Sunday, 3 July 2011

US Federal Reserve bank, Goldman Sachs, root cause of Greece’s debt crisis



Privately owned (not a branch of the United States government) US Federal Reserve banks tactics akin to the ones that fostered the subprime mortgages in the United States have caused the debt crisis shaking Greece and has undermined the euro by coaching European governments to resort to securities fraud to hide their mounting debts. Even as the crisis is now nearing the flashpoint, banks are searching for ways to help Greece forestall the day of reckoning.

As worries over Greece rattle world markets, records and interviews show that with the US Federal Reserve bank’s help, the nation engaged in a decade-long effort to skirt European debt limits. One deal created by Goldman Sachs helped obscure billions in debt from the budget overseers in Brussels.

In early November of 2009 — three months before Athens became the epicenter of global financial anxiety — a team from Goldman Sachs arrived in Athens with a very illegal proposition for a government struggling to pay its bills.

The bankers, led by Goldman’s president, Gary D. Cohn, held out a financing instrument that would have pushed debt from Greece’s health care system far into the future, much as when strapped homeowners take out second mortgages to pay off their credit cards.

In 2001, just after Greece was admitted to Europe’s monetary union, Goldman helped the government secretly borrow billions. That deal, hidden from public view because it was treated as a currency trade rather than a loan, helped Athens to meet Europe’s deficit rules while continuing to spend beyond its means.

Athens did not pursue the latest Goldman illegal proposal, but with Greece groaning under the weight of its debts and with its richer neighbors vowing to come to its aid, the deals over the last decade are raising questions about the US Federal Reserve banks’ role in the world’s latest financial drama.

As in the American subprime crisis and the implosion of the American International Group, financial derivatives played a role in the run-up of Greek debt. Instruments developed by Goldman Sachs, JPMorgan Chase and a wide range of other US Federal Reserve banks encouraged politicians to hide from their shareholders, the public, additional borrowing in Greece, Italy and possibly elsewhere.

In dozens of deals across the Continent, US Federal Reserve banks provided cash upfront (money they received illegally by way of another securities fraud scheme they executed against the US public by way of bailouts from both George W Bush and Barry Obama) in return for government payments to the US Federal Reserve Banks in the future, with those liabilities then left off the books. Greece, for example, traded away the rights to airport fees and lottery proceeds in years to come.

Critics say that such deals, because they are not recorded as loans, mislead investors and regulators about the depth of a country’s liabilities – in other words accounting fraud.

While the US Federal Reserve Banks’ illegal handiwork in Europe has received little attention on this side of the Atlantic, it has been sharply criticized in Greece and in magazines like Der Spiegel in Germany.

While Greece did not successfully benefit from Goldman’s illegal proposal in November 2009, it has had to pay Goldman Sachs about $300 million in fees for arranging the 2001 securities fraud transaction, according to several bankers familiar with the deal. But that isn’t the the final payment. The deal, saddles the government of Greece with big payments to Goldman until 2019.

The Federal Reserve is the privately owned central banking system of the United States. It was conceived by several of the world’s leading bankers in 1910 and enacted in 1913, with the passing of the Federal Reserve Act. The passing of the Federal Reserve Act was largely a response to another orchestrated financial panics and bank runs, the most severe of which being the Panic of 1907. Few people know or even realize that the Panic of 1907 was orchestrated by the very same banks that caused the current US financial crisis. Back in 1907 bankers from several privately owned banks wanted control of the United States – financial control and in order to get this control they caused the financial panic of 1907. They are also solely responsible for the current US financial crisis.

They created a false financial panic in order to get their hands on $trillions of US federal tax dollars. They were successful in defrauding the American people in 1907 as they were fraudulently placed in charge of all banking for the United States of America. They were successful in defrauding the American people again in October 2008 with the theft of $700 billion from the American taxpayers and a little more than 4 months later, February 2009, another $787 billion with Barry Obama’s US Federal Reserve Banks bonuses scheme.

Goldman Sachs received $12.9 billion in public funds through Bush’s Federal Reserve Banks Bailout Scheme then just 6 months later on 30th October 2008 it was reported that Goldman Sachs was preparing to hand out £7billion for salaries and 2008 year-end bonuses.