The Real Vampires: An Insider’s View of Banks

tragedy and hope

Tragedy and Hope: A History of the World in Our Time

Carroll Quigley* (1966 MacMillan)

Tragedy and Hope is a free download from http://sandiego.indymedia.org/media/2006/10/119975.pdf

(This is a third of a series of posts about stripping private banks of their power to create and control our money supply.)

Book Review

Tragedy and Hope is an exacting account of how the Bank of England, the Federal Reserve, the European central banks, and the investment banks that dominate them (e.g. Goldman Sachs and JP Morgan) came to control all western governments.

According to Quigley, banks have controlled western society – by manipulating the money supply – since the creation of the Bank of England and the fractional reserve lending system in 1694. Moreover, owing to the secrecy under which they operate, Quigley asserts that most elected officials are totally unaware of the immense control central and investment banks exert over the so-called democratic process.

He describes in exhaustive detail how all historical inflationary and deflationary crises, panics, wars, recessions and depressions were orchestrated behind the scenes by the banking establishment, for the purpose of increasing their private wealth. In his epic portrayal of three centuries of western civilization, he also describes how the banking aristocracy financed the rise of Communism in Russia, China and Eastern Europe, as well as bringing Hitler, Mussolini, Stalin and Roosevelt to power and guiding their governments from behind the scenes.

How Banks Create Money “Out of Nothing”

The single act, according to Quigley, that guaranteed Britain’s two century preeminence over the rest of the world was the development (in 1694), by British investment banks, of the fractional reserve lending system. This system allowed English investment banks to be the first in the world to lend money (to industry and the British government) that they created out of thin air. He goes on to list the banking dynasties that have held near absolute control of the global money supply since 1694, starting with banking cartel formed by Frankfurt banker Meyer Rothschild. At the time of his death, Rothschild’s five sons each controlled a major investment bank in Vienna, London, Naples, Paris and Frankfurt. Quigley lists the investment bank formed by the J.P. Morgan family as second to the Rothschild banks in power and influence, followed by the Baring Brothers, Morgan Grenfell, the Lazard Brothers, Erlanger, Warbur, Shroder, Seligman, the Speyers, Mirabaud, Mallet and Fould.

The Council on Foreign Relations

Quigley also writes about the network of secret round tables of international corporate and banking elites started by Cecil Rhodes and expanded by his followers with his sizable estate. At their founding, they had the stated purpose of spreading British the virtues of “ruling class” tradition throughout the English speaking world and solidifying the political power and influence of the British Empire. The US Council on Foreign Relations, one of the secret round tables started by Rhodes’ followers, was started in 1919, with the explicit goal of influencing the foreign and domestic policies of a former colony over which Britain no longer had direct control.

How English Banks Controlled the US Government

According to Quigley, the US was consistently a debtor nation prior to World War I. Following the 1776 revolution, US government and businesses continued to borrow funding for industrial and colonial expansion from English and European investment banks. The American banker, JP Morgan, collaborated with European investment banks to dictate US foreign and domestic policy. They did so by threatening to destroy the US economy by 1) refusing to renew treasury bonds (i.e. money the government borrowed from banks to fund public spending 2) causing a panic by throwing large numbers of shares on the stock market or 3) destroying the value of railroads and other companies the banks owned by loading them up with worthless assets.

As Quigley relates, they engaged in all three tactics at various times throughout the 19th century, resulting in a series of booms, panics, recessions and depressions that wreaked havoc on American economic development.

How Bankers Engineered, World War I, Bolshevism, Nazism and the Great Depression

The most disturbing section of Tragedy and Hope describes how international bankers engineered (he describes their secret meetings) World War I and what Quigley calls the Banker-Engendered Deflationary Crisis of 1927-40 (aka the Great Depression). Following the 1870 unification under Bismarck, Germany experienced a rapid burst of industrialization, generating sufficient profit that they ceased to rely on investment banks to finance either business or government. They also threatened global bankers by competing with England and other European countries for export markets.

While engineering the first world war to put Germany in her place, the world banking cabal simultaneously hatched a scheme to destabilize Russia (which was making claims on Balkan members of the former Ottoman Empire) by secretly funding the Bolsheviks and other Russian revolutionaries.

Financing Hitler and the Nazis

When the the first world war ended in 1918, public debt in Western Europe and the US had increased by 1000%. In 1929, the austerity measures global banks forced on the US, England, France and other European countries led to widespread bankruptcies and unemployment and the virtual collapse of foreign trade.

