Globalist Ultimatum: Pay up or Collapse
By Patrick Wood, Editor
September 10, 2008
There’s going to be no end of controversy over the bailout of Fannie Mae and Freddie Mac.
On September 9, 2008, CNBC’s popular financial show “Squawk Box Europe” interviewed Jim Rogers (CEO of Rogers Holding) on his view of the government takeover of Fannie and Freddie:
“You can see that this is welfare for the rich. This is socialism for the rich. It’s bailing out the financiers, the banks, the Wall Streeters... This is outrageous. Who are these people who are taking our money and doing this and ruining America?"
Who, indeed!
On March 21, 2008, The August Review wrote,
“As the global financial crisis unfolds, one thing is certain: The major investment and commercial banks who have wrecked our economy and financial system are now successfully sucking unlimited amounts of money from the people's Treasury to bail themselves out.”
The August Review has demonstrated repeatedly that the net effect of the New International Economic Order (term coined by the Trilateral Commission in 1973) was to devise new and more effective ways to divert money from the public sector into certain private hands.
With their right hand, elite bankers, investors and brokers can well afford to take on all the risk they desire, knowing that their left hand can get into the U.S. treasury to bail themselves out when they hit the financial brick wall.
And with the government takeover of Fanny Mae and Freddie Mac, they have simply outdone themselves: The magnitude of this bailout is on an order higher than anything ever recorded in our planetary history.
Of course, everyone in the financial elite are feigning shock and dismay at the tragic turn of events. Saving these companies, they say, will supposedly save our financial system from utter destruction. It’s an ultimatum: Pay up or collapse.
Is it all a smokescreen for yet another planned plundering of our Treasury?
In November 2005, Dr. Laurence J. Kotlikoff wrote a 23 page report titled, “Is the U.S. Bankrupt?” It was issued by the Federal Reserve Bank of St. Louis and quietly posted on their website – and it was totally ignored by the U.S. press.
With irrefutable logic and statistical data, he concluded that
“Countries can and do go bankrupt. The United States, with its $65 trillion fiscal gap, seems clearly headed down that path.”
Being that the U.S. government is the only and exclusive banking client of the Federal Reserve, it is inconceivable that the Fed did not fully understand what Kotlikoff was saying.
It is also inconceivable that the Fed would not take action to protect itself, its money, its private stockholders, and hence, to appoint a conservator.
A Man for all seasons?
In May of 2006, former Treasury Secretary John Snow was sacked by the Bush administration and was simultaneously replaced by the chairman of Goldman Sachs, Henry “Hammerin’ Hank” Paulson.
Goldman Sachs is one of a dozen or so global institutions that are allowed to purchase Bills, Bonds and Notes directly from the Treasury, and is among the top five investment banks in the world.
Conflict of interest, you say? Apparently, it is not to the Bush administration or to the Senate who unanimously confirmed his appointment.
Furthermore, President Bush apparently didn’t want anyone to know about this shuffle until it was a done deal.
On May 25, 2006, when Bush and U.K. Prime Minister Tony Blair appeared together on the White House lawn for a press conference, Bush was directly asked by a reporter about rumors that John Snow was on his way out. Said Bush, “No, he has not talked to me about resignation. I think he’s doing a fine job.”
Yet, on May 30th, Administration Press Secretary Tony Snow (no relation to John Snow) said in a White House press conference that “the two of them (John Snow and Bush) met on the 20th of May and there was a conversation. And Hank Paulson accepted the job a day later. That was subject to clearance. It does take time, especially for a Senate confirmable position, to complete those. So it did take time to get some of those clearances wrapped up.”
So, Bush pointedly lied in front of national television, on May 25th about Snow’s resignation and the appointment of Paulson that had occurred five days earlier.
Why? After Tony Snow was jumped repeatedly by a reporter, he finally stated “with all due respect, I think there was some concern again about how something like that affects the markets.”
Thus, their concerns became quite clear, and any public debate that might have disturbed the markets, was avoided.
Hammerin’ Hank’s Conservatorship?
If you follow financial news, you will have noticed that Paulson and Fed Chairman Ben Bernanke are appearing together in public on a continual basis these days– joint testimony before the Congress, joint press conferences, meetings at the White House, etc.
Headlines like these have been hot and heavy: “Paulson, Bernanke call on Congress to act”, “Bernanke, Paulson Push for New Regulatory Powers”, “Paulson, Bernanke Say Housing Woes May Last”, and “Paulson Meets with Bernanke, Fannie, Freddie Chiefs”.
Interesting. It never used to be this way.
On March 31, 2008, Paulson quietly released a 200 page document titled, “Blueprint for Stronger Regulatory Structure,” that he and Bernanke are now actively pushing Congress to adopt. It basically calls for the complete restructuring of U.S. markets and their regulatory structures to meet new “global standards”. After all, our regulatory bodies have been created over the last 75 years and are not compatible with today’s financial challenges.
In addition, the Blueprint calls for much more self-regulation by the banking/securities industry itself. The very people who brought us this financial chaos in the first place, want us to let them do whatever is in their self-perceived best interest to protect and increase their profits.
Meanwhile, Paulson recently demanded and received from Congress a blank check for the bailout of Fannie and Freddie. The alternative, he boldly claimed, was the further meltdown of the U.S. housing market and likely destruction of the economy.
Does this appear like a bankruptcy proceeding?
The banker and the CFO (Paulson) make autocratic decisions
The bankrupt company gets reorganized
New capital or financing is secured to pay off creditors
If this is even remotely close to the mark, then we can expect to see more bold ultimatums and actions by both Bernanke and Paulson. We can also expect that those who are getting protection for their investments are the global banks and investment houses, not the American people.
The Implications
U.S. citizens are getting hosed while banks, brokerages, hedge funds, sovereign wealth funds, wealthy investors, etc., are saved from trillions of dollars in well-deserved losses.
By assuming the debts of Fannie and Freddie, the national debt virtually doubles overnight. Even worse, the government risks a downgrade to our existing debt, potentially pushing borrowing costs up by hundreds of billions of dollars per year.
Americans can and should demand that Congress let Fannie Mae and Freddie Mac fail like any other grossly mismanaged company. And in the process, they ought to investigate their senior management for malfeasance and cooking the books to cover it up.
Let the free market provide new lenders who perhaps won’t be so greedy and ill-principled.
If a few more commercial or investment banks succumb in the process because of such action, let it serve as a warning to those survivors that they had better shape up or risk losing everything.
If there are any more ultimatums delivered, it should be us telling them to “Get out!” “Hit the road!” “Don’t come back!”
Allowing Bernanke and Paulson to administrate our financial crisis is like giving an ax and frying pan to the foxes who were left in charge of the hen house.
