Europe has fallen – The Empire of the Banks

Europe has fallen – The Empire of the Banks

Europe is a failed continent. Europe is occupied by the USA and colonized by China. Politics and the media are failing across the board. Democracy is only a facade in the geopolitical monopoly for power. In the background, a battle rages among powerful global players for nothing less than world domination.

Money is basically nothing more than a lot of energy and power jettons in the gambling casino called global economy. Everyone has heard the term “petrodollar” before. It describes the fact that the dollar is not backed by gold, but by oil since 1973. The extraction of raw materials requires vast amounts of energy. Since it is becoming more and more difficult to get oil, gas and coal out of the ground, but at the same time the total amount of money in circulation is increasing, the consequence is: the energy content, the value per token is decreasing.

Many states had made too big promises to their donors, in other words, they lied to them. High energy prices put pressure on the economy, which led to lower tax revenues and thus to imbalances. The European Central Bank (ECB) had to act – and is still doing so today. By buying up its government bonds, it increased the total money supply, but in doing so diluted the energy content per euro. We are all feeling the consequences of the ECB’s intervention. The prices of food, for example, are rising because their energy content has remained more or less the same. The inflation spiral is turning faster and faster. Energy is becoming less and less despite more money. Although there are now more red blood cells in the “financial cycle,” the economic engine is running out of oxygen because the proportion of oxygen per red blood cell is falling.

In 2020, we saw the largest increase in debt in a single year since World War II, with global debt rising to $226 trillion. The industrialized countries are mainly in debt to central banks at home and abroad. Central banks have almost quadrupled their holdings of government bonds over the past decade. In second place come institutional investors such as pension funds and insurance companies.

At the same time, China is expanding its political and economic influence worldwide. In the process, the communist-ruled country is deliberately positioning its currency, the yuan, against the U.S. dollar. Examples are Arab countries with which China tries to attack the settlement of oil in US dollars. Pakistan wants to replace the dollar as a second currency with the yuan. Israel is also adding Chinese RMB to its central bank reserves for the first time and reducing USD holdings. Israel, whose foreign exchange reserves have traditionally consisted of dollars, euros and British pounds, will add four new currencies – including the Chinese yuan (RMB).

And with the digital yuan, China even wants to establish a new global currency. The conflict over the currency goes beyond trade interests. The clash of systems is already palpable on the periphery of Europe as well.

But Beijing also wants to challenge the U.S. and the rest of the world economically. To this end, the dominance of the dollar is to be broken and the yuan increasingly established as the world currency. Some of the loans that China grants to developing countries along the new Silk Road are already no longer denominated in dollars, but in yuan.

At the start of the 2022 Beijing Winter Olympics, President Putin visited his Chinese counterpart, and the two issued a joint statement supporting Russia’s position on NATO expansion. Given the escalation in Ukraine, the Sino-Russian security alignment worries Western policymakers. Those concerned about military cooperation, however, should not overlook the fact that China and Russia also have increasingly converging interests on another front – finance and de-dollarization.

All these individual pieces of the puzzle are illuminated by the media, but they are not put together to form a picture. Without networked perception, no networked thinking.

The fairy tale about democracy

The European Roundtable of Industrialists (ERT) is an influential lobby group that today consists of senior executives and board members of 50 of the largest transnational companies within the European Union. Companies we all know: Barilla Group, Airbus, Roche, Rolls-Royce, Deutsche Telekom, AstraZeneca, Mercedes Benz, Nokia, Volvo, Michelin, thyssenkrupp, Nestlé, GlaxoSmithKline and Shell.

In 1983, 17 business leaders and two members of the European Commission founded the European Round Table of Industrialists at the instigation of Pehr Gyllenhammar (Volvo) and Etienne Davignon (Commissioner for Enterprise and Industry) with the aim of advancing European integration. The plan was to shape Europe in the interests of the big companies and to strengthen the EC. National vetoes of the member states, which could delay or hinder a decision by the EC, were to be abolished.

The ERT was not to deal with details, but to help determine the central direction of Europe, in close contact with the European Commission and the European Parliament. Other founding members were Umberto Agnelli (Fiat), Helmut Maucher (Nestlé), Olivier Lecerf (Lafarge Coppée) and Wolfgang Seelig (Siemens). The ERT is “a combination of club and high-profile think tank. Members are not companies, but 50 CEOs of major European corporations who have been invited (co-opted) to join. The European Union emerged from this circle. The EU is not a democratic but an economic construct.

