Saturday, January 30, 2010

Iceland president: We are being bullied -


London, England (CNN) -- Iceland's president accused the United Kingdom and the Netherlands on Friday of financially "bullying" his country.

Olafur Ragnar Grimsson said the two countries had been "using their influence within the International Monetary Fund" to stop it lending Iceland billions of dollars needed to rebuild the country's debt-ridden economy.

"We are being bullied. The British and the Dutch are using their influence within the IMF to prevent the IMF program from going forward," Grimsson told CNN's Richard Quest.

"We have a situation, where a small nation is in fact ready to shoulder part of this burden but doesn't want to be put in a corner where the very survival of its economy in the next 10 years would be at stake."

The comments came after the UK expressed anger at the highly controversial decision by Iceland's president's to veto a bill that would pay back billions of dollars Iceland owes the UK and Netherlands. Britain was forced to spend $3.69 billion last year to cover the losses that British savers incurred when Icelandic banks collapsed.

The British and Dutch governments condemned the decision by President Grimsson and hinted at repercussions for Iceland's bid to join the European Union and for its $10bn international economic rescue program.
Despite being already approved by Iceland's parliament, Grimsson refused to sign the bill and called for a national referendum.
Grimsson told CNN: "May I remind that if you take the sum that the Icelandic taxpayers are asked to shoulder and you transform it in to the British economic system to get the relative size, this is equal to the British taxpayers being asked to pay £700 billion ($1.1 trillion) for the years and decades to come."
Icelandic Prime Minister Johanna Sigurdardottir hinted that the move could further tarnish the country's image and crush its hopes to become a member of the European Union.
"Uncertainty... in the formal dealings with others countries can have unforeseen, wide-ranging and potentially damaging consequences for our society," she warned.
Announcing that Iceland was bankrupt ... was at worst, financial terrorism on their part--Olafur Ragnar Grímsson And while the repayment of Iceland's debt to the UK and the Netherlands is not theoretically a pre-condition for it to receive IMF funding, the president's actions could hinder it.
But Grimsson told CNN his move was in the name of democracy. He said he acted in response to the one-quarter of Icelanders who petitioned against the compensation bill that would cost about $17,300 per Icelandic citizen.

Announcing that Iceland was bankrupt ...
was at worst, financial terrorism on their part

--Olafur Ragnar Grímsson
"We have forgotten that there are two pillars in the western heritage that we are proud of. One is the evolution of the free market but the second is the evolution of democracy," Grimsson told CNN.
"And what I did was when I was faced with a decision between the financial concerns on the one hand, and democracy on the other, I decided to go with democracy."
Grimsson's veto also reflects his country's anger with their treatment at British hands at the height of the economic crisis, when the UK employed anti-terror legislation to freeze Icelandic assets.
"They put my country, on the official Web site, the British government Web site, side by side with al Qaeda and the Taliban.
"And the second thing was that Gordon Brown in October and Alistair Darling went on global television, including CNN and stated that Iceland was a bankrupt country.
"Which was utter nonsense at its best and financial terrorism on their part at its worst." He added: "This meant that companies all over the world, who had had dealings with Iceland, closed their operations down."
As a result, said Grimsson, his economy was damaged by the British "to a greater extent than otherwise would have been the case."
In a statement on January 6, however, a spokesperson for the British prime minister said that "the Government expects the loan to be repaid.
"We are obviously very disappointed by the decision by the Icelandic President, but we do expect Iceland to live up to its legal obligations and repay the money."


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Friday, January 29, 2010

Issa: AIG Investigation Just Getting Started

January 29, 2010 (LPAC)—Following Wednesday's hearing of the House Committee on Oversight and Government Reform examining the government's role in bailing out AIG counterparties and hiding its details from the American public, Ranking Member Darrell Issa (R-CA) made public a document (Schedule A) that the Federal Reserve Bank of New York (FRBNY) wanted kept confidential by the Securities Exchange Commission (SEC) until 2018. This 5-page document is a list of approximately 400 worthless credit default swap deals that were paid at 100% of par at the insistence of Fed Reserve Chairman Ben Bernanke and New York Federal Reserve Bank Chairman Timothy Geithner.

