- In an April 7 article in The London Telegraph titled
"The G20 Moves the World a Step Closer to a Global Currency,"
Ambrose Evans-Pritchard wrote:
- "A single clause in Point 19 of the communiqué
issued by the G20 leaders amounts to revolution in the global financial
- "We have agreed to support a general SDR allocation
which will inject $250bn (£170bn) into the world economy and increase
global liquidity,' it said. SDRs are Special Drawing Rights, a synthetic
paper currency issued by the International Monetary Fund that has lain
dormant for half a century.
- "In effect, the G20 leaders have activated the IMF's
power to create money and begin global 'quantitative easing'. In doing
so, they are putting a de facto world currency into play. It is outside
the control of any sovereign body. Conspiracy theorists will love it."
- Indeed they will. The article is subtitled, "The
world is a step closer to a global currency, backed by a global central
bank, running monetary policy for all humanity." Which naturally raises
the question, who or what will serve as this global central bank, cloaked
with the power to issue the global currency and police monetary policy
for all humanity? When the world's central bankers met in Washington last
September, they discussed what body might be in a position to serve in
that awesome and fearful role. A former governor of the Bank of England
- "[T]he answer might already be staring us in the
face, in the form of the Bank for International Settlements (BIS).... The
IMF tends to couch its warnings about economic problems in very diplomatic
language, but the BIS is more independent and much better placed to deal
with this if it is given the power to do so."1
- And if that vision doesn't alarm conspiracy theorists,
it should. The BIS has been called "the most exclusive, secretive,
and powerful supranational club in the world." Founded in Basel, Switzerland,
in 1930, it has been scandal-ridden from its beginnings. According to Charles
Higham in his book Trading with the Enemy, by the late 1930s the BIS had
assumed an openly pro-Nazi bias. This was corroborated years later in a
BBC Timewatch film titled "Banking with Hitler," broadcast in
1998.2 In 1944, the American government backed a resolution at the Bretton-Woods
Conference calling for the liquidation of the BIS, following Czech accusations
that it was laundering gold stolen by the Nazis from occupied Europe; but
the central bankers succeeded in quietly snuffing out the American resolution.3
- Modest beginnings, BIS Office, Hotel Savoy-Univers, Basel
- First Annual General Meeting, 1931
- In Tragedy and Hope: A History of the World in Our Time
(1966), Dr. Carroll Quigley revealed the key role played in global finance
by the BIS behind the scenes. Dr. Quigley was Professor of History at Georgetown
University, where he was President Bill Clinton's mentor. He was also an
insider, groomed by the powerful clique he called "the international
bankers." His credibility is heightened by the fact that he actually
espoused their goals. He wrote:
- "I know of the operations of this network because
I have studied it for twenty years and was permitted for two years, in
the early 1960's, to examine its papers and secret records. I have no aversion
to it or to most of its aims and have, for much of my life, been close
to it and to many of its instruments. ... [I]n general my chief difference
of opinion is that it wishes to remain unknown, and I believe its role
in history is significant enough to be known."
- Quigley wrote of this international banking network:
- "[T]he powers of financial capitalism had another
far-reaching aim, nothing less than to create a world system of financial
control in private hands able to dominate the political system of each
country and the economy of the world as a whole. This system was to be
controlled in a feudalist fashion by the central banks of the world acting
in concert, by secret agreements arrived at in frequent private meetings
and conferences. The apex of the system was to be the Bank for International
Settlements in Basel, Switzerland, a private bank owned and controlled
by the world's central banks which were themselves private corporations."
- The key to their success, said Quigley, was that the
international bankers would control and manipulate the money system of
a nation while letting it appear to be controlled by the government. The
statement echoed an often-quoted one made by the German patriarch of what
would become the most powerful banking dynasty in the world. Mayer Amschel
Bauer Rothschild famously said in 1791:
- "Allow me to issue and control a nation's currency,
and I care not who makes its laws."
- Mayer's five sons were sent to the major capitals of
Europe London, Paris, Vienna, Berlin and Naples with the mission
of establishing a banking system that would be outside government control.
The economic and political systems of nations would be controlled not by
citizens but by bankers, for the benefit of bankers. Eventually, a privately-owned
"central bank" was established in nearly every country; and this
central banking system has now gained control over the economies of the
world. Central banks have the authority to print money in their respective
countries, and it is from these banks that governments must borrow money
to pay their debts and fund their operations. The result is a global economy
in which not only industry but government itself runs on "credit"
(or debt) created by a banking monopoly headed by a network of private
central banks; and at the top of this network is the BIS, the "central
bank of central banks" in Basel.
- Behind the Curtain
- For many years the BIS kept a very low profile, operating
behind the scenes in an abandoned hotel. It was here that decisions were
reached to devalue or defend currencies, fix the price of gold, regulate
offshore banking, and raise or lower short-term interest rates. In 1977,
however, the BIS gave up its anonymity in exchange for more efficient headquarters.
The new building has been described as "an eighteen story-high circular
skyscraper that rises above the medieval city like some misplaced nuclear
reactor." It quickly became known as the "Tower of Basel."
