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The financial and economic crisis as an instrument of the geopolitical interests of the United States: from the "Long depression" of 1873 to 1896, before the "great depression" 1929 - 1933
Material posted: Publication date: 25-04-2012

At the turn of XX and XXI century, the global Manager has concentrated in their hands an unprecedented financial and economic resources to determine world development.

This is evidenced by the conclusion of experts from the Federal Institute of technology in Zurich, based on mathematical analysis of links 43 thousand transnational corporations: the world is ruled by one giant "supercorporation", consisting of 1318 companies, each of which showed the closest relationship with two or more other companies.(average number of affiliates was equal to 20)[15].

Modeling the global corporate system, the experts were treated gigantic array of data showing the relationship of ownership between the largest financial and industrial groups. The reality, according to the theorist of complex systems J. Glattfelder, was "so complex" that the experts "have deemed proper to move away from dogma, whether it be conspiracy theories or the theory of the free market". Despite the fact that the official income of these corporations barely exceeding 20% of global operating revenues, the company, through its satellites, they actually own most companies in the sector of "real" economy, receiving about 60% of the world income[15].

In a number of influential beneficiaries are financial institutions such as Citigroup, Bank of America, "Chase Manhattan Bank", "Rothschild Group", "Barclays plc", "Merrill Lynch & Co Inc" "JP Morgan Chase", "AXA", "Wells Fargo", "UBS AG" and "Capital Group Companies Inc". According to estimates of the American Commission on securities and stock exchanges only "Bank of America", "JP Morgan Chase", Citigroup and Wells Fargo are in the top ten owners almost all corporations of Fortune 500[17].

The path to the political power of this system was laid through a series of managed economic crises and monetary manipulation (through inflation), contributing to the monopolization of the world economy and the gradual dismantling of the regulatory role of national States in the economy and other spheres of social relations. In this regard, the symbolic importance of the term "crisis" from the Greek meaning "decision, a turning point", a condition in which "the existing means of achieving goals become inadequate, resulting in unpredictable situations and problems"; a kind of tool of "mass selection effective owners"[4, p. 88].

From a historical point of view, economic crises always provoke significant changes in the political system, creating new centers of power on the wreckage of past empires. So, for example, in the events of the period the "Long depression" of 1873 to 1896, when the boom in the construction of Railways has crashed the market after the Bank's collapse "Jay Cooke & company" (Jay Cooke and Company), "the Union Pacific railway and Northern Pacific railroad", "metastatic crisis," coming from America, had forced the British economy to give the U.S. the lead. Turning the Western shore of the Atlantic in the citadel of world development, the crisis undermined the power of England: "releasing in 1870 one third of world commodities", "less than ten years later, this figure dropped to a quarter", and "by 1913 the share of Albion in the international economy amounted to 14%"[2, c. 225].

Domestic science explains economic crises periodically "recurring sharp decline in output, accompanied by growth of unemployment, mass bankruptcy, the destruction of the productive forces" generated "a huge expansion of manufacturing capacities of capitalism and the relative decline of effective demand"[10, c. 282]. I.e., "narrow framework of consumption of the main mass of the population" stimulate "crisis of overproduction", exacerbating all the problems in society and in the context of increasing interdependence - planetary contradictions.

Mainly, these formulations are based on scientific research K. Marx and F. Engels, where he indicated: "the expansion of the market cannot keep pace with the expansion of production"[14, c. 77]. On the one hand, eminent authors, praised the enormous capacity of capitalism to develop the productive capabilities of society, and on the other, was drawn attention to the growing poverty of the working masses. Whether you want to do it naturally conclude that crises or depressions are caused by the fact that the exploited masses cannot buy what gives or is prepared to issue a constantly evolving industrial machine, and that for this and other reasons, the rate of profit is falling, leading to bankruptcy[14]?