The European Commission is a supranational body of the European Union (EU). In the political system of the EU, it primarily performs executive tasks and thus corresponds to the government in state systems. However, it has other functions as well: For example, as the “guardian of the treaties,” it monitors compliance with European law by EU member states and, if necessary, can bring an action against an EU state before the European Court of Justice. In addition, it has the sole right of initiative in the EU legislative process, except in a few cases specified in the EU treaties. The members of the Commission of the European Union, the EU Commissioners, are nominated by the governments of the EU states and elected by the European Parliament.

The basic salary of an EU Commissioner is 112.5% of the highest EU official, which is 19,909.89 euros a month without allowances.

The appointment procedure of the European Commission is often seen as part of the so-called “democratic deficit of the European Union,” since it was originally legitimized only indirectly through the governments of the member states. In fact, when it was founded, the Commission was seen primarily as an independent, technocratic institution, which, similar to a central bank, should, as far as possible, be removed from the influence of day- to-day political disputes.

When 25,000 lobbyists with an annual budget of 1.5 billion euros influence EU institutions in Brussels, when 70 percent of them work for companies and business associations, enjoy privileged access to commissioners, and inundate MEPs with their amendments to proposed legislation, only paid moles call this business-dominated lobbyocracy a democracy.

Goldman Sachs

A bank, an empire. It is a bank without branches, without a corporate sign, without a face. It never works with private clients, but exclusively with hand- picked large corporations like Ford, Facebook and for governments, those of the USA, China and Russia (Ukraine conflict), but above all they speculate into their own pockets. They are the masters of world finance. Their motto is, “It’s not enough for us to succeed, others must fail.” In the sea of finance, Goldman Sachs is undoubtedly the megalodon.

Goldman Sachs made $59.3 billion in revenue and $21.6 billion in profit in 2021. The company is worth at least $700 billion, which is twice the size of the French national budget, and employs 44`000 people.

In 2007, 7 million families could no longer pay their mortgages, and hundreds of thousands of homes were foreclosed. Goldman Sachs had already left the dance floor and decided to speculate against American households. With the Abacus scandal, Goldman Sachs said goodbye to the foundation of any private or business relationship – trust. A banker is a fiduciary whose job is to protect the interests of his clients. Now banks are treating their investors as victims and selling them products that they know can ruin them. A red line has been crossed here. The class action lawsuit filed against the bank was dropped in exchange for a $400 million payment. That’s how much Goldman Sachs earns in two weeks. Among themselves, the bank’s managers refer to Operation Abacus as “The big Short” – the big rip-off. In the end, there was only one big winner – Goldman Sachs. The bank makes $13 billion in profits and its CEO grants himself a record salary of the equivalent of over 50 million euros.

Today, the Abacus scandal seems like an omen of the great crash that was to shake the world soon after. When the American real estate bubble burst, the shock wave hit not only Wall Street. The entire system of financial capitalism was in danger of collapsing. One of Goldman Sachs’ biggest competitors, the bank Lehman Brothers, is on the verge of bankruptcy. The U.S. government is supposed to help with fresh money. Treasury Secretary Hank Paulsen refuses. Lehman Brothers goes under. Before Hank Paulsen became Secretary, he was a member of the board of Goldman Sachs and had taken the bank public.

In Bush’s administration, he gave up his Goldman Sachs shares for $200 million. Hank Paulsen not only refused to save Lehman Brothers bank, he also decides the fate of the largest American insurance company AIG, which is also facing bankruptcy. If AIG collapses, Goldman Sachs will lose 10 billion euros and get caught in the whirlpool itself. Paulsen hastily organizes a meeting in New York and conducts direct negotiations with his former right- hand man, Loyd Blankfine, now CEO at Goldman Sachs. And so, behind closed doors and old friends, it is decided to save AIG.

Hank Paulsen, as the head of Goldman Sachs, had personally approved the billion-dollar loan to AIG, and now that AIG is about to go out of business, he goes to Goldman Sachs to tell Goldman Sachs what Goldman Sachs should do with its debt. That is really sick. It will shock them, but the recommendation of the Goldman people was for the government to take over and pay off the debt, and it did. That is obscene and has cost the American citizen billions of dollars. Thanks to taxpayer money, Goldman Sachs is getting its 10 billion back without a dime of loss.

The Sachs government, as it is now called, saved the bank. But that’s not all. The influence of Goldman Sachs works on several levels, its network of relations reaches from the European Central Bank to the EU Commission, the Quirinal Palace of Italy to the Oval Office.

US Election Campaign

At $5.8 billion, the 2012 U.S. election campaign was the most expensive ever. Anyone who still talks about democracy in view of billions of dollars in donations would also sell us an adulterated Romanée Conti as the best wine in the world.

