In the west we have an almost disregard for our currency and Banking establishment. Yes we have had problems in the past but we are a thriving country with investment in most major countries. This can be said of all major powers in the world today. However there is a group of business men who if they so chose could wipe out a countries banking system with the stroke of a pen. I refer to the G7, a group of 7 individuals who RUN the world banking network and the global banking system.
What they
say goes, and don't think they don't have the power. Read some of the News
reports below and you will realize they have more power than we give them credit
for. In his book 'Better than Nostradamus' and 'Final Notice', Barry Smith
reports on how G7, through the World Bank has gained a foothold in the economy
of various countries around the world. Countries can borrow money from the IMF
(International Monetary Fund) or World Bank, yes one does exist, and they pay
back the money over the following years.
The idea of this is to stabilize the worlds economy. Obviously if one country thought it would suffer financially if another collapsed it would be in their best interest to make sure the other country was financially stable. Never before has this state been more relevant. With international trade being at its highest, each country's economy is of the utmost importance to the others.
BUT why
would the World Bank lend money out just on the basis of global financial
security. Which bank do you know lends money out just to help others, without
financial reward for it's self. Obviously none, the financial benefit to the
World bank or more importantly G7 is the foot hold it gets into the economy of
each country it lends money too. It is called collateral in every day
terms. The bank lends you money based on a security that you will repay. It is a
legal binding contract that says you will repay the money at a perdetermined
percentage, and a clause for non-payment is included to safe guard the bank.
The clause or collateral that G7 requires is a contract called Conditionalities Policies and is signed at the time of borrowing by sometimes forgotten or dead politicians. It is not just a contract that secures repayments on a monthly or annual date it is a security that includes certain devises which will secure the countries future.
If you
lent some one a large amount of money, which you needed back at some point you
would ot want that person entering into any dangerous hobbies or holidays to war
stricken countries incase they were killed. You would make sure that the money
would come to you in the event of their death or you would take steps to curb
the actions of that person by putting clauses in the contact. This is what G7
did. They said to countries, Yes here is some money but sign this contract which
states you will follow certain guidelines in the financial running of your
country. The fact that other parties come to power is irrelavant, the contact is
binding for the period of repayments, which like a mortgage can last a life
time.
Barry Smith shows that G7 used New Zealand as a
test case a far wider plan, one which is being implemented slowly the world
over. It started in the early 80's and its main plan was as follows, those
living in the UK take note of some of the points which can be related to the
second counrty which has been groomed for 'trials'
This happened in New Zealand in the 80's and in 1996 both Israel and Italy formed coalition governments, which are proving to be ungovernable. New Zealand's test was reported in 'The Economist' as follows Politics crashes on head. The ambiguous result of the New Zealand election should provide Britons with enough evidence to reject proportional representation
Going back to 20th December 1993, the Christchurch Mail reported - New Zealand 40% foreign owned - also a press headline 10 December 1994 - Most of major firms' shares, foreign owned. For example at the date shown:
What can you say about the country you live in, does the plan listed above look familiar - if so ask to see a copy of the 'Conditionalities Policy'
World: Americas
New hope for Brazil rainforests
Representatives of the Brazilian government and the major industrialized nations have concluded a meeting in Brasilia at which they've been trying to breathe new life into a program designed to help save the country's tropical rainforests.
The pilot program consists of a series of environmental projects, mainly funded by donors from the G7 nations. The meeting was designed to overhaul the management of the $250m program, which the Brazilian government says has not been working as well as it should.
In one way it was a success. Delegates agreed to set up a coordinating committee which will meet every three months and will also provide much needed focus in deciding which projects are to go ahead. The Brazilian authorities are also saying that they have been given a mandate by the G7 to take charge of the program.
Bureaucratic delays
But in another area little progress was made. The PPG7, as the program is known, is multilateral, but all the funds have to be used in accordance with the rules of individual donors. This leads to bureaucratic delays - something which the gathering in Brasilia did not address.
The PPG7 was never designed to be the solution to all the problems of Brazil's rainforests. Indeed environmentalists argue that some government policies, such as the renewed emphasis on big infra-structure projects, actually conflict with the goal of preserving bio-diversity.
But those concerned about the fate of the Amazon rainforests can perhaps take heart from one recent development. The government is now able to levy much heavier fines for environmental destruction. This week one farm was fined four and a half million dollars for illegal crop burning, a new record.
