By
Greg Palast
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When a little birdie dropped the End Game memo through my window, its content
was so explosive, so sick and plain evil, I just couldn't believe it.
The Memo confirmed every conspiracy freak’s fantasy: that in the late 1990s,
the top US Treasury officials secretly conspired with a small cabal of banker
big-shots to rip apart financial regulation across the planet. When you see
26.3 percent
unemployment in Spain, desperation and hunger in
Greece,
riots in Indonesia and Detroit in bankruptcy, go back to this End Game memo,
the genesis of the blood and tears.
The Treasury official playing the bankers’ secret End Game was
Larry Summers. Today,
Summers is Barack Obama’s leading choice for Chairman of the US Federal
Reserve, the world’s central bank. If
the
confidential memo is authentic, then Summers shouldn’t be serving on the
Fed, he should be serving hard time in some dungeon reserved for the criminally
insane of the finance world.
The memo is authentic.
I had to fly to Geneva to get confirmation and wangle a meeting with the
Secretary General of the World Trade Organisation,
Pascal Lamy. Lamy, the
Generalissimo of Globalisation, told me,
“The WTO was not created as some dark cabal of multinationals secretly cooking
plots against the people... We don’t have cigar-smoking, rich, crazy bankers
negotiating.”
Then I showed him the memo.
It begins with Larry Summers’ flunky,
Timothy Geithner,
reminding his boss to call the Bank bigshots to order their lobbyist armies to
march:
“As we enter the end-game of the WTO financial services negotiations, I believe
it would be a good idea for you to touch base with the CEOs…”
To avoid Summers having to call his office to get the phone numbers (which,
under US law, would have to appear on public logs), Geithner listed the private
lines of what were then the five most powerful CEOs on the planet. And here
they are:
Goldman Sachs:
John Corzine
(212)902-8281
Merrill Lynch:
David Kamanski (212)449-6868
Bank of America:
David
Coulter (415)622-2255
Citibank:
John
Reed (212)559-2732
Chase Manhattan:
Walter
Shipley (212)270-1380
Lamy was right: They don’t smoke cigars. Go ahead and dial them. I did, and
sure enough, got a cheery personal hello from Reed – cheery until I revealed I
wasn't Larry Summers. (Note: The other numbers were swiftly disconnected. And
Corzine can’t be reached while he faces criminal charges.)
It's not the little cabal of confabs held by Summers and the banksters that’s
so troubling. The horror is in the purpose of the "end game” itself.
Let me explain:
The year was 1997. US Treasury Secretary Robert Rubin was pushing hard to
de-regulate
banks. That required, first, repeal of the
Glass-Steagall
Act to dismantle the barrier between commercial banks and investment banks.
It was like replacing bank vaults with roulette wheels.
Second, the banks wanted the right to play a new high-risk game:
“derivatives trading”.
JP Morgan alone would soon carry $88 trillion of these pseudo-securities on its
books as “assets”.
Deputy Treasury Secretary Summers (soon to replace Rubin as Secretary)
body-blocked any attempt to control derivatives.
But what was the use of turning US banks into derivatives casinos if money
would flee to nations with safer banking laws?
The answer conceived by the Big Bank Five: eliminate controls on banks
in
every nation on the planet -- in one single move. It was as brilliant as it
was insanely dangerous.
How could they pull off this mad caper? The bankers' and Summers' game was to
use the Financial Services Agreement (or FSA), an abstruse and benign addendum
to the international trade agreements policed by the World Trade Organisation.
Until the bankers began their play, the WTO agreements dealt simply with trade
in goods – that is, my cars for your bananas. The new rules devised by Summers
and the banks would force all nations to accept trade in "bads" –
toxic assets like financial derivatives.
Until the bankers’ re-draft of the FSA, each nation controlled and chartered
the banks within their own borders. The new rules of the game would force every
nation to open their markets to Citibank, JP Morgan and their derivatives
“products”.
And all 156 nations in the WTO would have to smash down their own
Glass-Steagall divisions between commercial savings banks and the investment
banks that gamble with derivatives.
