by Joel Skousen, World Affairs Brief

With the growing public impatience and backlash over each new spending “solution” to the world’s deteriorating economic and political situation, leaders of the Big 20 world nations are competing for press time before the cameras in order to make points with their declining fan base back home. This is not a good time in history to be a politician pretending to have all the answers to the world’s problems. Never before, except for the phony demise of the Soviet Union, has the big lie of media manipulation become so important in controlling public opinion—and no one is really sure it’s working. In foreign affairs, Barack Obama and Hillary Clinton are desperate to project an optimistic view of relations between America, Russia and China. They are bending over backwards (calling each other Comrades) trying to paper over the growing hostility of both these predator nations toward the US—a hostility that is beginning to include other real allies as well—who are not pleased with the financial debacle they find themselves in. Most countries blame the US for the financial collapse, although clearly they were all willing players while the illusion of prosperity reigned.

By week’s end the G-20 leaders had settled on half of the $2 trillion stimulus package the US was demanding of other nations. The Europeans only got some of the regulatory powers over hedge funds they were asking for. They did reach consensus on an additional $500 billion for the International Monetary Fund, $250 billion in IMF Special Drawing Rights and $250 billion to boost trade. Each of the leaders left the conference with a reason to grandstand to their home press about success, great relations and finding solutions to the world’s problems. But, it wasn’t really true. The agreements were bare bones and modest, the regulations without enforcement, and the money committed was fiat money. While these agreements allowed everyone to go home claiming victory, nothing was settled in any binding fashion. This was a political charade for public consumption.

The European agenda for regulating world financial transactions was at odds with the US agenda of demanding that each nation dedicate a set percentage of GDP to its own bailout programs. And, no wonder the Europeans bulked at that—they simply cannot inflate like the US can. None of their currencies approaches the huge base that the dollar has. As Bloomberg News noted, ” The U.S. government and the Federal Reserve have spent, lent or committed $12.8 trillion, an amount that approaches the value of everything produced in the USA last year, to stem the longest recession since the 1930s.” Others simply can’t compete with that.

Reuters pointed out that, “World leaders [in Europe] will pledge to regulate major hedge funds for the first time and set up a new oversight board to monitor the global financial system, according to a draft of the G20 communique. The draft would… restore global growth and ‘refrain from competitive devaluation of our currencies.’”

Europeans refer to hedge funds as “shadow banking” movements and are particularly frustrated that huge (and often secret) currency trades through hedge funds and other silent agents for the Federal Reserve interfere with and destabilize their ability to manipulate their own currency value. It’s doubly frustrating for EU nations since they have already given up national control of currency inflation (when they joined the common currency convention of the EURO) and now are forced to compete with other member nations for control of the EU central bank that controls the EURO.

The Europeans are also desperate for more tax revenue since they have limits on how much they can inflate. For this reason they are pushing for global controls on tax havens that wealthy Europeans increasingly depend on to shield income from the income tax. The draft proposal by the EU would empower the International Monetary Fund to do most of this regulating. However, as part of this proposal, a lot of infighting is going on behind the scenes to wrest control of the IMF away from the US. That didn’t happen.

Finally, the G20 is having to deal with Russia’s “novel idea” of requiring that the IMF institute a gold standard in weighting the value of world currencies relative to Special Drawing Rights issued by the International Monetary Fund—the G20’s “solution” to evening out the equitable bailout of all nations, not just the US. But, as Bob Kirtley of Kitco.com pointed out, this is a phony gold standard.

“Russia Wants a Gold Standard… Well, a phony gold standard, but even that is better than the fiat dollar standard, and this proposal shows what kind of a wreck the current fiat money system is, and why gold is still the only system that brings soundness to money. Chinese and Russian leaders both plan to open debate on an SDR-based reserve currency as an alternative to the US dollar at the G20 summit in London this week, although the world may not yet be ready for such a radical proposal, according to the Telegraph.” I think the Telegraph is right. No one can afford to accept the limitations that a gold exchange clause would put on a nation’s ability to print money. Russia has more gold than most others and knows that this proposal would mostly restrict the US, not Russia.

