Three Great Banking Documentaries

"All truth passes through three stages. First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as self-evident.” -Arthur Schopenhauer


Many of us right now want to be "realistic" and believe the financial system will correct itself. The optimist in us, with a lifetime of programming, thinks things will get back to normal. The market will right itself over time, like it always has. The truth is our financial system has been so fundamentally damaged we will never return to what we once thought was normal. Watch the following three documentaries and you'll better understand why this is true.


Reliance on Foreign Capital
Before we get to the films I'd like to expand on a few ideas to ponder while you watch. One is reliance on foreign capital. During the election the issue of the United State's reliance on foreign oil was hammered over and over. None of us heard scripted speeches on the reliance of massive foreign capital. A reliance that drove Americans to fight England and its corrupt banking system in the American Revolutionary War. Guess what country is #1 in external debt right now. So how did the US fall so far of the path of its national heritage?

Part of it is blind disregard to fundamental systemic threats. The threat of $150 oil has been well known for decades. Only once $150 oil became a reality was the threat real. Do we have to wait for a total collapse of the global financial system in order to deal with a $53 trillion U.S. national debt. Many people want to know, “How can this be happening to the richest country in the world?”

Here's one theory. In 1972, during his first year as director of the Council on Foreign Relations, Zbigniew Brzezinski wrote:

Nation state as a fundamental unit of man's organized life has ceased to be the principal creative force: International banks and multinational corporations are acting and planning in terms that are far in advance of the political concepts of the nation-state.

Just How Much Money Can They Print?
The documentaries do an amazing job of explaining how money creation works. Everyone knows the U.S. Treasury has been printing money 24/7 for years. What no one really knows is just how long they can add dollars to the system. What is the ceiling to debt creation? Fundamentally, there is a limit based on bank reserve requirements. Also, print too much and hyperinflation enters the system.

During one of the financial crisis grill sessions Congressman Ron Paul asked Chairman Bernake:

So my question boils down to this. How in the world can we expect to solve the problems of inflation, that is the increase in the supply of money, with more inflation?

Here is a possible answer. The U.S. Treasury with the backing of the Federal Reserve and World Bank are on the path to bailout the entire system. For the U.S. the plan is: Nationalize all debt that is a systemic threat or go bankrupt. The Fed is on the verge of eliminating minimum bank reserve rates. So basically taking them from 10% to 0%. We touched on this issue in a prior story.

Theoretically when 10% of a bank's credit is held in reserve there is a limit to how much they can loan. When this rate goes to zero there is no limit. The final stop is thus bankruptcy. So this means an all or nothing push to preserve the fiat money system backing the dollar. It's rally or fail time.

Films and Quotes
The following three videos do a masterful job at explaining the banking system. They explain how fiat currency works, how a reserve banking system functions, and the problems with these systems. Included are some amazing quotes from each film. Look for future articles here at GTM about the Bank of International Settlements and some more solid numbers addressing the theory of "Rally or Fail." This concept will be expanded upon for sure!


Video Number One: I.O.U.S.A.
Made by David Walker / Jan. 2008



“Many are starting to ask: Where would the U.S. Government turn if it needed a bailout?”

“The only issue that is more severe than this would be the idea that an Islamic fundamentalist would get his or her hands on a nuclear weapon and use it against us. Beyond that there is nothing that is more severe than this. This issues represents the potential fiscal meltdown of this Nation. And it absolutely guarantees, if it’s not addressed, that our children will have less of a quality of life than we had. That they will have a government that they can’t afford.” -Sen. Judd Gregg (Senate Budget Committee)

“We are trying to consume more than we produce. We can do that in the short run, but over the long run it is of course impossible. Without savings there is no future.” -Alan Greenspan (Fed Chairman 1987-2006)

“The Vice President basically told me, ‘We don’t have to worry about deficits.’ Which I got to tell you was really a shock to me... I think we only need to look at the fate of other countries that lived beyond their means for a long time. You inevitably get into trouble. When you get extended to the point that you can’t service your debt you’re finished.” -Paul O’Neill (Sec. of the Treasury 2001-2002) [mentioned in a prior story]

“The first Baby Boomer will reach 62 and be eligible for early retirement social security Jan. 1, 2008. They’ll be eligible for Medicare just three years later. And when those Boomers start retiring in mass, then that will be a tsunami of spending that could swamp our ship of state, if we don’t get serious.” -David Walker (U.S. Comptroller General 1998-2008)