In the 2012 U.S. presidential election, the largest donations to Republican candidate Mitt Romney’s campaign came directly and indirectly from Goldman Sachs at $1,003,204. In previous elections, Goldman Sachs had also donated to the Obama campaign.

During the 2016 U.S. presidential election, Donald Trump accused his rival Hillary Clinton of being “totally controlled” by Goldman Sachs. After the election, on the other hand, Trump brought Steven Mnuchin, Stephen Bannon, and Gary Cohn, who were all managers at Goldman Sachs, onto his advisory board.

Italian Prime Minister Mario Draghi

2011 – Already during his candidacy for the ECB presidency, critical voices emerged questioning Draghi’s role in the cover-up of the crisis state of Greek public finances by the Greek government and Goldman Sachs with the help of off-market swaps. Draghi, who worked for Goldman Sachs in London from 2002 to 2005, denied any involvement in June 2011, saying these things happened before his time.

2012 – voices arose again that considered Draghi’s former activities at Goldman Sachs in particular to be a conflict of interest, as well as the activities of his son Giacomo Draghi as an interest rate trader at Morgan Stanley in London. Following a ruling by the European Court of Justice on November 29, 2012, the ECB refused to publish documents containing details of the credit swaps.

2012 – ECB President Draghi’s membership of the Group of Thirty (G30) was criticized in a complaint by Brussels-based anti-lobby group Corporate Europe Observatory (CEO). CEO found a clear conflict of interest between the mandate and membership in a private lobbying organization of the financial industry. The then EU Ombudsman Diamandouros rejected the complaint, saying that the G30 was not a lobbying organization.

2013 – Draghi again comes under fire in the wake of the scandals surrounding the bank Monte dei Paschi di Siena (MPS): It became known that while Draghi was still in charge as governor of the Italian central bank, MPS was conducting extremely risky business and that as recently as October 2011, the central bank gave the then stumbling MPS a securities-backed loan of EUR 2 billion, but informed neither the public nor the Italian Parliament about it. As a result of this secret rescue of MPS, dubious securities junk ended up at the Italian central bank, and in return MPS received government bonds whose interest and debt service is borne by the taxpayer.

Draghi is accused of having laid the foundation for a European shadow banking system led by national central banks – a system created primarily to protect commercial banks and their owners from insolvency or nationalization at the expense of taxpayers. At that time, the ECB was on the verge of taking over banking supervision in the euro zone, following the Italian model.

2014 – When the ECB took over banking supervision in November 2014, CEO saw the conflict of interest exacerbated and filed a complaint again. In January 2017, Ombudsman O’Reilly ordered an investigation. In the final report, O’Reilly confirmed the conflict of interest and saw the ECB’s independence compromised. In addition, she said Draghi’s membership in the G30 was not in line with established international practice. She chided the ECB’s refusal to follow her recommendation and terminate Draghi’s membership in the G30.

José Manuel Barroso

First Brussels, then the bank. First politics, then lucrative positions in business. How do you get these jobs? For experienced EU politicians, especially in the Commission, this is probably no problem. José Manuel Barroso, the ex-head of the EU Commission who moved to the investment bank Goldman Sachs in July 2016, meets high-ranking members of the Commission in his new job as a lobbyist.

Things have not gotten better since 2008

Zombie companies are companies that have existed on the market for more than ten years and have been unable to cover their interest burden from operating profit for three consecutive years. The zombie rate is currently around 17 percent. That would be around 300,000 companies in Germany alone.

The collapse of supply chains is adding fuel to the out-of-control inflation rate. Prices for intermediate goods have risen by 24 percent in one year. The world hasn’t seen that yet. Inflation, US interest rate turnaround, crypto bubble, swirling tech stocks and then the Ukraine conflict: we should prepare ourselves for the stock market to crash soon!

Christine Lagarde – President of the European Central Bank

In the affair surrounding a 400 million payment to entrepreneur Bernard Tapie, IMF head Christine Lagarde has been found guilty of negligence by a French court. Lagarde was economy and finance minister under then President Nicolas Sarkozy from 2007 to 2011. In this role, she was largely responsible for France’s response to the international financial crisis that began with the bursting of the real estate bubble in the United States.

In 2019, Lagarde succeeded Mario Draghi as the new president of the European Central Bank (ECB), continuing the ECB’s permanent low-interest- rate policy begun by her predecessors Jean-Claude Trichet and Draghi.

