Tag Archive: World Bank


Greg Hunter

Published on Feb 11, 2014

http://usawatchdog.com/united-states-… – Can we pull the world out of this economic calamity? Former World Bank Attorney Karen Hudes says, “It may be that we don’t, in which case, we end up in what happened just before we went into the dark ages, when gold went into hiding . . . . We can bring this gold that belongs to humanity out of its cloak of secrecy and out of hiding or we can go back into the dark ages. And we can have pestilence and starvation. . . . Civilization breaks down. We cannot pay for our international trade. Either we take back our gold, our legality, and we tell this group that thinks it’s above the law that it is not above the law, or we can kiss ourselves goodbye. Humanity will not continue, we will have World War III. Join Greg Hunter as he goes One-on-One with former World Bank Attorney Karen Hudes.

…..

YOU MUST SEE THIS!: Karen Hudes World Bank Whistleblower

firstflyover

Published on Aug 29, 2013

“Mr. Chambers! Don’t get on that ship! The rest of the book, “To Serve Man”, it’s – it’s a cookbook!” The Twilight Zone.

This is Greg Hunter’s interview with Karen Hudes. She is a World Bank whistleblower.
If you like Mr. Hunter’s work please sub to his channel. Link below. Peace!
http://www.youtube.com/user/usawatchd…

Karen Hudes: We’re Running Out of Time! We’re Dealing with Whether We Can Continue as Humanity

…..

‘Dollar valueless, about to crash’ – World Bank whistleblower

RT

Published on Oct 8, 2013

The US government shutdown – a temporary ailment or a symptom of a grave disease? Are the Republicans right in their move to block Obamacare spending? Who gains from the shutdown turmoil? Do the politicians care about their citizens? Our guest comes from the very heart of the banking system: Karen Hudes was World Bank lawyer when she blew the whistle on major corruption cases in the system and was fired as a result.

For FULL TRANSCRIPT of the interview click here: http://on.rt.com/ue0xat

RT LIVE http://rt.com/on-air 

…..

Enhanced by Zemanta

Greg Hunter

Published on Sep 18, 2013

http://usawatchdog.com/gold-backwarda… Karen Hudes, a former 20 year employee of the World Bank, contends the U.S. credit rating is on very dubious ground. Hudes says, “This is actually an underhanded move because they know the U.S. dollar is going to lose its status as an international currency.” What would that look like to the man on the street? Hudes predicts, “Prices would change on a daily basis. They would double. The number of families that would be employed would be in the minority . . . there would be lawlessness.” Join Greg Hunter as he goes One-on-One with former World Bank lawyer Karen Hudes.

Enhanced by Zemanta

breakingtheset

Published on Jun 21, 2013

Abby Martin talks to Karen Hudes, former senior executive at the World Bank, about her experience blowing the whistle on the high level corruption within the international financial system and how her story was censored.

LIKE Breaking the Set @ http://fb.me/BreakingTheSet
FOLLOW Abby Martin @ http://twitter.com/AbbyMartin

***************************************************

The World Bank: Rejecting “The Rule of Law”

“The proverb, ‘What you don’t know can’t hurt you”, originated in 1576 as, ‘So long as I know it not, it hurteth mee not.’ But the opposite is true.  Unpleasant hidden truths do the most harm.  The best way to fight corruption is to expose it.  Think of the World Bank as ENRON.” … Karen Hudes

by Karen Hudes (with Jim Fetzer)

Karen Hudes

When, thanks to Mark Novitsky, a federal whistleblower, I learned that Karen Hudes, who earned her J.D. at Yale, our most distinguished School of Law, and an M.Phil. in economics at the University of Amsterdam, which is also a formidable institution, had been removed from her position as Senior Counsel for the World Bank because of her efforts to expose corruption and reaffirm the rule of law in the form of appropriate standards of accounting, I was dumbfounded.  

What initially appear to be obscure issues of international finance, moreover, have the potential to sever ties between us and our NATO allies and weaken the national security of the United States.  The stakes involved are therefore extremely high for every American citizen.

During the World Bank and IMF Annual Meetings last October, with her encouragement, the Development Committee informed President Jim Yong Kim of the need for “a more open, transparent and accountable World Bank Group.”  The reasons that motivated that request included the following series of disturbing developments:

The Crisis in Cyprus as a Mini-Model

The threat by EU bankers to loot savings accounts held in Cyprus has raised red flags all over the world. As The New York Times (25 March 2013) has reported,

LIMASSOL, CYPRUS — It is not just about rich Russians and Cypriot retirees. Also vitally at stake in this island country’s banking crisis is Cyprus’s credibility as a place for international companies to continue doing business.

Take Avid Life Media, the Canadian-owned operator of some of the world’s biggest online dating sites. Only a few weeks ago it set up an office here as a base for its international operations, attracted to Cyprus — as hundreds of other foreign businesses have been — because of its reputation for financial stability, a low corporate tax rate, a friendly banking environment and most of all, a strong rule of law.

Now imagine that was the case for the most important bank of all, which affects the world’s economy.  Imagine that bank accounts were being looted world-wide and you will begin to appreciate the dimensions of the problem.

When I discovered that Karen Hudes’ reinstatement, which was being supported by the finance ministers of the nations of the world, was being blocked by its recently appointed president, Jim Yong Kim, who was formerly President of Dartmouth, I was further astonished, because I had encountered Kim before.  He had supported the publication for an article by a member of the computer science faculty, Hany Farid, who claimed that the backyard photographs used to convict Lee Harvey Oswald in the public mind were authentic, which was profoundly disturbing.

Hany Farid and “the backyard photographs”

That is a claim that others had long since proven false.  Jack White, the legendary JFK photo analyst, had testified to the House Select Committee on Assassinations (HSCA) when it had reinvestigated the deaths of JFK and of MLK in 1976-77 and had pointed out a dozen features that disqualify them.  Oswald himself had told Capt. Will Fritz, the Dallas Homicide detective who interrogated him, that the photo he was shown had his face pasted on someone else’s body.  Like other claims Oswald made at the time, subsequent research has proven that he was right.

The chin is not Lee Oswald’s chin, which was somewhat pointed, but a block chin; there is an insert line between the chin and his lower lip; and the  finger tips of his right hand are cut off, for example.  Even more interestingly, he realized that the two communist newspapers that Oswald was holding–The Militant and The Worker–had known dimensions and could serve as an internal rule to determine the height of the person who was holding them.  Using that method, he was able to establish that he was about 5’6″ tall, when Oswald was about 5’10″–which meant that either someone who was too short to be Oswald had posed for the photos or that they had been introduced too large when they were faked.  Either way, they could not possibly be authentic.

When I discovered that Hany Farid, who has a lab funded by the FBI, had published the claim that he had proven them to be authentic by showing that it was possible to replicate the shadow cast by the nose in one of them, I knew he was perpetrating a fraud on the public, because (1) there are four poses taken in different positions at different times, where it would have been virtually impossible for the nose shadow to remain constant from one to another; and (2) there are many other indications of fakery besides the shadow cast by the nose that prove fakery, where even if he had been right about the nose shadow, his conclusion of authenticity would have been wrong. He was violating a basic precept of science by not basing his reasoning upon all the available relevant evidence

So I wrote to President Kim to explain why Darmouth was committing a blunder in supporting Hany Farid’s claim, which I substantiated with multiple lines of proof.  Dartmouth stood pat, however, and never took steps to correct the record, even though it was a matter of immense public interest and concern.  I published an article about my experience with Kim in an article co-authored with Jim Marrs in OpEdNews, “The Dartmouth JFK-Photo Fiasco” (20 November 2009) and followed up by publishing my correspondence in “Blowing the Whistle on Dartmouth: Hany Farid in the nation’s service” (26 January 2010), which I regarded as a professional obligation.

