Preface

When David Rock­e­feller and Zbig­niew Brzezinski founded the Tri­lat­eral Com­mis­sion in 1973, the intent was to create a “New Inter­na­tional Eco­nomic Order” (NIEO). To this end, they brought together 300 elite cor­po­rate, polit­ical and aca­d­emic leaders from North America, Japan and Europe.

Few people believed us when we wrote about their nefar­ious plans back then. Now, we look back and clearly see that they did what they said they were going to do… glob­alism is upon us like an 8.6 mag­ni­tude earthquake.

The ques­tion is, “How did they do it?” Keep in mind, they had no public man­date from any country in the world. They didn’t have the raw polit­ical muscle, espe­cially in demo­c­ratic coun­tries where voting is allowed. They didn’t have global dic­ta­to­rial powers.

Indeed, how did they do it?

The answer is the Bank for Inter­na­tional Set­tle­ments (BIS), self-described as the “cen­tral bank for cen­tral bankers”, that con­trols the vast global banking system with the pre­ci­sion of a Swiss watch.

This report offers a con­cise sum­ma­tion of BIS his­tory, struc­ture and cur­rent activities.

Intro­duc­tion

The famous cur­rency expert Dr. Franz Pick once stated, “The des­tiny of the cur­rency is, and always will be, the des­tiny of a nation.”

With the advent of ram­pant glob­al­iza­tion, this con­cept can cer­tainly be given a global con­text as well: “The des­tiny of cur­ren­cies are, and always will be, the des­tiny of the world.”

Even though the BIS is the oldest inter­na­tional banking oper­a­tion in the world, it is a low pro­file orga­ni­za­tion, shun­ning all pub­licity and noto­riety. As a result, there is very little crit­ical analysis written about this impor­tant finan­cial orga­ni­za­tion. Fur­ther, much of what has been written about it is tainted by its own self-effacing literature.

The BIS can be com­pared to a stealth bomber. It flies high and fast, is unde­tected, has a small crew and car­ries a huge pay­load. By con­trast, how­ever, the bomber answers to a chain of com­mand and must be refu­eled by out­side sources. The BIS, as we shall see, is not account­able to any public authority and oper­ates with com­plete autonomy and self-sufficiency.

Leading up to Founding

As we will see, the BIS was founded in 1930 during a very trou­bled time in his­tory. Some knowl­edge of that his­tory is crit­ical to under­standing why the BIS was cre­ated, and for whose benefit.

There are three fig­ures that play promi­nently in the founding of the BIS: Charles G. Dawes, Owen D. Young and Hjalmar Schacht of Germany.

Charles G. Dawes was director of the U.S. Bureau of the Budget in 1921, and served on the Allied Repa­ra­tions Com­mis­sion starting in 1923. His latter work on “sta­bi­lizing Germany’s economy” earned him the Nobel Peace Prize in 1925. After being elected Vice Pres­i­dent under Pres­i­dent Calvin Coolidge from 1925 – 1929, and appointed Ambas­sador to Eng­land in 1931, he resumed his per­sonal banking career in 1932 as chairman of the board of the City National Bank and Trust in Chicago, where he remained until his death in 1951.

Owen D Young was an Amer­ican indus­tri­alist. He founded RCA (Radio Cor­po­ra­tion of America) in1919 and was its chairman until 1933. He also served as the chairman of Gen­eral Elec­tric from 1922 until 1939. In 1932, Young sought the demo­c­ratic pres­i­den­tial nom­i­na­tion, but lost to Franklin Delano Roosevelt.

More on Hjalmar Schacht later.

In the after­math of World War I and the impending col­lapse of the German economy and polit­ical struc­ture, a plan was needed to rescue and restore Ger­many, which would also insu­late other economies in Europe from being affected adversely.

The Ver­sailles Treaty of 1919 (which offi­cially ended WWI) had imposed a very heavy repa­ra­tions burden on Ger­many, which required a repay­ment schedule of 132 bil­lion gold marks per year. Most his­to­rians agree that the eco­nomic upheaval caused in Ger­many by the Ver­sailles Treaty even­tu­ally led to Adolph Hitler’s rise to power.

In 1924 the Allies appointed a com­mittee of inter­na­tional bankers, led by Charles G. Dawes (and accom­pa­nied by J.P. Morgan agent, Owen Young), to develop a plan to get repa­ra­tions pay­ments back on track. His­to­rian Car­roll Quigley noted that the Dawes Plan was “largely a J.P. Morgan pro­duc­tion”¹ The plan called for $800 mil­lion in for­eign loans to be arranged for Ger­many in order to rebuild its economy.

