the U.S. has become a third world banana republic

Written by Washington's Blog (January 27, 2010)
This version availed at Global Research

The big news today is Obama's proposed "spending freeze". Fiscal liberals say this cuts spending at the exact time that we most need to increase it. See this and this.
Fiscal conservatives say this doesn't go nearly far enough. See this, this, and this.
But I think there's a bigger issue that deserves some inquiry: is America being turned into a third world country?

As I wrote last June:

When the International Monetary Fund or World Bank offer to lend money to a struggling third-world country (or "emerging market"), they demand "austerity
measures".

As Wikipedia describes it:

In economics, austerity is when a national government reduces its spending in order to pay back creditors. Austerity is usually required when a government's fiscal deficit spending is felt to be unsustainable.

Development projects, welfare programs and other social spending are common areas of spending for cuts. In many countries, austerity measures have been associated with short-term standard of living declines until economic conditions improved once fiscal balance was achieved (such as in the United Kingdom under Margaret Thatcher, Canada under Jean Chrétien, and Spain under González).

Private banks, or institutions like the International Monetary Fund (IMF), may require that a country pursues an 'austerity policy' if it wants to re-finance loans that are about to come due. The government may be asked to stop issuing subsidies or to otherwise reduce public spending. When the IMF requires such a policy, the terms are known as 'IMF conditionalities'.

Wikipedia goes on to point out:

Austerity programs are frequently controversial, as they impact the poorest segments of the population and often lead to a wider separation between the rich and poor. In many situations, austerity programs are imposed on countries that were previously under dictatorial regimes, leading to criticism that populations are forced to repay the debts of their oppressors.

What Does This Have to Do With the First World?
Since the IMF and World Bank lend to third world countries, you may reasonably assume that this has nothing to do with "first world" countries like the US and UK.
But England's economy is in dire straight, and rumors have abounded that the UK might have to rely on a loan from the IMF.
And as former U.S. Comptroller General David Walker said:

People seem to think the [American] government has money. The government doesn't have any money.

Indeed, the IMF has already performed a complete audit of the whole US financial system, something which they have only previously done to broke third world nations.

Al Martin - former contributor to the Presidential Council of Economic Advisors and retired naval intelligence officer - observed in an April 2005 newsletter that the ratio of total U.S. debt to gross domestic product (GDP) rose from 78 percent in 2000 to 308 percent in April 2005. The International Monetary Fund considers a nation-state with a total debt-to-GDP ratio of 200 percent or more to be a "de-constructed Third World nation-state."
Martin explained:

What "de-constructed" actually means is that a political regime in that country, or series of political regimes, have, through a long period of fraud, abuse, graft, corruption and mismanagement, effectively collapsed the economy of that country.

What Does It Mean?
Some have asked questions like, "Is the goal to force the US into the same kinds of IMF austerity programs that have caused riots in so many other nations?" Some predicted years ago that the "international bankers" would bring down the American economy.I used to think, frankly, that such kinds of talk were crazy-talk. I'm not so sure anymore.

Catherine Austin Fitts - former managing director of a Wall Street investment bank and Assistant Secretary of the Department of Housing and Urban Development (HUD) under President George Bush Sr. - calls what is happening to the economy "a criminal leveraged buyout of America," something she defines as "buying a country for cheap with its own money and then jacking up the rents and fees to steal the rest." She also calls it the "American Tapeworm" model, explaining:

[T]he American Tapeworm model is to simply finance the federal deficit through warfare, currency exports, Treasury and federal credit borrowing and cutbacks in domestic "discretionary" spending .... This will then place local municipalities and local leadership in a highly vulnerable position - one that will allow them to be persuaded with bogus but high-minded sounding arguments to further cut resources. Then, to "preserve bond ratings and the rights of creditors," our leaders can he persuaded to sell our water, natural resources and infrastructure assets at significant discounts of their true value to global investors .... This will be described as a plan to "save America" by recapitalizing it on a sound financial footing. In fact, this process will simply shift more capital continuously from America to other continents and from the lower and middle classes to elites.