With Lagarde’s appointment, voices were raised calling for the president to be an ECB economist and, ideally, with central bank experience. Lagarde is the first lawyer to hold the post; her predecessors were economists and financial experts. Also, unlike previous presidents, Lagarde has never presided over a national central bank. According to Volker Wieland, professor of monetary economics, “it is imperative that more economists with a scientific background and central bank experience be appointed again.”

The Court of Justice of the Republic sits only very rarely. It has jurisdiction over offenses committed by members of the French government within the scope of their office. The special court was created in 1993; the proceedings against Lagarde were only the fifth trial. In addition to three professional judges, twelve parliamentarians sit on the bench.

The arbitration proceedings in the legal dispute over Tapie ultimately proved to be a bad solution. In the meantime, fraud investigations are underway against several parties involved because there are alleged to have been links between Tapie and one of the arbitrators. The arbitration award has therefore already been set aside by courts. Tapie was also ordered to repay the compensation of around 400 million.

Bernard Tapie

But who is this Bernard Tapie? The media only provide us with the individual parts; like at IKEA, we have to put it together ourselves. Born in humble circumstances in Paris and raised in Le Bourget, he started out as a salesman for television sets after his military service in 1963 and went into business for himself in 1964. In 1977, he acquired the Duverger paper mill and sold it on at a profit two years later. In 1979, he founded the investment company Groupe Bernard Tapie in Paris. The business model was the purchase and restructuring of insolvent companies. He was later accused of plundering the companies.

Thinking big was also his motto when he took over the Olympique Marseille soccer club in the early 1990s. With chutzpah, coach Franz Beckenbauer and strong support from sports equipment manufacturer Adidas, Tapie put the club, which had already been declared dead, on the road to success, winning the European Cup of Champions against AC Milan in May 1993. In Marseille, they have not forgotten this to this day. Even when it became known that Tapie had paid bribes to Valenciennes players on the way to the final and that Olympique Marseille had been relegated to the second division as a result, the fans stuck by him. In the fall of 1994, Bernard Tapie declared bankruptcy.

In July 1996, he was sentenced to two years’ suspended imprisonment and a fine of 300,000 francs for embezzlement in the Testut affair. At the end of 1996, he was again found guilty of insolvency offenses, embezzlement and bribery, in particular in the OM-VA affair, and sentenced to eight months’ imprisonment, of which he served six months in 1997.

In December 2012, Tapie and Philippe Hersant acquired a number of southern French newspapers for 50 million euros, including La Provence, Nice-Matin and its offshoots Var-Matin and Corse-Matin, which were spun off from the over-indebted Groupe Hersant Média. From insolvency to 50 million euros in 18 years!

Tapie was acquitted of charges of fraud and misappropriation of state funds in summer 2019. The public prosecutor’s office had appealed against this. The sale of his shares in the sporting goods manufacturer Adidas was negotiated for years at the court. In arbitration proceedings that were later annulled, he had been awarded more than 400 million euros in compensation because the then state bank Crédit Lyonnais had allegedly cheated him. Allegations of fraud then arose: Among other things, it was rumored that Tapie had received preferential treatment because of his proximity to then head of state Nicolas Sarkozy. Tapie died in October 21 before the verdict was announced.

Lagarde let this man get away with paying 400 million. This example illustrates the systematic fragmentation, a strategy of the media to conceal larger contexts. In particular, scandals are fragmented into individual fragments. The individual events are highlighted, but they are taken out of context or not linked to similar incidents.

This is like reporting on individual scenes from the torments of hell, but not connecting them to the nine concentric circles, and so the overall picture of “Dante’s Inferno,” the first part of the epic poem from the Divine Comedy, remains invisible to the reader. The strategic fragmentation makes it possible to report on structural and systematic injustices without causing an outcry.

Goldman Sachs and climate change

In 2019, Reuters reported that Goldman Sachs bank said it would provide $750 billion in financing, advisory services, and investments over the next decade for initiatives to combat climate change and promote economic opportunities for underserved populations.

The bank also updated its internal environmental policies to exclude financing new projects that involve drilling for oil in the Arctic or creating new coal-fired power plants or coal mines.

Goldman’s policy changes come at a time when the United Nations is concluding a conference that failed to strengthen efforts to combat global warming.

The megadolon becomes a vegetarian and the cows learn to fly. A bank where no ordinary mortal can open an account now wants to take care of “underserved populations.” The powerful global players now see human lives only as an investment in the game for power. In chess, you sometimes have to sacrifice a few pawns to get close to your opponent’s king.

Thank you very much for your attention

Jack Kabey

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