The job of turning the FSA into the bankers’ battering ram was given to
Geithner, who was named Ambassador to the World Trade Organisation.
Bankers Go Bananas
Why in the world would any nation agree to let its banking system be
boarded and seized by financial pirates like JP Morgan?
The answer, in the case of Ecuador, was
bananas. Ecuador was truly a
banana republic. The yellow fruit was that nation’s life-and-death source of
hard currency. If it refused to sign the new FSA, Ecuador could feed its
bananas to the monkeys and go back into bankruptcy. Ecuador signed.
And so on – with every single nation bullied into signing
.
Every nation but one, I should say. Brazil’s new President, Inacio Lula da
Silva, refused. In retaliation, Brazil was threatened with a virtual embargo of
its products by the European Union's Trade Commissioner, one Peter Mandelson,
according to
another
confidential memo I got my hands on. But Lula’s
refusenik stance
paid off for Brazil which, alone among Western nations, survived and thrived
during the 2007-9 bank crisis.
China signed – but got its pound of flesh in return. It opened its banking
sector a crack in return for access and control of the US auto parts and other
markets. (Swiftly, two million US jobs shifted to China.)
The new FSA pulled the lid off the Pandora’s box of worldwide derivatives
trade. Among the notorious transactions legalised: Goldman Sachs (where
Treasury Secretary Rubin had been co-chairman) worked a secret euro-derivatives
swap with Greece which, ultimately, destroyed that nation. Ecuador, its own
banking sector de-regulated and demolished, exploded into riots. Argentina had
to sell off its oil companies (to the Spanish) and water systems (to Enron)
while its teachers hunted for food in garbage cans. Then, Bankers Gone Wild in
the Eurozone dove head-first into derivatives pools without knowing how to swim
– and the continent is now being sold off in tiny, cheap pieces to Germany.
Of course, it was not just threats that sold the FSA, but temptation as well.
After all, every evil starts with one bite of an apple offered by a snake. The
apple: the gleaming piles of lucre hidden in the FSA for local elites. The
snake was named Larry.
Does all this evil and pain flow from a single memo? Of course not: the evil
was The Game itself, as played by the banker clique. The memo only revealed
their game-plan for checkmate.
And the memo reveals a lot about Summers and Obama.
While billions of sorry souls are still hurting from worldwide banker-made
disaster, Rubin and Summers didn’t do too badly. Rubin’s deregulation of banks
had permitted the creation of a financial monstrosity called “Citigroup”.
Within weeks of leaving office, Rubin was named director, then Chairman of
Citigroup – which went bankrupt while managing to pay Rubin a total of
$126 million.
Then Rubin took on another post: as key campaign benefactor to a young State
Senator, Barack Obama. Only days after his election as President, Obama, at
Rubin’s insistence, gave Summers the odd post of US “Economics Tsar” and made
Geithner his Tsarina (that is, Secretary of Treasury). In 2010, Summers gave up
his royalist robes to return to “consulting” for Citibank and other creatures
of bank deregulation whose payments have
raised
Summers’ net worth by $31 million since the “end-game” memo.
That Obama would, at Robert Rubin’s demand, now choose Summers to run the
Federal Reserve Board means that, unfortunately, we are far from the end of the
game.
Special thanks to expert Mary Bottari of Bankster USA www.BanksterUSA.org
without whom our investigation could not have begun.
The
film of my meeting with WTO chief Lamy was originally created for Ring of
Fire, hosted by Mike Papantonio and Robert F. Kennedy Jr.
Further discussion of the documents I laid before Lamy can be found in “The
Generalissimo of Globalization,” Chapter 12 of Vultures’ Picnic by Greg
Palast (Constable Robinson 2012).
Follow Greg on Twitter: @Greg_Palast
Previously –
'
The
Con' Is Leaving a Trail of Blood Across the Planet
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By
Greg Palast 1
day ago Tags:
Greg Palast,
global
financial crisis,
confidential
memos,
Larry Summers,
World Trade
Organisation,
derivatives,
bank de-regulation,
austerity,
recession,
Financial
Services Agreement,
derivatives trading,
conspiracy
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