According to Marx, the crises, as a product of capitalist production, not just shaken the existing order of things and construct a new reality: "the Monopoly of capital becomes a shackle the method of production that grew up with it and under it"; "centralization of the means of production and socialization of labor reach a point where they become incompatible with their capitalist integument" and "it explodes"[8, p. 772-773]. Moreover, the "preaching" in the "Communist Manifesto" doom of capitalism, Marx sums up his role in the universalization of the world: "the Bourgeoisie engaging in the civilization of the nation:It has created enormous cities:and vomited, thus, a significant portion of the population of backward village life in Less than a hundred years of class rule, the bourgeoisie has created more numerous and colossal productive forces than all preceding generations together"[7, c. 427-428].

After the leader of the international, renowned American economist. Schumpeter considers "the forms and conditions of production - the basic determinants of social structures, which, in turn, determine judgments of people, their behavior, the types of civilizations"[14, c. 43], thus confirming the famous thesis of Marx: "the hand-mill" creates feudal, and the "steam mill" - capitalist society[14].

Developing the thought, we may note that the "global printing press" created by the financial and political elite of America through the Federal reserve system in 1913, gives a capitalism based on mass production, planetary coverage. The pipeline, launched at the plants of Ford and fuelled by dollar emission, transforms into a powerful engine, making way of the United States (and the West in General) in the era of the undivided rule of the market. This angle views the crises of the theorist of the "new world order" Jacques Attali, stating in particular that the global financial crisis of 2008 - "the first true crisis of globalization," which "may allow someday to establish a single legal space, to provide a stable demand in the world economy and the common minimum wage level, and adjust the most important currency functions, the tools of sovereignty and in the long term is to create a global government", which "separates us, at most, a century"[1, p. 17].

At first glance, gracefully drawn picture of Jacques Attali may seem utopian. However, the concept of "creative destruction" created by Th. Schumpeter influenced by the ideas of Karl Marx, explains the nature of crises mobility forms of capitalist production and allows large-scale changes of the social reality, until a supranational system of governance, as "any existing structures and all conditions of operation of the business, are in a continuous process of change." According to Schumpeter, "the economy revolutionaires inside the new enterprise, i.e. by the introduction of existing at each point of time of the industrial structure of new products, production methods or business opportunities". From this it follows that "any situation is undermined, before there comes a time sufficient to have exhausted themselves"[14, c. 68].

 

1. The fed inflation and the beginning of total war

The formation of American capitalism and its expanding influence on world politics was meteoric. In 1890 the banking house of Morgan, supported the English and French branches of the Rothschilds, already lent to the Central Bank of Egypt, financed a railroad in Russia, has contributed to the trafficking of Brazilian government bonds and stimulated the public works projects in Argentina. J. P. Morgan (the head of the family) is the driving force behind the expansion of the US West, which controls the West direction of the Railways by creating trusts. So, funded by Morgan "New York Central Railroad" K. Vanderbilt provided in 1879 preferential tariffs for transportation of oil monopolies aspiring J. D. Rockefeller's "Standard Oil" , having strengthened, thus, the relationship between the two clans. According to the results of the hearings in the U.S. Congress, was revealed that the financing of petroleum, the Rockefeller Empire has also been made through banks "Kuhn Loeb" and "National City Bank", representing the interests of the Rothschild family in North America. Over the years, the relationship of government and business acquired symbiocity character. The recession of 1893 has only confirmed the growing interdependence of wall Street and the White house: George. P. Morgan helped the U.S. government to avoid banking panics, backed by Treasury reserves at the expense of the gold reserves of the Rothschilds for the sum more than 62 million.[17].

Having caught the beginning of XX century of trade leadership in the world, the United States, to the surprise of the whole world, still had no Central Bank, who has the exclusive right to issue American currency and flexible monetary policy, is able to export the dollar beyond national borders. From 1862 to 1913 the USA had a system of national banks. This deficiency confused financial and political elite of America due to the fact that in the British Empire, holding to the time the position of "mistress of the seas", financial policy determined by the Bank of England, Central Bank, created in 1694, the Captains of American business, such as John Rockefeller, John Morgan, Cornelius and William Vanderbilts, Edward Harriman and Andrew Carnegie, sought to overcome this anachronism, attracting influential senators and European bankers, one of which was Paul Warburg.

