This Book is Strongly recommended for those who really want to understand true power and the root of global crisis.
Gods of Money Wall Street and the Death of the American Century by F. William Engdahl
“Control oil and you control nations; control food and you control the people; control money and you control the world.” H.Kissinger
Excerpted from the book Gods of Money
Money is nothing more and nothing less than a political creation, a promise to pay between two or more parties, enforced, to a greater or lesser degree by the power of a state. Ultimately money, especially in a world where money is a pure paper commodity – fiat money so-called – is a question of “confidence,” confidence ultimately in the “full faith and credit of the Government of the United States of America.” And that confidence has been backed always, ultimately, by military power, political power, power to buy or control the lawmakers and administrators – Presidents, Congressmen, judges.
The edifice that has developed within the United States over the course of the past one hundred and fifty years is one where an inordinately powerful small circle of international bankers, the powers of Wall Street and the money center banks allied to it, has shaped the lives of the American public, prepared them for wars far from American shores, literally controlling what people buy and produce and most dangerously, even what they are allowed to think.
American historian Carroll Quigley in his book ‘Tragedy & Hope’
The aim of the international bankers was 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 feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in at frequent private meetings and conferences.
a memo, discreetly circulated among England’s wealthy aristocrats and bankers, in 1862, in the early months of the American Civil War
Slavery is likely to be abolished by the war power and all chattel slavery abolished. This I and my European friends are in favor of for slavery is but the owning of labor and carries with it the care of the laborers, while the European plan, led on by England, is that capital shall control labor by controlling wages… It will not do to allow the greenback, as it is called, to circulate as money any length of time, as we can not control that. But we can control the bonds and through them the bank issues.
If you control the oil, you control entire nations. If you control the food, you control the people. If you control the money, your control the entire world.
former Goldman Sachs Wall Street banker
[The culture that dominates Wall Street is] completely money-obsessed… Money is the way you define your success… It’s an addiction.
The nation’s first Treasury Secretary, Alexander Hamilton. In 1791 … proposed the establishment of a Bank of the United States, modeled on the privately-owned Bank of England.
… The Bank of the United States was used to deposit US Government revenues from its tax collections and to issue bank notes to increase the money supply as the Bank saw fit. The Bank had a capital stock of $10 million, with 80% of the bank being owned by private investors.
… The US Government in effect handed over to private bankers control over its money and agreed to pay those bankers interest to boot on money it borrowed.
… In 1816, Congress … created the second Bank of the United States, based on the same principles as the First bank.
… The Second Bank of the United States also permitted only 20% of its stock to be held by the Government, with 80% of shares — the control — in private ownership.
… The new Bank thus had the power to control the entire fiscal structure of the country.
… The Second Bank was controlled by Nicholas Biddle, a wealthy Philadelphian and the bank’s President after 1822. He and his shareholders renamed it the Bank of the United States.
… The dominant figure in the policy council of the Bank of England at that time was Nathan M. Rothschild, a close ally of US Bank President Nicholas L Biddle, and a major shareholder in the Bank of the United States.
President Abraham Lincoln, in the 1860s during the course of the Civil War
Money is the creature of law and creation of the original issue of money should be maintained as an exclusive monopoly of National Government. Government possessing the power to create and issue currency and credit as money and enjoying the right to withdraw both currency and credit from circulation by taxation and otherwise, heed not and should not borrow capital at interest as the means of financing governmental work and public enterprise.
The Government should create, issue, and circulate all the currency and credit needed to satisfy the spending power of the Government and the buying power of consumers. The privilege of creating and issuing money is not only the supreme prerogative of Government, but it is the Government’s greatest creative opportunity. By adoption of these principles, the long-felt want for a uniform medium will be satisfied.
The taxpayers will be saved immense sums in interest, discounts; and exchanges. The financing of all public enterprise, the maintenance of stable government and ordered process, and the conduct of f the Treasury will become matters of practical administration. The people can and will be furnished with a currency as safe as their own Government. Money will cease to be master and become the servant of humanity.
President Abraham Lincoln used the powers of the Constitution to convince Congress to authorize the issue of interest-free Legal Tender Notes in the amount of $150 million … backed by the Full Faith and Credit of the United States Government.
Under Lincoln, the Legal Tender Notes were issued by the US Treasury. The Notes paid no interest but were to be used for “all debts public and private except duties on imports and interest on the public debt. They came to be nicknamed “Greenbacks” for their distinctive design and color.
During the course of the Civil War, the volume of these government-authorized Greenbacks in circulation was increased to $450 million.
… The Greenbacks allowed Lincoln to finance war costs independent of London or New York bankers who were demanding an exorbitantly high interest rate – as high as between 24% and even 36%. Lincoln’s Greenbacks financed the war and avoided entangling the Union in large war debts to the private bankers, something that made him bitter enemies in London and New York banking circles.
The Times of London – in an editorial clearly written on behalf of the City of London bankers –
about President Lincoln’s Greenback issuance
If that mischievous financial policy, which had its origin in the North American Republic, should become indurated down to a fixture, then that government will furnish its own money without cost. It will pay off debts and be without a debt. It will have all the money necessary to carry on its commerce. It will become prosperous beyond precedent in the history of civilized governments of the world. The brains and the wealth of all countries will go to North America. That government must be destroyed or it will destroy every monarchy on the globe.
On April 14, 1865, Abraham Lincoln was assassinated, shot down in cold blood in a Washington theatre just five days after Confederate General Robert E. Lee surrendered to Grant at Appomattox Court House, Virginia.
… persuasive evidence suggested that Lincoln’s assassin, John Wilkes Booth, had been hired for the job by Judah Benjamin, Treasurer of the Confederacy. Judah Benjamin was a close associate of Benjamin Disraeli (1804-1881), British Prime Minister and an intimate of the London Rothschilds.
… Lincoln was viewed as a threat to the Rothschilds’ established order of things, and his assassination would be viewed as likely to weaken the United States, assisting the Rothschilds and their New York banking allies to take over its postwar economy.
In 1934 a Canadian attorney named Gerald G. McGeer obtained highly sensitive information about the identity of John Wilkes Booth … it showed that John Wilkes Booth was a mercenary working for the international bankers.
Canadian attorney Gerald G. McGeer, in a speech to the Canadian Parliament, reported in the Vancouver Sun, May 2, 1934
Abraham Lincoln, the murdered emancipator of the slaves, was assassinated through the machinations of a group representative of the International Bankers, who feared the United States President’s National Credit ambitions. There was only one group in the world at that time who had any reason to desire the death of Lincoln. They were the men opposed to his national currency program and who had fought him throughout the whole Civil War on his policy of Greenback currency.
What would-later come to be known as the American East Coast Establishment had its origins in [an] internationalist banking-centered group of powerful New York and East Coast families.
A syndicate of New York and London international banks pushed through [Congress] the Specie Resumption Act in 1875.
… The Specie Resumption Act specified that … all Greenbacks in circulation could be redeemed for gold specie. The Resumption Act was a major step towards bringing the US economy under the control of London and New York international bankers because they controlled the lions’ share of the world’s monetary gold in private hands.
George ‘Divine Right’ Baer, JP Morgan railroad executive in 1902
The rights and interests of the laboring man will be protected and cared for, not by the labor agitators, but by the Christian men to whom God in His infinite wisdom has given control of the property interests of the country.
Following a major economic Depression beginning in 1873 … powerful American industrial and banking families grouped around J.P. Morgan and John D. Rockefeller concentrated the wealth and control of American industry into their own hands.
… the Morgan and Rockefeller interests deployed fraud, deceit, violence, and bribery – and they deliberately manipulated financial panics. Each financial panic, brought about through their calculated control of financial markets and banking credit, allowed them and their closest allies to consolidate ever more power into fewer and fewer hands. It was this concentration of financial power within an elite few wealthy families that created an American plutocracy or, more accurately, an American oligarchy.
Whether it was called an oligarchy or a plutocracy-government by a wealthy “class” – the real power in the spectacular rise of the American Century at the end of the 1890s did not rest democratically in the hands of the majority of / citizens. It did not even lie in the hands of a broad, educated and growing middle class. Power, together with control over the nation’s economy, was being ruthlessly centralized in the hands of the wealthy few, every bit as much as it had been in the days of Imperial Rome.
[In the late 1800s an American] oligarchy used its immense economic power, often secretly and in coordinated fashion, to orchestrate events that generated waves of bankruptcies and severe economic depressions, even panics. The emerging American oligarchy cynically corrupted and co-opted state legislatures, governors, US Congressmen, judges, newspaper editors and even Presidents to serve their private interests. Those interests were served by wars their captive press helped trigger, wars from which that oligarchy profited while thousands of young Americans perished for causes they knew nothing about.
By the 1880s two colossal groups had emerged within the United States’ wealthiest families. Initially they were bitter, hated rivals. In the end they became allies, not out of love but out of practicality, in one of the greatest concentrations of financial and industrial power ever seen. The two families, Rockefeller and Morgan, created a combination of wealth and control so powerful in its influence over the economic and financial life of the United States at the beginning of the 20th Century that Congressional critics named it the Money Trust.
Following the American Civil War, right up to the end of the 19th Century, the United States Treasury recognized silver as well as gold as monetary metal. The monetary system was, in effect, a bi-metallic system. Silver existed in abundance in the Western United States.
However, the influential New York bank syndicate, headed in the 1890s by the House of Morgan, took the opposite position. They saw gold, especially in light of their close ties to leading London banks, as their best road to dominant power over the money supply of the United States. Supplies of monetary gold were controlled by a handful of New York banks and by the financial powers of the City of London – above all, by the banking group of Lord Rothschild.
The New York bankers wanted no competition from silver. Their banking allies in the City of London, the heart of the world gold standard at the time, wanted America exclusively on a gold standard where their influence would be vastly greater. London’s New York banking allies – J.P. Morgan, along with Rothschild’s US banking agent, August Belmont, and others in New York finance – shrewdly used their London banking associates to control American credit markets to their own exclusive advantage and to the distinct disadvantage of the general American public.
The Panic of 1893 was manipulated by [J.P.] Morgan interests, in collusion with August Belmont [the Rothschild’s agent in the US] to end the role of silver and to consolidate the gold of the nation into the hands of the private New York banks. In the course of manipulating several financial panics, the same bankers also gained unprecedented control over the nation’s steel and railroads – the heart of the economy.
By the end of the 1890’s [J.P.] Morgan and [John D.] Rockefeller had become the giants of an increasingly powerful Money Trust controlling American industry and government policy. There was little room for the actual practice of democracy in their world. Power was the commodity of their trade. It was the creation of an American aristocracy of blood and money, every bit as elite and exclusive as the titled nobility of Britain, Germany or France – despite the Constitutional ban on titled nobility in America. It was an oligarchy, a plutocracy in every sense of the word – rule by the wealthiest in their self-interest.
Some 60 families – names like Rockefeller, Morgan, Dodge, Mellon, Pratt, Harkness, Whitney, Duke, Harriman, Carnegie, Vanderbilt, DuPont, Guggenheim, Astor, Lehman, Warburg, Taft, Huntington, Baruch and Rosenwald formed a close network of plutocratic wealth that manipulated, bribed, and bullied its way to control the destiny of the United States. At the dawn of the 20th Century, some sixty ultra-rich families, through dynastic intermarriage and corporate, interconnected shareholdings, had gained control of American industry and banking institutions.’
The list of American fortunes built on fraud, corruption and bribery of government officials was long. It included the most famous names in America, men who donated money to the nation’s museums, endowed its finest universities like Princeton, Yale, Harvard with professorships, or had buildings and sometimes entire universities named after them. In this way, they created the image of philanthropy and “good works” while the reality was quite different.
A wave of mergers at the end of the 19th century engulfed most of US manufacturing, resulting in a few hundred huge corporations dominating the landscape. The biggest trust was Northern Securities Corporation of New Jersey; it was the umbrella enclosing 112 corporations worth $22 billion in assets and it was controlled by J.P. Morgan and John D. Rockefeller.
Theodore Roosevelt proclaimed his “Square Deal” between management and labor.
… The “Square Deal” established the principle of Presidential intervention in certain strikes and it made for good press, while [Theodore] Roosevelt, the Rough Rider, continued his backroom deals with J.P. Morgan and company.
… Teddy Roosevelt … was a shrewd politician who sensed which way the winds of change in the country were blowing and masterfully exploited it to retain Republican control of the Executive.
The 1900s would be misleadingly labeled the beginning of he “progressive era” in American politics. In reality the oligarchic families controlling the nation’s wealth were beginning to become more sophisticated about how they projected their image. None was more shrewd in that endeavor than J.P. Morgan. No American business giant of that day could hold a candle to the greatest fraudster and swindler in American financial history at that time – Junius Pierpont Morgan.
The panic of 1893 was caused by a run on gold engineered by the bankers themselves. The powerful winners that emerged from that panic were [J.P.] Morgan, along with James Stillman, then head of National City Bank in New York – the bank of Rockefeller’s Standard Oil Trust-and a handful of brokerage houses led by [August] Belmont and Kuhn Loeb & Co.
… Standard Oil magnate John D. Rockefeller, along with J.P. Morgan and his fellow Wall Street bankers, all donated heavily to Republican William McKinley, who was elected in 1896 in a sound defeat of silver advocate [William Jennings] Bryan.
… McKinley’s election as US President in 1896 was the result of a secret meeting between the Rockefeller and Morgan Wall Street factions… With McKinley, the presidency was in a safe pair of hands as far as the interests of Morgan and Rockefeller were concerned.
McKinley was re-elected in 1900 on a gold standard platform. Thanks to the Panic of 1893, the bi-metallic silver faction had been destroyed and the way was clear for Morgan and a tight circle of New York and allied London banks to take over the finances of the United States.
… By 1907, the Morgan and Rockefeller financial groups were ready to launch their next financial attack on the country’s economy – what came to be called the Panic of 1907. This was to be the needed final push to their greatest coup of all – passage in 1913 of the Federal Reserve Act in which a largely unwitting US Congress turned control of its power to print money over to a consortium of private bankers.
Passage in 1913 of the Federal Reserve Act – a largely unwitting US Congress turned control of its power to print money over to a consortium of private bankers.
The  panic had been carefully fed by false rumors deliberately planted by [J.P.] Morgan cronies in newspapers they controlled, including The New York Evening Sun and The New York Times.
… [Theodore] Roosevelt, who had campaigned on the nickname “trust-buster,” was deeply entrenched with the Money Trust, especially to the Morgan interests. In October 1903 Roosevelt had invited J.P. Morgan to the White House for a private discussion, and secretly corresponded with railroad mogul E. H. Harriman over political appointments and campaign contributions.
