News & Articles

Bernard Lietaer (ehemaliger ZentralBanker Belgiens) Vision der Zukunft:

Wir werden gezwungen sein unser Geldsystem bis 2020 zu reformieren.

 

“The Economist” prophezeit eine (vermutlich rein digitale) Weltwährung – leider leider leider könnte uns das so verkauft werden wie den Euro – dass alles besser wird… eine tolle Idee… aber ist diese auch ehrlich gemeint und designed? Oder wiegen die Interessen einiger weniger Egoisten und deren Macht-Sucht wiedermal befriedigt werden muss mehr?

Man muss beim Lietaer Ansatz unterscheiden – er möchte eine Biodiversität an verschiedenen sich ergänzenden Währungen – ein Ökosystem – welches sich auch expandieren und exportieren und skalieren lässt – aber vermutlich keine einzelne alles dominierenden Welt-Währung…

 

The Rise of the Phoenix world currency from the ashes of national fiat currencies ie. destruction of fiat currencies via hyperinflation. “Phoenix” is of course an occult metaphor. Out of the destruction, the ashes of the old world order, the Luciferian New World Order will rise like a Phoenix!

download article: ArticleEconomist1988GetReadyforthePhoenix_001.pdf
COVER: “GET READY FOR A WORLD CURRENCY”
Title of article: Get Ready for the Phoenix
Source: Economist; 01/9/88, Vol. 306, pp 9-10
THIRTY years from now, Americans, Japanese, Europeans, and people in many other rich countries, and some relatively poor ones will probably be paying for their shopping with the same currency. Prices will be quoted not in dollars, yen or D-marks but in, let’s say, the phoenix. The phoenix will be favoured by companies and shoppers because it will be more convenient than today’s national currencies, which by then will seem a quaint cause of much disruption to economic life in the last twentieth century.

At the beginning of 1988 this appears an outlandish prediction. Proposals for eventual monetary union proliferated five and ten years ago, but they hardly envisaged the setbacks of 1987. The governments of the big economies tried to move an inch or two towards a more managed system of exchange rates – a logical preliminary, it might seem, to radical monetary reform. For lack of co-operation in their underlying economic policies they bungled it horribly, and provoked the rise in interest rates that brought on the stock market crash of October. These events have chastened exchange-rate reformers. The market crash taught them that the pretence of policy co-operation can be worse than nothing, and that until real co-operation is feasible (i.e., until governments surrender some economic sovereignty) further attempts to peg currencies will flounder.

The new world economy
The biggest change in the world economy since the early 1970’s is that flows of money have replaced trade in goods as the force that drives exchange rates. as a result of the relentless integration of the world’s financial markets, differences in national economic policies can disturb interest rates (or expectations of future interest rates) only slightly, yet still call forth huge transfers of financial assets from one country to another. These transfers swamp the flow of trade revenues in their effect on the demand and supply for different currencies, and hence in their effect on exchange rates. As telecommunications technology continues to advance, these transactions will be cheaper and faster still. With unco-ordinated economic policies, currencies can get only more volatile.
….
In all these ways national economic boundaries are slowly dissolving. As the trend continues, the appeal of a currency union across at least the main industrial countries will seem irresistible to everybody except foreign-exchange traders and governments. In the phoenix zone, economic adjustment to shifts in relative prices would happen smoothly and automatically, rather as it does today between different regions within large economies (a brief on pages 74-75 explains how.) The absence of all currency risk would spur trade, investment and employment (not).

The phoenix zone would impose tight constraints on national governments. There would be no such thing, for instance, as a national monetary policy. The world phoenix supply would be fixed by a new central bank, descended perhaps from the IMF. The world inflation rate – and hence, within narrow margins, each national inflation rate- would be in its charge. Each country could use taxes and public spending to offset temporary falls in demand, but it would have to borrow rather than print money to finance its budget deficit. With no recourse to the inflation tax, governments and their creditors would be forced to judge their borrowing and lending plans more carefully than they do today. This means a big loss of economic sovereignty, but the trends that make the phoenix so appealing are taking that sovereignty away in any case. Even in a world of more-or-less floating exchange rates, individual governments have seen their policy independence checked by an unfriendly outside world.

As the next century approaches, the natural forces that are pushing the world towards economic integration will offer governments a broad choice. They can go with the flow, or they can build barricades. Preparing the way for the phoenix will mean fewer pretended agreements on policy and more real ones. It will mean allowing and then actively promoting the private-sector use of an international money alongside existing national monies. That would let people vote with their wallets for the eventual move to full currency union. The phoenix would probably start as a cocktail of national currencies, just as the Special Drawing Right is today. In time, though, its value against national currencies would cease to matter, because people would choose it for its convenience and the stability of its purchasing power.
…..
The alternative – to preserve policymaking autonomy- would involve a new proliferation of truly draconian controls on trade and capital flows. This course offers governments a splendid time. They could manage exchange-rate movements, deploy monetary and fiscal policy without inhibition, and tackle the resulting bursts of inflation with prices and incomes polices. It is a growth-crippling prospect. Pencil in the phoenix for around 2018, and welcome it when it comes. (not)

http://www.economist.com/

https://endtimeobserver.blogspot.de/2009/09/flashback-1988-economist-magazine-get.html

Admin Name: Morrison Bonpasse


Admin Organization:
Admin Street: PO BOX 390
Admin Street: 214 S DYERS NECK ROAD
Admin City: Newcastle
Admin State/Province: ME
Admin Postal Code: 04553-0390
Admin Country: US
Admin Phone: +1.2075866078
Admin Email: morrison@singleglobalcurrency.org

Home – Welcome to the Single Global Currency Association’s website

Morrison Bonpasse’s campaign for President is a limited campaign as the goal is to promote public awareness of issues important the the future of the United States and the world.

 

The initial campaign focus will be on New Hampshire, and its primary election on January 12, 2016, and then on to other New England States with primaries and caucuses.

 

The three primary issues for Bonpasse are:

 

1.  Justice: STOPPING and correcting Wrongful Convictions in the United States

Through improvements in the law enforcement and judicial systems, the U.S. must effectively correct and stop wrongful convictions by bringing them from the current level of approximately 2% to a level of .1% of convictions/inmates or fewer before the end of this decade.  These improvements would reduce the number of innocent inmates from approximately 30,000 in the U.S. to 1,500, which would still be a number too large.

 

2.  Environment: Global Warming – Population Stabilization (Zero Population Growth)

The U.S. should support programs to bring the U.S. and global birth rates down to the levels of  the death rates in order to bring population growth to ZPG (Zero Population Growth) as soon as possible, and then to continue to support lower birth rates to return the global population to an Earth-sustainable one billion.

 

3.  Economy: Global Economy – Single Global Currency

To enhance the stability of the global financial system and to reduce its cost, the United States should embrace the development of a Single Global Currency to replace the U.S. dollar.

 

For information about Bonpasse’s views on other issues, see “Issues and Views” on this website.

src: http://www.morrisonbonpasse.org/campaign.html

To Join the Association(FREE): Go To MEMBERSHIP/CONTRIBUTE

New material on site:

25 October 2015.   SGCA member Mohammed Ibrahim received his Phd. in August 2015.  A summary of his thesis is linked here:

The availability of reforming the performance of the global monetary system after the financial crisis (A Comparative Study)

The thesis supports the implementation of a Single Global Currency.

27 February 2015.  In the IMF Journal, “Finance and Development,” Kevin Hjortshoj O’Rourke wrote “Whither the Euro.”  See   “SGC Links – Articles – Academic”

27 January 2015.  Jimmy Zhou writes paper advocating WCC (World Calorie Currency.  See “SGC Links – Articles – Academic”

1 January 2015. Lithuania joins European Monetary Union, bringing membership to 19.

1 July 2014.  Journal of Economic Literature annotation in June 2014 issue for 2014 Edition of book, The Single Global Currency – Common Cents for the World.  See   “SGC Links – Articles – Academic”

30 March 2014. Publication of 2014 Edition of book:  The Single Global Currency – Common Cents for the World.  Available on Amazon.com as a PAPERBACK and in KINDLE format. The 2014 edition is a rewrite of the original 2006 edition, unlike the 2007, 2008 and 2009 editions which republished the original edition, together with Appendices for the updated information. It records the recent progress toward a Single Global Curency, including the growth of the Eurozone to 18 members, with the 2014 accession of Latvia.

