Why Syria? - Quareness Series (34th "Lecture").
There seems to be something of a pattern to recent revolutionary events in the Arab world reminiscent of the "domino theory" of old i.e. the snowballing effect of the fall of one regime for a whole region. We are constantly told that this is because local dictators are being overthrown in overwhelmingly popular uprisings, and there may be some truth in this in some cases. However, what if there were other well concealed real reasons for these events we see unfolding? - maybe reasons with profound effects and implications even for those of us well away from the "targeted" areas.
Since the dawn of the 21st century Iraq and Libya have been "taken out" and it now appears to be Syria's turn, with Iran perhaps likely to follow not far behind. Leaving aside the oft-stated hypocrisy of the major Western Powers (which like to regard and refer to themselves as the "International Community") in seeking to bring "democracy" to the peoples of these countries as well as the undoubted economic and strategic advantages for the "invaders", let us consider another possible scenario.
Back during the late 1990s it would appear that a secret plan was devised by Wall Street and US Treasury officials to open up banking to the lucrative derivatives business (ref an August 2013 article “Larry Summers and the Secret ‘End-game’ Memo” by investigative reporter Greg Palast). This required the relaxation of banking regulations not just in the US but globally through the Financial Services Agreement of the World Trade Organisation (WTO). And it also required coercing support among WTO members as well as taking down some key countries refusing to join the WTO, including Iraq, Libya, Syria and Iran. In these countries banks were/are largely state-owned and “usury” tends to be viewed as a sin, which of course puts them at odds with the "Western" model of rent extraction by private middlemen. Publicly-owned banks also pose a threat to mushrooming derivatives business, since Governments with their own banks do not need interest rate swaps, credit default swaps, or investment-grade ratings by private rating agencies in order to to finance their operations.
In the event bank deregulation proceeded (as planned?) and the sanctioned and nurtured derivatives business boomed (some would now say into a massive pyramid scheme). Of course the whole highly leveraged and poorly regulated and dangerously unsustainable shebang collapsed in 2008 when Lehman Brothers went belly up taking a large segment of the global economy with it. Notably, however, the countries that managed to escape were those sustained by public banking models outside of the international banking net including (in addition to those already mentioned) Brazil, Russia, India and China, all of which are prominent in today's news as opposing any outside military intervention in the "civil war" currently raging in Syria. These BRIC countries with 40% of the world's population are also coincidently home to most of the 40% of banks globally which are publicly owned, and while also escaping the 2008 credit crisis, they did make a show of conforming to Western banking rules, unlike the "rogue states" of the Islamic world. Thus in order to make the world safe for usury, these latter having failed to succumb to economic coercion now had to be "silenced" by other means - hence the scenario we have seen unfold in recent times?
Detail/Evidence.
An "alleged" 1997 memo from Timothy Geithner (then US Assistant Secretary of International Affairs under Robert Rubin and since a familiar name here in Ireland with regard to ensuring our citizens/taxpayers bailed out our failed banks) to Larry Summers (then Deputy Secretary of the US Treasury) referred to the “end-game of WTO financial services negotiations” and urged Summers to touch base with the CEOs of Goldman Sachs, Merrill Lynch, Bank of America, Citibank, and Chase Manhattan Bank, for whom private phone numbers were provided (see http://www.gregpalast.com).
In this the game then in play was the deregulation of banks so that they could gamble in the lucrative new field of derivatives, and this required the repeal of Glass-Steagall (the 1933 Act that imposed a firewall between investment banking and depository banking in order to protect depositors’ funds from bank gambling). Also banking controls had to be eliminated globally so that money would not flee to nations with safer banking laws. The “end-game” was to achieve this global deregulation through an obscure addendum to the international trade agreements policed by the WTO, called the Financial Services Agreement (FSA).
Per Palast.....
Until the bankers began their play, the WTO agreements dealt simply with trade in goods–that is, my cars for your bananas. The new rules ginned-up by Summers and the banks would force all nations to accept trade in “bads” – toxic assets like financial derivatives.
Until the bankers’ re-draft of the FSA, each nation controlled and chartered the banks within their own borders. The new rules of the game would force every nation to open their markets to Citibank, JP Morgan and their derivatives “products”.
And all 156 nations in the WTO would have to smash down their own Glass-Steagall divisions between commercial savings banks and the investment banks that gamble with derivatives.
The job of turning the FSA into the bankers’ battering ram was given to Geithner, who was named Ambassador to the World Trade Organisation.
