Truth Revolution

Our mission is simple: To vigorously seek the truth from the garbage heap of lies, ignorance, bigoted bias and witless diversion that has buried public discourse today. We will provide a new venue for disseminating hard news, insightful, fact based analysis of the harsh realities often ignored or distorted by mainstream media.
We hope you like to read "The hard truth"
Although I studied journalism, I found very quickly that most journalist work very hard on their stories but their editors would put some totally irrelevant spin on the story to push their own agendas demanded by their masters. So anything important was lost! We in today's society have allowed a few disgusting lying money grovelling grubs take over the worlds media heavily supported by Wall street money men, who could'nt 'lie' straight in bed! With the morals and integrity of a mangy alley cat.
They are truly dragging all of us down a very dangerous road to an unspeakable abyss!
The dollar, oil and the big wipeout
Moises Saman for The New York Times
Oil fields in the Iraqi province of Basra. Iraq produces about 2.5 million barrels of oil per day.
Published: June 19, 2008
BAGHDAD — Four Western oil companies are in the final stages of negotiations this month on contracts that will return them to Iraq, 36 years after losing their oil concession to nationalization as Saddam Hussein rose to power.
High Energy Thursday: A Peculiar Deal for Some of Iraq’s Oil
Exxon Mobil, Shell, Total and BP — the original partners in the Iraq Petroleum Company — along with Chevron and a number of smaller oil companies, are in talks with Iraq’s Oil Ministry for no-bid contracts to service Iraq’s largest fields, according to ministry officials, oil company officials and an American diplomat.
The deals, expected to be announced on June 30, will lay the foundation for the first commercial work for the major companies in Iraq since the American invasion, and open a new and potentially lucrative country for their operations.
The no-bid contracts are unusual for the industry, and the offers prevailed over others by more than 40 companies, including companies in Russia, China and India. The contracts, which would run for one to two years and are relatively small by industry standards, would nonetheless give the companies an advantage in bidding on future contracts in a country that many experts consider to be the best hope for a large-scale increase in oil production.
There was suspicion among many in the Arab world and among parts of the American public that the United States had gone to war in Iraq precisely to secure the oil wealth these contracts seek to extract. The Bush administration has said that the war was necessary to combat terrorism. It is not clear what role the United States played in awarding the contracts; there are still American advisers to Iraq’s Oil Ministry.
Sensitive to the appearance that they were profiting from the war and already under pressure because of record high oil prices, senior officials of two of the companies, speaking only on the condition that they not be identified, said they were helping Iraq rebuild its decrepit oil industry.
For an industry being frozen out of new ventures in the world’s dominant oil-producing countries, from Russia to Venezuela, Iraq offers a rare and prized opportunity.
While enriched by $140 per barrel oil, the oil majors are also struggling to replace their reserves as ever more of the world’s oil patch becomes off limits. Governments in countries like Bolivia and Venezuela are nationalizing their oil industries or seeking a larger share of the record profits for their national budgets. Russia and Kazakhstan have forced the major companies to renegotiate contracts.
The Iraqi government’s stated goal in inviting back the major companies is to increase oil production by half a million barrels per day by attracting modern technology and expertise to oil fields now desperately short of both. The revenue would be used for reconstruction, although the Iraqi government has had trouble spending the oil revenues it now has, in part because of bureaucratic inefficiency.
For the American government, increasing output in Iraq, as elsewhere, serves the foreign policy goal of increasing oil production globally to alleviate the exceptionally tight supply that is a cause of soaring prices.
The Iraqi Oil Ministry, through a spokesman, said the no-bid contracts were a stop-gap measure to bring modern skills into the fields while the oil law was pending in Parliament.
It said the companies had been chosen because they had been advising the ministry without charge for two years before being awarded the contracts, and because these companies had the needed technology.
A Shell spokeswoman hinted at the kind of work the companies might be engaged in. “We can confirm that we have submitted a conceptual proposal to the Iraqi authorities to minimize current and future gas flaring in the south through gas gathering and utilization,” said the spokeswoman, Marnie Funk. “The contents of the proposal are confidential.”
While small, the deals hold great promise for the companies.
“The bigger prize everybody is waiting for is development of the giant new fields,” Leila Benali, an authority on Middle East oil at Cambridge Energy Research Associates, said in a telephone interview from the firm’s Paris office. The current contracts, she said, are a “foothold” in Iraq for companies striving for these longer-term deals.
