- On Wednesday the New York Stock Exchange
world's biggest stock exchange founded 213 years ago will go public.
Its goal is to build a war chest in order to buy up other stock exchanges
around the world. These actions herald a new phase in the new world order.
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- With stock exchanges around the world
going public, it is the New York Stock Exchange that is the last of the
private non-profit companies to offer shares to the public.
You can imagine that if all the exchanges in the world are listed companies,
then the mergers and acquisitions that are common among other stocks will
also be part of the stock exchange empire. Can you imagine the NYX,
as the new public company will be called, buying the Euronext and/or the
London Stock Exchange? Talk about power! This is a parallel
to the central banking power that now runs the global banking system.
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- Furthermore, within the last eleven
years, the coming of a global stock exchange will compliment an evolving
global currency and global tax. For those who say world government
is far off, you had better point them in this direction. In order to understand
what Wednesday really means, let us review structures that have been put
in place that compliment a global stock exchange.
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- When Andrew Jackson was elected President
in 1828 he announced in his first message that he would not renew the charter
of America's first central bank. He ended up vetoing the law Congress
passed to re-charter the Bank. Jackson pointed out that the bank's
stock, valued at $8 million, was held by foreigners--chiefly in Britain.
His concern was that a majority of shares of its stock might fall into
alien hands, which if we were involved in a war, could use its influence
against the United States.
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- In 1913, the question of a central bank
came up again. The people involved in this effort included some of
the wealthiest people in America: Senator Nelson Aldrich (grandfather
of David Rockefeller); Jacob Schiff and Paul Warburg of Kuhn, Loeb and
Company, an international banking house; Piatt Andrew, Assistant Secretary
of the Treasury; Henry P. Davidson, Senior Partner of J.P. Morgan &
Company; Charles D. Norton, and Frank Vanderlip, President of National
City Bank which today is CitiGroup. The passage of the Federal Reserve
Act of 1913 was done through chicanery. Those in the Senate who favored
the Act did not go home while those that were against it went home for
Christmas. In a special session convened with quorum, the Act passed
at 11:45 p.m. on December 24, 1913.
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- With the passage of the Federal Reserve
Act, our monetary system changed back to one of control by a private corporation
and not the U.S. Treasury. Our currency now says, "Federal Reserve
Note." Earlier in the day on December 24, 1913, Congressman
Charles A. Lindberg, Jr. stated from the House floor: "This
Act established the most gigantic trust on earth. When the President
signs this bill, the invisible government by the Monetary Power will be
legalizedSThe worst legislative crime of the ages is perpetrated by this
banking bill." We should note that President Woodrow Wilson
could have vetoed this bill like Andrew Jackson did, but he was put in
power by the same powers that passed the bill.
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- Since 1913, the Federal Reserve has
evolved into a very powerful entity globally. The Federal Reserve
Act has been amended over 195 times with greater empowerments in the last
ten years that have included more types of discount window loans.
The discount window is where banks borrow from the Fed overnight to maintain
their stated level of capitalization. The Fed now accepts for collateral:
Treasury and federal agency securities, gold certificates, Special Drawing
Rights, foreign currencies, and discount window loans made under Section
13 of the Federal Reserve Act. What this means is that as the
indebtedness of America grows, the Fed is willing to take more types of
collateral to secure their loans to the government!
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- As a result of the Asian Crisis in 1997-1998,
the Group of Seven finance ministers, under the direction of President
Bill Clinton and then Treasury Secretary Robert Rubin invited the central
bank ministers of the G7 countries to join them in their discussions.
Since 1998, it is both the G7 treasury secretaries and the central bank
ministers who are directing the global economy.
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- The role of central banking in the United
States was seen after the crash of the stock market in 1929. The Crash
came about as a result of (1) America reducing the gold content of the
dollar by 40%, (2) Speculation in the stock market, much of which was financed
by credit, (3) Foreign investors selling their stocks, and (4) the Federal
Reserve taking money out of the banking system which the Fed thought would
stop the frenzy. In other words, this private corporation used the
same technique used to burst the Nasdaq bubble seventy-two years later-they
took money out of the banking system which made the market drop.
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- The Fed or any central bank is able
to create market highs or lows by the amount of money they pump into the
banking system (they buy U.S. Treasuries, which puts money into the system)
or by taking money out of the banking system by selling U.S. Treasuries.
When the Federal Reserve took money out of the banking system, it caused
the Depression. John Maynard Keynes, a British socialist and economist,
came over to advise President Franklin Roosevelt. His solution was
to go into debt in order to stimulate the economy. President
Roosevelt financed all of his New Deal programs by borrowing money.
