BEHIND THE NEWS JUNE 1981
A Comparatively short period will probably serve to decide whether we are to master the mighty economic and social machine that we have created, or whether it is to master us; and during that period a small impetus from a body of men who know what to do and how to do it, may make the difference between yet one more retreat into the dark ages, or the emergence into the full light of a day of such splendor as we can at present only envisage dimly. C.H. DOUGLAS Economic Democracy.
It was one of the biggest events in years, but only a few people ever knew it happened.
Even today, more than a year later, only a few more know anything at all about this event, the consequences of which, for the United States and for the whole world, are incalculable.
Did you know, di your newspaper ever tell you, that in March last year there were secretly inserted into an amendment of America’s Monetary Control Act (Public Law 96.221, The Depository Institutions and Monetary Control Act – to give its full name) a few words which permit the Federal Reserve Bank to purchase at face value all the debts owing to American banks by any or all the Communist and Third World countries?
Now that you have been told, do you know what that really means?
It means that unless the American people are awakened in time and the decision reversed, the whole of the monstrous debts incurred by the Communist empire and the Third World countries will sooner or later be distributed as a crushing burden on all the hard-working and producing people of the Western world in the form of sky-rocketing inflation and heavy taxation.
And if that happens, of course, the price of gold and other hard assets will sky-rocket to unprecedented heights.
The first stage in this process could begin quite soon – if it hasn’t begun by the time this newsletter reaches you – if the Soviet Union decides to march into Poland, something that is almost certain to happen sooner or later.
In fact, it was this immediate danger of a Soviet move which caused America’s Monetary Control Act to be so hurriedly and secretly altered.
For what happens if the Soviet does decide to march into Poland is that America’s $16-billion share of the Poles’ 23-billion foreign debt will at once be bought on the American Government’s account by the Federal Reserve Bank; and the American banks will be paid out with money created out of nothing for the purpose, and thus “let off the hook”.
Technically, the Poles have already defaulted on $3.1-billion of this debt which was due to be serviced on March 5 this year. But, of course, the debt was not declared to be in default, for that would have severely shaken that huge house of cards known as the Western monetary system.
All that happened, according to the media, was that the Poles unable even to pay the interest, asked for this portion of their debt to be “rolled over” or re-scheduled, a money-magician’s trick for making a default disappear.
Amendments to the Monetary Control Act came to in effect on June 1.
That may explain why Soviet forces were not in Poland before that date.
Now that all is ready for a shedding of all their liabilities by the American banks, we must not be surprised to learn that the Soviet Union has sent its forces into Poland to firmly re-establish a Communist regime. It stands to reason the Soviet Union cannot permit the disintegration of any part of the Communist system within its sphere of influence, for this would be plain counter-revolution, something that must be cut out like a deadly cancer that threatens Communism everywhere.
What’s more, Western high finance and the big business it owns own and controls are just as anxious as the Soviet Union that Communism should not fold up in Poland or anywhere else in the world.
Therefore, if or when the Soviet Union goes into Poland there is sure to be a noisy demonstration of protest, perhaps louder than the incidental music that accompanied the invasion of Afghanistan; but quite soon the hubbub will die down and it will be business as usual and no serious interruption of détente talk and the grain sales which, year after year, have rescued the Soviet Union from famine.
Winds of Change
How, then, was this vitally important piece of information hidden from the world for so long?
Carefully study this extract from one small section of PL 96.221, remembering that this forms part of 62 pages of text, all in the same legalistic jargon, and you will be able to answer that question for you:
(2) Section 14(b) (1) of the Federal Reserve Act (12 U.S.C. 355), as such section is in effect on the effective date of this title and as it will be in effect on June 1, 1981, is Amended by inserting after “reclamation districts”, the following: “and obligations of, or fully guaranteed as to principal and interest by, a foreign government or agency thereof.
Lawrence Patterson in his LTP STRATEGY LETTER* explains how America’s legislators had the wool pulled over their eyes, one of them, Congressman Dr. Ron Paul of Texas, even after he had spotted the offending amendment.
Reports LTP STRATEGY LETTER: “Paul questioned this provision when it came up in the Joint Conference and the Chairman of the Committee agreed to drop it, apparently because he didn’t want it to be a bone of contention. Later when the Bill came before the vote – paragraph had been surreptitiously added back in.”
How and by whom that was done would make a media scandal of Watergate dimensions, but this time “Deep Throat”, the WASHINGTON POST’S hitherto infallible source of secrets, appears to have been afflicted with the quinsy.
All that, however, is only one half of the story. If the Federal Reserve Bank buys the Polish debt, or any other irrevocable debt, and the Wall Street banks suddenly find themselves wallowing in newly created dollars – what then? As the Americans are hit with another nasty twist of the inflationary cyclone, they will know at once what caused it. Not so? So, how can this be prevented?
Mr. Paul Volcker, chairman of the Federal Reserve Board, had an answer to that one. Quite simple: Just stop the publication of money supply statistics! Let the Americans suffer, but don’t let them find out how, by whom and for whose benefit they are being made to suffer.
END TO WEEKLY MONEY REPORT STUDIED, reported the NEW YORK TIMES in a heading, with the news that the Federal Reserve Bank had “asked” that the usual MIB statistics should not be made public, the reasons given sounding harmless enough – one of these being that non-publication would tend to inhibit sharp fluctuations.
The Mammon of Unrighteousness
How much and for how long, will the Americans suffer before enough of them come to a full understanding of what is happening, and try collectively to do something about it?
The Communist bloc debts are bad enough, but what of the even bigger Third World debts?
The truth is summed up in a CHICAGO SUN TIMES heading of March 9: Third World Debts are Ours.
A similar trick was played, but on a much smaller scale, when the Shah of Iran was brought to the United States so as to precipitate a violent anti-American reaction in Teheran to give the Carter administration a publicly acceptable excuse to freeze all Iranian assets in American banks. Then, too, the New York banks mainly Rockefeller’s Chase Manhattan, were “let off the hook” to the tune of billions of dollars to their own immense profit and at appalling cost to the American people, including loss of life.
It is hardly necessary to add that if this form of legalized crime to continue much longer there will remain only one way in which the bankers can be “let off the hook” – a global conflagration, a third world war, that will give them the chance to transform their present total financial power into a totalitarian political power that will at last free them from all danger – or so they hope.
The main mark of modern governments is that we do not know who governs, de facto any more than de jure. We see the politicians and not his backer: still less the backer of the backer: or, what is most important of all, the banker of that backer. Thronged above all, in a manner without parallel in all the past, is the veiled prophet of finance, swaying all men living by a sort of “magic”. G.K. CHESTERTON.