Schedule A includes the names of all of AIG's counterparties, the identification numbers of each transaction, and the prices at which Maiden Lane 3 was purchasing the underlying assets. In the end, AIG's filings on December 2, 2008, and December 24, 2008, included the agreements between AIG and ML3 but omitted Schedule A. The Schedule A was finally submitted under pressure from the SEC, but was kept "in a special area at the SEC where national security related files are kept."
Issa also released a 22-page report: "Public Disclosure as a Last Resort: How the Federal Reserve Fought to Cover Up the Details of the AIG Counterparties Bailout from the American People."

In this second document, several emails further establish that Geithner lied under oath when he stated that he had recused himself from the AIG matter.

* On November 6, 2008, Sarah Dahlgren, the FRBNY's lead staff member in AIG's operations, emailed Geithner with a proposed statement regarding AIG's upcoming equity capital raise for Geithner's approval: "If you are good with this, ... we would also make sure that the company sticks to this line ...."

* On November 13, Geithner received a report on AIG's restructuring that would be sent to Congress, which Geithner had asked to personally review. Sophia Allison, a staff member of the Federal Reserve's Board of Governors, e-mailed the draft congressional report to several Federal Reserve staff. Michael Nelson, a staff member of the FRBNY, fowarded Allison's email to Geithner with the following message: "Tim — this is the draft EESA-required filing on AIG that the Board owes the Hill, as you requested."

* In addition, Geithner's meeting logs show that he had at least six formal meetings with the top FRBNY staff members about AIG-related issues between November 4, 2008, and November 21, 2008.

* Also, Geithner did not respond to a request from Issa for an interview before the hearing. He did, however, meet with Congressman Cummings together with Tom Baxter, General Counsel of the FRBNY, on Friday January 15, 2010, even though Baxter was scheduled to be a witness at the hearing as well. It is Baxter, who has claimed that Geithner had recused himself from AIG case.

In releasing these documents, Issa said: "It's not conjecture, its not speculation, it's fact, the New York Fed gave a back-door bailout to AIG's counterparties and then tried to cover it up. The veil of secrecy that swept through the Fed embraced a mentality that treated transparency as a dispensable luxury rather than a moral imperative."

Regarding Secretary Timothy Geithner's testimony addressing the NYFRB's efforts to limit public disclosure, Issa said, "If he didn't know, he should have and no one has answered the question as to why the New York Fed were so adamant at keeping details of the counterparty deal confidential. If he or anyone else thinks that this investigation will stop after today's hearing, they are completely mistaken. There has been a widespread effort by officials at the NY Fed to thwart transparency and working with the SIGTARP, we will continue to pursue this investigation for as long as it takes to get the truth. Unfortunate as it may be for those who acted deliberately to deceive the American people, there is no statute of limitations in our pursuit of transparency."

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Geithner Lie on Recusal in AIG Case Exposed

January 29, 2010 (LPAC)—During his testimony at the hearing of the House Oversight and Government Reform yesterday, Timothy Geithner lied that he had nothing to do with the New York Federal Reserve Bank decision to allow AIG to pay several banks, including Goldman Sachs, 100% of par on credit default swaps.

In the hearing, Rep. Marcy Kaptur (D-Ohio) pressed Geithner to prove that he had recused himself from decisions with regard to AIG: "Can you provide for the record a copy of the recusal agreement that you signed when you were at the New York Fed?" Geithner answered: "I did not sign a recusal agreement. I withdrew from day-to-day management, operations, policies of the New York Fed, and my colleagues both in Washington and in New York can attest to that. This was very important to do."

