BIS -The Tower of Basel Secretive Plans for the Issuing of a Global Currency

8/2/2019 BIS -The Tower of Basel Secretive Plans for the Issuing of a Global Currency

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The Tower of Basel: Secretive Plans for the Issuing of a GlobalCurrency

Do we really want the Bank for International Settlements (BIS) issuing our

global currency.In an April 7 article in The London Telegraph titled The G20 Moves the World a StepCloser to a Global Currency, Ambrose Evans-Pritchard wrote:

A single clause in Point 19 of the communiqu issued by the G20 leadersamounts to revolution in the global financial order.

"We have agreed to support a general SDR allocation which will inject $250bn(170bn) into the world economy and increase global liquidity, it said. SDRs areSpecial Drawing Rights, a synthetic paper currency issued by the InternationalMonetary Fund that has lain dormant for half a century.

In effect, the G20 leaders have activated the IMFs power to create money andbegin global quantitative easing. In doing so, they are putting a de facto worldcurrency into play. It is outside the control of any sovereign body. Conspiracytheorists will love it.

Indeed they will. The article is subtitled, The world is a step closer to a global currency,backed by a global central bank, running monetary policy for all humanity. Whichnaturally raises the question, who or what will serve as this global central bank, cloakedwith the power to issue the global currency and police monetary policy for all humanity?When the worlds central bankers met in Washington last September, they discussedwhat body might be in a position to serve in that awesome and fearful role. A former

governor of the Bank of England stated:

[T]he answer might already be staring us in the face, in the form of the Bank forInternational Settlements (BIS). . . . The IMF tends to couch its warnings abouteconomic problems in very diplomatic language, but the BIS is more independentand much better placed to deal with this if it is given the power to do so.1

And if the vision of a global currency outside government control does not set offconspiracy theorists, putting the BIS in charge of it surely will. The BIS has beenscandal-ridden ever since it was branded with pro-Nazi leanings in the 1930s. Foundedin Basel, Switzerland, in 1930, the BIS has been called the most exclusive, secretive,

and powerful supranational club in the world. Charles Higham wrote in his bookTrading with the Enemy that by the late 1930s, the BIS had assumed an openly pro-Nazibias, a theme that was expanded on in a BBC Timewatch film titled Banking withHitler broadcast in 1998.2 In 1944, the American government backed a resolution at theBretton-Woods Conference calling for the liquidation of the BIS, following Czechaccusations that it was laundering gold stolen by the Nazis from occupied Europe; but thecentral bankers succeeded in quietly snuffing out the American resolution.3


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In Tragedy and Hope: A History of the World in Our Time (1966), Dr. Carroll Quigleyrevealed the key role played in global finance by the BIS behind the scenes. Dr. Quigleywas Professor of History at Georgetown University, where he was President BillClintons mentor. He was also an insider, groomed by the powerful clique he called theinternational bankers. His credibility is heightened by the fact that he actually espoused

their goals. He wrote:

I know of the operations of this network because I have studied it for twentyyears and was permitted for two years, in the early 1960's, to examine its papersand secret records. I have no aversion to it or to most of its aims and have, formuch of my life, been close to it and to many of its instruments. . . . [I]n generalmy chief difference of opinion is that it wishes to remain unknown, and I believeits role in history is significant enough to be known.

Quigley wrote of this international banking network:

[T]he powers of financial capitalism had another far-reaching aim, nothing less

than to create a world system of financial control in private hands able todominate the political system of each country and the economy of the world as awhole. This system was to be controlled in a feudalist fashion by the centralbanks of the world acting in concert, by secret agreements arrived at in frequentprivate meetings and conferences. The apex of the system was to be the Bank forInternational Settlements in Basel, Switzerland, a private bank owned andcontrolled by the worlds central banks which were themselves privatecorporations.

The key to their success, said Quigley, was that the international bankers would controland manipulate the money system of a nation while letting it appear to be controlled bythe government. The statement echoed one made in the eighteenth century by thepatriarch of what would become the most powerful banking dynasty in the world. MayerAmschel Bauer Rothschild famously said in 1791:

Allow me to issue and control a nations currency, and I care not who makes itslaws.

Mayers five sons were sent to the major capitals of Europe London, Paris, Vienna,Berlin and Naples with the mission of establishing a banking system that would beoutside government control. The economic and political systems of nations would becontrolled not by citizens but by bankers, for the benefit of bankers. Eventually, aprivately-owned central bank was established in nearly every country; and this central

banking system has now gained control over the economies of the world. Central bankshave the authority to print money in their respective countries, and it is from these banksthat governments must borrow money to pay their debts and fund their operations. Theresult is a global economy in which not only industry but government itself runs oncredit (or debt) created by a banking monopoly headed by a network of private centralbanks; and at the top of this network is the BIS, the central bank of central banks inBasel.


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Behind the Curtain

For many years the BIS kept a very low profile, operating behind the scenes in anabandoned hotel. It was here that decisions were reached to devalue or defendcurrencies, fix the price of gold, regulate offshore banking, and raise or lower short-terminterest rates. In 1977, however, the BIS gave up its anonymity in exchange for moreefficient headquarters. The new building has been described as an eighteen story-highcircular skyscraper that rises above the medieval city like some misplaced nuclearreactor. It quickly became known as the Tower of Basel. Today the BIS hasgovernmental immunity, pays no taxes, and has its own private police force.4 It is, asMayer Rothschild envisioned, above the law.

The BIS is now composed of 55 member nations, but the club that meets regularly inBasel is a much smaller group; and even within it, there is a hierarchy. In a 1983 articlein Harpers Magazine called Ruling the World of Money, Edward Jay Epstein wrotethat where the real business gets done is in a sort of inner club made up of the half dozenor so powerful central bankers who find themselves more or less in the same monetary

boat those from Germany, the United States, Switzerland, Italy, Japan and England.Epstein said:

The prime value, which also seems to demarcate the inner club from the rest ofthe BIS members, is the firm belief that central banks should act independently oftheir home governments. . . . A second and closely related belief of the inner clubis that politicians should not be trusted to decide the fate of the internationalmonetary system.

In 1974, the Basel Committee on Banking Supervision was created by the central bankGovernors of the Group of Ten nations (now expanded to twenty). The BIS provides thetwelve-member Secretariat for the Committee. The Committee, in turn, sets the rules forbanking globally, including capital requirements and reserve controls. In a 2003 articletitled The Bank for International Settlements Calls for Global Currency, Joan Veonwrote:

The BIS is where all of the worlds central banks meet to analyze the globaleconomy and determine what course of action they will take next to put moremoney in their pockets, since they control the amount of money in circulation andhow much interest they are going to charge governments and banks for borrowingfrom them. . . .

When you understand that the BIS pulls the strings of the worlds monetary

system, you then understand that they have the ability to create a financial boomor bust in a country. If that country is not doing what the money lenders want,then all they have to do is sell its currency.5

The Controversial Basel Accords

The power of the BIS to make or break economies was demonstrated in 1988, when itissued a Basel Accord raising bank capital requirements from 6% to 8%. By then, Japanhad emerged as the worlds largest creditor; but Japans banks were less well capitalized


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than other major international banks. Raising the capital requirement forced them to cutback on lending, creating a recession in Japan like that suffered in the U.S. today.Property prices fell and loans went into default as the security for them shriveled up. Adownward spiral followed, ending with the total bankruptcy of the banks. The banks hadto be nationalized, although that word was not used in order to avoid criticism.6

Among other collateral damage produced by the Basel Accords was a spate of suicidesamong Indian farmers unable to get loans. The BIS capital adequacy standards requiredloans to private borrowers to be risk-weighted, with the degree of risk determined byprivate rating agencies; and farmers and small business owners could not afford theagencies fees. Banks therefore assigned 100 percent risk to the loans, and then resistedextending credit to these high-risk borrowers because more capital was required tocover the loans. When the conscience of the nation was aroused by the Indian suicides,the government, lamenting the neglect of farmers by commercial banks, established apolicy of ending the financial exclusion of the weak; but this step had little real effecton lending practices, due largely to the strictures imposed by the BIS from abroad.7

Similar complaints have come from Korea. An article in the December 12, 2008 KoreaTimes titled BIS Calls Trigger Vicious Cycle described how Korean entrepreneurs withgood collateral cannot get operational loans from Korean banks, at a time when theeconomic downturn requires increased investment and easier credit:

The Bank of Korea has provided more than 35 trillion won to banks sinceSeptember when the global financial crisis went full throttle, said a Seoul analyst,who declined to be named. But the effect is not seen at all with the bankskeeping the liquidity in their safes. They simply dont lend and one of the biggestreasons is to keep the BIS ratio high enough to survive, he said. . . .

Chang Ha-joon, an economics professor at Cambridge University, concurs withthe analyst. What banks do for their own interests, or to improve the BIS ratio, isagainst the interests of the whole society. This is a bad idea, Chang said in arecent telephone interview with Korea Times.

