The Global Banking Game Is Rigged, and the FDIC Is Suing

Ellen Brown

Taxpayers are paying billions of dollars for a swindle pulled off by the world’s biggest banks, using a form of derivative called interest-rate swaps; and the Federal Deposit Insurance Corporation has now joined a chorus of litigants suing over it. According to an SEIU report:

Derivatives . . . have turned into a windfall for banks and a nightmare for taxpayers. . . . While banks are still collecting fixed rates of 3 to 6 percent, they are now regularly paying public entities as little as a tenth of one percent on the outstanding bonds, with rates expected to remain low in the future. Over the life of the deals, banks are now projected to collect billions more than they pay state and local governments – an outcome which amounts to a second bailout for banks, this one paid directly out of state and local budgets.

It is not just that local governments, universities and pension funds made a bad bet on these swaps. The game itself was rigged, as explained below. The FDIC is now suing in civil court for damages and punitive damages, a lead that other injured local governments and agencies would be well-advised to follow. But they need to hurry, because time on the statute of limitations is running out.


Banking Union Time Bomb: Eurocrats Authorize Bailouts AND Bail-Ins

Ellen Brown

“As things stand, the banks are the permanent government of the country, whichever party is in power.” – Lord Skidelsky, House of Lords, UK Parliament, 31 March 2011)

On March 20, 2014, European Union officials reached an historic agreement to create a single agency to handle failing banks. Media attention has focused on the agreement involving the single resolution mechanism (SRM), a uniform system for closing failed banks. But the real story for taxpayers and depositors is the heightened threat to their pocketbooks of a deal that now authorizes both bailouts and “bail-ins” – the confiscation of depositor funds. The deal involves multiple concessions to different countries and may be illegal under the rules of the EU Parliament; but it is being rushed through to lock taxpayer and depositor liability into place before the dire state of Eurozone banks is exposed.

The bail-in provisions were agreed to last summer. According to Bruno Waterfield, writing in the UK Telegraph in June 2013:

Under the deal, after 2018 bank shareholders will be first in line for assuming the losses of a failed bank before bondholders and certain large depositors. Insured deposits under £85,000 (€100,000) are exempt and, with specific exemptions, uninsured deposits of individuals and small companies are given preferred status in the bail-in pecking order for taking losses . . . Under the deal all unsecured bondholders must be hit for losses before a bank can be eligible to receive capital injections directly from the ESM, with no retrospective use of the fund before 2018.


100 Years of Financial Terrorism

Stephen Lendman

December 23, 1913 will live in infamy. Three days before Christmas, House members passed the Federal Reserve Act (FSA).

On December 23, Senate members did so. President Woodrow Wilson was a tool of big money. He was JP Morgan's man in Washington. He signed FSA into law straightaway. He acted disgracefully.

So did Congress. It passed FSA in the middle of the night. Most congressional members hadn't read it. They wouldn't have understood it anyway. It was cleverly worded to deceive them. Only its creators knew its purpose.

Ellen Brown explained what happened as follows:

"In plain English, the Federal Reserve Act authorized a private central bank to create money out of nothing, lend it to the government at interest, and control the nation's money supply, expanding or contracting it at will."

Weeks before FSA was enacted, the 1913 Revenue Act became law. It imposed a federal income tax. It did so to pay bankers interest on America's money. It let taxpayers do it.

The University of Virginia's Miller Center of Public Affairs calls itself a "nonpartisan research institute." It claims to seek "to expand understanding of the presidency, policy, and political history." It calls the Federal Reserve Act "one of the crowning achievements of President Wilson's New Freedom program." It lied claiming it helped "safeguard America's financial institutions, the American economy, and the supply of US currency." It turned truth on its head saying it let "a level of governmental control...monetary supply that was unprecedented in American history." It went further claiming it continues to provide "the framework for regulating the nation's banks, credit, and money supply."

Truth is polar opposite what the Miller Center's narrative suggests. Privately controlled Fed policy has been hugely destructive for 100 years. It's a financial weapon of mass destruction. More on this below.


100 Years Is Enough: Time to Make the Fed a Public Utility

Ellen Brown

December 23rd, 2013, marks the 100th anniversary of the Federal Reserve, warranting a review of its performance. Has it achieved the purposes for which it was designed?

The answer depends on whose purposes we are talking about. For the banks, the Fed has served quite well. For the laboring masses whose populist movement prompted it, not much has changed in a century.

