The following article from the current
EIR demonstrates that the upcoming G-20 meeting in Moscow (Sept.
5-6) is intended by the London/Wall Street mafia to get world leaders to
sign-on to global genocide, in the form of the "Bail-in" process (the "Cyprus
model"), to simply steal depositors funds to pay the derivatives
liabilities of the failing banks. Even the Russian financial oligarchy,
despite Putin's overt opposition to this insanity, are pushing the Bail-in,
despite the fact that the entire European and US banking system is set
to collapse as soon as Bernanke stops, or even slows down, the massive
Quantitative Easing money printing at the US Federal Reserve (or even if he
continues it!).
Members and non-members
of the G-20 must be alerted to this scheme and crush
it. Mike Billington
Putin's G20 Paradox:
Summit Prepares to Endorse Bail-In
Aug. 19—The
annual Group of 20 (G20)[1]
summit will convene in St. Petersburg, Russia on Sept. 5-6. The heads of state
and government meeting would be a perfect opportunity to shift the international
economic agenda in a healthy direction: against the City of London policy of
pre-arranging "bail-in" of the next megabanks to face collapse because of
derivatives and other speculative operations, and in favor of Glass-Steagall banking
separation, which would protect the real economy and the population against
the murderous fallout from that next, inevitable collapse of the
financial-sector gamblers' wagers.
After all,
the world has been able to see bail-in in action since last March in Cyprus,
when deposits in failing banks were seized or frozen on orders from the Troika
(the European Commission, the European Central Bank, and the International
Monetary Fund).[2]
What's more, individuals and businesses from this year's host country for the
G20 summit took a direct hit in the Cyprus confiscations, because of extensive
Russian use of the Cypriot banking system as an offshore tax haven.
Russian
President Vladimir Putin himself spoke out dramatically against the financial
oligarchy's worldwide bail-in policy, during the June 20-21 St. Petersburg
International Economic Forum (SPIEF). During the question and answer session
after his SPIEF keynote speech, Putin was joined onstage by German Chancellor
Angela Merkel, who at one point complained that Putin sometimes "talks too
loud." Then, after Merkel gave a long and intricate, but not very substantial,
reply to a question about too-big-to-fail banks, Putin demanded the microphone
and said,
"Madame
Federal Chancellor has said that she doesn't know how the banks will be
recapitalized. She also said that I sometimes talk too loud. So, let me say
this in a whisper: [slowly and sotto voce] 'I hope it won't be at the expense
of their customers!' "
Putin's
disclaimer notwithstanding, Russian Finance Minister Anton Siluanov joined his
19 counterparts at a July 19-20 meeting of G20 finance ministers
in Moscow, in signing a joint statement that fully endorsed the Financial
Stability Board (FSB) guidelines on bail-in procedures. Paragraph 22 of the
statement announced: "The FSB will report to the St. Petersburg Summit [in
September] on the progress made and next steps towards addressing the 'too big
to fail' issue. We strongly support the work to establish robust resolution
regimes and resolution plans consistent with the scope and substance of the
FSB's Key Attributes of Effective Resolution for any financial
institution that could be systemically important beyond the banking sector, and
look forward to pilot assessments by the FSB, IMF and World
Bank using the Key Attributes' assessment methodology. We will
undertake any legislative and other steps needed to enable authorities to
resolve financial institutions in an effective manner, including in a
cross-border context."
The FSB's
"Key Attributes"[3]
are the framework of the bail-in policy, which is defined explicitly in
Key Attributes, 3.5.ii, as including conversion of "all or part of unsecured or
uninsured creditor claims" into equity in the entity undergoing "resolution."
These shareholders, then, take the hit for the failed bank, thus "bailing-in,"
as opposed to "bail-out" with government funds. The financial oligarchy's
propaganda says that this will protect taxpayers. But the inability of national
deposit insurance
funds to cover eligible bank deposits in the event of failure[4]
means that the pool of involuntary contributors to bail-in is de facto enlarged
to include all depositors—a set of people and businesses that greatly overlaps
taxpayers. Such a scheme was tested in the case of Spain's Bankia bank.[5]
As reported in this issue of EIR, Switzerland's banking regulator,
FINMA, places all uninsured depositors on the chopping block, under that
country's already-adopted bail-in regime.
Bankers'
Dictatorship
In the same
month as Putin delivered his anti-bail-in remark at the SPIEF, Russian Central
Bank deputy head Mikhail Sukhov told a banking conference, also held in St.