Writer Mike Whitney wrote in CounterPunch in April 2005:

[T]he towering [U.S.] national debt coupled with the staggering trade deficits
have put the nation on a precipice and a seismic shift in the fortunes of middle-class Americans is looking more likely all the time... The country has been intentionally plundered and will eventually wind up in the hands of its creditors This same Ponzi scheme has been carried out repeatedly by the IMF and World Bank throughout the world Bankruptcy is a fairly straightforward way of delivering valuable public assets and resources to collaborative industries, and of annihilating national sovereignty. After a nation is successfully driven to destitution, public policy decisions are made by creditors and not by representatives of the people .... The catastrophe that middle class Americans face is what these elites breezily refer to as "shock therapy"; a sudden jolt, followed by fundamental changes to the system. In the near future we can expect tax reform, fiscal discipline, deregulation, free capital flows, lowered tariffs, reduced public services, and privatization.

And given that experts on third world banana republics from the IMF and the Federal Reserve have said the U.S. has become a third world banana republic (and see this and this), maybe the process of turning first world into the third world is already complete.

To catch this dip in gold might be a good idea. The ultimate bubble is in fiat currencies

Market Rally Disintegrates Despite Surprise GDP Growth

[LOL!] "Bin Laden" defends the "Global Warming" Hoax/Scam

This wins hands down the prize for the most ridicolous B/S heard in 2010, courtesy of Al Jazeera, Jan 29 2010. (That's telling of how desperate T.H.E.Y. are):

Osama has condemned the US and other industrial economies, holding them responsible for the phenomenon of climate change. In an audio tape obtained by Al Jazeera, Osama criticised G W Bush for rejecting the Kyoto pact and condemned global corporations, saying:

"This is a message to the whole world about those responsible for climate change and its repercussions, whether intentionally or unintentionally, and about the action we must take. Speaking about climate change is not a matter of intellectual luxury. The phenomenon is an actual fact. All the industrial states are to blame, yet the majority of those states have signed the Kyoto Protocol and agreed to curb the emission of harmful gases. However, George Bush junior, preceded by congress, dismissed the agreement to placate giant corporations, and they are themselves standing behind speculation, monopoly and soaring living costs. They are also behind globalisation and its tragic implications, and whenever the perpetrators are found guilty, the heads of state rush to rescue them using public money. Noam Chomsky was correct when he compared the US policies to those of the Mafia. They are the true terrorists and therefore we should refrain from dealing in the US dollar and should try to get rid of this currency as early as possible. I am certain that such actions will have grave repercussions and huge impact."

“Secret Banking Cabal Emerges From AIG Shadows”

Bloomberg: The idea of secret banking cabals that control the country and global economy are a given among conspiracy theorists who stockpile ammo, bottled water and peanut butter. After this week’s congressional hearing into the bailout of American International Group Inc., you have to wonder if those folks are crazy after all.

Wednesday’s hearing described a secretive group deploying billions of dollars to favored banks, operating with little oversight by the public or elected officials.
We’re talking about the Federal Reserve Bank of New York, whose role as the most influential part of the federal-reserve system -- apart from the matter of AIG’s bailout -- deserves further congressional scrutiny.

The New York Fed is in the hot seat for its decision in November 2008 to buy out, for about $30 billion, insurance contracts AIG sold on toxic debt securities to banks, including Goldman Sachs Group Inc., Merrill Lynch & Co., Societe Generale and Deutsche Bank AG, among others. That decision, critics say, amounted to a back-door bailout for the banks, which received 100 cents on the dollar for contracts that would have been worth far less had AIG been allowed to fail.
That move came a few weeks after the Federal Reserve and Treasury Department propped up AIG in the wake of Lehman Brothers Holdings Inc.’s own mid-September bankruptcy filing.
Saving the System

Treasury Secretary Timothy Geithner was head of the New York Fed at the time of the AIG moves. He maintained during Wednesday’s hearing that the New York bank had to buy the insurance contracts, known as credit default swaps, to keep AIG from failing, which would have threatened the financial system.

The hearing before the House Committee on Oversight and Government Reform also focused on what many in Congress believe was the New York Fed’s subsequent attempt to cover up buyout details and who benefited.

By pursuing this line of inquiry, the hearing revealed some of the inner workings of the New York Fed and the outsized role it plays in banking. This insight is especially valuable given that the New York Fed is a quasi-governmental institution that isn’t subject to citizen intrusions such as freedom of information requests, unlike the Federal Reserve.

