How the Petro-Dollar Disintegrated the World Economy

 Our series on the world of finance continues. In this article, we will describe policies- both geopolitical and financial- that detail the increasing power of the two families, and a corresponding decrease in national sovereignty of the majority of nations in the world. If you can understand this fascinating story, then you will be able to discern current events much more clearly. We go through several points and reveal how the Rockefeller Empire has managed to defeat and neutralize its rivals one by one. In another published article, “The Origins of Modern Finance Part 3, we described how New York eliminated London’s choke-hold on international finance by its control of gold, and the gold-dollar convertibility.  Here goes:-

War on Gold

 Now that the Rockefeller Empire had gotten rid of the Rothschild boot on their financial neck, it was time to “dollarize” the world. And the role of gold was first on the target list.  Beginning in early 1975, the US Treasury office, along with the CIA, began to work out a future scenario to destroy the South African white-ruled government.  The trigger was the deals that the Shah of Iran had concluded with France and Germany. For the full story on this, go to the article Iran: A Case Study Part 2 (of a 3 Part Series) The deal was basic; Iran would supply oil on a long-term basis to France and Germany, and accept their currency, instead of dollars. But in order for these currencies to hold their value, they would need greater gold-backing.  This gold would come from South Africa. Part of the three-way deal with Iran was that both Germany and France would help South Africa with advanced technology.

 Since this deal would bring gold back into international economic agreements, South Africa was targeted. This took place in two forms. The first was that South Africa got suckered into invading Angola, on the advice of Henry Kissinger. The second was that South Africa got internally destabilized in 1976, when the Soweto riots broke out; the South African intelligence agencies pinpointed the US AID offices in Soweto as being the brain-child behind this. And we know the result- it took another 2 decades before the white government gave up. In short, New York was successful in eliminating South African gold from its aims of dollarizing the globe. Nothing, but nothing would be allowed to be an obstacle in their new “Petro-dollar “world. From here on, gold would have no longer have a role in the world of the Rockefeller-run international finance.

 And the Shah of Iran was toppled, even though the CIA (a Rockefeller entity) had put him into power back in 1953. The Shah wanted to follow an independent economic policy, by-passing the oil companies, and the new financial order. Although both the families had succeeded in toppling the Shah of Iran, the new man they put into power in Iran, Khomeini, double-crossed them, as soon as he had assumed power. That is the key reason as to why Iran and the US have been at logger-heads since.

Impact of the Oil-Shock

The shock effects of a sudden 400% increase in the price of Europe and Japan’s basic energy feed stock were devastating to industry, transport and agriculture. But the economic impact on the developing countries was staggering when confronted with the 400% increase in the cost of energy imports, to say nothing of the costs of chemicals and fertilizers for agriculture derived from oil. As a whole, over 1974-75, developing countries, without significant domestic oil resources, incurred a total trade deficit of $35 billion, a huge sum in that day and a deficit precisely 4 times as large in 1973, or just in proportion to the oil price increase.

 For the vast majority of the Third World, the oil shock spelled an end to development, inability to finance industrial and agricultural development, and a reversal of hopes for a better life that had emerged during the 1960s.

 As though some perverse fate had struck, the oil shock coincided, during 1974/5, with the onset of the worst global drought seen in decades, leading to severe harvest shortfalls, especially in the Third World, just as the economic impact of the oil shock was greatest. With a desperate need to import record volumes of grain and food from the US and Europe, most Third World countries found themselves faced with famine, and unable to finance increased food imports-at very high prices, to say nothing of financing the oil shock.

 The bulk of OPEC dollar revenues were deposited with the banks of the two families in New York and London.  In 1974, a full 70% of OPEC oil surplus revenues were invested into the banks of the 2 families (some $57 billion).  New arrangements were made with the Saudi Arabian Monetary Agency (SAMA), the central bank of Saudi Arabia to harness that countries surplus cash, to the benefit of the Rockefeller Empire. Furthermore, in 1975, OPEC agreed to continue pricing oil in dollars, and in no other currency. This was the birth of the “Petro-Dollar”. These “petro-dollars” were recycled as loans to the Third World during the 1970s, and it set the stage for the great debt crisis of the 1980s.

 This arrangement proved enormously valuable for the US dollar, and for the Rockefeller Empire. The world was forced to buy immense amounts of dollars to pay for oil imports. One consequence of this was to propel the Rockefeller oil companies and banks as giants in their respective industries. The Anglo-American oil and banking combinations so overwhelmed the scale of ordinary enterprise, that their power and influence seemed invincible. It is Kissinger’s belief, according to his aides, that “by controlling food, one can control the people; control finance and one controls governments, and by controlling oil, one can control the destinies of nations”.