Except in Germany. The global banking elite used the wealth generated from debt repayment to finance rapid German re-industrialization and militarization and the Nazi movement started by Hitler. The main German corporations funding Hitler were IG Farben, Siemens, Bayer, Daimler Benz, Porsche/Volksvagen and Krupp. In addition to Henry Ford and William Randolph Hearst, the important US banks and corporations who financed Hitler’s rise to power included Kodak, Coca-Cola, DuPont, Standard Oil, IBM, Random House and Chase Bank.

* Late mentor to former president Bill Clinton, Princeton, Harvard and Georgetown professor Carroll Quigley also served as an adviser to the Pentagon and Foreign Service.

The Robber Barons Behind Neoclassical Economics

rockefeller

John D Rockefeller

Classical Economics as a Stratagem Against Henry George (free link)

By Mason Gaffney (2007)

Book Review-Part II

(In Part I, I discuss how Henry George’s work inspired the Populist and Progressive movements of the early 1900s and how the corporate elite struck back by inventing a new type of economics for the rich, called neoclassical economics.)

Who Paid for Neoclassical Economics to Take Over American Universities?

Gaffney’s book traces the phenomenal public support Georgism enjoyed before the tenets of neoclassical economics took hold in American universities. In addition to inspiring the Populist and Progressive movements, an LVT to fund irrigation projects in California’s Central Valley made California the top producing farm state. In 1916 the first federal income tax law was introduced by Georgist members of Congress (Henry George Jr and Warren Bailey) and included virtually no tax on wages. In 1934 Georgist Upton Sinclair was almost elected governor of California.

Gaffney also identifies the robber barons whose fortunes financed the economics departments of the major universities who went on to substitute neooclassical economics for classical economic theory. At the top of this list were

  • Ezra Cornell (owner of both Western Union and Associated Press) – founder of Cornell University
  • John D Rockefeller – helped found the University of Chicago and installed his cronies in its economics department.
  • J. P Morgan – investment banker and early funder of Columbia University
  • B&O Railroad – John Hopkins University
  • Southern Pacific Railroad – Stanford University

The final section of Gaffney’s book lays out the tragic economic, political, and social consequences of allowing the Red Scare and neoclassical economics to stifle America’s movement for a single Land Value Tax:

Economic Consequences

  1. The corporate elite has privatized, or is privatizing, most of the public domain (including fisheries, the public airwaves, water, offshore oil and gas, and the right to clean air) without compensation to the public.
  2. The rate of saving and capital formation continues to fall rapidly. This is the main reason there is no recovery. Although profits soar, corporations have no incentive to invest in expansion and jobs. Instead they invest their profits in real estate, derivatives, and commodities speculation.
  3. American capital is decayed and obsolete. The US has lost much of its steel and auto industries. Power plants and oil refineries are ancient and polluting. Most public capital (infrastructure) is old and crumbling.
  4. The number of American farms has fallen from 6 million in 1920 to 1 million in 2007.
  5. The USA, once so self-sufficient, has grown dangerously dependent on importing raw materials and foreign manufacturers.
  6. The US financial system is a shambles, supported only by loading trillions of dollars of bad debts onto the taxpayers.
  7. Real wage rates have continued to fall since 1975,
  8. Unemployment has risen to chronically high levels.
  9. Inequality in wealth and income continues to increase rapidly.

Political Consequences

  1. The corporate elite has nullified all the Progressive Era electoral reforms by pouring money into politics and “deep lobbying,” at all levels of government, including our institutions of higher learning and our public schools.
  2. The corporate elite continue to pour ever more of our tax money into prisons.

Social Consequences

  1. Homelessness has risen to new heights, in spite of decades of subsidies to home-building and, favorable tax treatment of owner-occupied homes
  2. Hunger is rampant.
  3. Street begging, once rare, is everywhere
  4. Americans have experienced a sharp loss of community, honor, duty, loyalty and patriotism.
  5. In the shadow world between crime and business there is now the vast, gray underground economy that includes tax evasion, tax avoidance, and drug-dealing.
  6. The US which once led the world in nearly every endeavor, has fallen far behind in infant survival, in longevity, in literacy, in numeracy, in mental health.
  7. American education no longer leads the world. Privatized education in the form of commercial TV has largely superseded public education.

photo credit: cliff1066™ via photopin cc