In a May 2002 article in The Asia Times titled Global Economy: The BIS vs. NationalBanks, economist Henry C K Liu observed that the Basel Accords have forced nationalbanking systems to march to the same tune, designed to serve the needs of highlysophisticated global financial markets, regardless of the developmental needs of theirnational economies. He wrote:

[N]ational banking systems are suddenly thrown into the rigid arms of the BaselCapital Accord sponsored by the Bank of International Settlement (BIS), or toface the penalty of usurious risk premium in securing international interbankloans. . . . National policies suddenly are subjected to profit incentives of privatefinancial institutions, all members of a hierarchical system controlled and directedfrom the money center banks in New York. The result is to force national bankingsystems to privatize . . . .


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BIS regulations serve only the single purpose of strengthening the internationalprivate banking system, even at the peril of national economies. . . . The IMF andthe international banks regulated by the BIS are a team: the international bankslend recklessly to borrowers in emerging economies to create a foreign currencydebt crisis, the IMF arrives as a carrier of monetary virus in the name of sound

monetary policy, then the international banks come as vulture investors in thename of financial rescue to acquire national banks deemed capital inadequate andinsolvent by the BIS.

Ironically, noted Liu, developing countries with their own natural resources did notactually need the foreign investment that trapped them in debt to outsiders:

Applying the State Theory of Money [which assumes that a sovereign nation hasthe power to issue its own money], any government can fund with its owncurrency all its domestic developmental needs to maintain full employmentwithout inflation.

When governments fall into the trap of accepting loans in foreign currencies, however,they become debtor nations subject to IMF and BIS regulation. They are forced todivert their production to exports, just to earn the foreign currency necessary to pay theinterest on their loans. National banks deemed capital inadequate have to deal withstrictures comparable to the conditionalities imposed by the IMF on debtor nations:escalating capital requirement, loan writeoffs and liquidation, and restructuring throughselloffs, layoffs, downsizing, cost-cutting and freeze on capital spending. Liu wrote:

Reversing the logic that a sound banking system should lead to full employmentand developmental growth, BIS regulations demand high unemployment anddevelopmental degradation in national economies as the fair price for asound global private banking system.

The Last Domino to Fall

While banks in developing nations were being penalized for falling short of the BIScapital requirements, large international banks managed to escape the rules, although theyactually carried enormous risk because of their derivative exposure. The mega-bankssucceeded in avoiding the Basel rules by separating the risk of default out from theloans and selling it off to investors, using a form of derivative known as credit defaultswaps.

However, it was not in the game plan that U.S. banks should escape the BIS net. Whenthey managed to sidestep the first Basel Accord, a second set of rules was imposedknown as Basel II. The new rules were established in 2004, but they were not levied onU.S. banks until November 2007, the month after the Dow passed 14,000 to reach its all-time high. It has been all downhill from there. Basel II had the same effect on U.S.banks that Basel I had on Japanese banks: they have been struggling ever since tosurvive.8


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Basel II requires banks to adjust the value of their marketable securities to the marketprice of the security, a rule called mark to market.9 The rule has theoretical merit, butthe problem is timing: it was imposed ex post facto, after the banks already had the hard-to-market assets on their books. Lenders that had been considered sufficiently wellcapitalized to make new loans suddenly found they were insolvent. At least, they would

have been insolvent if they had tried to sell their assets, an assumption required by thenew rule. Financial analyst John Berlau complained:

The crisis is often called a market failure, and the term mark-to-market seemsto reinforce that. But the mark-to-market rules are profoundly anti-market andhinder the free-market function of price discovery. . . . In this case, the accountingrules fail to allow the market players to hold on to an asset if they dont like whatthe market is currently fetching, an important market action that affects pricediscovery in areas from agriculture to antiques.10

Imposing the mark-to-market rule on U.S. banks caused an instant credit freeze, whichproceeded to take down the economies not only of the U.S. but of countries worldwide.

In early April 2009, the mark-to-market rule was finally softened by the U.S. FinancialAccounting Standards Board (FASB); but critics said the modification did not go farenough, and it was done in response to pressure from politicians and bankers, not out ofany fundamental change of heart or policies by the BIS.

And that is where the conspiracy theorists come in. Why did the BIS not retract or atleast modify Basel II after seeing the devastation it had caused? Why did it sit idly by asthe global economy came crashing down? Was the goal to create so much economichavoc that the world would rush with relief into the waiting arms of the BIS with itsprivately-created global currency? The plot thickens . . . .

-

Ellen Brown developed her research skills as an attorney practicing civil litigation in LosAngeles. In Web of Debt, her latest book, she turns those skills to an analysis of theFederal Reserve and the money trust. She shows how this private cartel has usurped thepower to create money from the people themselves, and how we the people can get itback. Her earlier books focused on the pharmaceutical cartel that gets its power from themoney trust. Her eleven books include Forbidden Medicine, Natures Pharmacy (co-authored with Dr. Lynne Walker), and The Key to Ultimate Health (co-authored with Dr.Richard Hansen). Her websites are www.webofdebt.com and www.ellenbrown.com.

http://en.wikipedia.org/wiki/Bank_for_International_Settlements

http://www.bis.org/

http://www.bankingtimes.co.uk/09062008-central-bank-body-warns-of-great-depression/


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GLOBAL BANKING: THE BANK FOR INTERNATIONAL SETTLEMENTSPART 1 of 2

Patrick WoodOctober 19, 2005NewsWithViews.com

Preface

When David Rockefeller and Zbigniew Brzezinski founded the Trilateral Commission in1973, the intent was to create a "New International Economic Order" (NIEO). To thisend, they brought together 300 elite corporate, political and academic leaders from NorthAmerica, Japan and Europe.

Few people believed us when we wrote about their nefarious plans back then. Now, we

look back and clearly see that they did what they said they were going to do... globalismis upon us like an 8.6 magnitude earthquake.

The question is, "How did they do it?" Keep in mind, they had no public mandate fromany country in the world. They didn't have the raw political muscle, especially indemocratic countries where voting is allowed. They didn't have global dictatorial powers.

Indeed, how did they do it?

The answer is the Bank for International Settlements (BIS), self-described as the "centralbank for central bankers", that controls the vast global banking system with the precisionof a Swiss watch.

This report offers a concise summation of BIS history, structure and current activities.

Introduction

The famous currency expert Dr. Franz Pick once stated, "The destiny of the currency is,and always will be, the destiny of a nation."

With the advent of rampant globalization, this concept can certainly be given a globalcontext as well: "The destiny of currencies are, and always will be, the destiny of theworld."

Even though the BIS is the oldest international banking operation in the world, it is a lowprofile organization, shunning all publicity and notoriety. As a result, there is very littlecritical analysis written about this important financial organization. Further, much ofwhat has been written about it is tainted by its own self-effacing literature.

The BIS can be compared to a stealth bomber. It flies high and fast, is undetected, has asmall crew and carries a huge payload. By contrast, however, the bomber answers to achain of command and must be refueled by outside sources. The BIS, as we shall see, is


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not accountable to any public authority and operates with complete autonomy and self-sufficiency.

Leading up to Founding

As we will see, the BIS was founded in 1930 during a very troubled time in history.

Some knowledge of that history is critical to understanding why the BIS was created, andfor whose benefit.

There are three figures that play prominently in the founding of the BIS: Charles G.Dawes, Owen D. Young and Hjalmar Schacht of Germany.

Charles G. Dawes was director of the U.S. Bureau of the Budget in 1921, and served onthe Allied Reparations Commission starting in 1923. His latter work on "stabilizingGermany's economy" earned him the Nobel Peace Prize in 1925. After being elected VicePresident under President Calvin Coolidge from 1925-1929, and appointed Ambassadorto England in 1931, he resumed his personal banking career in 1932 as chairman of theboard of the City National Bank and Trust in Chicago, where he remained until his deathin 1951.

Owen D Young was an American industrialist. He founded RCA (Radio Corporation ofAmerica) in1919 and was its chairman until 1933. He also served as the chairman ofGeneral Electric from 1922 until 1939. In 1932, Young sought the democraticpresidential nomination, but lost to Franklin Delano Roosevelt.

More on Hjalmar Schacht later.

In the aftermath of World War I and the impending collapse of the German economy andpolitical structure, a plan was needed to rescue and restore Germany, which would also

insulate other economies in Europe from being affected adversely.The Versailles Treaty of 1919 (which officially ended WWI) had imposed a very heavyreparations burden on Germany, which required a repayment schedule of 132 billion goldmarks per year. Most historians agree that the economic upheaval caused in Germany bythe Versailles Treaty eventually led to Adolph Hitler's rise to power.