However, during the same hearing, Neil M. Barofsky, Special Inspector General of the TARP bailout program, testified to the following in his statement to the committee: "On November 7th, 2008, FRBNY employees involved with the negotiations reported to then-FRBNY President Geithner on the efforts to convince AIG counterparties to accept haircuts on their claims against AIG in return for unwinding the CDS contracts. Noting both the willingness of UBS to negotiate a small haircut and the generally negative reactions from the other counterparties, these FRBNY offials recommended that FRBNY cease negotiations and proceed with paying the counterparties the market value of their underlying CDOs and permitting them to keep the collateral already posted, effectively paying them par for securities that collectively had a market value, based on the amount of the collateral payments of approximately 48 cents on the dollar. According to these FRBNY executives, then-President Geithner 'acquiesced' to the executives' proposal. When asked by SIGTARP if the executives felt they had received their 'marching orders from then-FRBNY President Geithner to pay the counterparties par, one FRBNY official responded 'yes, absolutely.' The decision to pay effective par value was then brought before the Board of Directors of the FRBNY and the Board of Governors of the Federal Reserve. Each body gave its approval."

Moreover, at the end of the hearing, according to the Financial Times, a previously unpublished e-mail was disclosed: Written by 'TFG75' — Timothy Franz Geithner — to senior Fed officials, it asked: 'Where are you on the AIG counterparty disclosure issue?' The e-mail was written on March 15, 2009, the day on which the names of AIG's counterparties were released.

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LaRouche: We are at War and the Enemy is the British Empire | LaRouchePAC

January 29, 2010 (LPAC)—As we approach Lyndon LaRouche's international webcast tomorrow, Saturday, January 30, 2010, the mass strike in the U.S. whose leadership is Lyndon LaRouche, is zeroing in on the center of British monetarism in the U.S.—Wall Street and the Federal Reserve system. Even the "go along to get along"-controlled U.S. Senate was driven by this mass strike to cast 30 votes against the reconfirmation of "Bailout" Ben Bernanke, the most votes ever cast against a nominee for chairman of the British-controlled Federal Reserve.
While Bernanke was reconfirmed yesterday, the drive to nail both Geithner and Bernanke is now escalating. As Lyndon LaRouche said today, "It's not going to go away. This is the end of some people, the end of some people's careers."

In the case of Geithner, he could be facing perjury charges. During sworn testimony before the House Oversight and Government Reform Committee on Thursday, he admitted that he did not sign an agreement recusing himself from the AIG matter. Nonetheless, he claimed: "I withdrew from day-to-day management, operations, policies of the New York Fed, and my colleagues both in Washington and in New York can attest to that." Unfortunately for Geithner, Neil Barofsky, Special Inspector General of TARP, who also testified at the hearing, contradicted Geithner on this matter, and reported that FRBNY executives have stated to his office that they met with Geithner on the AIG credit default swaps deal, and that Geithner "acquiesced" to their proposal to pay the AIG credit default swaps at 100%. When asked by Barofsky's office if the executives felt they had received their "marching orders" from Geithner to pay the counterparties par, one FRBNY official responded, "Yes, absolutely."
On Monday, the ranking members of the House Oversight and Government Reform Committee, led by Rep. Issa, released a 22-page report entitled: "How the Federal Reserve Fought to Cover up the Details of the AIG Counterparties Bailout from the American People." The report releases a number of e-mails from FRBNY officials which prove that Geithner was deeply involved in the policy decision. His meeting log also shows that he conducted six formal meetings on AIG in November 2008 with staff.

But it is not only Geithner who is in trouble. On Tuesday, Rep. Issa sent a letter to Committee Chair Edolphus Towns urging him to issue a new subpoena in the AIG case, this time to the Federal Reserve. Issa points out that new information has come to light about documents in the possession of the Federal Reserve Board of Governors regarding the Federal Reserve's decision to bail out AIG in September of 2008. Issa points out that his office has received important information from a whistleblower who has identified specific documents which detail Bernanke's personal involvement in the decision to pay AIG credit default swaps at 100%.

So even as Bernanke was reconfirmed as Fed Chair, he is about as secure in his office as Nixon was after the 1972 elections.
After the hearings on Wednesday, Rep. Issa released a statement in which he said of Geithner: "If he or anyone else thinks that this investigation will stop after today's hearing, they are completely mistaken."