WTO members were induced to sign the agreement by threatening their access to global markets if they refused; and they all did sign, except Brazil. Brazil was then threatened with an embargo; but its resistance paid off, since it alone among Western nations survived and thrived during the 2007-2009 crisis.
As for the others: The new FSA pulled the lid off the Pandora’s box of worldwide derivatives trade. Among the notorious transactions legalised: Goldman Sachs (where Treasury Secretary Rubin had been Co-Chairman) worked a secret euro-derivatives swap with Greece which, ultimately, destroyed that nation. Ecuador, its own banking sector de-regulated and demolished, exploded into riots. Argentina had to sell off its oil companies (to the Spanish) and water systems (to Enron) while its teachers hunted for food in garbage cans. Then, Bankers Gone Wild in the Eurozone dove head-first into derivatives pools without knowing how to swim–and the continent is now being sold off in tiny, cheap pieces to Germany.
That was the fate of countries in the WTO, but what was/is to be the fate of those that were not in that organisation at all, among them Iraq, Libya, Syria, Lebanon, Somalia, Sudan, and Iran? In a 2007 “Democracy Now” interview the retired US General Wesley Clark identified these 7 countries as the new “rogue states” targeted for take down after September 11, 2001. He said that about 10 days after 9-11 he was told by a general that the decision had been made to go to war with Iraq and the same general later said they planned to "take out" the 7 countries in 5 years. None of these countries were members either of the WTO or of the Bank for International Settlements (BIS) and thus were not subject to the long regulatory arm of the central bankers’ central bank in Switzerland. Other countries later identified as “rogue states" that were also not members of the BIS included North Korea, Cuba and Afghanistan.
The body regulating banks today is called the Financial Stability Board (FSB) located in the BIS in
Switzerland. In 2009 the heads of the G20 nations agreed to be bound by rules imposed by the FSB, ostensibly to prevent another global banking crisis. It's important to realise that its regulations are not merely advisory but are binding, and that they can make or break not just banks but whole nations.
Back in 1989 when the Basel I Accord raised capital requirements a mere 2% (from 6% to 8%) the result was to force a drastic reduction in lending by major Japanese banks which though then the world’s largest and most powerful creditors, were undercapitalised relative to other banks. The Japanese economy sank along with its banks and has yet to fully recover.
Other game-changing regulations in play under the FSB are Basel III and the new bail-in rules, with the former slated to impose crippling capital requirements on public, cooperative and community banks thus coercing their sale to large multinational banks (we had a recent example of this here in Ireland when pressure was placed upon our credit unions to become more "normal banking" operations - successfully resisted for now but I dare say unlikely to be dropped longer term). The “bail-in” template was first tested in Cyprus and follows regulations imposed by the FSB in 2011. Too-big-to-fail banks are required to draft “living wills” setting forth how they will avoid insolvency in the absence of government bailouts. The FSB solution is to “bail in” creditors (including depositors) by turning investments and deposits into bank stock thereby effectively confiscating them.
In Conclusion.
Currently it seems that countries with an extractive private banking system are forced into “structural adjustment” and austerity by their unrepayable debt. But some other countries have so far managed to escape this fate. In the Middle East these are the targeted “rogue nations”. Their state-owned banks can issue the credit of the state on behalf of the state, leveraging public funds for public use without paying a massive tribute to private middlemen. And state funding appears to have allowed them to provide relatively generously for their people.
Like was the case in Libya and Iraq before they were embroiled in war, Syria has provided free education at all levels and free medical care. It has also provided subsidised housing for everyone (although some of this was compromised by adoption of an IMF structural adjustment program in 2006 and the presence of about 2 million Iraqi and Palestinian refugees). Iran too provides largely free higher education and primary health care. These may be some of the reasons why we had/have less discontent in these countries than we in the West were/are "brainwashed" to believe.
Again like Libya and Iraq before "takedown", Syria and Iran have state-owned central banks that issue the national currency and are under government control. Whether these countries will succeed in maintaining their financial sovereignty in the face of enormous economic, political and military pressure remains to be seen, but the signs are not good.
Larry Summers, after progressing his career at Citigroup (which of course went bankrupt while still managing to pay its director/chairman, Mr.Rubin again, a total of $126 million), became State Senator Barack Obama’s key campaign benefactor. He has played a key role in the banking deregulation that brought on the current crisis, causing millions to lose their jobs and their homes. And yet it seems he is President Obama’s first choice to replace Ben Bernanke as Federal Reserve Chairman. We may wonder why but he has proven highly adept at manipulating the system to make the world safe for Wall Street - "bankster" rule be the name of this game??
Sean.
Dean of Quareness.
September, 2013.