In 1924 the Allies appointed a committee of international bankers, led by Charles G.Dawes (and accompanied by J.P. Morgan agent, Owen Young), to develop a plan to getreparations payments back on track. Historian Carroll Quigley noted that the Dawes Planwas "largely a J.P. Morgan production"[1] The plan called for $800 million in foreignloans to be arranged for Germany in order to rebuild its economy.

In 1924, Dawes was chairman of the Allied Committee of Experts, hence, the "DawesPlan." He was replaced as chairman by Owen Young in 1929, with direct support by J.P.Morgan. The "Young Plan" of 1928 put more teeth into the Dawes Plan, which manyviewed as a strategy to subvert virtually all German assets to back a huge mortgage heldby the United States bankers.


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Neither Dawes nor Young represented anything more than banking interests. After all,WWI was fought by governments using borrowed money made possible by theinternational banking community. The banks had a vested interest in having those loansrepaid!

In 1924, the president of Reichsbank (Germany's central bank at that time) was HjalmarSchacht. He had already had a prominent role in creating the Dawes Plan, along withGerman industrialist Fritz Thyssen and other prominent German bankers andindustrialists.

The Young Plan was so odious to the Germans that many credit it as a precondition toHitler's rise to power. Fritz Thyssen, a leading Nazi Industrialist, stated

"I turned to the National socialist party only after I became convinced that thefight against the Young Plan was unavoidable if complete collapse of Germanywas to be prevented."[2]

Some historians too quickly credit Owen Young as the idea-man for the Bank for

International Settlements. It was actually Hjalmar Schacht who first proposed the idea[3],which was then carried forward by the same group of international bankers who broughtus the Dawes and Young Plans.

It is not necessary to jump to conclusions as to the intent of these elite bankers, so we willinstead defer to the insight of renowned Georgetown historian, Carroll Quigley:

"The Power of financial capitalism had another far reaching plan, nothing lessthan to create a world system of financial control in private hands able todominate the political system of each country and the economy of the world as awhole. This system was to be controlled in a feudalistic fashion by the centralbanks of the world acting in concert, by secret agreements arrived at in frequent

meetings and conferences. The apex of the system was to be the Bank forInternational Settlements in Basle, Switzerland, a private bank owned andcontrolled by the world's central banks, which were themselves privatecorporations. Each central bank, in the hands of men like Montagu Norman of theBank of England, Benjamin Strong of the New York Federal Reserve Bank,Charles Rist of the Bank of France, and Hjalmar Schacht of the Reichsbank,sought to dominate its government by its ability to control treasury loans, tomanipulate foreign exchanges, to influence the level of economic activity in thecountry, and to influence co-operative politicians by subsequent rewards in thebusiness world."[4] [Bold emphasis added]

So here we have a brief sketch of what led up to the founding of the BIS. Now we can

examine the nuts and bolts of how the BIS was actually put together.

The Hague Agreement of 1930

The formation of the BIS was agreed upon by its constituent central banks in the so-called Hague Agreement on January 20, 1930, and was in operation shortly thereafter.According to the Agreement,


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The duly authorised representatives of the Governments of Germany, of Belgium, ofFrance, of the United Kingdom of Great Britain and Northern Ireland, of Italy and ofJapan of the one part; And the duly authorised representatives of the Government of theSwiss Confederation of the other part Assembled at the Hague Conference in the monthof January, 1930, have agreed on the following:

Article 1. Switzerland undertakes to grant to the Bank for International Settlements,without delay, the following Constituent Charter having force of law: not to abrogate this

Charter, not to amend or add to it, and not to sanction amendments to the Statutes of theBank referred to in Paragraph 4 of the Charter otherwise than in agreement with theother signatory Governments.[5]

As we will see, German reparation payments (or lack thereof) had little to do with thefounding of the BIS, although this is the weak explanation given since its founding. Ofcourse, Germany would make a single payment to the BIS, which in turn would depositthe funds into the respective central bank accounts of the nations to whom payments weredue. (It would be the subject of another paper to show the shallowness of this operation:Money and gold were shuffled around, but the net amount that Germany actually paidwas very small.)

The original founding documents of the BIS have little to say about Germany, however,and we can look directly to the BIS itself to see its original purpose:

The objects of the Bank are: to promote the co-operation of central banks and toprovide additional facilities for international operations; and to act as trustees oragent in regard to international financial settlements entrusted to it underagreements with the parties concerned.[6]


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Virtually every in-print reference to the BIS, including their own documents, consistentlyrefer to it as "the central banker's central bank."

So, the BIS was established by an international charter and was headquartered in Basle,Switzerland.

BIS Ownership

According to James C. Baker, pro-BIS author ofThe Bank for International Settlements:Evolution and Evaluation, "The BIS was formed with funding by the central banks of sixnations, Belgium, France, Germany, Italy, Japan, and the United Kingdom. In addition,three private international banks from the United States also assisted in financing theestablishment of the BIS."[7]

Each nation's central bank subscribed to 16,000 shares. The U.S. central bank, theFederal Reserve, did not join the BIS, but the three U.S. banks that participated got16,000 shares each. Thus, U.S. representation at the BIS was three times that of any othernation. Who were these private banks? Not surprisingly, they were J.P. Morgan &Company, First National Bank of New York and First National Bank of Chicago.

On January 8, 2001, an Extraordinary General Meeting of the BIS approved a proposalthat restricted ownership of BIS shares to central banks. Some 13.7% of all shares werein private hands at that time, and the repurchase was accomplished with a cash outlay of$724,956,050. The price of $10,000 per share was over twice the book value of $4,850.

It is not certain what the repurchase accomplished. The BIS claimed that it was to correcta conflict of interest between private shareholders and BIS goals, but it offered nospecifics. It was not a voting issue, however, because private owners were not allowed tovote their shares.[8]

Sovereignty and Secrecy

It is not surprising that the BIS, its offices, employees, directors and members share anincredible immunity from virtually all regulation, scrutiny and accountability.

In 1931, central bankers and their constituents were fed up with government meddling inworld financial affairs. Politicians were viewed mostly with contempt, unless it was oneof their own who was the politician. Thus, the BIS offered them a once-and-for-allopportunity to set up the "apex" the way they really wanted it -- private. They demandedthese conditions and got what they demanded.

A quick summary of their immunity, explained further below, includes

diplomatic immunity for persons and what they carry with them (i.e., diplomaticpouches)

no taxation on any transactions, including salaries paid to employees embassy-type immunity for all buildings and/or offices operated by the BIS


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no oversight or knowledge of operations by any government authority freedom from immigration restrictions freedom to encrypt any and all communications of any sort freedom from any legal jurisdiction[9]

Further, members of the BIS board of directors (for instance, Alan Greenspan) areindividually granted special benefits:

immunity from arrest or imprisonment and immunity from seizure of theirpersonal baggage, save in flagrant cases of criminal offence;inviolability of all papers and documents;

immunity from jurisdiction, even after their mission has been accomplished, foracts carried out in the discharge of their duties, including words spoken andwritings;

exemption for themselves, their spouses and children from any immigrationrestrictions, from any formalities concerning the registration of aliens and fromany obligations relating to national service in Switzerland ;

the right to use codes in official communications or to receive or senddocuments or correspondence by means of couriers or diplomatic bags.[10]

Lastly, all remaining officials and employees of the BIS have the following immunities:

immunity from jurisdiction for acts accomplished in the discharge of theirduties, including words spoken and writings, even after such persons have

ceased to be Officials of the Bank;[bold emphasis added]

exemption from all Federal, cantonal and communal taxes on salaries, fees andallowances paid to them by the Bank

exempt from Swiss national obligations, freedom for spouses and family membersfrom immigration restrictions, transfer assets and properties includinginternationally with the same degree of benefit as Officials of otherinternational organizations.[11]

Of course, a corporate charter can say anything it wants to say and still be subject tooutside authorities. Nevertheless, these were the immunities practiced and enjoyed from

1930 onward. On February 10, 1987, a more formal acknowledgement called the"Headquarters Agreement" was executed between the BIS and the Swiss Federal Counciland basically clarified and reiterated what we already knew:

Article 2Inviolability

The buildings or parts of buildings and surrounding land which, whoever maybe the owner thereof, are used for the purposes of the Bank shall be inviolable.


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No agent of the Swiss public authorities may enter therein without the expressconsent of the Bank. Only the President, the General Manager of the Bank, ortheir duly authorised representative shall be competent to waive suchinviolability.

The archives of the Bank and, in general, all documents and any data mediabelonging to the Bank or in its possession, shall be inviolable at all times and inall places.

The Bank shall exercise supervision of and police power over its premises .Article 4Immunity from jurisdiction and execution

The Bank shall enjoy immunity from criminal and administrative jurisdiction,save to the extent that such immunity is formally waived in individual cases by thePresident, the General Manager of the Bank, or their duly authorisedrepresentative.