Video Number Two: Money Masters
Made by Bill Still and Pat Carmack / 1996

Part 1


Part 2


“We are on the verge of a global transformation. All we need is the right major crisis and the nation will accept the New World Order.” -David Rockefeller

Prior to his death published in the NY Times:
“These International bankers and Rockefeller-Standard Oil interests control the majority of newspapers and the columns of these papers to club into submission or drive out of public office officials who refuse to do the bidding of the powerful corrupt cliques which compose the invisible government.” –Theodore Roosevelt

On the day the Federal Reserve Bill passed:
“This act establishes the most gigantic trust on earth. When the President signs this bill, the invisible government by the Monetary Power will be legalized. The people may not know it immediately, but the day of reckoning is only a few years removed… The worst legislative crime of the age is perpetrated by this banking bill.” -Rep. Charles August Lindbergh

One year after the passage of the Federal Reserve Bill:
“They know in advance when to create panics to their advantage. They also known when to stop panic. Inflation and deflation work equally well for them when they control finance.” -Rep. Charles August Lindbergh

“Increased capital requirements put an upper limit to fractional reserve lending.” -Bill Still

“Our banks cannot loan more and more money to buy more and more time before the next depression, as a maximum loan ratio is now set. It means those nations with the lowest bank reserves in their systems have already felt the terrible effects of this credit contraction as their banks scramble to raise money to increase their reserves to 8%. To raise the money they had to sell stocks, which depressed their stock markets, and began the depression first in their countries.” -Bill Still [refering to Japan which we'll cover in the next article]


Video Number Three: Zeitgeist Addendum
Made by Peter Joseph / Oct. 2008



“We were seeing how very important it is to bring about, in the human mind, the radical revolution. The crisis is a crisis in consciousness. A crisis that can not anymore accept the old norms, the old patterns, the ancient traditions.” –Jiddu Krishnamurti

“Society today is composed of a series of institutions… Yet, of all the social institutions we are born into, directed by, and conditioned upon there seems to be no system as taken for granted and misunderstood as the monetary system.” –Peter Joseph

“The real deception is when we distort the value of money. When we create money out of thin air. We have no savings, yet there is so called 'capital'.” –Rep. Ron Paul

“New money is always needed to help cover the perpetual deficit built into the system, caused by the need to pay the interest. What this also means, is that mathematically defaults and bankruptcy are literally built into the system.” –Peter Joseph

"There are two ways to conquer and enslave a nation. One is by the sword. The other is by debt.” –John Adams (President of the United States)

"The majority of the people in the United States have no idea that we are living off the benefits of a clandestine empire. That today there`s more slavery in the world than ever before. And then you have to ask yourself, 'Well if it's an empire, then who's the emperor?'... We do have what I consider to be the equivalent of the emperor, and it`s what I call the Corporatocracy... At the very top of the corporatocracy you really can`t tell where the person`s working, for a private corporation or the government, because they're always moving back and forth. So, you know, you've got a guy who one moment is the president of a big construction company, like Haliburton, and the next moment he's Vice President of the United States." -John Perkins

"We can either have Democracy in this country or we can have great wealth concentrated in the hands of a few, but we can't have both. " -Louis Brandeis (Supreme Court Justice)

"It's not politicians that can solve problems. They have no technical capabilities. They don't know how to solve problems. Even if they were sincere, they don't know how to solve problems. It's the technicians that produce the desalinization plants. It's the technicians that give you electricity, that give you motor vehicles, that heat your house and cool it in the summertime. It's technology that solves problems, not politics. Politics cannot solve problems, because they are not trained to do so." -Jacque Fresco

"This tendency to blindly hold on to a belief system, sheltering it from new, possibly transforming information, is nothing less than a form of 'intellectual materialism.' The monetary system perpetuates this materialism not only by its self preserving structures, but also through the countless number of people who have been conditioned into blindly, and thoughtlessly upholding these structures, therefore becoming 'self-appointed guardians of the status quo.' Sheep, which no longer need a sheep dog to control them, for they control each other by ostracizing those who step out of the norm." -Peter Joseph

---

What we are trying, in all these discussions and talks here, is to see if we cannot radically bring about a transformation of the mind. Not accepting things as they are! But the understanding, to go into it, to examine it, to give your heart and your mind with everything you have. To find out a way of living differently. But that depends on you and not somebody else. Because in this there is no teacher--no pupil. There is no leader. There is no guru. There is no master--no savior. You yourself are the teacher and the pupil. You are the master. You are the guru. You are the leader. You are everything! And to understand is to transform what is. -Jiddu Krishnamurti