 

5 January 2014  Article “Global governance should recognise global citizenship” supports Single Global Currency.  Article by R. Seetharaman in the Gulf Times. See SGC Links – Articles – non-academic”

 

1 January 2014.  Latvia joins the Eurozone, bringing the number of euro countries to 18, and reducing the number of currencies needed to transact business in the world to 140 for 193 U.N. members.  See SGC Links – Articles – non-academic”

 

8 December 2013. Barry Eichengrein gives support to development of Australia/New Zealand monetary union.  See SGC Links – Articles – non-academic”

 

2 December 2013.  Five countries sign protocol for creating East Africa Monetary Unon. See SGC Links – Articles – non-academic”

 

18 July 2013  African Union urges all-Africa Monetary Union.  See SGC Links – Articles – non-academic”

5 June 2013.  Latvia given EU and EMU OK to adopt euro on January 1, 2014, pending further approvals.  See SGC Links – Articles – non-academic”

14 February 2013.  Ramon Tamames , distinguished citizen and economist of Espana, has agreed to join the Advisory Board of the Single Global Currency Assn., after meeting with SGCA President, Morrison Bonpasse in Malaga. 

5 February 2013. Duane Higgins of the U.S. proposes new name for future Single Global Currency: “SPEDRI,” as derived from of SDR (SPEcial Drawing RIghts).  See Feedback on SGC Name.

 

HOME PAGE/INTRODUCTION TO SITE:

This is the home page of the Single Global Currency Association, which is dedicated to the goal of implementing a Single Global Currency, within a Global Monetary Union and managed by a Global Central Bank by 2024.   We shall achieve this goal through education and persuasion.

We believe that once the peoples (including their corporations and labor and other organizations) of the world understand the benefits of a Single Global Currency, they will demand it from their governments.  The Single Global Currency is what the peoples of the world need, and it is what they want.

The referenda in Denmark and Sweden for a common currency have failed because the people were not persuaded of the benefits of that particular common currency.  A major reason why those benefits are restrained is that today’s common currencies (euro, EC dollar, West African franc, U.S. dollar) still must function in a multi-currency world, and therefore must suffer the ills of the current exchange rate system.    Once the peoples of the world see the significantly increased benefits of a Single Global Currency, even compared to the growing regional “common currencies”, they will demand that their governments start planning for its implementation.

A Single Global Currency would likely have a new name which denotes its global use, such as “mundo”, “global”, or “eartha”, just as the “euro” is currently for Europe. (See Feedback on SGC Names.)  It likely would not be the expanded form of any current currency, such as the dollar or euro or yen, unless those currencies opened up their central banks’ governing boards to worldwide participation and agreed to change the name of the currency to one with more global meaning.

With the use of a Single Global Currency, there would be no more need for expensive currency exchanges nor expensive hedges against currency fluctuations.   Gone would be currency speculation and the risk of currency failures and balance of payment problems.  Such a currency would therefore be more efficient as a means of conveying true value, without consideration of the political winds of the day.  (See Why an SGC, and see our one-page FACT sheet.)

The Single Global Currency would be managed by a single global central bank, with representative governing boards for the people , governments and financial institutions of the world.

Implementing a Single Global Currency for international transactions AND as legal tender in participating countries, does not mean that other currencies cannot co-exist with such a Single Global Currency.   When the euro was being planned, it was anticipated that the pre-existing national currencies would continue to co-exist. However, such a plan was deemed inefficient and it was decided to abandon the old national currencies.  That was a decision made by the members of the eurozone members of the Eurozone and was not a mechanical requirement of monetary union.  Within a global monetary union, and with a Single Global Currency managed by a global central bank, there may well continue to exist several pre-existing national currencies and other national instruments which might be called currencies, such as complementary currencies (e.g. frequent flier miles, Canadian Tire Dollars or Ithaca Hour Dollars)

The Global Central Bank would be financed by whatever benefits will come from the printing of money and seigniorage.   Any surplus monetary benefits coming to the bank would be allocated to politically agreed-upon goals, such as the reduction of foreign debt or the eradication of disease or the support of family planning.

As it’s thought by many economists that a Single Global Currency will be good for the people of the world and as many economists and non-economists expect a Single Global Currency “someday”, why not obtain the benefits thereof sooner rather than later?  It will surely benefit all the people of all the countries of the world if there is a Single Global Currency, just as it currently benefits California and Maine to be in the same monetary union with the U.S. dollar, and for Germany and Portugal to be in the European Monetary Union with the euro.   “Let’s start planning, NOW!”

Let’s ask the thousands of economists who specialize in international monetary issues to study how the Single Global Currency will work and what is needed to implement it.   Enough has been studied and written about how the current exchange rate systems do not give suffcient stability to the international finance system.  “Let’s start planning, NOW!”

Of course, there are issues to be worked and agreements to be made.   There will be questions about which countries can participate, and under what conditions.   There will be questions about what steps must be accomplished first or second or third.   There should be no question, however, of whether the goal should be reached.   In any case, “Let’s start planning, NOW!”

For more information about the Single Global Currency Association, please send email to: Single Global Currency Association

or you may write to:

Single Global Currency Association
P.O. Box 390, Newcastle, ME 04553, USA.

Visitor count since 10 June 2003

 

 

On this blog we’ve made frequent mention of late for the drive toward a new world economic order, including the push for a singular world currency.

However, it’s worth noting that it’s not just Christian prophecy-watchers and so-called “conspiracy nuts” who have long been watching for the emergence of a world currency. Twenty-one years ago, The Economist magazine spoke of the coming world currency, which they named “the phoenix”.

To the skeptics, all this talk of a coming new world order, one world government, and the Antichrist all sounds like silly talk. I’m sure when Noah warned the world of the flood to come, that sounded like silly talk too.

… until the rain started to fall.

————————–

COVER: “GET READY FOR A WORLD CURRENCY”
Title of article: Get Ready for the Phoenix
Source: Economist; 01/9/88, Vol. 306, pp 9-10

From the article:

“THIRTY years from now, Americans, Japanese, Europeans, and people in many other rich countries, and some relatively poor ones will probably be paying for their shopping with the same currency. Prices will be quoted not in dollars, yen or D-marks but in, let’s say, the phoenix. The phoenix will be favoured by companies and shoppers because it will be more convenient than today’s national currencies, which by then will seem a quaint cause of much disruption to economic life in the last twentieth century.

At the beginning of 1988 this appears an outlandish prediction. Proposals for eventual monetary union proliferated five and ten years ago, but they hardly envisaged the setbacks of 1987.”

(Note: the writer is apparently referring here to the events related to October 19, 1987 — often referred to as “Black Monday”– when stock markets crashed in the U.S. and around the world, shedding a huge value in a very short time.)

another quote…

” As the next century approaches, the natural forces that are pushing the world towards economic integration will offer governments a broad choice. They can go with the flow, or they can build barricades. Preparing the way for the phoenix will mean fewer pretended agreements on policy and more real ones. It will mean allowing and then actively promoting the private-sector use of an international money alongside existing national monies. That would let people vote with their wallets for the eventual move to full currency union. The phoenix would probably start as a cocktail of national currencies, just as the Special Drawing Right is today. In time, though, its value against national currencies would cease to matter, because people would choose it for its convenience and the stability of its purchasing power.”

Full article here.

Links Related;

http://www.singleglobalcurrency.org/documents/ArticleEconomist1988GetReadyforthePhoenix_001.doc

Related Content:

Coming Soon:
A Global Central Bank, Global Currency & World Government

© By ANDREW MARSHALL

Following the 2009 G20 summit, plans were announced for implementing the creation of a new global currency to replace the US dollar’s role as the world reserve currency. Point 19 of the communiqué released by the G20 at the end of the Summit stated, “We have agreed to support a general SDR allocation which will inject $250 billion into the world economy and increase global liquidity.” SDRs, or Special Drawing Rights, are “a synthetic paper currency issued by the International Monetary Fund.”

     As the Telegraph reported, “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.”1
The article continued in stating that, “there is now a world currency in waiting. In time, SDRs are likely to evolve into a parking place for the foreign holdings of central banks, led by the People’s Bank of China.” Further, “the creation of a Financial Stability Board looks like the first step towards a global financial regulator,” or, in other words, a global central bank.
It is important to take a closer look at these “solutions” being proposed and implemented in the midst of the current global financial crisis. These are not new suggestions, as they have been in the plans of the global elite for a long time. However, in the midst of the current crisis, the elite have fast-tracked their agenda of forging a New World Order in finance. It is important to address the background to these proposed and imposed “solutions” and what effects they will have on the International Monetary System (IMS) and the global political economy as a whole.