It now appears to me that Kim may have been rewarded for his contribution to the public deception about the death of JFK by being appointed to the World Bank, just as Paul Wolfowitz appears to have been appointed by George W. Bush for his contributions to 9/11 and the “war on terror”.  I have long believed that, in Washington, D.C., the bigger the liar, the further you go.  I now believe that, when it comes to acting contrary to the public interest, the presidency of the World Bank may be another sign of compliance with corruption, as the experiences of Karen Hudes reflects.  I regard us as kindred spirits insofar as “whistle blowing” seems to be coursing through our veins.

Credit Ratings, NATO and Democracy: Too Big for Transparency?

by Karen Hudes

The World Bank and its next door neighbor, the International Monetary Fund (IMF), stand at the crossroads of the international financial system.  Both organizations are referred to as the “Bretton Woods” institutions, named for the site in New Hampshire where the founding conference of 44 countries was held in 1944.  The Bretton Woods institutions were created to prevent the “beggar thy neighbor” policies responsible for World Wars I and II.

The World Bank’s membership has now grown to 188 countries.  The World Bank and IMF share a Board of Governors comprising the Ministers of Finance of member countries.  They each have resident Boards of 24 Directors; seven Directors are appointed by 7 countries with the largest economies and 17 Directors are appointed by groups or “constituencies” of the remaining member countries.

Because of its crucial role at the heart of the world’s financial system, problems at the World Bank are going to have consequences for the world’s financial system.  I know “up close and personal” because I served as Senior Counsel for the World Bank for 21 years.  My qualifications included a J.D. from Yale Law School and M.Phil. in economics from the University of Amsterdam.  I know the institution inside and out.  And I have been blowing the whistle on improper practices at the World Bank that threaten the world’s fiscal integrity.

Reporting Corruption up the Chain of Command

I worked in the Legal Department of the World Bank from 1986-2007.  But in 2007, I was fired in retaliation for reporting corruption at the Bretton Woods institutions up the chain of command at the World Bank, through the US Treasury Department, and to the US Congress.  My report was quite specific, namely:  that the World Bank is out of compliance with the law, because its financial statements to the holders of its $135 billion in bonds, which are denominated in 52 currencies, are not in accord with Generally Acceptable Accounting Principles and Auditing Standards.

I never imagined how intractable the corruption at the World Bank was. A reliable stakeholder analysis, based on game theory modeling, shows that failure to adhere to the rule of law by the World Bank will bring about a world-wide currency war that will make what we lived through in 2008 pale by comparison.  The stakeholder analysis began predicting success in bringing the World Bank into compliance after the European Parliament invited me to testify on May 25, 2011. My testimony included a chronology of the cover-up. President Kim has already prompted Germany to repatriate the equivalent of $36 billion in gold.  As I told Sen. Harry Reid in 2008, “the greatest security risk to the US is in alienating its partners by acting as a hegemon”.

The Failure of Press Coverage

One reason it is so difficult to end the corrupt regime at the World Bank is because there has been virtually no press coverage.  It is possible to conclude from this that democracy in the United States has been weakened by the reduction in the number of corporations who own the bulk of US media outlets (from 50 to 5 in less than twenty years.)  Barclays Bank, JPMorgan Chase & Co, The Goldman Sachs Group along with a few others use interlocking corporate ownership to control 40 percent of total wealth and 60 percent of global revenues.

This concentration of power rests on disproportionate corporate investments of one percent of all corporations.  Theorists at the Swiss Federal Institute of Technology in Zurich, using natural systems mathematical modeling and comprehensive data on the actual corporate ownership of 43,000 transnational corporations, discovered this concentration of power.  When questions are raised about “who controls the world”, this one percent looks like a very promising candidate. The crux of the matter is that the corporations control the mass media and, through the mass media, control the politicians.

Although there have been occasional articles about these issues, where some of my commentaries about them have appeared in print, for the most part, interest in these questions from the public has been few and far between, where recent interviews with Deanna Spingola and with Jim Fetzer, who are alternative media radio hosts, have been the exception. Here are some links to our recent interviews:

  1. “Spingola Speaks” with Karen Hudes, 22 January 2013, HOUR 1
  2. “Spingola Speaks” with Karen Hudes, 22 January 2013, HOUR 2,
  3. “The Real Deal” with Karen Hudes, 6 March 2013,  1800-1930,
  4. “The Real Deal” with Karen Hudes, 20 March 2013, 1800-1830,
  5. “The Real Deal” with Karen Hudes, 21 March 2013, UPDATE,
  6. “The Real Deal” with Karen Hudes, 22 March 2013, 1800-1830,

[NOTE: Both interviews are followed by discussion with Mark Novitsky.]

The Early Years of the World Bank

The longest-serving General Counsel of the World Bank, Aaron Broches, helped to write the charters of the World Bank and IMF at the Bretton Woods conference in 1944. According to Broches, corruption intensified during former Secretary of Defense Robert McNamara’s presidency of the World Bank from 1968-81.  In 2007, the Board fired another president from the Pentagon, Paul Wolfowitz, after Wolfowitz gave a 35% salary increase to his girlfriend at the World Bank, Shaha Riza.

The Europeans asked for an inquiry. The investigation headed by Paul Volcker, unfortunately, did not address the corruption. The Europeans reacted by calling for an end to the 66 years’ “Gentlemen’s Agreement” that the US appoints the President of the World Bank and the Europeans appoint the Managing Director of the IMF.  Had the press reported my warnings to the authorities about the corruption, the US could have avoided substantial tarnish to its reputation and the loss of the Gentlemen’s Agreement.

My efforts to expose and correct the failure of the World Bank to adhere to standard accounting procedures has been enduring.  In 2005, for example, the Dutch Government asked the Audit Committee to end a campaign of retaliation against me for reporting to the Executive Board about an inaccurate evaluation on a failed Banking Sector project in the Philippines.  Then Senator Richard Lugar (R-IN) and the Senate Committee on Foreign Relations have written three letters to the World Bank on my behalf, asking for an end to the ongoing cover-up.

My Efforts to Expose Corruption

In 2007, I also met with Chris Armstrong in Senate Finance, Jayme Roth in Senator Bayh’s office, and Nicole Willet in Senator Clinton’s office.  Senators Lugar, Leahy and Bayh began asking GAO to investigate the World Bank in 2008, and the Audit Committee is requiring an independent audit of the World Bank’s internal controls. The Audit Committee also referred my case to the Bank’s Institutional Integrity Department (INT).  INT, which reports to the President of the World Bank, is used to intimidate staff.  Paul Volcker ignored INT’s sinister role and simply recommended that whistleblower retaliation cases should be removed from INT’s mandate.