Issa also released a 5-page document, the "Schedule A" which AIG filed with the SEC, detailing all of the credit default swaps paid by AIG to Goldman Sachs, etc. The FRBNY had tried to prevent this information from being filed. When it was finally filed, the SEC was supposed to seal it until the year 2018 and keep it in a location designated for national security items. But now it has been released publicly in unredacted form.

At the same time, there are increasing indications, as Lyndon LaRouche said today, that some people who want to stay in public life, recognize that this is the obvious time to jump ship. Democrats are jumping ship to get on the Republican payroll.

A case in point is a deal struck on Wednesday between the Chairman of the House Energy and Commerce Committee Rep. Henry Waxman (D-Cal) and Rep. Michael Burgess (R-Tx.) to launch an investigation of the corrupt deal made by the Obama White House with the pharmaceutical companies, the hospitals, and the doctors, at the point that the drive for Obama deathcare was being launched. Waxman, one of three House committee chairmen responsible for shepherding the House version of Obama deathcare through the House, agreed to help Republicans get a comprehensive list of meetings the White House held with industry representatives, as well as records documenting calls and emails between outside groups and the Department of Health and Human Services.
Meanwhile, as Lyndon LaRouche has emphasized, Britain's puppet in the White House, Obama himself, is nearing the end of his Neronic career. Instead of listening to the mass strike process, in his State of the Union speech Obama proved himself, as LaRouche has stated, constitutionally in incapable of change. He insisted, instead, upon continuing to push his Nazi death bill and fascist "green energy" policy.

Even the Wall Street Journal lead editorial caught the flavor of Obama's tendency toward political suicide, comparing Obama to Willy Loman in Arthur Miller's Death of a Salesman. As the Journal wrote: "On health care, Mr. Obama offered a Willy Loman-esque soliloquy on his year-long effort, as if his bill's underlying virtues and his own hard work haven't been truly appreciated by the American public."

As the suppression of the article by Ambrose Evans-Pritchard exposing the intention of the British Empire to eliminate national sovereignty, demonstrates, the war we are engaged in is for the sovereign capacity of nation states, acting in concert to develop their respective peoples against a monetarist British Empire intent upon killing those same people. Evans-Pritchard compares the British-controlled EU beauracracy to the ultramontane medieval papacy with its jesuitical lawyers. It was against this ultramontane imperialist system that Nicolaus Cusa in 1433 wrote that the emperor "derives his power from the people." This is the principle which the British Empire and their puppet Obama are denying at their own peril.
As LaRouche has emphasized, the mass strike currently under way in the U.S., as reflected in the Massachusetts election, reflects precisely this principle, embedded in the U.S. Declaration of Independence and the U.S. Constitution.
It is this principle which is now defining politics in the U.S. and, by extension, throughout the world. The population is ready to fight. The only problem is, that it doesn't know the solution. Lyndon LaRouche does.

Thursday, January 28, 2010

LaRouche Warned: "Don't Betray the Country with this Bail-Out!" | LaRouchePAC

January 28, 2010 (LPAC)-- Wednesday Jan. 27's blatant lying under oath by Treasury Secretary Tim Geithner, who disclaimed all knowledge of the key decisions in history's biggest bail-out (as did Hank Paulson), and blamed everything on a third-level assistant, has all the hounds baying for Geithner's ouster. Geithner will have to go. But in fact, the decisions he is lying about came not from him, but from the White House under two successive Presidencies. But indeed, in reality, those decisions were not made by either one of those Presidents, either. Obama is nothing but a puppet. They were made behind the scenes.

History is not a series of events, not a ping-pong game, it's a process. And that is what economists and politicians today don't understand. Think back to the Fall of 2008. Then, when all the other top leaders were repeating in unison that this bail-out must go through, it was only Lyndon LaRouche who provided a rallying point against it. Every one of those other leaders, made a terrible mistake. They disagreed with LaRouche, and look what happened!

