Senate was that the purchase of Henry Bath was OK because it considered the acquisition of this commodities company kosher within the context of a larger sale that the Fed was cool with – “If the bulk of the acquisition is a permissible activity, they’re allowed to include a small amount of impermissible activities.”
What’s more, according to LME regulations, no warehouse company can also own metal or make trades on the exchange. While they may have been following the letter of the law, they were certainly violating the spirit: Goldman preposterously seems to have engaged in all three activities simultaneously, changing a hat every time it wanted to switch roles. It conducted its metal trades through its commodities subsidiary J. Aron, and then put Metro, its warehouse company, in charge of the storage, and according to industry experts, Goldman most likely owned some metal, though the company has remained vague on the subject.
If you’re wondering why the LME would permit a seemingly blatant violation of its own rules, a good place to start would be to look at who owned the LME at the time. Although it eventual­ly sold itself to a Hong Kong company in 2012, in 2010 the LME was owned by a consortium of banks and financial companies. The two largest shareholders? Goldman and JPMorgan Chase.
Humorously, another was Koch Metals (2.32 percent), a commodities concern that’s part of the Koch brothers’ empire. The Kochs have been caught up in their own commodity-manipulation schemes, including an episode in 2008, in which they rented out huge tankers and sed them to store excess oil offshore essentially as floating warehouses, taking cheap oil out of available supply and thereby helping to drive up energy prices. Additionally, some banks have been accused of similar oil-hoarding schemes.
And then there is of course Blythe, who is now looking for a new job precisely as a result of the cartel story:
Chase’s own head of commodities operations, Blythe Masters – an even more famed Wall Street figure, sometimes described as the inventor of the credit default swap – admitted that her company’s warehouse interests weren’t just a casual thing. “Just being able to trade financial commodities is a serious limitation because financial commodities represent only a tiny fraction of the reality of the real commodity exposure picture,” she said in 2010.
Loosely translated, Masters was saying that there was a limited amount of money to be made simply trading commodities in the traditional legal manner. The solution? “We need to be active in the underlying physical commodity markets,” she said, “in order to understand and make prices.”
We need to make prices. The head of Chase’s commodities division actually said this, out loud, and it speaks to both the general unlikelihood of God’s existence and the consistently low level of competence of America’s regulators that she was not immediately zapped between the eyebrows with a thunderbolt upon doing so. Instead, the government sat by and watched as a curious phenomenon developed at all of these new bank-owned warehouses, in the aluminum markets in particular.
Finally, the big picture:
[T]he potential for wide-scale manipulation and/or new financial disasters is only part of the nightmare that this new merger of banking and industry has created. The other, perhaps even darker problem involves the new existential dangers both to the environment and to the stability of the financial system. Long before Goldman and Chase started buying up metals warehouses, for instance, Morgan Stanley had already bought up a substantial empire of physical businesses – electricity plants in a number of states, a firm that trades in heating oil, jet fuels, fertilizers, asphalt, chemicals, pipelines and a global operator of oil tankers.
How long before one of these fully loaded monster ships capsizes, and Morgan Stanley becomes the next BP, not only killing a gazillion birds and sea mammals off some unlucky country’s shores but also taking the financial system down with them, as lawsuits plunge the company into bankruptcy with Lehman-style repercussions? Morgan Stanley’s CEO, James Gorman, even admitted how risky his firm’s new acquisitions were last year, when he reportedly told staff that a hypothetical oil spill was “a risk we just can’t take.”
The regulators are almost worse. Remember the 2008 collapse happened when government bodies like the Fed, the Office of the Comptroller of the Currency and the Office of Thrift Supervision – whose entire expertise supposedly revolves around monitoring the safety and soundness of financial companies – somehow missed that half of Wall Street was functionally bankrupt.
Now that many of those financial companies have been bailed out, those same regulators who couldn’t or wouldn’t smell smoke in a raging fire last time around are suddenly in charge of deciding if companies like Morgan Stanley are taking out enough insurance on their oil tankers, or if banks like Goldman Sachs are properly handling their uranium deposits.
“The Fed isn’t the most enthusiastic regulator in the best of times,” says Brown. “And now we’re asking them to take this on?”
Read the full story here (Rolling Stone link), or alternatively for those curious, here is a presentation highlighting all the key aspects of the aluminum price manipulation story by the big banks.