I met with the Ministry of Foreign Affairs of the Dutch Government on 24 September 2007. The Dutch are not happy with the Volcker Report and the ongoing cover-up.  Moreover, previous Dutch Executive Directors, Herman Wijffels and Ad Melkert, disclosed that ‘third parties’ attempted to intimidate them and other members of the World Bank’s Board through shocking invasions of their private lives. The US violation of the safe-conduct normally accorded to diplomats is an egregious breach of honor.  Article VII, Section 8 of the World Bank’s Articles provides immunities to Executive Directors, officers and staff.

Ben Heineman (who was a member of the Volcker Panel) spoke at the Yale Law School on October 5, 2007.  On October 8, 2007, at the suggestion of minority staff on the Senate Foreign Relations Committee, I contacted Kenneth Peel at Treasury, to encourage the Bush Administration to end the cover-up on the Philippines Banking Sector Reform Loan and restore the rule of law to the Bank.  But the upshot of my efforts to correct improper procedures was to have me removed from my position as Senior Counsel, which has had an intimidating effect.

The Crucial Year 2007

I wrote to the Dean of the School of Law at Yale, Robert Post, on 14 October 2007 to express my appreciation for his offer of assistance in exposing the scandal.  I included an email that I had sent to The Wall Street Journal in an effort to correct the false impression it had conveyed about the Volcker Panel report, but it was to no avail. Here is what I wrote him:

Dear Bret,

I am a regular reader of your column, and wanted to set you straight about my next-door neighbor, Suzanne Folsom, and her role as Director of the World Bank’s Institutional Integrity Department. INT’s function under Ms. Folsom is not as you described in your column today.  Ms. Folsom has continued to direct INT along the same lines as her predecessor Maarten de Jong: as a “goon squad” that intimidates any staff member who steps out of line and informs the Board of Directors about what is actually happening at the World Bank.

Until August 1, 2007 I was in-house counsel at the World Bank, and fulfilled my ethical obligations to report to the Audit Committee about a cover-up on a failed Banking project in the Philippines which resulted in the corrupt take-over of the second largest Bank in the Philippines, a $493 million bail-out from Philippines Deposit Insurance Corporation when depositors lost confidence in Philippines National Bank, the cancellation of $200 million from the World Bank’s associated loan to the Government of the Philippines, and the cancellation of $200 million in financing from Japan.

Instead of defending me, INT attacked me in a flawed report to the Audit Committee.  I am not the only whistleblower whom INT has attacked.  The Senate is fully aware of this scandal at the World Bank, which served as a poignant backdrop to Mr. Wolfowitz’ forced departure.  The Europeans are withdrawing their funding from the World Bank in favor of the European Investment Bank as a result of these severe governance issues.  Relevant documentation is attached to this email.

Because of AOL’s limitation on the size of files that may be attached to emails, I will forward other supporting documentation to you separately.

I sent The Wall Street Journal a set of the following, extremely important, documents, expecting that the cover-up would end.  I did not anticipate that a small elite group who owned the press was stealing democracy from US citizens by censoring what could be published by the media.

Read More here

***************************************************

Enhanced by Zemanta

America’s Bubble Economy Is Going To Become An Economic Black Hole

The Economic CollapseThe Economic Collapse

Black Hole The mainstream media never talks about that.  They are much too busy covering the latest dogfights in Washington and what Justin Bieber has been up to.  And most Americans seem to think that if the Dow keeps setting new all-time highs that everything must be okay.  Sadly, that is not the case at all.  Right now, the U.S. economy is exhibiting all of the classic symptoms of a bubble economy.  You can see this when you step back and take a longer-term view of things.  Over the past decade, we have added more than 10 trillion dollars to the national debt.  But most Americans have shown very little concern as the balance on our national credit card has soared from 6 trillion dollars to nearly 17 trillion dollars.  Meanwhile, Wall Street has been transformed into the biggest casino on the planet, and much of the new money that the Federal Reserve has been recklessly printing up has gone into stocks.  But the Dow does not keep setting new records because the underlying economic fundamentals are good.  Rather, the reckless euphoria that we are seeing in the financial markets right now reminds me very much of 1929.  Margin debt is absolutely soaring, and every time that happens a crash rapidly follows.  But this time when a crash happens it could very well be unlike anything that we have ever seen before.  The top 25 U.S. banks have more than 212 trillion dollars of exposure to derivatives combined, and when that house of cards comes crashing down there is no way that anyone will be able to prop it back up.  After all, U.S. GDP for an entire year is only a bit more than 15 trillion dollars.

But most Americans are only focused on the short-term because the mainstream media is only focused on the short-term.  Things are good this week and things were good last week, so there is nothing to worry about, right?

Unfortunately, economic reality is not going to change even if all of us try to ignore it.  Those that are willing to take an honest look at what is coming down the road are very troubled.  For example, Bill Gross of PIMCO says that his firm sees “bubbles everywhere”…

We see bubbles everywhere, and that is not to be dramatic and not to suggest they will pop immediately. I just suggested in the bond market with a bubble in treasuries and bubble in narrow credit spreads and high-yield prices, that perhaps there is a significant distortion there. Having said that, it suggests that as long as the FED and Bank of Japan and other Central Banks keep writing checks and do not withdraw, then the bubble can be supported as in blowing bubbles. They are blowing bubbles. When that stops there will be repercussions.

And unfortunately, it is not just the United States that has a bubble economy.  In fact, the gigantic financial bubble over in Japan may burst before our own financial bubble does.  The following is from a recent article by Graham Summers

First and foremost, Japan is the second largest bond market in the world. If Japan’s sovereign bonds continue to fall, pushing rates higher, then there has been a tectonic shift in the global financial system. Remember the impact that Greece had on asset prices? Greece’s bond market is less than 3% of Japan’s in size.

For multiple decades, Japanese bonds have been considered “risk free.” As a result of this, investors have been willing to lend money to Japan at extremely low rates. This has allowed Japan’s economy, the second largest in the world, to putter along marginally.

So if Japanese bonds begin to implode, this means that:

1)   The second largest bond market in the world is entering a bear market (along with commensurate liquidations and redemptions by institutional investors around the globe).

2)   The second largest economy in the world will collapse (along with the impact on global exports).

Both of these are truly epic problems for the financial system.

 

Read Full Article Here

*****************************************************************************************

40 Statistics About The Fall Of The U.S. Economy That Are Almost Too Crazy To Believe

The Economic CollapseThe Economic Collapse

40 Statistics About The Fall Of The U.S. Economy That Are Almost Too Crazy To BelieveIf you know someone that actually believes that the U.S. economy is in good shape, just show them the statistics in this article.  When you step back and look at the long-term trends, it is undeniable what is happening to us.  We are in the midst of a horrifying economic decline that is the result of decades of very bad decisions.  30 years ago, the U.S. national debt was about one trillion dollars.  Today, it is almost 17 trillion dollars.  40 years ago, the total amount of debt in the United States was about 2 trillion dollars.  Today, it is more than 56 trillion dollars.  At the same time that we have been running up all of this debt, our economic infrastructure and our ability to produce wealth has been absolutely gutted.  Since 2001, the United States has lost more than 56,000 manufacturing facilities and millions of good jobs have been shipped overseas.  Our share of global GDP declined from 31.8 percent in 2001 to 21.6 percent in 2011.  The percentage of Americans that are self-employed is at a record low, and the percentage of Americans that are dependent on the government is at a record high.  The U.S. economy is a complete and total mess, and it is time that we faced the truth.

