Greece: Island Of Democracy.

by Jerry Alatalo

DrachmaReading articles on the situation in Greece has led to looking at possible connections between a Citigroup-written Dodd-Frank-rollback provision snuck into the December 2014 “Cromnibus”, must-pass spending bill in the United States Congress – and how Greece ran up its debt. Could it be that Citigroup and other Wall Street megabanks placed huge derivatives bets on Greece continuing to pay its creditors, saw the rise of Syriza in Greece and a strong possibility the party would win the January 2015 Greek election, and that Syriza would fight further austerity to the point of default?

Who knows what top managers at Citigroup were thinking when they arranged for members of the US Congress to insert Citigroup’s derivatives/swaps bailout provision in the spending bill. Maybe the move was specifically in response to political developments in Greece and large “bets” which had the real chance of losing Citigroup and others great sums of money. Maybe the provisions became inserted because of growing awareness by Wall Street of imminent changes in the world’s finance/banking system, and coming monumental losses from losing “bets” on derivatives contracts. No matter the real reasons, some estimates of global derivatives totals include the word quadrillion – one thousand trillion.

What the specific reasons for Citigroup, its lobbyists in Washington, and collaborative (colluding?) members of Congress were for successfully inserting the derivatives provisions can only become known by the American people through asking those individuals responsible for getting it passed into law. At any rate, it’s interesting to go back to December 11, 2014 and listen to Senator Elizabeth Warren, unsuccessfully, try to keep the provision out of the spending bill.

The Citigroup provision passed in December 2014 specifically takes aim at Dodd-Frank legislation having to do with “Prohibition of government bailouts of swaps entities”.

Here’s some of what Senator Warren said before the vote on “Cromnibus” in December 2014:

“If big Wall Street banks want to gamble with their own money and live with the consequences of those risks, that’s how markets are supposed to work. But they shouldn’t get to gamble with government insured money and they shouldn’t get to run up to the government when the deal goes sour”.

“House Republicans are moving quickly to try to jam this bill through today before their own members have had a chance to digest this Wall Street bailout provision”.

Ms. Warren pointed out that a “fact sheet” on the provision was intentionally confusing, written to obfuscate, and designed for diverting attention so to increase the odds of passage.

“A vote for this bill is a vote for future taxpayer bailouts of Wall Street. When the next bailout comes, a lot of people will look back to this vote to see who was responsible for putting the government back on the hook to bail out Wall Street”.

“This fight isn’t about conservatives or liberals; it’s not about Democrats or Republicans. It’s about money and it’s about power right here in Washington. This legal change could trigger more taxpayer bailouts and could ultimately threaten our entire economy, but it will also make a lot of money for Wall Street banks. This change will be a huge boon to just a handful of our biggest banks – Citigroup, JP Morgan, Bank of America…”

“The American people sent us here – Republicans, Democrats and Independents – they sent us here to stand up for them, to stand up for taxpayers, to protect the economy. I urge my Republican colleagues in the House to withhold their support from this package until this risky giveaway is removed from the legislation. It is time for all of us to stand up and fight!”

Members of Congress weren’t convinced by Elizabeth Warren, the Cromnibus spending bill passed along with the Citigroup provision. If Wall Street banks lose big money on derivatives/swaps bets, the American people will become forced to bail them out.

(Thank you to Senator Elizabeth Warren at YouTube)

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That December 2014 event is interesting to consider in contrast to what economist Michael Hudson said recently on the situation in Greece.

“At the G8 meetings in 2011, President Obama went over along with Tim Geithner (then Treasury Secretary) and said ‘our big campaign contributors are on Wall Street, and they’ve made huge bets that Greece could pay’. If Greece doesn’t pay then these gamblers and derivatives players are going to lose their bets. You’ve got to sacrifice Greece, and you’ve got to drive it into poverty, and lend the Greek government the money to pay the bondholders so our Wall Street banks won’t lose money”.

“So the European Central Bank told the International Monetary Fund (IMF), ‘if you want to be a player you’ve got to ignore what the staff said’, and they did. (The IMF staff had determined Greece was unable to pay back more loans) The European Central Bank, the IMF paid over $100 billion euros to the bondholders, so Greece, instead of owing private bondholders, they owed the IMF and European Central Bank. Now the European Central Bank wants to get paid, but the debts can’t be paid”.