References:
http://www.iousathemovie.com/
http://www.themoneymasters.com/
http://www.zeitgeistmovie.com/
http://abcnews.go.com/Politics/Vote2008/Story?id=3839318&page=1

Front Running A Systemic Market Crash: PPT Style

Ever notice how official speeches to prop up the US capital markets are timed right before a massive sell off? How about those last hour rallies when the market looks really bad? Let’s explore just what the Plunge Protection Team can do. For starters, the White House came out with the trumpets to kick off the open of 2008. The Dow then peeled off 600 points making it the worst January open the stock market has ever seen--ever. Not bad for a “strong and solid” market! On Jan. 4th President Bush said the following:

President Meets with Working Group on Financial Markets

Fact Sheet: December 2007 Marks Record 52nd Consecutive Month of Job Growth

“I had quite a fascinating and productive meeting with the President's Working Group on Financial Markets, chaired by Secretary Paulson. I want to thank the members for working diligently to monitor our capital market system, our financial system. And while there is some uncertainty, the report is, is that the financial markets are strong and solid. And I want to thank you for being diligent. This economy of ours is on a solid foundation…”

What is the Working Group on Financial Markets?

Executive Order 12631 -- Working Group on Financial Markets

By virtue of the authority vested in me as President by the Constitution and laws of the United States of America, and in order to establish a Working Group on Financial Markets, it is hereby ordered as follows:

Section 1. Establishment. (a) There is hereby established a Working Group on Financial Markets (Working Group). The Working Group shall be composed of:

(1) the Secretary of the Treasury, or his designee;

(2) the Chairman of the Board of Governors of the Federal Reserve System, or his designee;

(3) the Chairman of the Securities and Exchange Commission, or his designee; and

(4) the Chairman of the Commodity Futures Trading Commission, or her designee.

(b) The Secretary of the Treasury, or his designee, shall be the Chairman of the Working Group.

Sec. 2. Purposes and Functions. (a) Recognizing the goals of enhancing the integrity, efficiency, orderliness, and competitiveness of our Nation's financial markets and maintaining investor confidence, the Working Group shall identify and consider:

(1) the major issues raised by the numerous studies on the events in the financial markets surrounding October 19, 1987, and any of those recommendations that have the potential to achieve the goals noted above; and

(2) the actions, including governmental actions under existing laws and regulations (such as policy coordination and contingency planning), that are appropriate to carry out these recommendations.

(b) The Working Group shall consult, as appropriate, with representatives of the various exchanges, clearinghouses, self-regulatory bodies, and with major market participants to determine private sector solutions wherever possible.

(c) The Working Group shall report to the President initially within 60 days (and periodically thereafter) on its progress and, if appropriate, its views on any recommended legislative changes.

Sec. 3. Administration. (a) The heads of Executive departments, agencies, and independent instrumentalities shall, to the extent permitted by law, provide the Working Group such information as it may require for the purpose of carrying out this Order.

(b) Members of the Working Group shall serve without additional compensation for their work on the Working Group.

(c) To the extent permitted by law and subject to the availability of funds therefor, the Department of the Treasury shall provide the Working Group with such administrative and support services as may be necessary for the performance of its functions.

Ronald Reagan

The White House,

March 18, 1988.

[Filed with the Office of the Federal Register, 11:23 a.m., March 21, 1988]

Treasury's War Room

These quiet meetings of the Working Group are the financial world's equivalent of the war room. The officials gather regularly to discuss options and review crisis scenarios because they know that the government's reaction to a crumbling stock market would have a critical impact on investor confidence around the world. (Fromsom)

In fact, as Ambrose Evans-Pritchard of the U.K. Telegraph notes, Secretary of the Treasury, Hank Paulson has called for the PPT to meet with greater frequency and set up “a command centre at the US Treasury that will track global markets and serve as an operations base in the next crisis. The top brass will meet every six weeks, combining the heads of Treasury, Federal Reserve, Securities and Exchange Commission (SEC), and key exchanges.”

"The government has a real role to play to make a 1987-style sudden market break less likely. That is an issue we all spent a lot of time thinking about and planning for," said a former government official who attended Working Group meetings. "You go through lots of fire drills and scenarios. You make sure you have thought ahead of time of what kind of information you will need and what you have the legal authority to do."