The assets of the Bank may be subject to measures of compulsory execution forenforcing monetary claims. On the other hand,all deposits entrusted to the Bank,all claims against the Bank and the shares issued by the Bank shall, without theprior agreement of the Bank, be immune from seizure or other measures ofcompulsory execution and sequestration, particularly of attachment within themeaning of Swiss law.[12][bold emphasis added]

As you can see, the BIS, its directors and employees (past and present) can do virtuallyanything and everything they want, with complete secrecy, immunity and with no onelooking over their shoulders. It was truly a banker's dream come true, and it paved the

international freeway for the rampant financial globalism that we see manifest today.Don't miss the stunning conclusion! Click on part 2 below.

Click Here For Part-----> 2 [below]

Footnotes:

1, Quigley, Tragedy & Hope, (MacMillan, 1966), p.3082, Edgar B Nixon, ec., Franklin D. Roosevelt and Foreign Affairs, Volume III(Cambridge: Balknap Press, 1969) p. 4563, Sutton, Wall Street and the Rise of Hitler, (GSC & Associates, 2002) p. 264, Quigley, op cit, p. 324

5, BIS web site, Extracts from the Hague Convention, www.bis.org/about/conv-ex.htm6, BIS, Statutes of the Bank for International Settlements Article 3 [as if January 1930,text as amended on March 10,2003], Basic Texts (Basle, August 2003), p. 7-87, Baker, The Bank for International Settlements: Evolution and Evaluation, (Quorum,2002), p. 208, ibid., p. 169, BIS, Protocol Regarding the Immunities of the Bank for International Settlements,Basic Texts, (Basle, August 2003), p. 33


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10, ibid, Article 12, p.43.11, ibid, p. 4412, BIS, Extracts from the Headquarters Agreement, www.bis.org/about/hq-ex.htm

GLOBAL BANKING: THE BANK FOR INTERNATIONAL SETTLEMENTSPART 2 of 2

Patrick WoodOctober 19, 2005NewsWithViews.com

Day-to-Day Operations

Acting as a central bank, the BIS has sweeping powers to do anything for its own accountor for the account of its member central banks. It is like a two-way power-of-attorney any party can act as agent for any other party.

Article 21 of the original BIS statutes define day-to-day operations:

1,buying and selling of gold coin or bullion for its own account or for the account ofcentral banks;2,holding gold for its own account under reserve in central banks; 3,accepting the supervision of gold for the account of central banks;4,making advances to or borrowing from central banks against gold, bills of exchange,and other short-term obligations of prime liquidity or other approved securities;5,discounting, rediscounting, purchasing, or selling with or without its endorsement billsof exchange, checks, and other short-term obligations of prime liquidity; 6,buying and selling foreign exchange for its own account or for the account of centralbanks;7,buying and selling negotiable securities other than shares for its own account or forthe account of central banks;8,discounting for central banks bills taken from their portfolio and rediscounting withcentral banks bills taken from its own portfolio;9,opening and maintaining current or deposit accounts with central banks;10,accepting deposits from central banks on current or deposit account;11,accepting deposits in connection with trustee agreements that may be made betweenthe BIS and governments in connection with international settlements.;12,accepting such other deposits that, as in the opinion of the Board of the BIS, comewithin the scope of the BIS functions.[1]

The BIS also may

1,act as agent or correspondent for any central bank2,arrange with any central bank for the latter to act as its agent or correspondent; 3,enter into agreements to act as trustee or agent in connection with international


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settlements, provided that such agreements will not encroach on the obligations of theBIS toward any third parties.[2]

Why is "agency" an important issue? Because any member of the network can obscuretransactions from onlookers. For instance, if Brown Brothers, Harriman wanted totransfer money to a company in Nazi Germany during WWII (which was not "politically

correct" at that time), they would first transfer the funds to the BIS thus putting thetransaction under the cloak of secrecy and immunity that is enjoyed by the BIS but not byBrown Brothers, Harriman. (Such laundering of Wall Street money was painstakinglynoted in Wall Street and the Rise of Hitler, by Antony C. Sutton.)

There are a few things that the BIS cannot do. For instance, it does not accept depositsfrom, or provide financial services to, private individuals or corporate entities. It is alsonot permitted to make advances to governments or open current accounts in theirname.[3] These restrictions are easily understood when one considers that each centralbank has an exclusive franchise to loan money to their respective government. Forinstance, the U.S. Federal Reserve does not loan money to the government of Canada. In

like manner, central banks do not loan money directly to the private or corporate clientsof their member banks.

How Decisions are Made

The board of directors consist of the heads of certain member central banks. Currently,these are:

Nout H E M Wellink, Amsterdam (Chairman of the Board of Directors)Hans Tietmeyer, Frankfurt am Main (Vice-Chairman)Axel Weber, Frankfurt am MainVincenzo Desario, Rome

Antonio Fazio, RomeDavid Dodge, Ottawa Toshihiko Fukui,Tokyo Timothy F Geithner, New YorkAlan Greenspan, WashingtonLord George, LondonHerv Hannoun, ParisChristian Noyer, ParisLars Heikensten, StockholmMervyn King, LondonGuy Quaden, BrusselsJean-Pierre Roth, Zrich

Alfons Vicomte Verplaetse, Brussels[4]

Of these, five members ( Canada, Japan, the Netherlands, Sweden and Switzerland) arecurrently elected by the shareholders. The majority of directors are "ex officio," meaningthey are permanent and are automatically a part of any sub-committee.

The combined board meets at least six times per year, in secret, and is briefed by BISmanagement on financial operations of the bank. Global monetary policy is discussed andset at these meetings.


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It was reported in 1983 that there is an inner club of the half dozen central bankers whoare more or less in the same monetary boat: Germany, U.S., Switzerland, Italy, Japan andEngland.[5] The existence of an inner club is neither surprising nor substantive: thewhole BIS operation is 100% secret anyway. It is not likely that members of the innerclub have significantly different beliefs or agendas apart from the BIS as a whole.

How the BIS works with the IMF and the World Bank

The interoperation between the three entities is understandably confusing to most people,so a little clarification will help.

The International Monetary Fund (IMF) interacts with governments whereas the BISinteracts only with other central banks. The IMF loans money to national governments,and often these countries are in some kind of fiscal or monetary crisis. Furthermore, theIMF raises money by receiving "quota" contributions from its 184 member countries.Even though the member countries may borrow money to make their quota contributions,it is, in reality, all tax-payer money.[6]

The World Bank also lends money and has 184 member countries. Within the WorldBank are two separate entities, the International Bank for Reconstruction andDevelopment (IBRD) and the International Development Association (IDA). The IBRDfocuses on middle income and credit-worthy poor countries, while the IDA focuses onthe poorest of nations. In funding itself, the World Bank borrows money by direct lendingfrom banks and by floating bond issues, and then loans this money through IBRD andIDA to troubled countries.[7]

The BIS, as central bank to the other central banks, facilitates the movement of money.They are well-known for issuing "bridge loans" to central banks in countries where IMFor World Bank money is pledged but has not yet been delivered. These bridge loans are

then repaid by the respective governments when they receive the funds that had beenpromised by the IMF or World Bank.[8]

The IMF is the BIS' "ace in the hole" when monetary crisis hits. The 1998 Brazilcurrency crisis was caused by that country's inability to pay inordinate accumulatedinterest on loans made over a protracted period of time. These loans were extended bybanks like Citigroup, J.P. Morgan Chase and FleetBoston, and they stood to lose a hugeamount of money.

The IMF, along with the World Bank and the U.S., bailed out Brazil with a $41.5 billionpackage that saved Brazil, its currency and, not incidentally, certain private banks.

Congressman Bernard Sanders (I-VT), ranking member of the International MonetaryPolicy and Trade Subcommittee, blew the whistle on this money laundry operation.Sander's entire congressional press release is worth reading:

IMF Bailout for Brazil is Windfall to Banks, Disaster for US Taxpayers SaysSanders

BURLINGTON, VERMONT - August 15 - Congressman Bernard Sanders (I-VT),the Ranking Member of the International Monetary Policy and Trade


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Subcommittee, today called for an immediate Congressional investigation of therecent $30 billion International Monetary Fund (IMF) bailout of Brazil.

Sanders, who is strongly opposed to the bailout and considers it corporatewelfare, wants Congress to find out why U.S. taxpayers are being asked toprovide billions of dollars to Brazil and howmuch of this money will befunneled to U.S. banks such as Citigroup, FleetBoston and J.P. Morgan Chase. These banks have about $25.6 billion in outstanding loans to Brazilianborrowers. U.S. taxpayers currently fund the IMF through a $37 billion line ofcredit.

Sanders said, "At a time when we have a $6 trillion national debt, a growingfederal deficit, and an increasing number of unmet social needs for our veterans,seniors, and children, it is unacceptable that billions of U.S. taxpayer dollars arebeing sent to the IMF to bailout Brazil."

