From Contracts to Concessions to Capitulations and Unequal Multinational Trade Agreements
Human beings are constantly at war.
The first conflicts began between families, then clans , tribes, villages, cities ,kingdoms ,empires and then power blocs. Everyone is trying to get the better of the other by all possible means. If diplomacy is war by other means than vice versa ie coercion by war for economic and political gains is also true. The economic warfare cum diplomacy with overt or covert means is but a war without military weapons, which began with stones, javelins, bows and arrows, guns, more and more destructive bombs, including yet to be tried fusion bombs, with catapults to missiles ie whatever means of delivery human mind has created. The latest is cyber survieylence and warfare .
Peace is only a ceasefire between hot wars, but economic warfare in overt and subtle ways continues. An open coercive way of economic warfare is use of sanctions or threat of use of sanctions before a hot war or even threat of nuclear war, as in the case of sanctions against Iran. Of late it is being used even against Russia in which even a country like India gets adversely affected. The various economic agreements under the coercive power of big blocks is basically economic warfare.
India-US Nuclear Agreement;
Remember Indian PM MM Singh, Indian diplomats, pressitutes, pressigolos and media whores proclaiming the great benefits of the agreement .How India's energy problem would be resolved .We will become members of Nuclear Suppliers Group .We will get the most advanced technology.
Indian Laws will prevail
What has happened .Indian operators must bear the cost of massive failures like of Bhopal in 1984. So no progress on the agreement . What does Obama want!
Indians are familiar with the English East India Trading Company.
Let me give another example from history .How contracts, concessions and treaties were one of the major causes of the decline of the Ottoman Empire.
Capitulations and the Ottoman Empire
They were contracts, to begin with, between the Ottoman Empire and European powers, particularly France , then with others. In Turkish capitulations, or ahdnames, were generally bilateral acts whereby definite arrangements were entered into by each contracting party towards the other, and were not mere concessions.
They were grants made by successive Sultans to Christian nations, conferring rights and privileges in favour of their subjects resident or trading in the Ottoman dominions, following the policy towards European states of the Byzantine Empire.
Thus foreign traders under capitulation regimes entering the Ottoman Empire were exempt from local prosecution, local taxation, local conscription, and the searching of their domicile.
France first signed a treaty or Capitulations with the Mamluk Sultanate in Cairo in 1500, during the rule of Louis XII, in which the Sultan of Egypt had made concessions to the French and the Catalans. This treaty was upheld by the Ottoman Empire when the later captured the Mamluk Sultanate in 1517, following the Ottoman–Mamluk War (1516–1517).Draft of the 1536 Treaty or Capitulations negotiated between French ambassador Jean de La Forêt and Ibrahim Pasha, a few days before his assassination, expanding to the whole Ottoman Empire the privileges received in Egypt from the Mamluks before 1518.
Capitulation reopening trade between Venice and the Ottoman Empire signed 2 October 1540, following the Battle of Preveza. Before the middle of the seventeenth century, various religious orders (Capuchin, Carmelite, Dominican, Franciscan and Jesuit) were established, as chaplains of the French ambassadors and consuls, in major Ottoman cities Lebanon and the islands of the Aegean Archipelago. They assembled the Catholics to instruct and confirm them in the Catholic faith, established schools which were open to children of all Christian rites, worked to improve the conditions of Christians in Turkish prisons, and nursed the sick.
The Capitulations began with four agreements in regards to the regime's governing status of those in the Ottoman Empire but not under the rule of the sultan:
1. Foreigners were exempt from local prosecution
2. Foreigners were exempt from local taxation
3. Foreigners were exempt from local conscription
4. Foreigners were exempt from search of domicile
These were the result of an international legal presence. This list broadened in the 1870's, with much abuse of these capitulations by many foreigners. However, the Capitulations did serve to promote trade between the Ottomans and Europe because they secured the rights of the European residents of the Ottoman Empire.
Although the Turkish capitulations were not in themselves treaties, yet by subsequent confirmation they acquired the force of commercial durable instead of personal nature; the conversion of permissive into perfect rights; questions as to contraband and neutral trade stated in definite terms.
As far as Turkey is concerned, the capitulations were abolished by the Treaty of Lausanne (1923), specifically by Article 28: Each of the High Contracting Parties hereby accepts, in so far as it is concerned, the complete abolition of the Capitulations in Turkey in every respect.