A New Bretton-Woods

     In October of 2008, Gordon Brown, Prime Minister of the UK, said that we “must have a new Bretton Woods – building a new international financial architecture for the years ahead.” He continued in saying that, “we must now reform the international financial system,” and that he would want “to see the IMF reformed to become a ‘global central bank’ closely monitoring the international economy and financial system.”2
On October 17, 2008, Gordon Brown wrote an op-ed in the Washington Post in which he said that this ‘new Bretton-Woods’ should work towards “global governance,” and implementing “shared global standards for accounting and regulation,” and “the renewal of our international institutions to make them effective early-warning systems for the world economy.”3
In early October 2008, it was reported that, “as the world’s central bankers gather this week in Washington DC for an IMF-World Bank conference to discuss the crisis, the big question they face is whether it is time to establish a global economic ‘policeman’ to ensure the crash of 2008 can never be repeated.” Further, “any organisation with the power to police the global economy would have to include representatives of every major country – a United Nations of economic regulation.” A former governor of the Bank of England suggested that, “the answer might already be staring us in the face, in the form of the Bank for International Settlements (BIS),” however, “the problem is that it has no teeth. 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.”4

Emergence of Regional Currencies

     On January 1, 1999, the European Union established the Euro as its regional currency. The Euro has grown in prominence over the past several years. However, it is not to be the only regional currency in the world. There are moves and calls for other regional currencies throughout the world.
In 2007, Foreign Affairs, the journal of the Council on Foreign Relations, ran an article titled, ‘The End of National Currency’, in which it began by discussing the volatility of international currency markets, and that very few “real” solutions have been proposed to address successive currency crises.
The author poses the question, “Will restoring lost sovereignty to governments put an end to financial instability?” He answers by stating that, “this is a dangerous misdiagnosis,” and that, “the right course is not to return to a mythical past of monetary sovereignty, with governments controlling local interest and exchange rates in blissful ignorance of the rest of the world. Governments must let go of the fatal notion that nationhood requires them to make and control the money used in their territory. National currencies and global markets simply do not mix; together they make a deadly brew of currency crises and geopolitical tension and create ready pretexts for damaging protectionism. In order to globalise safely, countries should abandon monetary nationalism and abolish unwanted currencies, the source of much of today’s instability.”
The author explains that, “monetary nationalism is simply incompatible with globalisation. It has always been, even if this has only become apparent since the 1970s, when all the world’s governments rendered their currencies intrinsically worthless.” The author states that, “since economic development outside the process of globalisation is no longer possible, countries should abandon monetary nationalism. Governments should replace national currencies with the dollar or the euro or, in the case of Asia, collaborate to produce a new multinational currency over a comparably large and economically diversified area.” Essentially, according to the author, the solution lies in regional currencies.5
In October of 2008, “European Central Bank council member Ewald Nowotny said a ‘tri-polar’ global currency system is developing between Asia, Europe and the US and that he’s skeptical the US dollar’s centrality can be revived.”6
In South America, there are moves to create a regional currency and central bank under the Union of South American Nations, which was established in May of 2008.7,8 The Gulf Cooperation Council (GCC), a regional trade bloc of Arabic Gulf nations, has also been making moves towards creating a regional central bank and common currency for its member nations, following the example of Europe, and even being advised by the European Central Bank.9-12
From the time of the East Asian financial crisis in the late 1990s, there have been calls for the creation of a regional currency for East Asia among the ten member nations of the ASEAN bloc, as well as China, Japan and South Korea. In 2008, ASEAN central bank officials and financial ministers met to discuss monetary integration in the region.13-19
Within Africa, there are already certain regional monetary unions, and within the framework of the African Union, there are moves being implemented to create an African currency under the control of an African Central Bank (ACB), which is to be located in Nigeria.20-24
In North America, there are moves, coinciding with the deepening economic and political integration of the continent under NAFTA and the Security and Prosperity Partnership of North America (SPP), to create a regional currency for North America, aptly given the current designation as the Amero, and even the then-Governor of the Central Bank of Canada, David Dodge, in 2007, said that a regional currency was “possible.”25-33

A Global Currency

     In 1988, The Economist ran an article titled, ‘Get Ready for the Phoenix’, in which they wrote, “thirty years from now, Americans, Japanese, Europeans, and people in many other rich countries and some relatively poor ones will probably be paying for their shopping with the same currency. Prices will be quoted not in dollars, yen or D-marks but in, let’s say, the phoenix. The phoenix will be favoured by companies and shoppers because it will be more convenient than today’s national currencies, which by then will seem a quaint cause of much disruption to economic life in the late twentieth century.”
The article stated that, “The market crash [of 1987] taught [governments] that the pretence of policy cooperation can be worse than nothing, and that until real co-operation is feasible (ie, until governments surrender some economic sovereignty) further attempts to peg currencies will flounder.”
Amazingly the author of the article adds that, “Several more big exchange-rate upsets, a few more stockmarket crashes and probably a slump or two will be needed before politicians are willing to face squarely up to that choice. This points to a muddled sequence of emergency followed by patch-up followed by emergency, stretching out far beyond 2018 – except for two things. As time passes, the damage caused by currency instability is gradually going to mount; and the very trends that will make it mount are making the utopia of monetary union feasible.”
The article advocated the formation of a global central bank, perhaps through the IMF, and “this means a big loss of economic sovereignty, but the trends that make the phoenix so appealing are taking that sovereignty away in any case.”
The article concludes in stating that, “The phoenix would probably start as a cocktail of national currencies, just as the Special Drawing Right is today. In time, though, its value against national currencies would cease to matter, because people would choose it for its convenience and the stability of its purchasing power.” The last sentence says, “Pencil in the phoenix for around 2018, and welcome it when it comes.”34
Former US Federal Reserve Governor Paul Volcker has said that, “if we are to have a truly global economy, a single world currency makes sense.” A European Central Bank executive stated that, “we might one day have a single world currency,” in “a step towards the ideal situation of a fully integrated world.”35
The IMF held a conference in 2000 discussing how the world was segmenting into regional currency blocs and that a single world currency was possible, and that it is, in fact, preferable.36 Nobel Prize winning economist Robert Mundell has long advocated the creation of a global currency, and that it “would restore a needed coherence to the international monetary system, give the International Monetary Fund a function that would help it to promote stability, and be a catalyst for international harmony.”37
In March 2009, Russia suggested that the G20 meeting in April should “consider the possibility of creating a supra-national reserve currency or a ‘super-reserve currency’,” and to consider the IMF’s Special Drawing Rights (SDRs) in this capacity.38 A week later, China’s central bank governor proposed the creation of a global currency controlled by the IMF, replacing the US dollar as the world reserve currency, also using the IMF’s SDRs as the reserve currency basket against which all other currencies would be fixed.39
Days after this proposal, the US Treasury Secretary Timothy Geithner, former President of the New York Federal Reserve Bank, told the Council on Foreign Relations that, in response to a question about the Chinese proposal, “we’re actually quite open to that suggestion. But you should think of it as rather evolutionary, building on the current architectures, than – rather than – rather than moving us to global monetary union.”40
In late March a UN panel of economists recommended the creation of a new global currency reserve that would replace the US dollar, and that it would be an “independently administered reserve currency.”41

Creating a World Central Bank

     In 1998, Jeffrey Garten wrote an article for the New York Times advocating a “global Fed.” Garten was former Dean of the Yale School of Management, former Undersecretary of Commerce for International Trade in the Clinton administration, previously served on the White House Council on International Economic Policy under the Nixon administration and on the policy planning staffs of Secretaries of State Henry Kissinger and Cyrus Vance of the Ford and Carter administrations, former Managing Director at Lehman Brothers, and is a member of the Council on Foreign Relations.
In his article written in 1998, he stated that, “over time the United States set up crucial central institutions – the Securities and Exchange Commission (1933), the Federal Deposit Insurance Corporation (1934) and, most important, the Federal Reserve (1913). In so doing, America became a managed national economy. These organisations were created to make capitalism work, to prevent destructive business cycles and to moderate the harsh, invisible hand of Adam Smith.” He stated that, “this is what now must occur on a global scale. The world needs an institution that has a hand on the economic rudder when the seas become stormy. It needs a global central bank.”
Interestingly, Garten states that, “one thing that would not be acceptable would be for the bank to be at the mercy of short-term-oriented legislatures.” In essence, it is not to be accountable to the people of the world. So, he asks the question, “To whom would a global central bank be accountable? It would have too much power to be governed only by technocrats, although it must be led by the best of them. One possibility would be to link the new bank to an enlarged Group of Seven – perhaps a ‘G-15’ [or in today’s context, the G20] that would include the G-7 plus rotating members like Mexico, Brazil, South Africa, Poland, India, China and South Korea.” He further states that, “There would have to be very close collaboration” between the global bank and the Fed.42
In September of 2008, Jeffrey Garten wrote an article for the Financial Times in which he stated that, “Even if the US’s massive financial rescue operation succeeds, it should be followed by something even more far-reaching – the establishment of a Global Monetary Authority to oversee markets that have become borderless.”
In late October of 2008, Garten wrote an article for Newsweek in which he stated that, “leaders should begin laying the groundwork for establishing a global central bank.” He explained that, “there was a time when the US Federal Reserve played this role [as governing financial authority of the world], as the prime financial institution of the world’s most powerful economy, overseeing the one global currency. But with the growth of capital markets, the rise of currencies like the euro and the emergence of powerful players such as China, the shift of wealth to Asia and the Persian Gulf and, of course, the deep-seated problems in the American economy itself, the Fed no longer has the capability to lead single-handedly.”43
In January of 2009, it was reported that, “one clear solution to avoid a repeat of the problems would be the establishment of a ‘global central bank’ – with the IMF and World Bank being unable to prevent the financial meltdown.” Dr. William Overholt, senior research fellow at Harvard’s Kennedy School, formerly with the Rand Institute, gave a speech in Dubai in which he said that, “To avoid another crisis, we need an ability to manage global liquidity. Theoretically that could be achieved through some kind of global central bank, or through the creation of a global currency, or through global acceptance of a set of rules with sanctions and a dispute settlement mechanism.”44