The following are 40 statistics about the fall of the U.S. economy that are almost too crazy to believe…

#1 Back in 1980, the U.S. national debt was less than one trillion dollars.  Today, it is rapidly approaching 17 trillion dollars…

National Debt

#2 During Obama’s first term, the federal government accumulated more debt than it did under the first 42 U.S presidents combined.

#3 The U.S. national debt is now more than 23 times larger than it was when Jimmy Carter became president.

#4 If you started paying off just the new debt that the U.S. has accumulated during the Obama administration at the rate of one dollar per second, it would take more than 184,000 years to pay it off.

#5 The federal government is stealing more than 100 million dollars from our children and our grandchildren every single hour of every single day.

#6 Back in 1970, the total amount of debt in the United States (government debt + business debt + consumer debt, etc.) was less than 2 trillion dollars.  Today it is over 56 trillion dollars…

Total Debt

#7 According to the World Bank, U.S. GDP accounted for 31.8 percent of all global economic activity in 2001.  That number dropped to 21.6 percent in 2011.

#8 The United States has fallen in the global economic competitiveness rankings compiled by the World Economic Forum for four years in a row.

#9 According to The Economist, the United States was the best place in the world to be born into back in 1988.  Today, the United States is only tied for 16th place.

#10 Incredibly, more than 56,000 manufacturing facilities in the United States have been permanently shut down since 2001.

#11 There are less Americans working in manufacturing today than there was in 1950 even though the population of the country has more than doubled since then.

#12 According to the New York Times, there are now approximately 70,000 abandoned buildings in Detroit.

#13 When NAFTA was pushed through Congress in 1993, the United States had a trade surplus with Mexico of 1.6 billion dollars.  By 2010, we had a trade deficit with Mexico of 61.6 billion dollars.

#14 Back in 1985, our trade deficit with China was approximately 6 million dollars (million with a little “m”) for the entire year.  In 2012, our trade deficit with China was 315 billion dollars.  That was the largest trade deficit that one nation has had with another nation in the history of the world.

#15 Overall, the United States has run a trade deficit of more than 8 trillion dollars with the rest of the world since 1975.

#16 According to the Economic Policy Institute, the United States is losing half a million jobs to China every single year.

#17 Back in 1950, more than 80 percent of all men in the United States had jobs.  Today, less than 65 percent of all men in the United States have jobs.

#18 At this point, an astounding 53 percent of all American workers make less than $30,000 a year.

 

Read Full Article  Here

Jackson and the Bank of the United States

Click Here to Enlarge –  Andrew Jackson hated the idea of the Bank of the United States. He thought it wasn’t fair to the poor people. He wanted to destroy it. The many-headed monster is the states, who are fighting Jackson to keep the bank. Jackson raises a cane that says “veto.”

“The proverb, ‘What you don’t know can’t hurt you”, originated in 1576 as, ‘So long as I know it not, it hurteth mee not.’ But the opposite is true.  Unpleasant hidden truths do the most harm.  The best way to fight corruption is to expose it.  Think of the World Bank as ENRON.” … Karen Hudes

by Karen Hudes (with Jim Fetzer)

Veterans Today

Karen Hudes

When, thanks to Mark Novitsky, a federal whistleblower, I learned that Karen Hudes, who earned her J.D. at Yale, our most distinguished School of Law, and an M.Phil. in economics at the University of Amsterdam, which is also a formidable institution, had been removed from her position as Senior Counsel for the World Bank because of her efforts to expose corruption and reaffirm the rule of law in the form of appropriate standards of accounting, I was dumbfounded.  

What initially appear to be obscure issues of international finance, moreover, have the potential to sever ties between us and our NATO allies and weaken the national security of the United States.  The stakes involved are therefore extremely high for every American citizen.

During the World Bank and IMF Annual Meetings last October, with her encouragement, the Development Committee informed President Jim Yong Kim of the need for “a more open, transparent and accountable World Bank Group.”  The reasons that motivated that request included the following series of disturbing developments:

The Crisis in Cyprus as a Mini-Model

The threat by EU bankers to loot savings accounts held in Cyprus has raised red flags all over the world. As The New York Times (25 March 2013) has reported,

LIMASSOL, CYPRUS — It is not just about rich Russians and Cypriot retirees. Also vitally at stake in this island country’s banking crisis is Cyprus’s credibility as a place for international companies to continue doing business.

Take Avid Life Media, the Canadian-owned operator of some of the world’s biggest online dating sites. Only a few weeks ago it set up an office here as a base for its international operations, attracted to Cyprus — as hundreds of other foreign businesses have been — because of its reputation for financial stability, a low corporate tax rate, a friendly banking environment and most of all, a strong rule of law.

Now imagine that was the case for the most important bank of all, which affects the world’s economy.  Imagine that bank accounts were being looted world-wide and you will begin to appreciate the dimensions of the problem.

When I discovered that Karen Hudes’ reinstatement, which was being supported by the finance ministers of the nations of the world, was being blocked by its recently appointed president, Jim Yong Kim, who was formerly President of Dartmouth, I was further astonished, because I had encountered Kim before.  He had supported the publication for an article by a member of the computer science faculty, Hany Farid, who claimed that the backyard photographs used to convict Lee Harvey Oswald in the public mind were authentic, which was profoundly disturbing.

Hany Farid and “the backyard photographs”

That is a claim that others had long since proven false.  Jack White, the legendary JFK photo analyst, had testified to the House Select Committee on Assassinations (HSCA) when it had reinvestigated the deaths of JFK and of MLK in 1976-77 and had pointed out a dozen features that disqualify them.  Oswald himself had told Capt. Will Fritz, the Dallas Homicide detective who interrogated him, that the photo he was shown had his face pasted on someone else’s body.  Like other claims Oswald made at the time, subsequent research has proven that he was right.

The chin is not Lee Oswald’s chin, which was somewhat pointed, but a block chin; there is an insert line between the chin and his lower lip; and the  finger tips of his right hand are cut off, for example.  Even more interestingly, he realized that the two communist newspapers that Oswald was holding–The Militant and The Worker–had known dimensions and could serve as an internal rule to determine the height of the person who was holding them.  Using that method, he was able to establish that he was about 5’6″ tall, when Oswald was about 5’10″–which meant that either someone who was too short to be Oswald had posed for the photos or that they had been introduced too large when they were faked.  Either way, they could not possibly be authentic.

When I discovered that Hany Farid, who has a lab funded by the FBI, had published the claim that he had proven them to be authentic by showing that it was possible to replicate the shadow cast by the nose in one of them, I knew he was perpetrating a fraud on the public, because (1) there are four poses taken in different positions at different times, where it would have been virtually impossible for the nose shadow to remain constant from one to another; and (2) there are many other indications of fakery besides the shadow cast by the nose that prove fakery, where even if he had been right about the nose shadow, his conclusion of authenticity would have been wrong. He was violating a basic precept of science by not basing his reasoning upon all the available relevant evidence

So I wrote to President Kim to explain why Darmouth was committing a blunder in supporting Hany Farid’s claim, which I substantiated with multiple lines of proof.  Dartmouth stood pat, however, and never took steps to correct the record, even though it was a matter of immense public interest and concern.  I published an article about my experience with Kim in an article co-authored with Jim Marrs in OpEdNews, “The Dartmouth JFK-Photo Fiasco” (20 November 2009) and followed up by publishing my correspondence in “Blowing the Whistle on Dartmouth: Hany Farid in the nation’s service” (26 January 2010), which I regarded as a professional obligation.

