When The Bank of
International Settlements was
formed back in 1930, two board seats
were allocated to the
U.S. Federal Reserve but for many
years [decades actually] the Fed did not name anyone to these positions.
As reported by Reg Howe at
the Golden Sextant years
ago, The Federal Reserve finally took up their seats as directors of the BIS back in
1994. Howe never
did articulate the
importance or assign a reason
as to why the Fed took their seats on the BIS at that time, but he did question the timing:
“To deal with this situation and preserve a
certain level of American participation, the
Convention established a Constituent Charter for
the BIS that gave it a
unique corporate structure. Fifteen
percent of the original issue of partially paid shares -- the American
issue -- was allocated to
Morgan and two other private American financial
institutions in return for their guarantee of its public subscription in the United States. The remaining shares were allocated to the founding central banks to be taken up by them or subscribed publicly in their respective
countries, as was done with parts of the French and Belgian
issues. No voting rights attached to any of the shares, which all carried equal rights to participate in the
profits of the bank or any
distribution of assets. Voting
rights were assigned exclusively to the member central banks in
proportion to their respective issues. The
Constituent Charter also assigned
certain seats on the BIS's
board to governors of the
founding central banks or
their designees.
Two board seats were allocated
to the United States, but Federal Reserve officials [the Chairman and the head
of the N.Y. Fed] did not assume these
seats until 1994. Then, as described by Mr.
Greenspan in the transcript of the Federal Open Market Committee's conference call on July 20, 1994 (P.A. Ex. I):
[Greenspan explanation]
Up until the Maastrich Treaty, our relationships
with the BIS seemed to be appropriately constrained to our periodic visits over there to deal with the G-10 on a
consultative basis and to be involved
with a number of their committees, but to have
no involvement at all with the actual management of
the BIS. With the advent
of the Maastrich Treaty
and the development of the European
Monetary Institute, the potential
of the BIS being effectively
neutered because of the overlap in jurisdictions of the
EMI and the BIS has led the BIS to move toward a much more global role, one that anticipates inviting a significant number of non-European members, 10 to 25 as I
recall the range, to become
members of the BIS. That would
significantly alter its character from a largely though not exclusively European managed operation to one which is far more global in
nature. It is possible, perhaps
probable, that the BIS as a consequence
will become a much larger player
on the world scene. It was
our judgment that it would
be advisable for us to be involved in the managerial changes that are
about to be initiated rather than to stay on the sidelines, as we chose to do through all those decades when we did
not want to get involved with a European-type international organization.
In contradistinction to that,
we think it is important to be an active player in the development of this institution
to make certain that we as the principal international financial
player have a significant
amount to say in the evolution of the institution. That's
the basis upon which this decision has been made here at the Board,
and it was one which we probably
would not have addressed
in any meaningful way had not the altered nature of the BIS itself
become imminent.”
Greenspan’s explanation seems to be self-serving and misdirection. The Maastrich
Treaty was negotiated in Feb. 1992 –
a full year and a half before Greenspan had his epiphany. Remember, it was none other
than former Treasury Secretary Robert Rubin on page 181 of his book, In An Uncertain
World, when he characterizes the manner in which Greenspan intentionally obfuscates facts when responding to direct questioning. Rubin goes on to characterize a typical Maestro response, under oath, to explicit and direct Congressional
questioning,
“That’s an interesting observation you make, Senator, about the earth being flat, he’d say. If I might, let me rephrase the question. Alan would then ask himself
a completely different question and answer it with such
complexity and finely calibrated nuance that the questioner faced a choice between nodding intelligently and acknowledging his own confusion. I must say that testifying next to the chairman, I was sometimes completely baffled myself.”
Indeed, Greenspan was a true charlatan. For years I too wondered about the real reason why the Fed waited so long to occupy their allocated seats on the
BIS. It finally
became clear to me exactly why – only today, May 15, 2011, when Dominique Straus-Kahn
[I.M.F. head] was charged in N.Y. with sexual impropriety. In a forum that
I frequent, a poster [2
point] raised the question as to whether Strauss-Kahn would have
diplomatic immunity from such charges citing the work of renowned BIS researcher Patrick Wood as he
reported years ago:
The BIS can be compared to a stealth bomber. It flies high and fast, is undetected, has a small crew
and carries a huge payload.
By contrast, however, the
bomber answers to a chain
of command and must be refueled
by outside sources. The BIS, as we
shall see, is not accountable to any public authority and operates with complete autonomy and self-sufficiency……
It is not surprising that the BIS, its offices, employees, directors and members share an incredible immunity from virtually all regulation, scrutiny and accountability.
In 1931, central bankers
and their constituents were fed up with
government meddling in
world financial affairs. Politicians were viewed mostly with contempt, unless it was
one of their own who was the politician.
Thus, the BIS offered them a once-and-for-all opportunity
to set up the "apex" the way they really wanted
it -- private. They demanded these conditions and got what they demanded.