Targeting the Nuclear Alternative

 The Anglo-American grip on the world oil market was threatened if various nuclear programs went ahead.  World nuclear technology threatened to open unlimited energy possibilities, and this policy was deliberately sabotaged by the two networks.

 It was no accident that a growing population in the West began talking for the first time about “limits to growth”, or threats to the environment. Very few people realized the extent to which their “opinions” were being carefully manipulated from the top by a network established by the 2 families behind the oil-price increase.

 Beginning in the 1970s, an awesome propaganda offensive was launched from select Anglo-American think tanks and journals, which intended to shape a new “limits to growth” agenda, which would ensure the success of their oil shock strategy. It was to become one of the most successful frauds in history. Currently, we are now in 2019, and we are witnessing the hysteria about “global warming” and “climate-change”. Now, you know where it all started from!

 The Rockefeller Empire created and funded many of these environment and ecological groups, in order to block moves towards developing alternative energy strategies and industrial growth plans. In short, it was a move to de-industrialise the Third World. Some of these organisations were the Sierra Club, the Aspen Institute, and the UN Conference on the Environment. These were all Rockefeller entities, and Rockefeller men headed them all.

Population Control becomes US “National Security”:

Whenever one hears the words – “national security”- it is a code word, meaning the welfare and protection of the Rockefeller Empire. In December 1974, Henry Kissinger issued National Security Study Memorandum 200 (NSSM 200), and titled “Implications of Worldwide Population Growth for US Security and Overseas Interests”. NSSM 200 argued that population growth in select developing countries that also contain key strategic resources necessary to the US economy posed potential US “national security threats”.

 The study warned that under pressure from an expanding economy with needed raw materials, that country will tend to demand higher prices and more favorable terms of trade for their exports to the US. Kissinger explicitly stated in the memo , “ how much more efficient expenditures for population control might be, than funds for raising production through direct investments  in additional irrigation, power projects and industries”. As a higher population would consume more of these resources, thus reducing exports of these commodities, thus putting the exporting country at an advantage in demanding higher prices for their exports. Population control measures were put in place to avoid America paying higher prices for that country’s raw materials exports.

 With this secret policy declaration, the US government had committed itself to an agenda that would bring untold famine, misery and unnecessary death in the Third World.

 Population control has been a pet Rockefeller subject since 1905. Over the decades, this form took shape in policies such as eugenics (which culminated in the experiments in Nazi Germany’s slave labor camps), birth control pills, abortion clinics, and the use of condoms. But all this did not slow down population growth. In 1969, in the bio-warfare labs of the Pentagon, many biological weapons were produced. By 1970, the AIDS virus was perfected, and tried out in New York and San Francisco. By 1975, this weapon was ready to be unleashed in the Third World.

 In this context, NSSM 200 identified a target list of 13 countries, singled out as “strategic targets”. These countries were Brazil, Mexico, Colombia, Egypt, Turkey, Pakistan, Bangladesh, Nigeria, Thailand, Indonesia, the Philippines and Ethiopia. The reader is invited to reflect upon the tragic history of these unfortunate 13 since Kissinger drew up the list in late 1974.

The Colombo Declaration

 In August 1976, in Colombo, Sri Lanka, heads of states of 85 nations, members of the Group of Non-Aligned  Movement (NAM)Nations met to discuss an intervention into the deteriorating economic conditions of the Third World. Many points were raised but the most alarming aspect (to the two families) was a call for a debt moratorium.  The explosive issue of foreign debt had been placed on the negotiating table for the first time, not by a single government, but by 85 governments, acting collectively.

 Guyana’s Foreign Minister Frederick Wills, was designated as the spokesperson for the group, and he said, in a speech at the UN that September; – – – “developing countries are not able to manage their basic requirements without resorting to some form of debt restructuring. We must make every attempt to oppose attempts to divide us through “case-by-case” techniques. We cannot allow ourselves to mortgage future unborn generations to the burdensome debt repayments and destructive debt service- – the time for a Debt Moratorium has arrived”.

 The impact of the Colombo and UN Declarations were immediately felt. On Wall Street, share prices for US banks began falling. The Fed was forced to intervene to support the falling dollar. The implications of a concerted action by developing states on the dollar debt sent shock waves through the financial system.