In 1924, Dawes was chairman of the Allied Com­mittee of Experts, hence, the “Dawes Plan.” He was replaced as chairman by Owen Young in 1929, with direct sup­port by J.P. Morgan. The “Young Plan” of 1928 put more teeth into the Dawes Plan, which many viewed as a strategy to sub­vert vir­tu­ally all German assets to back a huge mort­gage held by the United States bankers.

Nei­ther Dawes nor Young rep­re­sented any­thing more than banking inter­ests. After all, WWI was fought by gov­ern­ments using bor­rowed money made pos­sible by the inter­na­tional banking com­mu­nity. The banks had a vested interest in having those loans repaid!

In 1924, the pres­i­dent of Reichs­bank (Germany’s cen­tral bank at that time) was Hjalmar Schacht. He had already had a promi­nent role in cre­ating the Dawes Plan, along with German indus­tri­alist Fritz Thyssen and other promi­nent German bankers and industrialists.

The Young Plan was so odious to the Ger­mans that many credit it as a pre­con­di­tion to Hitler’s rise to power. Fritz Thyssen, a leading Nazi Indus­tri­alist, stated

“I turned to the National socialist party only after I became con­vinced that the fight against the Young Plan was unavoid­able if com­plete col­lapse of Ger­many was to be pre­vented.” ²

Some his­to­rians too quickly credit Owen Young as the idea-man for the Bank for Inter­na­tional Set­tle­ments. It was actu­ally Hjalmar Schacht who first pro­posed the idea³, which was then car­ried for­ward by the same group of inter­na­tional bankers who brought us the Dawes and Young Plans.

It is not nec­es­sary to jump to con­clu­sions as to the intent of these elite bankers, so we will instead defer to the insight of renowned George­town his­to­rian, Car­roll Quigley:

“The Power of finan­cial cap­i­talism had another far reaching plan, nothing less than to create a world system of finan­cial con­trol in pri­vate hands able to dom­i­nate the polit­ical system of each country and the economy of the world as a whole. This system was to be con­trolled in a feu­dal­istic fashion by the cen­tral banks of the world acting in con­cert, by secret agree­ments arrived at in fre­quent meet­ings and con­fer­ences. The apex of the system was to be the Bank for Inter­na­tional Set­tle­ments in Basle, Switzer­land, a pri­vate bank owned and con­trolled by the world’s cen­tral banks, which were them­selves pri­vate cor­po­ra­tions. Each cen­tral bank, in the hands of men like Mon­tagu Norman of the Bank of Eng­land, Ben­jamin Strong of the New York Fed­eral Reserve Bank, Charles Rist of the Bank of France, and Hjalmar Schacht of the Reichs­bank, sought to dom­i­nate its gov­ern­ment by its ability to con­trol trea­sury loans, to manip­u­late for­eign exchanges, to influ­ence the level of eco­nomic activity in the country, and to influ­ence co-operative politi­cians by sub­se­quent rewards in the busi­ness world.”⁴ [Bold emphasis added]

So here we have a brief sketch of what led up to the founding of the BIS. Now we can examine the nuts and bolts of how the BIS was actu­ally put together.

The Hague Agree­ment of 1930

The for­ma­tion of the BIS was agreed upon by its con­stituent cen­tral banks in the so-called Hague Agree­ment on Jan­uary 20, 1930, and was in oper­a­tion shortly there­after. According to the Agreement,

The duly autho­rised rep­re­sen­ta­tives of the Gov­ern­ments of Ger­many, of Bel­gium, of France, of the United Kingdom of Great Britain and Northern Ire­land, of Italy and of Japan of the one part; And the duly autho­rised rep­re­sen­ta­tives of the Gov­ern­ment of the Swiss Con­fed­er­a­tion of the other part Assem­bled at the Hague Con­fer­ence in the month of Jan­uary, 1930, have agreed on the following:

Article 1. Switzer­land under­takes to grant to the Bank for Inter­na­tional Set­tle­ments, without delay, the fol­lowing Con­stituent Charter having force of law: not to abro­gate this Charter, not to amend or add to it, and not to sanc­tion amend­ments to the Statutes of the Bank referred to in Para­graph 4 of the Charter oth­er­wise than in agree­ment with the other sig­na­tory Gov­ern­ments.⁵

As we will see, German repa­ra­tion pay­ments (or lack thereof) had little to do with the founding of the BIS, although this is the weak expla­na­tion given since its founding. Of course, Ger­many would make a single pay­ment to the BIS, which in turn would deposit the funds into the respec­tive cen­tral bank accounts of the nations to whom pay­ments were due. (It would be the sub­ject of another paper to show the shal­low­ness of this oper­a­tion: Money and gold were shuf­fled around, but the net amount that Ger­many actu­ally paid was very small.)