Capitulations in Egypt ended in 1949 as stipulated in the Montreux Convention Regarding the Abolition of the Capitulations in Egypt
A day before I had circulated a piece on an example of economic warfare through treaties etc.
WPF DIALOGUE OF CIVILIZATIONS
21 NOVEMBER 2014
A Transcript of the Paper by Jane Kelsey, Professor of Law, University of Auckland, New Zealand, delivered at the 12th Rhodes Forum in September 2014
I am delighted to be able to make some contribution to such an esteemed panel. When I got the invitation I thought as a critic of international economic agreements what might I be able to contribute to this dialogue. My starting point is some reflections on international law from Tony Anghie in his book entitled"Imperialism, Sovereignty and the Making of International Law". One of the features of the post-World War II period has been the increasing role of international economic law as a vehicle for superpowers. Anghie said quite incisively that the old law of conquest created the inequalities that we now see in the new international law of contracts that perpetuate, legalize and substantiate the concept of neutrality, but a neutrality that is in fact based on those inequalities when the international agreements that the Third World states entered into in particular are enforced against them. The notion of progressive international law that we heard in the last panel, I am going to take issue with to some degree as international economic law being in fact one of the vehicles for ongoing imperialism.
I want to skip to the contemporary period to illustrate my argument. Those who followed these areas will know that the Doha round of World Trade Organization talks was launched in the shadow of 9/11. One of the interesting statements of the Robert Zoellick who subsequently became president of the World Bank was that those who opposed a new round of WTO negotiations were siding with the terrorists. Similarly when the 9/11 Commission started looking at how the US should respond, the Bush administration was encouraged to expand trade in the Middle East as a vehicle for the advance of Washington's interests. And indeed when we saw Zoellick discussing an FTA with the US as being a tool of foreign policy more generally, he said the Free Trade Agreement is a privilege, not a right, for which the US seeks at a minimum cooperation – and at better – foreign policy and security. That is you cannot separate the economic agenda of the US from the broader strategic objectives. And indeed the very next day president Bush announced a new Middle East initiative for free trade area by 2013 as a strategy to back the US foreign policy interests. Full on
Some friends wrote back that was it really true and they are quite well educated. Yes it is true. In our own history, the British and other colonial powers came for trading and slowly, they sucked the country's blood and dried us dry of our wealth and minerals etc with the result that when they left India in 1947, UK's GDP of the world GDP had increased from 2% 25% or so. And India's was reduced from 23% to 2%. Still, one of four venerable Prime Minister's was singing paeans of the civilizing mission of British colonialism, simply because he was granted a scholarship and given a doctoral degree.
By now everyone understands what the word capitulate means. But to begin with, it did not have this meaning. It was used to destroy internally the economic strength sinews of the Ottoman Empire.
NATO and Europe Union and its other poodles, allies willing and not so willing are generally uneasy and scared of the rising strength of five-nation Brics union of Brazil, Russia, India, China and South Africa. WE and NATO's love for Russia and China is quite well known. South Africa is as yet not that significant, but this is a bad example of for African continent, which is the least explored continent of oil and is full of diamonds gold and other mineral resources.
However, Brazil, the biggest state in Latin America, which was considered the backyard by the US and treated as such, where rulers were changed, one after the other and reduced to Banana republics , is a very important because of emergence of pro-people leaders. In spite of all the means, fair and foul used by Washington , President Dilma Rousseff was re-elected a few months ago.( I love the photos of Dilma and Naren Bhai holding hands whenever they meet).
Below is a thought provoking and notable recent piece on Brazil. Therefore, let us be very clear in our minds, and I am afraid minds of most Indians have been brainwashed ,bought of f, drugged by various means and they can see no wrong in Washington's policies. More so now and we must watch what Washington says and does, before, during and after Obama's presence as the chief guest at India's Republic Day on 26. January 2015. Here below is the article on Brazil. And later an old similar piece on Argentina, both nations being ruled by tough Ladies.
K.Gajendra Singh 2 December, 2014. Delhi
BRICS' Brazil President Next Washington Target
William Engdahl, Courtesy:journal-neo.org, November 27, 2014
Brazil's newly re-elected President, Dilma Rousseff, survived a massive US State Department disinformation campaign to win a runoff vote against US-backed Aecio Neves on October 26. However it is already clear that Washington has opened a new assault on one of the key leaders of the non-aligned BRICS group of emerging economies—Brazil, Russia, India, China, South Africa. With a full-scale US financial warfare attack to weaken Putin's Russia and a series of destabilizations aimed at China, including most recently the Hong Kong US-financed "Umbrella Revolution," getting rid of Brazil's socially-minded President is a top priority to stop the emerging counter-pole to Washington's New World (dis-)Order.