It now appears to me that Kim may have been rewarded for his contribution to the public deception about the death of JFK by being appointed to the World Bank, just as Paul Wolfowitz appears to have been appointed by George W. Bush for his contributions to 9/11 and the “war on terror”.  I have long believed that, in Washington, D.C., the bigger the liar, the further you go.  I now believe that, when it comes to acting contrary to the public interest, the presidency of the World Bank may be another sign of compliance with corruption, as the experiences of Karen Hudes reflects.  I regard us as kindred spirits insofar as “whistle blowing” seems to be coursing through our veins.

Credit Ratings, NATO and Democracy: Too Big for Transparency?

by Karen Hudes

The World Bank and its next door neighbor, the International Monetary Fund (IMF), stand at the crossroads of the international financial system.  Both organizations are referred to as the “Bretton Woods” institutions, named for the site in New Hampshire where the founding conference of 44 countries was held in 1944.  The Bretton Woods institutions were created to prevent the “beggar thy neighbor” policies responsible for World Wars I and II.

The World Bank’s membership has now grown to 188 countries.  The World Bank and IMF share a Board of Governors comprising the Ministers of Finance of member countries.  They each have resident Boards of 24 Directors; seven Directors are appointed by 7 countries with the largest economies and 17 Directors are appointed by groups or “constituencies” of the remaining member countries.

Because of its crucial role at the heart of the world’s financial system, problems at the World Bank are going to have consequences for the world’s financial system.  I know “up close and personal” because I served as Senior Counsel for the World Bank for 21 years.  My qualifications included a J.D. from Yale Law School and M.Phil. in economics from the University of Amsterdam.  I know the institution inside and out.  And I have been blowing the whistle on improper practices at the World Bank that threaten the world’s fiscal integrity.
nbsp;

Reporting Corruption up the Chain of Command

I worked in the Legal Department of the World Bank from 1986-2007.  But in 2007, I was fired in retaliation for reporting corruption at the Bretton Woods institutions up the chain of command at the World Bank, through the US Treasury Department, and to the US Congress.  My report was quite specific, namely:  that the World Bank is out of compliance with the law, because its financial statements to the holders of its $135 billion in bonds, which are denominated in 52 currencies, are not in accord with Generally Acceptable Accounting Principles and Auditing Standards.

I never imagined how intractable the corruption at the World Bank was. A reliable stakeholder analysis, based on game theory modeling, shows that failure to adhere to the rule of law by the World Bank will bring about a world-wide currency war that will make what we lived through in 2008 pale by comparison.  The stakeholder analysis began predicting success in bringing the World Bank into compliance after the European Parliament invited me to testify on May 25, 2011. My testimony included a chronology of the cover-up. President Kim has already prompted Germany to repatriate the equivalent of $36 billion in gold.  As I told Sen. Harry Reid in 2008, “the greatest security risk to the US is in alienating its partners by acting as a hegemon”.

The Failure of Press Coverage

One reason it is so difficult to end the corrupt regime at the World Bank is because there has been virtually no press coverage.  It is possible to conclude from this that democracy in the United States has been weakened by the reduction in the number of corporations who own the bulk of US media outlets (from 50 to 5 in less than twenty years.)  Barclays Bank, JPMorgan Chase & Co, The Goldman Sachs Group along with a few others use interlocking corporate ownership to control 40 percent of total wealth and 60 percent of global revenues.

This concentration of power rests on disproportionate corporate investments of one percent of all corporations.  Theorists at the Swiss Federal Institute of Technology in Zurich, using natural systems mathematical modeling and comprehensive data on the actual corporate ownership of 43,000 transnational corporations, discovered this concentration of power.  When questions are raised about “who controls the world”, this one percent looks like a very promising candidate. The crux of the matter is that the corporations control the mass media and, through the mass media, control the politicians.

Although there have been occasional articles about these issues, where some of my commentaries about them have appeared in print, for the most part, interest in these questions from the public has been few and far between, where recent interviews with Deanna Spingola and with Jim Fetzer, who are alternative media radio hosts, have been the exception. Here are some links to our recent interviews:

  1. “Spingola Speaks” with Karen Hudes, 22 January 2013, HOUR 1
  2. “Spingola Speaks” with Karen Hudes, 22 January 2013, HOUR 2,
  3. “The Real Deal” with Karen Hudes, 6 March 2013, 1.5 HOURS,
  4. “The Real Deal” with Karen Hudes, 20 March 2013, .5 HOUR,

[NOTE: Both interviews are followed by discussion with Mark Novitzky.]

The Early Years of the World Bank

The longest-serving General Counsel of the World Bank, Aaron Broches, helped to write the charters of the World Bank and IMF at the Bretton Woods conference in 1944. According to Broches, corruption intensified during former Secretary of Defense Robert McNamara’s presidency of the World Bank from 1968-81.  In 2007, the Board fired another president from the Pentagon, Paul Wolfowitz, after Wolfowitz gave a 35% salary increase to his girlfriend at the World Bank, Shaha Riza.

The Europeans asked for an inquiry. The investigation headed by Paul Volcker, unfortunately, did not address the corruption. The Europeans reacted by calling for an end to the 66 years’ “Gentlemen’s Agreement” that the US appoints the President of the World Bank and the Europeans appoint the Managing Director of the IMF.  Had the press reported my warnings to the authorities about the corruption, the US could have avoided substantial tarnish to its reputation and the loss of the Gentlemen’s Agreement.

My efforts to expose and correct the failure of the World Bank to adhere to standard accounting procedures has been enduring.  In 2005, for example, the Dutch Government asked the Audit Committee to end a campaign of retaliation against me for reporting to the Executive Board about an inaccurate evaluation on a failed Banking Sector project in the Philippines.  Then Senator Richard Lugar (R-IN) and the Senate Committee on Foreign Relations have written three letters to the World Bank on my behalf, asking for an end to the ongoing cover-up.

My Efforts to Expose Corruption

In 2007, I also met with Chris Armstrong in Senate Finance, Jayme Roth in Senator Bayh’s office, and Nicole Willet in Senator Clinton’s office.  Senators Lugar, Leahy and Bayh began asking GAO to investigate the World Bank in 2008, and the Audit Committee is requiring an independent audit of the World Bank’s internal controls. The Audit Committee also referred my case to the Bank’s Institutional Integrity Department (INT).  INT, which reports to the President of the World Bank, is used to intimidate staff.  Paul Volcker ignored INT’s sinister role and simply recommended that whistleblower retaliation cases should be removed from INT’s mandate.

I met with the Ministry of Foreign Affairs of the Dutch Government on 24 September 2007. The Dutch are not happy with the Volcker Report and the ongoing cover-up.  Moreover, previous Dutch Executive Directors, Herman Wijffels and Ad Melkert, disclosed that ‘third parties’ attempted to intimidate them and other members of the World Bank’s Board through shocking invasions of their private lives. The US violation of the safe-conduct normally accorded to diplomats is an egregious breach of honor.  Article VII, Section 8 of the World Bank’s Articles provides immunities to Executive Directors, officers and staff.