The orig­inal founding doc­u­ments of the BIS have little to say about Ger­many, how­ever, and we can look directly to the BIS itself to see its orig­inal purpose:

“The objects of the Bank are: to pro­mote the co-operation of cen­tral banks and to pro­vide addi­tional facil­i­ties for inter­na­tional oper­a­tions; and to act as trustees or agent in regard to inter­na­tional finan­cial set­tle­ments entrusted to it under agree­ments with the par­ties con­cerned.” ⁶

Vir­tu­ally every in-print ref­er­ence to the BIS, including their own doc­u­ments, con­sis­tently refer to it as “the cen­tral banker’s cen­tral bank.”

So, the BIS was estab­lished by an inter­na­tional charter and was head­quar­tered in Basle, Switzerland.

BIS Own­er­ship

According to James C. Baker, pro-BIS author of The Bank for Inter­na­tional Set­tle­ments: Evo­lu­tion and Eval­u­a­tion, “The BIS was formed with funding by the cen­tral banks of six nations, Bel­gium, France, Ger­many, Italy, Japan, and the United Kingdom. In addi­tion, three pri­vate inter­na­tional banks from the United States also assisted in financing the estab­lish­ment of the BIS.”⁷

Each nation’s cen­tral bank sub­scribed to 16,000 shares. The U.S. cen­tral bank, the Fed­eral Reserve, did not join the BIS, but the three U.S. banks that par­tic­i­pated got 16,000 shares each. Thus, U.S. rep­re­sen­ta­tion at the BIS was three times that of any other nation. Who were these pri­vate banks? Not sur­pris­ingly, they were J.P. Morgan & Com­pany, First National Bank of New York and First National Bank of Chicago.

On Jan­uary 8, 2001, an Extra­or­di­nary Gen­eral Meeting of the BIS approved a pro­posal that restricted own­er­ship of BIS shares to cen­tral banks. Some 13.7% of all shares were in pri­vate hands at that time, and the repur­chase was accom­plished with a cash outlay of $724,956,050. The price of $10,000 per share was over twice the book value of $4,850.

It is not cer­tain what the repur­chase accom­plished. The BIS claimed that it was to cor­rect a con­flict of interest between pri­vate share­holders and BIS goals, but it offered no specifics. It was not a voting issue, how­ever, because pri­vate owners were not allowed to vote their shares.⁸

Sov­er­eignty and Secrecy

It is not sur­prising that the BIS, its offices, employees, direc­tors and mem­bers share an incred­ible immu­nity from vir­tu­ally all reg­u­la­tion, scrutiny and accountability.

In 1931, cen­tral bankers and their con­stituents were fed up with gov­ern­ment med­dling in world finan­cial affairs. Politi­cians were viewed mostly with con­tempt, unless it was one of their own who was the politi­cian. Thus, the BIS offered them a once-and-for-all oppor­tu­nity to set up the “apex” the way they really wanted it — pri­vate. They demanded these con­di­tions and got what they demanded.

A quick sum­mary of their immu­nity, explained fur­ther below, includes

• diplo­matic immu­nity for per­sons and what they carry with them (i.e., diplo­matic pouches)
• no tax­a­tion on any trans­ac­tions, including salaries paid to employees
• embassy-type immu­nity for all build­ings and/or offices oper­ated by the BIS
• no over­sight or knowl­edge of oper­a­tions by any gov­ern­ment authority
• freedom from immi­gra­tion restrictions
• freedom to encrypt any and all com­mu­ni­ca­tions of any sort
• freedom from any legal juris­dic­tion⁹

Fur­ther, mem­bers of the BIS board of direc­tors (for instance, Alan Greenspan) are indi­vid­u­ally granted spe­cial benefits:

• “immu­nity from arrest or impris­on­ment and immu­nity from seizure of their per­sonal bag­gage, save in fla­grant cases of crim­inal offence;”
• “invi­o­la­bility of all papers and documents;”
• “immu­nity from juris­dic­tion, even after their mis­sion has been accom­plished, for acts car­ried out in the dis­charge of their duties, including words spoken and writings;”
• “exemp­tion for them­selves, their spouses and chil­dren from any immi­gra­tion restric­tions, from any for­mal­i­ties con­cerning the reg­is­tra­tion of aliens and from any oblig­a­tions relating to national ser­vice in Switzerland ;”
• “the right to use codes in offi­cial com­mu­ni­ca­tions or to receive or send doc­u­ments or cor­re­spon­dence by means of couriers or diplo­matic bags.”¹⁰

Lastly, all remaining offi­cials and employees of the BIS have the fol­lowing immunities:

• “immu­nity from juris­dic­tion for acts accom­plished in the dis­charge of their duties, including words spoken and writ­ings, even after such per­sons have ceased to be Offi­cials of the Bank;”[bold emphasis added]
• “exemp­tion from all Fed­eral, can­tonal and com­munal taxes on salaries, fees and allowances paid to them by the Bank…”
• exempt from Swiss national oblig­a­tions, freedom for spouses and family mem­bers from immi­gra­tion restric­tions, transfer assets and prop­er­ties – including inter­na­tion­ally – with the same degree of ben­efit as Offi­cials of other inter­na­tional orga­ni­za­tions.¹¹

Of course, a cor­po­rate charter can say any­thing it wants to say and still be sub­ject to out­side author­i­ties. Nev­er­the­less, these were the immu­ni­ties prac­ticed and enjoyed from 1930 onward. On Feb­ruary 10, 1987, a more formal acknowl­edge­ment called the “Head­quar­ters Agree­ment” was exe­cuted between the BIS and the Swiss Fed­eral Council and basi­cally clar­i­fied and reit­er­ated what we already knew:

Article 2
Invi­o­la­bility 

• The build­ings or parts of build­ings and sur­rounding land which, who­ever may be the owner thereof, are used for the pur­poses of the Bank shall be invi­o­lable. No agent of the Swiss public author­i­ties may enter therein without the express con­sent of the Bank. Only the Pres­i­dent, the Gen­eral Man­ager of the Bank, or their duly autho­rised rep­re­sen­ta­tive shall be com­pe­tent to waive such inviolability.
• The archives of the Bank and, in gen­eral, all doc­u­ments and any data media belonging to the Bank or in its pos­ses­sion, shall be invi­o­lable at all times and in all places.
• The Bank shall exer­cise super­vi­sion of and police power over its premises.

• The Bank shall enjoy immu­nity from crim­inal and admin­is­tra­tive juris­dic­tion, save to the extent that such immu­nity is for­mally waived in indi­vidual cases by the Pres­i­dent, the Gen­eral Man­ager of the Bank, or their duly autho­rised representative.
• The assets of the Bank may be sub­ject to mea­sures of com­pul­sory exe­cu­tion for enforcing mon­e­tary claims. On the other hand, all deposits entrusted to the Bank, all claims against the Bank and the shares issued by the Bank shall, without the prior agree­ment of the Bank, be immune from seizure or other mea­sures of com­pul­sory exe­cu­tion and seques­tra­tion, par­tic­u­larly of attach­ment within the meaning of Swiss law.¹² [bold emphasis added]

As you can see, the BIS, its direc­tors and employees (past and present) can do vir­tu­ally any­thing and every­thing they want, with com­plete secrecy, immu­nity and with no one looking over their shoul­ders. It was truly a banker’s dream come true, and it paved the inter­na­tional freeway for the ram­pant finan­cial glob­alism that we see man­i­fest today.

Day-to-Day Oper­a­tions

Acting as a cen­tral bank, the BIS has sweeping powers to do any­thing for its own account or for the account of its member cen­tral banks. It is like a two-way power-of-attorney – any party can act as agent for any other party.