In the event of a financial crisis, each federal agency with a seat at the table of the Working Group has a confidential plan. At the SEC, for example, the plan is called the "red book" because of the color of its cover. It is officially known as the Executive Directory for Market Contingencies. The major U.S. stock markets have copies of the commission's plan as well as the CFTC's.

"We all have everybody's home and weekend numbers," said a former Working Group staff member.

The Working Group's main goal, officials say, would be to keep the markets operating in the event of a sudden, stomach-churning plunge in stock prices -- and to prevent a panicky run on banks, brokerage firms and mutual funds. Officials worry that if investors all tried to head for the exit at the same time, there wouldn't be enough room -- or in financial terms, liquidity -- for them all to get through. In that event, the smoothly running global financial machine would begin to lock up.

This sort of liquidity crisis could imperil even healthy financial institutions that are temporarily short of cash or tradable assets such as U.S. Treasury securities. (Fromsom)

[This might explain the often seen cash infusion, or massive buying of index futures, after 2:30pm.]

According to John Crudele of the New York Post, the Plunge Protection Team's (PPT) modus operandi was revealed by a former member of the Federal Reserve Board, Robert Heller. Heller said that disasters could be mitigated by “buying market averages in the futures market, thus stabilizing the market as a whole.”

Some Say the PPT Doesn’t Exist (from John Mauldin)

Every time the market drops and then "mysteriously" rallies, knowing individuals look at each other and nod, seeing the handiwork of the PPT.

Let's say it straight out. The plunge protection team does not exist. It is an urban myth. Let me step by step prove it does not exist, and see if we can learn something in the process.

Art Cashin, of CNBC fame, and one of the real veterans of the markets, who has seen it all, wrote me the following very clear thoughts:

Trading desks do arbitrage program trading for a fraction of a percent on a trade. Any attempt by the Fed to manipulate the market would just make a lot of money for hedge funds and trading desks.

The amounts of money required to attempt such a manipulation would be huge. We are talking tens of billions of dollars if there was a true collapse going on. The collective size of the trading community in the world (hedge funds and "prop" desks - a prop desk is a proprietary desk for an investment bank or broker-dealer) is in the multiple hundreds of billions. It would require the willingness to lose billions of dollars every time you took the plunge, so to speak.

If the Fed or Treasury or some slush fund did buy stocks, it would inject liquidity or more total money into the financial system or money supply. Since the Fed openly manipulates the money supply every day in transactions that everyone can see, in order for the Fed to hide the activity of the PPT, they would have to take out liquidity by selling treasury notes. Otherwise, the numbers at the end of the day or week would not add up, and someone would notice. But if they were taking out liquidity and the money supply did not go down, then someone would know something was up. You can't hide these numbers, unless you can get a lot of clerks at the Fed and elsewhere to agree to lie.

[Maybe not a lie. As Spock once said, "An omission." They stopped publishing M3 in March 2006. This is three years after Mauldin called it a myth.]

How To Hide PPT Action (from Mike Whitney)

This may explain why the Federal Reserve mysteriously decided to stop publishing its M-3 report. Since the Fed is the “main resource” for buying averages in the futures market “the money is injected into markets via the New York Fed's Repo desk, which easily showed up in the M-3…. Without the useful resource of M-3”, Robert McHugh, Ph.D.says, “we need to find other tools to monitor when the PPT is likely to intervene, and kill shorts”.

What PPT Action Looks Like (from Minyanville)

Wall-Streeters and the media have called those who claim the government intervenes in the stock market ridiculous. They'd better. If it were ever found out that Washington does intervene in the market, all remaining confidence in the integrity of markets would be lost.

Tuesday morning in Europe when UBS (UBS) announced it would write down $19 billion and Deutsche Bank (DB) made similar pronouncements, both stocks were down big and the market was indicated much lower. That was the same day Lehman Brothers (LEH) was supposed to sell $3 billion in preferred stock to raise much needed capital. Imagine Lehman trying to get that deal done in such a messy tape.

Then all of a sudden those stocks began to turn. Along with the market, they closed higher on the day. Futures steadily rose all morning and methodically ended at the highs of the day. U.S. stocks saw one of the biggest rallies of the year. LEH not only got its deal done, but the stock rose so much the firm decided to grant another $1 billion in stock to its most loyal and secret investors.

