“Sovereign Governments” Versus “The Lords of Finance”: Challenging the Bankers Who Operate the Global Casino
by Hazel Henderson
October 22, 2010
The world has reached a new stage. If governments don’t get together and face down the bankers who operate the global casino, the dominoes will start falling, one by one.
Sovereign governments must heed the lessons of past financial crises described by Liaquat Ahamed in Lords of Finance (2009); Nassim Taleb in The Black Swan (2008); Carmen Reinhart and Ken Rogoff in This Time Is Different (2009); Ellen Brown in Web of Debt (2008); Nomi Prins in It Takes a Pillage (2009); Gillian Tett in Fool’s Gold (2009); and Yves Smith in ECONNED (2010).
Brooksley Born, who headed the US Commodities Futures Trading Commission (CFTC), warned the US Congress in 1998 that derivatives would blow up the financial system. She was attacked by Fed Chairman Alan Greenspan, Robert Rubin (then Treasury Secretary), his assistant Larry Summers (now Obama’s chief economic advisor), and Senator Phil Gramm (who pushed through the Enron loophole for their ill-fated energy derivatives). Brooksley Born resigned and now serves on the U.S. Financial Crisis Inquiry Commission, set to report its findings by December 2010.
The fate of Greece is caught between the excesses of its previous government and its past Wall Street-friendly policies; the still dominant ideology of market fundamentalism; their bond-holders and market makers; Goldman Sachs and the still-obscure $600 trillion derivatives market – betting on Greece’s eventual default. We have reached the inflection point in the globalized financial casino and its mountains of odious, unrepayable debt. Religious, ethical and humanitarian views will soon be calling for another JUBILEE after the debt cancellations of HIPIC countries in 2000.
How will the new JUBILEE 2010 play out? Clearly, outstanding derivative positions at some $600 trillion while global GDP is only $63 trillion makes today’s global debt levels unrepayable. Central bankers running their money printing presses cannot fill this gigantic hole. So who will lose, beyond taxpayers, so far stuck with the bills ($23 trillion in the USA’s bailouts alone)?