Article 21 of the orig­inal BIS statutes define day-to-day operations:

1. buying and selling of gold coin or bul­lion for its own account or for the account of cen­tral banks;

1. holding gold for its own account under reserve in cen­tral banks;

1. accepting the super­vi­sion of gold for the account of cen­tral banks;

1. making advances to or bor­rowing from cen­tral banks against gold, bills of exchange, and other short-term oblig­a­tions of prime liq­uidity or other approved securities;

1. dis­counting, redis­counting, pur­chasing, or selling with or without its endorse­ment bills of exchange, checks, and other short-term oblig­a­tions of prime liquidity;

1. buying and selling for­eign exchange for its own account or for the account of cen­tral banks;

1. buying and selling nego­tiable secu­ri­ties other than shares for its own account or for the account of cen­tral banks;

1. dis­counting for cen­tral banks bills taken from their port­folio and redis­counting with cen­tral banks bills taken from its own portfolio;

1. opening and main­taining cur­rent or deposit accounts with cen­tral banks;

1. accepting deposits from cen­tral banks on cur­rent or deposit account;

1. accepting deposits in con­nec­tion with trustee agree­ments that may be made between the BIS and gov­ern­ments in con­nec­tion with inter­na­tional settlements.;

1. accepting such other deposits that, as in the opinion of the Board of the BIS, come within the scope of the BIS’ func­tions.¹³

The BIS also may

1. act as agent or cor­re­spon­dent for any cen­tral bank

1. arrange with any cen­tral bank for the latter to act as its agent or correspondent;

1. enter into agree­ments to act as trustee or agent in con­nec­tion with inter­na­tional set­tle­ments, pro­vided that such agree­ments will not encroach on the oblig­a­tions of the BIS toward any third par­ties.¹⁴

Why is “agency” an impor­tant issue? Because any member of the net­work can obscure trans­ac­tions from onlookers. For instance, if Brown Brothers, Har­riman wanted to transfer money to a com­pany in Nazi Ger­many during WWII (which was not “polit­i­cally cor­rect” at that time), they would first transfer the funds to the BIS thus putting the trans­ac­tion under the cloak of secrecy and immu­nity that is enjoyed by the BIS but not by Brown Brothers, Har­riman. (Such laun­dering of Wall Street money was painstak­ingly noted in Wall Street and the Rise of Hitler, by Antony C. Sutton.)

There are a few things that the BIS cannot do. For instance, it does not accept deposits from, or pro­vide finan­cial ser­vices to, pri­vate indi­vid­uals or cor­po­rate enti­ties. It is also not per­mitted to make advances to gov­ern­ments or open cur­rent accounts in their name.¹⁵ These restric­tions are easily under­stood when one con­siders that each cen­tral bank has an exclu­sive fran­chise to loan money to their respec­tive gov­ern­ment. For instance, the U.S. Fed­eral Reserve does not loan money to the gov­ern­ment of Canada. In like manner, cen­tral banks do not loan money directly to the pri­vate or cor­po­rate clients of their member banks.

How Deci­sions are Made

The board of direc­tors con­sist of the heads of cer­tain member cen­tral banks. Cur­rently, these are:

• Nout H E M Wellink, Ams­terdam (Chairman of the Board of Directors)

• Hans Tiet­meyer, Frank­furt am Main (Vice-Chairman)

• Axel Weber, Frank­furt am Main

• Vin­cenzo Desario, Rome

• Anto­nio Fazio, Rome

• David Dodge, Ottawa

• Toshi­hiko Fukui, Tokyo

• Tim­o­thy F Gei­thner, New York

• Alan Greenspan, Wash­ington

• Lord George, London

• Hervé Hannoun, Paris

• Chris­tian Noyer, Paris

• Lars Heiken­sten, Stockholm

• Mervyn  King, London

• Guy Quaden, Brus­sels

• Jean-Pierre Roth, Zürich

• Alfons Vicomte Ver­plaetse, Brus­sels¹⁶

Of these, five mem­bers ( Canada, Japan, the Nether­lands, Sweden and Switzer­land) are cur­rently elected by the share­holders. The majority of direc­tors are “ex officio,” meaning they are per­ma­nent and are auto­mat­i­cally a part of any sub-committee.

The com­bined board meets at least six times per year, in secret, and is briefed by BIS man­age­ment on finan­cial oper­a­tions of the bank. Global mon­e­tary policy is dis­cussed and set at these meetings.

It was reported in 1983 that there is an inner club of the half dozen cen­tral bankers who are more or less in the same mon­e­tary boat: Ger­many, U.S., Switzer­land, Italy, Japan and Eng­land.¹⁷ The exis­tence of an inner club is nei­ther sur­prising nor sub­stan­tive: the whole BIS oper­a­tion is 100% secret anyway. It is not likely that mem­bers of the inner club have sig­nif­i­cantly dif­ferent beliefs or agendas apart from the BIS as a whole.

How the BIS works with the IMF and the World Bank

The inter­op­er­a­tion between the three enti­ties is under­stand­ably con­fusing to most people, so a little clar­i­fi­ca­tion will help.