This impenetrability comes in handy since the bank is the preferred vehicle for many of the Fed’s bailout programs. It’s as though the New York Fed was a black-ops outfit for the nation’s central bank.

Geithner’s Bosses
The New York Fed is one of 12 Federal Reserve Banks that operate under the supervision of the Federal Reserve’s board of governors, chaired by Ben Bernanke. Member-bank presidents are appointed by nine-member boards, who themselves are appointed largely by other bankers.
As Representative Marcy Kaptur told Geithner at the hearing: “A lot of people think that the president of the New York Fed works for the U.S. government. But in fact you work for the private banks that elected you.”

And yet the New York Fed played an integral role in the government’s bailout of banks, often receiving surprisingly free rein to act as it saw fit.

Consider AIG. Let’s take Geithner at his word that a failure to resolve the insurer’s default swaps would have led to financial Armageddon. Given the stakes, you might think Geithner would have coordinated actions with then-Treasury Secretary Henry Paulson. Yet Paulson testified that he wasn’t in the loop.

“I had no involvement at all, in the payment to the counterparties, no involvement whatsoever,” Paulson said.

Bernanke’s Denials
Fed Chairman Bernanke also wasn’t involved. In a written response to questions from Representative Darrell Issa, Bernanke said he “was not directly involved in the negotiations” with AIG’s counterparty banks.

You have to wonder then who really was in charge of our nation’s financial future if AIG posed as grave a threat as Geithner claimed.

Questions about the New York Fed’s accountability grew after Geithner on Nov. 24, 2008, was named by then-President- elect Barack Obama to be Treasury Secretary. Geither said he recused himself from the bank’s day-to-day activities, even though he never actually signed a formal letter of recusal.

That left issues related to disclosures about the deal in the hands of the bank’s lawyers and staff, rather than a top executive. Those staffers didn’t want details of the swaps purchase to become public.

New York Fed staff and outside lawyers from Davis Polk & Wardell edited AIG communications to investors and intervened with the Securities and Exchange Commission to shield details about the buyout transactions, according to a report by Issa.

That the New York Fed, a quasi-governmental body, was able to push around the SEC, an executive-branch agency, deserves a congressional hearing all by itself.

Later, when it became clear information would be disclosed, New York Fed legal group staffer James Bergin e-mailed colleagues saying: “I have to think this train is probably going to leave the station soon and we need to focus our efforts on explaining the story as best we can. There were too many people involved in the deals -- too many counterparties, too many lawyers and advisors, too many people from AIG -- to keep a determined Congress from the information.”

Think of the enormity of that statement. A staffer at a body with little public accountability and that exists to serve bankers is lamenting the inability to keep Congress in the dark.

This belies the culture of secrecy obviously pervasive within the New York Fed. Committee Chairman Edolphus Towns noted during the hearing that the bank initially refused to disclose even the names of other banks that benefited from its actions, arguing this information would somehow harm AIG.

‘Penchant for Secrecy’
“In fact, when the information was finally released, under pressure from Congress, nothing happened,” Towns said. “It had absolutely no effect on AIG’s business or financial condition. But it did have an effect on the credibility of the Federal Reserve, and it called into question the Fed’s penchant for secrecy.”

Now, I’m not saying Congress should be meddling in interest-rate decisions, or micro-managing bank regulation. Nor do I think we should all don tin-foil hats and start ranting about the Trilateral Commission.

Yet when unelected and unaccountable agencies pick banking winners while trying to end-run Congress, even as taxpayers are forced to lend, spend and guarantee about $8 trillion to prop up the financial system, our collective blood should boil.

(David Reilly is a Bloomberg News columnist. The opinions expressed are his own.)

More: Revealed: See Who Was Paid Off In The AIG Bailout

And more: Why Are We Donating $2,000 Per Family to Wall Street Bonuses?
The sad fact is this: During the worst year since the Great Depression, with 30 million people out of work or forced into part-time jobs, Wall Street is awarding itself $150 billion in bonus money.....and it comes from us! That's $500 for every man, women and child in the country -- $2,000 for a family of four. (Maybe we should try deducting it from our income taxes as a charitable donation.) Had we not bailed out the financial sector, there would be no bonus pool this year. Zip, zero, ziltch. Tags: Economic Death Squad Bonuses Posted...

Greenbacks, "crazy lone gunmen" & dead presidents # 2

Did the Banksters Kill James Garfield?