Today the BIS has governmental immunity, pays no taxes, and has its own
private police force.4 It is, as Mayer Rothschild envisioned, above the
- The BIS is now composed of 55 member nations, but the
club that meets regularly in Basel is a much smaller group; and even within
it, there is a hierarchy. In a 1983 article in Harper's Magazine called
"Ruling the World of Money," Edward Jay Epstein wrote that where
the real business gets done is in "a sort of inner club made up of
the half dozen or so powerful central bankers who find themselves more
or less in the same monetary boat" those from Germany, the United
States, Switzerland, Italy, Japan and England. Epstein said:
- "The prime value, which also seems to demarcate
the inner club from the rest of the BIS members, is the firm belief that
central banks should act independently of their home governments... . A
second and closely related belief of the inner club is that politicians
should not be trusted to decide the fate of the international monetary
- In 1974, the Basel Committee on Banking Supervision was
created by the central bank Governors of the Group of Ten nations (now
expanded to twenty). The BIS provides the twelve-member Secretariat for
the Committee. The Committee, in turn, sets the rules for banking globally,
including capital requirements and reserve controls. In a 2003 article
titled "The Bank for International Settlements Calls for Global Currency,"
Joan Veon wrote:
- "The BIS is where all of the world's central banks
meet to analyze the global economy and determine what course of action
they will take next to put more money in their pockets, since they control
the amount of money in circulation and how much interest they are going
to charge governments and banks for borrowing from them... .
- "When you understand that the BIS pulls the strings
of the world's monetary system, you then understand that they have the
ability to create a financial boom or bust in a country. If that country
is not doing what the money lenders want, then all they have to do is sell
- The Controversial Basel Accords
- The power of the BIS to make or break economies was demonstrated
in 1988, when it issued a Basel Accord raising bank capital requirements
from 6% to 8%. By then, Japan had emerged as the world's largest creditor;
but Japan's banks were less well capitalized than other major international
banks. Raising the capital requirement forced them to cut back on lending,
creating a recession in Japan like that suffered in the U.S. today. Property
prices fell and loans went into default as the security for them shriveled
up. A downward spiral followed, ending with the total bankruptcy of the
banks, which had to be nationalized although that word was not used,
in order to avoid criticism.6
- Among other collateral damage produced by the Basel Accords
was a spate of suicides among Indian farmers unable to get loans. The BIS
capital adequacy standards required loans to private borrowers to be "risk-weighted,"
with the degree of risk determined by private rating agencies; and farmers
and small business owners could not afford the agencies' fees. Banks therefore
assigned 100 percent risk to the loans, and then resisted extending credit
to these "high-risk" borrowers because more capital was required
to cover the loans. When the conscience of the nation was aroused by the
Indian suicides, the government, lamenting the neglect of farmers by commercial
banks, established a policy of ending the "financial exclusion"
of the weak; but this step had little real effect on lending practices,
due largely to the strictures imposed by the BIS from abroad.7
- Similar complaints have come from Korea. An article in
the December 12, 2008 Korea Times titled "BIS Calls Trigger Vicious
Cycle" described how Korean entrepreneurs with good collateral cannot
get operational loans from Korean banks, at a time when the economic downturn
requires increased investment and easier credit:
- "'The Bank of Korea has provided more than 35 trillion
won to banks since September when the global financial crisis went full
throttle,' said a Seoul analyst, who declined to be named. 'But the effect
is not seen at all with the banks keeping the liquidity in their safes.
They simply don't lend and one of the biggest reasons is to keep the BIS
ratio high enough to survive,' he said... .
- "Chang Ha-joon, an economics professor at Cambridge
University, concurs with the analyst. 'What banks do for their own interests,
or to improve the BIS ratio, is against the interests of the whole society.
This is a bad idea,' Chang said in a recent telephone interview with Korea
- In a May 2002 article in The Asia Times titled "Global
Economy: The BIS vs. National Banks," economist Henry C K Liu observed
that the Basel Accords have forced national banking systems "to march
to the same tune, designed to serve the needs of highly sophisticated global
financial markets, regardless of the developmental needs of their national
economies." He wrote:
- "[N]ational banking systems are suddenly thrown
into the rigid arms of the Basel Capital Accord sponsored by the Bank of
International Settlement (BIS), or to face the penalty of usurious risk
premium in securing international interbank loans... . National policies
suddenly are subjected to profit incentives of private financial institutions,
all members of a hierarchical system controlled and directed from the money
center banks in New York. The result is to force national banking systems
to privatize ... .
- "BIS regulations serve only the single purpose of
strengthening the international private banking system, even at the peril
of national economies... . The IMF and the international banks regulated
by the BIS are a team: the international banks lend recklessly to borrowers
in emerging economies to create a foreign currency debt crisis, the IMF
arrives as a carrier of monetary virus in the name of sound monetary policy,
then the international banks come as vulture investors in the name of financial
rescue to acquire national banks deemed capital inadequate and insolvent
by the BIS."
- Ironically, noted Liu, developing countries with their
own natural resources did not actually need the foreign investment that
had trapped them in debt to outsiders:
- "Applying the State Theory of Money [which assumes
that a sovereign nation has the power to issue its own money], any government
can fund with its own currency all its domestic developmental needs to
maintain full employment without inflation."