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- The legacy today of Roosevelt and Keynesian
economics is that every level of government is broke: local, county,
state, and federal and every level of government is selling assets in order
to pay down debt. In the last several years, the City of Chicago
sold the Chicago Skyway, a toll road to Spain's Grupo Ferrovial and to
a unit of Australia's Macquarie Bank for $1.8B. Since then other toll roads
around the country are being sold. The ports are part of the same
equation.
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- When President Franklin D. Roosevelt
was elected on his "New Deal for the American People" program,
his first act as president on his inaugural, March 4, 1933, was to declare
a national bank holiday. For the next 8 days, banks were closed because
of the number of people withdrawing their savings in gold.
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- A little more than a month later, on
April 20, Roosevelt passed the Emergency Banking Act of 1933 which took
America off the gold standard. It put an end to the following:
(1) Convertibility of notes into gold for Americans but allowed foreign
countries to convert their gold-backed dollars at any time and (2) Private
ownership of gold was made illegal except if you were a rare gold coin
collector. In essence the American financial system was transferred
from a standard of accountability which used gold to guard against excess
debt, to a system in which there is no accountability. All a government
has to do is print money. This opened the door for the massive debt
which is Keynesian economics at its finest: a world in debt to a private
group of bankers.
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- However, if you really want to control
the monetary system of the world, not only do you have to control the banking
system, but you have to devalue its money. It was President Nixon who severed
any remaining ties the dollar had to the gold standard in 1971. Between
1933 and 1971, foreign countries that owned gold backed dollars were able
to redeem them for gold. However, when Nixon closed the "Gold
Window", it changed the monetary system of the world from one in which
currency was gold-backed to a paper system. Basically what Nixon
did was to DEFAULT on millions of dollars that those countries held in
their vaults.
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- There is no other historic incident that
can equate the financial devastation that Nixon did when he took the dollar
off the gold standard. Never before in the 6,000 year history of
trade, was a piece of paper been used. During Biblical times and earlier,
traders used animals, jewels, expensive clothing, and gold and silver to
trade. These all have TANGIBLE value. Today, the world is on
a fiat monetary system that has nothing of value supporting it. The
purchasing power can drop simply by government printing more paper money!
From what we can understand, this was the first phase of changing the monetary
system of the world.
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- The second phase was to internationalize
it. In 1944, finance ministers from over 40 countries of the world met
in New Hampshire to set up financial international institutions that would
deal with a post-War world: the International Monetary Fund and World Bank.
Their objective was to set in place global institutions that would facilitate
the financial and economic integration of the nation-states. That
however was not the immediate objective. Both of these institutions
were set in place to facilitate loans to help rebuild war-torn Europe.
Today on a bi-annual basis, finance ministers from 186 countries of the
world meet to determine the state of the world's finances. Both of
these organizations have been instrumental in "harmonizing" financial
growth around the world and redistributing growth from strong countries
to weaker countries. In fact, the World Bank established the
International Finance Corporation that has established over 60 stock exchanges
in third world countries.
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- From an economic standpoint, if you
are going to put a global economic infrastructure in place, it must also
be political and encompass trade. The United Nations was established
in 1945 and the final piece of a global trading system was birthed in 1994
when our Congress passed the 27,000 page General Agreement on Trade and
Tariffs which established the World Trade Organization. The purpose
of which is to have a completely flat trading system-no barriers of any
kind. No longer does the American farmer, accountant, manufacturer,
or engineer compete with his competition across town, but he now competes
on a global playing field. Since President Bush II has been
in office, 2.7 million jobs have left the U.S.
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- Open borders supported by the World
Trade Organization need for the countries of the world to de-regulate laws
that restrict where people can invest. In 1980, during the Carter
presidency, Congress passed the Monetary De-Regulation Act of 1980.
It impacted the U.S. in several ways: First, it changed various federal
laws as foreigners could now invest in America and Americans could now
invest outside the United States. These changes led to the proliferation
of foreign and global mutual funds, global mergers and acquisitions between
companies, and $2T in stateless money running around the world daily looking
for higher returns and a quick currency play. Obviously the integration
of investments and corporations is part of making the world one and in
changing its currency from individual nation-state currencies to a global
currency. Secondly, it gave the Federal Reserve more
power over the U.S. banking system.