Britain

is the next big nation on the brink of financial collapse. As the Times Online said, “Britain may have to go to the IMF for a huge financial bailout, the influential investor George Soros warns today. The [insider] man who made $1 billion on Black Wednesday in 1992 told The Times that Britain was particularly vulnerable to the economic crisis.” Ambrose Evans-Pritchard chimed in that “G20 unity spells end of Brown’s ‘New Deal’ plans for a $2 trillion (£1.4 trillion) bailout to revive the global economy have been quietly dropped to preserve the facade of unity as world leaders gather in London for the G20 summit.”But it gets worse for Brown. Britain’s successor to Tony Blair, who has never stood for election as PM, came under withering fire from a British member of the European Parliament, whose resounding speech condemning Brown’s voodoo economics was published on YouTube and became a worldwide phenomenon—confirming the fears of the PTB that the public’s tolerance for more phony financial solutions is waning fast.

The Globe and Mail commented about the speech as “Saying What Needs To Be Said.” “I commend Daniel Hannan who had the courage to blast Prime Minister Gordon Brown on his handling of the economic crisis. The Mail Online picks up the story on the Tory who told Brown to his face [Brown was present during the speech] that he’s a disaster. Here are a few snips from his speech:

“‘Prime Minister, I see you’ve already mastered the essential craft of the European politician: namely the ability to say one thing in this chamber and a very different thing to your home electorate. Perhaps you would have more moral authority in this House if your actions matched your words, and perhaps more legitimacy in the councils of the world if the United Kingdom were not sailing into this recession in the worst condition of any G20 country. We are now running a deficit that touches 10 per cent of GDP, an almost unbelievable figure – more than Pakistan, more than Hungary; countries where the IMF has already been called in. You cannot spend your way out of a recession or borrow your way out of debt. And when you repeat, in that wooden and perfunctory way, that our situation is better than others, that we are well placed to weather the storm, I have to tell you, you sound like a Brezhnev era apparatchik giving the party line. You know and we know and you know that we know that it’s nonsense. Everyone knows that Britain is worse off than any other country as we go into these hard times. The IMF has said so. The European Commission has said so. The markets say so, which is why the pound has lost a third of its value. In a few months, the voters will have their chance to say so, too. They can see what the markets have seen: that you are the devalued Prime Minister of a devalued Government.’” BRAVO. Now, that’s courage! Watch for Hannan’s star to rise. Hear it for yourself here:

http://www.youtube.com/watch?v=94lW6Y4tBXs THE “DO NOTHING” OPTION TURNS OUT TO BE THE RIGHT OPTION

As this financial debacle fully unravels, it will become clear to all that the “Do Nothing” option would have been the right option after all. Bailing out the perpetrators of these scams only impoverishes the rest of us by destroying the value of our assets and currency. The trouble is, the public continues to give each new failed “solution” time to work. When the failure becomes evident it only seems to justify yet another attempt at something else. Here is a sampling of the ways in which insiders are manipulating the bailout system to their advantage.

Last week we discussed how AIG’s giant aircraft leasing company, International Lease Finance Corporation, (ILFC) was in trouble because of AIG’s lack of money. By extension Boeing aircraft was at risk in losing a large share of its aircraft orders, and Boeing is a major insider player with government military contracts. Sure enough, the New York Federal Reserve bank came to ILFC’s rescue and gave them another cash infusion. AIG had already loaned $800 million to its leasing company to cover March spending and was committed to continue filling this gaping hole with nearly a billion dollars a month hoping the unit sells.

However, few buyers have the kinds of deep pockets that can tolerate these kinds of monthly losses—unless they have a guaranteed back door to government financing. But there is even more to the story. Let’s look at the real reason why AIG is being saved, apart from being a conduit to funnel bailout money to other insider institutions. The founder of ILFC Steven Udvar_Hazy, a Hungarian emigre who launched ILFC in 1973, became one of the world’s richest men through lucrative government contracts with the dark side of CIA aviation. Udvar_Hazy may still get his wish to reacquire ILFC as AIG attempts to come up with much_needed cash.