 When the foreign ministers of the European Community met in December 1976 to take up a possible cooperation with the NAM, Kissinger sent a telegram to the delegates warning them against it. His veiled threat succeeded in breaking up any alliance from the European nations with both OPEC and NAM.

 As for the key strategists of the bold Colombo initiative, within months each of them had been forced out of office, as Kissinger would term it, “case-by-case”.

 In February 1977, Indian Prime Minister was voted out of office. In Sri Lanka, the prime minister lost the elections in May 1977. In February 1978, Frederick Wills of Guyana was forced to resign his post.

 In Pakistan, Prime Minister Zulfikar Bhutto began a small-scale nuclear energy program with France. In March 1976, Kissinger applied tremendous pressure on France and Pakistan. In Lahore, Kissinger delivered a direct threat “that he would make a horrible example of Bhutto”, if Bhutto did not abandon the nuclear processing project with France.

 A year later, Bhutto was overthrown in a military coup led by General Zia ul-Haq. Before his death by hanging, Bhutto accused Kissinger of being behind his overthrow because of Bhutto’s insistence on developing Pakistan’s independent nuclear program. Bhutto declared, before his execution: “Dr. Henry Kissinger has a brilliant mind. He told me that I should not insult the intelligence of the United States by saying that Pakistan needed the Reprocessing Plant for her energy needs. I told him that I will not insult the intelligence of the United States by discussing the energy needs of Pakistan, but in the same token, he should not insult the sovereignty and self-respect of Pakistan, by discussing the plant at all – I got the death sentence”.

 General Zia reversed Bhutto’s independent foreign policy and quickly embraced Washington. Abundant US military assistance followed. In late 1989, the General himself was killed by the CIA in a plane crash.

 Then followed the Iran debacle. The Rockefeller machine sorted out Iran very quickly, as told in the articles titled “The Iran File”. Sticking to Iran; we find that in Germany, the principal players involved in this economic deal, were assassinated. In July 1977, Dr. Jurgen Ponto, the head of Germany’s Dresdner Bank was assassinated. A few weeks later the head of the German Employers Federation, Hanns-Martin Schleyer was killed.

 In South Africa, the country was destabilized by its intervention into the Angolan war in 1975, on the personal request of Kissinger. In 1976, the CIA instigated the Soweto riots. Dr. Robert Smit, the designated successor of South Africa’s Finance Minister Nico Diedrichs, was murdered. He was the architect of the SA end of the deal with Iran and Germany.

 The heavy hand of Kissinger was present in each case. According to a British diplomat: “But this was done in close coordination with the British – – the British, you know, were very clever. They were willing to let the Americans do the dirty work and take the blame, while they worked very effectively on a more discreet level. It was the people of Chatham House (the Royal Institute of International Affairs, or RIIA- the premier Rothschild-controlled policy-making body of the British Empire), and the British Intelligence circles, who went into action against the Colombo initiative”. The familiar story of “British gain and American blame”.

 The Third World threat to the Anglo-American order and their regime of global taxation through petrodollars had apparently been beaten back. The leading banks of the two families in London and New York opened the floodgates to lend even greater sums to select countries of the Third World who agreed to the draconian IMF terms, to refinance their oil-related deficits.

The  Volcker Shock

 At a closed-door meeting of the newly-formed Trilateral Commission in Tokyo in April 1975, a hundred of the world’s most influential policy-makers met. The Trilateral Commission was formed by David Rockefeller in 1972, which brought together the 100 most powerful people in the world together. Members came from North America, Western Europe, and Japan – hence the ‘Trilateral” name.

 What concerned David was the dangerous risk to his Empire of continuing the offensive US foreign policy stance against the rest of the world associated with Kissinger’s hard-line “divide and rule” tactics that had been adopted to isolate one country after another, whether European, Third World, or OPEC.

 By 1975, his thinly veiled “thug” approaches to international diplomacy risked creating an enormous backlash. A “new” image was needed to sell the world on the need for continued American hegemony. Therefore, at that Tokyo meeting, David Rockefeller introduced a man to his influential international friends as ‘the next President of the United States’. Few Americans, not to mention foreigners, had ever heard of the small-town Georgian peanut farmer who preferred to be called Jimmy Carter.