"This money is not going to significantly help the poor people of that country. The

real winners in this situation are the large, profitable U.S. banks such asCitigroup that have made billions of dollars in risky investments in Brazil andnow want to make sure their investments are repaid. This bailout represents anegregious form of corporate welfare that must be put to an end. Interestingly,these banks have made substantial campaign contributions to both politicalparties," the Congressman added.

Sanders noted that the neo-liberal policies of the IMF developed in the 1980'spushing countries towards unfettered free trade, privatization, and slashing socialsafety nets has been a disaster for Latin America and has contributed to increasedglobal poverty throughout the world. At the same time that Latin Americacountries such as Brazil and Argentina followed these neo-liberal dictatesimposed by the IMF, from 1980-2000, per capita income in Latin America grewat only one-tenth the rate of the previous two decades.

Sanders continued, "The policies of the IMF over the past 20 years advocatingunfettered free trade, privatizing industry, deregulation and slashinggovernment investments in health, education, and pensions has been a completefailure for low income and middle class families in the developing world and inthe United States . Clearly, these policies have only helped corporations in theirconstant search for the cheapest labor and weakest environmental regulations.Congress must work on a new global policy that protects workers, increasesliving standards and improves the environment."

One can surmise that a financial circle exists where the World Bank helps nations get intodebt, then when these countries can't pay their massive loans, the IMF bails them out withtaxpayer money -- and in the middle stands the BIS, collecting fees as the money travelsback and forth like the ocean tide, while assuring everyone that all is well.

BIS dumps gold-backed Swiss Francs for SDR's


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On March 10, 2003, the BIS abandoned the Swiss gold franc as the bank's unit of accountsince 1930, and replaced it with the SDR.

SDR stands for Special Drawing Rights and is a unit of currency originally created by theIMF. According to Baker,

"The SDR is an international reserve asset, created by the IMF in 1969 tosupplement the existing official reserves of member countries. SDR's areallocated to member countries in proportion to their IMF quotas. The SDR alsoserves as the unit of account of the IMF and some other internationalorganizations. Its value is based on a basket of key international currencies."[9]

This "basket" currently consists of the euro, Japanese yen, pound sterling and the U.S.dollar.

The BIS abandonment of the 1930 gold Swiss franc removed all restraint from thecreation of paper money in the world. In other words, gold backs no national currency,leaving the central banks a wide-open field to create money as they alone see fit.

Remember, that almost all the central banks in the world are privately-held entities, withan exclusive franchise to arrange loans for their respective host countries.

Regional and Global Currencies: SDR's, Euros and Ameros

There is no doubt that the BIS is moving the world toward regional currencies andultimately, a global currency. The global currency could well be an evolution of the SDR,and may explain why the BIS recently adopted the SDR as its primary reserve currency.

The Brandt Equation, 21st Century Blueprint for the New Global Economy notes, forinstance, that

Since the SDR is the world's only means of meeting international payments that

has been authorized through international contract, "The SDR thereforerepresents a clear first step towards a stable and permanent internationalcurrency"[10] [bold emphasis added]

As to regional currencies, the BIS has already been hugely successful in launching theeuro in Europe. Armed with new technical and social know-how, the BIS' next logicalstep is to focus on America and Asia.

For instance, according to BIS Papers No. 17, Regional currency areas and the use offoreign currencies,

"Canada, Mexico and the United States are members of the trade group NAFTA.

Given the high proportion of Canada and Mexicos trade with the United States, aNAFTA dollar or Amero has been proposed by some Canadian academics suchas Grubel (1999). See also Beine and Coulombe (2002) and Robson and Laidler(2002)."[11]

Assuming that NAFTA permanently identifies Canada, the U.S. and Mexico as onetrading block, then North America will look like the European Union and the Amero willfunction like the Euro. All of the work put into the SDR would be perfectly preserved by


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simply substituting the Amero for the U.S. dollar when they choose to bring the Amero toascendancy over the dollar.

For those American readers who do not grasp the significance of the adoption of the euroby European Union countries, consider how one American globalist describes it.

C. Fred Bergsten is a prominent and core Trilateral Commission member and head of theInstitute for International Economics. On January 3, 1999, Bergsten wrote in theWashington Post

"The adoption of a common currency is by far the boldest chapter of Europeanintegration.Money traditionally has been an integral element of nationalsovereignty ...and the decision by Germany and France to give up their markand franc ...represents the most dramatic voluntary surrender of sovereignty inrecorded history. The European Central Bank that will manage the euro is a trulysupranational institution".[12] [bold emphasis added]

Bergsten will have to rephrase this when the U.S. gives up the dollar for the amero -- that

will become the most dramatic voluntary surrender of sovereignty in recorded history!

Conclusions

Our credo is "Follow the money, follow the power." This report has endeavored to followthe money. We find that:

The BIS is central bank to all major central banks in the world It is privately owned by central banks themselves, most of whom are also private It was founded under questionable circumstances by questionable people It is accountable to no one, especially government bodies It operates in complete secrecy and is inviolable Movement of money is obscured and hidden when routed through the BIS The BIS is targeting regional currency blocks and ultimately, a global currency It has been hugely successful at building the New International Economic Order,

along with its attendant initiatives on global governance.

As to "follow the power," another paper will more fully explore the influence of power

that the BIS exerts over other banks, nations and governments. For your ownconsideration in the meantime, Proverbs 22:7 provides a useful compass: "The rich ruleover the poor, and the borrower is servant to the lender".

NOTE: Carl Teichrib, World Research Library Senior Fellow, contributed to this report.

Click Here For Part-----> 1


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Footnotes:

1, Baker, op cit, p. 26-272, ibid, p. 273, BIS, The BIS in profile, Bank for International Settlements flyer, June, 20054, BIS, Board of Directors, www.bis.org/about/board.htm5, Epstein, Ruling the World of Money, Harper's Magazine, 19836, IMF web site, http://www.imf.org7,World Bank web site.8, Baker, op cit, p. 141-1429,IMF web site10, The Brandt Equation: 21 st Century Blueprint for the New Global Economy. TheBrandt Proposals A Report Card: Money and Finances.11, BIS, Regional currency areas and the use of foreign currencies, BIS Papers No. 17,September, 200312, Washington Post, The Euro Could Be Good for Trans-Atlantic Relations, C. FredBergsten, January 3, 199

Patrick M. Wood is editor ofThe August Review, which builds on his original researchwith the late Dr. Antony C. Sutton, who was formerly a Senior Fellow at the HooverInstitution for War, Peace and Revolution at Stanford University. Their 1977-1982newsletter, Trilateral Observer, was the original authoritative critique on the NewInternational Economic Order spearheaded by members of the Trilateral Commission.

Their highly regarded two-volume book, Trilaterals Over Washington, became astandard reference on global elitism. Wood's ongoing work is to build a knowledgecenter that provides a comprehensive and scholarly source of information on globalismin all its related forms: political, economic and religious.

E-Mail:[email protected]

Web Site: www.AugustReview.com

Other Western litesThe World Central Bank: The Bank forInternational Settlements


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Address: The Tower of Basel - Centralbahnplatz 2, 4051, Basel, Switzerlandhttp://www.bis.org/about/baselmap.htm

This page is the fruit of research for the UK Green Party's economics group fortheir 2001 mini-conference in Manchester.

The BIS is the most obscure arm of the Bretton-Woods International Financialarchitecture but its role is central. John Maynard Keynes wanted it closed down asit was used to launder money for the Nazis in World War II. Run by an inner eliterepresenting the world's major central banks it controls most of the transferablemoney in the world. It uses that money to draw national governments into debt forthe IMF.

BIS Official Website http://www.bis.org/The Bretton Woods Project http://www.brettonwoodsproject.org/WALL STREET AND THE RISE OF HITLER. By Antony C. Suttonhttp://reformed-theology.org/html/books/wall_street/index.html

05Aug03 - Rich Jannsen - Bank watching in Basel

The BIS - Ruling the World of Money - Edward Jay Epstein

Carrol Quigley quote - the bankers' planThe Network - Alfred Mendez

Global Financial Institutions - Mark Evans

Board of Directors - July 2001

1983 - Trading With The Enemy - A Bank for All Reasons

Unraveling the Basel Capital Accord

Antony Sutton - B.I.S. The Apex of Control


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05Aug03 - Bank watching in Basel

All pictures on this page are by Richard

Janssen

I was on business-travel from city to cityin Switzerland. After the work in Basel Iwent straight to the BIS to see thebuildings in real life.

In Basel, I noticed that there are two BIS-buildings, about a kilometer fromeachother. The 'Botta'-building at theAeschenplatz is a former UBS-bank. It has a door with the ABN-Amro-bank next door,very strange. ABN-Amro has a indoor connection with BIS, I saw it with my own twoeyes!

After that I went to Geneva via Evian. Evian-les-Bains in France was also a place worthto visit.