It's all highly convenient things turned out this way. The markets went from potential disaster based on fundamentals to a rip-roaring rally just when the government and banks needed it. It's also highly suspicious.

But the pundits don't do a very good job of debunking all the ancillary evidence of such intervention. Their main argument is that there's no way to hide stock market buying by the government. That argument is very flimsy; there are many ways to hide it.

How about all these “loans” the Federal Reserve is making to dealers. There could easily be an arrangement that looks like a simple loan but in fact indemnifies the dealer from losses on any assets purchased with the proceeds of the loan. Just look at the deal the Fed made with JPMorgan (JPM) in buying Bear Stearns (BSC).

The Fed said it was taking control of $30 billion of a BSC portfolio, but not buying those assets, as currently the 1913 Federal Reserve act doesn't permit such an action. However, the Fed is the the residual claimant, so it's apparent it effectively has equity even if it won't admit it. Overall, the Fed appears to be using any legal or structural manifestations necessary to accomplish what it wants to do despite what the Federal Reserve Act actually permits it to do.

How To Stage A PPT Bull Run

The editors of the New York Times summarized the feelings of many market-watchers who were baffled by this odd recovery:

“The torrent of bad news on housing is only worsening, with a report yesterday that new home sales for January had their steepest slide in 13 years...Manufacturing has already slipped into a recession, with activity contracting in two of the last three months. How is it then that investors took Mr. Bernanke's words as a “buy” signal?”

Robert McHugh, Ph.D. has provided a description of how it works which seems consistent with the comments of Robert Heller. McHugh lays it out like this:

The PPT decides markets need intervention, a decline needs to be stopped, or the risks associated with political events that could be perceived by markets as highly negative and cause a decline; need to be prevented by a rally already in flight. To get that rally, the PPT's key component — the Fed — lends money to surrogates who will take that fresh electronically printed cash and buy markets through some large unknown buyer's account. That buying comes out of the blue at a time when short interest is high. The unexpected rally strikes blood, and fear overcomes those who were betting the market would drop. These shorts need to cover, need to buy the very stocks they had agreed to sell (without owning them) at today's prices in anticipation they could buy them in the future at much lower prices and pocket the difference. Seeing those stocks rally above their committed selling price, the shorts are forced to buy — and buy they do. Thus, those most pessimistic about the equity market end up buying equities like mad, fueling the rally that the PPT started. Bingo, a huge turnaround rally is well underway, and sidelines money from Hedge Funds, Mutual funds and individuals' rushes in to join in the buying madness for several days and weeks as the rally gathers a life of its own. (Robert McHugh, Ph.D., “The Plunge Protection Team Indicator”)

According to Michael Edward: (“The Secrets of the Plunge Protection Team” Rense.com)

“Since 911, there have been at least three major long-term stock market rallies. In all 3 instances, when the markets opened all the indexes began to quickly plunge. In each incidence, by early afternoon the markets were brought back from the brink of collapse to the surprise of everyone, including historical analysts….An event that should have sent markets spiraling downward was the Enron, et al, unprecedented corporate accounting scandals. Yet despite this, an unprecedented across-the-board markets rally began on July 24, 2002. Once again, the European Press called it a ‘PPT rally'".

The Danger of Free Market Intervention

Edward goes on to say that outside the US it's “no secret” that the market is being manipulated. He cites an article in the UK Guardian on 9-16-01 which states, "that a secretive committee... dubbed 'the plunge protection team'... is ready to coordinate intervention by the Federal Reserve on an unprecedented scale. The Fed, supported by the banks, will buy equities from mutual funds and other institutional sellers.”

Kenneth J. Gerbino put it like this in his recent article “The Big Sell Off” on kitco.com:

Latest figures from the Bank of International Settlements: $8.3 trillion of real money is controlling $313 trillion in derivatives. That's 38 to 1 leverage. These figures are just for the over - the - counter derivatives and do not include the global exchange traded derivatives in currencies, stocks and commodities which are another $75 trillion.”

“$8.3 trillion of real money is controlling $313 trillion in derivatives!”

This illustrates the sheer magnitude of the problem and the economy-busting potential of a miscalculation. That's why Warren Buffett calls derivatives “financial weapons of mass destruction.” If there's a fire-sale in hedge funds or derivatives, there's nothing the Plunge Protection Team or the Federal Reserve will be able to do to stop a meltdown. The market will crash leaving nothing behind.