Ben Heineman (who was a member of the Volcker Panel) spoke at the Yale Law School on October 5, 2007.  On October 8, 2007, at the suggestion of minority staff on the Senate Foreign Relations Committee, I contacted Kenneth Peel at Treasury, to encourage the Bush Administration to end the cover-up on the Philippines Banking Sector Reform Loan and restore the rule of law to the Bank.  But the upshot of my efforts to correct improper procedures was to have me removed from my position as Senior Counsel, which has had an intimidating effect.

Read Full Article Here

Corruption/WorldBank/Whistleblower.mp4

Karen Hudes·

Uploaded on Apr 12, 2011

Senior Counsel for the World Bank legal department reports corruption to US Congress, the World Bank’s other member countries, and the public.

Earth Watch Report  –  Flooding

3 18.01.2013 Flash Flood Indonesia Capital City, Jakarta Damage level
Details

Flash Flood in Indonesia on Wednesday, 16 January, 2013 at 17:23 (05:23 PM) UTC.

Back

Updated: Friday, 18 January, 2013 at 16:35 UTC
Description
Heavy rain was forecast again for Indonesia’s capital as floods that began three days ago claimed 11 lives in the city. Five people died of electrocution, four elderly victims died of hypothermia or illnesses, and two children drowned since flooding began on Jan. 15, Sutopo Purwo Nugroho, a spokesman at the National Agency for Disaster Management, told reporters in Jakarta today. More than 18,000 people in the city of 9.6 million have been evacuated from their homes, he said. “Rainfall with high intensity may be ongoing until this weekend,” Nugroho said. Water levels rose in the neighboring city of Depok and the resulting surge was headed toward Jakarta. The floods have disrupted businesses, stranded travelers and swamped the offices of President Susilo Bambang Yudhoyono. Consumer prices may rise because of disruptions in food distribution, Coordinating Minister for the Economy Hatta Rajasa said in Jakarta today, adding that the government is working to ensure smooth deliveries.

A state of emergency in the capital, which contributes about 16 percent of Indonesia’s economy output, will stay in effect until Jan. 27, Governor Joko Widodo said yesterday. The seasonal floods are affecting 41 square kilometers (16 square miles) of Jakarta, representing about six percent of the city’s total land area. In 2007, floods submerged 232 square kilometers and forced the evacuation of 320,000 people, Nugroho said. Indonesia’s floods are not affecting industrial areas and will have a limited impact on banks, Citigroup Inc. analyst Ferry Wong said in a report today. The overall economy will face a limited impact if the heavy rains stop now, he said in the report. Demand for home improvements, pharmaceuticals and noodles will increase, while distribution and logistics businesses will be impacted, according to the report. Jakarta sits in a low-lying area with 13 rivers and more than 1,400 kilometers of man-made waterways, making it prone to flooding, according to the World Bank. About 40 percent of Jakarta’s land area is below sea level.

 

Earth Watch Report  –   Climate  Change

 

CLIMATE SCIENCE

Arab world to bear brunt of climate change: World Bank

by Staff Writers
Doha (AFP)


Nations brainstorm global climate rescue plan
Doha (AFP) Dec 5, 2012 – Ministers meet at a UN climate conference in Doha on Wednesday to brainstorm novel ways of achieving urgently needed greenhouse gas emission cuts pending the drafting of a new, global pact.The meeting was requested by the European Union amid a slew of scientific reports showing that the world may be heading for calamitous global warming and cannot afford to wait for the new deal, due to take effect in 2020, to act.The ministers meet as negotiators from nearly 200 countries enter the final stretch of talks seeking to pin down a deal on money and mechanisms to mitigate what UN chief Ban Ki-moon on Tuesday called a climate change “crisis.”

On Wednesday, the ministers will consider proposals to phase out fossil fuel subsidies, 10 times higher than subsidies for renewable energy sources.

They will also look at drastically reducing emissions of hydrofluorocarbons (HFCs) found in aerosols and fridges, while boosting energy efficiency projects and climate-friendly renewable energy.

HFCs had replaced ozone layer-depleting chlorofluorocarbons (CFCs) but are adding to the Earth-warming greenhouse effect.

“There are many things where we don’t have to wait until 2015 or 2020,” European climate commissioner Connie Hedegaard said on Monday of the ministers’ meeting, which had not been part of the conference’s original planning.

“We could actually just get going, cooperating, those of us who want to move forward.”

Conference organisers have cautioned in a scheduling document not to expect any decisions from Wednesday’s talks.

Ban on Tuesday urged negotiators in Doha to set aside their quarrels and act urgently to tackle global warming.

After nine days of tough talks and late-night efforts, observers say parties remained in disagreement over details on extending the Kyoto Protocol on curbing greenhouse gas emissions and funding Third World climate projects.

Negotiators were joined by some 100 cabinet ministers and a handful of heads of state on Tuesday for the final phase of negotiations in the annual United Nations huddle.

The Doha talks are meant to finalise a second commitment period of the Kyoto Protocol, the world’s only binding pact on curbing greenhouse gas emissions, but delegates disagree on its time frame and country targets.

The protocol’s first round, which expires on December 31, bound about 40 rich nations and the EU to curbing emissions but excludes the two largest polluters.

The United States refused to ratify it and China which was left out because it is a developing country.

Another area of disagreement is money.

Developed nations are being asked to show how they intend to keep a promise to raise funding for poor nations’ climate mitigation plans to $100 billion per year by 2020 — up from a total of $30 billion in 2010-2012.

The developing world says it needs a total of $60 billion from now to 2015.

 

Global warming will have dire consequences for the Middle East and North Africa, with even hotter and drier conditions devastating everything from agriculture to tourism, a World Bank report said on Wednesday.

On current trends, average temperatures in Arab countries are likely to rise by as much as three degrees Celsius (5.4 Fahrenheit) by 2050 — and double that for night-time temperatures, said the report released at UN climate talks in Doha.

Rainfall in the region with the worlds lowest endowment of fresh water is projected to become even more unreliable, and flash floods more frequent.

“The climate of Arab countries will experience unprecedented extremes,” warned the report.

“Temperatures will continue to reach record highs, and in many places there will be less rainfall. Water availability will be reduced, and with a growing population the already water-scarce region may not have sufficient supplies to irrigate crops, support industry, and provide drinking water.

“Climate change will not only challenge the status quo: it will threaten the basic pillars of development.”

Negotiators from nearly 200 countries are gathered in the Qatari capital to thrash out a deal on reducing Earth-warming greenhouse gas emissions and provide funding to help developing nations, many in this region, deal with a changing climate.

The United Nations is targeting a global warming limit of two degrees Celsius from industrial age levels, but several reports have recently warned that Earth is heading for double this on current emissions trends.

The World Bank said climate change has, or soon will, affect most of the 340 million people in the Arab region — but the 100 million poorest, with fewer resources to adapt, will feel it most.

It will affect livelihoods — causing a cumulative drop in household incomes of about seven percent in Syria and Tunisia and 24 percent in Yemen, said the report.