The reason Washington wants to get rid of Rousseff is clear. As President she is one of five heads of the BRICS who signed the formation of the US$100 billion BRICS Development Bank and a reserve currency pool worth over another US$100 billion. She also supports a new International Reserve Currency to supplement and eventually replace the dollar. Inside Brazil she is supported by millions of lower-income Brazilians who have been lifted out of poverty by her various programs, especially the Bolsa Familia, an economic subsidy program for low-income mothers and families. The Bolsa Familia has brought an estimated thirty-six million families out of poverty via Rousseff and her party's economic policies, something that creates apoplexy in Wall Street and Washington.
Her US-backed campaign rival, Aécio Neves of the Brazilian Social Democracy Party (Partido da Social Democracia Brasileira – PSDB), serves the interests of tycoons and their Washington allies.
Neves' chief economic adviser who would have become Finance Minister in a Neves presidency was Arminio Fraga Neto, a close friend and former associate of Soros and his Quantum hedge fund. Neves' senior adviser, and likely Foreign Minister had he won, was Rubens Antônio Barbosa, former Brazil ambassador to Washington and today a Senior Director of ASG based in Sao Paulo.
ASG is the consulting group of Madeline Albright, former US Secretary of State during the 1999 US bombing of Yugoslavia. Albright, a Director of the leading US think-tank, Council on Foreign Relations, is also chair of the prime US Government "Color Revolution" NGO, the National Democratic Institute (NDI). Not surprisingly, Barbosa during the recent campaign called for a strengthening of Brazil-US relations and a diminishing of the strong Brazil-China ties developed by Rousseff in the wake of revelations of USA spying by NSA on Rousseff and her .
During the bitter election campaign between Rousseff and Neves, the Neves opposition began circulating rumors that Rousseff, who until now had never been linked to corruption so common to Brazilian politics, was implicated in a scandal involving the state oil giant, Petrobras. In September, a Petrobras former director alleged that members of Rousseff's government had received commissions on contracts signed with the oil giant which were then used to buy congressional support. Rousseff served on the company's board of directors until.
Now on November 2, just days after Rousseff's hard-fought victory, the US major accounting firm, PriceWaterhouseCoopers, refused to sign Petrobras' third-quarter earnings. PWC demanded wider investigation into the corruption scandal involving the state-run oil .
PricewaterhouseCoopers is one of the most scandal-ridden US accounting firms. It was implicated in 14 years of covering up fraud in the AIG insurance group which was at the heart of the 2008 US financial crisis. And the British House of Lords in 2011, criticized PwC for not drawing attention to the risks in the business model followed by Northern Rock bank, a major disaster in Britain's real estate financial crisis of 2008, a client which had to be bailed out by the UK government. The attacks on Rousseff are escalating we can be sure.
It is not merely Rousseff's alliance with BRICS countries that has made her a prime Washington destabilization target. Under her tenure, Brazil is moving swiftly to decouple from US NSA electronic surveillance vulnerability.
Days after her re-election, the state-owned Telebras announced plans to construct a major underwater fiber-optic telecommunications cable to Portugal across the Atlantic. The Telebras-planned cable will run 3,500 miles from the Brazilian city of Fortaleza to Portugal. It represents a major break for trans-Atlantic communications with US technology domination. Notably, Telebras President Francisco Ziober Filho said in an interview that the cable project will be built without any US .
The Snowden NSA revelations in 2013 among other things revealed the intimate ties of key strategic IT companies like Cisco Systems, Microsoft and others to the US intelligence community. He stated that "The issue of data integrity and vulnerability is always a concern for any telecom company."
Brazil has reacted to the NSA leaks by making thorough audits of all foreign-made equipment to check for security vulnerabilities and accelerated the country's move toward technological self-reliance according to the Telebras chief.