Listen to his prophetic warning from his webcast of October 1, 2008.

Link to Video: Click Here

ECB prepares legal grounds for euro rupture as Greece festers

By Ambrose Evans-Pritchard
The Telegraph, London
Sunday, January 17, 2010

Fears of a euro breakup have reached the point where the European Central Bank feels compelled to issue a legal analysis of what would happen if a country tried to leave monetary union.
"Recent developments have, perhaps, increased the risk of secession (however modestly), as well as the urgency of addressing it as a possible scenario," said the document, entitled "Withdrawal and Expulsion from the EU and EMU: Some Reflections."
The author makes a string of vaulting, Jesuitical, and mischievous claims, as EU lawyers often do. Half a century of ever-closer union has created a "new legal order" that transcends a "largely obsolete concept of sovereignty" and imposes a "permanent limitation" on the states' rights.

Those who suspect that the European Court has the power pretensions of the medieval papacy will find plenty to validate their fears in this astonishing text.
Crucially, the author argues that eurozone exit entails expulsion from the European Union as well. All EU members must take part in EMU (except Britain and Denmark, with opt-outs).
This is a warning shot for Greece, Portugal, Ireland, and Spain. If they fail to marshal public support for draconian austerity, they risk being cast into Icelandic oblivion. Or for Greece, back into the clammy embrace of Asia Minor.
ECB chief Jean-Claude Trichet upped the ante, warning that the bank would not bend its collateral rules to support Greek debt. "No state can expect any special treatment," he said. He might as well daub a death's cross on the door of Greece's debt management office.
This euro-brinkmanship must be unnerving for the Hellenic Socialists (PASOK). Last week's E1.6 billion (L1.4 billion) auction of Greek debt did not go well. The interest rate on six-month notes rose to 1.38 percent, compared to 0.59 percent a month ago. The yield on 10-year bonds has touched 6 percent, the spreads ballooning to 270 basis points above German Bunds.

Greece cannot afford such a premium for long. The country must raise E54 billion this year -- front-loaded in the first half. Unless the spreads fall sharply, the deficit cannot be cut from 12.7 percent of GDP to 3 percent within three years. As Moody's put it, Greece (and Portugal) face the risk of "slow death" from rising interest costs.
Stephen Jen from BlueGold Capital said the design flaws of monetary union are becoming clearer. "I don't believe Euroland will break up. Too much political capital has been spent in the past half century for Euroland to allow an outright breakage. However, severe 'stress-fractures' are quite likely in the years ahead."
As Portugal, Italy, Ireland, Greece, and Spain (PIIGS) slide into deflation, their "real" interest rates will rise even higher. "It is tantamount to hiking rates in the already weak PIIGS," he said. This is the crux. ECB policy will become "pro-cyclical," too tight for the South, too loose for the North.
The City view is that the North-South split may cause trouble but that there will always be a bailout to prevent a domino effect. "If a rescue turns out to be necessary, a rescue will be mounted," said Marco Annunziata from Unicredit.
It comes down to a bet that Berlin will do for Club Med what it did for East Germany: subsidise forever. It is a judgment on whether EMU is the binding coin of sacred solidarity or just a fixed exchange rate system like others before it.
Politics will decide, and in Greece it is already proving messy as teams of "inspectors" ruffle feathers. The Orthodox LAOS party is not happy that an EU crew dared to demand an accounting from the colonels. "The Ministry of Defence is sacrosanct," it said.
Greece alone in Western Europe treats the military budget as a state secret. Rating agencies guess it is a ruinous 5 percent of GDP. Does the country really need 1,700 battle tanks, 420 combat jets, and eight submarines? To fight NATO ally Turkey? Merely to pose the question is to enter dangerous waters.
Who knows what the IMF surveillance team made of their mission in Athens. The fund's formula for boom-bust countries that squander their competitiveness is to retrench and devalue. But devaluation is ruled out. Greece must take the pain, without the cure.
The policy is conceptually foolish and arguably cynical. It is to bleed a society in order to uphold the ideology of the European Project. Greece's national debt will be 120 percent of GDP this year. S&P says it will reach 138 percent by 2012. A fiscal squeeze -- without any offsetting monetary or exchange stimulus -- will cause tax revenues to collapse. Debt will rise higher on a shrinking economic base.

