by Matthew J. L. Ehret / March 20th, 2020
Amidst the current hysteria of the covid-19 pandemic, talk of general chaos and economic collapse have taken the forefront of peoples’ minds.
Increasingly over recent months, western media has been hit with warnings of “financial Armageddon” and the need for a “global hegemonic synthetic currency” to replace the collapsing US dollar under a new system of green finance. These statements have been made by former and current Bank of England Governors Mark Carney and Mervyn King respectively and should not be ignored as the world sits atop the largest financial bubble in human history reminiscent of the 1929 bubble that was triggered on black Friday in the USA which unleashed a great depression across Europe and America.
While I’m not arguing that a systemic change is not vital to protect people from the effects of a general meltdown of the $1.2 trillion derivatives bubble sometimes called “the western banking system”, what such central bankers are proposing is a poison more deadly than the disease they promise to cure.
In principle, the world crisis is no different from the artificially manufactured crises which the world faced in 1923 when unpayable Versailles debts were heaved onto a beaten Germany, which I elaborated upon in my previous report. It is also no different from the nature of the folly that unleashed unbounded speculation during the “roaring 1920s” which led to the bank-run and general meltdown. Similarly, the solutions being proposed to put out the fire by those same arsonists who lit the matches today are identical to what the world faced in 1933 as a “central bankers” solution for the world depression.
How the 1929 Crash was Manufactured
While everyone knows that the 1929 market crash unleashed four years of hell in America which quickly spread across Europe under the great depression, not many people have realized that this was not inevitable, but rather a controlled blowout.
The bubbles of the 1920s were unleashed with the early death of President William Harding in 1923 and grew under the careful guidance of JP Morgan’s President Coolidge and financier Andrew Mellon (Treasury Secretary) who de-regulated the banks, imposed austerity onto the country, and cooked up a scheme for Broker loans allowing speculators to borrow 90% on their stock. Wall Street was deregulated, investments into the real economy were halted during the 1920s and insanity became the norm. In 1925 broker loans totalled $1.5 billion and grew to $2.6 billion in 1926 and hit $5.7 billion by the end of 1927. By 1928, the stock market was overvalued fourfold!
When the bubble was sufficiently inflated, a moment was decided upon to coordinate a mass “calling in” of the broker loans. Predictably, no one could pay them resulting in a collapse of the markets. Those “in the know” cleaned up with JP Morgan’s “preferred clients”, and other financial behemoths selling before the crash and then buying up the physical assets of America for pennies on the dollar. One notable person who made his fortune in this manner was Prescott Bush of Brown Brothers Harriman, who went on to bailout a bankrupt Nazi party in 1932. These financiers had a tight allegiance with the City of London and coordinated their operations through the private central banking system of America’s Federal Reserve and Bank of International Settlements.
The Living Hell that was the Great Depression
Throughout the Great depression, the population was pushed to its limits making America highly susceptible to fascism as unemployment skyrocketed to 25%, industrial capacity collapsed by 70%, and agricultural prices collapsed far below the cost of production accelerating foreclosures and suicide. Life savings were lost as 4000 banks failed.
This despair was replicated across Europe and Canada with eugenics-loving fascists gaining popularity across the board. England saw the rise of Sir Oswald Mosley’s British Union of Fascists in 1932, English Canada had its own fascist solution with the Rhodes Scholar “Fabian Society” League of Social Reconstruction (which later took over the Liberal Party) calling for the “scientific management of society”. Time magazine had featured Il Duce over 6 times by 1932 and people were being told that corporate fascism was the economic solution to all of America’s economic woes.
In the midst of the crisis, the City of London removed itself from the gold standard in 1931 which was a crippling blow to the USA, as it resulted in a flight of gold from America causing a deeper contraction of the money supply and thus inability to respond to the depression. British goods simultaneously swamped the USA crushing what little production was left.
It was in this atmosphere that one of the least understood battles unfolded in 1933.
1932: A Bankers’ Dictatorship is Attempted
In Germany, a surprise victory of Gen. Kurt Schleicher caused the defeat of the London-directed Nazi party in December 1932 threatening to break Germany free of Central Bank tyranny. A few weeks before Schleicher’s victory, Franklin Roosevelt won the presidency in America threatening to regulate the private banks and assert national sovereignty over finance.
Seeing their plans for global fascism slipping away, the City of London announced that a new global system controlled by Central Banks had to be created post haste. Their objective was to use the economic crisis as an excuse to remove from nation states any power over monetary policy, while enhancing the power of Independent Central Banks as enforcers of “balanced global budgets”.
In December 1932, an economic conference “to stabilize the world economy” was organized by the League of Nations under the guidance of the Bank of International Settlements (BIS) and Bank of England. The BIS was set up as “the Central Bank of Central Banks” in 1930 in order to facilitate WWI debt repayments and was a vital instrument for funding Nazi Germany long after WWII began. The London Economic Conference brought together 64 nations of the world under a controlled environment chaired by the British Prime Minister and opened by the King himself.