The Inter­na­tional Mon­e­tary Fund (IMF) inter­acts with gov­ern­ments whereas the BIS inter­acts only with other cen­tral banks. The IMF loans money to national gov­ern­ments, and often these coun­tries are in some kind of fiscal or mon­e­tary crisis. Fur­ther­more, the IMF raises money by receiving “quota” con­tri­bu­tions from its 184 member coun­tries. Even though the member coun­tries may borrow money to make their quota con­tri­bu­tions, it is, in reality, all tax-payer money.¹⁸

The World Bank also lends money and has 184 member coun­tries. Within the World Bank are two sep­a­rate enti­ties, the Inter­na­tional Bank for Recon­struc­tion and Devel­op­ment (IBRD) and the Inter­na­tional Devel­op­ment Asso­ci­a­tion (IDA). The IBRD focuses on middle income and credit-worthy poor coun­tries, while the IDA focuses on the poorest of nations. In funding itself, the World Bank bor­rows money by direct lending from banks and by floating bond issues, and then loans this money through IBRD and IDA to trou­bled coun­tries.¹⁹

The BIS, as cen­tral bank to the other cen­tral banks, facil­i­tates the move­ment of money. They are well-known for issuing “bridge loans” to cen­tral banks in coun­tries where IMF or World Bank money is pledged but has not yet been deliv­ered. These bridge loans are then repaid by the respec­tive gov­ern­ments when they receive the funds that had been promised by the IMF or World Bank.²⁰

The IMF is the BIS’ “ace in the hole” when mon­e­tary crisis hits. The 1998 Brazil cur­rency crisis was caused by that country’s inability to pay inor­di­nate accu­mu­lated interest on loans made over a pro­tracted period of time. These loans were extended by banks like Cit­i­group, J.P. Morgan Chase and Fleet­Boston, and they stood to lose a huge amount of money.

The IMF, along with the World Bank and the U.S., bailed out Brazil with a $41.5 bil­lion package that saved Brazil, its cur­rency and, not inci­den­tally, cer­tain pri­vate banks.

Con­gressman Bernard Sanders (I-VT), ranking member of the Inter­na­tional Mon­e­tary Policy and Trade Sub­com­mittee, blew the whistle on this money laundry oper­a­tion. Sander’s entire con­gres­sional press release is worth reading:

IMF Bailout for Brazil is Wind­fall to Banks, Dis­aster for US Tax­payers Says Sanders

BURLINGTON, VERMONT – August 15 – Con­gressman Bernard Sanders (I-VT), the Ranking Member of the Inter­na­tional Mon­e­tary Policy and Trade Sub­com­mittee, today called for an imme­diate Con­gres­sional inves­ti­ga­tion of the recent $30 bil­lion Inter­na­tional Mon­e­tary Fund (IMF) bailout of Brazil.

Sanders, who is strongly opposed to the bailout and con­siders it cor­po­rate wel­fare, wants Con­gress to find out why U.S. tax­payers are being asked to pro­vide bil­lions of dol­lars to Brazil and how much of this money will be fun­neled to U.S. banks such as Cit­i­group, Fleet­Boston and J.P. Morgan Chase. These banks have about $25.6 bil­lion in out­standing loans to Brazilian bor­rowers. U.S. tax­payers cur­rently fund the IMF through a $37 bil­lion line of credit.

Sanders said, “At a time when we have a $6 tril­lion national debt, a growing fed­eral deficit, and an increasing number of unmet social needs for our vet­erans, seniors, and chil­dren, it is unac­cept­able that bil­lions of U.S. tax­payer dol­lars are being sent to the IMF to bailout Brazil.”

“This money is not going to sig­nif­i­cantly help the poor people of that country. The real win­ners in this sit­u­a­tion are the large, prof­itable U.S. banks such as Cit­i­group that have made bil­lions of dol­lars in risky invest­ments in Brazil and now want to make sure their invest­ments are repaid. This bailout rep­re­sents an egre­gious form of cor­po­rate wel­fare that must be put to an end. Inter­est­ingly, these banks have made sub­stan­tial cam­paign con­tri­bu­tions to both polit­ical par­ties,” the Con­gressman added.

Sanders noted that the neo-liberal poli­cies of the IMF devel­oped in the 1980′s pushing coun­tries towards unfet­tered free trade, pri­va­ti­za­tion, and slashing social safety nets has been a dis­aster for Latin America and has con­tributed to increased global poverty throughout the world. At the same time that Latin America coun­tries such as Brazil and Argentina fol­lowed these neo-liberal dic­tates imposed by the IMF, from 1980 – 2000, per capita income in Latin America grew at only one-tenth the rate of the pre­vious two decades.