“So the European Central Bank says, ‘Ok, Greece. Sell us your islands, sell us your ports, sell us your land, sell us your raw materials… This is foreclosure time, and if you can’t pay we want everything in the public domain. And you also have to impose austerity. You only have a 60% unemployment rate for youth. You’ve got to increase the unemployment rate to 80%, double the emigration, in order for us to make the loans to your government – that will turn right around to pay us!’

“It’s either austerity or we will ‘smash and grab’. Take your pick”.

Bill Black added:

“…Crony capitalism. You can’t keep a country – at least there’s no economically rational basis for doing so, and of course it’s completely inhumane – to keep a country in a condition where it constantly will be in ever-greater debt. And that’s precisely what the Troika wants to do, and as Michael said, German politicians have openly demanded that Greece begins selling islands. In other words, selling the nation. Just a complete disruption of sovereignty”. 

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(Thank you to TheRealNews at YouTube)

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Greece’s Prime Minister Alexis Tsipras was recently quoted as saying:

“My personal view is that their plan is not to push Greece out of the Euro zone. Their plan is to end hope that there can be a different kind of policy in Europe”.

Greece missed the June 30 deadline on its $1.6 billion payment. Has anyone seen those 85 people who own as much wealth as half the world’s population? If anyone does see them, ask them if they could “pass the hat” for the birthplace of democracy. If you think that’s going to happen, I’ve got some islands in Greece to sell you…

Canada Public Bank Reformer: Private Bank Execs Asked Me ‘Where Are You Going With This?’

by Jerry Alatalo

FedOn the topic of public banking, found an excellent talk posted by the Canadian group COMER (Committee on Monetary and Economic Reform) on their new YouTube channel. COMER members initiated the legal challenge to the Bank of Canada which has a chance to prevail and transform Canada’s monetary system.

Visit www.comer.org for a wealth of articles on monetary reform, and more information on what could become a world-changing event in international finance.

During a conference organized by COMER in January 2015, one of the speakers was a City of Toronto council member and public bank advocate Ms. Kristyn Wong-Tam. Her experience began when her and other members of the Toronto City Council participated in a survey answering the question “What can be done about Toronto’s financial crisis?” Ms. Wong-Tam describes how – after she suggested a public bank for Toronto – she became engaged in a discussion with one of a local newspaper’s reporters and eventually wrote a 1,200-word essay, which was then published.

The article raised a few eyebrows according to Ms. Wong-Tam, and illustrated both lack of citizens’ awareness of the benefits of public banking along with the need for education. She described first meetings with finance managers for the City of Toronto to talk about establishing a public bank, and their – coming from either non-awareness of the concept or stubborn unwillingness to change – telling her “we don’t need a public bank… we can already borrow at competitive rates… but is this even legal?”

She told the audience that people need to begin strongly advocating for public banking by spreading the word, commenting on national on-line websites, and explaining the good financial management aspects to friends and relatives in their areas. In her estimate, the ongoing COMER challenge in the courts to the Bank of Canada and establishing public banks across the country are part of a very important issue – possibly the most important issue – for Canadians.

Interestingly, Ms. Wong-Tam shared with the audience that after publication of her op-ed article she began making a good number of contacts with people requesting to talk with her – including investment bankers operating off-shore, professors of law and economics, among others who told her, “you’re on the right track… keep going”. In sharp contrast, she talks about private bank executives from some of the largest financial institutions trying to find out “where are you going with this?” and “how far are you going?” Giving evidence of how much resistance from the private banking sector will come forth for serious public bank advocates, she describes the answers she gave while acting “uninformed” about the finance concept: “Oh, I don’t know. I’m just asking a question. I really don’t know the answer, maybe you can help me out”.

She then gives encouragement to members of COMER for their legal case against the Bank of Canada and advocates for public banking in the room by reinforcing her experience, telling the audience: “you’re on the right track”.

Finally, Ms. Wong-Tam shares her experience related to Canada’s postal service and an 800-page study on ways to sustain the national organization by diversification of revenue, in particular establishing postal banking. She said she experienced astonishment to find 701 pages of the 800-page completed report had become redacted, leading her to ask “what are you hiding?” She suggested redaction of 88% of the government report was close to or actually an act of treason, similar to poisoning a public water supply.

She again stressed in closing remarks her belief that educating the public on public finance reform is an important task, and that citizens of Canada must become “involved in this crucial issue”.

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(Thank you to Committee on Monetary and Economic Reform (COMER) at YouTube)