A “New World Order” in Banking

     In June of 2008, before he was Treasury Secretary in the Obama administration, Timothy Geithner, as head of the New York Federal Reserve, wrote an article for the Financial Times following his attendance at the 2008 Bilderberg conference, in which he said that, “banks and investment banks whose health is crucial to the global financial system should operate under a unified regulatory framework,” and that, “the US Federal Reserve should play a ‘central role’ in the new regulatory framework, working closely with supervisors in the US and around the world.”45
In November of 2008, The National, a prominent United Arab Emirates newspaper, reported on Baron David de Rothschild accompanying UK Prime Minister Gordon Brown on a visit to the Middle East, although not as a “part of the official party” accompanying Brown. Following an interview with the Baron, it was reported that, “Rothschild shares most people’s view that there is a new world order. In his opinion, banks will deleverage and there will be a new form of global governance.”46
In February of 2009, the Times Online reported that a “new world order in banking [is] necessary,” and that, “it is increasingly evident that the world needs a new banking system and that it should not bear much resemblance to the one that has failed so spectacularly.”47
But of course, the elites that are shaping this new banking system are the champions of the previous banking system. The solutions that will follow are simply the extensions of the current system, only sped up through the necessity posed by the current crisis.

An Emerging Global Government

     An April 3, 2009 article in the Toronto Star, reported that the G20 “confab constitutes the first great get-together of the new world order. This geopolitical order may follow a number of directions, by no means all of them pleasant. But its defining characteristic is already unchangeable.” Further, “An uncomfortable characteristic of the new world order may well turn out to be that global income gaps will widen because the rising powers, such as China, India and Brazil, regard those below them on the ladder as potential rivals.” The author further states that, “The new world order thus won’t necessarily be any better than the old one,” and that, “what is certain, though, is that global affairs are going to be considerably different from now on.”48
David Rothkopf, a scholar at the Carnegie Endowment for International Peace, former Deputy Undersecretary of Commerce for International Trade in the Clinton administration, and former managing director of Kissinger and Associates, and a member of the Council on Foreign Relations, recently wrote a book titled, Superclass: The Global Power Elite and the World They are Making, of which he is certainly a member. When discussing the role and agenda of the global “superclass,” he states that, “in a world of global movements and threats that don’t present their passports at national borders, it is no longer possible for a nation-state acting alone to fulfil its portion of the social contract.”49
He writes that “the international organisations and alliances we have today,” are evolving and achieving great things, despite certain flaws, and that he is “optimistic that progress will continue to be made,” but it will be difficult, because it “undercuts many national and local power structures and cultural concepts that have foundations deep in the bedrock of human civilisation, namely the notion of sovereignty.”50 He further notes that, “mechanisms of global governance are more achievable in today’s environment,” and that these mechanisms “are often creative with temporary solutions to urgent problems that cannot wait for the world to embrace a bigger and more controversial idea like real global government.”51
In December of 2008, the Financial Times ran an article written by Gideon Rachman, a past Bilderberg attendee, who wrote that, “for the first time in my life, I think the formation of some sort of world government is plausible,” and that, “a ‘world government’ would involve much more than co-operation between nations. It would be an entity with state-like characteristics, backed by a body of laws. The European Union has already set up a continental government for 27 countries, which could be a model. The EU has a supreme court, a currency, thousands of pages of law, a large civil service and the ability to deploy military force.” Asking if the European model could “go global,” he states that it can, and that this is made possible through an awakening “change in the political atmosphere,” as “the financial crisis and climate change are pushing national governments towards global solutions, even in countries such as China and the US that are traditionally fierce guardians of national sovereignty.”
He quoted an adviser to French President Nicolas Sarkozy as saying, “global governance is just a euphemism for global government,” and that the “core of the international financial crisis is that we have global financial markets and no global rule of law.” However, Rachman states that any push towards a global government “will be a painful, slow process.” He then states that a key problem in this push can be explained with an example from the EU, which “has suffered a series of humiliating defeats in referendums, when plans for ‘ever closer union’ have been referred to the voters. In general, the Union has progressed fastest when far-reaching deals have been agreed by technocrats and politicians – and then pushed through without direct reference to the voters. International governance tends to be effective, only when it is anti-democratic. [Emphasis added]”52
In November of 2008, the United States National Intelligence Council (NIC), the US intelligence community’s “centre for midterm and long-term strategic thinking,” released a report that it produced in collaboration with numerous think tanks, consulting firms, academic institutions and hundreds of other experts, among them are the Atlantic Council of the United States, the Wilson Center, RAND Corporation, the Brookings Institution, American Enterprise Institute, Texas A&M University, the Council on Foreign Relations and Chatham House in London.53
The report, titled Global Trends 2025: A Transformed World, outlines the current global political and economic trends that the world may be going through by the year 2025. In terms of the financial crisis, it states that solving this “will require long-term efforts to establish a new international system.”54 It suggests that as the “China-model” for development becomes increasingly attractive, there may be a “decline in democratisation” for emerging economies, authoritarian regimes, and “weak democracies frustrated by years of economic underperformance.” Further, the dollar will cease to be the global reserve currency, as there would likely be a “move away from the dollar.”55
It states that the dollar will become “something of a first among equals in a basket of currencies by 2025. This could occur suddenly in the wake of a crisis, or gradually with global rebalancing.”56 The report elaborates on the construction of a new international system, stating that, “by 2025, nation-states will no longer be the only – and often not the most important – actors on the world stage and the ‘international system’ will have morphed to accommodate the new reality. But the transformation will be incomplete and uneven.” It also notes that, “most of the pressing transnational problems – including climate change, regulation of globalised financial markets, migration, failing states, crime networks, etc. – are unlikely to be effectively resolved by the actions of individual nation-states. The need for effective global governance will increase faster than existing mechanisms can respond.”57
The report discusses the topic of regionalism, stating that, “Asian regionalism would have global implications, possibly sparking or reinforcing a trend toward three trade and financial clusters that could become quasi-blocs (North America, Europe, and East Asia).” These blocs “would have implications for the ability to achieve future global World Trade Organisation agreements and regional clusters could compete in the setting of trans-regional product standards for IT, biotech, nanotech, intellectual property rights, and other ‘new economy’ products.”58
Reflecting similar assumptions made by Rachman in his article advocating a world government is the topic of democratisation, on which the report says, “advances are likely to slow and globalisation will subject many recently democratised countries to increasing social and economic pressures that could undermine liberal institutions.” This is largely because “the better economic performance of many authoritarian governments could sow doubts among some about democracy as the best form of government. The surveys we consulted indicated that many East Asians put greater emphasis on good management, including increasing standards of livings, than democracy.” Further, “even in many well-established democracies, surveys show growing frustration with the current workings of democratic government and questioning among elites over the ability of democratic governments to take the bold actions necessary to deal rapidly and effectively with the growing number of transnational challenges.”59