Sanders con­tinued, “The poli­cies of the IMF over the past 20 years advo­cating unfet­tered free trade, pri­va­tizing industry, dereg­u­la­tion and slashing gov­ern­ment invest­ments in health, edu­ca­tion, and pen­sions has been a com­plete failure for low income and middle class fam­i­lies in the devel­oping world and in the United States . Clearly, these poli­cies have only helped cor­po­ra­tions in their con­stant search for the cheapest labor and weakest envi­ron­mental reg­u­la­tions. Con­gress must work on a new global policy that pro­tects workers, increases living stan­dards and improves the environment.”

One can sur­mise that a finan­cial circle exists where the World Bank helps nations get into debt, then when these coun­tries can’t pay their mas­sive loans, the IMF bails them out with tax­payer money — and in the middle stands the BIS, col­lecting fees as the money travels back and forth like the ocean tide, while assuring everyone that all is well.

BIS dumps gold-backed Swiss Francs for SDR’s

On March 10, 2003, the BIS aban­doned the Swiss gold franc as the bank’s unit of account since 1930, and replaced it with the SDR.

SDR stands for Spe­cial Drawing Rights and is a unit of cur­rency orig­i­nally cre­ated by the IMF. According to Baker,

“The SDR is an inter­na­tional reserve asset, cre­ated by the IMF in 1969 to sup­ple­ment the existing offi­cial reserves of member coun­tries. SDR’s are allo­cated to member coun­tries in pro­por­tion to their IMF quotas. The SDR also serves as the unit of account of the IMF and some other inter­na­tional orga­ni­za­tions. Its value is based on a basket of key inter­na­tional cur­ren­cies.”²¹

This “basket” cur­rently con­sists of the euro, Japanese yen, pound ster­ling and the U.S. dollar.

The BIS aban­don­ment of the 1930 gold Swiss franc removed all restraint from the cre­ation of paper money in the world. In other words, gold backs no national cur­rency, leaving the cen­tral banks a wide-open field to create money as they alone see fit. Remember, that almost all the cen­tral banks in the world are privately-held enti­ties, with an exclu­sive fran­chise to arrange loans for their respec­tive host countries.

Regional and Global Cur­ren­cies: SDR’s, Euros and Ameros

There is no doubt that the BIS is moving the world toward regional cur­ren­cies and ulti­mately, a global cur­rency. The global cur­rency could well be an evo­lu­tion of the SDR, and may explain why the BIS recently adopted the SDR as its pri­mary reserve currency.

The Brandt Equa­tion, 21st Cen­tury Blue­print for the New Global Economy notes, for instance, that

Since the SDR is the world’s only means of meeting inter­na­tional pay­ments that has been autho­rized through inter­na­tional con­tract, “The SDR there­fore rep­re­sents a clear first step towards a stable and per­ma­nent inter­na­tional cur­rency”²² [bold emphasis added]

As to regional cur­ren­cies, the BIS has already been hugely suc­cessful in launching the euro in Europe. Armed with new tech­nical and social know-how, the BIS’ next log­ical step is to focus on America and Asia.

For instance, according to BIS Papers No. 17, Regional cur­rency areas and the use of for­eign cur­ren­cies,

“Canada, Mexico and the United States are mem­bers of the trade group NAFTA. Given the high pro­por­tion of Canada and Mexico’s trade with the United States, a NAFTA dollar or “Amero” has been pro­posed by some Cana­dian aca­d­e­mics such as Grubel (1999). See also Beine and Coulombe (2002) and Robson and Lai­dler (2002).”²³

Assuming that NAFTA per­ma­nently iden­ti­fies Canada, the U.S. and Mexico as one trading block, then North America will look like the Euro­pean Union and the Amero will func­tion like the Euro. All of the work put into the SDR would be per­fectly pre­served by simply sub­sti­tuting the Amero for the U.S. dollar when they choose to bring the Amero to ascen­dancy over the dollar.

For those Amer­ican readers who do not grasp the sig­nif­i­cance of the adop­tion of the euro by Euro­pean Union coun­tries, con­sider how one Amer­ican glob­alist describes it.