Until now virtually all Trans-Atlantic IT traffic routed via the east Coast of USA to Europe and Africa a major espionage advantage for Washington
Reacting to the Snowden leaks, the Rousseff government ordered termination of contracts with Microsoft for Outlook e-mail services. Rousseff declared at the time that it was to help "prevent possible espionage." Instead Brazil is going national with its own e-mail system called Expresso, developed by state-owned Servico Federal de Processamento de Dados (Serpro). Expresso is already used by 13 of the country's 39 ministries. Serpro spokesman Marcos Melo stated, "Expresso is 100 percent under our control." If true or not clear is that under Rousseff and her party Brazil is pursuing what she sees as Brazil's best national
Brazil is also moving away from the Anglo-American domination of its oil and gas exploration. In late 2007 Petrobras discovered what was estimated to be a mammoth new basin of high-quality oil on the Brazilian Continental Shelf offshore in the Santos Basin. Since then, Petrobras has sunk 11 oil wells in the Santos Basin, all successful. At Tupi and Iara alone, Petrobras estimates there are 8 to 12 billion barrels of recoverable oil, which can almost double current Brazilian oil reserves. In total the Brazil Continental Shelf could contain over 100 billion barrels of oil, transforming the country into a major oil and gas power, something Exxon and Chevron, the US oil giants have tried hard to
In 2009 according to leaked US diplomatic cables published via WikiLeaks, Exxon and Chevron were noted by the US Consulate in Rio to be trying in vain to alter a law proposed by Rousseff's mentor and predecessor in her Brazilian Workers' Party , President Luis Inácio Lula da Silva, or Lula as he is called.
That 2009 law made the state-owned Petrobras chief operator of all offshore blocks. Washington and the US oil giants were furious at losing key control over potentially the largest single new oil discovery in decades.
Making matters worse in Washington's eyes, Lula not only pushed ExxonMobil and Chevron out of the controlling position in favor of the state-owned Petrobras, but he also opened Brazilian oil exploration to the Chinese. In December, 2010 in one of his last acts as President, he oversaw signing of a deal between the Brazilian-Spanish energy company Repoll and China's state-owned Sinopec. Sinopec formed a joint venture, Repoll Sinopec Brazil, investing more than $7.1 billion towards Repoll Brazil. Already in 2005 Lula had approved formation of Sinopec International Petroleum Service of Brazil Ltd as part of a new strategic alliance between China and Brazil, a forerunner of today's BRICS .
In 2012 in a joint exploration drilling, Repsol Sinopec Brasil, Norway's Statoil and Petrobras made a major new discovery in Pão de Açúcar, the third in block BM-C-33, which includes the Seat and Gávea, the latter one of the world's 10 largest discoveries in 2011. US and British oil majors were nowhere to be
As relations between Rousseff's government and China as well as Russia and the other BRICS partners deepened, in May 2013, US Vice President Joe Biden made a trip to Brazil where his agenda was focused on oil and gas development. He met with President Dilma Rousseff who succeeded her mentor Lula in 2011. Biden also met with leading energy companies in Brazil including .
While little was publicly said, Rousseff refused to reverse the 2009 oil law in a way suitable to Biden and Washington. Days after Biden's visit came the Snowden NSA revelations that the US had also spied on Rousseff and top officials of Petrobras. She was livid and denounced the Obama Administration that September before the UN General Assembly for violating international law. She cancelled a planned Washington visit in protest. After that US-Brazil relations took a dive.
Before Biden's May 2013 visit Dilma Rousseff had 70% of popularity rating. Less than two weeks after Biden left Brazil, nationwide protests by a well-organized group called Movimento Passe Livre, over a nominal 10 cent bus fare increase, brought the country virtually to a halt and turned very. The protests bore the hallmark of a typical "Color Revolution" or Twitter destabilization that seems to follow Biden wherever he makes a presence. Within weeks Rousseff's popularity plummeted to 30%.
Washington had clearly sent a signal that Rousseff had to change course or face serious problems. Now that she has won re-election and defeated the well-financed right-wing oligarchs and the opposition, Washington will clearly try with renewed energy to get rid of another BRICS leader in an increasingly desperate bid to hold the status quo. It seems the world no longer snaps to attention as it did in past decades when Washington gave the marching order. The year 2015 will be an adventure not only for Brazil but for the entire world.
F. William Engdahl is strategic risk consultant and lecturer, he holds a degree in politics from Princeton University and is a best-selling author on oil and geopolitics, exclusively for the online magazine
August 25, 2014 by Ellen Brown
If Argentina were in a high-stakes chess match, the country's actions this week would be the equivalent of flipping over all the pieces on the board.
