It´s become quite widely known in recent years how US imperial corporate forces have robbed and raped a string of so called developing countries under the pretext of helping them out of their poverty through generous loans via the World Bank (WB) and the International Monetary Fund (IMF).
The best known whistleblower in this regard is John Perkins, who in his book CONFESSIONS OF AN ECONOMIC HITMAN reveals how they set up the countries for eventual collapse and takeover.
Financial colonialism
The poor countries were offered large loans on apparently favorable terms for important infrastructure or other capital-intensive development projects. The deciding politicians would in most cases be “greased” in order to better understand the benefits for their country of the operation, and frequently the result was that a considerable percentage of the loan did not go to the infrastructure as such, but to kickbacks for local distributors, administrators, bankers, bureaucrats etc.
Invariably, the bulk money that really went to the infrastructure was transferred directly to US contractors or other global companies in bed with the WB and the IMF. It would be a condition for the loans that the contracts be awarded international corporations approved by the lender. So there was no benefit for local industries with the exception of the common workers who would earn very low wages, and practically be slaves.
Usually by definition, these capital-intensive projects prompted by the international “helpers” would not be making much money, at least not in the short term. In other words, they would not be able to return the interests the country had to pay to its debtors. And easy new credits were always beckoning on the horizon. Generally, the indebted country would now have to ask for more credit to pay off the interest on the first loans, and it would be automatically granted them. In this way the debt grew and required ever higher interest payments.
In due time, however, “the international community” (read: the global corporate banking cartel run by privately owned banks) would claim interest payments and amortizations according to the contracts. Since the struggling “developing” country was now unable to pay what it owed, a solution was offered, consisting in the forced privatization at “fire sales prices” of national patrimony, natural resources, public transport, public utility companies that provide water, electricty, gas etc. With very generous commissions and kickbacks for the politicians who made the decisions and determined the prices.
The end result was routinely that US banks and global corporations bought up everything of value “for cents on the dollar” in the countries “fortunate” enough to have been offered financial help by the WB and IMF. Which further meant that the governments were deprived of their resources and income for social projects, health, education, welfare etc. and so the population sank ever deeper into abject poverty and desperation.
That´s what I call financial AIDS to the developing countries to eradicate hunger and poverty!
Exactly the same thing has now been engineered by Goldman Sachs for Greece, and all signs indicate that both Italy and Spain are next in line for the same treatment. To pay their debt they must ask for more credit, and in order to get more credit they are required to sell off all their assets and drastically reduce their expenses, which among other things means sacking thousands of employees, cutting down on all services, on health, education etc. This, in turn, means jobless people who cannot consume, sick people who cannot get care, and a generally reduced demand for products, leading to more bankruptcies, more unemployment, more misery and so on in a downward spiral. Total disaster.
Of course one should refrain from spending money one doesn´t have. Basic good householding means avoiding debt and spending a little less than you earn to save something for the metaphoric “rainy day”. This is just common sense. But it seems common sense is a commodity in increasingly short supply these days. Orthodox medicine ran out of it many decades ago.
On the other hand, when a financial crisis has been created with unemployment, large debt burdens on government, companies and individuals alike, then it is sheer madness to insist on less money in circulation, more unemployment, more bankruptcies etc. to overcome the crisis. The austerity should have been the rule before the crisis erupted, not after.
At the same time, it is irresponsible to just let the printing presses run day and night to increase spending power without any corresponding production, as the US has done now since 2008. Money should only be a means of change of real values, consisting in goods and services. When it is created without matching existing real products and services, then inflation results. And inflation means problems.
Inflation is a covert way of moving purchasing power from those who have earned it, to those who have not. Even if this is “Robin Hoodery”, meaning to take from the rich and give to the poor, it´s still a form of thievery. And the truth is that it is often the most vulnerable, and not the rich, who suffer: Pensionists, people who have savings in the bank, low-salaried employees without the negotiating power to keep raising their salaries in lockstep with the inflationary pressure on prices.
The banks have set us up with cheap and easy loans. Then, when we are trapped, they demand “their” money back. But it isn´t even their money. They have the legal right to swindle people by creating new money out of thin air, and charge interest on it. Before Nixon abandoned the gold standard for the dollar, and before the neoliberal trashing of all regulations on banking and financial services, certain rules applied offering certain guarantees. That is no longer the case.
We mustn´t forget that the entire financial debacle during the past decade with the global casino and its derivatives – they should probably be called depravities – was made possible by the reckless deregulation of the neoliberal politicians. Many keen observers of the events now claim that this whole development has been cleverly engineered with the precise goal in mind of a global financial melt-down, from the ashes of which a Phoenix called The New World Order would rise to assume dictatorial powers over a fast shrinking world population.
Controlled Demolition
I will finish with a quote from the foreword by John Perkins to his book Confessions Of An Economic Hitman:
“This book was written so that we may take heed and remold our story. I am certain that when enough of us become aware of how we are being exploited by the economic engine that creates an insatiable appetite for the world’s resources, and results in systems that foster slavery, we will no longer tolerate it. We will reassess our role in a world where a few swim in riches and the majority drown in poverty, pollution, and violence. We will commit ourselves to navigating a course toward compassion, democracy, and social justice for all. Admitting to a problem is the first step toward finding a solution.”
Next week I intend to write more about the European crisis
Till then, stay awake and be aware!
Dr. Jens
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