Saturday, December 21, 2013

Up Is Down...Black Is White...And The World Bank Fights Corruption

By, Chris Rossini

Sometimes you just have marvel at what the establishment is able to pull off:
  • The government, which steals from one to give to another, is considered "compassionate". 
  • The Military, which has wiped out millions of people around that world, is "spreading freedom".
  • The Federal Reserve, which destroys the dollar and which is the only source of inflation, is considered an "inflation fighter".
It's called bizarro world.

Well, we can add the following to the list. This week, the World Bank President declared "corruption" to be Public Enemy #1.

Reuters reports:
"The World Bank took a bold stance on fighting corruption on Thursday, with President Jim Yong Kim saying that corruption at both the public and private level is the scourge of the developing world."
Let me explain to you how backwards this is, and why it's a slap in the face to any person who understands what the World Bank does.

You and I work and earn money. The U.S. government steals from our earnings. Part of the stolen money goes to fund The World Bank. Yes....every morning that you wake up to go to work, you're actually toiling away to help fund The World Bank.

We all know that The Federal Reserve creates money out of thin air. And we all know that Wall Street cherishes the position of being the first receivers of the new money. As one would expect, Wall Street gets moving right away. The JPMorgans, the BlackRocks, the Goldmans make loans to foreign governments and foreign companies. They loan to "emerging markets" and "developing economies".

Here's the good part. The more of this money-out-of-thin-air that Wall Street is able to loan out, the more interest they can earn. And the U.S. government is all in as well because these loans act as "leverage" over the countries that receive them. If there's one thing that governments (especially Empires) love, it's "leverage". Vassal states obey, when you've got leverage.

With the incentive for Wall Street to loan to the hilt, common sense dictates that they'll make riskier and riskier bets. Some of these "emerging market" loans will turn out to be disasters. Eventually, the riskiest loans "blow up" in Wall Street-speak.

What to do?

You're not expecting Wall Street to suffer massively for these losses, are you?

This is where The World Bank (and IMF) come in. They use funds (i.e., your money and my money) to "bail out" these "emerging market" and "third world" governments.

Where do you think the bailout money goes?

***Ding, Ding, Ding***

You're correct if you guessed --- To pay back the loans made by Wall Street!

What a system!

Robert Wenzel summed up The World Bank & IMF perfectly:
"They are the enforcers that make sure global banks get paid. They will squeeze every penny they think they can get away with from the citizens of any country, to get banksters paid. They are totally evil organizations."
And Reuters tells us that The World Bank is focused on fighting corruption.

Bizarro world.

Chris Rossini in on Twitter & Google+


  1. The World Bank sells insurance to investors through the Multilateral Investment Guarantee Agency (MIGA). Bailouts are paid from premiums. It works like the FDIC.

    Tax payer money is used for anti-poverty programs, not bailouts.

    Regarding the evil IMF, at the urging of Robert Rubin, the IMF pursued a strong dollar policy in the late 90s during the Asian financial crisis. This resulted in a exploding trade deficit which meant an influx of foreign capital into the US (most of which inflated the housing bubble). Obviously since "strong dollar always good", this site can't criticize the IMF for the damage this policy did to the manufacturing (jobs lost every year for a decade) and housing sector in the US.

    Manufacturing jobs and the dollar index

    1. "The World Bank Fights Corruption"

      LOL! Yeah, right....and pink elephants jump over rainbows.

    2. And like clockwork, in from Bizarro world comes Bizarro Jerry, with another undefended, indefensible broadside.

    3. @ Jerry
      The World Bank is a massive taxpayer-funded operation overall with the MIGA program just a small subset that is likewise taxpayer-funded to cover woefully deficient premium collections.