Read Full Article Here

Corporate Assault on Our Lives And Our Health

How plastic bottled water is harming you and the environment

water
by: Anita Khalek
(NaturalNews) As soda sales leveled off in the U.S., multinational corporations like PepsiCo, Coca Cola and Nestle found a cash cow in marketing bottled water as the healthy alternative. Though blessed with an abundance of clean water, the U.S. now consumes more bottled water than any other country, piling up enough empty bottles to run the circumference of the equator every 27 hours, and we do so at an unacceptable price to both human health and the environment.

A feigned image of health

The World Bank estimates the bottled water market at $800 billion, making the prospect of a fraction of this fortune enough for companies to salivate over. Marketing words like pristine, pure, and fresh, have been used to describe bottled water, while undermining the perceived quality of tap water. Yet, contamination issues have led to over 100 recalls on bottled water in recent years. Unlike tap water, which is tested hundreds of times a day and is under constant monitoring, bottled water producers are not required to provide water quality reports. Bottled water is not regulated, as the FDA has no jurisdiction on bottled water sourced and sold in the same state, which is often mined from local streams and lakes before being sold back to the public at a cost thousands of times more than what they can readily get from their own faucet.

Hazards on the environment

The hazards of bottled water far outweigh its convenience. Small towns across the U.S. and around the world are being exploited for water resources to feed the manufactured demand of giant corporations selling public water and commodifying a necessity of life. Furthermore, poor neighborhoods, often in minority communities, are being poisoned by the toxic manufacturing of plastic bottles.

According to the Environmental Working Group, the annual manufacturing of plastic bottles for water alone in the U.S. market takes as much oil as required to fuel a million cars. At the consumer end, it is estimated that only one out of five bottles actually gets recycled, with much of the rest polluting our fragile environment. The throw-away bottled water economy has a significant burden on its resource as well, where it is estimated that two liters of water are needed to bottle every liter on the store shelf, resulting in approximately 72 billion gallons wasted annually worldwide.

Harzards on health

Producers of bottled water are not required to offer water quality reports, leaving a consumer to wonder what kind of filtering is actually occurring. In third-party testing, bottled water showed traces of bacteria, chemicals, fluoride, endocrine disruptors such as BPA and PETE (or PET). In fact, whether the filtering process is pure or not does not exclude some of these chemicals since the process of storing the water in the PET plastic water bottles (especially after being exposed to heat during transportation and storage) infuses the water with leaching from the plastic. The fact is plain and simple: in the majority of counties across the U.S., local tap water is safer than the plastic-laced water bought for insanely inflated prices.

A clearer path ahead

Given its ease and convenience, it takes commitment and planning to relinquish the costly addiction to bottled water. Nonetheless, it must be done for the sake of our own health, the health of others, and for the sake of our fragile, over-polluted environment. A healthier alternative would be to install a good quality filter in the home and use non-plastic, reusable water bottles. If a need arises, glass-bottled spring water is a better choice as it is bottled at the source and is naturally filtered underground.

Sources for this article include

http://www.ewg.org/bottled-water-2011-home
http://recipes.howstuffworks.com
http://thewaterproject.org/bottled_water.asp
http://earth911.com
http://www.rd.com/health/rethink-what-you-drink/3/
http://newswatch.nationalgeographic.com

About the author:
Anita is a researcher, a writer and a passionate believer in the healing power of food. Using her culinary skills and amateur photography, she regularly creates new recipes and shares her techniques on her food blog at www.myfreshlevant.com.
Questions and suggestions can be directed to anita@myfreshlevant.com

Crossroads News : Changes In The World Around Us And Our Place In It

 

 

Climate Change/Global Community  :  Economic Hardships/ Rising Costs

Food prices jump will hit poor, World Bank warns

Damaged corn in a field in Oakland City, Indiana A severe drought in the US has led to many farmers having to abandon their 2012 harvest

Global food prices have leapt by 10% in the month of July, raising fears of soaring prices for the planet’s poorest, the World Bank has warned.

The bank said that a US heatwave and drought in parts of Eastern Europe were partly to blame for the rising costs.

The price of key grains such as corn, wheat and soybean saw the most dramatic increases, described by the World Bank president as “historic”.

The bank warned countries importing grains will be particularly vulnerable.

From June to July this year, corn and wheat prices each rose by 25% while soybean prices increased by 17%, the World Bank said. Only rice prices decreased – by 4%.

In the United States, the most severe, widespread drought in half a century has wreaked havoc on the corn and soybean crops while in Russia, Ukraine and Kazakhstan, wheat crops have been badly damaged.

The World Bank said that the use of corn to produce ethanol biofuel – which represents 40% of US corn production – was also a key factor in the sharp rise in the US maize price.

Overall, the World Bank’s Food Price Index – which tracks the price of internationally traded food commodities – was six percent higher than in July of last year, and one percent over its previous peak, in February 2011.

‘Lifetime of perils’

The organization is urging governments to bolster programs to protect their most vulnerable communities from the increase in the cost of food.

“We cannot allow these historic price hikes to turn into a lifetime of perils as families take their children out of school and eat less nutritious food to compensate for the high prices,” World Bank President Jim Yong Kim said.

This ‘wait and see’ attitude is unacceptable”

 

Colin Roche Oxfam

He said countries in North and Sub-Saharan Africa and the Middle East were among those most exposed to such price increases because much of their food was imported and food bills make up a large proportion of average household spending.

Already, the bank said, maize prices had increased by 113% over the past quarter in Mozambique, while sorghum had risen 220% in South Sudan.

Although the bank said that it did not foresee the kind of price increases which led to riots in many countries in 2008 there were, it said, other potential risks which could push grain prices higher.

These included exporters pursuing panic policies, a severe El Nino, disappointing Southern hemisphere crops and strong increases in energy prices.

The G20 group of leading economies has said it will not take any decision on joint action until after the US agriculture department’s September estimate of this year’s harvest.

But aid charity Oxfam said it was not acceptable for governments to delay acting on food prices until the situation had deteriorated further.

“This ‘wait and see’ attitude is unacceptable,” Colin Roche said.

“Oxfam is already seeing the devastating impact of food price volatility in developing countries that rely on food imports.”

 

 

 

Related Stories

Politics, Legislation and Economy News

 

Banking &Financial Corruption  :  Taxation Hypocrisy

 

 

 

Trillions Stashed in Offshore Tax Havens

by Stephen Lendman
 

A new Tax Justice Network (TJN) USA report reveals an estimated $21 – $32 trillion of hidden and stolen wealth stashed largely tax-free secretly. 

Titled “The Price of Offshore Revisited,” it explains what financial insiders know but won’t discuss. Many of them have their own hidden wealth.

 

TJN describes a “subterranean” systemic “economic equivalent of an astrophysical black hole.” The higher estimate above exceeds US GDP twofold.

 

It’s mind-boggling. It’s hard imagining a tiny percent of privileged elites control this much wealth secretly. It’s worse knowing it’s largely tax free. It’s appalling that governments let them get away with it.

 

Wall Street and other major banks manage it. Their business is fraud and grand theft. Private banking operations yield huge profits. Keeping funds secreted tax free attracts rich clients. Private capital globally is attracted. It’s welcome from anyone, “no questions asked.”