The gullible [American] public was told of a “heroic and courageous rescue of the nations’ banking system by the selfless J. Pierpont Morgan [Panic of 1907]. One of the few men who was not convinced of the altruistic motives of Morgan, Rockefeller and their Wall Street cronies was the pro-silver Democrat William Jennings Bryan. Bryan declared, “Blame the unscrupulous financiers who have piled up predatory .wealth and who exploit a whole nation as high finance.”
[J.P.] Morgan, [John D.] Rockefeller and the elite interests behind the Money Trust … were determined to use the panic [of 1907] and the crisis atmosphere to move forward their most audacious plan yet – capturing from the Federal Government of the United States its power to coin print and control the supply of money. Their plan was to create a national bank [Federal Reserve] in the private hands of bankers J.P. Morgan, Rockefeller and friends.
Wisconsin Senator Robert La Follette in 1908
A group of financiers who withhold and dispense prosperity, deliberately brought on the Panic [of 1907]
In 1908, a year after the creation of [Senator Nelson] Aldrich’s National Monetary Commission the most powerful bankers in America met in highest secrecy to draw up plans for the greatest financial and political coup d’etat in the history of the United States. The plan was to rob from the US Congress its constitutionally mandated powers to create and control money. The coup was to usurp those Constitutional powers in order to serve private special interests, even at the expense of the general welfare of the population of the United States.
The men who drew up the plans to take control of the nation’s money were no ordinary bankers. They were a breed apart within the American banking world.
They were primarily international bankers who patterned themselves on their London cohorts. The bankers who orchestrated “the money coup” included j. Pierpont Morgan; German émigré Paul Warburg of the New York private bank Kuhn Loeb & Co.; August Belmont & Co.; J.& W. Seligman & Co.; Lee, Higginson & Co., and others. In London these international bankers called themselves “merchant bankers.” In New York they preferred the title “investment bankers.
International bankers [are] not loyal to any fixed national space. Their world [is] not a particular nation state, but wherever their influence [can] alter events to their financial advantage.
… Control of money [is] the bankers’ strategic goal. Control of countries through control of their central or national banks [is] essential to their power. Ultimately, the elite cabal of international bankers [seeks] nothing less than control of the entire world as their goal and purpose.
Henry Kissinger, 1970s
Control the money and you control the entire world.
Political manipulations, buying of politicians and judges, financing of coups to eliminate an uncooperative sovereign [or] a head of state, all to make way for governments more amenable to bankers’ dictates.
Before the end of the 19th Century, unregulated investment banks, which became the international banking firms such as J.P. Morgan, Kuhn Loeb, Lazard Frères, Drexel and a small number of others, were free to organize the largest financial dealings for building of the national railroads and for financing the expansion of large industry across state boundaries.
Because they were not regulated or restricted to state boundaries, these banks made their fortunes by organizing capital, largely from London and Paris banks, to finance the huge costs of building America’s railroads. These were America’s international bankers.”
In this elite world of international finance at the end of the first decade of the 20th Century two giants, one British and one American, stood well above the rest of the international banking elite – Nathaniel Lord Rothschild’s N.M. Rothschild & Co. and J. Pierpont Morgan’s J.P. Morgan & Co.
The creation of the Federal Reserve System was designed to establish control over the United States money system by [J.P.] Morgan and a small circle of private, allied, international bankers in New York.
Under a system of fractional reserve lending, the value of a bank or an entire banking system rests on one ethereal value-depositors’ confidence. The essence of fractional reserve banking drives banks to lend to the maximum to maximize earnings until credit excess leads to a market collapse. Because the bank lends funds it does not own, the credit mechanism leads to creation of money ex nihilo – out of nothing – through simple bookkeeping entries.
The election of Woodrow Wilson in 1912 was the work of a small group of men who engineered a split in the Republican Party by financing a third party, the Progressive Party, nicknamed the “Bull Moose” party for its Presidential candidate former Republican President Teddy Roosevelt.
It was [J.P.] Morgan and [John D.] Rockefeller money that put ‘reform’ Democrat Woodrow Wilson in the White House in 1912. Since 1898 when Wilson was president of . Princeton University, he had been promoted into national politics by a powerful group of bankers.
… When the Morgan group decided that [Woodrow] Wilson would be more likely to pass an essentially Republican national bank act into law than would a Republican President, they orchestrated a national media campaign around Wilson.
… On December 23, 1913, the day before Christmas Eve, the Federal Reserve Act, also known as the Glass-Owen Bill, was passed by Congress with scarcely a debate. The Republican controlled Senate pushed the bill through when many members of the US Congress were home for the Christmas holiday. Democratic President Woodrow Wilson signed it into law one hour after it was passed by the Congress.
… The key provision of the Federal Reserve Act stipulated that decisions of the Federal Reserve were not to be ratified by the President, or anyone else in the Executive branch of the United States Government or the Congress. Instead, buried in the legislation was the granting of total power over the monetary policies of all US banks in effect to the privately-owned New York Federal Reserve Bank and its directors -the most powerful names on Wall Street of the Money Trust.
… The way was now clear for the Federal Reserve and the private bankers controlling its policies to create economic boom periods, mobilize the economy for wars, and to create deflationary recessions and depression.
… The most essential use value inherent in the new Federal Reserve was that it allowed private banks … to take risks never before imagined. Their ventures – no matter how risky – were now backed by the “full faith and credit” of the Government of the United States of America and its unwitting taxpayers.
In 1899 the British had fought a war with the aid of Cecil Rhodes, a highly eccentric British mining magnate, in order to wrest control of the vast gold riches of the Transvaal in South Africa away from the Boer settlers. South African gold had given the city of London a new lease on life.
… Rhodes was convinced that the gold and minerals of South Africa would be sufficient to guarantee that the City of London would be the world’s unchallenged financial center for decades to come.
[Cecil] Rhodes and [Alfred] Milner and an elite circle of Empire strategists founded a secret society in 1910 whose purpose was to revitalize a flagging British imperial spirit. The society, many of whose members were graduates of All Souls College at Oxford University, would secretly steer the strategic policies of the British Empire up until the end of the Second World War. They called their group the Round Table. a reference to King Arthur’s medieval table surrounded by his select knights.
The very rich avoided most taxation by protecting their wealth in new tax-exempt ‘charitable’ foundations such as the Rockefeller Foundation, created the same year as the income tax. The passage of a broad-based tax on income would allow Wall Street to finance the war [WWI] through issuance of US Treasury bonds, so-called ‘Liberty Bonds’ whose debt service would be assured by the taxpayer.
[J.P.] Morgan served as intermediary for His Majesty’s Government [Britain] in arranging purchases of munitions, arms, uniforms, chemicals, in short all that would be needed to wage a modern war in 1914. As Financial Agent for the British Government, J.P. Morgan & Co. not only organized the financing of war purchases and decided which companies would be the suppliers, but it also set the prices at which the equipment would be supplied. Not surprisingly, corporations directly in the Morgan and Rockefeller groups of companies were the prime beneficiaries of Morgan’s astute purchasing.
Thomas W. Lamont, a partner in J.P. Morgan, in a speech before the American Academy of Political and Social Science in Philadelphia, April 1915
[W]e are turning from a debtor into a creditor… We are piling up prodigious export trade balance …. Many of our manufacturers and merchants have been doing a wonderful business in articles relating to the war [WWI]. So heavy have been the war orders running into the hundreds of millions of dollars, that now their effect is beginning to spread to general business.
… [The] question of trade and financial supremacy must be determined by several factors, a chief one of which is the duration of the war. If…the war should come to an end in the near future…we should probably find Germany, whose export trade is now almost wholly cut off, swinging back into keen competition very promptly.
… [Another factor that] is dependent on the duration of the war, is as to whether we shall become lenders to foreign nations upon a really large scale… Shall we become lenders upon a really stupendous scale to these foreign governments?… If the war continues long enough to encourage us to take such a position, then inevitably we would become a creditor instead of a debtor nation, and such a development, sooner or later, would tend to bring about the dollar, instead of the pound sterling, as the international basis of exchange.
In 1934 … Senator Gerald Nye, a North Dakota Progressive Republican, held hearings to investigate the role of the munitions industry and finance in dragging the United States into the First World War.
Nye called the war industries “merchants of death.” He was especially critical of DuPont and other large chemical and munitions dealers, claming that they were willing to sacrifice American soldiers in order to make larger profits from sales.
From the time of its official entry into the European war in April 1917 until the signing of armistice with Germany on November 11, 1918, the United States Government lent the European Allied Power … $9,386,311,178. Britain received the lion’s share of $4,136,000,000. France got $2,293,000,000.
The Full Faith and Credit of the United States of America, backed by the new Federal Reserve, was being mobilized to defeat Germany. The $9 billion, however, did not go to London or Paris. Rather, it went directly to American industries, most of which were tied to either the Morgan group, Kuhn-Loeb, or the Rockefellers, to pay for war supplies to the Allies.
On April 13, 1917 Woodrow Wilson created the Committee on Public Information (CPI) to promote the war [WWI] domestically and to publicize American war aims abroad. Under the leadership of a journalist crony of Wilson named George Creel, the CPI combined advertising techniques with a sophisticated understanding of human psychology. It marked the first time that a government disseminated propaganda on such a large scale. It was in every sense a precursor of the world depicted by George Orwell in his novel 1984.
Creel was joined at the CPI by one of the shrewdest propagandists in American history, a young Viennese-born naturalized American named Edward Bernays. Bernays brought with him intimate knowledge of a new branch of human psychology which had not yet been translated into English. He was the nephew and literary agent in American for Austrian psychoanalyst Sigmund Freud.
Using Creel’s muckraking journalism and Bernays’ Freudian psychology with its analysis of unconscious needs and drives – the Government’s Committee on Public Information assaulted the unwitting American public with a calculated barrage of lies, jingoistic epithets demonizing Germans, coupled with horrifying images allegedly showing German soldiers bayoneting Belgian babies, and other manufactured atrocities. These images and symbols were fed continuously through the mainstream media in order to whip the American public into a pro-war frenzy against a nation, Kaiser Germany, which posed no actual threat to it.
… Creel and Bernays were joined at the CPI by anglophile journalist and close Wilson adviser Walter Lippmann. As a young Harvard graduate, Lippmann had been recruited to be a link between Wall Street interests around Morgan and the British secret society, the Round Table, which had been agitating England to L prepare for war against Germany since its founding in 1909.
Lippmann’s biweekly column in the New York Herald Tribune was syndicated in hundreds of local newspapers across America, making him one of the most influential pro-British voices in the country. His columns were critical to winning the allegiance of the educated middle class, a sector that would otherwise tend to be neutral or against war.
But it was Bernays’ unique, perverse genius for fusing mob psychology and mass media techniques to manipulate specific human emotions on a large scale. He had learned these keys to influencing human behavior through the work of his uncle, Sigmund Freud.
Applying those insights on a mass scale, the Committee on Public Information achieved extraordinary results within months, orchestrating the American public into a mass frenzy in favor of war. With Bernays’ genius in full play, the Freudian view of human nature was combined with what became Madison Avenue advertising techniques; the results were deployed by the CPI in the service of war.
… CPI [Committee on Public Information] propaganda consciously appealed to the emotions, not to the mind. It was heavily influenced by Bernays’ adaptations from Freud. Emotional agitation was a favorite technique of the CPI strategists who understood that any emotion may drained off and re-directed into any activity by skillful manipulation.
Harold Lasswell, University of Chicago, after World War I
So great are the psychological resistances to war in modern nations that every war must appear to be a war of defense against a menacing murderous aggressor. There must be no ambiguity about who the public is to hate.
Harold Lasswell, University of Chicago, after World War I
A handy rule for arousing hate [during war] … use an atrocity. It has been employed with unvarying success in every conflict known to man.
In 1927, [Harold] Lasswell [University of Chicago] wrote a book length study, Propaganda Technique in the World War, analyzing the work of [George] Creel, [Walter] Lippmann and [Edward] Bernays in detail. He shared their conviction that in a democracy, the population could not be trusted to act as the elites wished and must be emotionally manipulated to do so.
The extraordinary techniques of mass manipulation of opinion during World War I greatly assisted the transformation of America into a democracy – by outward appearance – ruled deceptively by a plutocratic elite in its own self-interest.
Edward Bernays in his book ‘Propaganda’, 1928
It was … the astounding success of propaganda during the war that opened the eyes of the intelligent few to the possibilities of regimenting the public mind.
Edward Bernays in his book ‘Propaganda’, 1928
The American government developed a technique which … was new… the manipulators of patriotic opinion made use of the mental clichés and the emotional habits of the public to produce mass reactions against the alleged atrocities, the terror, and the tyranny of the enemy. It was only natural, after the war ended, that intelligent persons should ask themselves whether it was possible to apply a similar technique to the problems of peace.
By the time the Peace of Versailles was signed on June 28, 1919, Great Britain and the British Empire – including India, Canada and the Commonwealth nations – had spent a total of 11 billion Pound Sterling, or $54 billion, on executing the war against the German and allied Central Powers.
… The British people paid 36% of the war costs in the form of taxes. The other 64% was borrowed, mainly from the United States Government, through the agency of the Federal Reserve.
… It was the end of the British Empire as the banking metropolis of the world… England was choking on her war debts. The public debt of the United States expanded by some 2,500% during the war from $1 billion in 1913 to more than $25 billion by the end of 1919. The debt was financed by the sale of Government bonds via the Federal Reserve to the private bond dealing banks led by J. P. Morgan, Kuhn, Loeb and Wall Street, at a stunning profit to the latter.
The First World War changed the status of the United States … from that of a debtor nation to the world’s greatest creditor nation, a role filled formerly by England.
… One major aim of the backers of the Federal Reserve – displacing London as world money market – had been achieved.
The gold standard was still the basis of foreign exchange. The small group of international bankers – now led by New York banks – who owned the gold, controlled the monetary system of Western nations.
The [J.P.] Morgan faction owed much of its enormous power within the United States since the 1870s to its intimate links with leading London financial groups, above all, the House of Rothschild. Morgan therefore favored a strategy of alliance, a form of ‘special relationship’ between a weakened City of London and the emerging power of Wall Street, as the preferred path to an ultimate American Century. J.P. Morgan’s ties with the City of London and the British Treasury were so strong, in fact, that his bank remained the British Government’s official financial agents in the United States from the 1870s until September 1931, when England left the Gold Standard.