– David Dayen, Fiscal Times, August 22, 2014
In the past 20 years, Israelis—both investors and intelligence operatives--have swarmed over Patagonia. That there may be an ulterior motive in this is alluded to in the following article. In the event of a generalized Mid East nuclear war, or the disintegration of the Israeli state, Israelis may soon flock to places like Patagonia and their ethnic homeland in Ukraine—Tom
Argentina is playing hardball with the vulture funds, which have been trying to force it into an involuntary bankruptcy. The vultures are demanding what amounts to a 600% return on bonds bought for pennies on the dollar, defeating a 2005 settlement in which 92% of creditors agreed to accept a 70% haircut on their bonds. A US court has backed the vulture funds; but last week, Argentina sidestepped its jurisdiction by transferring the trustee for payment from Bank of New York Mellon to its own central bank. That play, if approved by the Argentine Congress, will allow the country to continue making payments under its 2005 settlement, avoiding default on the majority of its bonds.
Argentina is already foreclosed from international capital markets, so it doesn't have much to lose by thwarting the US court system. Similar bold moves by Ecuador and Iceland have left those countries in substantially better shape than Greece, which went along with the agendas of the international financiers.
The upside for Argentina was captured by President Fernandez in a nationwide speech on August 19th. Struggling to hold back tears, according to Bloomberg, she said:
When it comes to the sovereignty of our country and the conviction that we can no longer be extorted and that we can't become burdened with debt again, we are emerging as Argentines.
. . . If I signed what they're trying to make me sign, the bomb wouldn't explode now but rather there would surely be applause, marvelous headlines in the papers. But we would enter into the infernal cycle of debt which we've been subject to for so long.
The Endgame: Patagonia in the Crosshairs
The deeper implications of that infernal debt cycle were explored by Argentine political analyst Adrian Salbuchi in an August 12th article titled "Sovereign Debt for Territory: A New Global Elite Swap Strategy." Where territories were once captured by military might, he maintains that today they are being annexed by debt. The still-evolving plan is to drive destitute nations into an international bankruptcy court whose decisions would have the force of law throughout the world. The court could then do with whole countries what US bankruptcy courts do with businesses: sell off their assets, including their real estate. Sovereign territories could be acquired as the spoils of bankruptcy without a shot being fired.
Global financiers and interlocking mega corporations are increasingly supplanting governments on the international stage. An international bankruptcy court would be one more institution making that takeover legally binding and enforceable. Governments can say no to the strong-arm tactics of the global bankers' collection agency, the IMF. An international bankruptcy court would allow creditors to force a nation into bankruptcy, where territories could be involuntarily sold off in the same way that assets of bankrupt corporations are.
For Argentina, says Salbuchi, the likely prize is its very rich Patagonia region, long a favorite settlement target for ex-pats. When Argentina suffered a massive default in 2001, the global press, including Time and The New York Times, went so far as to propose that Patagonia be ceded from the country as a defaulted debt payment mechanism.
The New York Times article followed one published in the Buenos Aires financial newspaper El Cronista Comercial called "Debt for Territory," which described a proposal by a US consultant to then-president Eduardo Duhalde for swapping public debt for government land. It said:
[T]he idea would be to transform our public debt default into direct equity investment in which creditors can become land owners where they can develop industrial, agricultural and real estate projects. . . . There could be surprising candidates for this idea: during the Alfonsin Administration, the Japanese studied an investment master plan in Argentine land in order to promote emigration. The proposal was also considered in Israel.
Salbuchi notes that ceding Patagonia from Argentina was first suggested in 1896 by Theodor Herzl, founder of the Zionist movement, as a second settlement for that movement.
Another article published in 2002 was one by IMF deputy manager Anne Krueger titled "Should Countries like Argentina Be Able to Declare Themselves Bankrupt?" It was posted on the IMF website and proposed some "new and creative ideas" on what to do about Argentina. Krueger said, "the lesson is clear: we need better incentives to bring debtors and creditors together before manageable problems turn into full-blown crises," adding that the IMF believes "this could be done by learning from corporate bankruptcy regimes like Chapter 11 in the US".
These ideas were developed in greater detail by Ms. Krueger in an IMF essay titled "A New Approach to Debt Restructuring," and by Harvard professor Richard N. Cooper in a 2002 article titled "Chapter 11 for Countries" published in Foreign Affairs ("mouthpiece of the powerful New York-Based Elite think-tank, Council on Foreign Relations"). Salbuchi writes:
Here, Cooper very matter-of-factly recommends that "only if the debtor nation cannot restore its financial health are its assets liquidated and the proceeds distributed to its creditors – again under the guidance of a (global) court" (!).