Conclusion (from Bob Chapman)

Treasury securities are also used to fuel the Fed's repo pool which is used to power the PPT's market manipulations by making tens of billions of dollars available on a moment's notice. The Fed creates money out of nothing to buy treasuries from the primary dealers, who then use the sales proceeds to fund the operations of the President's Working Group on Financial Markets which assists the elitists in stealing from you on a 24/7 basis. The dealers offer to buy these securities back from the Fed within a month or less in what are called repurchase agreements. Thus, this "funny money" is shoveled back and forth from the Fed to the primary dealers and from the primary dealers back to the Fed as needed whenever the Illuminati deign that financial assistance for manipulation of markets is needed.

Treasuries are therefore the engine which drives this fraudulent scheme, a scheme that is completely illegal because the authority granted in Reagan's Executive Order creating the PPT is exceeded beyond all belief in what one day will be exposed as the greatest abuse of financial power by US government officials in the history of our country. Because of this blatant illegality, Buck-Busting Ben and Hanky Panky Paulson deny that the PPT does anything but meet occasionally to brainstorm pending issues.

Sources:

Executive Order 12631 -- Working Group on Financial Markets

March 18, 1988

Stock Market Manipulation - The secret maneuverings of the Plunge Protection Team (PPT)

by Mike Whitney

The Key To All Market Analysis

by Bob Chapman

July 5 2008

President Meets with Working Group on Financial Markets

Market Manipulation Under Veil of Secrecy?

Minyanville

Apr 03, 2008

Plunge Protection Team

by Brett D. Fromson

The Washington Post

Sunday, February 23, 1997; Page H01

NYSE Announces Third-Quarter 2008 Circuit-Breaker Levels

June 30, 2008

http://www.nyse.com/press/circuit_breakers.html

The Plunge Protection Team
by John Mauldin

April 05, 2003

Our Engineered Market Meltdown: Part 2

What does it take to drive grandmothers into the streets in protest to be whipped and trampled by mounted police? If you know anyone from Argentina you'll get an answer. It is said that history has a way of repeating itself. People in the United States will do well to understand Argentina's banking failure in December 2001.

Here are two primers:
Timeline: Argentina's Road to Ruin
Timeline: Argentina's economic crisis


Argentina Crisis Documentary
Fernando Solanas made the following brilliant documentary: Memorias del saqueo. He is a very outspoken critic of the Menem government which drove Argentina into financial collapse. Solanas was shot and wounded in 1991 a day after he publicly criticised Argentina's elite. This was way before the peak of their financial crisis and riots in 2001. The complete video series can be found here. Listen to his warning:

Raid the Pensioners

Today in the United States there are many grandmothers wondering about their future and if they will have any money left to live out the remainder of their lives. Many pensioners in Argentina were wiped out. Again, remember Enron and how people were convinced to jump on board based on a giant lie. In Argentina they were told to trust Citigroup and JPMorgan Chase. One of the concepts to understand is how we are manipulated by international corporations and central banks. They force governments (and wage slaves) to borrow heavily to curb inflation, drive themselves into major debt, credit is then squeezed to pay the debt, and the economy collapses. Then they really own you. The credit squeeze was so severe for Argentina the country sold its prime assets often at 10% of fair value. Sound familiar?

The market was crashed then monopolized. The same thing is happening in the US right now. Twenty-six corporations owned 60% of Argentina's wealth. In a deregulated environment they were able to produce triple the profits of similar companies outside Argentina. All at the expense of the citizenry, half of them driven out of their jobs. This is crime on a massive scale that causes thousands of poverty related deaths a year. None of the men prosecuted for these crimes were found guilty.

Meet Domingo

One of the men responsible was Domingo Cavallo. Like Bernake he is a Harvard educated economist turned crisis manager. He belongs to the Group of Thirty along with Bernake's mentor Stanley Fischer and the NY Fed's president Timothy Geithner. Cavallo was President of the Central Bank of Argentina, and Minister of Economy during the 2001 collapse. He instituted the policy of corralito which limited bank cash withdrawals to $250/week. He also increased the debt Argentina owed the IMF which drove the country further into misery. After he resigned and got out of jail for international weapons trafficking he came to the US to teach economics at Harvard University.