… All major Wall Street factions agreed that their future lay in extending highly profitable credits to Europe, Latin America, Japan and the rest of the world, areas that had been the province of City of London bankers for the better part of a century. Those loans, and especially Wall Street underwriting of bonds to the world, earned the New York bankers the very attractive foreign interest rates of 5% and even as high as 8%. The bonds or credits were to be secured by national governments, which had agreed to ‘stabilize’ their postwar currencies by linking them to a new, US-led Gold Standard. The system of stabilization was a crude, ad hoc version of what the New York banks would later institutionalize in the International Monetary Fund and World Bank as the heart of the post-World War II dollar-based system. –
After 1914 … US monetary policy and capital flows in the critical years up to 1929-1931 were, in effect, guided by the needs of Wall Street in its drive to displace London as the world’s banker
… From 1920-1929, the banks centered in New York channeled the wealth created by American industry and agriculture, via Wall Street, into foreign credit markets.
… One consequence of the destructive European War of 1914-1918 had been the unprecedented transfer of Europe’s gold reserves out of Europe’s central banks and into the vaults of the Federal Reserve, as debt-strapped European belligerents, from England to France to Italy and beyond, were forced to pay for American manufactured war supplies in gold.
By the time the Treaty of Versailles was signed, the United States had become the possessor of the vast bulk of the world’s monetary gold, a 400% increase in US gold reserves since the prewar period. Until the 1914 outbreak of war, gold had been the basis of the international monetary system, a system that had been centered in the City of London since the Napoleonic Wars.
By 1920, however, the United States Federal Reserve had accumulated 40% of the world’s monetary gold reserves. It had garnered the gold by being able to pay the world’s highest price for monetary gold at a time Britain and Continental Europe were burdened with America’s severe war reparations and war debt repayment obligations pursuant to Versailles.
Montagu Norman, the arch conservative governor of the Bank of England throughout the 1920s … supported the aims of finance capitalism “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.
Carroll Quigley in his book ‘Tragedy and Hope’
[The global economic] system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences … In each country the power of the central bank rested largely on its control of credit and money supply. In the world as a whole the power of the central bankers rested very largely on their control of loans and of gold flows.
In 1919 the strongest economic power was clearly no longer the British Empire, but rather, the United States which had emerged from the war in a most powerful position – as the creditor to all major European countries. America’s gold stocks had multiplied fourfold during the war, giving it the world’s largest monetary gold reserves. The process continued up until the great stock market crash of 1929.16 Britain, by contrast, had massive foreign debts, mostly to the United States. Its currency had sharply depreciated, and its reserves of gold had fallen dangerously low.
The role of gold was a decisive factor in determining which power served as financial center of the world. In 1919 the United States had resumed pegging the dollar to gold, having suspended it for two years when America entered the war in 1917. Unlike Britain, America had no problem to return to the gold standard because of its enormous, accumulated reserves. The United States had the decisive position in creation of a new postwar gold standard, both because of its reserves and its new role in the world’s gold market.
The entire edifice of the Roaring ’20’s consumer credit binge, the new practice of “buying on the installment plan,” came crashing down… Instead of injecting liquidity into the domestic economy to stave off the growing economic contraction, the New York Fed … withdrew liquidity from the economy in a vain attempt to hold onto the Gold Exchange Standard, raising Federal Reserve discount rates in the process from 1% to 3% in October, 1931, a staggering differential.
That desperate attempt by Wall Street and the New York Federal Reserve to salvage their gold standard and with it, their dreams of an American financial empire, resulted in the destruction of both… The higher rates of the Federal Reserve pushed the US economy deep into depression and deflation.
It was not because of economic orthodoxy that it held on to the fixed gold standard so long. It was because the powerful forces directing Wall Street, the Money Trust, were determined not to sacrifice their goal of a US-controlled global money power through the Gold Exchange Standard that J. P. Morgan & Co., Benjamin Strong, Dillon, Read, Edwin Kemmerer and the leading financial elites of the United States had built on the ashes of World War One. They had few qualms about plunging the economy of the United States into the most severe depression in American history in their ultimately vain bid to grasp global financial power from England.
In contrast to developments in the United States, after 1931 British Sterling floated free of ties to gold, and a devaluation of some 40% boosted British exports and mitigated the effects of world collapse. In rapid succession, other European countries left the gold standard, except for France. The United States, meanwhile, clung to the deflationary gold parity until April 1933.
The conjuncture of these crises led to an increased role of the Federal government in American economic life. It took the form of Franklin Roosevelt’s New Deal, when the first Democratic President since World War I was inaugurated on March 4, 1933. Most of FDR’s recovery programs were in reality the continuation or implementation of many of the infrastructure projects that had been initiated under the hapless Hoover.
From the full onset of the Great Depression in 1931 through the peak of war) spending in 1944, US government debt rose from 29% of GDP to over 130% of GDP. Simultaneously, the share of public spending in the overall national economy rose from 12% in 1931 to over 45% by 1944.
Benjamin Strong’s grand project for making New York and Wall Street the bankers to Europe and to the world had fundamentally distorted the structures of the global financial system and of global trade and economic development, leading to their eventual, inevitable collapse.
It would take six years of domestic economic depression, corporate restructuring and preparation for a new great war in Europe to reverse the setback to Wall Street’s bid to displace the British Empire as the world’s dominant power. It required knocking out the revitalized German Reich as a future rival to American hegemony once and for all.
The process would be called World War II. In reality it was a continuation of the unresolved geopolitical issues of World War I, a titanic and tragic battle between two powers-Germany and the United States-to become successor to ( the falling British Empire as world hegemonic power. At least that was how leading elites in the US establishment saw it.
… There could be no doubt, however, that the United States Money Trust did have the idea and intention of creating a global imperium, an informal empire of finance secured by the world’s most powerful military. To realize that goal they needed a new World War.
The Federal Reserve was to play a decisive role here as well. The first bid by the powerful New York Banks, backed by their private Federal Reserve of New York, had proved a catastrophic failure that plunged the United States into the worst financial crisis in its history, with chain-reaction bank failures and years of depression. Within less than a decade, Wall Street and the powerful families behind it were ready to make their second and victorious bid for global power.
Between the October 1929 stock market crash and the end of 1932, just three months prior to the inauguration of Franklin Delano Roosevelt in March 1933, America’s national wealth had evaporated on a scale never before imagined. National income or GDP fell from some $88 billion to less than half that, or $42 billion, by the end of 1932. Amid the turmoil of the 1929-1933 New York stock market meltdown, and Federal Government debt. Banks became, in effect, government bond traders rather than commercial business lenders… The stock market was not to recover its highs of 1929 for almost four decades.
The longer-term consequence of the Roosevelt era policies was a dramatic shift away from the power of international private banking, especially investment banking as done by J.P. Morgan, Kuhn Loeb, Dillon Read and other
In June 1933 the US Congress passed the Glass-Steagall Act, officially named the Banking Act of 1933. As a measure intended to curtail future stock and financial speculation bubbles, the new act prohibited a bank holding company from owning other financial companies, including insurance and investment banks. In addition, it established the Federal Deposit Insurance Corporation for insuring bank deposits.
… The Glass-Steagall Act, passed amid the national bank panic in the first days of Roosevelt’s administration, dealt a devastating blow to the once almighty House of Morgan, a blow from which it never fully recovered. The Rockefeller faction emerged on the ashes of the House of Morgan to dominate US establishment policy as no other.
Two days after his inauguration as President on March 6, 1933, Roosevelt decreed a four-day national banking holiday. The main aim was to prevent anyone from hoarding or exporting gold or silver. Every bank in the United States was shut down. Neither deposits nor withdrawals were possible.
… Within three days Congress had passed the Emergency Banking Act that validated the President’s actions and gave him near carte blanche powers to go further.
… On April 5, 1933 Roosevelt signed an Executive Order declaring it illegal for American citizens to hold or own gold coins, bullion or gold certificates. Violation was punishable by a $10,000 fine or ten years in prison, making owning of gold a felony.
The Federal Government thus had confiscated its own citizens’ gold. As gold was universally regarded as the ultimate store of value for a currency or for repayment of debts, it was a massive, forced confiscation by the State of the private wealth of its citizens in return for mere paper promises to pay… By confiscating civilian gold holdings the US Government not only restocked its gold vaults at the expense of its citizens, it also cut off any chance citizens could resort to gold for a personal long-term store of value in the middle of the nation’s worst economic depression.
Bernard Baruch [was] one of the most politically influential of the Wall Street Money Trust. Baruch was a financier, a political “contributor” of Wall Street money to influence Congress, and an adviser to Presidents from Wilson to Hoover to Roosevelt and even a British Prime Minister, Winston Churchill.
… Throughout the Republican presidencies of the 1920’s, [Bernard] Baruch had built up his influence, mainly by making large financial contributions to influential Congressional Democrats. He was a power broker without rival in that day, widely known to control the votes of at least 60 Senators and Representatives in Congress, through his money and influence.
…[Bernard] Baruch … had gained a fortune in the stock market by selling all his stocks at peak prices some weeks before the October 1929 crash… He didn’t say that his close friend, Winston Churchill, had done the same on Baruch’s advice. Both Baruch and Churchill, curiously managed to get out at the stock market peak, just before the Bank of England triggered the events leading to the London market crash in September 1929. Suspicions in certain quarters held that Churchill and Baruch both benefited from their respective insider positions.
… Baruch held an unequalled position of power and influence over Washington economic policy during those critical first few years of the depression.
… Baruch’s unique influence blocked any genuine Democratic alternative to the disastrous Hoover laissez faire policy in those critical months. That lack of initiatives or solutions from the Democrats in the 1930s was not unlike the deafening silence of Congressional Democrats more than eight decades later during the 2008 Congressional debate over an unprecedented $700 billion Republican bailout bill for Wall Street.
Shortly after his reelection to a second term in 1937, [Franklin] Roosevelt, notorious for lack of understanding of economics, accepted the opinion of his Treasury Secretary Henry Morgenthau that the depression was ending, and that the greatest danger was potential inflation from too much government spending.
As a consequence, FDR slashed Federal spending and dramatically reduced the budgets of New Deal agencies such as the Works Progress Administration.
The Federal Reserve duly tightened the money supply, slamming the brakes on consumer spending. The stock market underwent its most severe drop in US history as two million Americans were thrown out of work. The press called it “Roosevelt’s Depression.”
Rockefeller’s Wall Street interests, Bernard Baruch, and a powerful circle of big business leaders [in the 1930s] were determined to reorganize the US economy along the centralized corporatist model of Mussolini’s fascist Italy.
Contrary to carefully planted propaganda in the media portraying FDR as the “hero of the little man” who was ready to “chase the moneylenders from the temple,” Roosevelt was the scion of a wealthy East Coast family, a distant relative of Teddy Roosevelt, and every bit The Man of Wall Street-especially of Baruch, Rockefeller and their group.
In May 1933, during his first weeks in office, FDR proposed to Congress the creation of a National Recovery Administration (NRA). It passed with a minimum of debate amid the depression crisis. Its first head was Hugh S Johnson associate of and advisor to Bernard Baruch.
The concept of the NRA was largely drawn from the national military emergency mobilization of industry that Baruch and Johnson had administered during the First World War. Ever since then, Big Business and Wall Street had been salivating over the possibility of getting such power over the economy into their hands once again. The Great Depression would be their cancer. Johnson would be their man. Within Roosevelt’s Administration, Johnson was open about the fact that he saw Mussolini’s Italian Fascist corporatism – the merger of government and corporate power to the one-sided gain of business – as a model for America.
In 1930 as most banks were struggling to survive, Rockefeller’s Chase National Bank was thriving… Chase Bank’s most significant acquisition during the first months of the financial crisis in 1930 was the Equitable Trust Company of New York, the largest stockholder of which was John D. Rockefeller Jr. This made the Chase Bank the largest bank in America and indeed the world .
As a result of their dominant position following the decline of the House of Morgan during the depression, the Rockefeller group, in addition to controlling Chase Bank and First City Bank of New York, controlled the largest US oil companies.
… The Rockefeller group also consolidated a commanding control over the major chemical and defense-related industries.
[John D.] Rockefeller’s principal business adviser, Frederick T. Gates, suggested that he organize his wealth into a tax-exempt foundation after 1913, using tax-free funds, to extend the power and influence of the family.
… The Rockefeller Foundation was incorporated in New York State in 1913, under the direction of Gates, whom Rockefeller called the greatest businessman he ever encountered. Gates would focus the new foundation’s activities on programs that would dramatically leverage Rockefeller wealth, but above all, the family’s political and social power.
Under this mantle of philanthropy, the Rockefeller Foundation would reshape the map of the entire world, beginning in the late 1930s. The programs and mechanisms through which it operated were phenomenally important and little understood, as they were extremely well disguised.
In 1939, with a major funding grant from the Rockefeller Foundation, the New York Council on Foreign Relations (CFR) began what would be a series of long-term studies in collaboration with the US State Department.
The top secret project [was] called the War & Peace Studies.
… Between November 1939 and late 1942, the Rockefeller Foundation had contributed no less than $350,000 to finance a plan for post-war American economic hegemony via the War & Peace Studies Group was an investment that, like most ‘philanthropic’ investments made by the Rockefellers, would be ( repaid thousands of times over in later years) It defined the post-war American f business empire globally. Their American Century was very much a Rockefeller empire though most Americans were blissfully ignorant of the fact.
Unlike the British Empire, which was based on military conquest and direct possession of colonies, their American vision of global domination was based on financial conquest and economic possession. It was a brilliant refinement, one which allowed US corporate giants to veil their interests behind the flag of ‘democracy and political rights’ for ‘oppressed colonial peoples,’ support of ‘free enterprise’ and ‘open markets.
a confidential memo from the Council on Foreign Relations War & Peace Studies group to the US State Department in 1941
If war [WWII] aims are stated which seem to be solely concerned with Anglo-American imperialism, they will offer little to people in the rest of the world. The interests of other peoples should be stressed. This would have a better propaganda effect.
The interests represented in the Council on Foreign Relations [War & Peace Studies] … reflected the interests of the elite handful of American banks and industrial corporations that had developed global interests. The businessmen and their law firms represented in the Council on Foreign Relations were a breed apart from the rest of Americans, an oligarchy to themselves, an aristocracy of power and money.
Council on Foreign Relations – War & Peace Studies Security Sub-Committee minutes
[Realizing it was doubtful that] the British Empire as it existed in the past will ever reappear and …. the United States may have to take its place…,” the US “must cultivate a mental view toward world settlement after this war which will enable us to impose our own terms, amounting …. to Pax Americana.
Council on Foreign Relations War & Peace Studies Group memorandum E-B19 (1941)
The foremost requirement of the United States in a world in which it proposes to hold unquestionable power is the rapid fulfillment of a program of complete re-armament… to secure the limitation of any exercise of sovereignty by foreign nations that constitutes a threat to the minimum world area essential for the security and economic prosperity of the United States.
Council on Foreign Relations War & Peace Studies Group would present themselves as the selfless advocates of freedom for colonial peoples and as the enemy of imperialism. They would champion world peace, but through multinational control.