- When governments fell into the trap of accepting loans
in foreign currencies, however, they became "debtor nations"
subject to IMF and BIS regulation. They were forced to divert their production
to exports, just to earn the foreign currency necessary to pay the interest
on their loans. National banks deemed "capital inadequate" had
to deal with strictures comparable to the "conditionalities"
imposed by the IMF on debtor nations: "escalating capital requirement,
loan writeoffs and liquidation, and restructuring through selloffs, layoffs,
downsizing, cost-cutting and freeze on capital spending." Liu wrote:
- "Reversing the logic that a sound banking system
should lead to full employment and developmental growth, BIS regulations
demand high unemployment and developmental degradation in national economies
as the fair price for a sound global private banking system."
- The Last Domino to Fall
- While banks in developing nations were being penalized
for falling short of the BIS capital requirements, large international
banks managed to escape the rules, although they actually carried enormous
risk because of their derivative exposure. The mega-banks succeeded in
avoiding the Basel rules by separating the "risk" of default
out from the loans and selling it off to investors, using a form of derivative
known as "credit default swaps."
- BIS Tower Building, Basel
- Botta 1 Building, Basel
- However, it was not in the game plan that U.S. banks
should escape the BIS net. When they managed to sidestep the first Basel
Accord, a second set of rules was imposed known as Basel II. The new rules
were established in 2004, but they were not levied on U.S. banks until
November 2007, the month after the Dow passed 14,000 to reach its all-time
high. The economy was all downhill from there. Basel II had the same effect
on U.S. banks that Basel I had on Japanese banks: they have been struggling
ever since to survive.8
- Basel II requires banks to adjust the value of their
marketable securities to the "market price" of the security,
a rule called "mark to market."9 The rule has theoretical merit,
but the problem is timing: it was imposed ex post facto, after the banks
already had the hard-to-market assets on their books. Lenders that had
been considered sufficiently well capitalized to make new loans suddenly
found they were insolvent. At least, they would have been insolvent if
they had tried to sell their assets, an assumption required by the new
rule. Financial analyst John Berlau complained:
- "The crisis is often called a 'market failure,'
and the term 'mark-to-market' seems to reinforce that. But the mark-to-market
rules are profoundly anti-market and hinder the free-market function of
price discovery... . In this case, the accounting rules fail to allow the
market players to hold on to an asset if they don't like what the market
is currently fetching, an important market action that affects price discovery
in areas from agriculture to antiques."10
- Imposing the mark-to-market rule on U.S. banks caused
an instant credit freeze, which proceeded to take down the economies not
only of the U.S. but of countries worldwide. In early April 2009, the mark-to-market
rule was finally softened by the U.S. Financial Accounting Standards Board
(FASB); but critics said the modification did not go far enough, and it
was done in response to pressure from politicians and bankers, not out
of any fundamental change of heart or policies by the BIS.
- And that is where the conspiracy theorists come in. Why
did the BIS not retract or at least modify Basel II after seeing the devastation
it had caused? Why did it sit idly by as the global economy came crashing
down? Was the goal to create so much economic havoc that the world would
rush with relief into the waiting arms of the BIS with its privately-created
global currency? The plot thickens ...
- Ellen Brown developed her research skills as an attorney
practicing civil litigation in Los Angeles. In Web of Debt, her latest
book, she turns those skills to an analysis of the Federal Reserve and
"the money trust." She shows how this private cartel has usurped
the power to create money from the people themselves, and how we the people
can get it back. Her earlier books focused on the pharmaceutical cartel
that gets its power from "the money trust." Her eleven books
include Forbidden Medicine, Nature's Pharmacy (co-authored with Dr. Lynne
Walker), and The Key to Ultimate Health (co-authored with Dr. Richard Hansen).
Her websites are www.webofdebt.com and www.ellenbrown.com.
- 1. Andrew Marshall, "The Financial New World Order:
Towards a Global Currency and World Government," Global Research (April
- 2. Alfred Mendez, "The Network," The World
Central Bank: The Bank for International Settlements, http://copy_bilderberg.tripod.com/bis.htm.
- 3. "BIS Bank of International Settlement:
The Mother of All Central Banks," hubpages.com (2009).
- 4. Ibid.
- 5. Joan Veon, "The Bank for International Settlements
Calls for Global Currency," News with Views (August 26, 2003).
- 6. Peter Myers, "The 1988 Basle Accord Destroyer
of Japan's Finance System," http://www.mailstar.net/basle.html (updated
September 9, 2008).
- 7. Nirmal Chandra, "Is Inclusive Growth Feasible
in Neoliberal India?", networkideas.org (September 2008).
- 8. Bruce Wiseman, "The Financial Crisis: A look
Behind the Wizard's Curtain," Canada Free Press (March 19, 2009).
- 9. See Ellen Brown, "Credit Where Credit Is Due,"
webofdebt.com/articles/creditcrunch.php (January 11, 2009).
- 10. John Berlau, "The International Mark-to-market
Contagion," OpenMarket.org (October 10, 2008).