The over 1000 point plunge of
the stock market on Feb 27th and broader ruptures of
the financial system last week have been yet another wake up call for those who
have been contented so far to “live in the moment” of fast money.
Since
the 2008 financial crisis, which is considered the most serious financial
crisis since the Great Depression of the 1930s, many have not been able to go
back to sleep after such a lucid nightmare. Some have chosen the path of
stocking up on cans of beans, distilling their urine into water and binge
watching survivalists such as Bear Grylls hoping to absorb his skills through
television osmosis.
The 2008 crisis put in the spotlight the
psychopathic level of greed, vice, apathy and short-sightedness from those who
wanted to play into the City of London and Wall Street casino houses. Get rich
quick and don’t care who you screw in the process, after all, at the end of the
day you’re either a winner or a loser.
Since
the general public tends to consist of decent people, there is a widespread
difficulty in comprehending how entire economies of countries have been
hijacked by these piranhas. That we have hit such a level of crime that even
people’s hard earned pensions, education, health-care, housing etc. are all
being gambled away… LEGALLY.
Looking upon investment bankers today, one
is reminded of those sad addicts in the casino who are ruined and lose
everything, except the difference is, they are given the option to sell their
neighbour’s family into slavery to pay off their debt.
It is no secret that much of the “finance”
that goes through the City of London and Wall Street is dirty and yet despite
this recognition, there appears to be an inability to address it and that at
this point we are told that if we tried to address it by breaking up and
regulating the “Too Big to Fail” banks, then the whole economy would come
tumbling down.
That is, the world is so evidently run by
criminal activity that at this point we have become dependent on its dirty
money to keep afloat the world economy.
Faced
with the onrushing collapse of the financial system, the greatest Ivy League
trained minds of the world have run into a dead end: the bailouts into the
banking system that began this past September have prevented a chain reaction
meltdown for a few months, but as the liquidity runs out so too will the ideas
on where the money justifying bank bailouts will come from.
With
these dead ends, we have seen the lightbulb go off in the minds of a large
strata of economists who have been making the case in recent years that
valuable revenue can yet be generated from one more untapped stream: the
decriminalisation and legalisation of vice.
Hell,
the major banks have already been doing this covertly as a matter of practice
for generations… so why not just come out of the closet and make it official?
This is where the money is at. This is where the job market is at. So let us
not “bite the hand that feeds us”!
But
is this truly the case? Is there really no qualitative difference how the money is
generated and how it
is spent as long as there is an adequate money flow?
Well it is never a good sign when
beside the richest you can also find the poorest just a stone’s throw away. And
right beside the largest financial center in the world, the City of London,
there lies the poorest borough in all of London: Tower Hamlets with a 39% poverty rate and an average family income amounting
to less than £
13, 000/year.
A City within a City
“Hell is a city much like London”
–
Percy Bysshe Shelley
Although
Wall Street has contributed greatly to this sad situation, this banking hub of
America is best understood as the spawn of the City of London.
The
City of London is over 800 years old, it is arguably older than England
herself, and for over 400
years it has been the financial center of the world.
During
the medieval period the City of London, otherwise known as the Square Mile or
simply the City, was divided into 25 ancient wards headed each by an
alderman. This
continues today. In addition, there existed the ominously titled
City of London Corporation, or simply the Corporation, which is the municipal
governing body of the City. This
also still continues today.
Though
the Corporation’s origins cannot be specifically dated, since there was never a
“surviving” charter found establishing its “legal” basis, it has kept its
functions to this day based on the Magna Carta. The Magna Carta is a charter of
rights agreed to by King John in 1215, which states that “the City of London shall have/enjoy
its ancient liberties”. In other words, the legal function of the
Corporation has never been questioned, reviewed, re-evaluated EVER but rather
it has been left to legally function as in accordance with their “ancient
liberties”, which is a very grey description of function if you ask me. In
other words, they are free to do as they deem fit.
And
it gets worst. The Corporation is not
actually under the jurisdiction of the British government. That is, the British
government presently does not have the authority to undermine how the
Corporation of the City chooses to govern the largest financial center in the world. The
City has a separate voting system that allows for, well, corporations to vote
in how their separate “government” should run. It also has its own private
police force and system of private courts.
The
Corporation is not just limited to functioning within the City. The City
Remembrancer, which sounds more like a warped version of the ghost of Christmas
past, has the role of acting as a channel of communication between the
Corporation and the Sovereign (the Queen), the Royal Household and Parliament.
The Remembrancer thus acts as a “reminder”, some would even say “enforcer”, of
the will of the Corporation. This position has been held by Paul Double since
2003, it is not clear who bestows this non-elected position.
Mr.
Double has the right to act as an official lobbyist in the House of Commons,
and sits to the right of the Speaker’s chair, with the purpose of scrutinising
and influencing any legislation he deems affects the interests of the
Corporation. He also appears to have the right to review any piece of
legislation as it is being drafted and can even comment on it affecting its
final outcome. He is the only non-elected person allowed into the House of
Commons.
According
to the official City of
London website, the reason why the City has a separate voting system
is because:
“The City is the only area in the country in which the number of
workers significantly outnumbers the residents and therefore, to be truly
representative of its population, offers a vote to City organisations so they
can have their say on the way the City is run.”
However, the workers have absolutely no say. The City’s
organisations they work for have a certain size vote based on the number of
workers they employ, but they do not consult these workers, and many of them
are not even aware that such elections take place.