… The American domination of the world after 1945 would be accomplished via a new organization, the United Nations Organization… It would include the new Bretton Woods institutions of the International Monetary Fund and World Bank, and later, the General Agreement on Tariffs and Trade (GATT).
Under the banner of ‘free trade’ and the opening of closed markets around the world, US big business would advance their agenda, forcing open new untapped markets for cheap raw materials as well as new outlets for selling American manufactured goods after the war [WWII].
The Rockefeller group within the American power establishment, along with numerous related corporate heads from Henry Ford to the DuPonts, had long been attracted to the European models of Mussolini’s corporatist Fascism and even German Nazism.
… There was a larger geopolitical motive to their fascist sympathies before the war. They, like their cousins in the British Round Table circles, desired a larger war, a war between their two formidable potential Eurasian rivals for hegemony: Russia and Germany. They wanted a war in which both great powers, Stalin’s Soviet Union and Hitler’s Third Reich would, as one British insider put it, “bleed each other to death.
… Their motivation had everything to do with the building of their American Century on the ashes of Europe, which would require decimating both Germany and the Soviet Union.
In 1941, at the onset of the US entry into the war, Standard Oil of New Jersey, later renamed Exxon, was the largest oil company in the world. It controlled 84% of the US petroleum market. Its bank was Chase Bank, and its controlling ownership was held by the Rockefeller family and their tax-free foundations.
In 1941, at the onset of the US entry into the war, Standard Oil of New Jersey, later renamed Exxon, was the largest oil company in the world. It controlled 84% of the US petroleum market. Its bank was Chase Bank, and its controlling ownership was held by the Rockefeller family and their tax-free foundations. After the Rockefellers, the next largest stockholder in Standard Oil was LG. Farben, the enormous petrochemicals trust of Germany, which at the time was a vital part of the German war industry.
While Nelson Rockefeller was ostensibly combating Nazi economic interests in Latin America as head of the US Government’s CIAA (Coordinator of InterAmerican Affairs), the Rockefeller family’s Standard Oil, through its Chairman Walter C. Teagle, and President William S. Farish, was arranging to ship vital tetraethyl lead gasoline to the German Luftwaffe. Standard Oil’s Teagle, Henry Ford and Royal Dutch Shell’s Sir Henry Deterding were all openly pro-Third Reich before the war [WWII].
… The Rockefeller clan was not alone in secret financial and industrial dealings with the Third Reich. They worked with other leaders of the US power through most notably the DuPont chemicals family and the Bush family through Prescott Bush, father of President George Herbert Walker Bush and grandfather of President George W. Bush.
Rockefeller’s Standard Oil had handed over to the Third Reich the secret of synthetic rubber manufacture, its superior acetylene process and its method for producing synthetic gasoline. The gasoline processes kept the Luftwaffe in the air for two and a half years and enabled Hitler to keep his gigantic motorized army in motion.
The Round Table group of Lord Milner had been the catalyst for the propaganda drive to go to a war against Germany before 1914.
By the late 1930s, the Round Table that propagandized for a war against the German Reich, also beat the drums for accepting a German remilitarization of the Rhineland. Using their house organ, the London Times, and their own magazine, The Round Table, the same group called for non-intervention into the Spanish Civil War when Germany backed Franco’s forces with arms and logistical support.
If the British Round table elites, as well as Hitler, had miscalculated their relative power equations, the emerging power circles around the Rockefeller brothers and their War & Peace Studies group at the Council on Foreign Relations did not. They clearly saw that if England were to emerge in any way intact and the “victory” in the war, then the emerging US hegemony would be blocked perhaps for decades or longer. That was clearly something they wanted to avoid. They also knew that Germany, too, must be eliminated as a postwar contender for hegemony.
One way to do so was to insure that Germany was able to prosecute the war with enough fuel, at least at the beginning. It was not a matter of corporate profit for the Standard Oil group or for Rockefeller banking interests. It was about balance of power calculations and the American establishment’s own understanding of the lessons of geopolitics.
… For Germany and Russia to be “played” against each other in a destructive war of attrition, the Germany Luftwaffe and tank corps would at least have to be assured of adequate fuel.
[A] major player in the Rockefeller and Wall Street backing for the Third Reich sand a future war against the Soviet Unioivas Prescott Bush, father of President George Herbert Walker Bush, and father of George Walker Bush. All three were members of Yale University’s secret society, Skull & Bones.
The Bush family had collaborated intimately with the powerful Rockefeller group for decades before World War II. Both families made their money in oil and in war industries.
George H. Walker and Samuel Prescott, Bush, the grandfathers of George Herbert Walker Bush, were the dynasty’s founders during and after World War I.
Walker, a St. Louis financier, made a fortune in war contracts. In 1919, he was hired by railroad heir W. Averell Harriman to be president of the Wall Street-based W.A. Harriman Co. which invested in oil, shipping, aviation and manganese, partly in Russia and Germany, during the 1920s.
Samuel Bush ran an Ohio weapons manufacturing company, Buckeye Steel Castings. In 1917, Samuel Bush was appointed head of the ammunition, small arms and ordnance section of the federal War Industries Board of Bernard Baruch. Both George Walker and Sam Bush were deeply invested in the creation of what became the US military-industrial complex.
Prescott Bush made his fortune as director of companies involved in US war production throughout World War II. One Bush company, Dresser Industries of Texas, produced the incendiary bombs dropped on Tokyo and made gaseous diffusion pumps for the atomic bomb project. At the same time, his companies were strategically engaged in secretly arming and financing the Third Reich through German steel magnate, Fritz Thyssen.
The Bush family, in addition to long-standing ties with the influential Harriman banking and railroad fortune, enjoyed intimate links to the Rockefellers and their control of the US oil industry.
Bush family ties to John D. Rockefeller and Standard Oil went back 100 years, when Rockefeller had made Sam Bush’s Buckeye Steel Castings fabulously successful by convincing railroads that carried their oil to buy heavy equipment from Buckeye Steel. George H. Walker helped rebuild the Soviet oil industry in the 1920s, and Prescott Bush acquired experience in the international oil business as a director of Dresser Industries in Texas, a part of the Harriman family banking holdings and a company with intimate ties to the Rockefeller oil interests. Dresser later became part of Halliburton Corporation, the firm made infamous through Dick Cheney.
In 1931, as a consequence of the reorganization of power on Wall Street after the 1929 stock crash, the investment bank, W.A. Harriman & Co. merged with the British-American investment house, Brown Brothers, to create the investment bank, Brown Bros. Harriman. The senior partners were Averell Harriman and his brother, and Prescott Bush and Thatcher H. Brown. The London branch operated as Brown, Shipley, the bank where Montagu Norman had been a senior partner before heading the Bank of England. 36
During the 1920s Harriman had become banker in New York for German steel magnate Fritz Thyssen. In 1934, a year into the Third Reich, Prescott Bush, senior partner at Brown Bros., Harriman, was also a director of the German Steel Trust’s Union Banking Corporation. In 1926, Wall Street investment banker Clarence Dillon, a close friend of Prescott Bush, had created the German Steel Trust on behalf of Thyssen, and held two seats on the board of the new steel trust.
The Union Banking Corporation, located at W.A. Harriman & Co and interlocked with Thyssen-owned Bank voor Handel en Scheepvaart (BHS) in the Netherlands, was set up as a unit of W.A. Harriman & Co. BHS was used as the vehicle to move money back and forth across the Atlantic between the United States and Thyssen enterprises in Germany. Meanwhile, Prescott Bush and Avereil Harriman, at Brown Bros. Harriman, were the managers for Thyssen’s financial operations outside Germany.
In 1942, the US Government’s Alien Property Custodian Leo T. Crowley signed Vesting Order Number 248, seizing the property of Prescott Bush under the Trading with the Enemy Act. The order was published in obscure government record books and kept out of the news. It explained only that the Union Banking Corporation was run for the “Thyssen family of Germany and/or Hungary …nationals … of a designated enemy country. “38
After the war, US Congressional investigators probed the Thyssen companies, Union Banking Corp. and related Nazi enterprises. They reported that Thyssen’s huge German steelworks, Vereinigte Stahiwerke, had produced the following shares of total German national output during the Third Reich: 50.8% of pig iron; 41.4% of universal plate; 36.0% of heavy plate; 38.5% of Nazi Germany’s galvanized sheet; 45.5% of pipes and tubes; 22.1% of wire; 35.0% of explosives. 11 Their role in producing Hitler’s war armaments was enormous.
The deep involvement of the Rockefeller, Harriman and Bush families in providing vital strategic and financial support to Hitler’s war buildup was(in the final analysis)an integral part of an even more ambitious agenda. Their aim was not to back a victorious Germany, but to create the global war out of which an American Century, more accurately, a Rockefeller Century, would emerge after 1945.
Bush, Rockefeller, Harriman, DuPont and Dillon were all instrumental in providing critical support to the Third Reich in its early years as part of their grand geopolitical game plan — to bring the great European powers, especially Germany and Russia, to ruin by ‘bleeding each other to death,’ thereby opening the door to the hegemony of the American Century. That was the real agenda of Rockefeller’s War & Peace Studies.
[Franklin Roosevelt] and his Secretary of War, Henry Stimson, had deliberately incited the Japanese into war. They did so by embargoing Japanese oil supplies and preparing a US military ,action against Japanese expansion in the Pacific… Roosevelt was fully informed days before the bombing of Pearl Harbor of the exact details of the Japanese naval advance.
Five months before the attack on Pearl Harbor, the highest levels of the United States Government knew a war was imminent with Japan, based on US intelligence’s top secret Magic intercepts which had broken the Japanese Naval and diplomatic encryption codes.
On November 28, 1941, Admiral Husband Kimmel in Hawaii received an updated dispatch from Admiral Stark in Washington
Negotiations with Japan appear to be terminated to all practical purposes … Japanese future action unpredictable but hostile action possible at any moment. If hostilities cannot repeat not be avoided the United States desires that Japan commit the first overt act.
After receiving this warning, Admiral Kimmel was ordered by Washington not to institute long-range reconnaissance from Pearl Harbor against possible air attacks. Following instructions from Stimson’s War Department, between November 28th and December 5th, Kimmel ordered the two US aircraft carriers, U SS Enterprise and USS Lexington, together with six heavy cruisers and fourteen destroyers, to leave Pearl Harbor for Midway and Wake Island — placing the most modern strategic ships of the Pacific Fleet conveniently far from the site of the Japanese attack on December 7th Washington deliberately withheld vital intelligence from Kimmel that would have indicated days in advance that the Japanese goal was Pearl Harbor.
On November 26, two weeks before the attack, Roosevelt had been urgently and personally alerted to an imminent attack on Pearl Harbor by none other than Winston Churchill. Roosevelt responded by stripping the fleet at Pearl Harbor of air defenses, a measure bound to insure Japanese success.
… Churchill’s November 26, 1941 message to Roosevelt is the only document in their correspondence that has to this day never been made public, on grounds of ‘national security.’ Churchill reportedly explicitly warned FDR of an imminent attack on Pearl Harbor to come on “December 8,” the actual date Tokyo time, of the December 7 Japanese attack, according to the memoirs of Churchill’s Washington Ambassador, Lord Halifax.
[President Franklin] Roosevelt and his advisers incited the Japanese attack on the US Naval base at Hawaii in order to mobilize unwitting American citizens into a war to establish the American Century.
Sir Halford Mackinder, in 1919
Who rules East Europe commands the Heartland; who rules the Heartland commands the World Island; who rules the World Island commands the entire World.
The policy makers from the Council on Foreign Relations (CFR) and the internationalists around the Rockefeller group engaged in seemingly paradoxical and contradictory policies. They were simultaneously financing and staffing the CFR War & Peace Studies – intended to be a detailed blueprint for a postwar US global domination, an American Century – while at the same time they were going to extraordinary lengths supporting the Third Reich’s war buildup, accruing huge profits from the sales to their ‘enemy’.
For the influential US elites grouped around the CFR [Council on Foreign Relations], war (WWII) was merely an instrument through which to extend their financial power in the postwar world and create an American imperium, one displacing not only the British Empire, but also the German Reich and any other potential European competitor. They understood quite well that wars enabled the conquering and subjugating of new markets, and that what the world called ‘peace’ was but a ‘temporary armistice’ or ceasefire in the continual war process, until prospects for looting a given area had reached relative limits and a new war of conquest became necessary.
For the influential US elites grouped around the CFR [Council on Foreign Relations], war (WWII) was merely an instrument through which to extend their financial power in the postwar world and create an American imperium, one displacing not only the British Empire, but also the German Reich and any other potential European competitor.
Yale University geopolitical strategist Nicholas Spykman, 1938
Unless the dreams of European Confederation should materialize, it may well be that fifty years from now the quadrumvirate of world powers will be China, India, the United States and the USSR.
minutes of the CFR [Council on Foreign Relations] War & Peace Studies’ Security Sub-Committee of the Advisory Committee of the Post-War Foreign Policy, 1938
The British Empire as it existed in the past will ever reappear and… the United States may have to take its place… The US must cultivate a mental view toward world settlement after this war [WWII] which will enable us to impose our own terms, amounting… to Pax Americana.
American leading circles around the Rockefellers and Wall Street had resolved among themselves that all potential European rivals for power would have to grind themselves down in a mutual slaughter. The goal of these American elites was to eliminate, above all, the prospect of a German Reich that would fill the power vacuum in Central Europe left by the collapse of France and its allies.
The United States developed its future war strategy within the internationalist circles around FDR, Rockefeller, Prescott Bush and the Council on Foreign Relations. Their geopolitical agenda … was to ‘support’ and use Hitler in order to destroy Germany once and for all.
… The goal of these circles in the United States was to realize a global American supremacy built on the war-ravaged ashes of Germany, of Britain and of Stalin’s Russia. The Rockefellers and their crowd were no more ‘pro-German’ than they were ‘pro-British.’
They were pro-American Century, and above all, pro-Rockefeller.
… They formed tactical alliances with Nazi Germany one moment, and with Russia and Britain the next. These were simply matters of expediency-tactics in pursuit of their strategic end goal: global American hegemony, their American Manifest Destiny, their Lebensraum or Grand Area.
[Franklin] Roosevelt and the circles around Rockefeller’s War & Peace Studies at the Council on Foreign Relations were certain that they would emerge the victors in the most costly war in history [WWII]. They began a careful propaganda campaign to prepare public opinion to come into a war against Hitler’s Germany. The reason for the US entering the European war, at least from the perspective of Rockefellers and their allies on Wall Street and in big industry, had nothing to do with Hitler’s policies of “final solution” against Jews or other atrocities of the Third Reich.
Rather, the growing propaganda campaign to win American hearts to another war in Europe had to do with the need to destroy the most serious rival to a postwar American Century – the German Reich.