Thwarting Populist Demands

The Federal Reserve Act was passed in 1913 in response to a wave of bank crises, which had hit on average every six years over a period of 80 years. The resulting economic depressions triggered a populist movement for monetary reform in the 1890s. Mary Ellen Lease, an early populist leader, said in a fiery speech that could have been written today:

Wall Street owns the country. It is no longer a government of the people, by the people, and for the people, but a government of Wall Street, by Wall Street, and for Wall Street. The great common people of this country are slaves, and monopoly is the master...Money rules...Our laws are the output of a system which clothes rascals in robes and honesty in rags. The parties lie to us and the political speakers mislead us...

We want money, land and transportation. We want the abolition of the National Banks, and we want the power to make loans direct from the government. We want the foreclosure system wiped out.

That was what they wanted, but the Federal Reserve Act that they got was not what the populists had fought for.


Monsanto, the TPP, and Global Food Dominance

Ellen Brown

Control oil and you control nations. Control food and you control the people.” - US Secretary of State Henry Kissinger

Global food control has nearly been achieved, by reducing seed diversity with GMO (genetically modified) seeds that are distributed by only a few transnational corporations. But this agenda has been implemented at grave cost to our health; and if the Trans-Pacific Partnership (TPP) passes, control over not just our food but our health, our environment and our financial system will be in the hands of transnational corporations.

Profits Before Populations

According to an Acres USA interview of plant pathologist Don Huber, Professor Emeritus at Purdue University, two modified traits account for practically all of the genetically modified crops grown in the world today. One involves insect resistance. The other, more disturbing modification involves insensitivity to glyphosate-based herbicides (plant-killing chemicals). Often known as Roundup after the best-selling Monsanto product of that name, glyphosate poisons everything in its path except plants genetically modified to resist it.

Glyphosate-based herbicides are now the most commonly used herbicides in the world. Glyphosate is an essential partner to the GMOs that are the principal business of the burgeoning biotech industry. Glyphosate is a “broad-spectrum” herbicide that destroys indiscriminately, not by killing unwanted plants directly but by tying up access to critical nutrients.

Because of the insidious way in which it works, it has been sold as a relatively benign replacement for the devastating earlier dioxin-based herbicides. But a barrage of experimental data has now shown glyphosate and the GMO foods incorporating it to pose serious dangers to health.


Public Banking in Costa Rica: A Remarkable Little-known Model

Ellen Brown

In Costa Rica, publicly-owned banks have been available for so long and work so well that people take for granted that any country that knows how to run an economy has a public banking option. Costa Ricans are amazed to hear there is only one public depository bank in the United States (the Bank of North Dakota), and few people have private access to it. - So says political activist Scott Bidstrup, who writes:

For the last decade, I have resided in Costa Rica, where we have had a “Public Option” for the last 64 years.

There are 29 licensed banks, mutual associations and credit unions in Costa Rica, of which four were established as national, publicly-owned banks in 1949. They have remained open and in public hands ever since—in spite of enormous pressure by the I.M.F. [International Monetary Fund] and the U.S. to privatize them along with other public assets. The Costa Ricans have resisted that pressure—because the value of a public banking option has become abundantly clear to everyone in this country.

During the last three decades, countless private banks, mutual associations (a kind of Savings and Loan) and credit unions have come and gone, and depositors in them have inevitably lost most of the value of their accounts.

But the four state banks, which compete fiercely with each other, just go on and on. Because they are stable and none have failed in 31 years, most Costa Ricans have moved the bulk of their money into them. Those four banks now account for fully 80% of all retail deposits in Costa Rica, and the 25 private institutions share among themselves the rest.


Making the World Safe for Banksters: Syria in the Cross-hairs

Ellen Brown

“The powers of financial capitalism had another far reaching aim, 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.” — Prof. Caroll Quigley, Georgetown University, Tragedy and Hope (1966)

Iraq and Libya have been taken out, and Iran has been heavily boycotted. Syria is now in the cross-hairs. Why? Here is one overlooked scenario.

In an August 2013 article titled “Larry Summers and the Secret ‘End-game’ Memo,” Greg Palast posted evidence of a secret late-1990s plan devised by Wall Street and U.S. Treasury officials to open banking to the lucrative derivatives business. To pull this off required the relaxation of banking regulations not just in the US but globally. The vehicle to be used was the Financial Services Agreement of the World Trade Organization.

The “end-game” would require not just coercing support among WTO members but taking down those countries refusing to join. Some key countries remained holdouts from the WTO, including Iraq, Libya, Iran and Syria. In these Islamic countries, banks are largely state-owned; and “usury” – charging rent for the “use” of money – is viewed as a sin, if not a crime. That puts them at odds with the Western model of rent extraction by private middlemen. Publicly-owned banks are also a threat to the mushrooming derivatives business, since governments with their own banks don’t need interest rate swaps, credit default swaps, or investment-grade ratings by private rating agencies in order to finance their operations.