A quick summary
of their immunity, explained further below, includes
·
diplomatic
immunity for persons and what they
carry with them (i.e., diplomatic pouches)
·
no taxation on any transactions, including
salaries paid to employees
·
embassy-type immunity
for all buildings and/or offices operated by the
BIS
·
no oversight
or knowledge of operations
by any government authority
·
freedom from
immigration restrictions
·
freedom to encrypt any and all communications of any
sort
·
freedom from any legal jurisdiction9
Further, members of
the BIS board of directors
(for instance, Alan Greenspan) are individually granted special benefits:
·
“immunity from arrest or imprisonment and immunity from seizure of their personal baggage, save in flagrant cases of criminal
offence;”
·
“inviolability of all papers and
documents;”
·
“immunity from jurisdiction, even after their
mission has been accomplished, for acts carried out in the discharge of their duties, including words spoken and writings;”
·
“exemption for themselves, their spouses and children from any immigration
restrictions, from any formalities concerning the
registration of aliens and from
any obligations relating
to national service in Switzerland ;”
·
“the right to use
codes in official communications or to receive or send documents or correspondence
by means of couriers or diplomatic bags.”10
Lastly, all remaining
officials and employees
of the BIS have the following immunities:
·
“immunity from jurisdiction for acts accomplished in the discharge of their duties, including words spoken and writings, even after such persons
have ceased to be Officials of the Bank;”[bold emphasis added]
·
“exemption from all Federal, cantonal and
communal taxes on salaries, fees
and allowances paid to them by the Bank…”
·
exempt from Swiss national obligations,
freedom for spouses and family members from immigration restrictions, transfer
assets and properties
– including internationally
– with the same degree of benefit as Officials of other
international organizations.11
That’s when
everything “clicked”.
I know Patrick Wood and the caliber of his work. Second,
GATA has long maintained that
gold price suppression began
in the timeframe circa
1994. Coincidentally,
or perhaps not, that is also the same
timeframe that wholesale interest rate
suppression began. Excerpted
from, The Federal Reserve Is
Selling Paper Gold and Buying Physical Gold:
Price of Gold and Interest Rates Are Joined at the Hip
The academic research that
outlines the inter-relatedness of gold and interest rates is succinctly laid
out in a 2001 treatise, Gibson's Paradox Revisited, by Reg Howe. From this one can deduct that ANY rigging
of the gold price must go hand-in-hand with simultaneous rigging of interest
rates.
Folks would do well to
realize how neatly emerging details of Fed surrogate Morgan's
"stealth" activity in the bullion market dovetails with their
obscene, obsequious activity elsewhere in their derivatives
book—particularly their JUMBO TRILLIONS sized interest rate swap
positions.
Stealth activity on the part
of the Fed—utilizing proxy institutions to generate limitless
artificial demand for any and all U.S. Government Debt—effectively gives
the Fed control of the long end of the interest rate curve [the bond market].
From a timing perspective,
it is also noteworthy that gold price rigging—long maintained by
GATA—is alleged to have begun in earnest during the Clinton
Administration with the appointment of Robert Rubin as U.S. Treasury
Secretary [along with understudy Lawrence Summers] in Jan. 1995.
Coincidentally [or perhaps
not?] we can trace the genesis of the "explosion" in the use of
derivatives [mostly interest rate] to that exact same time frame. In
fact, if we follow the time line in "reverse"—the growth in
the use of derivatives appears like a trail of bread crumbs —right back
to the time when Professor Lawrence Summers, under the tutelage of Sir Robert
of Rubin, brought his academic alchemy to Washington:
Conclusion: The Federal
Reserve began systemically
engaging in treasonous financial acts in the timeframe circa 1994. It appears that Mr. Greenspan and his henchmen at the Fed demanded and received the diplomatic “comfort” [immunity] afforded them as DIRECTORS OF THE BIS before they would
engage in what otherwise would have been flagrant, manipulative, criminal acts.
The powers extended to American designees
on the BIS board of directors appear to contradict the U.S.
Constitution, as any clandestine, unethical, illegal, and/or manipulative activities engaged in by or under the
auspices of these individuals
would flaunt the fiduciary protocols of free markets, regulatory principles, and fair trade. It supposes that these individuals are above the rules, above the democratically elected government, immune from the judiciary rules and answerable to no one but
themselves.
One might ask why such
extraordinary powers
are afforded to this
group? In light of the recent financial meltdown and subsequent bailouts by these same individuals,
"crony capitalism"
has resulted in: a greater
consolidation of wealth and power in the hands of
the few; more reliance on the too
big to fails rather than less;
on-going "ever-greater
risk" in the system; and deliberate
impoverishment of the middle class through the hidden tax of inflation.
The granting
of these immunities was the seed for enabling the unbridled growth of manipulative derivatives to impose a draconian, undeclared, stealth system of fascist central planning. Together with "The Great Guttenberg", the banking elites have "murdered"
the bond vigilantes, rigged real markets with fractional paper tsunamis, and supported their shenanigans with official data
and public relations manipulations. What's
an average hard working
girl to do?
When leaders of the Federal
Reserve require supra constitutional
immunity and protections to insulate
themselves from treasonous, tawdry acts – we must ask if the Federal Reserve has outstayed its welcome?
Rob Kirby
KirbyAnalytics.com
Subscribers to Kirbyanalytics.com
are profiting from paid in-depth research reports, analysis and commentary on
rapidly unfolding economic developments. Subscribe here.
|