The US plan was to delay launching the Anglo-American Second Front against Hitler long enough to let Russia and Germany bleed each other to death.
The war [WWII] involved the mobilization over 100 million military personnel, making it the most widespread war in history. In a state of ‘total war,’ the major belligerents had placed their entire economic, industrial, and scientific capabilities at the service of the war effort, blurring the distinction between civilian and military resources. Over 70 million people, the majority of them civilians, had been killed, making it the deadliest conflict in human history.
President [Harry] Truman on his order to use the Atomic bomb on Japan in August 1945
It seems to be the most terrible thing ever discovered, but it can be made the most useful… This is the greatest thing in history.
In the summer of 1945 President Harry Truman signed the order to drop a terrifying new bomb on Japanese cities.
No other act of the war underscored the brutal new message of postwar American power more than Washington’s use of two atomic bombs, one on August 6 on Hiroshima and on August 9 on Nagasaki, Japan. Although the United States had previously dropped leaflets warning civilians of air raids on twelve other Japanese cities where conventional bombing raids were to take place, residents of Hiroshima were given no notice of the atomic bomb.
… The two bombs had killed as many as 140,000 people in Hiroshima and 880,000 in Nagasaki by the end of 1945, with roughly half of those deaths occurring on the days of the bombings. Among those, perhaps 20% died from injuries or the combined effects of flash burns, trauma, and radiation burns, compounded by illness, malnutrition and radiation sickness.
Hitler’s Germany had surrendered to the Allied Forces in May 1945, a month after Truman became President. Japan was by then isolated, economically on its knees and de facto a defeated power. Its exhausted troops were deserting in droves. According to military experts, an effective naval blockade of Japan by US and Allied warships would have been sufficient to force the Japanese Emperor to surrender, even on the harsh terms demanded by Washington and with no further loss of lives.
… The purpose of dropping the atomic bombs on Hiroshima and Nagasaki had been not for terrorizing Japan into surrender – they were already on their knees – but for overwhelming the Soviet Union with a convincing demonstration of American military power.
The driving force behind the entire War & Peace Studies of the Rockefellers’ Council on Foreign Relations, the motive for Roosevelt to bring the United States into war, the entire war mobilization and public indebtedness that the war effort required in the United States, all were aimed at one postwar objective: the creation of a vast captive global market or economic space for the United States.
… America was to be an empire in much the same way that Great Britain had been an Empire after 1815, with one significant difference. America’s economic imperialism would disguise itself under the rhetorical cover of ‘spreading free enterprise,’ and supporting ‘national self-determination’ and ‘democracy.’ The term ’empire’ was to be scrupulously avoided.
… It was every bit an empire, albeit a less visible one, based on the role of the United States in international finance, with the dollar as the pillar of the postwar system, backed up by overwhelming military superiority.
… The US establishment realized the value of giving abundant local spoils to the wealthy and often corrupt national elites in foreign markets they wished to conquer. The system that evolved after 1945 was one of a single, overwhelming global power, the United States, and a growing number of de facto vassal states whose wealthy elites were in one way or another dependent for their existence on the ‘good graces’ of Washington and the Pentagon. The ‘good graces’ usually included US-trained secret police forces, death squads, and timely coups.
The American Century was to be an informal empire of dependent “client states” rather than occupied colonies, deemed by them to be an outmoded and inefficient model of domination.
American history over the previous century [19th century] had been driven an increasingly powerful carte of financial elites and the large industrial trusts they controlled [The Money Trust]. Their interests, rather than the interests of the nation and the population as a whole, defined the strategic priorities of that powerful cartel. Their overwhelming control of the national media allowed their propaganda experts to portray their interests as ‘America’s interests.’ Most Americans, wanting to think the best of their country, bought the propaganda.
… Their economic model was that of the British East India Company or, more accurately, of the Barbary pirates, looting and plundering to exhaustion one region after the next to prop up their empire, leaving behind as little of value as possible. For the Rockefellers … the entire world was considered their ‘frontier.’ By portraying their mission after 1948 as a Cold War fought by ‘American democracy’ against ‘Godless Communism’ they gave the cause of advancing American interests a messianic religious cover that was astonishingly effective for decades.
For the Rockefellers … the entire world was considered their ‘frontier.’ By portraying their mission after 1948 as a Cold War fought by ‘American democracy’ against ‘Godless Communism’ they gave the cause of advancing American interests a messianic religious cover that was astonishingly effective for decades.
Sir Halford Mackinder, the father of British geopolitics, in his essay, ‘The Round World and the Winning of the Peace’, July 1943. Mackinder outlined his vision for a US-dominated postwar order. He defined ‘the Heartland’ as essentially the area covered by the USSR. Mackinder planted the geopolitical seed for what became the Cold War.
The conclusion is unavoidable that if the Soviet Union emerges from ‘ this war [WWII] as conqueror of Germany, she must rank as the greatest land Power on the globe. Moreover she will be the power in the strategically strongest defensive position. The Heartland is the greatest natural fortress on earth.
On April 15, 1945, a few days after the death of Franklin Delano Roosevelt, and only days before the German surrender, a group of senior foreign policy advisors met behind closed doors at the State Department in Washington.
… The men discussed how to turn America’s military focus from Germany to the Soviet Union in the face of the overwhelming sentiment among ordinary Americans that the war had been won with the help of the Soviet Union and that a return to peacetime would reflect this. They discussed how to achieve a radical shift in US opinion, turning it against America’s wartime ally, Russia.
The decision by Washington to use the devastating power of the atomic bomb on Japan was a signal event that was intended among other things to declare to the world the dawn of the American Century and to open the way for a postwar dollar imperium, a Pax Americana on American rules. No debate was to be tolerated. The Cold War was born to underpin that economic imperium, the American Century. Bretton Woods and the unique role of the US dollar as ‘key currency’ would become the basis of a new American global empire, the American Century.
So long as the weakened nations of Western Europe had to depend on a US military security umbrella in a prolonged Cold War with the Soviet Union and later the Peoples’ Republic of China, Washington could virtually dictate vital economic conditions of that alliance. It did, and the Bretton Woods System was the cornerstone of that economic domination.
Leo D Welch, Treasurer of Standard Oil Company, 1946
As the largest source of capital, and the biggest contributor to the global mechanism, we must set the pace and assume the responsibility of the majority stockholder in this corporation known as the world.., nor is this for a given term of office. This is a permanent obligation.’
George F. Kennan, in a confidential internal State Department memo, 1948
[W]e have about 50% of the world’s wealth but only 6.3% of its population …. In this situation, we cannot fail to be the object of envy and resentment. Our real task in the coming period is to devise a pattern of relationships which will permit us to maintain this position of disparity without positive detriment to our national security. To do so, we will have to dispense with all sentimentality and day-dreaming; and our attention will have to be concentrated everywhere on our immediate national objectives. We need not deceive ourselves that we can afford today the luxury of altruism and world benefaction.
The true postwar [WWII] goal of the US elite was US domination of the world, or at least as much of it as it could seize and hold onto in 1948.
The single largest expenditure for [European] countries receiving Marshall Plan aid [after WWII] was for the purchase of American oil – oil supplied by the Rockefeller Standard Oil companies at highly inflated prices paid for in US dollars.
President Harry Truman announcing the Truman Doctrine to the US Congress on March 12, 1941
I believe that it must be the policy of the United States to support free peoples who are resisting attempted subjugation by armed minorities or by outside pressures.
Containment of the Soviet Union served the useful purpose for the US power establishment and their military industry of creating a permanent national security state with what later were revealed as fictional images of an aggressive, threatening Soviet Union.
US foreign policy was being significantly shifted from an alliance with the Soviet Union against the German threat to one of gradual alliance with a postwar humiliated Germany against the alleged Soviet threat.
For the Rockefeller faction and their allies in American finance and industry, the mere fact that state socialism in the Soviet Union  and China  effectively removed more than one-fifth of the planet’s land mass and untold treasures of raw materials and resources as well as potential markets from their grip was sufficient grounds to declare them the new “enemy image.” Their problem was how to sell it to a skeptical American population, how to sufficiently mobilize fear and anxiety in the American public to justify financing a permanent war state directed against the new “absolute evil, Godless Communist Totalitarianism.”
Leading circles in and around the Truman Administration concluded by late 1949 that the only means to mobilize a sense of sacrifice from the American population for vastly larger military spending … would be a new war. The ideal war would be one that could be managed, and one that posed no direct threat to the United States or the still-fragile Western Europe.
… For various reasons, Korea was chosen as the ideal place to stage a limited war designed to mobilize popular support for a permanent national security state. The goal was the enormous expansion of military industry on a permanent basis – what financier and Truman adviser Bernard Baruch labeled a “Cold War”.
In late 1948 Washington announced plans for the creation of a new Atlantic military alliance with its Marshall Plan partners, in return for permanent US bases in western European countries The legal instrument to create a North Atlantic Treaty Organization, NATO, was signed in April 1949, with Belgium, Luxembourg, the Netherlands, France and Britain joining Washington.
Within months, the Korean War would galvanize NATO members to accept an active, permanent military defense organization in Western Europe under the control of Washington, with headquarters in Brussels. A war weary Europe was drawn into Washington’s Cold War strategy via a military alliance.
In 1949, a year after the creation of NATO, a top secret group within the US State Department convened to formulate a new US strategic policy. Their report, “NSC 68: United States Objectives and Programs for National Security,” argued for a US military buildup to confront what it claimed was an enemy “unlike previous aspirants to hegemony… animated by a new fanatic faith, antithetical to our own.”
The group, chaired by former Wall Street banker Paul Nitze, argued that the Soviet Union and the United States existed in a polarized world in which the Soviet Union wished to “impose its absolute authority over the rest of the world.”
Following proclamation of the Truman Doctrine, a creation of Secretary of State Dean Acheson, the Administration’s propaganda apparatus tried to drum up popular support for their Cold War against the ‘evil, Godless’ communists in the Soviet Union. They believed that they could win popular voter support for huge increases in Federal defense spending by “scaring the hell out of America,” as one of Truman’s advisors put it –perhaps by engendering a “war scare to deceive the nation.”
General MacArthur had demanded of Truman that US forces under his command use the pretext of the Korean conflict to launch a direct military attack on China itself, one using nuclear weapons.
… MacArthur, US Chief of Joint Chiefs of Staff General Omar Bradley, Defense Secretary Johnson and Rockefeller lawyer and State Department consultant John Foster Dulles, all wanted to use Korea as a stepping stone for a direct war not just against China, but ultimately against the Soviet Union itself in Asia.
… Korea’s war was a matter of US geopolitical grand strategy to shift the pieces on the Asian chess board and mobilize Cold War fears within NATO and the US population, in order to provide the pretext for creating an enormous, permanent US national security state… The Korean War led most Americans to conclude that the Soviet Union was indeed bent on world domination. It was the needed catalyst to justify mobilization of the nation’s significant resources to counter the perceived threat.
… The Korean War served the agenda of the Washington Cold War faction masterfully. The US Defense budget soared 400% from less than $13 billion at the start of the war to more than $60 billion by war’s end in 1953. US puppet regimes under Chiang Kai-shek in Taiwan and Syngman Rhee in South Korea, and a US Military Government in Japan under Douglas MacArthur, would provide the basis for America’s Cold War presence in East Asia. Under MacArthur’s occupation, assisted by a young New York banker named John D. Rockefeller, III, Japan’s industry was allowed to reorganize into giant conglomerate groups to provide a ‘bulwark against communism’ in Asia.
… In the domestic US economy, politicians quickly realized that they could get almost any program passed by Congress if they argued ‘US national security’ and ‘defense against totalitarian Godless communism.’
In 1953, the war and national security anxiety of the American public had been raised to such a fever pitch that retired wartime General Eisenhower was elected President. It was the Rockefellers initially who had convinced Eisenhower to run and who organized Wall Street money behind his campaign.
Republican Senator Robert Taft, 1952
Every Republican candidate for President since 1936 has been nominated by the Chase Bank.
In addition to dominating the two largest banks in New York – Chase Bank and National City Bank of New York – Rockefeller controlled the largest oil companies in the world, the Standard Oil group, and numerous strategic military industries, chemical companies, and agribusiness firms. In addition [Rockefeller] controll[ed] the CFR through the Dulles brothers, the Central Intelligence Agency and State Department.
James Burnham, co-founder of the National Review magazine, in a1947 book titled ‘The Struggle for the World’
The United States cannot within the allotted time win the leadership of a viable world political order merely by appeals to rational conviction… Power must be there, with the known readiness to use it, whether in the indirect form of paralyzing economic sanctions, or in the direct explosion of bombs. As the ultimate reserve in the power series there would be the monopoly control of atomic weapons.
The United States  held extraordinary power over much of the world in an informal economic empire. It had done so by using the mechanisms of the Bretton Woods institutions, the IMF and World Bank, through its control of broad western European economic policy via the Marshall Plan and the Paris-based Organization for Economic Cooperation and Development (OECD), through the role of the dollar as the world reserve currency and the heart of world finance, and above all, through the Money Trusts New York banks and their allied civil servants in Washington.
As President, [John] Kennedy earned many powerful enemies during his few months in office, from the head of US Steel to CIA chief Allen Dulles and the Pentagon. Perhaps no one opposed Kennedy more strongly than the powerful bankers of Wall Street.
… Five months before his assassination by what was decades later revealed to have been a CIA hit team,” Kennedy issued an all-but unknown proclamation which may have cost him his life.
Much as Abraham Lincoln did when he avoided dependence on London bank loans to finance the Civil War and instead issued interest-free US Treasury notes, Greenbacks, to finance the war, President Kennedy issued Executive Order 11110 on June 4, 1963. Kennedy’s EO 11110, which did not require a vote of Congress, mandated the US Treasury “to issue silver certificates against any silver bullion, silver, or standard silver dollars in the Treasury.”
This meant that for every ounce of silver in the US Treasury’s vault, the government could introduce new money into circulation. In all, Kennedy brought nearly $4.3 billion in US notes into circulation in $2 and $5 denominations. The $10 and $20 United States Notes were just in the process of being printed by the Treasury Department when Kennedy was assassinated. They were never circulated. It was the first time since Lincoln that a President had issued interest free money and the first time a President had challenged the sole money power of the private Federal Reserve.
… After JFK’s death, E011110 was put into abeyance, no more silver certificates were issued and those that had been issued were removed from circulation. The very existence of E011110 was hidden from the public, and forgotten or ignored by most historians.
Shortly before he was assassinated, JFK issued United States Notes, interest free and independent of the Federal Reserve. At the top it says, United States Note, not Federal Reserve Note. The Notes were immediately recalled by his successor.