President James Garfield, who was murdered in 1881, is hardly ever mentioned in State brainwashing centers (schools).

Here's some interesting quotes.

He who controls the money supply of a nation controls the nation.

Whoever controls the volume of money in any country is absolute master
of all industry and commerce.

Allegedly, the latter was said during his inauguration speech.

This quote is also interesting.

The chief duty of the National Government in connection with the currency of
the country is to coin money and declare its value. Grave doubts have been
entertained whether Congress is authorized by the Constitution to make any form
of paper money legal tender. The present issue of United States notes has been
sustained by the necessities of war; but such paper should depend for its value
and currency upon its convenience in use and its prompt redemption in coin at
the will of the holder, and not upon its compulsory circulation. These notes are
not money, but promises to pay money. If the holders demand it, the promise
should be kept.

It seems that James Garfield knew that the financial industry was one big scam. Even in 1881 before the creation of the Federal Reserve, a regulated financial industry was forced to operate under corrupt fractional reserve principles.

That quote makes it sound like James Garfield was planning to issue more Greenbacks, like President Lincoln did to finance the Civil War. The banksters are *VERY* hostile to credit-based fiat money directly spent into circulation by the government. Such money does not come with debt-strings attached, and helps people escape the chains of debt slavery. In the present, deficit spending is financed by Treasury Bonds, which are owned by the banksters. The only reason the Federal government doesn't directly spend money into circulation is that contradicts the interests of the banksters.

Even though the banking cartel has a lot of power, they sometimes make a mistake and let someone with a clue become President. James Garfield is an example of such an error. Such mistakes are easily corrected via an assassination. That both eliminates a threat and sends a message to all other politicians, making sure they don't behave too honestly.

There's another interesting thing about these "Presidents were assassinated!" conspiracy theories. Lincoln, Garfield, and Kennedy were all hostile to the interests of the banksters, and all three were assassinated. For each of them, the official State explanation was "It was a lone crazy person responsible for the assassination!" rather than "Insiders killed him to protect their interests!" In the "conspiracy talk" surrounding Kennedy's assassination, people usually debate the mechanics of how Kennedy was killed, rather than "Why was Kennedy killed?"

Some people say that the Secret Service that protects the President is *REALLY GOOD*. The President could not be assassinated unless his security team allowed it. Allegedly, President Kennedy could not have been killed unless it were an inside job.

I wouldn't be surprised if some Secret Service agents were also on the payroll of the banksters. The Secret Service doesn't just protect the President. The Secret Service also spies on the President all the time. The Secret Service helps make sure that the President isn't exposed to any "dangerous" ideas.

If you're one of the insiders working for the banking cartel, it isn't too hard to hire someone to conduct an assassination, and then deny any connection to the banksters.

Given James Garfield's opposition to the banksters, it's not a surprise that he is not discussed at all in school. Source

Iraq inquiry is being 'gagged' after secret documents withheld

Crucial evidence about the reasons Britain went to war against Saddam Hussein is being kept secret it has emerged – leading to accusations that the Iraq inquiry has been "gagged". 28 Jan 2010 In an apparent breach of the Inquiry terms, Sir John Chilcot, head of the probe, expressed his “frustration” that he was unable to refer to key documents while questioning Lord Goldsmith, the former Attorney General, about why he gave the "green light" for war. Lord Goldsmith also said that he was unhappy at being denied the opportunity to discuss documents including a letter from Jack Straw, then-former foreign secretary, about United Nations negotiations. Read all

More: Ex-Prime Minister Blair Faces Iraq Inquiry --Mr Blair, who has been called "Bush's poodle", will also be questioned about whether he gave the US President [sic] an early assurance that British troops would join the invasion without consulting Parliament or the public.

28 Jan 2010 Tony Blair will be questioned for six hours tomorrow on his decision to take Britain into war with Iraq in 2003. The former Prime Minister's testimony is expected to be the highlight of the Iraq Inquiry. The audience will include family members of soldiers and civilians killed or missing in the country. Mr Blair is expected to be quizzed about accusations that he and his inner circle were so determined to topple Saddam Hussein that they exaggerated intelligence reports about Iraqi weapons and pressured the then-Attorney General to conclude that the invasion would not be a violation of international law.

