The following is an article by Ellen Brown that I find interesting. One thing I have learned from my work in Iraq is that our governments can not be trusted. There is always something else working in the background. As a friend recently said about his work in inner city problems….. “when you see two bullies standing in front of you, there is often a hidden, more powerful person in the background….out of sight”.
I always get that feeling when I watch the actions of super powers.
Libya: All About Oil, or All About Banking
Wednesday 13 April 2011
by: Ellen Brown, Truthout
Several writers have noted the odd fact that the Libyan rebels took time out from their rebellion in March to
create their own central bank – this before they even had a government.
Robert Wenzel wrote in the Economic Policy Journal:
I have never before heard of a central bank being created in just a matter of weeks out of a popular
uprising. This suggests we have a bit more than a rag tag bunch of rebels running around and that there are some pretty sophisticated influences.
Alex Newman wrote in the New American:
In a statement released last week,
the rebels reported on the results of a meeting held on March 19. Among
other things, the supposed rag-tag revolutionaries announced the
“[d]esignation of the Central Bank of Benghazi as a monetary authority
competent in monetary policies in Libya and appointment of a Governor to
the Central Bank of Libya, with a temporary headquarters in Benghazi.”
Newman quoted CNBC Senior Editor John Carney,
who asked, “Is this the first time a revolutionary group has created a
central bank while it is still in the midst of fighting the entrenched
political power? It certainly seems to indicate how extraordinarily
powerful central bankers have become in our era.”
Another anomaly involves the official
justification for taking up arms against Libya. Supposedly it’s about
human rights violations, but the evidence is contradictory. According to
an article on the Fox News web site on February 28:
As the United Nations works
feverishly to condemn Libyan leader Muammar al-Qaddafi for cracking down
on protesters, the body’s Human Rights Council is poised to adopt a
report chock-full of praise for Libya’s human rights record.
The review commends Libya for improving
educational opportunities, for making human rights a “priority” and for
bettering its “constitutional” framework. Several countries, including
Iran, Venezuela, North Korea, and Saudi Arabia but also Canada, give
Libya positive marks for the legal protections afforded to its citizens -
who are now revolting against the regime and facing bloody reprisal.
Whatever might be said of Qaddafi’s personal
crimes, the Libyan people seem to be thriving. A delegation of medical
professionals from Russia, Ukraine and Belarus wrote in an appeal
to Russian President Medvedev and Prime Minister Putin that after
becoming acquainted with Libyan life, it was their view that in few
nations did people live in such comfort:
[Libyans] are entitled to free
treatment and their hospitals provide the best in the world of medical
equipment. Education in Libya is free, capable young people have the
opportunity to study abroad at government expense. When marrying, young
couples receive 60,000 Libyan dinars (about 50,000 US dollars) of
financial assistance. Non-interest state loans and as practice shows,
undated. Due to government subsidies the price of cars is much lower
than in Europe and they are affordable for every family. Gasoline and
bread cost a penny, no taxes for those who are engaged in agriculture.
The Libyan people are quiet and peaceful, are not inclined to drink and
are very religious.
They maintained that the international
community had been misinformed about the struggle against the regime.
“Tell us,” they said, “who would not like such a regime?”
Even if that is just propaganda, there is no
denying at least one very popular achievement of the Libyan government:
it brought water to the desert
by building the largest and most expensive irrigation project in
history, the $33 billion GMMR (Great Man-Made River) project. Even more
than oil, water is crucial to life in Libya. The GMMR provides 70
percent of the population with water for drinking and irrigation,
pumping it from Libya’s vast underground Nubian Sandstone Aquifer System
in the south to populated coastal areas 4,000 kilometers to the north.
The Libyan government has done at least some things right.
Another explanation for the assault on Libya
is that it is “all about oil,” but that theory, too, is problematic. As
noted in the National Journal, the country produces only about 2 percent
of the world’s oil. Saudi Arabia alone has enough spare capacity to
make up for any lost production if Libyan oil were to disappear from the
market. And if it’s all about oil, why the rush to set up a new central
bank?
Another provocative bit of data circulating
on the net is a 2007 Democracy Now! interview of US Gen. Wesley Clark
(Ret.). In it he says that about ten days after September 11, 2001, he
was told by a general that the decision had been made to go to war with
Iraq. Clark was surprised and asked why. “I don’t know!” was the
response. “I guess they don’t know what else to do!” Later, the same
general said they planned to take out seven countries in five years:
Iraq, Syria, Lebanon, Libya, Somalia, Sudan and Iran.
What do these seven countries have in common?
In the context of banking, one that sticks out is that none of them is
listed among the 56 member banks
of the Bank for International Settlements (BIS). That evidently puts
them outside the long regulatory arm of the central bankers’ central
bank in Switzerland.