The Creation of a New World Order

     Ultimately, what this implies is that the future of the global political economy is one of increasing moves toward a global system of governance, or a world government, with a world central bank and global currency; and that, concurrently, these developments are likely to materialise in the face of and as a result of a decline in democracy around the world, and thus, a rise in authoritarianism. What we are witnessing is the creation of a New World Order, controlled by a totalitarian global government structure.
In fact, the very concept of a global currency and global central bank is authoritarian in its very nature, as it removes any vestiges of oversight and accountability away from the people of the world, and toward a small, increasingly interconnected group of international elites.
As Carroll Quigley explained in his monumental book, Tragedy and Hope, “[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 Basle, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations.”60
Indeed, the current “solutions” being proposed to the global financial crisis benefit those that caused the crisis over those that are poised to suffer the most as a result of the crisis: the disappearing middle classes, the world’s dispossessed, poor, indebted people. The proposed solutions to this crisis represent the manifestations and actualisation of the ultimate generational goals of the global elite; and thus, represent the least favourable conditions for the vast majority of the world’s people.
It is imperative that the world’s people throw their weight against these “solutions” and usher in a new era of world order, one of the People’s World Order; with the solution lying in local governance and local economies, so that the people have greater roles in determining the future and structure of their own political-economy, and thus, their own society. With this alternative of localised political economies, in conjunction with an unprecedented global population and international democratisation of communication through the internet, we have the means and possibility before us to forge the most diverse manifestation of cultures and societies that humanity has ever known.
The answer lies in the individual’s internalisation of human power and destination, and a rejection of the externalisation of power and human destiny to a global authority of which all but a select few people have access to. To internalise human power and destiny is to realise the gift of a human mind, which has the ability to engage in thought beyond the material, such as food and shelter, and venture into the realm of the conceptual. Each individual possesses – within themselves – the ability to think critically about themselves and their own life; now is the time to utilise this ability with the aim of internalising the concepts and questions of human power and destiny: Why are we here? Where are we going? Where should we be going? How do we get there?
The supposed answers to these questions are offered to us by a tiny global elite who fear the repercussions of what would take place if the people of the world were to begin to answer these questions themselves. I do not know the answers to these questions, but I do know that the answers lie in the human mind and spirit, that which has overcome and will continue to overcome the greatest of challenges to humanity, and will, without doubt, triumph over the New World Order.

Footnotes:

1. Ambrose Evans-Pritchard, ‘The G20 moves the world a step closer to a global currency’, The Telegraph, April 3, 2009, www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/5096524/The-G20-moves-the-world-a-step-closer-to-a-global-currency.html
2. Robert Winnett, ‘Financial Crisis: Gordon Brown calls for “new Bretton Woods”,’ The Telegraph, October 13, 2008, www.telegraph.co.uk/finance/financetopics/financialcrisis/3189517/Financial-Crisis-Gordon-Brown-calls-for-new-Bretton-Woods.html
3. Gordon Brown, ‘Out of the Ashes’, The Washington Post, October 17, 2008, www.washingtonpost.com/wp-dyn/content/article/2008/10/16/AR2008101603179.html
4. Gordon Rayner, ‘Global financial crisis: does the world need a new banking “policeman”?’, The Telegraph, October 8, 2008, www.telegraph.co.uk/finance/financetopics/financialcrisis/3155563/Global-financial-crisis-does-the-world-need-a-new-banking-policeman.html
5. Benn Steil, ‘The End of National Currency’, Foreign Affairs, Vol. 86, Issue 3, May/June 2007, pp.83-96
6. Jonathan Tirone, ‘ECB’s Nowotny Sees Global “Tri-Polar” Currency System Evolving’, Bloomberg, October 19, 2008, www.bloomberg.com/apps/news?pid=20601087&sid=apjqJKKQvfDc&refer=home
7. BBC, ‘South America nations found union’, BBC News, May 23, 2008, http://news.bbc.co.uk/2/hi/americas/7417896.stm
8. CNews, ‘South American nations to seek common currency’, China View, May 26, 2008, http://news.xinhuanet.com/english/2008-05/27/content_8260847.htm
9. AME Info, ‘GCC: Full steam ahead to monetary union’, September 19, 2005, www.ameinfo.com/67925.html
10. John Irish, ‘GCC Agrees on Monetary Union but Signals Delay in Common Currency’, Reuters, June 10, 2008, www.arabnews.com/?page=6&section=0&article=110727&d=10&m=6&y=2008
11. TIMELINE-Gulf single currency deadline delayed beyond 2010’, Forbes, March 23, 2009, www.forbes.com/feeds/afx/2009/03/24/afx6204462.html
12. Agencies, ‘GCC need not rush to form single currency’, Business 24/7, March 26, 2009, www.business24-7.ae/articles/2009/3/pages/25032009/03262009_4e19de908b174f04bfb3c37aec2f17b3.aspx
13. Barry Eichengreen, ‘International Monetary Arrangements: Is There a Monetary Union in Asia’s Future?’, The Brookings Institution, Spring 1997, www.brookings.edu/articles/1997/spring_globaleconomics_eichengreen.aspx
14. ‘After European now Asian Monetary Union?’, Asia Times Online, September 8, 2001, www.atimes.com/editor/CI08Ba01.html
15. ‘ASEAN Makes Moves for Asian Monetary Fund’, Association of Southeast Asian Nations, May 6, 2005, www.aseansec.org/afp/115.htm
16. Reuven Glick, ‘Does Europe’s Path to Monetary Union Provide Lessons for East Asia?’, Federal Reserve Bank of San Francisco, August 12, 2005, www.frbsf.org/publications/economics/letter/2005/el2005-19.html
17. AFP, ‘Asian Monetary Fund may be needed to deal with future shocks’, Channel News Asia, July 2, 2007, www.channelnewsasia.com/stories/afp_world_business/view/285700/1/.html
18. AFX News Limited, ‘East Asia monetary union “feasible” but political will lacking – ADB’, Forbes, September 19, 2007, www.forbes.com/feeds/afx/2007/09/19/afx4133743.html
19. Lin Li, ‘ASEAN discusses financial, monetary integration’, China View, April 2, 2008, http://news.xinhuanet.com/english/2008-04/02/content_7906391.htm
20. Paul De Grauwe, Economics of Monetary Union, Oxford University Press, 2007, pp.109-110
21. Heather Milkiewicz & Paul R. Masson, ‘Africa’s Economic Morass—Will a Common Currency Help?’, The Brookings Institution, July 2003, www.brookings.edu/papers/2003/07africa_masson.aspx
22. John Gahamanyi, ‘Rwanda: African Central Bank Governors Discuss AU Financial Institutions’, The New Times, August 23, 2008, http://allafrica.com/stories/200808230124.html
23. Eric Ombok, ‘African Union, Nigeria Plan Accord on Central Bank’, Bloomberg, March 2, 2009, www.bloomberg.com/apps/news?pid=20601116&sid=afoY1vOnEMLA&refer=africa
24. Ministry of Foreign Affairs, ‘Africa in the Quest for a Common Currency’, Republic of Kenya, March 2009, www.mfa.go.ke/mfacms/index.php?option=com_content&task=view&id=346&Itemid=62
25. Herbert Grubel, ‘The Case for the Amero’, The Fraser Institute, September 1, 1999, p.4, www.fraserinstitute.org/Commerce.Web/publication_details.aspx?pubID=2512
26. Ibid, p.17
27. Thomas Courchene & Richard Harris, ‘From Fixing to Monetary Union: Options for North American Currency Integration’, C.D. Howe Institute, June 1999, p.22, www.cdhowe.org/display.cfm?page=research-fiscal&year=1999
28. Ibid, p.23
29. Barrie McKenna, ‘Dodge Says Single Currency “Possible”‘, The Globe and Mail, May 21, 2007
30. ‘Consider a Continental Currency, Jarislowsky Says’, The Globe and Mail, November 23, 2007, www.theglobeandmail.com/servlet/story/LAC.20071123.RDOLLAR23/TPStory/?query=%22Steven%2BChase%22b
31. CNN, Larry King Live, Transcripts, October 8, 2007, http://transcripts.cnn.com/TRANSCRIPTS/0710/08/lkl.01.html
32. Herbert Grubel, ‘Fix the Loonie’, The Financial Post, January 18, 2008, www.nationalpost.com/opinion/story.html?id=245165
33. Todd Harrison, ‘How realistic is a North American currency?’, Market Watch, January 28, 2009, www.marketwatch.com/news/story/Do-we-need-a-North/story.aspx?guid={D10536AF-F929-4AF9-AD10-250B4057A907}
34. ‘Get ready for the phoenix’, The Economist, Vol. 306, January 9, 1988, pp.9-10
35. ECB, ‘The euro and the dollar – new imperatives for policy co-ordination’, Speeches and Interviews, September 18, 2000, www.ecb.int/press/key/date/2000/html/sp000918.en.html
36. IMF, ‘One World, One Currency: Destination or Delusion?’, Economic Forums and International Seminars, November 8, 2000, www.imf.org/external/np/exr/ecforums/110800.htm
37. Robert A. Mundell, ‘World Currency’, The Works of Robert A. Mundell, www.robertmundell.net/Menu/Main.asp?Type=5&Cat=09&ThemeName=World%20Currency
38. Itar-Tass, ‘Russia proposes creation of global super-reserve currency’, ITAR-TASS News Agency, March 16, 2009, www.itar-tass.com/eng/level2.html?NewsID=13682035&PageNum=0
39. Jamil Anderlini, ‘China calls for new reserve currency’, The Financial Times, March 23, 2009, www.ft.com/cms/s/0/7851925a-17a2-11de-8c9d-0000779fd2ac.html
40. CFR, A Conversation with Timothy F. Geithner, Council on Foreign Relations Transcripts, March 25, 2009, www.cfr.org/publication/18925/
41. ‘UN backs new global currency reserve’, The Sunday Telegraph, March 29, 2009, www.news.com.au/business/story/0,27753,25255091-462,00.html
42. Jeffrey E. Garten, ‘Needed: A Fed for the World’, The New York Times, September 23, 1998, www.nytimes.com/1998/09/23/opinion/needed-a-fed-for-the-world.html
43. Jeffrey Garten, ‘We Need a Bank Of the World’, Newsweek, October 25, 2008, www.newsweek.com/id/165772
44. Sean Davidson, ‘Global central bank could prevent future crisis’, Business 24/7, January 10, 2009, www.business24-7.ae/articles/2009/1/pages/01102009_350bc822e4ee4508b724e55b0f1393df.aspx
45. James Politi & Gillian Tett, ‘NY Fed chief in push for global bank framework’, The Financial Times, June 8, 2008, http://us.ft.com/ftgateway/superpage.ft?news_id=fto060820081850443845
46. Rupert Wright, ‘The first barons of banking’, The National, November 6, 2008, www.thenational.ae/article/20081106/BUSINESS/167536298/1005
47. Michael Lafferty, ‘New world order in banking necessary after abject failure of present model’, The Times Online, February 24, 2009, http://business.timesonline.co.uk/tol/business/management/article5792585.ece
48. Richard Gwyn, ‘Change not necessarily for the better’, The Toronto Star, April 3, 2009, www.thestar.com/comment/article/612822
49. David Rothkopf, Superclass: The Global Power Elite and the World They are Making, Toronto: Penguin Books, 2008, p.315
50. Ibid, pp.315-316
51. Ibid, p.316
52. Gideon Rachman, ‘And now for a world government’, The Financial Times, December 8, 2008, www.ft.com/cms/s/0/7a03e5b6-c541-11dd-b516-000077b07658.html
53. NIC, Global Trends 2025: A Transformed World, The National Intelligence Council’s 2025 Project, November, 2008, www.dni.gov/nic/NIC_2025_project.html
54. Ibid, p.11
55. Ibid, pp.11-12
56. Ibid, p.94
57. Ibid, p.81
58. Ibid, p.83
59. Ibid, p.87
60. Carroll Quigley, Tragedy and Hope: A History of the World in Our Time, New York: Macmillan Company, 1966, p.324

