....There is serious ground to
believe that US Goldman Sachs ex CEO Henry Paulson, as Treasury
Secretary, is not stupid. There is also serious ground to believe that
he is actually moving according to a well-thought-out long-term
strategy. Events as they are now unfolding in the EU tend to confirm
that. As one senior European banker put it to me in private discussion,
‘There is an all-out war going on between the United States and the EU
to define the future face of European banking.’
In this banker’s view, the
ongoing attempt of Italian Prime Minister Silvio Berlusconi and
France’s Nicholas Sarkozy to get an EU common ‘fund’, with perhaps
upwards of $300 billion to rescue troubled banks, would de facto play
directly into Paulson and the US establishment’s long-term strategy, by
in effect weakening the banks and repaying US-originated Asset Backed
Securities held by EU banks.
Using panic to centralize power
As I document in my forthcoming book, Power of Money: The Rise and Decline of the American Century,
in every major US financial panic since at least the Panic of 1835, the
titans of Wall Street—most especially until 1929, the House of JP
Morgan—have deliberately triggered bank panics behind the scenes in
order to consolidate their grip on US banking. The private banks used
the panics to control Washington policy including the exact definition
of the private ownership of the new Federal Reserve in 1913, and to
consolidate their control over industry such as US Steel, Caterpillar,
Westinghouse and the like. They are, in short, old hands at such
financial warfare to increase their power.
Now they must do something
similar on a global scale to be able to continue to dominate global
finance, the heart of the power of the American Century.
....
Paulson seems to have learned
from his White House mentor. As co-chairman of Goldman Sachs according
to a New York Times account, in 1998 he forced out his co-chairman, Jon
Corzine ‘in what amounted to a coup’ according to the Times.
Paulson, and his friends at
Citigroup and JP Morgan Chase, had a strategy it is becoming clear, as
did the Godfather of Asset Backed Securitization and deregulated
banking, former Fed Chairman Alan Greenspan, as I have detailed in my
earlier series here, Financial Tsunami, Parts I-V.
Knowing that at a certain
juncture the pyramid of trillions of dollars of dubious sub-prime and
other high risk home mortgage-based securities would come falling down,
they apparently determined to spread the so-called ‘toxic waste’ ABS
securities as globally as possible, in order to seduce the big global
banks of the world, most especially of the EU, into their honey trap.
They had help. In recent
testimony under oath by Mr Lynn Turner, Chief Accountant of the
Securities & Exchange Commission (SEC) testified that the SEC
Office of Risk Management which had oversight responsibility for the
Credit Default Swap market, an exotic market worth nominally some $62
trillions, was cut in Administration ‘budget cuts’ from a staff of one
hundred down to one person. Yes, that was not a typo. That’s one as in
‘Uno.’
Vermont Democratic Congressman
Peter Welsh queried Turner, ‘... was there a systematic depopulating of
the regulatory force so that it was impossible actually for regulation
to occur if you have one person in that office? ...and then I
understand that 146 people were cut from the enforcement division of
the SEC, is that what you also testified to?’ Mr. Turner, in
Congressional testimony replied, ‘Yes…I think there has been a
systematic gutting, or whatever you want to call it, of the agency and
it's capability through cutting back of staff.’
....It now would appear that the
Paulson strategy was to use a crisis—a crisis that was pre-programmed
and predictable as far back as 2003 when Josh Bolten became head of
OMB—when it exploded, to panic the more conservative European Union
governments into rushing to the rescue of US toxic waste assets.
....
If the allegation of
pre-planned panic, a la the Panic of 1907 is accurate, and it is a big
if, then the plan worked…up to a point. That point came over the
weekend of October 3, coincidentally the national unification holiday
of Germany
....
The battle lines drawn
What has emerged are the
outlines of two opposite approaches to the unfolding crisis. The
Paulson plan is now clearly part of a project to create three colossal
global financial giants—Citigroup, JP MorganChase and, of course,
Paulson’s own Goldman Sachs, now conveniently enough a bank. Having
successfully used fear and panic to wrestle a $700 billion bailout from
the US taxpayers, now the big three will try to use their unprecedented
muscle to ravage European banks in the years ahead. So long as the
world’s largest financial credit rating agencies—Moody’s and Standard
& Poors—are untouched by the scandals and Congressional hearings,
the reorganized US financial power of Goldman Sachs, Citigroup and JP
Morgan Chase could potentially regroup and advance their global agenda
over the coming several years, walking over the ashes of a bankrupt
American economy made bankrupt by their follies.
By agreeing on a strategy of
nationalizing what EU finance ministers deem are ‘EU banks too
systemically strategic to fail,’ while guaranteeing bank deposits, the
largest EU governments, Germany and the UK, in contrast to the US, have
opted for what will in the longer run allow European banking giants to
withstand the anticipated financial attacks from the likes of Goldman
or Citigroup.
....
By initiating state partial
nationalizations across the EU, and rejecting the Berlusconi/Sarkozy
bailout scheme, the governments of the EU, interestingly enough this
time led by the German, are laying a more sound foundation to emerge
from the crisis.
Stay tuned, it’s far from over.
This is a fight for the survival of the American Century which has been
bvuilt since 1939 on the twin pillars of American financial dominance
and American military dominance—Full Spectrum, Dominance.
....
F. William Engdahl is author of the book, A Century of War: Anglo-American Oil Politics and the New World Order (Pluto Press Ltd) and Seeds of Destruction: The Hidden Agenda of Genetic Manipulation (www.globalresearch.ca) He may be contacted through his website, www.engdahl.oilgeopolitics.net.
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