In Argentina's recent tangle with the vulture funds, Ms. Krueger and the mainstream media have come out in apparent defense of Argentina, recommending restraint by the US court. But according to Salbuchi, this does not represent a change in policy. Rather, the concern is that overly heavy-handed treatment may kill the golden goose:
. . . [I] n today's delicate post-2008 banking system, a new and less controllable sovereign debt crisis could thwart the global elite's plans for an "orderly transition towards a new global legal architecture" that will allow orderly liquidation of financially-failed states like Argentina. Especially if such debt were to be collateralized by its national territory (what else is left!?)
Breaking Free from the Sovereign Debt Trap
Salbuchi traces Argentina's debt crisis back to 1955, when President Juan Domingo Peron was ousted in a very bloody US/UK/mega-bank-sponsored military coup:
Peron was hated for his insistence on not indebting Argentina with the mega-bankers: in 1946 he rejected joining the International Monetary Fund (IMF); in 1953 he fully paid off all of Argentina's sovereign debt. So, once the mega-bankers got rid of him in 1956, they shoved Argentina into the IMF and created the "Paris Club" to engineer decades-worth of sovereign debt for vanquished Argentina, something they've been doing until today.
Many countries have been subjected to similar treatment, as John Perkins documents in his blockbuster exposé Confessions of an Economic Hit Man. When the country cannot pay, the IMF sweeps in with refinancing agreements with strings attached, including selling off public assets and slashing public services in order to divert government revenues into foreign debt service.
Even without pressure from economic hit men, however, governments routinely indebt themselves for much more than they can ever hope to repay. Why do they do it? Salbuchi writes:
Here, Western economists, bankers, traders, Ivy League academics and professors, Nobel laureates and the mainstream media have a quick and monolithic reply: because all nations need "investment and investors" if they wish to build highways, power plants, schools, airports, hospitals, raise armies, service infrastructures and a long list of et ceteras . . . .
But more and more people are starting to ask a fundamental common-sense question: why should governments indebt themselves in hard currencies, decades into the future with global mega-bankers, when they could just as well finance these projects and needs far more safely by issuing the proper amounts of their own local sovereign currency instead?
Neoliberal experts shout back that government-created money devalues the currency, inflates the money supply, and destroys economies. But does it? Or is it the debt service on money created privately by banks, along with other forms of "rent" on capital, that create inflation and destroy economies? As Prof. Michael Hudson points out:
These financial claims on wealth – bonds, mortgages and bank loans – are lent out to become somebody else's debts in an exponentially expanding process. . . . [E]economies have been obliged to pay their debts by cutting back new research, development and new physical reinvestment. This is the essence of IMF austerity plans, in which the currency is "stabilized" by further international borrowing on terms that destabilize the economy at large. Such cutbacks in long-term investment also are the product of corporate raids financed by high-interest junk bonds. The debts created by businesses, consumers and national economies cutting back their long-term direct investment leaves these entities even less able to carry their mounting debt burden.
Spiraling debt also results in price inflation, since businesses have to raise their prices to cover the interest and fees on the debt.
From Sovereign Debt to Monetary Sovereignty
For governments to escape this austerity trap, they need to spend not less but more money on the tangible capital formation that increases physical productivity. But where to get the investment money without getting sucked into the debt vortex? Where can Argentina get funding if the country is shut out of international capital markets?
The common-sense response, as Salbuchi observes, is for governments to issue the money they need directly. But "printing money" raises outcries that can be difficult to overcome politically. An alternative that can have virtually the same effect is for nations to borrow money issued by their own publicly-owned banks. Public banks generate credit just as private banks do; but unlike private lenders, they return interest and profits to the economy. Their mandate is to serve the public, and that is where their profits go. Funding through their own government-issued currencies and publicly-owned banks has been successfully pursued by many countries historically, including Australia, New Zealand, Canada, Germany, China, Russia, Korea and Japan. (For more on this, see The Public Bank Solution.)
Countries do need to be able to buy foreign products that they cannot acquire or produce domestically, and for that they need a form of currency or an international credit line that other nations will accept. But countries are increasingly breaking away from the oil- and weapons-backed US dollar as global reserve currency. To resolve the mutually-destructive currency wars will probably take a new Bretton Woods Accord. But that is another subject for a later article.
Ellen Brown is an attorney, founder of the Public Banking Institute, and author of twelve books, including the best-selling Web of Debt. In The Public Bank Solution, her latest book, she explores successful public banking models historically and globally. Her 200+ blog articles are at EllenBrown.com.
Argentina found to be in contempt of court by US judge