ANDREW MARSHALL is a Research Associate with the Centre for Research on Globalization based out of Montreal, Canada (www.globalresearch.ca). He has written extensively on issues imperialism in the Middle East and Africa, the environment, Homeland Security, war, terrorism and the global economy. He is currently studying Global Political Economy and the History of the Middle East and Africa at Simon Fraser University (Canada).

The above article appears in
New Dawn No. 115
(July-August 2009)

“fraud and missmanagement at HUD” “affordable housing”

Hearing 1989 CAFitts-HUD_Appointment-08011989.pdf

“I left the Bush Administration in 1990, persuaded that digital technology and the Internet could be used by entrepreneurs to create new wealth in an investment model that created alignment between global investors and the land, environment and people. If we financed places with equity instead of debt, we could create a way for global investors to profit from reducing consumption of scarce resources, integrating new technology into our infrastructure, healing the environment and improving my rule of thumb for the health of a community — the Popsicle Index.[52] The Popsicle Index is the percentage of people in a place who believe a child can leave their home and go to the nearest place to buy a popsicle or snack and come home alone safely.[53]

Alexander Hamilton, first Secretary of the Treasury of the United States.
(Photo courtesy Scottish Parliament)

When I was a little girl growing up in West Philadelphia, the Popsicle Index was close to 100%. The Dow Jones was 150. Today, in my old neighborhood the Popsicle Index has fallen about 90% to 10% while the Dow Jones has risen more than sixty times to over 10,000. In short, we have a win-lose relationship between investors and communities. In addition, we also have a win-lose relationship between government and communities. For more than fifty years we have had steadily rising government budgets for programs and enforcement (often justified on the theory that they will make the Popsicle Index go up) and a steadily falling Popsicle Index.

In 1991, at the same time that Dillon was bankrolling the Cornell Corrections start-up, I started an investment bank and financial software firm in Washington called The Hamilton Securities Group. Hamilton was named after Alexander Hamilton, one of the key drafters of the U.S. Constitution. While I served as Assistant Secretary of Housing-FHA Commissioner at HUD, I tried on numerous occasions to persuade Secretary of HUD Jack Kemp and his staff not to propose new policies that would result in the abrogation of government contracts or contractual obligations with respect to financial assets. I had a deputy who always reminded me that Alexander Hamilton had gone through a similar process of ensuring that the government did not illegally abrogate its obligations and debts when he was the first Secretary of the Treasury of the United States — and that Hamilton had always prevailed. Numerous Alexander Hamilton quotes became part of our way of cheering ourselves up in the midst of cleaning up nauseating levels of corruption. Sayings like “A promise must never be broken.”

The Hamilton Securities Group offices won an award from the American Institute of Architects for Advanced Technology Facility Design. (Photo courtesy The Hamilton Securities Group)

One of The Hamilton Securities Group’s goals was to map out how the flows of money worked in the U.S. and create software tools that would make this information accessible to communities. We believed that the way to re-engineer government was for citizens to have access to the information about the sources and uses of taxes and government spending and financing in their communities, and to participate in the process of making sure that these investments were managed to restore our neighborhoods to a “Popsicle Index” of 100%. Transparency is essential for private markets to work and for government investment to be economically productive, accountable to those who fund it and managed according to the laws that are supposed to govern such investment. Otherwise, we will veer toward subsidizing private interests that are powerful politically or forceful, including through dirty tricks and economic warfare, as opposed to those that are productive.

After I started The Hamilton Securities Group, I was approached by Nick Brady, still Secretary of Treasury, to serve as a Governor of the Federal Reserve. When I declined, John Sununu, then White House Chief of Staff, had me appointed to the board of Sallie Mae, the corporation that helps to provide financing for student loans. While on the board of Sallie Mae, I was taken aside by the Chairman who explained that it was essential for me to ask Nick to sponsor me for membership in the Council on Foreign Relations (CFR). When I said that this was not something I felt comfortable doing, he said, quite alarmed in a generous and caring manner, “You don’t understand, if you don’t join the Council, you will be out for good.”

 

In 1995, Hamilton Securities integrated telephone and computer systems in an open office design. Whether at a desk, in a conference room or in the kitchen, Hamiltonians and network members — many educated and experienced in information technology — could access state of the art technology, software tools and T1 Internet line. (Photos courtesy The Hamilton Securities Group)

I did not join the CFR and in retrospect — after years of watching how the CFR and its members operate — believe I made a sound decision.

My dream was to find solutions.

That required getting in the trenches to prototype money maps, tools and transactions.

Prototyping of this type requires high degrees of trust with diverse networks — in communities and financial markets alike.

Some of these networks would not welcome a central banker or members of organizations like the CFR that provide the intellectual smokescreen for the centralization of financial data and flows and economic and political power.

Over time I was increasingly shocked by the speed and ease with which many intelligent and seemingly competent members of the CFR appeared to eagerly justify policies and actions that supported growing corruption.

The regularity with which many CFR members would protect insiders from accountability regarding another appalling fraud surprised even me.

Many of them seemed delighted with the advantages of being an insider while being entirely indifferent to the extraordinary cost to all citizens of having our lives, health and resources drained to increase insider wealth in a manner that violated the most basic principles of fiduciary obligation and respect for the law. In short, the CFR was operating in a win-lose economic paradigm that centralized economic and political power. I was trying to find a way for us to shift to a win-win economic paradigm that was — by its nature — decentralizing.