Wayne Madsen

put out this report on AIG’s aviation leasing wing this week, and it reveals that ILFC is deeply involved in government spook operations. “Questions remain as to why a company primarily involved in insurance would have taken over an aircraft leasing business that leases Airbus and Boeing passenger jet liners to airlines, the super wealthy, and Hollywood stars. The answer may be found in AIG’s classified files that would put the spotlight on AIG’s clandestine work for U.S. intelligence since the company’s founding in 1919 in Shanghai as American Asiatic Underwriters by Cornelius Vander Starr, the uncle of President Clinton’s chief prosecutor, Kenneth Starr [who engineered the cover-up investigation on the death of Vince Foster, the Clinton’s money and bag man]. In 1992, Maurice “Hank” Greenberg [a highly placed globalist] took over majority shares in the company from Starr.”Greenberg, a close confidante of Henry Kissinger, was once considered by Clinton to head up the CIA after James Woolsey’s departure in 1995 and Greenberg named Kissinger as chairman of AIG’s International Advisory Board. AIG’s one_time vice chairman was Frank G. Wisner, Jr., son of veteran Office of Strategic Services (OSS) and CIA veteran Frank Wisner, a one_time liaison to British agent Kim Philby, who later turned out to be a top Soviet spy. The senior Wisner allegedly committed suicide in 1965 using his son’s shotgun.

“A check of Securities and Exchange Commission (SEC) filings show that ILFC leased aircraft to three large U.S. airlines that have been involved with various CIA and U.S. military operations for a number of years: World Airways, Tower Air, and Evergreen International Airlines.

“In 1975, upon the fall of Saigon to the North Vietnamese and Vietcong, World Airways was the last flight out of Saigon. During the first Gulf War, the airline flew 300 flights into the Persian Gulf region, bringing in troops and supplies during Operation Desert Shield and Desert Storm. World Airways also flew into Somalia during Operation Restore Hope.

“In 2006, protests against World Airways use of Shannon Airport in Ireland to ferry U.S. troops back and forth to Iraq resulted in the airline bypassing Ireland and using Frankfurt as an alternate stopover. Shannon was also used by a number of CIA_leased ‘extraordinary rendition’ aircraft used to transport kidnapped alleged ‘terrorists.’” Tower Air was also used by the Pentagon to shuttle troops to the Persian Gulf during Desert Shield and Storm.

“Evergreen International Airlines [still operating out of McMinnville, Oregon] was part of a network of covert CIA airlines that was founded by George A. Doole, Jr., a veteran CIA agent. In the CIA’s network were Air America, Air Asia, Civil Air Transport, Intermountain Aviation, and Southern Air Transport. Pinal Air Park, near Marana, Arizona, was the base for Doole’s Evergreen International’s maintenance operation and a storage facility for 60 boneyard airliners, some of which may have been used after 9/11 for CIA detainee renditions.

“From CIA airlines to covert operations, using its American International Assurance Asian (AIA) unit as cover in Asia, AIG has plenty to answer for. Unfortunately, for the American taxpayers, those answers will be buried in classified files that will never see the light of day.”

The more you get into the close relationship between insider companies and government, you will see a revolving door system that cycles insiders in and out of key government positions to make sure the right people and companies are in position to direct this nation and to allow insider companies like AIG, Haliburton, Dyncorp, The Carlyle group, Blackwater [aka Xe] and others prosper.

It is little surprise that “One of the people named this week to President Obama’s new Task Force on Tax Reform is a member of the AIG board of directors. Martin Feldstein, a professor of economics at Harvard University, has been on the board of American International Group since 1988. Asked about the AIG connection, a senior administration official said Friday that the White House declined to comment on the story.”

