The famous currency expert Dr. Franz Pick once stated, The destiny of the currency is, and always will be, the destiny of a nation. With the advent of rampant globalization, this concept can certainly be given a global context as well: The destiny of currencies are, and always will be, the destiny of the world. Even though the BIS is the oldest international banking operation in the world, it is a low profile organization, shunning all publicity and notoriety. As a result, there is very little critical analysis written about this important financial organization. Further, much of what has been written about it is tainted by its own self-effacing literature. 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. Leading up to Founding As we will see, the BIS was founded in 1930 during a very troubled time in history. Some knowledge of that history is critical to understanding why the BIS was created, and for whose benefit. There are three figures that play prominently in the founding of the BIS: Charles G. Dawes Owen D. Young Hjalmar Schacht of Germany Charles G. Dawes was director of the U.S. Bureau of the Budget in 1921, and served on the Allied Reparations Commission starting in 1923. His latter work on stabilizing Germany’s economy earned him the Nobel Peace Prize in 1925. After being elected Vice President under President Calvin Coolidge from 1925-1929, and appointed Ambassador to England in 1931, he resumed his personal banking career in 1932 as chairman of the board of the City National Bank and Trust in Chicago, where he remained until his death in 1951. Owen D Young was an American industrialist. He founded RCA (Radio Corporation of America) in1919 and was its chairman until 1933. He also served as the chairman of General Electric from 1922 until 1939. In 1932, Young sought the democratic presidential nomination, but lost to Franklin Delano Roosevelt. More on Hjalmar Schacht later. In the aftermath of World War I and the impending collapse of the German economy and political structure, a plan was needed to rescue and restore Germany, which would also insulate other economies in Europe from being affected adversely. The Versailles Treaty of 1919 (which officially ended WWI) had imposed a very heavy reparations burden on Germany, which required a repayment schedule of 132 billion gold marks per year. Most historians agree that the economic upheaval caused in Germany by the Versailles Treaty eventually led to Adolph Hitler’s rise to power. In 1924 the Allies appointed a committee of international bankers, led by Charles G. Dawes (and accompanied by J.P. Morgan agent, Owen Young), to develop a plan to get reparations payments back on track. Historian Carroll Quigley noted that the Dawes Plan was largely a J.P. Morgan production1 The plan called for $800 million in foreign loans to be arranged for Germany in order to rebuild its economy. In 1924, Dawes was chairman of the Allied Committee of Experts, hence, the Dawes Plan. He was replaced as chairman by Owen Young in 1929, with direct support by J.P. Morgan. The Young Plan of 1928 put more teeth into the Dawes Plan, which many viewed as a strategy to subvert virtually all German assets to back a huge mortgage held by the United States bankers. Neither Dawes nor Young represented anything more than banking interests. After all, WWI was fought by governments using borrowed money made possible by the international banking community. The banks had a vested interest in having those loans repaid! In 1924, the president of Reichsbank (Germany’s central bank at that time) was Hjalmar Schacht. He had already had a prominent role in creating the Dawes Plan, along with German industrialist Fritz Thyssen and other prominent German bankers and industrialists. The Young Plan was so odious to the Germans that many credit it as a precondition to Hitler’s rise to power. Fritz Thyssen, a leading Nazi Industrialist, stated I turned to the National socialist party only after I became convinced that the fight against the Young Plan was unavoidable if complete collapse of Germany was to be prevented. Some historians too quickly credit Owen Young as the idea-man for the Bank for International Settlements. It was actually Hjalmar Schacht who first proposed the idea3, which was then carried forward by the same group of international bankers who brought us the Dawes and Young Plans. It is not necessary to jump to conclusions as to the intent of these elite bankers, so we will instead defer to the insight of renowned Georgetown historian, Carroll Quigley: The Power of financial capitalism had another far reaching plan, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalistic fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basle, Switzerland, a private bank owned and controlled by the world’s central banks, which were themselves private corporations. Each central bank, in the hands of men like Montagu Norman of the Bank of England, Benjamin Strong of the New York Federal Reserve Bank, Charles Rist of the Bank of France, and Hjalmar Schacht of the Reichsbank, sought to dominate its government by its ability to control treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence co-operative politicians by subsequent rewards in the business world. Day-to-Day Operations Acting as a central bank, the BIS has sweeping powers to do anything for its own account or for the account of its member central banks. It is like a two-way power-of-attorney - any party can act as agent for any other party. Article 21 of the original BIS statutes define day-to-day operations: buying and selling of gold coin or bullion for its own account or for the account of central banks holding gold for its own account under reserve in central banks accepting the supervision of gold for the account of central banks making advances to or borrowing from central banks against gold, bills of exchange, and other short-term obligations of prime liquidity or other approved securities discounting, rediscounting, purchasing, or selling with or without its endorsement bills of exchange, checks, and other short-term obligations of prime liquidity buying and selling foreign exchange for its own account or for the account of central banks buying and selling negotiable securities other than shares for its own account or for the account of central banks discounting for central banks bills taken from their portfolio and rediscounting with central banks bills taken from its own portfolio opening and maintaining current or deposit accounts with central banks accepting deposits from central banks on current or deposit account accepting deposits in connection with trustee agreements that may be made between the BIS and governments in connection with international settlements. accepting such other deposits that, as in the opinion of the Board of the BIS, come within the scope of the BIS’ functions. The BIS also may, act as agent or correspondent for any central bank arrange with any central bank for the latter to act as its agent or correspondent enter into agreements to act as trustee or agent in connection with international settlements, provided that such agreements will not encroach on the obligations of the BIS toward any third parties. How Decisions are Made The board of directors consist of the heads of certain member central banks. Currently, these are: Nout H E M Wellink, Amsterdam (Chairman of the Board of Directors) Hans Tietmeyer, Frankfurt am Main (Vice-Chairman) Axel Weber, Frankfurt am Main Vincenzo Desario, Rome Antonio Fazio, Rome David Dodge, Ottawa Toshihiko Fukui, Tokyo Timothy F Geithner, New York Alan Greenspan, Washington Lord George, London Hervé Hannoun, Paris Christian Noyer, Paris Lars Heikensten, Stockholm Mervyn King, London Guy Quaden, Brussels Jean-Pierre Roth, Zürich Alfons Vicomte Verplaetse, Brussels For more details Please Click the link. Meraj Sirajuddin bibliotecapleyades.net/sociopolitica/sociopol_globalbanking04.htm
Posted on: Sat, 13 Sep 2014 01:37:02 +0000
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