 

Government policies protect them. Societal costs are huge. Tax justice is absent. Hotel magnate Leona Helmsley once said only little people pay taxes. TJN’s report bears her out.

 

A vast “global offshore industry” is explained. It’s largely tax-free. It’s controlled by the world’s richest, most powerful elites. Estimating amounts secreted takes tedious data mining.

 

Previous estimates relied more on rough judgments. TJN used several methods. They include available data sources, estimation methods, and core assumptions. They’re open to peer review and public scrutiny.

 

Four key approaches were used:

 

(1) A “sources-and-uses” country-by-country model.

 

(2) An “accumulated offshore wealth” model.

 

(3) An “offshore investor portfolio” model.

 

(4) Best-guess estimates of offshore assets held by the world’s top 50 private banks. 

 

Familiar Wall Street, European, and other global financial institutions comprise them.

 

Current data gotten from global central banks, the World Bank, IMF, UN, and national accounts were used. Other evidence includes:

 

(1) “Transfer mispricing” data.

 

(2) Demand for cross-border liquid “mattress money” data.

 

(3) Current research data on the offshore private banking market’s size.

 

TJN believes its work comprises the “most rigorous and comprehensive” data ever produced. It challenges anyone to contest it.

 

In overall size through 2010, it estimates hidden global wealth at from $21 – $32 trillion. It’s invested “virtually tax-free” through a still-expanding black hole of more than 80 secret jurisdictions. It calls estimates conservative.

 

Developed countries don’t face debt problems. They’ve got huge offshore tax evasion ones. Repatriation would reduce debt substantially. Doing so would bring it well within tolerable levels.

 

Only financial wealth is included. Much else isn’t measured. It includes real estate, yachts, racehorses, gold, art, and other categories not easily quantified.

 

The offshore economy alone has an enormous negative impact on the domestic tax bases of affected countries. They’ve had significant private capital outflows for years, decades or longer.

 

TJN focused on 139 countries. They’re mainly “low-middle income” ones. The World Bank and IMF maintain data on them.

 

Since the 1970s, private bankers let rich elites accumulate trillions in hidden wealth. At the same time, these nations experienced structural adjustment harshness. 

 

They became debt-entrapped. Some borrowed themselves into insolvency. They sold off public assets at fire sale prices. They impoverished their people. They colluded with big money interests at their expense.

 

Through 2010, they accumulated over $4 trillion in debt. Minus foreign reserves invested in First World securities, it’s $2.8 trillion. Including hidden wealth, they’re net lenders.

 

Key is that assets of these countries are held by wealthy elites. Ordinary people bear the burden of debts.

 

In the 1980s, an unnamed Fed official said:

 

“The problem is not that these countries don’t have any assets. The problem is they’re all in Miami” and other global cities. They’re home to private financial institutions.

 

Hidden offshore wealth correlates positively with loan amounts to indebted countries. Large amounts of borrowed capital were secreted lawlessly in global tax havens.

 

Local elites continue “vot(ing) with financial feet.” At the same time, their public sectors borrow heavily and ordinary people go begging.

 

Although First World countries borrow most, they and elites in them remain global financiers.

 

Wealth is concentrated in select private hands “in a handful of source countries.” Many are regarded as debtors.

 

Through 2010, 50 top private banks managed over $12 trillion in cross-border assets from individual clients,  trusts and foundations.

 

Smaller banks, investment firms, insurers, and non-bank intermediaries like hedge funds and independent money managers handle additional amounts up to an overall $32 trillion estimate.

 

TJN calls these enablers part of a global “tax injustice system.” Complicit governments let them operate at the expense of their own people.

 

“Since the late 1970s, investigative journalists, tax authorities, drug enforcement officials, terrorist trackers, national security experts,” and others became aware about vast amounts of money stashed in “offshore” tax havens.

 

Private banking “professional enablers” manage it. They make fortunes doing it. The term “offshore” refers less to physical locations than virtual ones anywhere. They’re often “networks of legal and quasi-legal entities and arrangements.” They operate in the interests of money managers.

 

Physical locations can be anywhere. Legal structures typically are assets owned by anonymous offshore companies in one jurisdiction. Trusts are in another. Trustees are in multiple places globally.

 

Clients are rich elites, companies, and criminals. They include real estate speculators, technology tycoons, oil sheiks, underworld millionaires, heads of state, despots, and drug lords, among others. Their common needs include:

 

(1) Anonymity and confidentiality.

 

(2) Minimizing or avoiding taxes.

 

(3) Skilled money management.

 

(4) Ability to access and manage their wealth anywhere.

 

(5) Secure places to reside, visit, or hide.

 

(6) Assured financial security no matter what’s happening in the real world.

 

Skilled professionals provide these services globally. Money management happens in a virtual world. They live under one set of rules. Another exists for all others. It’s gone on for decades. Global banks thrive on it. It’s one of their most profitable operations.

 

Physical locations operate from Bermuda, the Cayman Islands, Nauru, St. Kitts, Antigua, Tortola, Switzerland, the Channel Islands, Monaco, Cyprus, Gibraltar, Liechtenstein, and elsewhere. 

 

Over 3.5 million paper companies, thousands of shell banks and insurers, more than half the world’s registered commercial ships above 100 tons, and tens of thousands of shell subsidiaries of giant global banks, accounting firms, and various other companies operate there.

 

Nonetheless, conventional havens are misleading. Despite their vast financial infrastructure, most super-rich elites want more security. They also need easy access to First World capital markets, competent attorneys and accountants, independent judiciaries, and laws protecting them.

 

Professional “enablers” provide all needed services. Managing vast wealth is complex. Many skills are required. They include financial, economic, legal, accounting, and insurance. Super-rich elites demand and get the best.

 

Haven locations offer more than tax avoidance. Almost anything goes on. It includes fraud, bribery, illegal gambling, money laundering, human and sex trafficking, arms dealing, toxic waste dumping, conflict diamonds and endangered species trafficking, bootlegged software, and endless other lawless practices.

 

It’s impossible to estimate total lawful and illegal wealth from all sources. It’s vastly more than estimates within the parameters of TJN’s study. Credit Suisse tried. 

 

Through mid-2011, it puts total financial and non-financial global wealth at $231 trillion. It’s a best guess. It’s tenfold TJN’s top figure. It’s mind-boggling. It’s roughly 3.5 times global GDP. In 2011, it was about $65 trillion.

 

Imagine the good a small percent of global wealth could do for billions of disadvantaged people. Imagine its ability to stabilize and recapitalize troubled countries. Imagine a world where everyone shares its wealth. Imagine one worth living in. 

 

Global wealth represents low-hanging fruit out of reach. Instead of everyone benefitting, few do at the expense of all others. Injustice that great begs for transformational change. From the bottom up is the only way possible. Shedding light on what’s dark is a good way to start.

 

Stephen Lendman lives in Chicago and can be reached at lendmanstephen@sbcglobal.net

 

His new book is titled “How Wall Street Fleeces America: Privatized Banking, Government Collusion and Class War”

 

http://www.claritypress.com/Lendman.html

 

Visit his blog site at sjlendman.blogspot.com and listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network Thursdays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.

 

http://www.progressiveradionetwork.com/the-progressive-news-hour

Stephen Lendman is a frequent contributor to Global Research.  Global Research Articles by Stephen Lendman