 Following his initiation at the 1975 Tokyo meeting, Carter received an extraordinary public relations media buildup, and 18 months later, in November 1976, Carter did become President of the US. The public profile of Carter’s Presidency was “human rights “for the Third World; “negotiation-not confrontation”. Carter’s “human rights” would soon become a bludgeon to justify unprecedented intervention into the internal affairs of targeted Third World nations. The strategy failed miserably.

 The plan to topple the Shah of Iran, and replace him with Khomeini was given the go-ahead in March 1975, at the offices of David Rockefeller, in New York. The turmoil in Iran peaked in October 1978, By December the Shah was out. In January 1979, Khomeini arrived in Iran. Within 3 months, Khomeini began double-crossing his backers-the 2 families.  The fall of the Shah and the coming to power of the fanatical Khomeini adherents unleashed chaos in Iran. Iran’s oil exports (some 5 million bpd) to the world were suddenly cut off. Curiously, Saudi Arabian production in the critical period from January-March 1979, were also cut by some 2 million bpd. Prices on the spot market soared in early 1979 as a result.  Oil prices went from $14 to $40 a barrel. The “Second Oil Shock” of the 1970s was underway.

 The size of the oil shock, combined with the growing international alarm over the incompetent Carter administration, led to a further weakening of the dollar. Since early 1978, the dollar had dropped some 15% against major currencies. The price of gold was rising rapidly, and by September 1978, was then trading at the record high of almost $400/ounce.

 Already in September 1978, the dollar fell in a near panic collapse when it became known that Saudi Arabia’s SAMA had begun liquidating billions of dollars in US Treasury bonds. It appeared that Carter’s Presidency was proving too much for even these staunch allies. The Arabs were losing about 15% on their dollar and sterling investments, year by year, in the 1970s – due to inflation. They were getting fed-up.

 In August 1979, David Rockefeller’s Chase Manhattan Bank was in very serious trouble. This was in regards to deposits held in the bank for the Iranian State Oil Company, NIOC. At the beginning of the year, Chase held about $6 billion in NIOC deposits, against a loan to Iran of $500 million, on its books.  When Khomeini came to power in February 1979, he refused any additions to Iran’s deposits in the Chase, and adding insult to injury, started reducing the amount of funds on deposit at the Chase. August was a crucial month, as NIOC deposits just about equaled Chase’s loans to Iran.

 To forestall a run on the bank and on the US dollar, David Rockefeller instructed Carter to appoint Paul Volcker as the new head of the FED. Volcker was a senior executive of the Chase Manhattan Bank, President of the New York branch of the Federal Reserve – the most important of the 12 branches of the American central bank. Rockefeller’s policy strategists had resolved to impose a monetary shock on top of the oil shock to tilt the balance of world development decisively to their relative advantage. On assuming office, as head of America’s central bank, Volcker increased interest rates some 300%, from 7% to a shocking 20%. This was done overnight.

Controlled Disintegration

During 1975 the CFR (Council on Foreign Relations-the premier Rockefeller think tank, which shapes policy for the family) drafted a series of policy blueprints for the 1980s, much as they had done at the crucial turning point in the 1957 recession. And this new policy, in turn, used John D Rockefeller’s 1972 book, “The Second American Revolution”, as its inspiration. The CFR stated, in its account, that “- – a degree of controlled disintegration in the world economy is a legitimate objective for the 1980s”. What was disintegrating, however, was the entire fabric of traditional industrial and agricultural development in the Third World. The first World was not left out either.

 The decade of the 1980s would widen the gap between the very wealthy (the 1%) and the masses. And the elite would serve the 1%. This fact was not being made available to the masses, because “they would not understand”. The elite must shape the illusion in what was termed the “manufacture of consent”. The American version of this model would be shaped by an aristocracy of money, rather than the British version which relied on blood aristocracy of birth.

 But increasingly, as a consequence of the economic policy decisions of the Rockefeller Empire, the United States became transformed. America, once the ideal for freedom for much of the world, was transformed, step-by-step, into the opposite, and at a quickening pace during the 70s and 80s, while she retained a rhetorical facade of “freedom and liberty”.

Long-term government-funded infrastructure- such as railroads, highways, water, and sewage and power construction was devastated by this policy in the early 1980s. The world steel industry was forced into its worst depression since the 1930s. The aim was to shift economic policy throughout most of the industrialized world away from the direction of long-term industrial and nuclear development.

 The relative power of the two families was thus set to become dominant again, in which Wall Street would call the shots, rather than industrial development. Financial speculation was more important and profitable than building a factory. What followed in the decade of the 1980s would have appeared inconceivable to a world which had not already been stunned and disorientated by the shocks of the 1970s.