If you feel like you have just walked through Alice’s Looking
Glass, you’re not alone, but what appears to be an absurd level of madness is
what has been running the largest financial center in the world since the
1600s, under the machinations of the British Empire.
Therefore the question is, if the City of London has kept its
“ancient liberties” and has upheld its global financial power, is the British
Empire truly gone?
Offshore Banking: Adam Smith’s Invisible Hand?
Contrary to popular naïve belief, the
empire on which the sun never sets (some say “because God wouldn’t trust them in the dark”) never went away.
After WWII, colonisation was meant to
be done away with, and many thought, so too with the British Empire. Countries
were reclaiming their sovereignty, governments were being set up by the people,
the system of looting and pillaging had come to an end.
It is a nice story, but could not be
further from the truth.
In
the 1950s, to “adapt” to the changing global financial climate, the City of
London set up what are called “secrecy jurisdictions”. These were to operate
within the last remnants of Britain’s small territories/colonies. Of Britain’s
14 oversea territories, 7 are bona fide tax havens or “secrecy jurisdictions”.
A separate international financial market was also created to facilitate the
flow of this offshore money, the Eurodollar market. Since this market has its
banks outside of the UK and U.S., they are not under the jurisdiction of either
country.
By
1997, nearly 90% of all international loans were made through this market.
What
is often misunderstood is that the City of London’s offshore finances are not
contained in a system of banking secrecy but rather of trusts. The difference
being that a trust ultimately plays with the concept of ownership. The idea is
that you hand over your assets to a trustee and at that point, legally those
assets are no longer yours anymore and you are not responsible for accounting
for them. Your connection to said assets is completely hidden.
In
addition, within Britain’s offshore jurisdictions, there is no qualification
required for who can become a trustee: anyone can set up a trust and anyone can
become a trustee. There is also no registry of trusts in these territories.
Thus, the only ones who know about this arrangement are the trustee and the
settler.
John Christensen, an investigative economist,
estimates that this capital that
legally belongs to nobody could amount to as high as $50
trillion within these British territories. Not only is this not being taxed,
but a significant portion of it has been stolen from sectors of the real
economy.
So how does this affect “formerly”
colonised countries?
There
lies the rub for most developing nations. According to John Christensen, the
combined external debts of Sub-Saharan African countries was $177 billion in
2008. However, the wealth that these countries’ elites moved offshore, between
1970-2008, is estimated at $944 billion, 5X their foreign debt. This is not
only dirty money, this is also STOLEN money from the resources and productivity
of these economies. Thus, as Christensen states, “Far from being a net debtor
to the world, Sub-Saharan Africa is a net creditor” to offshore finance.
Put in this context, the so-called
“backwardness” of Africa is not due to its incapability to produce, but rather
that it has been experiencing uninterrupted looting since these regions were
first colonised.
These African countries then need to borrow
money, which is happily given to them at high interest rates, and accrues a
level of debt that could never be repaid. These countries are thus looted twice over, leaving
no money left to invest in their future, let alone to put food on the table.
Offshore havens are what make this sort of
activity “legal” and rampant.
And it doesn’t stop there. Worldwide, it is
estimated that developing countries lose $1 trillion every year in capital
flight and tax evasion. Most of this wealth goes back into the UK and U.S.
through these offshore havens, and allows their currencies to stay strong
whilst developing nations’ currencies are kept weak.
However, developing nations are not the only ones to have suffered
from this system of looting. The very economies of the UK and U.S. have also
been gutted. In the 1960s and onward, the UK and U.S., to compensate for the
increase in money flow out of their countries decided that it was a good idea
to open their domestic markets to the trillions of dollars passing through its
offshore havens.
However, such banks are not interested in putting their money into
industry and manufacturing, they put their money into real estate speculation,
financial speculation and foreign currency trade. And thus the financialization
of British and American economies resulted, and the real jobs coming from the
real economy decreased or disappeared.
Although many economists try to claim
differently, the desperation has boiled over and movements like the yellow
vests are reflections of the true consequences of these economic policies.
We have reached a point now where every
western first world country is struggling with a much higher unemployment rate
and a lower standard of living than 40 years ago. Along with increased poverty
has followed increased drug use, increased suicide and increased crime.
A Stable Economy based on Freedom or Slavery?
According
to the European Monitoring Centre for Drugs and Drug Addiction (EMCDDA) report in 2017,
the UK has by far the highest rate of drug overdose in all of Europe at 31%
followed by Germany at 15%. That is, the UK consists of 1/3 drug overdoses that
occur in all of Europe.
The
average family income in the UK is presently £28, 400. The poverty rate within
the UK is ~20%.
The
average family income of what was once the epicentre of world
industrialisation, Detroit, has an average family income of $26, 249. The
poverty rate of Detroit is ~34.5%.
What is the solution?
Reverse Margaret Thatcher’s 1986 Big
Bang deregulation of the banking system that destroyed the separation of
commercial banking, investment banking, trusts and insurance for starters. A
similar restoration of Glass-Steagall in the USA should follow suit, not only
to break up the “Too Big to Fail” banking system but to restore the authority
of nation states over private finance once more. IF these emergency measures
were done before the markets collapse (and they will collapse), then the
industrial-infrastructure revival throughout trans-Atlantic nations can still
occur.
Let us end here by hearkening to the
words of Clement Attlee, UK Prime Minister from 1945-1951:
“Over
and over again we have seen that there is another power than that which has its
seat at Westminster. The City of London, a convenient term for a collection of
financial interests, is able to assert itself against the government of the
country. Those who control money can pursue a policy at home and abroad
contrary to that which is being decided by the people.”