      A weakening dollar, just like the initial benefits of money-printing, benefits a favored group, the export firms, in the short-term, but this initial boost to exports quickly wears off unless the dollar is given another weakening boost. And in the long-run, a weak dollar makes everything more expensive to the larger consumer group as they find they are unable to import cheaper products. Rubin has been criticized for his "strong dollar" policy because it essentially just represented a weak counter-balancing of the overall policy of massive inflation and is fundamentally inconsistent with running large budget deficits funded by the exporting countries' purchase of treasuries and hoping those countries will hang on to the treasuries instead of cashing them in via influxes of foreign capital that funded the housing bubble. In other words, you simply cannot make weak, jaw-boning gestures towards a strong dollar when the overall plan is to continue large deficits funded by money printing. Bottom line is that a strong dollar, long-run, is actually the very best way to become a strong, long-run exporter of both goods and capital, but it cannot be done while running massive deficits funded by money printing. So Rubin was working cross purposes to the larger Statist agenda.

      I suggest you read Stockman's, The Great Deformation if you seriously want to understand this area instead of reflexively disagreeing with every post here.

  2. The House Edge
    Off Limits, but Blessed by the Fed
    Published: December 21, 2013

    In 1999, Congress permitted Wall Street investment banks like Goldman Sachs and Morgan Stanley to keep their commodity operations. Since then, other banks have been allowed to expand into commodities, but in recent years no bank has gotten more leeway from the Fed than JPMorgan, experts in the field contend. In California and the Midwest, JPMorgan’s subsequent dealings in electricity echoed actions of Enron a decade earlier. The Federal Energy Regulatory Commission contended that JPMorgan engaged in price manipulation that generated $125 million in “unjust profits.” Last July, JPMorgan agreed to pay $410 million in penalties and restitution; it neither admitted nor denied wrongdoing.

    Maneuvering in markets for electricity, metals, oil and more added billions to the bottom line at banks like JPMorgan, Goldman Sachs and Morgan Stanley in recent years. But their involvement in commodities has now come under intense scrutiny. Industrial users of aluminum and other metals contend that questionable activities by major banks have increased their costs. Regulators like the Commodity Futures Trading Commission have been investigating the issue, and congressional hearings have also explored potential problems.

  3. Comex Claims Per Deliverable Ounce of Gold at 92 to 1 - Let Them Eat Treasuries

  4. You know that that the Fed creates money out of thin air & yet are content to "take it on the chin" until the government is bankrupt?


    1. There is nothing bad about the government being bankrupt.
      In fact, the sooner the better.

  5. Thanks, Chris. If you haven't seen it already, fyi

  6. More and more people - especially young men - are beginning to understand this instinctively, if not specifically. And they are reacting by downsizing to the extent that they are producing only what they need for themselves - ie - not feeding the beast. The book that seems to champion this strategy is "Enjoy The Decline" by Aaron Clarey, which I would enjoy seeing reviewed here.

  7. Former US Treasury Official - We No Longer Have Free Markets

    “In other words, the story was saying that looking ahead to the future, when the massive bank reserves that the banks have accumulated from the Fed’s quantitative easing -- roughly $3 trillion -- come into play, as the economy strengthens, and the banks start lending again to people, inflation could be a problem.

    How is the Fed to deal with that? If they (the banks) simply started selling bonds, or selling their portfolio, this could destabilize the system in some way because too much of a rise in interest rates would choke off the recovery. So they (the Fed) were experimenting with a plan to use their portfolio of mortgage-backed financial instruments to do reverse repos in which they would pay the banks interest. And in that way, stop them from lending their excess reserves and causing the money supply in circulation to grow.

    Well, what that says is that the Fed is now going to be trading the market. It (the Fed) is no longer a central bank. In other words, the manipulations are becoming part of the system. The New York Fed is going to be a big market player, dealing with a massive portfolio to affect the supply of credit and the prices of financial instruments.

    This is another departure from the tradition of monetary policy in the United States. And the article that was explaining this policy didn’t really have anything to say about this extraordinary development. It seems to me to be a very extraordinary development because it means the Federal Reserve is now going to be trading the markets.”

  8. It's worrying that the institutions who are supposedly managing the world are subject to childish psychological issues and an inability for self-criticism.