 As the cost of their oil imports rose some 300% after the Iran oil shock of 1979, developing countries this time around found that the dollar itself, in terms of their local currency, was rising like a rocket at the same time, due to high  US interest rates. Not only could most Third World countries barely manage the borrowings to finance the oil deficits built up from the 1974 oil shock ; by 1980, an entirely new element faced them – floating interest rates on the foreign Eurodollar borrowings.

 The Eurodollar came into existence when American companies kept their foreign earnings in Europe, rather than repatriating it back to the US.  London had evolved as the geographical center for this Eurodollar “offshore” market.  No attempt was made to regulate or control the flow of foreign currencies into the London Eurodollar market. It was part of the Rothschild strategy of reconstructing the City of London as the center of world finance.

 Foreign debts incurred by the developing countries expanded from $130 billion in 1973 to some $612 billion by 1982. Walter Wriston – head of Rockefellers Citibank justified the bank’s lending to Brazil and Mexico by arguing “- – governments don’t go broke!” The Anglo-American banks extracted a little-known concession, pioneered by a Rockefeller bank, Manufacturers Hanover. All Eurodollar loans to the Third World were fixed at a specific premium over whatever the given London Inter-Bank Offered Rate (LIBOR) was. This LIBOR rate was a “floating rate”, which would rise or fall, as determined by short-term interest rate levels in New York and London. Before 1979, this seemed a small condition to borrow needed funds to finance oil deficits. But from late 1979, as interest rates soared to 20%, the LIBOR rate also went up, and the interest rate burdens of the Third World countries compounded overnight. 

 With this one factor alone, Third World debtor countries would have collapsed into default as the altered debt service conditions imposed on them by the banks added an unpayable new amount to their previously onerous debt burden. As interest rate burdens on their foreign debt obligations soared after 1980, the market for Third World debtor country commodity exports to the industrialized countries, which were critical to repay these debt burdens, collapsed, as the industrialized economies were plunged into the deepest economic downturn since the world depression of the 1930s.

 Third World debtor countries began to be squeezed between deteriorating terms of trade for their commodity exports, falling export earnings, and a soaring debt service ratio. This, in short, was what was called the “Third World debt crisis”. But the crisis was made in London and New York, and not in the capitals of Third World countries. Events came to a predictable head during the summer of 1982.

 When it became obvious that the Latin American debtor countries would soon explode under the new debt repayment burdens, the 2 families, in London and New York, began to prepare an “example” to deter debtor countries from considering non-payment of the debts to the banks of the 2 families.

Gunboat Diplomacy

Argentina was the third largest debtor nation at the time, with $38 billion in foreign debts, and the country that appeared closest to default. It was also one of the few countries in the world that had the ability to survive a credit cut-off from the 2 families, due to the fact that Argentina was totally self-sufficient as far as food and energy was concerned. It was a country that was one of the richest in the world, in terms of natural resources, and could survive without importing anything. Thus, before Argentina could make a move towards a debt repudiation – which would act as an encouragement to other nations- she had to be stopped, and made an example of. British Prime Minister Margaret Thatcher had been instructed to make a test case of Argentina.

 In April 1982, Thatcher went to war against Argentina over the Falkland Islands, or as the Argentinians call it, the Malvinas Islands. Situated in the desolate waters of the South Atlantic off Argentina’s coast; the surrounding area was believed to contain rich untapped oil reserves. With the rise in the oil price, Argentina’s military believed it was time to start exploration and drilling in these waters; the problem was that the British controlled the Malvinas Islands. So, the government had justifiably claimed sovereignty over the islands, and retaken them on April 1, after years of unsuccessful negotiations over the issue.

 The real issue of Britain’s military confrontation with Argentina was to enforce the principle of collection of Third World debts by a new form of 19th century “gunboat diplomacy”. Two thirds of Britain’s naval fleet was dispatched in April 1982, for a shooting war with Argentina, which Britain nearly lost to Argentinian deployment of French Exocet missiles.

 The British intent was to trigger a crisis in order to attempt to place the military might of NATO behind policing of Third World debt repayment, under the changed terms of sky-high floating interest rates. Washington gave the British a green light in its fight against Argentina. This British military action against Argentina resulted in the worsening of Washington’s relations with its Latin American neighbors.