Bilderberg Conference Convenes

Stephen Lendman

Their ideal world isn't fit to live in. They may end up destroying it in the process. They want one world government. They want unchallenged global dominance. It's hard imagining a more malevolent force.

On June 5, the London Evening Standard headlined "No minutes, no press conferences - just the world's power brokers chewing the fat on the issues of the day. It's the Bilderberg conference - and it's coming to a suburb near you."

On June 6, it convened. It continues through June 9.

It's a rite of spring. A previous article said British political economist Will Hutton calls attendees the "high priests of globalization." Powerful movers and shakers have their own agenda. They're up to no good. They meet annually face-to-face. They conspire, collude and collaborate against populist interests. Their's alone matter. According to Bilderberg Meetings.org:

"Founded in 1954, Bilderberg is an annual conference designed to foster dialogue between Europe and North America."
"Every year, between 120 -150 political leaders and experts from industry, finance, academia and the media are invited to take part in the conference."
"About two thirds of the participants come from Europe and the rest from North America; one third from politics and government and the rest from other fields."
"The conference is a forum for informal, off-the-record discussions about megatrends and the major issues facing the world."
"Thanks to the private nature of the conference, the participants are not bound by the conventions of office or by pre-agreed positions."
"As such, they can take time to listen, reflect and gather insights. There is no detailed agenda, no resolutions are proposed, no votes are taken, and no policy statements are issued."
"The 61st Bilderberg meeting will take place at the beginning of June 2013 in the UK."


Bail-out Is Out, Bail-in Is In: Time for Some Publicly-Owned Banks

Ellen Brown

“[W]ith Cyprus . . . the game itself changed. By raiding the depositors’ accounts, a major central bank has gone where they would not previously have dared. The Rubicon has been crossed.” — Sprott & Kargutkar, “Caveat Depositor

The crossing of the Rubicon into the confiscation of depositor funds was not a one-off emergency measure limited to Cyprus. Similar “bail-in” policies are now appearing in multiple countries. (See my earlier articles here.) What triggered the new rules may have been a series of game-changing events including the refusal of Iceland to bail out its banks and their depositors; Bank of America’s commingling of its ominously risky derivatives arm with its depository arm over the objections of the FDIC; and the fact that most EU banks are now insolvent. A crisis in a major nation such as Spain or Italy could lead to a chain of defaults beyond anyone’s control, and beyond the ability of federal deposit insurance schemes to reimburse depositors.

The new rules for keeping the too-big-to-fail banks alive: use creditor funds, including uninsured deposits, to recapitalize failing banks. - But isn’t that theft?

Perhaps, but it’s legal theft. By law, when you put your money into a deposit account, your money becomes the property of the bank. You become an unsecured creditor with a claim against the bank. Before the Federal Deposit Insurance Corporation (FDIC) was instituted in 1934, U.S. depositors routinely lost their money when banks went bankrupt. Your deposits are protected only up to the $250,000 insurance limit, and only to the extent that the FDIC has the money to cover deposit claims or can come up with it. - The question then is, how secure is the FDIC?


Winner Takes All: The Super-priority Status of Derivatives

Ellen Brown

Cyprus-style confiscation of depositor funds has been called the “new normal.” Bail-in policies are appearing in multiple countries directing failing TBTF banks to convert the funds of “unsecured creditors” into capital; and those creditors, it turns out, include ordinary depositors. Even “secured” creditors, including state and local governments, may be at risk. Derivatives have “super-priority” status in bankruptcy, and Dodd Frank precludes further taxpayer bailouts. In a big derivatives bust, there may be no collateral left for the creditors who are next in line.

Shock waves went around the world when the IMF, the EU, and the ECB not only approved but mandated the confiscation of depositor funds to “bail in” two bankrupt banks in Cyprus. A “bail in” is a quantum leap beyond a “bail out.” When governments are no longer willing to use taxpayer money to bail out banks that have gambled away their capital, the banks are now being instructed to “recapitalize” themselves by confiscating the funds of their creditors, turning debt into equity, or stock; and the “creditors” include the depositors who put their money in the bank thinking it was a secure place to store their savings.

The Cyprus bail-in was not a one-off emergency measure but was consistent with similar policies already in the works for the US, UK, EU, Canada, New Zealand, and Australia, as detailed in my earlier articles here and here. “Too big to fail” now trumps all. Rather than banks being put into bankruptcy to salvage the deposits of their customers, the customers will be put into bankruptcy to save the banks.


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