The Vietnam War strategy had been deliberately designed by Defense Secretary Robert McNamara, National Security Adviser McGeorge Bundy, along with Pentagon planners and key advisers around Lyndon Johnson, to be a “no-win war” from the onset, in order to ensure a prolonged buildup of the military sector of the US economy.
Beginning in the late 1950s the major New York banks had greatly increased their power and influence through a series of bank mergers. Rockefeller’s Chase National Bank had merged with the Bank of Manhattan to form Chase Manhattan Bank headed by John J. McCloy, Rockefeller’s attorney and a Rockefeller Foundation Trustee as well as Chairman of the New York Council on Foreign Relations… The National City Bank of New York took over the First National Bank of New York to form City Bank of New York, later Citibank, under the chairmanship of James Stiliman Rockefeller.
… According to a 1961 US Department of Justice report, the five largest New York banks, dominated by the two Rockefeller banks, controlled 75% of all deposits in the nation’s largest city, the world’s international financial center.
… To facilitate this extraordinary concentration of financial power, the US Government exempted banks from US anti-trust laws prohibiting undue concentration or cartelization.
A confidential internal memo [at the Rockefellers’ Chase Manhattan Bank] was circulated within the bank in 1966 on the subject of the disadvantages that American, i.e. New York, banks had in capturing the lucrative international market for ‘flight capital.’ The memo pointed to the advantages enjoyed by Swiss banks that dominated the lucrative market in managing and profiting from the hidden fortunes of dictators like Marcos in the Philippines, Saudi princes, drug barons and the like. The memo proposed that Chase open up a foreign entity to capture a major share of the booming offshore flight capital, or ‘hot money,’ for itself.
Offshore banking [1960s] marked a sea change in New York banking practice that would explode in importance during the next three decades and beyond. Chase Manhattan, Citibank and other major US money center banks were to launder hundreds of billions of dollars of illicit hot money, no questions asked, whether the funds originated from US-friendly dictators like the Philippines’ Ferdinand Marcos, Iran’s Shah Reza Pahlavi, Mexico’s Rañl Salinas de Gortari, or Juárez drug cartel money being transferred to Uruguay and Argentina, or from countless other controversial and politically sensitive transactions.”
On August 15, 1971 President Richard Nixon announced to the world that he had ordered the Gold Discount Window of the New York Federal Reserve to be permanently shut. Foreign holders of dollars had without warning been robbed of their right to gold by the unilateral act of the US President, and in violation of a treaty obligation of the United States.
… Nixon was acting on the advice of a small circle of Rockefeller -linked advisers, including Secretary of State Henry Kissinger, a life-long appendage of the Rockefeller interests, and budget adviser George Shultz, later Secretary of State and chairman of the vast Bechtel construction giant.
Under Secretary for International Monetary Affairs and former Chase Manhattan Bank executive, Paul Volcker [was] a life-long enabler of Rockefeller interests. Volcker went on … at the urging of David Rockefeller, to become Jimmy Carter’s nominee to head the Federal Reserve.
In May 1973 on a resort island outside Stockholm, a highly secret meeting took place that gave the dollar a new lease on life, a lease at the expense of world industrial growth.
Wall Street and Washington power elites around Secretary of State Henry Kissinger decided to impose a dramatic shock on the world economy in order to rescue the falling dollar as the asset of world trade and finance, and restore it as a pillar of the American economic imperial strategy.
In May 1973, with the dramatic fall of the dollar still vivid, a group of 84 of the world’s top financial and political insiders met at the secluded island resort of the Swedish Wallenberg banking family, at Saltsjoebaden, Sweden. This gathering later came to be known as Prince Bernhard’s Bilderberg Group. At the meeting, the group heard an American participant outline a ‘scenario’ for an imminent 400% increase in OPEC petroleum revenues.
In May i972 a year before the Bilderberg Saltsjoebaden [Sweden] talks, the Shah had met with [Henry] Kissinger and President Nixon in Teheran. Nixon and Kissinger promised the Shah he could buy any US military equipment he wanted from the US defense arsenal except nuclear weapons, and he would be permitted to do it without US Congressional OK.
In order to finance the huge purchases, the Shah would need vastly higher oil revenues. Chase Manhattan Bank, of course, was Iran’s bank, the Shah’s personal bank, National Iranian Oil Company’s bank, the Pahlavi family bank, and the Pahlavi Foundation’s bank. The entire financial empire of the Pahlavi regime was a Rockefeller operation from top to bottom.
Present at Saltsjoebaden [Sweden] for the May 1973 gathering were David Rockefeller of Chase Manhattan Bank, by then the acknowledged ‘chairman of the board’ of the American establishment; … Zbigniew Brzezinski, the new Executive Director of David Rockefeller’s private Trilateral Commission and soon to be President Carter’s National Security Adviser … Henry Kissinger had also been invited to the gathering.
The powerful Bilderberg elite group that met in Sweden in May 1973 had decided to launch a colossal assault against industrial growth in the world, in order to tilt the balance of power back to the advantage of American Wall Street financial interests, and specifically to support the vulnerable dollar, the heart of their global financial and economic power. In order to do this, they would use their most valuable strategic weapon-their control of the world’s oil flows.
The Bilderberg policy was put into effect six months later in October 1973 when US diplomacy was deployed to trigger a global oil embargo, shockingly enough, in order to force the intended dramatic increase in world oil prices. Since 1945, world oil trade had by international custom been priced in dollars because American oil companies dominated the postwar market. A sharp and / sudden increase in the world price of oil, therefore, meant an equally dramatic increase in world demand for US dollars to pay for that necessary oil. In addition 1 to making Exxon, Mobil Oil and the other Rockefeller companies into the largest corporations in the world, it would make their banks-Chase Manhattan, Citibank and a handful of others-into the world’s largest banks.
The Rockefeller-dominated American financial establishment had resolved to use their oil power in a manner no one could imagine possible. The very outrageousness of their scheme was to their advantage. No one could conceive that such a thing could possibly be deliberate. It was.
In October 6, 1973, Egypt and Syria invaded Israel, igniting what became known as the ‘Yom Kippur’ war. The Yom Kippur war was not the simple result of miscalculation, blunder, or an Arab decision to launch a military strike against the state of Israel. The entire series of events leading up to the outbreak of the October war had been secretly orchestrated by Washington and London, using powerful ‘back door’ diplomatic channels developed by Nixon’s National Security Adviser, Henry Kissinger.
Kissinger effectively controlled the Israeli policy response through his intimate connection with Israel’s Washington ambassador, Simcha Dinitz. Kissinger had also cultivated channels to the Egyptian and Syrian side. His method was simply to misrepresent to each party the critical elements of the other’s position, ensuring the outbreak of war and the subsequent Arab oil embargo.
… The war brought about the very oil price shock discussed at the Bilderberg deliberations of the previous May in Saltsjoebaden [Sweden], some six months before the outbreak of the war.
OPEC and the Arab oil-producing nations would be the scapegoats for the coming rage of the world over the resulting oil embargo to the United States and Europe and an ensuing huge increase in oil prices, while the Anglo-American interests that were actually responsible, stood quietly in the background, ready to reap the windfall.
… One enormous consequence of the ensuing 400% rise in OPEC oil prices was that the risky North Sea investments of hundreds of millions of dollars by British Petroleum, Royal Dutch Shell and other Anglo-American petroleum concerns could produce oil at a profit. It was a curious fact of the time that the profitability of the new North Sea oil fields was not at all secure until after Kissinger’s oil shock. At pre-1973 world oil prices, the North Sea projects would have gone bankrupt before the first oil could flow.
… The US Treasury ‘arrangement’ with Saudi Arabia on dollar pricing of oil was finalized February 1975… Under the terms of the agreement, the huge new Saudi oil revenue windfall would be channeled largely into financing the US government deficits.
… The Bilderberg scheme was operating fully as planned. The Eurodollar market that had been built up over the previous several years was to play a decisive role in the offshore petrodollar ‘recycling’ strategy. Subsequently, Rockefeller’s Chase Manhattan Bank estimated that between 1974 and the end of 1978 the oil producing countries of OPEC generated a surplus from oil exports of $185 billion, more than three-fourths of which passed through Western financial institutions, the lion’s share through Chase and allied banks in New York and London, and from thereon as loans to the Third World.
… From 1949 until the end of 1970, Middle East crude oil prices had averaged approximately $1.90/barrel. They had risen to $3.01 in early 1973, the time of the fateful Saltsjoebaden meeting of the Bilderberg group who discussed the imminent 400% future rise in OPEC’s price. By January 1974 that 400% increase was a fait accompli.
… After Nixon had eliminated the gold exchange mechanism in August 1971, the offshore Eurodollar market exploded … by the mid-1970s in the wake of the 400% OPEC oil price rise the Eurodollar market reached an estimated $1.3 trillion pool of ‘hot money. Interestingly, by the end of the 1980s, the volume of international narcotics revenues alone – which had to be laundered through such offshore ‘hot money’ banks – exceeded an estimated $1 trillion a year. The big New York and London banks made sure they got the lion’s share of drug money.
The London Eurodollar banking market became the centerpiece of the huge Petrodollar recycling operation, lending OPEC oil revenue deposits from banks ‘offshore’ in London, to Argentina, Brazil, Poland, Yugoslavia, Africa and other oil importing nations that were starved for dollars with which to import the more expensive OPEC oil after 1974.
The dollar system … a paper or fiat currency, went through several phases after August 1971. The first phase could be called)the ‘petrodollar’ currency phase in which the strength of the dollar rested on the 400% rise in oil on the world market priced in dollars, and on the highly profitable recycling of those petrodollars through the US and UK and a select handful of other international banks in the City of London, the offshore haven for Eurodollars. That phase lasted until about the end of the 1970s.
The second phase of the post-1971 dollar system was sustained on the Voicker interest rate coup of October 1979 and lasted until approximately 1989 when the fall of the Berlin Wall opened a vast new domain for dollarization and asset looting by Wall Street banks. That opening, combined with the colossal economic growth of China as a member of the WT O, opened the world economy to a drastic lowering of wages across the board, most dramatically in the industrial countries.
In 1997 yet another phase in the post-1971 dollar system was initiated with a politically-driven hedge fund attack on the vulnerable currencies of the high-growth ‘Tiger’ economies of east Asia, beginning with Thailand, the Philippines, Indonesia and spreading to South Korea. That phase was in large part responsible for a massive inflow of Asian central bank dollars into the US dollar to build dollar reserves as defense against a possible new speculative attack. The inflow of hundreds of billions of dollars of Asian capital after 1998 fuelled the US IT stock market bubble of 1999-2002.
The final phase of the dollar system after August 1971 was the Alan Greenspan Revolution in finance, which he launched after the collapse of the IT stock market bubble in 2001-2002, By his strong support of the revolution in finance, mortgage and other assets as security to issue new bonds, Greenspan helped engineer the ‘securitization revolution’ which ended with the collapse of his real estate securitization bubble in 2007.
The agenda of the US establishment had been announced [in 1973] by David Rockefeller’s brother John D. III, in a book modestly titled, ‘The Second American Revolution’.
… The book called for a radical reduction in the powers of government for expanded ‘privatization’ of functions long performed by the state, “moving as many government functions and responsibilities toward the private sector as possible.” It was a clear call for abandonment of New Deal Keynesian policies-at least the use of the state to correct imbalances in social distribution of jobs and income that had existed since the 1930s.
Rockefeller’s 1973 call served as the signal for launching a national media propaganda campaign against alleged Government inefficiency, incompetence, and obstruction, using the inevitable bureaucratic inefficiencies of social services as a smoke screen to end all oversight and regulation of banking and large commercial transactions. The book used carefully selected examples that every citizen could recognize to build support for essentially destroying the traditional and necessary role of the state in regulating commerce and the pubic welfare, to the advantage of the pure and unfettered profit-maximization of private companies and banks financing those companies. It was a Darwinian world they unleashed where the fittest were the biggest and naturally the ones with the clout to destroy their competitors.
In 1976, the Rockefeller agenda for a ‘second American revolution’ made a significant advance: David Rockefeller’s protégé at the Trilateral Commission, Georgia peanut farmer turned Governor, Jimmy Carter, won an upset election against incumbent Gerald Ford who had taken over when Nixon was driven from office by the Watergate scandals. Carter promptly went on to staff his key cabinet positions with 26 members of Rockefeller’s Trilateral Commission, including Vice President Walter Mondale, Secretary of State Cyrus Vance, Defense Secretary Harold Brown, and Treasury Secretary Michael Blumenthal.
As President, Carter’s entire foreign policy, much of his election strategy, and some of his domestic policy came directly from Rockefeller’s Trilateral Commission. The architect of Carter’s foreign policy from 1975 was his National Security Adviser Zbigniew Brzezinski who had resigned as Trilateral Commission Executive Director in order to take the post.
… It was Carter who began the Rockefeller group’s long process of Government deregulation and privatization that his successor, Ronald Reagan, would make the centerpiece of his Presidency.
The deepening US economic crisis of the 1970s was the motivation for the Rockefellers and other US establishment leaders to come up with radical new strategies. The US was faced with stagnation or even decline of its market strength and corresponding profit share globally and within the United States.
… From this crisis emerged a new social vision or political philosophy called “neoliberalism.”
… The neoliberal revolution that was launched in the mid-1970s was a project of the US establishment and their British counterparts. Specifically, it was a concoction of the Rockefeller brothers, based on the radical free market dogma of Milton Friedman, a member of the arch-conservative Mont Pelerin Society and then professor of Economics at the University of Chicago, an institution founded decades earlier with Rockefeller Standard oil money. Neoliberalism could more accurately have been called neo-feudalism.
Echoing John D. Rockefeller’s 1973 manifesto, Friedman’s neoliberalism, enshrined in his popular book, ‘Free to Choose’, called for untrammeled free markets and free trade, and attacked trade unions as a “throwback to a preindustrial period. “
The neoliberal revolution was, in essence, a globalized version of John D. Rockefeller’s Second American Revolution… It was the initial phase of what two decades later would be called “globalization.”
The powerful circles around the Rockefellers within the US financial establishment called explicitly for a global restructuring to their benefit, including:
new discipline of labor and management to the benefit of lenders and shareholders; the diminished intervention of the state concerning development and welfare; the dramatic growth of financial institutions; the implementation of new relationships between the financial and non-financial sectors to the benefit of the former; a new legal stand in favor of mergers and acquisitions; the strengthening of central banks and the targeting of their activity toward price stability, and the new determination to drain the resources of the periphery toward the center.
The predominant feature of the new neoliberalism was not just its structural arrangements, but the creation of mechanisms to extend the dollar’s reach to the rest of the planet, the globalization of the dollar and of US finance behind it. The destructive process of market liberalization spread with devastating speed and efficiency, assisted by creation of new multinational institutions such as the World Trade Organization and massive trade pressures from Washington and its free market allies, especially Britain.