Petersburg, that the Central Bank fully supports bail-in. "Major creditors" need
to be docked in order to "save" problem banks, said Sukhov. The Russian economic
weekly Expert took note of his speech, reporting on it June 7 under the
headline "Creditors to Replace the State." According to Expert, Sukhov
"stressed that the Central Bank will be able to impose a special supervisory
regime.... Conversion of debt into equity, Sukhov believes, will create 'a kind
of buffer, so that state funds will not serve as the source for dealing with
financial problems.'... Essentially the Bank of Russia is proposing to use the
scheme that European authorities have proposed to their lending institutions,
whereby the state and taxpayers will become the financial rescuers only of last
resort for troubled banks. The EU project is being discussed by the various
national parliaments. Mikhail Sukhov noted this fact, commenting that the
international community is now moving to prevent the use of state funds for
resolving banks' financial problems."
Sukhov is one
of Russia's three ex officio representatives to the FSB, the
institution under whose auspices the bail-in policy has been developed for
global application.
Another
Russian emissary to the FSB, Deputy Finance Minister Sergei Storchak, has
likewise contradicted statements by leading Russian officials, in order to
promote the FSB's G20 agenda of bail-in. By contrast, on April 13, the daily
Izvestia publicized a letter addressed to Putin by Deputy Prime
Minister Dmitri Rogozin, who urged that the Strategic Defense of the Earth be
placed high on the agenda of the G20 summit in September. According to
Izvestia, Rogozin stated:
"The scale
of the task of neutralizing the asteroid threat requires the concentration of
global intellectual resources and the scientific potential of Russia, the
United States, and other countries.... Such a program of cooperation will
increase trust between the nations and at the same time create the conditions
for ending the confrontation over the missile defense
program."
Storchak,
however, speaking to the FinMarket news service on June 11, said that the G20
agenda had "expanded too much" already, and that the only notable success of the
Russian G20 chairmanship to date had been "solving the problem of government
rescues of 'too big to fail' banks"—through endorsing the bail-in policy. In
September, Storchak promised, the G20 leaders would issue a "special
announcement," saying that
"the
problem of 'too big to fail' has been solved, once and for all.... We hope
that in St. Petersburg the leaders will close the book on this problem,
seconding their [finance] ministers' agreement that this problem has been
solved. And that was the key problem from the standpoint of the 2008-2009
crisis."
Who are these
deputy ministers of finance or deputy Central Bank chairmen, who freely override
the agenda proposals and policy heads of state or deputy prime ministers? In the
case of Russia, the phenomenon is well known. Fifteen years ago, on Aug. 17,
1998, the events known as "the default" took place. The scheme of issuing
increasingly short-term government bonds for the benefit and amusement of
international speculators, a scheme foisted upon Russia by the band of
London-trained radical free-marketeers who had seized power there in 1991-92,
came to a crashing halt. In the wake of Russia's freezing of its government
securities market in GKOs (short term bonds) and OFZs (other federal loan
paper), the ruble was devalued by two-thirds. Attempts to install a foreign
Currency Board dictatorship were beaten back, and the Yevgeni Primakov-Yuri
Maslyukov government, formed in September 1998, undertook emergency actions to
revive the economy.
Putin, coming
to power in 1999-2000, inherited not only the beginnings of a recovery launched
under Primakov, but also a large and ramified network of financial officials,
who had become deeply embedded in Russian institutions during the 1990s, and did
not leave office.[6]
They are still there, in the person of Storchak, Sukhov, and many others, to
this day. In June of this year, Putin appointed one of them, long-time Deputy
Central Bank Chairman Alexei Ulyukayev, as minister of economics. One of the
calling cards of this circle is the claim that they alone have the experience
with international financial institutions, necessary for navigating in the
current global crisis.
Such
London-trained functionaries are the mechanism through which a bankers'
dictatorship is imposed. The same practice crops up in many countries, not only
Russia. A recent investigation of an ongoing plot to sneak bail-in legislation
through the Australian parliament identified at least 11 executives of
Australian financial regulatory agencies, who have, either simultaneously or
just prior, chaired or served on committees of the FSB and its superior
organization, the Bank for International Settlements (BIS).[7]
Likewise
noteworthy, amid an intense drive by the BIS, FSB, and the Bank of England to
make the EU as a whole, and France and Germany foremost among individual
European nations, adopt bail-in (as France has now done, through the Banking
Reform Law passed on July 18), is the recent appointment of Jon Cunliffe as
deputy governor of the Bank of England. Cunliffe, currently the U.K.'s permanent
representative to the EU, has been closely involved in negotiations towards an
EU banking union, Bloomberg reported July 26. For four years ending in 2011, he
had been an advisor to the British government on European affairs and
international finance. Mark Carney, the Canadian veteran of Goldman Sachs who
has chaired the FSB since 2011 and now, as of July 1, heads the Bank of England,
was quoted by Bloomberg about Cunliffe: "He brings an important European and
international perspective. That will be vital in ensuring that the Bank of
England can shape both the U.K. and international financial systems"
(emphasis added).
What Is the
G20?
It is one
thing for City of London and Wall Street agents to be inserted into national
governments, individually
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