A resolution passed by the Conference’s Monetary Committee stated:
The conference considers it to be essential, in order to provide an international gold standard with the necessary mechanism for satisfactory working, that independent Central Banks, with requisite powers and freedom to carry out an appropriate currency and credit policy, should be created in such developed countries as have not at present an adequate central banking institution” and that “the conference wish to reaffirm the great utility of close and continuous cooperation between Central Banks. The Bank of International Settlements should play an increasingly important part not only by improving contact, but also as an instrument for common action.
Echoing Carney’s current fixation with “mathematical equilibrium”, the resolutions stated that the new global gold standard controlled by central banks was needed “to maintain a fundamental equilibrium in the balance of payments” of countries. The idea was to deprive nation states of their power to generate and direct credit for their own development.
FDR Torpedoes the London Conference
Chancellor Schleicher’s resistance to a bankers’ dictatorship was resolved by a “soft coup” ousting the patriotic leader in favor of Adolph Hitler (under the control of a Bank of England toy named Hjalmar Schacht) in January 1933 with Schleicher assassinated the following year. In America, an assassination attempt on Roosevelt was thwarted on February 15, 1933 when a woman knocked the gun out of the hand of an anarchist-freemason in Miami resulting in the death of Chicago’s Mayor Cermak.
Without FDR’s dead body, the London conference met an insurmountable barrier, as FDR refused to permit any American cooperation. Roosevelt recognized the necessity for a new international system, but he also knew that it had to be organized by sovereign nation states subservient to the general welfare of the people and not central banks dedicated to the welfare of the oligarchy. Before any international changes could occur, nation states castrated from the effects of the depression had to first recover economically in order to stay above the power of the financiers.
By May 1933, the London Conference crumbled when FDR complained that the conference’s inability to address the real issues of the crisis is “a catastrophe amounting to a world tragedy” and that fixation with short term stability were “old fetishes of so-called international bankers”. FDR continued “The United States seeks the kind of dollar which a generation hence will have the same purchasing and debt paying power as the dollar value we hope to attain in the near future. That objective means more to the good of other nations than a fixed ratio for a month or two. Exchange rate fixing is not the true answer.”
The British drafted an official statement saying “the American statement on stabilization rendered it entirely useless to continue the conference.”
FDR’s War on Wall Street
The new president laid down the gauntlet in his inaugural speech on March 4th saying:
The money-changers have fled from their high seats in the temple of our civilization. We may now restore that temple to the ancient truths. The measure of the restoration lies in the extent to which we apply social values more noble than mere monetary profit.
FDR declared a war on Wall Street on several levels, beginning with his support of the Pecorra Commission which sent thousands of bankers to prison, and exposed the criminal activities of the top tier of Wall Street’s power structure who manipulated the depression, buying political offices and pushing fascism. Ferdinand Pecorra, who ran the commission, called out the deep state when he said “this small group of highly placed financiers, controlling the very springs of economic activity, holds more real power than any similar group in the United States.”
Pecorra’s highly publicized success empowered FDR to impose sweeping regulation in the form of 1) Glass-Steagall bank separation, 2) bankruptcy re-organization and 3) the creation of the Security Exchange Commission to oversee Wall Street. Most importantly, FDR disempowered the London-controlled Federal Reserve by installing his own man as Chair (Industrialist Mariner Eccles) who forced it to obey national commands for the first time since 1913, while creating an “alternative” lending mechanism outside of Fed control called the Reconstruction Finance Corporation (RFC) which became the number one lender to infrastructure in America throughout the 1930s.
One of the most controversial policies for which FDR is demonized today was his abolishment of the gold standard. The gold standard itself constricted the money supply to a strict exchange of gold per paper dollar, thus preventing the construction of internal improvements needed to revive industrial capacity and put the millions of unemployed back to work for which no financial resources existed. Its manipulation by international financiers made it a weapon of destruction rather than creation at this time. Since commodity prices had fallen lower than the costs of production, it was vital to increase the price of goods under a form of “controlled inflation” so that factories and farms could become solvent and unfortunately the gold standard held that back. FDR imposed protective tariffs to favor agro-industrial recovery on all fronts ending years of rapacious free trade.
FDR stated his political-economic philosophy in 1934:
The old fallacious notion of the bankers on the one side and the government on the other side, as being more or less equal and independent units, has passed away. Government by the necessity of things must be the leader, must be the judge, of the conflicting interests of all groups in the community, including bankers.