One country that did not appreciate Washington’s support for Britain was Mexico. Under the presidency of President Lopez Portillo, beginning late 1976, Mexico had undertaken an impressive modernization and industrialization program. Mexico’s nationally controlled oil resources were to be the means to modernize Mexico.

 By 1981, the Rockefeller Empire had determined that the prospect of a strong, industrial Mexico, a “Japan on our southern border”, would “not be tolerated”. As with Iran earlier, a modern Mexico was considered to be dangerous. The decision was made to intervene to sabotage Mexico’s industrial ambitions, in favor of securing rigid repayment of usurious foreign debt levels. This was “controlled disintegration” at work!

 A well-prepared run on the Mexican peso was orchestrated in October 1981. Powerful local financial players-tied to the Rockefellers- prevented Portillo from imposing foreign exchange controls. Capital flight accelerated. In February 1982, the Portillo government cracked under pressure, and was forced to impose a draconian austerity program, in a desperate hope of stabilizing the capital flight out of Mexico into the US. The Mexican peso was devalued by 30%. Private Mexican industry which had borrowed dollars to finance investments in the previous years were bankrupted overnight, led by the once-powerful Alfa Group of Monterrey. Its earnings were in pesos and its debt service in vastly more costly dollars. Only to maintain their previous debt position, the company would have to increase peso prices by 30%, or cut costs by reducing its workforce.

 The devaluation also forced a reduction in Mexico’s industrialization program, cuts in living standards, and increased domestic inflation. Mexico was plunged into chaos.

 Mexico was now put firmly under the international spotlight as a “problem borrower”, and a “high-risk country”. Leading banks in New York, London, Zurich, Frankfurt, and Tokyo, quickly cut their lending plans. Mexico, under the combined pressures of peso devaluations, loss of needed billions lost through capital flight, and the decision by the banks of the two families not to roll over the old debts, faced a debt crisis of titanic proportions.

 On August 20, Mexican Finance Minister, Jesus Herzog, met with bankers at the New York Fed, and told them that Mexico was broke and had no money to meet its debt installments due that week. Over the next few days, a financial rescue package was worked out, and a deal was done, but it was not to Mexico’s advantage. One of the items dealt with the repayment of a standby loan from the US government to Mexico, by allowing the US to buy Mexican oil at a 15% discount!

On September 1, Portillo nationalized Mexico’s private banks. He attacked them for being “speculative and parasitical”, and he detailed the capital flight which they had funneled out of Mexico’s industrialization effort into US dollars and real estate speculation in the US. The total flight capital amounted to $76 billion, equivalent to the entire total of foreign debt contracted in the previous 10 years for the country’s industrialization.

 On October 1, 1982, Portillo appeared before the UN and gave a speech, in which he called on the nations of the world to act in concert to prevent regression into the Dark Ages. He effectively identified the cause of the crisis of the financial system as a result of policies of very high interest rates and collapsing raw material prices. Portillo’s summons to Latin American unity failed. Within 2 months he was out of office.  Argentina and Brazil were visited by an army of US officials, who exerted extraordinary blackmail and other pressure to dissuade these from joining Mexico in demanding a common solution to the debt crisis.

 Henry Kissinger had formed a new high-powered consultancy firm, Kissinger Associates Inc, as a trouble-shooting firm for the 2 families. Along with him was Lord Carrington, former British Foreign Minister, and a Rothschild agent. Kissinger Associates worked together with the New York and London banks to impose, “case-by-case” solutions; the most onerous debt collection terms since the Versailles reparations process of the early 1920s. They also brought in the IMF to act as the international “policeman”, in what became the most concerted looting operation in modern history.

 Debtor countries paid many times over, literally with blood and the proverbial “pound of flesh” to the modern – day Shylocks of New York and London.  It was not the case that after August 1982, large Third World debtor nations refused to pay. They had a “pistol to the head”, under IMF pressure, to sign what the banks termed “debt work-outs” with the leading private banks, most often led by Citicorp or Chase Manhattan. The banks secured international support for the debt collection strategy.

 The 2 families used the crisis to turn the power of their multi-lateral institutions, such as the World Bank and the UN (both within the Rockefeller orbit) and the IMF (within the Rothschild orbit), to enforce the interests of their banks. In October, their banks came together to create a de facto creditors cartel of leading banks, called the Institute of International Finance, or informally, the Ditchley Group. These private banks socialized their lending risks to the majority of the taxpaying public, while privatizing to themselves all the gains. They followed the principle of – “what’s mine is mine, – – and what’s your is negotiable”.