Even if Greece can cut wages without setting off mass protest, it lacks the open economy and export sector that may yet save Ireland in similar circumstances. Greece is caught in a textbook deflation trap.
Labour minister Andreas Loverdos says unemployment would reach a million this year -- or 22 percent, equal to 30 million in the US. He broadcast the fact with a hint of menace, as if he wanted Europe to squirm. Two can play brinkmanship.

Monday, January 25, 2010


Save the People of Iceland - the Official Petition

We the undersigned support the people of Iceland in their uprising against being bullied into taking on more debt then they can possible handle from the private bank Icesave. Private debt should never be passed on to taxpayers.  

Iceland may be the first Western democracy to be forced into South-American style debt-slavery. The IMF, in concert with the UK and the Netherlands, has attempted to strongarm the recently impoverished Island of 317,000 into paying over 3.6 billion pounds ($6.3bn) -- $86,000 per Icelandic family -- at 5.5% interest for the next generation. The money is not conventional government debt, but arises from the collapse of a private multi-national bank during the financial crisis.

The issue is so serious that the entire nation will vote on the issue towards the end of February 2010.

On December 30, 2009, after extraordinary diplomatic threats, Iceland's parliament passed narrowly a bill agreeing to pay the onerous terms. Only a few months earlier parliament had agreed to the full amount, but under more reasonable conditions.
The people of Iceland must be internationally supported, so they can feel safe in voting down debt-slavery. If Iceland falls, it won't be long before other countries suffer similar financial extortion.



Sunday, January 10, 2010


by Lyndon H. LaRouche, Jr.

January 7, 2010

It goes virtually without saying, that I am proud of Iceland and its President.

Iceland President Stands by His People

January 8, 2010 (LPAC)-- Despite the hostility of the governments of Great Britain and the Netherlands, which have threatened to kick Iceland out of the "international community," Iceland President Olaf Ragnar Grimsson is standing by his decision, and defending, in interviews and statements, the right of his people to national sovereignty. In the Financial Times today, he is quoted as saying, "The Icelandic constitution is based on the fundamental principle that the people have sovereignty. It is the responsibility of the President to make sure that the will of the people will prevail."

He then called on the peoples of Britain and Netherlands ("and their political leaders") to stand "with the longstanding democratic traditions of Britain and the Netherlands, acknowledging that a referendum is a democratic way of making a decision," Grimsson was also interviewed in Swedish radio.

In an interview with BBC on Wednesday evening, Grimsson was verbally assaulted by the host, who looked like an attorney for Shylock and treated the President of a state like a felon. "Don't trust an Icelander," "Aren't international agreements more important than a President's will?" and "Are you happy with these results?" (downrating, loss of international credit, etc.) were the interviewer's questions and remarks. Grimsson taught the arrogant fellow a lesson, telling him, "I understand that Britain is not familiar with systems where the people is called to express its will " and that in Iceland, "not the parliament, but the nation is sovereign."

In contrast to the oligarchy, the British people continue to express their sympathy for Icelanders, at least judging from readers' comments continuing to flow in to major dailies (see below). It is probably due to this that a faction of the British establishment, represented by the Financial Times, has taken a distance from the government and openly rejected the "hard-line" approach towards Iceland. Significantly, an FT editorial today is entitled "Do Not Put Iceland in a Debtors' Prison." The FT also chose to publish a letter by Advocacy International, saying that it is "unjust" to make Iceland take sole responsibility for the "reckless behavior of private bankers and risk-takers."