The Real New Deal
Once liberated from the shackles of the central banks, FDR and his allies were able to start a genuine recovery by restoring confidence in banking. Within 31 days of his bank holiday, 75% of banks were operational and the FDIC was created to insure deposits. Four million people were given immediate work, and hundreds of libraries, schools and hospitals were built and staffed, all funded through the RFC. FDR’s first fireside chat was vital in rebuilding confidence in the government and banks, serving even today as a strong lesson in banking which central bankers don’t want you to learn about.
From 1933-1939, 45 000 infrastructure projects were built. The many “local” projects were governed, like China’s Belt and Road Initiative today, under a “grand design” which FDR termed the “Four Quarters” featuring zones of mega-projects such as the Tennessee Valley Authority area in the south east, the Columbia River Treaty zone on the northwest, the St Laurence Seaway zone on the North east, and Hoover Dam/Colorado zone on the Southwest. These projects were transformative in ways money could never measure as the Tennessee area’s literacy rose from 20% in 1932 to 80% in 1950, and racist backwater holes of the south became the bedrock for America’s aerospace industry due to the abundant and cheap hydropower.
Wall Street Sabotages the New Deal
Those who criticize the New Deal today ignore the fact that its failures have more to do with Wall Street sabotage than anything intrinsic to the program. For example, JP Morgan tool Lewis Douglass (U.S. Budget Director) forced the closure of the Civil Works Administration in 1934 resulting in the firing of all 4 million workers.
Wall Street did everything it could to choke the economy at every turn. In 1931, NY banks’ loans to the real economy amounted to $38.1 billion which dropped to only $20.3 billion by 1935. Where NY banks had 29% of their funds in US bonds and securities in 1929, this had risen to 58% which cut off the government from being able to issue productive credit to the real economy.
When, in 1937, FDR’s Treasury Secretary persuaded him to cancel public works to see if the economy “could stand on its own two feet”, Wall Street pulled credit out of the economy collapsing the Industrial production index from 110 to 85 erasing seven years’ worth of gain, while steel fell from 80% capacity back to depression levels of 19%. Two million jobs were lost and the Dow Jones lost 39% of its value. This was no different from kicking the crutches out from a patient in rehabilitation and it was not lost on anyone that those doing the kicking were openly supporting Fascism in Europe. Bush patriarch Prescott Bush, then representing Brown Brothers Harriman, was found guilty for trading with the enemy in 1942!
Coup Attempt in America Thwarted
The bankers didn’t limit themselves to financial sabotage during this time, but also attempted a fascist military coup which was exposed by Maj. Gen. Smedley Butler in his congressional testimony of November 20, 1934. Butler had testified that the plan was begun in the Summer of 1933 and organized by Wall Street financiers who tried to use him as a puppet dictator leading 500 000 American Legion members to storm the White House. As Butler spoke, those same financiers had just set up an anti-New Deal organization called the American Liberty League which fought to keep America out of the war in defense of an Anglo-Nazi fascist global government which they wished to partner with.
The American Liberty league only changed tune when it became evident that Hitler had become a disobedient Frankenstein monster who wasn’t content in a subservient position to Britain’s idea of a New World Order. In response to the Liberty League’s agenda, FDR said “some speak of a New World Order, but it is not new and it is not order”.
FDR’s Post-War Vision Destroyed
While FDR’s struggle did change the course of history, his early death during the first months of his fourth term resulted in a fascist perversion of his post-war vision.
Rather than see the IMF, World Bank or UN used as instruments for the internationalization of the New Deal principles to promote long term, low interest loans for the industrial development of former colonies, FDR’s allies were ousted from power over his dead body, and they were recaptured by the same forces who attempted to steer the world towards a Central Banking Dictatorship in 1933.
The American Liberty League spawned into various “patriotic” anti-communist organizations which took power with the FBI and McCarthyism under the fog of the Cold War. This is the structure that Eisenhower warned about when he called out “the Military Industrial Complex” in 1960 and which John Kennedy did battle with during his 900 days as president.
The New Silk Road as the 21st Century New Deal
This is the structure which is out to destroy President Donald Trump out of fear that a new FDR impulse is beginning to be revived in America which may align with the 21st Century international New Deal emerging from China’s Belt and Road Initiative and Eurasian alliance. French Finance Minister Bruno LeMaire and Marc Carney have stated their fear that if the Green New Deal isn’t imposed by the west, then the New Silk Road and yuan will become the basis for the new world system.
The Bank of England-authored Green New Deal and Synthetic Hegemonic Currency which promise to impose draconian constraints on humanity’s carrying capacity in defense of saving nature from humanity have nothing to do with Franklin Roosevelt’s New Deal and they have less to do with the Bretton Woods conference of 1944. These are merely central bankers’ wet dreams for depopulation and fascism “with a democratic face” which their 1933 conference failed to achieve and can only be imposed if people remain blind to their own recent history.
• First published at Strategic Culture Foundation