More: Wanted: Tony Blair for war crimes. Arrest him and claim your reward

More: Meet one of the 5-members "inquiry panel"

Better Off Deadbeat: People Get Into Debt, Learn the Law, Become “Credit Terrorists”

..."While most Americans with unpaid bills dread the collector's call, Cunningham sees them as lucrative opportunities. Many collection and credit card companies, intentionally or not, violate little-known consumer rights laws, and Cunningham's favorite pastime is catching them doing so and then suing them. In fact, it's a profitable side job.

Call it ironic, but the only house on the block that appears to be the foreclosed end to some sad financial story is in fact the home of one of the debt collection industry's emerging and persistent threats. Cunningham calls himself a private attorney general—someone who files private lawsuits in the public interest. Debt collectors call him a credit terrorist.

Patrick Lunsford, who edits InsideARM, a trade magazine for the debt collection industry, knows the term. "There is a sub-group out there that does actually advise people on how to bait [collectors]," he says. "That's something that really gets under the skin of, well, obviously, collectors."

Cunningham beats the debt collectors at their own game. He turns their money-making practice into a financial liability. He is a regular guy who has become a radical enemy of the banking system..." Read all

More: Fighting on Frontlines of the Foreclosure Crisis: Citizens Take on the Monster Banks

US troops already deployed in Yemen from at least 6 wks

Obusha opens new, illegal secret war front: US runs 'secret' military operations in Yemen 27 Jan 2010

Washington has involved in secret joint operations in Yemen after President Barack Obama approved US military and intelligence teams to be dispatched to the country, the Washington Post revealed Wednesday. The operations begun six weeks ago, involving troops from the US military's clandestine Joint Special Operations Command (JSOC), whose main mission is tracking and killing suspected terrorists, the Post reported. The American agents are helping the Yemeni army develop tactics and providing Sana'a forces with electronic and video surveillance, as well as three-dimensional terrain maps, the report said.

More: Pentagon To "Significantly Increase" Special Forces In Yemen

More: American added to 'shortlist' of U.S. citizens targeted for killing or capture by JSOC

The Taliban Stimulus: Nato says Afghanistan conference will raise millions to pay off Taliban

From CLG: The Taliban Stimulus: Nato says Afghanistan conference will raise millions to pay off Taliban --The Nato Secretary General has said the London Conference on Afghanistan will be used to raise millions of pounds to pay off (bribe) the Taliban leadership.

26 Jan 2010 Anders Fogh Rasmussen said it was necessary to "establish a trust to finance the reintegration programme" that would persuade the militants to lay down their weapons. The Afghan president Hamid Karzai, who will pledge to tackle government corruption [LOL!], will present a plan to reconcile senior Taliban leaders at tomorrow's meeting. But the proposals will require huge amounts of money to pay for new jobs, pensions, land and even fund the relocation of senior militants abroad. [The GOP is thrilled. They're thinking: Thank *God* the money won't be spent on jobs and pensions (or health care) in the US! This way, many of the Taliban can take the $$$ and raise arms against the US invaders, and the war can continue for eons! Think of how much Blackwater and DynCorp can make!

More: The new Afghan plan: buy off Taliban --Leaders back multimillion-pound fund and consider an olive branch for leadership

28 Jan 2010 Britain and the US are backing a new strategy to buy off "soft" supporters of the Taliban in a radical attempt to end nine years of war in Afghanistan. The plan, to be approved at a 60-nation conference in London today, comes amid unexpected signs of growing political support for the equally high-risk idea of talks leading to a political settlement with the Taliban leadership. The multimillion-pound "peace and reintegration" [aka Stimulus] fund would seek to lure low ranking Taliban fighters, who join out of poverty rather than ideology, by giving them jobs, schooling or land for farming. An effective amnesty for these men, now believed to make up 75 per cent of the insurgency's ranks, means that even those who took part in attacks involving the deaths of British or US soldiers would be rehabilitated.

More: NATO to Provide $500 mn. to Bribe Taliban

More: UN removes Taliban officials from blacklist 27 Jan 2010 The United Nations has removed five former Taliban officials from its blacklist as part of reconciliation efforts in war-weary Afghanistan. The de-listing, which came on Wednesday, was approved by a special Security Council committee. The UN said in a statement that the five Afghan nationals would no longer be subject to a freeze on their assets and a travel ban.