The Hamilton Securities Group was financed with the money I made as a partner of Dillon Read and the sale of my home in Washington and then financed internally with reinvested profits from operations. Several years after starting, we won a contract by competitive bid to serve as the lead financial advisor to the Federal Housing Administration FHA at HUD. As a result, I had the opportunity to serve the Clinton Administration in the capacity of President of The Hamilton Securities Group in addition to having served as Assistant Secretary of Housing-FHA Commissioner in the first Bush Administration.[54]

Catherine’s home in Woodley Place, Washington, D.C. was sold to help finance Hamilton Securities. (Photos courtesy Catherine Austin Fitts)

One of our assignments for HUD was serving as lead financial advisor for $10 billion of mortgage loan sale auctions. Using online design books[55] and our own analytic software tools as well as bidding technology from Bell Laboratories we adapted for financial applications, we were able to significantly increase HUD’s recovery performance on defaulted mortgages, generating $2.2 billion of savings for the FHA Mutual Mortgage Insurance and General Insurance Funds.

While we plowed all of our profits back into the expenses of building databases and software tools and into banking a community-based data servicing company, we were still profitable, generating $16 million of fee revenues and $2.3 million of net income in 1995.[56]

While the loan sales were a great success for taxpayers, homeowners and communities, it turned out that they were a significant threat to the traditional interests that fed at the trough of HUD programs, contracts and related FHA mortgage and Ginnie Mae, Fannie Mae and Freddie Mac mortgage securities operations.

For example, if you illuminated the sources and uses of government resources on a neighborhood by neighborhood basis, you would see that government monies were spent in ways that created fat stock market and personal profits for insiders at the expense of more productive outsiders who are providing most of the tax and other resources used. Insiders could include big developers and property management companies that specialized in HUD-subsidized properties like then Harvard Endowment-owned National Housing Partners (NHP) and their affiliated mortgage banking operations like NHP’s Washington Mortgage (WMF), or for investment bankers like Dillon Read or Stephens, Inc. who issued municipal housing bonds for agencies like the Arkansas Development and Finance Agency (See “Narco Dollars in the 1980s—Mena Arkansas” above). When I suggested to the head of HUD’s Hope VI public housing construction program during the Clinton Administration that she could spend $50,000 per home to rehab single family homes owned by FHA rather than spending $250,000 to create one new public housing apartment in the same community, she got frustrated and said “How would we generate fees for our friends?”

Our efforts at The Hamilton Securities Group to help HUD achieve maximum return on the sale of its defaulted mortgage assets coincided with a widespread process of “privatization” in which assets were, in fact, being transferred out of governments worldwide at significantly below market value in a manner providing extraordinary windfall profits, capital gains and financial equity to private corporations and investors. In addition, government functions were being outsourced at prices way above what should have been market price or government costs — again stripping governmental and community resources in a manner that subsidized private interests. The financial equity gained by private interests was often the result of financial, human, environmental and living equity stripped and stolen from communities — often without communities being able to understand what had happened or to clearly identify their loss. This is why I now refer to privatization as

“piratization.”

One of the consequences was to steadily increase the political power of companies and investors who were increasingly dependent on lucrative back door subsidies — thus lowering overall social and economic productivity. Hence, the doubling of FHA’s mortgage recovery rates from 35% to 70-90% ran counter to global trends and ruffled feathers. FHA, with Hamilton’s help, was requiring investors like Harvard Endowment to pay full price for assets while it appeared that they and investors like them were engineering progressively deeper and deeper windfall discount prices as part of government privatization programs elsewhere in the U.S. and globally. A Federal False Claims Act lawsuit against Harvard and journalist coverage regarding their role as a USAID government contractor in Russia illuminated the extent of the windfall profits that they and members of their networks were able to engineer at the expense of the Russian people, investors and the American people.[57]A criticism that I now have that I did not understand at the time was that even efficiently and honestly executed privatization transactions such as the HUD loan sales policies which insist on open competition at the highest price run the risk of advantaging players who were the most successful at laundering money for the “black budget.” All solutions to this problem bring us back to the importance of place-based transparency of government resources and the importance of investing in the equity of small businesses and small farms.

Things took an even darker turn when we started Edgewood Technology Services, a data servicing company in a largely African-American residential community in Washington, D.C.[58] Our investment in Edgewood gave us the ability to develop a skilled dedicated workforce that could help us build much more powerful databases and software tools. It also helped us understand the investment opportunity to train people working at minimum wage jobs or living on subsidies to develop more marketable skills and earning power by doing financial data servicing and software development.

From the financial information that emerged from our portfolio strategy work for HUD and from our investment in Edgewood, we discovered that it was less expensive to train people to do these jobs than to fund their living on government subsidies indefinitely, let alone going to prison. For example, a woman with two children living in subsidized housing in Washington, D.C. on welfare and food stamps cost the government $35-55,000 or more. In 1996, the General Accounting Office (GAO) published a study showing that on average total annual expenditures for federal, state and local prisoners was over $150,000 per prisoner. Presumably this included all overhead and capital costs but did not include the costs of supporting minor children of such prisoners. If government funded the care of her two children while she was in prison, those costs would be in addition.

What we found at Edgewood was that there was a portion of the work force that, due to obligations to children and elderly parents, was not able to commute. Some of these people could be a productive work force working near their home and developing computer and software skills at their own pace. If training was combined with the creation of jobs, the economics of training people to do these jobs were sustainable and with proper screening and management could be profitable for the private sector. The potential savings to the public sector was astonishing — not to mention the potential improvement in quality of life for cities, suburbs and rural communities. With government leadership and large corporations actively working to move jobs abroad, people in all areas of the U.S. would need these kinds of new skills and jobs. Moreover, small businesses would need access to the kinds of venture capital and financial equity we were proposing to invest in community venture capital. That meant that communities needed to circulate more deposits and savings internally rather than depositing and investing their funds in large banks and corporations that used those funds to win local market share away from small businesses and farms.

During this period, The Hamilton Securities Group helped HUD develop a program to permit owners of HUD-subsidized projects to treat some of the costs of community learning centers as “allowable costs” that could be funded from property cash flows. This allowed apartment building operations in communities experiencing welfare reform, cutbacks in domestic programs and unemployment from jobs moving abroad to provide facilities and programs that could help residents improve their ability to generate income. It encouraged linkages between private real estate managers and community colleges and other organizations committed to helping people learn new skills.

As I traveled and researched around the country, it became apparent that data servicing jobs like those we were prototyping at Edgewood were highly competitive with jobs in the illegal economy. In other words, data servicing jobs paying $8-10 per hour and offering health care benefits and the opportunity to improve skills had the potential to attract a surprising number of people away from dealing drugs, prostitution and other street crime. The Hamilton Securities Group’s primary competition for the younger multi-racial portion of this work force appeared to be organized crime and the industries dependent on the continuation of organized crime activities — including enforcement and private prisons.

Meanwhile, The Hamilton Securities Group’s growing software and database infrastructure about public and private resource flows in communities indicated that the vast majority of government subsidies were either not necessary or not economic — whether welfare and HUD subsidies or prisons and the huge and growing infrastructure of community and social development and private real estate and government contractors that they supported. There was a much more economic way for government to reduce domestic subsidies and crime. Billions of dollars of government investment had a negative return on investment. We were paying millions of people — whether on welfare or government contracts or HUD property subsidies — to do things that were not productive. Change those expenditures to a positive return on investment, and extraordinary improvements in productivity were possible. There was much work needed to be done that warranted investment — from repairing our infrastructure to rebuilding communities. As part of the potential opportunities, with both the private sector and federal government predicting very significant increases in the need for data servicing support and other jobs that could be outsourced through telecommunications, there appeared to be a significant opportunity. We shared our data and results with HUD, The Department of Health and Human Services (HHS), Congress and the Office of Management and Budget at the White House, and with leaders within the real estate and community development industries.

The initial response was very positive from a number of quarters, particularly those people most concerned with the growing federal debt and issues of productivity. I will never forget one of our meetings with a senior White House official. We showed him our initial estimates of the savings that were possible from potential reduced subsidy expenditures as well as lower default rates on federal mortgage and loan programs as a result of increased employment and income in low and moderate communities. He was ecstatic about the potential to save billions while reducing poverty — all recently made possible by new technology. He and many other government officials — when they saw the initial estimates emerging from the loan sales and our aggregates of the extraordinary amounts of federal monies being wasted by place — realized the potential when a negative financial return on investment is reengineered to a positive return on investment in a place.

Private investment leaders were also enthusiastic. During one presentation, the head of portfolio strategy for one large corporate fund said with astonishment, “This is terrific. We can save the country and make a fortune doing it.” Making a fortune was a good thing. One of our biggest concerns was achieving a sufficient investment performance on pension fund capital to ensure that retirement benefits were adequately funded. Hamilton was proposing a financial model that would also help fund retirement obligations as a result of pension funds profiting from the wealth created by reducing poverty.

