A WEEKLY COMMENTARY
Year Twenty-Nine ... Number Thirty-Six ... September 17, 1982
WE'RE BAILING OUT THE WORLD WITH FEDERAL RESERVE NOTES
"Dear Editor:
"The imminent or present bankruptcies of Mexico, Argentina, Bolivia and Poland ought to direct our attention to the Monetary Control Act once again.
"By the end of August, the Federal Reserve had purchased debts of West Germany, Switzerland, Italy, Canada, France and England, and used those debts as collateral for printing and issuing, on 70 different occasions, about $2 billion worth of Federal Reserve notes from four different Reserve Banks.
"There is no legal impediment that would prevent the Federal Reserve from buying the debts of Mexico, Argentina, Bolivia or Poland and using them for the same purpose. With the nationalization of the banks in Mexico, virtually all Mexican debt becomes eligible for Fed purchase, for the Monetary Control Act empowers the Fed to buy the debts issued or guaranteed by foreign governments or their agents.
"Mexico's external debt is between $80-85 billion, $27 billion of which comes due this year. Mexico has already announced its inability to pay, and Argentina has requested a standby IMF loan. The Federal Reserve, which prides itself on its lender-of-last-resort position, will be bailing out the world.
"The total Communist and Third World external debt is now about $850 billion. In the next few weeks, the Monetary Control Act will become more and more important.
Sincerely,
Ron Paul
Member of Congress."
Congressman Paul's reference is to the first Title of Public Law 96-221, which became a law on March 31, 1980. It already has become justly notorious because of its potential for causing economic and financial havoc. Among other things, it (1) gives the Federal Reserve control over all depository institutions; (2) lowers bank reserve requirements, potentially to zero; (3) enables the Fed to print unlimited quantities of Federal Reserve notes by abolishing all collateral requirements on cash held in vaults; (4) allows expansion of circulating notes by permitting the Fed to use virtually any of its assets as collateral for Federal Reserve notes; and (5) allows the Fed to monetize debts of foreign governments and their agencies by issuing Federal Reserve notes collateralized by foreign government obligations.
Although the Federal Reserve can pride itself in being in the lender-of-last-resort position, there is one other major method by which American taxpayers are bilked into covering the debts of overextended megabanks and bankrupt countries. This is through the IMF and its associated international financing agencies. In our last DBR, we mentioned the IMF conference that was taking place in Toronto. But it was too soon to know how we fared in that giveaway contest. Human Events of September 18 has some information. We quote:
".... officials from nearly 150 countries were engaged in an effort to gang up on the American taxpayer. They were demanding, urging, cajoling and begging the United States to hand out huge new helpings of dollars to such institutions as the IMF and the World Bank for the purpose of bailing out the debtor nations and supposedly, lifting the underdeveloped countries to a state of Nirvana. On September 4, it was learned the U.S. (had agreed) with nine other leading industrial democracies to increase IMF funds by at least 25 per cent, which would give this institution some $85 bilion in lending authority. With a fresh supply of dollars, the IMF would then be able to continue rescuing the dead-beat nations of the world, thus ensuring that their profligate ways of the past would not come to a halt. (Also important, so the overextended International Banks would not come to a halt). After considerable giveaways to "poor nations" increased by 50 per cent, the article concludes: "The time has come, as the Administration well knows, to put an end to giveaways and the feuling of our enemies thorugh the multilateral lending institutions. But it was less than clear from the Tortonto meeting as to just how firm the United States was going to be in resisting the Third World pressures for lavish new handouts, largely paid for with taxes from American citizens." Actually, it should be very clear: the U.S. government is not going to stop its giveaways to enemy nations, because this would ruin such institutions as Chase Manhattan, Citibank, BankAmerica, Morgan Gaurantee, etc. And, nothing serious is going to happen to them in this decade because of their sins. The world's ruling clique has so spoken.