Business: The Economy
Debt relief
Debt relief will ease the burden but critics say it's not enough. After
years of debate on the morality and practicality of it, debt relief to some of
the world's poorest countries is being significantly boosted. BBC News Online
looks at what relief is actually on offer.
The industrialized nations have finally reached a fresh agreement, which brings new momentum to an initiative launched three years ago. The Heavily Indebted Poor Countries (HIPC) initiative is aimed at cutting some $70bn off the $214bn debt burden of the world's poorest nations.
About half the total debt is owed directly to individual governments - mainly Japan, the US, Britain, Canada, France, Germany and Italy - the G7. Most of the rest is owed to the World Bank and the International Monetary Fund, which are effectively run by the G7 governments. Only about 10% is owed to private banks. G7 leaders say the number of countries which will qualify has been increased, from 29 to at least 36.
'Too little for too few'
When the G7 nations agreed in June in Cologne, Germany, to go ahead, it was hailed as an historic breakthrough. But critics such as Jubilee 2000 say the scheme does not go far enough.
When Mozambique receives debt relief later this year it will save about $12m on a debt service bill of $108m. And it will continue to spend more on debt servicing than on health and education combined. They also point out that only 24 nations are expected to qualify by the end of 2000. They say only 16 will see their annual debt repayments reduced by a significant amount.
Strict conditions
According to International Monetary Fund figures, a country like Burkina Faso will see its total debt service costs reduced from $55m to $33m.
The main sticking point is the complex monetary criteria that countries must meet to qualify - they must adhere to strict IMF program. The G7 finance ministers said: "There will have to be a strong link between debt relief, continued adjustment, improved governance and poverty alleviation." The IMF and World Bank will decide whether a nation has met the criteria laid out for receiving relief.
In the past, a country had to take part in an IMF program for six years before receiving any actual relief. Under the terms, it is hoped that the qualifying period will be reduced to three years. But countries will still have to meet strict conditions laid down by the IMF, including sound economic policies, good governance, and reform.
Since the HIPC began in 1996, it has come under fire for requiring so many conditions that the process took years and the countries' economies came under even more pressure in the meantime. The IMF criteria have been attacked as part of the poverty problem itself. Three years after HIPC was launched, only four countries have actually received debt relief, according to World Bank figures - Bolivia, Uganda, Guyana and Mozambique.
Business: The Economy
The Group of Seven finance ministers have expressed concern about the potential impact of the rising yen, but have stopped short of promising intervention to limit its rise.
The statement issued after the G-Seven meeting said that Japan would take measures to stimulate its own domestic economy but it did not promise the coordinated action to weaken the yen that Japan had hoped for. It said the G-Seven nations would monitor developments in exchange markets and co-operate as appropriate. Observers have interpreted the statement as a signal of a potential change of policy by the Bank of Japan ( BOJ).
The BOJ last week refused to ease monetary policy to dampen the yen and this statement - which places the onus on Japan to stimulate the economy - is thought to signal a new willingness by the bank to pump more cash into the economy. This may result in a weaker yen.
While Japan had hoped for intervention to hold down the value of the yen, the US is reluctant to take any action that would make Japanese imports cheaper again.
The G-Seven ministers said the outlook for the world's economies was promising, with signs of renewed growth in Asian economies and signs of improvement in Europe. The G-Seven talks are taking place before the annual meetings of the World Bank and International Monetary Fund.
BOJ wait
The yen is expected to continue its rise, prompting weaker Japanese stocks, until it becomes clear what the Bank of Japan's intentions are, analysts say. Mr Masatoshi Moriyama, a senior analyst at Sanwa Research Institute Corp., said the possibility of concerted intervention seemed to have faded.
"At the start of the trading week, the yen is expected to go higher while stocks lose more ground," he said. The Group of Seven meetings between the heads of state of Germany, France, Italy, the UK, the United States, Canada and Japan were originally designed to find a way to make the world's currency system more stable.
World: Asia-Pacific
G7 ministers concerned over yen
Finance ministers of the Group of Seven leading industrial countries say they share Japan's concern about the potential impact of the recent rise in the value of the Japanese yen.
But the ministers made no mention of intervention to cap the rise in the yen, although they said they would monitor developments. Meeting on the sidelines of the World Bank and International Monetary Fund annual conferences in Washington, the G-Seven ministers also said there was a critical need for Russia to fight corruption and money laundering.