A second example of insider dealings and cover-ups is now surfacing relative to the Bernie Madoff scandal. The big hole in the Madoff story is why the government investigators have supposedly been unable to find out where all Madoff’s stolen money went. They claim to only be able to locate a couple of billion by tracing bank records. That is supposed to be impossible since all bank records are available to regulators. Or are they? There is another level under the surface, but it is only for government connected companies.

To launder over $60B out of the banking system into the underground can only happen when someone has direct access to government Federal Reserve banks which can invoke a veil of secrecy over such accounts. All normal banks within the Federal Reserve system are required to keep track of all money movements. So if the money is untraceable through normal banks, Madoff had to be funneling his funds through insider Federal Reserve banks that keep banking records secret. No non-insider is ever allowed access to the private system.

One writer suspects that Madoff’s own lifestyle does not reflect the charge that Madoff converted all those stolen funds to his own use. Where did they go and for what purpose? Allen L Roland believes that “The Madoff investigation is very similar to the 9_11 investigation in that evidence of a larger conspiracy is being avoided and ignored. It is possible that the billions that Madoff stole, and is still unaccounted for, were being used to finance Israel’s vast global spy and sabotage network Mossad” both here in the US and Israel. Roland believes that the key piece of evidence lies in “Madoff’s long standing ties with two of Israel’s largest banks —Bank Leumi and Israel Discount Bank ( IDB ), both of which have a history of money laundering and illegal money transfers.”

“According to Chris Bollyn, Jacob Ezra Merkin is a part owner of Bank Leumi and has funneled billions of dollars to Madoff’s fund —suggesting that Madoff’s scheme was, in reality, a massive theft being disguised as a Ponzi scheme. A theft that involved many high level Zionists [Israeli-American globalists tasked with seeking out private funding for Israel’s black operation].”

Wayne Madson also investigated Madoff and found out that “Jailed Ponzi scammer Bernard Madoff carefully segregated and walled off his private investment business from the normal trading activities of Madoff Investment Securities at 885 Third Avenue in Manhattan. Madoff Investment Securities on the 19th floor was a legitimate trading activity monitored electronically by the Securities and Exchange Commission (SEC) and internal compliance officers of the firm. The SEC, as with all securities firms it inspects and monitors, conducted one announced audit of Madoff Investment Securities a year and one random ‘surprise’ audit. Since the 19th floor trading operation at Madoff complied with all regulations and requirements, no red flags were ever raised to the SEC.”

“Madoff, curiously, did not have a computer in his office nor did he use e-mail. Madoff Investment Securities was required to electronically store all internal and external e-mails for SEC inspection. In addition, most of the employees on the 17th floor, where much of Madoff’s private investment activities took place, did not use e-mails. According to Madoff insiders, these included Frank DiPasquale, Madoff’s late-fortyish Chief Financial Officer, and DiPasquale’s administrative assistant. When asked why Madoff and his private hedge fund group did not use e-mails, the response was to avoid burdening computer storage with excessive e-mails.” Nonsense. This was clearly done to hide the fact that no paper or electronic trail was being built. What the SEC clearly missed was the fact that funds from the 19^th floor Investment Securities Business were being laundered by purchases of investments that were being sold without the money coming back into the firm. It was a one-way outflow of cash into some other unknown channel of massive size.

Danny Schechter of Global Research feels that there are other huge Ponzi schemes that are skimming off billions and that the Obama administration, like the Bush administration before it, is looking the other way. “This time it’s the Millenium Bank in the Eastern Caribbean accused of a mere $65 million dollar rip off. (Ponzi king Bernard Maddoff allegedly took in $65 billion.) Regulators say there is a ‘ponzimonium’ underway with scores of newly opened investigations. We are talking about pervasive institutional crime, not just individual theft. The role of shady, largely unreported, ‘off shore’ institutions is slowly emerging as a component of a larger criminal scheme. There is a report that ‘a class action lawsuit has been filed against several offshore entities and individuals on behalf of investors in four hedge funds who allegedly lost over $3 billion in the Bernard Madoff fraud.’”