The G20 summit in London was a great show, but what did it set out to achieve? It promised to solve the global financial and economic collapse but ended with an agenda that only threatens to worsen the crisis.
Danny Schechter of Global Research says, “Unemployment is climbing. The real estate contagion is now claiming condos and even shopping malls. It’s bad and by most accounts, getting worse. And, all the ‘leaders’ of the world can do is devote ONE DAY to a forum that must have cost millions to stage?”
All in all, it was a G7 show, with 13 others, including China , India , Brazil , Indonesia , and South Africa , keeping a polite silence as supporting cast. Throughout the summit, Gordon Brown and Barack Obama kept hamming it up with: 1) a $1.1-trillion fund to poor nations through the IMF; 2) re-regulation of the financial sector; 3) climate change issues; and 4) a clamor against turning to “protectionism.”
Let’s examine the measures closely. First, the $1.1 trillion is ostensibly for the poor, developing countries’ stimulus investments--this, notwithstanding the IMF’s need for massive replenishment after bailing out Ireland, Iceland and the new US satellites in Eastern Europe. Remember that the IMF is mandated to extend loans only to stabilize a country’s exchange rates and assist in its balance-of-payment problems. Funding real stimulus projects for infrastructure or industrial development are therefore not part of it.
So, here we have another con game that is being played on the rest of the world: The IMF will lend this money to Third World countries hardest hit by the present global crisis only to help pay for their old debts.
As Michel Chussodovsky explains, “The IMF will lend two more dollars so (that) poor countries can continue to pay their four dollar debt amortization every year”--which naturally, will go back to the banks again!
For sure, this new money will come with the usual “structural adjustments,” such as more deregulation, liberalization and privatization. Although Brown and Obama believe that they can help their crashing economies this way, it certainly won’t help the poor countries.
Second, while the two leaders promise, on one hand, to re-regulate the financial sector, they, on the other hand, continue to feed the bankers’ swindle of the world. Such re-regulation is, thus, meaningless as it avoids confronting the fundamental problem that causes the global financial system to run amuck endlessly--the mother of all Ponzi schemes: Usury.
The Bretton Woods system set up after the Second World War mandated not only fixed exchange rates for the world’s currencies but also a stable interest rate regime limited to 8 and 9 percent. The deregulation of interest rates, however, since the 1970s, simultaneous with the dollar decoupling from gold--making it a fiat currency, spun off the spiraling of interest rates, then pushed these even higher through the entry of creative financial instruments. What we call here “5-6” by “ Bombay ” lenders started happening all over the world.
As American artist Jim Kirwan, in his Usury Remains Untouched, says: “We have dismantled the most ancient of human laws, the law against usury… We have not focused enough on the big deregulation that precedes all other deregulation, and that’s the ceiling that (is)… the amount of interest that banks can get… In the 1970s we began to deregulate this… And we have today, taken as common, that banks can charge 17, 18, 19, 30, 35 percent, not to mention payday lenders charging 200, 300, 400 percent in states like Illinois, California.”
His main point then follows: “If you’re able to charge 30 percent... You (will) want people to go into debt… This addicted the financial sector to very, very, very high rates of return compared to what investors were used getting in the real economy, the manufacturing sector, General Motors…”
Thus, the single biggest stumbling block to the resurgence of the Philippine economy is the foreign (and domestic) debt it is endlessly paying to the bankers’ mafia. As of August 2007, RP’s outstanding debts were placed at $81.9 billion or P3.871 trillion--not including the contingent liabilities conservatively placed at over half a trillion.
We are taxed more and more to pay for these debts, including 70 percent of the rVAT, with less than 10 percent going to the Katas ng VAT dole-outs of the DSWD, touted by Arroyo ignoramuses as a solution to the crisis. Still, they want to tax us even more--on tobacco and alcoholic beverages, and now, on text. Even if the Philippines is not among the Highly Indebted Poor Countries--as many in Africa are--as yet, we’re headed toward that.
Quite simply, the G20 did not address the debt bomb because the G7 won’t allow it. Instead, it will exacerbate the problem with this new IMF loan to indebt countries like us even more.
Third, Obama and Brown stressed the issues of climate change or man-made global warming, in spite of the fact that the weather these days isn’t agreeing with them. Cooling patterns are everywhere--from US cold spells to nice cool evenings in Manila .
Marina Litvinsky, writing for the International Press Service headlined: “G20 Leaders Wrangle over Kyoto Successor.” There is thankfully no consensus over this proposed new climate protocol because every nation knows the US-British aim in the global warming scare is to institute the “carbon tax,” to tax everything from power plant emissions to methane from cows’ dung (a greenhouse gas, as reported by The New York Times).
Carbon credits trading has already reached $59 billion in the first half of 2008. Once they fool more countries like the Philippines into accepting it because the G20 and the UN say so, it’ll run to the trillions globally, stunt Third World industrialization, and enrich global carbon traders.
Fourth, the G20 warned against protectionism--of course! The US, Britain , China , India , and even Brazil , are all eager to keep markets open for their agricultural and industrial exports. But this would only perpetuate the centralization of the global economy around a few giant economies that want to be super-rich and super-powerful. Instead, we should democratize the global economy by fostering the Nationalist Development Economy (NDE) for every country, making every nation positive contributors to the global economy in a trickle up fashion, and reduce dependency on the control of global superpowers.
Continued Friday...