The FT ran as a blowup quote, the view of its chief financial commentator, Martin Wolf: "This is not about cutting a running deficit, which is, indeed, unavoidable. It is about forcing innocent people to assume gigantic liabilities for which they have no legal or moral responsibility. How would U.K. citizens feel if they were forced to assume a debt of £400 billion because of HSBC's failure to meet deposit insurance liabilities in Asia? Let the U.K. take the bank's assets and leave it at that."

Also, Michael Hudson from the University of Missouri writes that "Iceland has the right to refuse debt servitude." Hudson argues that Iceland could pay foreign debt only out of balance-of-payments receipts, i.e. through export revenues. But already fish export revenues have been entirely earmarked to service existing debt; the same goes for aluminum exports and its geothermal and hydroelectric resources. Add to this the fact that most families have mortgages which, if the currency is depreciated, can only get worse, and you have the picture: It is impossible for Iceland to pay the debt. "A pragmatic economic principle is at work in such conditions. Debts that cannot be paid, will not." If we have learned the lessons of the collapse of living standards in post-Soviet Russia, he ends by asking, "by how many years must Icelandic lifespans shorten?"

According to a European banking source, the British and the Dutch are going to dump the burden on Scandinavian countries. On their side, the resistance organization in Iceland is calling on the Scandinavian governments to support them against the London and The Hague.


The question addressed by the following presentation, is:

What are to be recommended for consideration as perspectives for what is (a) a truly, urgently needed four-power initiative on behalf of a mission-oriented process of transformation of the world’s economic systems, (b) away from the presently ruinous effects of submission to an implicitly financially imperialist, global monetarist system, a virtual “new Tower of Babel,” and, (c) toward an urgently needed, fixed-exchange-rate credit system of (d) mutually beneficial, global cooperation among peoples organized as a community of respectively sovereign nation-states.

This presumes the indispensable, included, practical measure of the included, (e) immediate application of the precedent provided as the principle of the Glass-Steagall reform which was introduced to the U.S.A. under U.S. President Franklin Roosevelt.

Which also means, once more, (f) the eradication of intrinsically pro-imperialist, monetary systems, by their replacement by (g) a system of sovereign national credit-systems configured in the formation of a long-term, fixed-exchange rate array of national credit-systems.

Since most of the nominal monetary-financial assets abroad presently, are loaded with an implicitly hyper-inflationary accumulations of increasingly worthless “paper,” an immediate change from a monetary system, to a fixed-exchange-rate credit system, is the only presently available hope for avoiding the plunge of the planet as a whole into a prolonged new dark age.

What is written on the current state of the British empire, is admittedly harsh, but must be stated as a truthful representation, without fear of any actual exaggeration respecting the current policies of practice of the present British Royal House. I have been careful, not to overlook the natural, national rights of the people of the United Kingdom, with whom I, after all, share an certain ancient ancestry.


Iceland President Warns British Leaders Who Behave in a "Versailles Mode" | LaRouchePAC

January 9, 2010 (LPAC)—Iceland President Olafur Ragnar Grimsson warned British Prime Minister Gordon Brown and Chancellor of the Exchequer Alistair Darling to be careful about the Iceland-bashing. "It is very important for Alistair Darling and Gordon Brown to realize that a few minutes after they speak to their audience in Britain, everything they say is being talked about in Icelandic fishing plants, and every village, and every office. We live in a global village where leaders in Britain can have a negative or positive impact on a referendum in Iceland," Grimsson told Britain's "Today" program. "If they want a constructive outcome of this dispute, they should be aware every sentence they say will have repercussions on the debate in Iceland."

Nothing has changed at Downing Street since the Versailles Congress 1918: the British government is behaving towards Iceland as it did with German reparations after World War I. The Financial Service Secretary to the U.K. Treasury, Paul Myners, has written a letter to the Financial Times making the point that it is "Important that this international agreement is honored." Apparently annoyed by the Financial Times opposition to the gunboat methods of the British government, Myners says: "It is very important that Iceland honors its international obligations and repays money provided by the U.K. to protect Icesave depositors." Myners argues sophistically that the repayment agreement allows Iceland to honor the debt without hampering its economic recovery, but does not move one inch away from his position. According to Myners, for Iceland to dedicate 4% of its GDP just to repay Icesave's speculative losses is fair! And this, at the same time that Iceland is promised EU membership, which means submitting to a 3% cap on deficit!