Others were not so positive, including special interests whose business had become managing “the poor” and who would be out of a business if new tools and opportunities were to significantly decrease the number of people who were poor. Many of these were traditionally powerful Democratic constituencies, including private for-profits, foundations, universities and not-for-profit agencies that had built up a significant infrastructure servicing and supporting programs to house, feed and supervise poor people. If people were no longer poor, what was their purpose? When we made a presentation to a group of leading foundations, in partnership with a Los Angeles entertainment company interested in using entertainment skills to make training fun, the head of low-income programs at Fannie Mae told me that it was the most depressing presentation he had ever seen. It implied that the poor did not need his help — that his life and work had no meaning. It appeared he did not want to end poverty. His personal meaning was derived from poverty continuing, if not growing. Real estate interests that were hoping to gentrify neighborhoods as a result of welfare reform were also not pleased. They would make more money turning over populations rather than helping the current population improve without moving. Their allies were enforcement teams like the HUD OIG that won funding and generated revenues from helping to get one group out, so another group could be moved in.

One HUD official told Catherine that when she saw this June 1996 Washington Post article about Edgewood Technology Services, the HUD Inspector General said, “That’s it, I am going to get her [referring to Catherine.]”

We were warned that the HUD Inspector General’s office had a very negative response to the “neighborhood networks” model of community learning centers, with one of the enforcement team members referring to such efforts as “computers for niggers.” Essentially, the vision we were proposing was in competition with their enforcement business, which consisted of dropping 200 person “swat” teams into a neighborhood to round up and arrest lots of young people who were in the wrong place at the wrong time and could not afford an attorney. This required a fundamentally different approach and philosophy. One model proposed helping the people in a place improve. The other proposed rounding them up and pushing them out so that new people could be moved in.

 

The highly successful HUD loan sales had also run into a problem with the staff of the HUD Inspector General’s Office. According to HUD staff, the HUD OIG staff wanted the HUD loan sale staff to withdraw loans from sale portfolios so they could pursue civil money penalties against the building owners. If the loans were sold, it would be better for the FHA fund and for building residents and the surrounding communities. However, it would make less money for the “Sheriff of Nottingham” business in HUD OIG. The IG and General Counsel staff were apparently indifferent to overall best interests of the government on a government wide basis let alone taxpayers and communities.

Years later, when HUD Inspector General Susan Gaffney was asked during a deposition what the recovery rates were on HUD’s defaulted mortgage portfolio before, during and after the loan sale program that The Hamilton Securities Group pioneered, she said she had no idea. Her attitude suggested that this was not an important piece of information. Which suggests that she found something that had billions of dollars of impact on the FHA Funds each year to be of no interest. The focus in federal enforcement was on activities that made money and garnered funding support and headlines directly for the enforcement teams. This “for-profit ” philosophy was surprisingly blatant. I was reminded of the Congressman who jumped up from dinner to cast his vote in appropriations committee and as he rushed off said to me, “Let’s face it, honey, I’m only here to protect my shit.”

In late 1995, The Hamilton Securities Group began work on Community Wizard, a software tool designed to facilitate community Internet access to all public data and some private data on local resource use, including federal tax, expenditures and credit data. The initial response to the tool from Congress, HUD and our technology networks was astonishing. People were ecstatic to realize that they did not have to continue to live and work in the dark financially. It was a relatively easy thing for new software tools to help people learn about the flow of money and resources in their community. Additional software tool development also resulted in numerous tools to analyze subsidized housing in a place-based context, including detailed pricing tools that combined significant databases on government rules and regulations with all of our pricing data from the various loan sales, with databases about mortgage, municipal and stock market financing of homebuilding and home ownership. Such tools would allow people to take a positive and proactive role in insuring that government resources were well used. Such tools would allow investors to improve the performance of local investment — particularly venture and equity investment in small businesses and farms.

Community Wizard Brochure

(Photo courtesy The Hamilton Securities Group)

There was only one problem. If communities had easy access to this data, the pro-centralization team of Washington and Wall Street would be in trouble. Everything from HUD real estate companies to private prisons would be shown to make no economic sense — other than to generate private profits and capital gains for insiders. And billions of government contracts, subsidies and financing would be shown to make no economic sense — other than to generate private profits and capital gains for insiders. Indeed, communities were better off without many of these activities and funding. Through our software, private citizens would see the cost of decades of accumulated “fees for our friends.”

A case in point was a meeting I had with a former partner of Dillon Read who I had hoped to recruit to Hamilton in 1996. He came to our offices and during my presentation of our plans for community venture, told me that the situation was hopeless and that our tools would make no difference. I powered up Community Wizard and our software tools on the monitors and asked him where he lived. He said “Bronxville, New York.” I had one of my team print out from our databases a list of federal expenditures in his neighborhood. When he saw the first item, he exploded with rage, “$4 million last year for flood insurance? That is ridiculous. That is corrupt!” $4 million of flood insurance sounded pretty innocent to me and I said, “why is that corrupt?” He said, “Bronxville is on a hill. I have lived in Bronxville for many years and I have never seen or heard of a flood.” It is typical that someone with years of experience in a place can spot potential waste and reengineering opportunities much faster when presented with detailed government financial information than someone who does not know the place.

As the former Dillon Read partner started to read through the details of the annual expenditures, he became more and more upset. The next day we were scheduled to speak by conference call after he returned to New York. I called and called at the appointed time but the line was busy. When I finally got through, he said he had been on the line with the Deputy Mayor of Bronxville for hours going through the data we had provided him. He said, “All this corruption is going to stop.” I said, “I thought you said it was hopeless.” And then he said something to the effect of “that was until I got the numbers for my neighborhood.” He understood that the corruption is funded one neighborhood at a time. If each neighborhood cuts off or reengineers the flow of wasteful or corrupt government funds, the situation can transform in a significant way nationally and globally. You have to cut off the money to the bad guys at the root. And he had realized how much money per person was being wasted when he saw the waste on a human scale where he could both see how the resources could be properly used and could do something about it.

This was, however, before we even addressed the question: “Who was bringing in narcotics and where was all the money from the trafficking and other illegal activities going?” If enough people stopped dealing drugs and taking drugs, then who needed more prisons and all these enforcement agencies and War on Drugs contractors? And how did all of this connect with the stock market and the mortgage markets and the fraud in those markets?

Ask and answer those questions — as communities would now be able to start to do with tools like Community Wizard and our tools — and much Iran-Contra style narcotics trafficking, the private prison industry and the “Sheriff of Nottingham-style” enforcement programs so in vogue at the White House, DOJ and HUD OIG might just be dead in the water. Unfortunately, that might have profound implications for the existing financial market as many corporate and government securities depended on the continued flow of wasted government expenditures.

As part of our efforts, we started to publish maps on the Internet of defaulted HUD mortgages in places with significant defaulted mortgage portfolios and to encourage HUD to offer place-based sales that would allow bidders to bid on different types of HUD-related mortgages and properties in one place. If successful, it would permit us to also create bids that optimized total government performance in a particular place — including assets from other agencies as well as contracts, subsidies and services.

The Map of South Central Los Angeles, California

(Map courtesy The Hamilton Securities Group)

One of the maps we put up in the spring of 1996 showed the properties which were financed with defaulted HUD single-family mortgages in South Central Los Angeles, California. The map showed significant HUD defaults and losses in the same area as the crack cocaine epidemic described by Gary Webb in Dark Alliance. Such heavy mortgage default patterns are symptoms of a systemic and very expensive problem — including systemic fraud. This could occur, for example, in situations such as those in which mortgages were being used to finance homes above market prices with inflated appraisals (one of the patterns of HUD fraud documented by the The Sopranos TV show) or where defaulted mortgages or foreclosed properties were being passed back to private parties at below market values, or where these types of mortgage fraud were supporting mortgage securities (such as those issued by Ginnie Mae, Freddie Mac and Fannie Mae) that did not have real collateral behind them. This is the type of mortgage fraud that launders profits in a way that can multiply them by many times. Los Angeles was also the area with the largest flow of activities in the Department of Justice’s Asset Forfeiture Fund. Whether drug arrests and incarcerations, legal support for HUD foreclosures and enforcement or asset seizures and forfeitures — these maps were illuminating areas that were big business for “Sheriff of Nottingham-style” operations.

The Map of Washington D.C.

(Map courtesy The Hamilton Securities Group)

 

The Map of New Orleans

(Map courtesy The Hamilton Securities Group)

backup of article: http://www.dunwalke.com/11_Hamilton_Securities.htm