Understanding the functioning of the European financial centres inside P. Warburg, was instructively noted that "in the field of financial regulation America is on the same level of development as Europe in the age of the Medici"[20]. Thanks to the work of "Kuhn, Loeb and Co", the Warburg acquires extensive contacts on wall Street, which subsequently allow for cooperation with the head of the National Commission on money circulation, by Senator Nelson Aldrich. Once claimed, the European financier is involved in two working groups Aldrich, explores how the "American monetary system" and "experience the Old world in the field of banking"[20].

In 1910 the leading financiers of the USA: N. Aldrich, bankers P. Warburg, F. Vanderlip, G. Davidson, B. strong, assistant Secretary of the Treasury Andrew P., within ten days, conduct a "brainstorming" on Jekyll island to produce a compromise regarding the structure and functions of the future Central Bank. The result is the present scheme N. Aldrich American Parliament, in which the state receives representation in the Board of Directors[20].

This project, despite the previous crises and banking panics of 1873, 1893 and 1907 - G., stressing the need to create a Supervisory and regulatory financial institutions, caused a long discussion that lasted until December 1913, when President Woodrow Wilson signed passed through both houses of Congress the law establishing the Federal reserve system (the fed).

From this period, the global financial market changes its nature. With the approach of the First world war banks "J. P. Morgan", "Rockefeller", "Chase", "City", "Lehman Brothers", "Morgan Stanley", mostly founded in the nineteenth century, acquire a huge amount of savings in currency and securities. First of all, they were military notes and, in addition, stocks and bonds[1, p. 23]. The unprecedented concentration of capital on the Western shore of the Atlantic gradually moves the center of global political activity in the city of London to wall Street, which the European powers owed more than $ 10 billion. Now, the Eurocentrism of the history. This meant the founder of the Soviet state V. I. Lenin, stating: "America cannot reconcile with Europe, because between them is a deep economic strife because Americans are wealthier than others"[6, c. 67-68]. However, the Old world, which was drained after the First world war, did not intend to retreat without a fight: "the struggle between the European and American financial capital in 1919-1922 takes place with varying degrees of success". For example, "after leaving in November-December 1918 the German-Turkish armies from Transcaucasia, the United States began to prepare for dispatch in the region of 70-thousand army to master its oil wealth, but the English managed to thwart us plans"[5, c. 90].

Some aspects of this opposition reflected in the United States. Thus, under the slogans of isolationism, "the role of the Warburgs, J. Schiff, Morgan and Vanderlip in the preparation of the postwar became the subject of scandalous proceedings in Congress, which opened disturbed by the fact that the text of the documents of the Paris conference and, especially, the text of the Covenant of the League of Nations was well known to bankers previously authorized diplomatic representatives in Paris". The foreign Affairs Committee found: "the American bankers until 1917, not only prevented the entry into the war and denied Russia the credits for purchase of arms, but placed a bet on the victory of Germany that have ceased to surprise when it was revealed that the German branch of the Warburgs owned a controlling stake in "the Hamburg-American and German Lloyd Steamship Lines" and the banks who financed the German shipbuilding and Navy". During the hearings, "it became clear that the same people started the propaganda of new ideas with the prosecution of the "European response" to the outbreak of world war"[9, c. 13].

 

2. The transformation of the world order: economic americanocentrism

Mainly geo-economic power of Washington was measured by the ratio of the dollar to the German mark: "by 1923 $ 1 was paid 4.2 trillion. brands" [19]. The victory was total, "the German currency was destroyed only due to the Central Bank (the fed), which supported the American government by financing its military spending" [19]. European intellectuals sounded the alarm. So, German philosopher Spengler said that the events of 1914 - 1918 "new economic war," which constitutes "a significant part of the global economic crisis", "enhanced the United States and its monetary aces" and also formed "the new image of the Russian Empire"[13, c. 62].