Myners' rantings are published under a letter pushing the opposite view, written by a Cambridge Fellow named Michael Waibel, who warns Britain that under EU laws, Britain has "no clear legal obligation to pay up." That in the best case, England has only 60% chance of winning its case. And even then, one should remember "the advice given by Elihu Root, a former U.S. Secretary of State and Nobel Peace Prize laureate, to James Brown Scott, his legal adviser: 'We must always be careful, and especially so in our relations with the smaller state, that we never propose a settlement which we would not be willing to accept if the situation were reversed.'"

Iceland's Economy Minister Gylfi Magnusson confirmed in Dagens Nyheter today that the government will probably resign if the referendum turns down their Icesave bill.

Thursday, January 7, 2010

Iceland sees the first anti-bailout revolt | City AM

Iceland sees the first anti-bailout revolt City AM

SOMEONE should give Gordon Brown a copy of John Maynard Keynes’ The Economic Consequences of the Peace. Published in 1919, it addressed post-war Germany – but the book is uncannily relevant to the situation in today’s Iceland, explaining how crippling reparations enforced by powerful foreign nations on an unwilling population are counter-productive. Iceland – unlike Weimar Germany – won’t turn to extremism, though an eventual descent into national bankruptcy and hyperinflation is a real possibility, with Fitch yesterday downgrading the country’s debt to junk.

The UK and Dutch governments have been too harsh towards Iceland, to deflect the attention from their own stupidity – and now its people, who fear being pushed into poverty, are revolting. It is the first successful grass-roots anti-tax, anti-bailout revolt since the onset of the credit crunch.

The row boils down to Landsbanki’s Icesave unit, which like the rest of the Icelandic banking system collapsed in 2008. A small group of Icelandic entrepreneurs pushed the crazed Northern Rock banking model to its extreme, borrowing vast amounts to build financial giants with massive European property assets. These were often operated out of London and given the seal of approval by the FSA, academics and “experts”. But when the credit markets imploded, the banks collapsed.

British and Dutch depositors in Icesave were bailed out by their governments; Iceland had said it would cover the first €20,887 in accounts but didn’t have the foreign currency to meet its obligations. It was a worthless promise which should have been seen as such by the UK authorities: tiny nations are physically unable to guarantee all the foreign liabilities of any giant bank that they happen to host. Either they shouldn’t host the banks; or they should explicitly state that they are unprotected and in a real free market; or their banks should take part in pre-funded insurance schemes.

The bankers were incompetent, as were the Icelandic authorities, the UK authorities, the EU and the depositors who didn’t do their research. Egged on by price comparison websites and personal finance pages, the public assumed regulators would ensure every newfangled online bank was safe and forgot that high returns often mean high risk. Instead of acknowledging this, Brown is pursuing a vendetta against Iceland, trying to recoup all of the cash from its government.

Bailouts have been unpopular all over the world. Until now, however, voters were never consulted – but after a fifth of Iceland’s entire population signed a petition against the terms of a proposed £3.6bn reimbursement (at a 5.5 per cent rate of interest and a 14-year schedule) the proposal will now be put to a referendum and crushed. The sums involved are huge: 40-60 per cent of Iceland’s national income, taking the national debt to 200 per cent of GDP. Each of Iceland’s 304,000 citizen would have to pay £11,700 without getting shares or any assets in return. The money would be gone for good. Imagine if UK taxpayers were asked to pay £700bn to overseas governments because one of our banks had messed up. We too would be up in arms.

Iceland will hopefully hand over some money, albeit on more sensible terms. But the last thing we need is for Britain, the IMF and the EU to push Reykjavik into total bankruptcy or nobody will get anything. Shame that Brown, a self-professed Keynesian, has actually failed to heed his master’s warnings.