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- At the 1995 Group of Seven meeting in
Halifax, the heads of state and the G7 finance ministers embarked on putting
in place a "new international financial architecture." It included
a number of deep empowerments and structural changes being made to the
International Monetary Fund and the World Bank in order to prepare it for
a world without borders. The IMF has the responsibilities which include
"surveillance" of the world's banking systems and the flow of
monies worldwide. In addition, the IMF makes available lines of credit
for countries in trouble, our Congress graciously made $18B available for
this purpose. These changes were touted by both Robert Rubin and
his successor Larry Summers as necessary for the 21st century. This
is all part and parcel of the evolving global stock exchange.
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- Of course, no take-over of the global
economic infrastructure would be possible without changing key laws.
In 1999, Congress passed HR10 which was the "Banking Modernization
Act." It helped modernize our banking system by repealing the
1933 Glass-Steagall Act which separated commercial banking from investment
banking. HR10 merged these two activities, thus returning the stock
market to pre-1929 times. In addition it provided for foreign banks,
insurance companies, and brokerage firms to buy American banks, insurance
companies, and brokerage firms.
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- So now if you are going to globalize
the entire financial architecture, you then need international accounting
standards. Using Enron as an exampled, former Federal Reserve Chairman
Paul Volcker called for international accounting standards. The fact
that he is chairman of the Board of the Trustees for the International
Accounting Standards Committee (IASC) which is located in London was very
convenient! Now countries around the world are converting to these
new rules.
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- Getting "Joe Average" into
the market was also necessary. By the end of the 1990s, the highest number
of Americans, 45%, owned stocks either through a 401k, IRA, or personally.
Today, the market has a psychological affect on people. When it is
up, people feel good and when it is down, they are not happy. When
Greenspan was Fed Chairman, the bottom line is that "When Greenspan
speaks, the markets listen."
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- Lastly, to facilitate a global financial
architecture, you need "market-based democracy" - that is what
Treasury Secretary John Snow called it in February, 2004. He basically
told the world that every market is dependent on growth in another country
and that we need to let market forces work.
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- Secretary Snow was signaling the new
MARKET BASED GOVERNANCE SYSTEM in which the stock, bond, commodity, and
currency markets now rule the world. This change has been coming for some
time and began with President Reagan and the privatization or selling off
of government assets that he encouraged. Those assets, in some cases,
went into the market. The World Bank also developed the market
by setting up stock exchanges in many developing countries where there
were none: China, Russia, Brazil, South Africa, Ghana, Poland, etc.
To help these countries have stock to trade on their new exchange, they
sold or privatized state owned assets: railroads, banks, telephones
in order to list them on their new exchange. According to the World Bank,
more than 80 countries are selling state-owned assets.
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- At one point in our banking history,
banks held the loans they made as part of their portfolio: mortgages, automobile
loans, credit card loans, and personal loans. Today, banks have sold
them and transferred the risk that they use to assume to the market (you
and me). This technique is called "securitization." What this
means is that the market now is like the kitchen sink-everything is in
it: mortgages, auto loans, credit card loans, home equity loans,
stocks, bonds---everything and now stock exchanges!
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- In 2002, based on remarks by Dr. Jacob
Frenkel, I asked him if he saw a global currency in the market for a globalized
world. He told me that before we could have a global currency, we
needed harmonization of economies. Eighteen months later I asked
former Federal Reserve Chairman Paul Volcker if we needed a global currency
and he told me, "For the long term-but it's a long ways off, if we
are going to be successful in a globalized world, we should have an international
currency." Since 2004, I have been asking key officials at the
Bank for International Settlements in Basle about a global currency, they
have told me it is a long way off. I don't know what they call "a
long way off" for chief economist William White just issued a Working
Paper, #193, in which he says the global imbalances that the world economy
currently has will lead either to a return to the gold system (which is
highly unlikely since you can't print paper like we are currently doing)
or an international currency.
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- So now we have the harmonization of
world economies, the calls for an international currency, a market based
system in which all assets are now traded on the stock or bond exchange
and we are seeing now the rise of a global stock exchange! All we
need now is global taxation and that too, is in the works.
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- The United States is the only country
in the world NOT to have a Value Added Tax and this is now part of President
Bushes "tax simplification" measures. As well, France is
the first country to put a tax on airline tickets to help the poor countries
of the world. There are ten other countries that are considering
it as well. I asked French President Jacques Chirac what he thought
about a tax on airline tickets and he told me that if it was success, "many
more global taxes of this kind" were being planned.
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- Welcome to the new world order.
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- World government is not coming.
It is here.
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