According to Spengler, crisis management accompanied by world order "attacks the dollar to the pound sterling, which are conducted through foreign exchange through managed inflation as the destruction of an entire national domain and autarky of national economies, perhaps up to the destruction of the exports of the enemy, that is, economy and living conditions of large Nations"[13]. Under this logic, "the Dawes and young plans - financial groups attempt to bring whole countries forced to work in banks"; the idea is to "save the viability of the nation through the vitality of others"[13]. Policy instrument - "the printing of paper money in ever-increasing quantities, which are gradually devalued by depriving citizens of property by reducing the value of their savings"[12, c. 95].

A classic of Austrian economic school Ludwig von Mises also not left behind, noting in 1919 that "inflation is a basic tool of militarism", "without which the consequences of the war were overcome would be much faster"[19]. A similar viewpoint explaining the financial motives of U.S. foreign policy, expresses Director of the Foundation for advancement of monetary education (FAME), American economist Lawrence Parkes: "the Creation of the fed has made possible the involvement of America in the war" because "without the possibility of creating new money, the Federal government previously financed the war through taxes and loans (both of which have limits) never has been able to mobilize huge numbers of people and resources" [18]. Reinforcing the position of his compatriot, prominent economist Dzh. Stiglitz believes the crisis is a man-made phenomenon resulting from the activity of people, many of whom have worked hard and spent serious money on a system purchased just such a form; it was what wall Street did to itself and to the rest of society[11, p. 23, 24, 17].

Paper money, which spread everywhere with the creation of the fed, make the inflation-induced "increase of the money supply in circulation"[12, c. 89], an effective instrument of international policy. Like physically laws, financial laws work smoothly: "the growth of liquidity always increases prices"[16, p. 58].

The cause of crises may be different phenomena: for example, the flywheel of the great depression 1929 -1933 G. was largely running a "cartel of major oil companies "Seven sisters" that sharply raised fuel prices, and ravaged the automotive industry"[1, p. 25]. It all happened on the rise: a targeted flow of information provokes panic, which in turn affects the market, impoverishing those who took loans under the collateral of its securities; and to pay on time payments, they have to sell everything, thereby accelerating the "death" of the exchange rate[1, p. 26]. The reduction of the money supply from 26.6 billion to 19.9 billion dollars stops the train called "the American economy" that pulls the entire world economy. Wave of bankruptcies undermine people's trust in financial institutions, savings are rapidly withdrawn from the deposits and cashed; the surviving banks, in turn, avoid the issuance of new loans preferring to keep their money in the most liquid form[3]. The final chord of the entire action - taking in June 1930, a Congress of the tariff Smoot-Hawley, imposing 40 percent duty on imports, ostensibly to protect the domestic market: those who found it difficult marketing of European products distributes the crisis in the Old world[3].

In the same year and created the Bank for international settlements (BIS), which recognized the dominant position of large Anglo-American capital. The first President of this Institute is the former Rockefeller banker gates Mcgarrah (McGarrah), which left this appointment as Chairman of the fed. All this happens against the background of the fact that officially the US was not involved in the creation of the BIS, as the "Hoover moratorium" could not obtain reparation payments from Germany. Therefore, the shares of the Bank for international settlements subscribed by private American banks headed "J. P. Morgan". The BIS has granted the right to control the activities of the fed, Bank of England, Bank of Italy, Bank of Canada, the Swiss National Bank, Bank of Netherlands, Bank of Germany and Bank of France . Owning at least 10% of monetary reserves for at least 80 of the world's Central banks, the BIS acts as a financial agent for international agreements, as the lender of last resort"[17].

From this period the economic Empire of Britain is integrated into a supranational governing structure, where the role of "first violin" was given to the Americans. Geo-economic and political changes in the world order was not long in coming: "in 1931, Britain wanting to keep the "Imperial supremacy", suspends the convertibility of the pound for gold and creates a sterling zone"; "Weimar Germany, crushed by war debt, establishes full control over the currency exchange"[1, p. 27]; for annual payments of reparations in the amount of billion dollars in gold, Germany includes the printing press, which caused high inflation and mass impoverishment of the population, in the Wake of which the Nazis in 1933 came to power (refusal of reparations was the main point of the economic program of Hitler); in turn, in 1936, "France stops to convert franc to the gold"[1, p. 28]; followed by Japan.