The most renegade of the lot could be Libya and Iraq, the two that have
actually been attacked. Kenneth Schortgen Jr., writing
on Examiner.com, noted, “[s]ix months before the US moved into Iraq to
take down Saddam Hussein, the oil nation had made the move to accept
Euros instead of dollars for oil and this became a threat to the global
dominance of the dollar as the reserve currency and its dominion as the
petrodollar.”
According to a Russian article
titled “Bombing of Lybia – Punishment for Ghaddafi for His Attempt to
Refuse US Dollar,” Qaddaffi made a similarly bold move: he initiated a
movement to refuse the dollar and the euro and called on Arab and
African nations to use a new currency instead, the gold dinar. Qaddafi
suggested establishing a united African continent, with its 200 million
people using this single currency. During the past year, the idea was
approved by many Arab countries and most African countries. The only
opponents were the Republic of South Africa and the head of the League
of Arab States. The initiative was viewed negatively by the USA and the
European Union, with French President Nicolas Sarkozy calling Libya a
threat to the financial security of mankind; but Qaddafi was not swayed
and continued his push for the creation of a united Africa.
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And that brings us back to the puzzle of the Libyan central bank. In an
article posted on the Market Oracle, Eric Encina observed:
One seldom mentioned fact by
western politicians and media pundits: the Central Bank of Libya is 100%
State Owned…. Currently, the Libyan government creates its own money,
the Libyan Dinar, through the facilities of its own central bank. Few
can argue that Libya is a sovereign nation with its own great resources,
able to sustain its own economic destiny. One major problem for
globalist banking cartels is that in order to do business with Libya,
they must go through the Libyan Central Bank and its national currency, a
place where they have absolutely zero dominion or power-broking
ability. Hence, taking down the Central Bank of Libya (CBL) may not
appear in the speeches of Obama, Cameron and Sarkozy but this is
certainly at the top of the globalist agenda for absorbing Libya into
its hive of compliant nations.
Libya not only has oil. According to the International Monetary Fund
(IMF), its central bank has nearly 144 tons of gold, in its vaults.
With that sort of asset base, who needs the BIS, the IMF and their
rules?
All of which prompts a closer look at the BIS rules and their effect on
local economies. An article on the BIS web site
states that central banks in the Central Bank Governance Network are
supposed to have as their single or primary objective “to preserve price
stability.” They are to be kept independent from government to make
sure that political considerations don’t interfere with this mandate.
“Price stability” means maintaining a stable money supply, even if that
means burdening the people with heavy foreign debts. Central banks are
discouraged from increasing the money supply by printing money and using
it for the benefit of the state, either directly or as loans.
In a 2002 article in Asia Times titled “The BIS vs National Banks,”
Henry Liu maintained:
BIS regulations serve only the
single purpose of strengthening the international private banking
system, even at the peril of national economies. The BIS does to
national banking systems what the IMF has done to national monetary
regimes. National economies under financial globalization no longer
serve national interests.
… FDI [foreign direct investment]
denominated in foreign currencies, mostly dollars, has condemned many
national economies into unbalanced development toward export, merely to
make dollar-denominated interest payments to FDI, with little net
benefit to the domestic economies.
He added, “Applying the State Theory of Money,
any government can fund with its own currency all its domestic
developmental needs to maintain full employment without inflation.” The
“state theory of money” refers to money created by governments rather
than private banks.
The presumption of the rule against borrowing
from the government’s own central bank is that this will be
inflationary, while borrowing existing money from foreign banks or the
IMF will not. But all banks actually create the money they lend
on their books, whether publicly owned or privately owned. Most new
money today comes from bank loans. Borrowing it from the government’s
own central bank has the advantage that the loan is effectively interest
free. Eliminating interest has been shown to reduce the cost of public
projects by an average of 50 percent.
And that appears to be how the Libyan system works. According to
Wikipedia, the functions of the Central Bank of Libya
include “issuing and regulating banknotes and coins in Libya” and
“managing and issuing all state loans.” Libya’s wholly state-owned bank
can and does issue the national currency and lend it for state purposes.
That would explain where Libya gets the money
to provide free education and medical care and to issue each young
couple $50,000 in interest-free state loans. It would also explain where
the country found the $33 billion to build the GMMR project. Libyans
are worried that NATO-led airstrikes are coming perilously close to this
pipeline, threatening another humanitarian disaster.
So, is this new war all about oil or all about
banking? Maybe both – and water as well. With energy, water and ample
credit to develop the infrastructure to access them, a nation can be
free of the grip of foreign creditors. And that may be the real threat
of Libya: it could show the world what is possible. Most countries don’t
have oil, but new technologies
are being developed that could make non-oil-producing nations energy
independent, particularly if infrastructure costs are halved by
borrowing from the nation’s own publicly-owned bank. Energy independence
would free governments from the web of the international bankers and of
the need to shift production from domestic to foreign markets to
service the loans.
If the Qaddafi government goes down, it will
be interesting to watch whether the new central bank joins the BIS,
whether the nationalized oil industry gets sold off to investors and
whether education and health care continue to be free.
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