Milton Friedman’s dogma of monetarism was the theoretical expression of the new revolution, or more accurately, counter-revolution. The decisive year in the economic counter-revolution was 1979 when David Rockefeller got President Carter to name his protege, Paul Volcker, to become Chairman of the Federal Reserve. In October 1979 Volcker imposed the most radical monetarist policy in the history of the Federal Reserve as he allowed interest rates to soar by more than 300% into the 20% range, and held them high until the resulting inevitable Third World debt crisis erupted by August 1982, prompting him to reverse the rate policy.
… The high interest policy was imposed by the wealthiest members of the establishment as part of their long-term strategy of clawing back the concessions forced from them during the Great Depression in terms of the creation of the Keynesian social welfare state, social security, and Government support for labor union organization.
Confronted with stagnating domestic markets, declining absolute profits and the need to invest huge sums in order to bring their domestic US industries up to world standards, the Rockefeller circles opted instead to walk away from renewing their domestic US economic base, leaving it to become what their think-tanks called a ‘post-industrial society.’
[Paul] Volcker’s interest rate policy led to ‘real’- that is, corrected-for-inflation – interest rates of 6-8%, a staggering windfall boon for wealthy bond holders, the center of the financial system. It also created a recession and with it, a rising wave of unemployment in Europe and in the United States, which created the conditions for a new crackdown on labor implemented by both Reagan and Thatcher in the early 1980s, dramatically weakening the influence of trade unions on wage levels for decades to come.
By 1973 the US trade position with respect to its major allies in Western Europe and Japan was taking form. The terms of the ‘grand bargain’ would be that the US would open its borders to almost unlimited Japanese or European imports of products such as cars, steel, and later, electronics. In return, the foreign countries would agree to purchase US defense equipment, US agricultural products and US aircraft for its national airlines.
But the most far-reaching aspect of the new regime implemented after 1973 by Washington and adhered to by every Administration since then was the idea that, because of the unique role of the dollar as world foreign exchange reserve under a floating-rate exchange regimen — and the fact that the dollar could no longer be redeemed for gold — foreign nations that built up a surplus of dollars exporting to the United States, especially Japan and Germany, would be forced to reinvest those dollar trade surpluses in US Government debt, in order to earn interest and hold them in a safe repository.
… The United States, led by Wall Street banks that held the monopoly on buying and selling US Treasury debt, would emerge as the world’s greatest capital market during the 1980s, as US deficits exploded and its internal industry went into malign neglect as a result of the decision. Wall Street bond brokers reaped the gains. Ronald Reagan’s Presidency was chosen by the establishment to implement this ‘greatest rip-off.’
The monetary shock therapy that [US Federal Reserve Chairman Paul] Volcker imposed on the United States [1970s] had been developed and already implemented several months earlier in Britain by Prime Minister Margaret Thatcher. Voicker and his close circle of Wall Street banking friends … merely imposed Thatcher’s monetary shock model onto US conditions. The goal of both was the same-to dramatically roll back the redistribution of wealth and income in their respective countries in favor of the wealthiest 5%, or even fewer.
In early May 1979 Margaret Thatcher won election in Britain by campaigning on a platform of “squeezing inflation out of the economy.” Thatcher, and her inner circle of Adam Smith ‘free market’ ideologues, promoted a fraud, insisting that government deficit spending, and not the 140 percent increase in the price of oil since the fall of Iran’s Shah, was the chief cause of Britain’s 18% rate of price inflation.
According to Thatcher’s advisers, inflated prices could be lowered simply by cutting the supply of ‘surplus money,’ thereby inducing an economic recession. Since the major source of surplus money, she argued, was from chronic government budget deficits, therefore government expenditure must be savagely cut, in order to reduce ‘monetary inflation.’ The Bank of England simultaneously restricted credit to the economy by a policy of high interest rates, as their part of the remedy. It was identical in every respect to the Rockefellers’ Second American Revolution, only it was called instead, the ‘Thatcher Revolution.’
In June 1979, only one month after Thatcher took office, Thatcher’s Chancellor of the Exchequer, Sir Geoffrey Howe, raised Base Rates for the banks a staggering five percentage points-from 12% up to 17%–within a matter of twelve weeks. This amounted to an unprecedented 42% increase in the cost of borrowing for both industry and homeowners. Never in modern history had a major industrialized nation undergone such a shock in such a brief period, outside the context of a wartime economic emergency.
The Bank of England simultaneously began to cut the money supply, to ensure that interest rates remained high. Unable to pay borrowing costs, businesses went bankrupt; families were unable to buy new homes; long-term investment into power plants, subways, railroads, and other infrastructure ground to a halt as a consequence of Thatcher’s monetarist revolution.
Thatcher also imposed draconian labor policies, forcing militant British miners to cave in after brutal months of strike, which earned her the epithet ‘The Iron Lady.’ Unemployment in Britain doubled, rising from 1.5 million when she was elected, to a level of 3 million by the end of her first eighteen months in office. That was part of the bankers’ strategy: calculating that unemployed workers who are desperate will work for less to get any decent job. Thatcher targeted labor unions, claiming they were obstacles to the success of the monetarist ‘revolution,’ and blaming them for creating the enemy-inflation.
Meanwhile, Thatcher accommodated the big City banks by removing exchange controls, so that instead of capital being invested in rebuilding Britain’s rotted aging industrial base, funds flowed out to speculative real estate in Hong Kong or lucrative loans to Latin America.
Beginning in Britain, then in the United States, and from the AngloAmerican world radiating outward, the shock waves from the radical monetarism of Thatcher and Rockefeller protégé [US Federal Reserve Chairman Paul] Volcker spread like a virulent parasite after 1979. Country after country buckled under demands to cut government spending, lower taxes, deregulate industry and break the power of organized labor. Interest rates rose around the world to levels never before imagined in peacetime.
In the United States, [US Federal Reserve Chairman Paul] Volcker’s monetary shock policy by early 1980 had driven US interest rates up to an astonishing 20% nominal level.
… The sky was to be the interest rate limit under the new dogma of what the British called ‘neoliberal monetarism.’ Money was to be King, and the world, its dutiful servants. And Wall Street bankers were to be the Gods of Money.
The global impact of the Volcker high interest rates was devastating to industrial and developing world. By the early 1980s, worldwide spending on long-term government-funded infrastructure and capital investments – such as railroad, highway, bridge, sewer, and electricity plant construction – had collapsed.
An arch-conservative Republican President, former Hollywood movie actor Ronald Reagan, had no hesitation in backing the Volcker shock treatment. Reagan had been tutored while Governor of California by the guru of monetarism, University of Chicago economist, Milton Friedman. Friedman was also an adviser to Britain’s Margaret Thatcher.
… Reagan kept Milton Friedman as his unofficial adviser on economic policy. His administration was filled with disciples of Friedman’s radical monetarism as well as followers of Austrian free market economist Ludwig von Mises.
The powerful US banking circles of New York were determined to use the same radical measures on the US economy that had earlier been imposed by Friedman to break the back of Chile’s economy under the dictatorship of Augusto Pinochet. Friedman’s policies had also been implemented by the Argentinean military juntas during the late 1970s and early 80s, to break Argentina’s unions and destroy the country’s middle classes.
… The power of American finance was given a new lease on life with the Volcker shock therapy, just as intended. The byproduct of Volcker’s soaring interest rate policy – a policy he held firmly to until October 1982 – was a resurgence of the US dollar as capital flowed into US bonds and other assets to earn the very high interest rate returns.
… The Latin American debt crisis, an ominous foretaste of the 2007 US sub-prime crisis, erupted as a direct result of [US Federal Reserve Chairman Paul] Volcker’s interest rate shock therapy. In August 1982 Mexico announced it could no longer pay the interest on its staggering dollar debt. Mexico, along with most of the Third World from Argentina to Brazil, from Nigeria to Congo, from Poland to Yugoslavia, had fallen for the New York banks’ debt trap.
… The IMF was then brought in to run things in the debtor or victim country, brought there by the major New York banks and the US Treasury. The greatest looting binge in world history to that date-misnamed the Third World Debt Crisis-was on. the scale of the big banks’ looting binge during the 1980s was exceeded only by their gains from the 2000-2007 mortgage securitization swindles.
Volcker’s shock policy had triggered the crisis, and the New York and London banks cleaned up on that debt crisis.
By 1986, after seven years of relentlessly high interest rates by the Volcker Fed, the internal state of the US economy was horrendous. Much of America had come to resemble a Third World country, with its sprawling slums, double-digit unemployment, rising crime rates, and endemic drug addiction. A Federal Reserve study showed that 55% of all American families were net debtors.
… In reality [US Federal Reserve Chairman Paul] Volcker, who had worked under David Rockefeller at Chase Manhattan Bank, had been sent by Rockefeller to Washington to do one thing-save the dollar from a free fall collapse that threatened the role of the US dollar as global reserve currency, and with it, to save the bond markets for the wealthy upper stratum of American elite society, the money interests. It was, in effect, the financial oligarchs’ counter-revolution against the concessions they had been forced to give to the ‘lower classes’ during and after the Great Depression.
That role of the US dollar as world reserve currency was the hidden key to American financial power.
With US interest rates going through the roof, foreign investors flooded in to reap the gains by buying US bonds. Bonds, US Government debt, were the heart of Wall Street’s control of the international financial system. Voicker’s shock therapy for the economy reaped astronomical profits for the New York financial community.
… The dollar rose to all-time highs against the currencies of Germany, Japan, Canada and other countries from 1979 through the end of 1985. The over-valued US dollar made US manufactured exports prohibitively expensive on world markets, however, and led to a dramatic decline in US industrial exports.
There would not have been a Third World debt crisis during the 1980s, had there not been Margaret Thatcher’s and Paul Volcker’s radical monetary shock policies.
The IMF had become the global financial ‘policeman,’ enforcing payment of usurious debts through imposition of the most draconian austerity in history. With the crucial voting bloc of the IMF firmly controlled by an American-British axis, the IMF became the global enforcer of a de facto Anglo-American neocolonial monetary and economic dictatorship, one imposed by a supranational institution immune from any democratic political controls.
… The debtor countries had been caught in a debt trap from which the only way out, offered conveniently by the creditor banks of New York and London, was to surrender their national sovereign control over their economy, especially over valuable national resources such as oil and raw materials.
One study, by Hans K. Rasmussen of Danish UNICEF, pointed out that what had taken place since the early 1980s was a massive transfer of wealth from the capital-starved Third World, primarily into the financing of deficits in the United States. It was de facto imperialism or, as some called it, neo-colonialism under the disguise of IMF technocracy.
… With high US interest rates, a rising dollar, and the security of American government backing, 43% of the record high US budget deficits during the 1980s were financed by this looting of capital from the debtor countries of the once-developing sector… the debt was merely a vehicle for establishing de facto economic control over entire sovereign countries.
Africa fared even worse than other regions as a result of the American debt strategy. The oil shocks and the ensuing 20% interest rates and collapsing world industrial growth in the 1980s dealt the death blow to almost the entire Continent. Until the 1980s, Black Africa had been 90% self-sufficient in exporting its raw materials to finance its development. Beginning in the early 1980s, the world dollar price of such raw materials- everything from cotton to coffee to copper, iron ore and sugar – began an almost uninterrupted freefall.
… By 1987 such raw materials prices had fallen to their lowest levels since the Second World War, as low as their level in 1932, a year of deep global economic depression. The 1980s collapse, which would last almost twenty years until China’s economic boom began to reverse it in the early years of the next century, was a deliberate policy of the American financial interests to fuel an economic growth based on dirt-cheap raw materials in a ‘globalized’ economy.
Wall Street’s … zeal for lifting government ‘shackles’ off financial markets resulted in an extravaganza of financial excess. When the dust settled by the end of that decade, some began to realize that Reagan’s free market had all but destroyed an entire national economy: the USA’s.
President Ronald Reagan signed the largest tax reduction bill in postwar history in August 1981. The bill contained provisions that gave generous tax relief for certain speculative forms of real estate investment, especially commercial real estate. Government restrictions on corporate takeovers were also removed, and Washington gave the clear signal that ‘anything goes, so long as it stimulated the Dow Jones Industrials stock index.
[Alan] Greenspan would rarely disappoint his Wall Street patrons during the 18 years when he controlled the Fed with an almost iron grip. Those 18 years were marked by financial deregulation, successive speculation bubbles and instability.
… Greenspan’s entire tenure as Fed chairman was dedicated to advancing the interests of American world financial domination in a nation whose domestic economic base had been essentially destroyed in the years following 1971.
Greenspan knew who buttered his bread and as Federal Reserve head he loyally served what the US Congress in 1913 had termed “the Money Trust,” in reference then to the cabal of bankers behind the 1913 creation of the Federal Reserve.
Many, of the same banks which were pivotal in the securitization revolution of the 1990s and into 21st Century, including Citibank and J.P. Morgan had been at the center of the 1913 Money Trust as well. Both had share ownership of the key New York Federal Reserve Bank, the heart of the system. The real goal of the Money Trust whether in 1913 or in 1987 was to consolidate their control over major industries, economies and ultimately, over the economy of the entire world through what would be called the globalization of finance.
The real goal of the Money Trust whether in 1913 or in 1987 was to consolidate their control over major industries, economies and ultimately, over the economy of the entire world through what would be called the globalization of finance.
When Alan Greenspan arrived in Washington in 1987, he had been hand picked by Wall Street and the big banks to implement their Grand Strategy. Greenspan was a Wall Street consultant whose clients included J.P. Morgan Bank, among others. Before taking the post as head of the Federal Reserve, Greenspan had also sat on the boards of some of the most powerful corporations in America, including Mobil Oil Corporation, Morgan Guaranty Trust Company and JP Morgan & Co. Inc. Greenspan had also served as a director of the Council on Foreign Relations since 1982. As Federal Reserve Chairman his first test in October 1987 would be the manipulation of stock markets using the then-new derivatives markets.
The doctrine of “Too Big to Fail” (TBTF) … was that certain very large banks, because they were so large, must not be allowed to fail for fear it would trigger a chain-reaction of failures across the economy. It didn’t take long before the large banks realized that the bigger they became through mergers and takeovers, the more certain they were to qualify for TBTF treatment.
… The TBTF doctrine, during [Alan] Greenspan’s tenure as Chairman of the Federal Reserve, would be extended to cover very large hedge funds (LTCM), very large stock markets (NYSE), and virtually every large financial entity in which the US financial establishment had a strategic stake.
… Once the TBTF principle was made clear, the biggest banks scrambled to get even bigger. The traditional separation of banking into local S&L mortgage lenders, on the one hand, and large international money center banks like Citibank or J.P. Morgan or Bank of America, on the other – as well as the prohibition on banking in more than one state – were systematically dismantled.