One of the interesting (and maddening to this reporter) incidents that will develop is the transfer of Cuba's debts from the USSR to the USA. The London Daily Telegraph reported recently, "Senior Cuban officials have told the Reagan administration they would like to reduce Cuba's economic dependence on the Soviet Union. So far Washington has not responded, but American officials confirmed privately yesterday that some weeks ago the Cuban approach was made. The Cubans indicated their country needed an economic relationship with the United States and would be prepared to guarantee an end to the Cuban political interference in Central America to which the Reagan administration has so strongly objected. Cuba's economy is in dire straits, and the Kremlin, which has reportedly bailed her out, appears to be saying 'no more'."
DBR readers should not be surprised at this development. Our DBR #31, August 8, 1982, dealt in large depth with this slow but sure takeover by the United States of the financial burdens of Cuba, under the title "Cuba, Our Dependent Ally?" We noted that Larry Patterson had mentioned the upcoming event. And Globecan in its current issue (10 Sept. 1982) carries a full report of the development. We quote: "Way back on August 30, 1981 Globescan warned, 'The IMF and America will, in the not too distant future, take over Russia's subsidy of the Cuban Operation.' On October 10, 1981, Globescan said that 'Cuban Marxists are to be laundered to become clean Socialists like France and the rest of the European Community.' On April 22, 1982, Globescan said to start watching Cuba very carefully, that the operation to cleanse Castro was getting underway. Before he quit, Alexander Haig met secretly with Cuba's Vice-President Rodriguez, and top roving ambassador from the CIA, General Vernon Walters, has had lengthy meetings with Castro. And from Globescan, July 5, 1982: 'A June 5th editorial in The Economist of London represents Cuba as the U.S.'s battered sparring partner, tired of the fight and ready to talk. The article states that '20 years of trying to isolate Cuba have got rid of neither Mr. Castro, nor the Russians in his country.' This is absurd. No one ever intended to rid Cuba of Castro or the Russians. Cuba was developed and maintained as an 'enemy' to frighten U.S. taxpayers into financing foreign schemes -- undertakings such as the wealth transfers in Central America, or the use of Cuban soldiers to guard supranational monopolies like Gulf Oil against sabotage by patriotic freedom fighters in Angola. On June 19th, The Economist again poured on the soft soap, saying that Russia can no longer afford Cuba. They cried that the Soviets pump in roughly $4 billion a year - $11 million a day. Obviously Russia cannot continue to finance Cuba. Russia doesn't even produce enough wealth to feed herself -- no socialist country does. They must borrow continually from countries where freedom to produce and keep the earnings creates surplus capital. If Socialism in Cuba or Russia were allowed to fall, the game would be over for the International Bankers who love to lend to socialists who can never repay -- and thus are hooked on loans forever. So what must be done to keep things going?
"The International Monetary Fund has lots of money, thanks to U.S. taxpayers, and so does the World Bank, thanks again to Americans who put their money in banks that buy World Bank bonds. So, in order to spring loose all that money for Fidel, simply soft soap Americans to change the way they think about Cuba and Dr. Castro. Make Cuba out as struggling to obtain the good life, but is misunderstood and driven into the Russian camp only because of America's twenty-year-long cold shoulder. The operation is underway. The IMF, as the emerging World Central Bank and lender of last resort, will take the Cuban financial burden, using American money, as usual. The IMF is already doing this in Eastern Europe. Soon all of Russia's satellites and socialist regional governments will be re-financed. Then, as banker to one-world government and the New International Economic Order, the IMF will take over the financing of Russia as well." (Globescan, 10 September 1982. 1 year (24 issues) $125. U.S. subscription center: 1545 New York Avenue, N.E., Washington, D.C., 20002).
That the USSR is willing and eager to let the United States support Cuba does not mean that there will be any lessening of Soviet pressure in the Carribean, in Central and South America. In the first place, there is an invisible Communist command: Once any country has adopted a Socialist form of government with the approval of or aid from the Soviet Union, that country will never be allowed to charge its mind. It will remain a Socialist country, even if the Soviets have to fight to keep it that way; as once in Hungary, now in Afghanistan, perhaps later in Poland. And in the second place, the elitists and International Bankers must maintain an "enemy" to frighten people and governments into supporting the elitists. That's why the International Bankers supported Lenin and his few followers in the beginning, why they have continued to support the USSR ever since. There must be that 'threat' to scare people into agreement. That 'threat' has become so real in the 1980s that even the International Bankers must often feel that their monster might rise up to destroy them.