They said the next disbursement of international credits to Russia should be conditional on an audit. The ministers said the outlook for the world's economies was promising, with signs of renewed growth in Asian economies and signs of improvement in Europe.
Business: The Economy
Currency co-operation
During the IMF annual meeting there will be much discussion of currency co-operation, with the Japanese government calling for support for its policy of stabilising the yen. But the IMF itself will probably not be directly involved. BBC News Online looks at the history of attempts at international co-ordination of the world's currencies.
When the International Monetary Fund was set up in Bretton Woods, New Hampshire, at the end of the Second World War, dealing with problems of the world's currencies was very much top of its agenda. But the IMF was never given full powers to reconcile currency mis-alignments which might distort trade, especially when currencies became too strong.
Instead, it could only lend to countries whose currencies and balance of payments got into difficulty.
For the large industrial countries, the last time this happened on a significant scale was in the l970s, when IMF loans helped stabilize the lira and the pound sterling at the cost of some painful adjustments in Britain and Italy.
A key part of the Bretton Woods system, fixed exchange rates, had broken and no one could agree on how to restore order to the world's currencies. And the oil shock - steep increases in prices due to OPEC agreements - put pressure on economies around the world.
After that turbulent decade, informal arrangements have grown up involving discussions between economic policy makers in the world's most important industrial countries. The Group of Seven meetings between the heads of state of Germany, France, Italy, the UK, the United States, Canada and Japan were originally designed to find a way to make the world's currency system more stable.
By the 1980s these focused on the problem of the dollar, which was rising higher and higher, as the US central bank raised interest rates to counter the effects of big budget deficits. The high dollar made US goods expensive abroad, and led to a huge trade deficit. Protectionist pressures were rising, and investors in Europe were putting all their money into offshore dollar accounts which paid high rates of interest.
From Plaza to the Louvre
In September 1985 the finance ministers of the G7 countries met at the Plaza Hotel in New York City to agree a managed decline of the dollar. They were concerned to avoid any sharp drop in the dollar which could have caused panic. But they agreed that central banks around the world would sell dollars in order to lower its value.
The plan proved successful, coupled with lower interest rates in the US and some attempts to get to grips with the US budget deficit. Two years later, meeting in the Louvre in Paris, the ministers agreed that the decline had gone far enough, and successfully stabilized the greenback.
Target zones
The success of the approach led some to suggest that permanent "target zones" should be adopted between the world's main currencies.
The world's central banks would try to buy and sell currencies in order to maintain their broad value, with a range of around 10-20% on each side. That could boost world trade and prevent sharp changes that could destabilize financial markets.
In Europe, the successful cooperation stimulated attempts to introduce a single currency, culminating in the Maastricht Treaty, in order to insulate EU countries from major currency misalignments. The most recent advocate of target zones was the former German finance minister, Oskar Lafontaine, who resigned after clashing with Chancellor Gerhard Schroeder.
But target zones were rejected by most G7 governments - mainly because of the difficulty of trying to buck the currency markets, which trade $1.5 trillion of currency each day, far more than the reserves held by central banks.
A yen for intervention
That left the problem of the dollar-yen, which has been subject to dramatic fluctuations as the fortunes of the Japanese and US economies have ebbed and flowed.
Early in the l990s, the US recession led to the yen rising strongly against the dollar until it reached ¥80 to the dollar - putting severe strains on Japanese companies who exported to America. But by 1998, the booming US economy and the "strong dollar" policy, coupled with more evidence of instability in Japan's banking system, brought the yen to an all-time low of ¥144 to the dollar.
The US Treasury was forced to intervene, helping stabilize the currency in return for a commitment to banking reform. Now the yen is on the rise again, approaching ¥100 as disarray among Japan's policy makers grows.
And again intervention is being called for by the Japanese government. The US, however, has reason to oppose such a plan, which would make Japanese imports cheaper again. Getting agreement among policymakers is often difficult.
And it is usually the case the currency misalignments reflect more fundamental economic problems in the country concerned. Nevertheless, there are real risks that without co-ordination, world economic problems are made worse and spill over to other countries. It is that prospect that will keep finance ministers meeting for the foreseeable future.
From the newsroom of the BBC World Service