Eventually, the Second world war and the conference in Bretton woods overthrow "of the pound sterling from the throne in favor of the dollar": the exchange rate was proposed to Express "in gold or in currency convertible to 1 July 1944 in gold"[1, p. 34]and such remained only a dollar. On 12 July at the request of the British delegate, but contrary to the instructions George. M. Keynes, the phrase "currency, convertible into gold" was replaced by "currency, convertible into gold or United States dollars", a final recognition of dollar benchmark[1]. The us dollar became the main reserve currency of the world at the rate of $ 35. per ounce of gold[12, c. 85].

From now on America is economic and political steering of the train called "the West" and Europe and Japan - its loyal passengers. Only the Soviet Union, which expanded its Empire through Central and Eastern Europe, will be able to challenge Washington in Asia, Africa and Latin America, after closing its domestic market from the dollar. "The Russian idea" and the "American dream" will become implacable opponents throughout the twentieth century until the Pro-American forces within the Country of the Soviets did not commit to dismantling the Empire. "Cold war" against Russia is rapidly becoming a war economic and financial, in which the "monetary bomb", leading to catastrophic inflation and the impoverishment of broad masses of the population, will become an effective tool of American geo-Economics.

 

References:

[1] J. Attali, the World economic crisis. What's next? - SPb.: Peter, 2009.

[2] Brendon, P. the Decline and destruction of the British Empire 1781-1997 / TRANS. angl. - M.: AST, 2010.

[3] the Great depression. http://usa-info.com.ua/history/great_deprecion.html.

[4] Glushchenko V. V. Introduction to crisisology. Financial crisisology. Crisis management. - M.: IP Glushchenko V. V., 2008.

[5] A. Kukina E. the Failure of American plans for world domination in 1917-1920 - M.: Gospolitizdat, 1954.

[6] Lenin V. I. Complete works. 42. - M.: Publishing house of political literature, 1967.

[7] Marx K., Engels F. Compositions. - 2nd ed. Vol. 4.

[8] Marx K., Engels F. Compositions. - 2nd ed. Vol. 23.

[9] N. Narochnitskaya. A. American "analytical institutions". Eyes, ears and conscience of America / Orange networks: from Belgrade to Bishkek / resp. Ed. N. A. Narochnitskaya. - SPb.: Aletheia, 2008.

[10] Political dictionary / Under. edited by Professor B. N. Ponomareva. - M.: Gospolitizdat, 1956.

[11] Stiglitz, J. Steep dive: America and the new economic order after the global crisis, Transl. angl. V. Paddle. - M.: Eksmo, 2011.

[12] Turk D., Rubino D. the collapse of the dollar and how to benefit from it, Transl. angl. I. Sokolova. - M.: AST, 2006.

[13] Spengler O. the Years of decisions. Germany and world-historical development, Transl. with it. S.E. Vershinin. - Ekaterinburg: U-Faktoriya, 2007.

[14] Schumpeter J. Capitalism, socialism and democracy, Transl. angl. - M: Economy, 1995.

[15] Coghlan A, MacKenzie D. Revealed - The Capitalist Network That Runs The World. http://www.newscientist.com/article/mg21228354.500-revealed--the-capitalist-network-that-runs-the-world.html.

[16] R. Epperson The Unseen Hand. An Introduction into the Conspiratorial View of History. - T.: Publius Press, 1985.

[17] D. Henderson The Federal Reserve Cartel: The Eight Families. http://www.globalresearch.ca/index.php?context=va&aid=25080.

[18] Paul R. Inflation and War Finance. http://www.safehaven.com/article/6801/inflation-and-war-finance.

[19] Rockwell Jr. L. War and Inflation / Ludwig von Mises Institute. http://mises.org/daily/3010.

[20] Whitehouse M. Paul Warburgs Crusade to Establish a Central Bank in the United States / The Federal Reserve Bank of Minneapolis. http://www.minneapolisfed.org/publications_papers/pub_display.cfm?id=3815.

Source: http://www.georgefilimonov.com/articles/financial-and-economic-crisises-in-usa/Author: S. A. Tsaturyan, G. Y. Filimonov


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