So the "enemy" must remain a threat in the Carribean, in Central and South American. It's just that, with the US financing Cuba, now the USSR can adopt new strategies and take new directions. In fact, according to Mike Blair in The Spotlight for September 20, the new Soviet strategy has been announced. "In an effort to block the Reagan administration's so-called 'Caribbean Basin Initiative,' says Blair, 'a plan to pump up the economies of Eastern Caribbean nations with $60 million this year alone, the Soviet empire has initiated its own massive plan of aid, generously laced with massive military efforts .... Soon from bases built in Nicaragua, Grenada and Guyana, Soviet MIG jet aircraft will be able to strike vital oil tankers anywhere in the Caribbean." Reporter Blair is of the opinion that Cuba will be involved in these future operations. But we don't think so. If all the signs of the times are right, now begins a period of cleansing for Cuba and Castro. They need our money. More Russian aid has become problematic.
So, except for their troubles with Afghanistan and Poland, the Soviets are doing very well, thanks to Megabankers' aid. The same can be said for the Megabankers, who aren't really worried about unpaid loans so long as those lenders-of-last-resort, the IMF and the Fed, are there to keep them lending, and their operations chieftain, David Rockefeller, whether he is in office at 1 Chase Manhattan or his branch office at 1 Karl Marx Square, or visiting heads of state, continues to dominate the American government. Congress has the power to change all this, but doesn't dare to exercise its power in killing the Fed and establishing a gold standard.
In the final analysis, it seems to be up to we, the people, who are helpless without the support of their King of Kings.
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FEDERAL REGISTER, Vol. 47, No. 175, Thursday, September 9, 1982.
Presidential Determination No. 82-19 of August 30, 1982,
MEMORANDUM FOR THE HONORABLE GEORGE P. SHULTZ, THE SECRETARY OF STATE
Pursuant to Section 2(b)(2) of the Export-Import Bank Act of 1945, as amended, I determine that it is in the national interest for the Export-Import Bank of the United States to extend a credit and guarantee in the aggregate amount of $68,425,000 to the People's Republic of China in connection with its purchase of steel making equipment and related services.
On my behalf, please transmit this determination to the Speaker of the House and the President of the Senate.
This determination shall be published in the Federal Register.
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TRILATERALISTS IN DISARRAY?
The following observation comes to us from the British-based Intelligence Digest. We quote without comment:
The Trilateralists and their one-world government elitist associates in a variety of organizations are in some confusion as a result of recent foreign policy developments. The departure of Secretary Haig is but an outward sign of deeper cross-currents. The strains began not in Europe but in Japan where there is an organization dedicated to training the leaders of the 21st century to shoulder the responsibility which some Japanese believe will fall on their shoulders as a result of the change in world power patterns following political and economic changes.
The strength of the Japanese economy is well known inasmuch as it has had a considerable impact on the United States and Europe. But the Japanese have also had a less well-publicized impact in Asia. A number of American Trilateralists have found themselves in disagreement with their Japanese counterparts. But as if that were not bad enough, there is now a division between the European and U.S. Trilateralists which involves a number of Bilderbergers and members of the US Council on Foreign Relations (CFR). Now all this is supposed to be confidential; indeed it is not supposed to be happening at all. And of course it is quite above our heads, secrecy and elitism being two key factors in the entire international setup.
The European divisions have come about because of conflicting foreign policies concerning the Middle East. A well known Bilderberger is reported to have accused a well known US Trilateralist of being a Zionist before anything else. The argument that there was no conflict was soundly rejected by the Europeans. However, the elitist power brokers of these organizations are determined to repair the divisions and continue the development of the powerful international network of top people who are convinced that they know what is best for the rest of us. (Intelligence Digest, 17 Rodney Road, Cheltenham, Glos. GL50 1HX, United Kingdom. Subscription rates available on request from the publisher).
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