I didn't dare to take pictures of some particular buildings, because through my remarkablebehavior in Basel I was followed by Securitas people everywhere I went. There was noplace in Switzerland where I had to introduce myself, because Securitas already knew mein advance.

Of course I have been at 'Place des Nations', where all the global organisations are based.

Also I've been in the most-shattered bank in Geneva: the UBS-headquarters, it was full ofnasty punchholes in the glass windows because of the quite recent demonstrations. Swisspeople were really flabbergasted, because such demonstration of hooligans at the anti-globalists demonstrations are new to them.

Everywhere I went, I was protected by Securitas. 'Big Bro Securitas' was watching me allthe time. I enjoyed every minute of it, because of the predictable manners of Securitas-employees. Also in Bern I was heavily protected by Securitas.

Back in Basel I went into the BIS building at the Central Station Place to try to open abank-account. At that moment there was a press-conference going on, how strange. TheSecuritas-guy in front of the building recognized me, so he didn't ask a thing and let me

go to do what I want to do. I asked the receptionist to open a bank account, but he lied tome that BIS is a private-bank.

After that I went to the Aeschenplatz and went in. The receptionist told mefrankly that the B.I.S. "IS NOT A BANK". Thanks, lady receptionist, that wasexactly what I wanted to hear, that BIS is not a bank. Now it is confirmed by this BIS-employee!


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Ruling the World of Money

Convenient formats for printing this articleRuling the World of Money in Rich Text FormatRuling the World of Money as a Word Document

by Edward Jay Epstein -1983 Harpers Magazine

reprinted from Monetary Reform Magazine - Canadawebsite: http://www.monetary-reform.on.ca/main.shtmlemail: [email protected]

TEN TIMES A YEAR - once a month except in August and October - a small group ofwell dressed men arrives in Basel, Switzerland. Carrying overnight bags and attachcases, they discreetly check into the Euler Hotel, across from the railroad station. They

have come to this sleepy city from places as disparate as Tokyo, London, andWashington, D.C., for the regular meeting of the most exclusive, secretive, and powerfulsupranational club in the world.

Each of the dozen or so visiting members has his own office at the club, with securetelephone lines to his home country. The members are fully serviced by a permanent staffof about 300, including chauffeurs, chefs, guards, messengers, translators, stenographers,secretaries, and researchers. Also at their disposal are a brilliant research unit and anultramodern computer, as well as a secluded country club with tennis courts and aswimming pool, a few kilometres outside of Basel.

The membership of this club is restricted to a handful of powerful men who determine

daily the interest rate, the availability of credit, and the money supply of the banks intheir own countries. They include the governors of the U.S. Federal Reserve, the Bank ofEngland, the Bank of Japan, the Swiss National Bank, and the German Bundesbank. Theclub controls a bank with a $40 billion kitty in cash, government securities, and gold thatconstitutes about one tenth of the world's available foreign exchange. The profits earnedjust from renting out its hoard of gold (second only to that of Fort Knox in value) aremore than sufficient to pay for the expenses of the entire organization. And theunabashed purpose of its elite monthly meetings is to coordinate and, if possible, to


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control all monetary activities in the industrialized world. The place where this clubmeets in Basel is a unique financial institution called the Bank for InternationalSettlements - or more simply, and appropriately, the BIS (pronounced "biz" in German).

THE BIS was originally established inMay 1930 by bankers and diplomats ofEurope and the United States to collectand disburse Germany's World War Ireparation payments (hence its name). Itwas truly an extraordinary arrangement.Although the BIS was organized as acommercial bank with publicly heldshares, its immunity from governmentinterference - and taxes in both peace andwar was guaranteed by an internationaltreaty signed in The Hague in 1930.Although all its depositors are central banks, the BIS has made a profit on every

transaction. And because it has been highly profitable, it has required no subsidy or aidfrom any government.

Since it also provided, in Basel, a safe and convenient repository for the gold holdings ofthe European central banks, it quickly evolved into the bank for central banks. As theworld depression deepened in the Thirties and financial panics flared up in Austria,Hungary, Yugoslavia, and Germany, the governors in charge of the key central banksfeared that the entire global financial system would collapse unless they could closelycoordinate their rescue efforts. The obvious meeting spot for this desperately neededcoordination was the BIS, where they regularly went anyway to arrange gold swaps andwar-damage settlements.

Even though an isolationist Congress officially refused to allow the U.S. Federal Reserveto participate in the BIS, or to accept shares in it (which were instead held in trust by theFirst National City Bank), the chairman of the Fed quietly slipped over to Basel forimportant meetings. World monetary policy was evidently too important to leave tonational politicians. During World War II, when the nations, if not their central banks,were belligerents, the BIS continued operating in Basel, though the monthly meetingswere temporarily suspended. In 1944, following Czech accusations that the BIS waslaundering gold that the Nazis had stolen from occupied Europe, the Americangovernment backed a resolution at the Bretton Woods Conference calling for theliquidation of the BIS. The naive idea was that the settlement and monetary-clearing

functions it provided could be taken over by the new International Monetary Fund. Whatcould not be replaced, however, was what existed behind the mask of an internationalclearing house: a supranational organization for setting and implementing globalmonetary strategy, which could not be accomplished by a democratic, United Nations-like international agency. The central bankers, not about to let their club be taken fromthem, quietly snuffed out the American resolution.

After World War II, the BIS reemerged as the main clearing house for Europeancurrencies and, behind the scenes, the favored meeting place of central bankers. When the


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dollar came under attack in the 1960s, massive swaps of money and gold were arrangedat the BIS for the defence of the American currency. It was undeniably ironic that, as thepresident of the BIS observed, "the United States, which had wanted to kill the BIS,suddenly finds it indispensable." In any case, the Fed has become a leading member ofthe club, with either Chairman Paul Volcker or Governor Henry Wallich attending every

"Basel weekend."

"It was in the wood-paneled rooms above the shop and the hotel that decisions werereached to devalue or defend currencies, to fix the price of gold, to regulate offshorebanking, and to raise or lower short-term interest rates."

ORIGINALLY, the central bankers soughtcomplete anonymity for their activities.Their headquarters were in an abandonedsix-storey hotel, the Grand et Savoy HotelUniverse, with an annex above theadjacent Frey's Chocolate Shop. There

purposely was no sign over the dooridentifying the BIS so visiting centralbankers and gold dealers used Frey's,which is across the street from the railroadstation, as a convenient landmark. It wasin the wood-paneled rooms above the shopand the hotel that decisions were reached to devalue or defend currencies, to fix the priceof gold, to regulate offshore banking, and to raise or lower short-term interest rates. Andthough they shaped "a new world economic order" through these deliberations (as GuidoCarli, then the governor of the Italian central bank, put it), the public, even in Basel,remained almost totally unaware of the club and its activities.

In May 1977, however, the BIS gave up its anonymity, against the better judgement ofsome of its members, in exchange for more efficient headquarters. The new building, aneighteen-story-high circular skyscraper that rises over the medieval city like somemisplaced nuclear reactor, quickly became known as the "Tower of Basel" and beganattracting attention from tourists. "That was the last thing we wanted, " Dr. FritzLeutwiler, current president of both the BIS and the Swiss National Bank, explained tome while watching currency changes flash across the Reuters screen in his office. "If ithad been up to me, it never would havebeen built."

Despite its irksome visibility, the newheadquarters does have the advantages ofluxurious space and Swiss efficiency. Thebuilding is completely air-conditioned andself-contained, with its own nuclear-bombshelter in the sub-basement, a triplyredundant fire-extinguishing system (sooutside firemen never have to be calledin), a private hospital, and some twenty


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miles of subterranean archives. "We try to provide a complete clubhouse for centralbankers ... a home away from home," said Gunther Schleiminger, the super-competentgeneral manager, as he arranged a rare tour of the headquarters for me.

The top floor, with a panoramic view of three countries - Germany, France, andSwitzerland - is a deluxe restaurant, used only to serve the members a buffet dinner whenthey arrive on Sunday evenings to begin the "Basel weekends." Aside from those tenoccasions, this floor remains ghostly empty.

On the floor below, Schleiminger and his small staff sit in spacious offices, administeringthe day-to-day details of the BIS and monitoring activities on lower floors as if they wererunning an out-of-season hotel.

The next three floors down are suites of offices reserved for the central bankers. All aredecorated in three colors - beige, brown, and tan - and each has a similar modernisticlithograph over the desk. Each office also has coded speed-dial telephones that at a pushof a button directly connect the club members to their offices in their central banks back

home. The completely deserted corridors and empty offices - with nameplates on thedoors and freshly sharpened pencils in cups and neat stacks of incoming papers on thedesks - are again reminiscent of a ghost town. When the members arrive for theirforthcoming meeting in November, there will be a remarkable transformation, accordingto Schleiminger, with multilingual receptionists and secretaries at every desk, andconstant meetings and briefings.