  The IMF prescription, or “conditionalities”, was invariably the same. The victim debtor country was told that if they ever wanted to see a penny of foreign bank lending again, it must slash domestic imports to the bone (to secure scarce foreign currency),  cut the national budget savagely – most often state subsidy for food, pensions, and other necessities (to free up funds to pay the interest on its foreign debt), devalue the national currency ( so that foreign companies can either buy up companies or raw materials at far lower prices than before devaluation, so that its exports is made “attractive” to industrial countries), while simultaneously making the cost of importing advanced industrial goods prohibitive. All of this, it was argued, would earn hard currency to service the debt.

 The IMF Structural Program was “Step One” to make the candidate eligible for “Step Two” – an agreement with creditor banks for restructuring of the payment schedule of their foreign debt. In the second stage, the banks contracted for huge future rights over debtor countries, as they added defaulted interest arrears onto the face amount of the total debt owed.

 The end result of the countless debtor restructuring since 1982 was an enormous increase in the amount of debt owed to the banks, despite the fact that not penny of new money had come into Latin America. Total foreign debt of all developing countries rose steadily from $839 billion in 1982 to just over $1,300 billion by 1987. Virtually all of this increase is accounted for in the added burden of “refinancing” the unpayable old debt.

 Mexico, under this IMF regime, was forced to slash subsidies on vital medicines, foodstuffs, fuel, and other necessities for its population. People, often infants, died needlessly, for lack of the most basic medicine imports. The IMF then dictated a series of peso devaluations to “spur exports”. In early 1982, before the first 30% devaluation, the peso stood at 12 to the dollar. By 1986, it required 862 pesos to buy one dollar, and by 1989 the sum had climbed to an incredible 2,300 pesos per dollar.

 The same process was repeated in Argentina, Brazil, Venezuela, large parts of Asia, and most of black Africa, including Zambia, Egypt and Zaire/Congo.

  The IMF was the global policeman to enforce payment of interest and principle to the banks, through imposition of the most draconian austerity in history. With the IMF firmly under Rothschild control, it became the global enforcer of the 2 families’ monetary and economic interests in a manner never before seen. It was hardly surprising that victim countries shuddered when told that they were to receive an IMF inspection visit. In effect the Anglo-American banks blackmailed their bank counterparts in Western Europe and Japan to “solidarize”, or face the prospect of the collapse of the international banking system.

 In 1982 and the years following, the threat was indeed credible. No one dared challenge; everybody was terrified of Kissinger, and the power behind him. All countries of the creditor banks closed ranks behind the New York banks, and backed the Kissinger hard-line approach to the debt. This allowed Washington, the New York banks, and their friends in London, to promote the useful rhetoric that the debt was solely the “fault” of corrupt, irresponsible Third World governments.

 The Rockefeller Empire was so confident that they refused to even increase their emergency loan-loss reserves against default on their Third World loans. Two Rockefeller banks, Citicorp and Chase Manhattan paid impressive dividends to their shareholders during the early 1980s, publicly declaring “record profits” as though nothing extraordinary was occurring.

 An important point is to be noted here is how American banks work their numbers:-

Let us take an example of a hypothetical bank called ABC Bank. It has a capital of $1 billion, and a loan book 10 times its capital, which comes to $10 billion. In the old days, it could legally lend not more than 5 % of its capital to any one single borrower, i.e., a maximum of $50 million. If the borrower is an X country, then, in the event of the loan being in arrears for 90 days, then this loan amount of $50 million has to be written off. When this happens, then this $50 million has to be deducted from profits and/or from capital. If the capital base is reduced by $50 million, then its loan book has to have a proportional reduction to $9.5 billion (950 x 10). Investors in the bank will suffer a fall in the banks share price. This is bad for the senior executives as it will negatively impact their bonuses. So, we find, in most cases, banks would rather lend an additional sum to country X, just enough to cover its loan arrears. Then, everything is hunky-dory. The bonuses are safe.

 In this manner, we find that the outstanding loan amounts just keep on increasing, but NO NEW MONEY has been received by the borrower. With this in mind, we explain what is termed, within banking circles as, “bankers’ arithmetic”

An even more astonishing aspect of this entire debt crisis of the 1980s was the fact that much of the money never even left New York or London banks. According to a direct participant in the procedures, “Most of the money never came into Latin America. Out of the $270 billion taken by Latin America between 1974 and 1981, we found only 8.4% actually cashed by Latin America – money which could have been used for productive investment. All the rest remained in the banks, never came to Latin America – only changed books “.