C. Fred Berg­sten is a promi­nent and core Tri­lat­eral Com­mis­sion member and head of the Insti­tute for Inter­na­tional Eco­nomics. On Jan­uary 3, 1999, Berg­sten wrote in the Wash­ington Post

“The adop­tion of a common cur­rency is by far the boldest chapter of Euro­pean inte­gra­tion. Money tra­di­tion­ally has been an inte­gral ele­ment of national sov­er­eignty …and the deci­sion by Ger­many and France to give up their mark and franc …rep­re­sents the most dra­matic vol­un­tary sur­render of sov­er­eignty in recorded his­tory. The Euro­pean Cen­tral Bank that will manage the euro is a truly supra­na­tional insti­tu­tion”.²⁴ [bold emphasis added]

Berg­sten will have to rephrase this when the U.S. gives up the dollar for the amero — that will become the most dra­matic vol­un­tary sur­render of sov­er­eignty in recorded history!

Con­clu­sions

Our credo is “Follow the money, follow the power.” This report has endeav­ored to follow the money. We find that:

• The BIS is cen­tral bank to all major cen­tral banks in the world
• It is pri­vately owned by cen­tral banks them­selves, most of whom are also private 
• It was founded under ques­tion­able cir­cum­stances by ques­tion­able people 
• It is account­able to no one, espe­cially gov­ern­ment bodies
• It oper­ates in com­plete secrecy and is inviolable
• Move­ment of money is obscured and hidden when routed through the BIS
• The BIS is tar­geting regional cur­rency blocks and ulti­mately, a global currency
• It has been hugely suc­cessful at building the New Inter­na­tional Eco­nomic Order, along with its atten­dant ini­tia­tives on global governance.

As to “follow the power,” another paper will more fully explore the influ­ence of power that the BIS exerts over other banks, nations and gov­ern­ments. For your own con­sid­er­a­tion in the mean­time, Proverbs 22:7 pro­vides a useful com­pass: “The rich rule over the poor, and the bor­rower is ser­vant to the lender”.

NOTE: Carl Teichrib, World Research Library Senior Fellow, con­tributed to this report.

Foot­notes

1. Quigley, Tragedy & Hope, (MacMillan, 1966), p.308
2. Edgar B Nixon, ec., Franklin D. Roo­sevelt and For­eign Affairs, Volume III (Cam­bridge: Balknap Press, 1969) p. 456
3. Sutton, Wall Street and the Rise of Hitler, (GSC & Asso­ciates, 2002) p. 26
4. Quigley, op cit, p. 324
5. BIS web site, Extracts from the Hague Con­ven­tion, http://www.bis.org/about/conv-ex.htm
6. BIS, Statutes of the Bank for Inter­na­tional Set­tle­ments Article 3 [as if Jan­uary 1930, text as amended on March 10,2003], Basic Texts (Basle, August 2003), p. 7 – 8
7. Baker, The Bank for Inter­na­tional Set­tle­ments: Evo­lu­tion and Eval­u­a­tion, (Quorum, 2002), p. 20
8. ibid., p. 16
9. BIS, Pro­tocol Regarding the Immu­ni­ties of the Bank for Inter­na­tional Set­tle­ments, Basic Texts, (Basle, August 2003), p. 33
10. ibid, Article 12, p.43.
11. ibid, p. 44
12. BIS, Extracts from the Head­quar­ters Agree­ment, http://www.bis.org/about/hq-ex.htm
13. Baker, op cit, p. 26 – 27
14. ibid, p. 27
15. BIS, The BIS in pro­file, Bank for Inter­na­tional Set­tle­ments flyer, June, 2005
16. BIS, Board of Direc­tors, www.bis.org/about/board.htm
17. Epstein, Ruling the World of Money, Harper’s Mag­a­zine, 1983
18. IMF web site, http://www.imf.org
19. World Bank web site. http://www.WorldBank.org
20. Baker, op cit, p. 141 – 142
21. IMF web site, http://www.imf.org/external/np/exr/facts/sdr.htm
22. The Brandt Equa­tion: 21 st Cen­tury Blue­print for the New Global Economy. The Brandt Pro­posals – A Report Card: Money and Finances. See http://www.brandt21forum.info/1ckMoney.htm.
23. BIS, Regional cur­rency areas and the use of for­eign cur­ren­cies, BIS Papers No. 17, Sep­tember, 2003
24. Wash­ington Post, The Euro Could Be Good for Trans-Atlantic Rela­tions, C. Fred Berg­sten, Jan­uary 3, 1999