While at Harvard, in the Spring of 2004, he wrote a really fascinating article for the Council on Foreign Relations. Here are some amazing excerpts from Argentina and the IMF During the Two Bush Administrations:

My intention in writing this article is to point out how damaging the current US vision of the world and style of leadership in international affairs can be, not only for the climate of friendship and sense of alliance between the USA and its southern neighbours, but also for the well-being of the people of Latin America...

I do support the view that the policies of the administration of George H. W. Bush (‘Bush 41’) created incentives for countries that wanted to embrace the US-led new world order and offered a window of opportunity to solve crises and renew economic growth...

Nonetheless, I do support the view that the lack of commitment of the administration of George W. Bush (‘Bush 43’) with the new world order and the lack of US leadership in international finance contributed more than any other factor to discredit Market Capitalism, and pushed the country back into the ideas and practices of Nationalism and Statism...

The origins of the Argentinian crisis that became virulent in 2001–02 can be traced back to the long lasting recession that started in the second half of 1998. This recession was the result of the combination of domestic phenomena and foreign shocks.

The main domestic phenomenon was the lack of fiscal discipline of the Argentinian provincial governments and their heavy borrowing from the domestic banking system. This problem became acute in 1998 as a consequence of the internal race for the Peronist Party presidential nomination for the elections that would take place in 1999. In addition, there was a growing perception of corruption regarding Menem’s ways, which started to create uncertainty in relation to the continuity of the economic reforms...

By July 2001 what Argentina needed and expected from the US government was political support for an orderly process of debt restructuring. Unfortunately, the vision and style of leadership in international affairs of President George W. Bush prevented his administration from delivering this support.

As a counterfactual guess, I would argue that, if President George W. Bush had had the same vision and style of leadership in international affairs as his father, the outcome would have been completely different. Argentina and Argentinians would not be blaming market capitalism and the IMF for their suffering. Moreover, the climate of friendship and alliance of the 1990s in the bilateral relationship between Argentina and the USA would not have been reversed...

But we became alarmed and started to worry about what could be a significant change of vision and style of leadership in international affairs when, in July 2001, Paul O’Neill stated that ‘Argentines have been off and on in trouble for 70 years or more. They don’t have any export industry to speak of at all. And they like it that way. Nobody forced them to be what they are.’ A few days later he added: ‘And Argentina is now, after the $41 billion intervention, in a very slippery position. We’re working to find a way to create a sustainable Argentina, not just one that continues to consume the money of the plumbers and carpenters in the USA who make $50,000 a year and wonder what in the world we’re doing with their money.’

Blame Joe or the NWO?

So the concept of Joe the Plumber has been around for a while. Does it seem incredulous that Cavallo is blaming the very system he supports? He is essentially saying Argentina's banking system failed because it was designed to be supported by the US which is an ally of the NWO. Some will argue the United States is pushing forward a New World Order. Don't be mistaken. The plans of the NWO are based on a globalized banking structure that has no national allegiance. This is key to understanding the potential collapse of the US banking system. American money won't disappear, it will be redistributed to the Elite. What will disappear is our standard of living, but not theirs.

Here is an incredible footnote from that document:

See the Report of the International Financial Institutions Advisory Commission, March 2000. Available at http://www.house.gov/jec/imf.ifiac.htm. In page 27 it says: ‘1994–95: The Mexican Crisis. The 1994–1995 Mexican crisis is seen by many as a watershed in the history of the ‘‘new’’ international monetary system and the ‘‘new’’ IMF. It raised important questions about the effectiveness of IMF assistance in preventing such crises. Mexico had been the largest single recipient of IMF credit during the six years leading up to the crash of the Mexican peso in December 1994. With its loans it received frequent advice, conditions, and visits by IMF officials and staff. After the crisis, the IMF approved an eighteen-month standby credit worth $17.8 billion, the largest financial package ever granted a member state and one clearly beyond the borrowing limits that the IMF had always maintained. The US Treasury offered to provide up to $20 billion in additional funds through its Exchange Stabilization Fund and the Federal Reserve’s swap network. According to the General Accounting Office (GAO), Mexico eventually used some $13 million of IMF money and $13.5 billion of US official funds. The Mexican program established several bad precedents. Congress had shown that it opposed a large expenditure to aid Mexico. The Treasury used the Exchange Stabilization Fund to circumvent the Congressional budget process. And the IMF circumvented established procedures for approving loans and limiting their size in relation to the borrower’s IMF quota. The IMF and the US Treasury view the Mexican bailout as a success.