 The debtor countries were caught in a trap, from which the only escape offered by the creditor banks of London and New York was to surrender national sovereign control over their economy, especially valuable resources such as state oil monopolies and raw material concessions. This, the bankers called swapping the old “debt-for-equity” , which was aimed at securing control of attractive resources of the debtor country.

 A study by a Danish economist, Hans Rasmussen, illustrated the process: “In 1979, a net sum of $40 billion flowed from the rich North to the poorer South. That flow was reversed in 1983, when the Third World sent $6 billion to the industrialised countries. Since then, the amount has risen to about $30 billion a year. But, if the transfer of resources due to falling raw materials prices throughout the 1980s is taken into account, we are talking about a transfer of capital from the Third World to the industrialised countries of at least $60 billion a year. To this sum, one should then add the capital flight of black money”.

The study pointed out that there had been a wealth transfer from the capital-starved Third World since the early 1980s, primarily devoted to financing deficits in the US and to a lesser degree Britain. Rasmussen estimated that, during the 1980s, the combined nations of the developing world transferred a total of $400 into the US alone. This allowed the Reagan Administration to finance the largest deficits in history, while falsely claiming credit for “the longest peacetime recovery”.

With high US interest rates, a rising dollar, and the security of the American government, 43% of the record high US budget deficits during the 1980s were “financed” by this de facto looting from the Third World debtor countries. The debt was merely a vehicle to establish de facto economic control over entire sovereign countries. The jaded New York bankers reasoned they had little to fear from powerless Latin American or African countries. After all, business is business.

 Capital flight from Third World countries into the “safe haven “ of the US and other creditor countries was $123 billion in the decade up to 1985. The rise of cocaine addiction in the West, which grew in parallel with the explosion of the Third World debt crisis, bore a striking congruence to the rise in illegal dollars being laundered out of Latin America through discreet transfers by firms such as Merrill Lynch, American Express and Citicorp (all Rockefeller firms). The clients were given the more tasteful name, “high net worth individuals”.

Facilitating capital flight flows for such clients had become one of the most profitable parts of the “debt crisis” for the large American banks during the 1980s. In addition to some $50 billion annual interest payments from hard-pressed debtor countries, these large banks were bringing in flight-capital assets of some $100-120 billion from the very countries against whom they demanded brutal austerity to “stabilize” the currency. It was more than a bit hypocritical, and more than a bit lucrative for the banks.

The annual return for the banks on their Latin American flight-capital business, kept in strictest secrecy, was averaging 70%. As one such banker stated about this aspect, “some banks would kill to get a piece of this business”. That was putting it mildly. In 1983, Brazil was far and away the most profitable part of Citicorp’s international operations.

 If anything, Africa fared worse as a result of the Anglo-American debt strategy. Since the 19th century colonial times, Africa was kept largely as a primitive underdeveloped source of cheap raw materials, with the stubborn exception of South Africa. The wave of independence during the “decolonization“ of the 1960s and 1970s produced little substantial improvement in the economic prospects of black Africa.

 The oil shocks, along with the ensuing shocks of 20% interest rates, and collapsing world industrial growth in the 1980s dealt a death blow to almost the entire Continent.  Until the 1980s, black Africa remained 90% dependent on raw materials exports for financing its development. Beginning in the early 1980s, the world dollar price of such raw materials – everything from cotton, coffee, copper iron ore and sugar, began an almost unprecedented fall. By 1987, such raw material prices fell to the lowest levels since World War 2.

 If their prices for such raw material exports had been stable at merely the price levels of the 1980 period, black Africa would have earned an additional $150 billion during the decade of the 1980s. In 1982, these countries owed creditor banks in the West and Japan some $73 billion. By the end of the decade, this sum, through debt “rescheduling and various IMF interventions into their economies had more than doubled to $160 billion; in short, almost exactly the sum which these countries would have earned at a stable export price level.

As debtor after debtor was coerced to come to terms with the IMF and the creditor banks of the Ditchly Group, a reversal in capital flows of titanic dimensions set in. Between 1980 and 1986, for a group of 109 debtor countries, on an original debt of $430 billion, payment of interest came to $326. Repayment of principal on the same debts totaled another $332 billion, for a combined debt service payment of $658 billion. But, despite this effort, these countries still owed creditors the sum of $882 billion, in 1986. It was an impossible debt vortex. Thus, worked the wonders of compounded interest and floating rates.

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