… By 1996 the number of independent banks had shrunk by more than one-third from the late 1970s — from more than 12,000 to fewer than 8,000. The percentage of banking assets controlled by banks with more than $100 billion doubled to one-fifth of all US banking assets.
Goldman Sachs chairman Lloyd Blankfein, New York Times, June 2007
We’ve come full circle, because this is exactly what the Rothschilds or J. P. Morgan, the bankers were doing in their heyday. What caused an aberration was the Glass-Steagall Act.
What had emerged after the 1999 repeal of Glass-Steagall was an awesome transformation of American credit markets into what would soon become the world’s greatest unregulated private money-creating machine.
The New Finance was built on an incestuous, interlocking, if informal, cartel of players, all reading from the script written by Alan Greenspan and his friends at J.P. Morgan, Citigroup, Goldman Sachs, and the other major financial houses of New York. Securitization was going to secure a ‘new’ American Century and US financial domination of the world, as its creators clearly believed on the eve of the millennium.
Key to the ‘revolution in finance,’ in addition to the unabashed backing of the Greenspan Fed, was the complicity of the Executive, Legislative and Judicial branches of the US Government, up to and including the Supreme Court. Also required in order to make the game work seamlessly, was the active complicity of the two leading credit agencies in the world-Moody’s and Standard & Poors.
The revolution in finance required a Congress and Executive branch that would repeatedly reject rational appeals to regulate over-the-counter financial derivatives, bank-owned or financed hedge funds, and would systematically remove all of the mechanisms for supervision, control, and transparency that had been painstakingly built up over the previous century or more.
Fed Chairman [Alan] Greenspan … worked with J.P. Morgan and a handful of other trusted friends on Wall Street to support the launch of securitization in the 1990s. It soon became clear what the staggering potential gains would be for the banks who were first in line and who could shape the rules of the new game, the New Finance.
J.P. Morgan & Co. had led the march of the big money center banks, beginning in 1995, away from traditional customer bank lending towards the pure trading of credit and of credit risk. The goal was to amass huge fortunes for the bank’s balance sheet – and its executives — without having to carry the risk on the bank’s books. It was an open invitation to greed, fraud and ultimate financial disaster. Almost every major bank in the world — from Deutsche Bank to UBS to Barclays to Royal Bank of Scotland to Société Générale — soon followed Chase, J.P Morgan and Citibank like eager, blind lemmings.
[Federal Reserve Chairman Alan] Greenspan’s 18-year tenure could be described as rolling the financial markets from successive crises into ever larger ones, in the process to accomplish the over-riding objectives of the Money Trust guiding the Greenspan agenda – the extension of their power over the world monetary system.
In 1999 the US Congress and GAO investigated Citigroup for illicitly laundering $100 million in drug money for Raul Salinas, brother of then-President of Mexico. The investigations also discovered that the bank had laundered money for corrupt officials from Pakistan to Gabon to Nigeria.
Four successive US Presidents — from Ronald Reagan to George H.W. Bush, to Bill Clinton, and to George W. Bush – all determined to enable the speculative debt binge destruction of the American economy by encouraging financial deregulation. The result was a drastic redistribution of wealth and power in the American population, enhanced by selective tax cuts for the wealthiest and tax hikes, direct and indirect, for the over-indebted American consumer.
… Wall Street investment banks — such as Morgan Stanley, Goldman Sachs, Merrill Lynch, and Lehman Brothers – introduced securitization, a process supported by the authority that should have been restraining it, the Federal Reserve. This process led to the creation of the new instruments of fraud and deception-Asset Backed Securities. Banks issued ‘liar’s loans’ and other easy credit to their customers, often misleading them as to ultimate risk.
… the Asia Crisis of 1997-1998, a crisis had been covertly and overtly ignited by the same Wall Street banks in order to draw Asian capital into the United States, the flood of money from Asia – – above all from China — into US semi-public real estate giants Fannie Mae and Freddie Mac.
… The securitization structure had been created and … designed to fraudulently enrich those financial institutions that were at the heart of the American colossus –Wall Street and their closest allies.
A small handful of very big banks had grown so huge that they were deemed Too Big To Fail, thanks mainly to the deliberate Government policy of financial deregulation, most notably the 1999 repeal of the Glass-Steagall Act, engineered under [Bill] Clinton by [Larry] Summers and [Tim] Geitner… By December 2008, despite their losses in the financial crisis to date, the assets of the four largest US banks exceeded the Gross Domestic Product of most countries in the world. They had indeed become the ‘Gods of Money,’ so large and so powerful that entire governments bowed down to their demands, worshipping at the alter of Wall Street.
The Bank of America, the largest, had a staggering $2.5 trillion in assets. It was followed by JP Morgan Chase at $2.2 trillion; Citigroup at $1.9 trillion and Wells Fargo at $1.3 trillion. The four US mega-banks combined had a nominal asset value of almost $8 trillion.
… As of June 2008, four US banks held the overwhelming majority of all contracts for complex financial derivatives.
… By far the largest derivatives bank was JP Morgan Chase with $91 trillion in notional or nominal derivatives exposure. Bank of America followed with $40 trillion; Citibank was close behind at $37 trillion, and the merged Wells Fargo-Wachovia after October 2008 held a combined $5.5 trillions.
… In the riskiest derivatives segment, the totally unregulated market for Credit Default Swaps (CDS) — a market that had been invented by JP Morgan Chase – the four named US banks plus HSBC Bank USA, a subsidiary of Britain’s largest bank, accounted for a staggering 95% of all trading by US banks in the complex CDS derivatives.
Wall Street’s giant banks, the new 21st Century version of the Money Trust – based on exotic new derivative instruments – went to extraordinary lengths to hide the real cause of the financial system losses – the bankers’ own fraudulent schemes – and to panic American taxpayers into covering the banks’ losses. And the giant banks were aided and abetted every step of the way by their friends in the Federal Reserve and the US Treasury, and in the White House.
William Black, a former US bank regulator during the Saving Loan crisis of the 1980s
The finance sector is worse than parasitic … In addition to siphoning off capital for its own benefit, the finance sector misallocates the remaining capital in ways that harm the real economy in order to reward already-rich financial elites harming the nation… the US real economy suffers from critical shortages of employees with strong mathematical, engineering, and scientific backgrounds. Graduates in these … fields all too frequently choose careers in finance rather than the real economy because the financial sector provides far greater executive compensation.
… Instead of flowing to the places where it will be most useful to the real economy, capital gets directed to the investments that create the greatest fraudulent accounting gains.
Because the bubble of American consumer spending had been built on a pyramid of debt, as the pyramid imploded and debts went unpaid, the entire credit system began to collapse. Banks refused to lend, even to other established banks, fearing the unknown. The American economy had entered into its own version of a Third World debt trap.
The roots of the decline and ultimate collapse of the Roman Empire, in its day also the world’s sole superpower, lay in the political decision by a ruling aristocracy, more accurately an oligarchy of wealth, to extend the bounds of empire through wars of conquest and plunder of foreign lands to feed their private wealth and personal power, not to the greater good of the state. The economic model of the Empire of Rome was based on the plunder of conquered territories. As the empire expanded, it installed remote military garrisons to maintain control and increasingly relied on foreign mercenaries to man those garrisons.
In the process of military expansionism the peasantry, the heart of the empire, became impoverished. They were forced to leave their farms, often for years to fight foreign wars of conquest. The south of Italy was devastated as one result. Those with money were able to buy land as the only stable investment, becoming huge latifundistas or landowners. 18
That led to the concentration of land in a few hands, and the land in turn was worked by slaves captured in wars of conquest. Small farmers were bankrupted and forced to flee to Rome to attempt a living as proletarians, wage laborers. They had no voting rights or other citizen rights. In the eyes of the rich, they were simply the ‘mob’ that could be bought, manipulated, and directed to attack an opponent; they were the ‘demos,’ the masses, the public. Roman ‘democracy’ was all about mass manipulation in the service of empire.
The government of Imperial Rome didn’t have a proper budget system, and squandered resources maintaining the empire while itself producing little of value. When the spoils from conquered territories were no longer enough to cover expenses, it turned to higher taxes, shifting the burden of the immense military structure onto the citizenry. Higher taxes forced many more small farmers to let their land go barren. To distract its citizens from the worsening conditions, the Roman ruling oligarch politicians handed out free wheat to the poor and entertained them with circuses, chariot races, throwing Christians to the lions and other entertainments, the notorious “bread and circuses” strategy of keeping unrest at bay.
Political offices increasingly were sold to those with wealth. The masses, in turn, ‘sold’ their votes to various politicians for favors, the charade of democracy.
The next fundamental change that vitally wounded the Roman Empire was the shift from a draft army made up of farmer soldiers to one of paid professional career soldiers as the ever-more distant wars became more unpopular was not unlike what took place in America in the years after the Vietnam War when President Nixon abolished the draft in favor of an “all volunteer” Army, after the popular protest became a threat to the future of the military.)
As conditions for Roman soldiers in far away wars became more onerous, more incentives were needed to staff the legions. Limiting of military service to citizens was dropped and Roman citizenship could be won in exchange for military service,(not unlike what is taking place now as immigrant teenagers are being promised US citizenship if they risk their lives for America’s wars in Afghanistan, Iraq or elsewhere)At a certain point, Roman soldiers were forced to take an oath of service to their commander, not to the state.
Small farms were gradually replaced by huge latifundia, bought for booty, and the gap between the Roman rich and the poor increased. Then the two brothers Gracchus tried in the second century AD to ease the growing gap between rich and the rest by introducing agriculture reforms that limited the powers of the wealthy Senators, they were assassinated by the men of wealth.
The Roman oligarchy grew increasingly degenerate. Towards the end of the reign of Roman emperors, gluttony was so commonplace among the rich that vomitoriums were constructed so that people who had eaten or drunk too much could throw up and go and eat and drink some more.
… Over time the costs of maintaining this huge global military structure became overwhelming – the Third Century people were seeking every means to avoid the onerous taxes imposed to maintain the military. The army itself had doubled in size from the time of Augustus to the time of Diocletian, in the course of an inflationary spiral, inflation brought on by a systematic debasing of the gold and silver content of the Roman currency. In addition, costs of the state administration had grown enormously. By the time of Diocletian there was not one emperor but four emperors-which meant financing four imperial courts, four Praetorian Guards, four palaces, four staffs. The cost of policing the Roman state became increasingly enormous.” The cost of the Roman state bureaucracy ballooned the size and cost of the US Executive Branch Federal Bureaucracy after 1971.
Ultimately, as Rome’s territorial expansion stalled and began to contract, less and less loot was available to support the empire’s global ambitions as well as its domestic economy. The outsourcing of the military led to lethargy, complacency, and decadence.
The Roman Empire gradually lost power. Barbarians in the north frequently went on raids against the disintegrating empire. The empire became steeped in debt as emperors tried desperately to buy the loyalty of the army, and the moral condition of its subjects continued to spiral downward.
Rome steadily lost control of its frontiers, and roads and bridges were not maintained, leading to a breakdown in trade and communication. Riots and revolts became commonplace in Rome itself. As the government fell deeper into debt, it raised taxes. The armies of different generals seized any supplies they needed from local people. Food became a precious commodity, and for the first time in centuries, large numbers of people went hungry.
Further wars of conquest plunged the Empire into internal chaos. Roman wars extended to Asia and Africa and corruption within the political ruling class increased dramatically. Money was king. Rome had become a plutocracy, an oligarchy where power was synonymous with wealth.
By 2009 the Government of the United States, authorized by the Congress of the United States, had spent more than one trillion dollars on two wars so far from American shores that most citizens could not comprehend their necessity. Iraq and Afghanistan were exposing the frayed edges of what the British called “imperial overstretch.” Despite the most advanced military technology, including drone remote bombers piloted from special centers as far away from Afghan targets a Las Vegas, the United States war machine was losing rather than gaining. [By 2009] America had become transformed, much as ancient Rome, into a de facto military state, a national security garrison. By 2009 the Government was officially spending a total of more than $1 trillion annually on its military machinery, more than the total of the next forty five nations combined.
Depending on where one dated the irreversible decline, it took the Roman Empire almost two centuries to collapse. By the first months of the end of the first decade of the 21st Century, it looked as though it might have taken the American Empire, the self-proclaimed American Century, little more than six decades to accomplish its destruction from within. In both cases the corruption of an oligarchy, a plutocracy in which power was equated to wealth, was at the heart of the collapse.
In March 2008, David M. Walker, the Comptroller General of the United States and head of the Government Accountability Office, resigned 5 years before the end of his 15-year term expired. His reason for resigning as he stated publicly in speeches across the country, was that as Comptroller he was limited in what he could do and that the United States was in danger of collapsing in much the same manner as the Roman Empire. Drawing parallels with the end of the Roman Empire, Walker warned there were “striking similarities” between America’s current situation and the factors that brought down Rome.
The American Century that had been proclaimed by Time chairman Henry Luce, the Rockefeller brothers, Averell Harriman and others of the wealthiest circles of the establishment in 1941, had been based as had Rome on a system of looting and plunder of foreign lands. It took a different form from that of Rome over time, using the supranational technocrats IMF to plunder the wealth of countries from Argentina to Brazil to the nations of resource-rich Africa. It used the unique financial advantage after 1971 of being the world’s reserve currency and at the same time its unchallenged military superpower to extend its power and influence far beyond what its internal economy could have sustained. As Roman emperors diluted the gold and silver content of the coins of the realm to continue an unsustainable system, the Gods of Money on Wall Street used a free-floating dollar and virtual money in the form of financial derivatives to maintain a facade of solvency. That facade cracked in August 2007 with the collapse of Germany’s IKB bank.
It was an open question whether the rest of the world or even future generations of Americans would appreciate the lessons of Rome, let alone of the American Century. William Jennings Bryan had warned against letting the nation be hanged “on a cross of gold,” before the Democratic National Convention of 1896, as he was nominated the party’s Presidential candidate. A life-long opponent The Money Trust, of the oligarch’s creed of “social Darwinism,” as Secretary of State under Woodrow Wilson, Bryan had resigned in 1915 in protest against Wilson’s manipulation of the circumstances surrounding sinking of the Lusitania in order to build a case for entering the European war. Bryan noted prophetically in a 1906 speech, little more than a century before the collapse of the US economy and its financial system,
Plutocracy is abhorrent to a republic; it is more despotic than monarchy, more heartless than aristocracy, more selfish than bureaucracy. It preys upon the nation in time of peace and conspires against it in the hour of its calamity …The time is ripe for the overthrow of this giant wrong.
PQC: From anarchist point of view, the last but not least question that must be asked: COULD THEY HAVE ACHIEVED AS SUCH IN THE ABSENCE OF ABSOLUTE POWER OF THE STATE?