On the lower floors are the BIS computer, which is directly linked to the computers of themember central banks, and provides instantaneous access to data about the globalmonetary situation, and the actual bank, where eighteen traders, mainly from Englandand Switzerland, continually roll over short-term loans on the Eurodollar markets andguard against foreign-exchange losses (by simultaneously selling the currency in whichthe loan is due). On yet another floor, gold traders are constantly on the telephonearranging loans of the bank's gold to international arbitragers, thus allowing central banksto make interest on gold deposits.

Occasionally there is an extraordinary situation, such as the decision to sell gold for theSoviet Union, which requires a decision from the "governors," as the BIS staff calls thecentral bankers. But most of the banking is routine, computerized, and riskless. Indeed,the BIS is prohibited by its statutes from making anything but short-term loans - most arefor thirty days or less - that are government-guaranteed or backed with gold deposited atthe BIS. The profits the BIS receives for essentially turning over the billions of dollarsdeposited by the central banks amounted to $162 million last year.

AS SKILLED as the BIS may be at all this, the central banks themselves have highlycompetent staff capable of investing their deposits. The German Bundesbank, forexample, has a superb international trading department and 15,000 employees - at leasttwenty times as many as the BIS staff. Why then do the Bundesbank and the other centralbanks transfer some $40 billion of deposits to the BIS and thereby permit it to make sucha profit?


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One answer is, of course, secrecy. By commingling part of their reserves in what amountsto a gigantic mutual fund of short-term investments, the central banks create a convenientscreen behind which they can hide their own deposits and withdrawals in financialcenters around the world. For example, if the BIS places funds in Hungary, the individualcentral banks do not have to answer to their governments for investing in a communist

country. And the central banks are apparently willing to pay a high fee to use the cloak ofthe BIS.

There is, however, a far more important reason why the central banks regularly transferdeposits to the BIS: they want to provide it with a large profit to support the otherservices it provides. Despite its name, the BIS is far more.than a bank. From the outside,it seems to be a small, technical organization. Just eighty-six of its 298 employees areranked as professional staff. But the BIS is not a monolithic institution: artfully concealedwithin the shell of an international bank, like a series of Chinese boxes one insideanother, are the real groups and services the central bankers need -- and pay to support.

The first box inside the bank is the board of directors, drawn from the eight European

central banks (England, Switzerland, Germany, Italy, France, Belgium, Sweden, and theNetherlands), which meets on the Tuesday morning of each "Basel weekend." The boardalso meets twice a year in Basel with the central banks of Yugoslavia, Poland, Hungary,and other Eastern bloc nations. It provides a formal apparatus for dealing with Europeangovernments and international bureaucracies like the IMF or the European EconomicCommunity (the Common Market). The board defines the rules and territories of thecentral banks with the goal of preventing governments from meddling in their purview.For example, a few years ago, when the Organization for Economic Cooperation andDevelopment in Paris appointed a low-level committee to study the adequacy of bankreserves, the central bankers regarded it as poaching on their monetary turf and turned tothe BIS board for assistance. The board then arranged for a high-level committee, under

the head of Banking Supervision at the Bank of England, to preempt the issue. TheOECD got the message and abandoned its effort.

To deal with the world at large, there is another Chinese box called the Group of Ten, orsimply the "G-10." It actually has eleven full-time members, representing the eightEuropean central banks, the U.S. Fed, the Bank of Canada, and the Bank of Japan. it alsohas one unofficial member: the governor of the Saudi Arabian Monetary Authority. Thispowerful group, which controls most of the transferable money in the world, meets forlong sessions on the Monday afternoon of the "Basel weekend." It is here that broaderpolicy issues, such as interest rates, money-supply growth, economic stimulation (orsuppression) , and currency rates are discussed - if not always resolved.

Directly under the G-10, and catering to all its special needs, is a small unit called the"Monetary and Economic Development Department," which is, in effect, its private thinktank. The head of this unit, the Belgian economist Alexandre Lamfalussy, sits in on allthe G-10 meetings, then assigns the appropriate research and analysis to the half dozeneconomists on his staff. This unit also produces the occasional blue-bound "economicpapers" that provide central bankers from Singapore to Rio de Janeiro, even though theyare not BIS members, with a convenient party line. For example, a recent paper called"Rules versus Discretion: An Essay on Monetary Policy in an Inflationary Environment,"


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politely defused the Milton Friedmanesque dogma and suggested a more pragmatic formof monetarism. And last May, just before the Williamsburg summit conference, the unitreleased a blue book on currency intervention by central banks that laid down theboundaries and circumstances for such actions. When there are internal disagreements,these blue books can express positions sharply contrary to those held by some BIS

members, but generally they reflect a consensus of the G-10.

OVER A BRATWURST-AND-BEER lunch on the top floor of the Bundesbank, whichis located in a huge concrete building (called "the bunker") outside of Frankfurt, KarlOtto Phl, its president and a ranking governor of the BIS, complained to me about therepetitiousness of the meetings during the "Basel weekend." "First there is the meeting onthe Gold Pool, then, after lunch, the same faces show up at the G-10, and the next daythere is the board [which excludes the U.S., Japan, and Canada], and the EuropeanCommunity meeting [which excludes Sweden and Switzerland from the previousgroup]." He concluded: "They are long and strenuous - and they are not where the realbusiness gets done." This occurs, as Phl explained over our leisurely lunch, at stillanother level of the BIS: "a sort of inner club," as he put it.

The inner club is made up of the half dozen or so powerful central bankers who findthemselves more or less in the same monetary boat: along with Phl are Volcker andWallich from the Fed, Leutwiler from the Swiss National Bank, Lamberto Dini of theBank of Italy, Haruo Mayekawa of the Bank of Japan, and the retired governor of theBank of England, Lord Gordon Richardson (who had presided over the G -10 meetingsfor the past ten years). They are all comfortable speaking English; indeed, Phl recountedhow he has found himself using English with Leutwiler, though both are of course nativeGerman-speakers. And they all speak the same language when it comes to governments,having shared similar experiences. Phl and Volcker were both undersecretaries of theirrespective treasuries; they worked closely with each other, and with Lord Richardson, in

the futile attempts to defend the dollar and the pound in the 1960s. Dini was at the IMF inWashington, dealing with many of the same problems. Phl had worked closely withLeutwiler in neighboring Switzerland for two decades. "Some of us are very old friends,"Phl said. Far more important, these men all share the same set of well-articulated valuesabout money.

The prime value, which also seems to demarcate the inner club from the rest of the BISmembers, is the firm belief that central banks should act independently of their homegovernments. This is an easy position for Leutwiler to hold, since the Swiss NationalBank is privately owned (the only central bank that is not government owned) andcompletely autonomous. ("I don't think many people know the name of the president of

Switzerland - even in Switzerland," Phl joked, "but everyone in Europe has heard ofLeutwiler.") Almost as independent is the Bundesbank; as its president, Phl is notrequired to consult with government officials or to answer the questions of Parliament -even about such critical issues as raising interest rates. He even refuses to fly to Basel in agovernment plane, preferring instead to drive in his Mercedes limousine.

The Fed is only a shade less independent than the Bundesbank: Volcker is expected tomake periodic visits to Congress and at least to take calls from the White House - but heneed not follow their counsel. While in theory the Bank of Italy is under government


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control, in practice it is an elite institution that acts autonomously and often resists thegovernment. (In 1979, its then governor, Paolo Baffi, was threatened with arrest, but theinner club, using unofficial channels, rallied to his support.) Although the exactrelationship between the Bank of Japan and the Japanese government purposely remainsinscrutable, even to the BIS governors, its chairman, Mayekawa, at least espouses the

principle of autonomy. Finally, though the Bank of England is under the thumb of theBritish government, Lord Richardson was accepted by the inner club because of hispersonal adherence to this defining principle. But his successor, Robin Leigh-Pemberton,lacking the years of business and personal contact, probably won't be admitted to theinner circle.

In any case, the line is drawn at the Bank of England. The Bank of France is seen as apuppet of the French government; to a lesser degree, the remaining European banks arealso perceived by the inner club as extensions of their respective governments, and thusremain on the outside.

A second and closely related belief of the inner club is that politicians should not be

trusted to decide the fate of the international monetary system. When Leutwiler becamepresident of the BIS in 1982, he insisted that no government official be allowed to visitduring a "Basel weekend." He recalled that in 1968, U.S. Treasury undersecretary FredDeming had been in Basel and stopped in at the bank. "When word got around that anAmerican Treasury official was at the BIS," Leutwiler said, "bullion traders, speculatingthat the U.S. was about to sell its gold, began a panic in the market." Except for theannual meeting in June (called " the Jamboree" by the staff), when the ground floor of theBIS headquarters is open to official visitors, Leutwiler has tried to enforce his rulestrictly. "To be frank," he told me, "I have no use for politicians. They lack the judgementof central bankers." This effectively sums up the common antipathy of the inner clubtoward "government muddling," as Phl puts it.

The inner-club members also share a strong preference for pragmatism and flexibilityover any ideology, whether that of Lord Keynes or Milton Friedman. For this reason,there was considerable apprehension last spring that Paul Volcker would be replaced by asupply-side ideologue like Beryl Sprinkel, and considerable relief when he wasreappointed for another term. Rather than resorting to rhetoric and invoking principles,the inner club seeks any remedy that will relieve a crisis. For example, earlier this year,when Brazil failed to pay back on time a BIS loan that was guaranteed by the centralbanks, the inner club quietly decided to extend the deadline instead of collecting themoney from guarantors. "We are constantly engaged in a balancing act - without a safetynet," Leutwiler explained.

THE FINAL AND by far the most important belief of the inner club is the conviction thatwhen the bell tolls for any single central bank it tolls for them all. When Mexico facedbankruptcy last year, for instance, the issue for the inner club was not the welfare of thatcountry but, as Dini put it, "the stability of the entire banking system." For monthsMexico had been borrowing overnight funds from the interbank market in New York - asevery bank recognized by the Fed is permitted to do - to pay the interest on its $80 billionexternal debt. Each night it had to borrow more money to repay the interest on theprevious nights transactions, and, according to Dini, by August Mexico had borrowed


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nearly one quarter of all the "Fed Funds," as these overnight loans between banks arecalled.

The Fed was caught in a dilemma: if it suddenly stepped in and forbade Mexico fromfurther using the interbank market, Mexico would be unable to repay its enormous debtthe next day, and 25 percent of the entire banking system's ready funds might be frozen.But if the Fed permitted Mexico to continue borrowing in New York, in a matter ofmonths it would suck in most of the interbank funds, forcing the Fed to expanddrastically the supply of money.

It was clearly an emergency for the inner club. After speaking to Miguel Mancera,director of the Banco de Mexico, Volcker immediately called Leutwiler, who wasvacationing in the Swiss mountain village of Grison. Leutwiler realized that the entiresystem was confronted by a financial time bomb: even though the IMF was prepared toextend $4.5 billion to Mexico to relieve the pressure on its long-term debt, it wouldrequire months of paperwork to get approval for the loan. And Mexico needed animmediate fix of $1.85 billion to get out of the interbank market, which Mancera had

agreed to do. But in less than forty-eight hours, Leutwiler had called the members of theinner club and arranged the temporary bridging loan.

While this $1.85 billion appeared - at least in the financial press - to have come from theBIS, virtually all the funds came from the central banks in the inner club. Half camedirectly from the United States - $600 million from the Treasury's exchange-equalizationfund and $325 million from the Fed's coffers; the remaining $925 million mainly fromthe deposits of the Bundesbank, Swiss National Bank, Bank of England, Bank of Italy,and Bank of Japan, deposits that were specifically guaranteed by these central banks,though advanced pro forma by the BIS (with a token amount advanced by the BIS itselfagainst the collateral of Mexican gold). The BIS undertook virtually no risk in this rescue

operation; it merely provided a convenient cloak for the inner club. Otherwise, itsmembers, especially Volcker, would have had to take the political heat individually forwhat appeared to be the rescue of an underdeveloped country. In fact, they were - true totheir paramount values - rescuing the banking system itself.

On August 31 of this year, Mexico repaid the BIS loan. But the bailout was only atemporary, if not pyrrhic, victory. With the multibillion-dollar debts of a score of othercountries - including Argentina, Chile, Venezuela, Brazil, Zaire, the Philippines, Poland,Yugoslavia, Hungary, and even Israel - hanging like so many swords of Damocles overits sacred monetary system, the inner club has "no choice," as Leutwiler has concluded,but to remain a crisis manager. This new role has created considerable concern among theouter circle, and even in the Bank of England, since the members who don't entirely sharethe mentality of the inner club want the BIS to remain primarily a European institution."Let the Fed worry about Brazil and the rest of Latin America - that is not the job of theBIS," a blunt representative of the Bank of England, definitely not part of the inner club,told me. Others at the BIS have argued that it does not have the experience or facilities tobecome "a mini-IMF - putting out fires around the world," as one staffer described it.

To mollify such dissent on the periphery, inner club members publicly pay lip service tothe ideal of preserving the character of the BIS and not turning it into a lender of last


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resort for the world at large. Privately, however, they will undoubtedly continue theirmaneuvers to protect the banking system at whatever point in the world it seems mostvulnerable. After all, it is ultimately the central banks' money at risk, not the BIS's. Andthe inner club will also keep using the BIS as its public mask - and pay the requisite pricefor the disguise.

The next meeting of the inner club is Monday, November 7.....

Edward Jay Epstein is the author of The Rise and Fall of Diamonds, Legend: The SecretWorld of Lee Harvey Oswald, and News From Nowhere. He also has written a book oninternational deception.

UPDATE (9 years later) -

Investor's Business Daily, May 1, 1992 summed up the character of the BIS in an articleentitled:

Why a Global Credit Crunch? Some say Little-known BIS Is Partly to Blame - Despite its

global anonymity, the BIS is one of the most powerful financial institutions in the world...

In the book Global Financial Integration: the End of Geography, author Richard F.O'Brien further confirms the powerful role of the BIS:

In the financial marketplace, the trend towards some sort of global governance is bestrepresented by the efforts of bank supervisors under the aegis of the Bank forInternational Settlements in Basel to impose common minimum capital requirements onbanks ... and to integrate and coordinate the supervision of banking, securities marketsand insurance ...

Financial World Magazine - February 16, 1993 "Where Has All the Money Gone?"explains how the BIS has more recently flexed its muscle:

Even before Japan's equity markets began to contract, regulations put into effect in 1988by the Bank of International Settlement's Committee on Banking regulation andSupervisory Practices had begun to exact a particularly heavy toll on Japanese lenders.Those regulations require the world's bankers to raise their underlying asset bases, themoney against which they lend, to 8% to total capital, more than double the asset averageof the 1980's.- J Epstein

Carrol Quigley - the bankers' plan"The Power of financial capitalism had [a]far reaching plan, nothing less than tocreate a world system of financial controlin private hands able to dominate thepolitical system of each country and theeconomy of the world as a whole.


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This system was to be controlled in a feudalistic fashion by the central banks of the worldacting in concert, by secret agreements arrived at in frequent meetings and conferences.

The apex of the system was to be the Bank for International Settlements in Basel,Switzerland, a private bank owned and controlled by the world's central banks, whichwere themselves private corporations.

Each central bank sought to dominate its government by its ability to control treasuryloans, to manipulate foreign exchanges, to influence the level of economic activity in thecountry, and to influence co-operative politicians by subsequent rewards in the businessworld."

Carrol Quigley, Tragedy and Hope, 1966 - [Bill Clinton's mentor and GeorgetownUniversity professor]

THE NETWORKAlfred Mendez -

See also Alfred Mendez'articleAN UNCOMMONVIEW OF THE BIRTH OFAN UNCOMMONMARKETon myBilderberg History page

http://www.spectrezine.o

rgThe wealth of the countryflees the landLike cottonseed on a windBlown by the fetid breathOf money-pimps inBedlamPursuing the creed ofmastersWho worship a market

freedOf all restraints on greed -While politicians postureAnd feed on delusions ofpower

The above graph [couldn'treproduce it here, seebelow ed.] was created in


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order to bestow meaning in simplistic, delineated form to such terms as 'free market','new world order' and 'globalisation' - terms that have dominated political/economicterminology over the past two decades-or-so, and the fact that it focusses on banks andbankers (a profession endowed with the aura of authority in the eyes of the public) isquite simply because, without money, those terms are meaningless. Indeed, the title itself

emphasises the role of money: After all, what is a banker if he's not a trader in money?Similarly, 'globalisation' would be equally meaningless if such politically omnipotentgroups as the Bilderberg Group and the Trilateral Commission were not taken intoaccount when assessing it's (globalisation's) significance. Moreover, how is it possible todisassociate banker from politician from businessman when, at times, one individual is allthree - and, in any case, they are constituent parts of a single entity: the corporateestablishment? Hence the inclusion of these two groups withinthe graph.

The Bilderberg (or BB from now on) was formed in 1954 out of the need of corporateAmerica to ensure cohesion of purpose on the part of its European partners in the recentlyformed North Atlantic Alliance (NATO) - the twin aim being to facilitate the flow ofAmerican capital into the region, and to bring Germany into the Alliance (against, it

should be noted, the wishes of many of its partners). That it is a group endowed withenormous political clout can be attested to by: (1) examination of the lists of committeemembers an

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BIS -The Tower of Basel Secretive Plans for the Issuing of a Global Currency

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