By ANDREW E. KRAMER
Posted by Cromwell
Among some of the many urgent and relevant issues today is the soaring price of fuel. There is absolutely no justification for the price of petrol at the pumps! Fuel still cost exactly the same to refine today as it did in the 70's, 80's and 90's. It's what the media are implying when they ram down our throats hundreds of times a day, "the price of oil per barrel today folks is at record highs". Absolute garbage! Oil companies pay around $10.00 a barrel for their oil and sometimes less. What the deceitful media are telling you is the daily "hedge fund futures market" price, or the daily spot price and has nothing to do with what oil companies pay.
Now the billions of dollars they're getting from the Fed is being diverted into commodities which is destabilizing the world economy; driving gas prices to the moon and triggering food riots across the planet.
How the IMF props up the bankrupt U.S. dollar system
One of the crucial pillars of support for today's Dollar
System is Washington's control of the International Monetary Fund, the IMF.
The way this actually works is carefully disguised, behind a facade of
technocrats and economic theory of free market ideology. In reality, the IMF
is a modern era collection agency for the Dollar Empire. It collects its
tribute, through major international banks, which use the dollars to further
extend the power of American financial and corporate hegemony, in effect the
driving motor of what is globalisation.
Ironically, though the IMF is a main prop of the Dollar System, it's
nominally headed by a European, today a German, Horst Koehler, and before
him, by a Frenchman, Michel Camdessus. The real power is carefully concealed
behind the facade. Under the constitution of the IMF, no major decision is
possible without 85% support of the board of directors. The United States,
which drafted the original IMF charter at Bretton Woods New Hampshire in
1944, made sure it had the decisive veto control with an 18% vote share.
That veto remains to today. Insiders know well that the IMF is run by
Washington. It is no accident that its headquarters is also there.
The IMF was originally created in the 1944 Bretton Woods New Hampshire
international monetary conference, called by President Roosevelt to set up a
post-war monetary and trade system. It was intended as a fund to support
stability of currencies and trade of the post-war European allied countries.
At that time Washington held the vast bulk of world gold reserves and
expected to lend dollars to rebuild Europe. The original IMF idea was to
pool a share of reserves of member states, which any single state could then
borrow, in event of a short-term payments crisis, to stabilize their
currency. Ten years after the Great Depression, the major industrial
nations, including the USA, were concerned with creation of a stable,
growing Europe, not least as an export market for US products. The first
member to borrow was Great Britain after the war. The last European state
was Italy in 1977.
Since 1977, no European or G7 country has gone to
the IMF to borrow. Instead they have borrowed from private banks or issued
state debt. They know all too well how destructive the IMF conditions are.
By the end of the 1970s some people were suggesting the IMF had outlived its
role, much as some argue with NATO after the end of the Cold War. Washington
had other ideas for the IMF however.
The role of the IMF changed dramatically in the early 1980s, under US
pressure. Instead of serving as a stabilizing fund for industrial countries
of Europe or Japan, the IMF became the decisive agency controlling economic
policy of underdeveloped countries. What evolved since the first Latin
American debt crises of the early 1980s was an entirely new role for the IMF
to act as policeman to collect dollar loans for private New York and
international banks. The IMF became the driving motor for what
came to be called "globalisation."
After the first oil price rise of 400% in the 1970s, many developing
countries such as Brazil, Argentina, or most of Africa, borrowed heavily to
finance needed oil imports, or trade deficits. They borrowed dollars from
major international banks operating in the London Eurodollar market. London
was the centre for, in effect, the recycling of the large sums of
petrodollars from Arab OPEC countries to US and other major banks.
The major banks took the new oil dollars and immediately relent them at a
nice profit, to countries like Argentina or Egypt. Before the 1970s
Argentina had been a fast-growing economy developing modern industry,
agriculture and a rising standard of living for its people. It had almost no
foreign debt. Ten years later, the country was under control of the IMF and
foreign banks. The US changed the rules, in the process creating
the debt crisis.
In October 1979, a dramatic shock occurred for the debtor countries.
Overnight their cheap dollar loans cost them 300% more interest charge. Paul
Volcker of the Federal Reserve Bank in the US, unilaterally changed US
interest policy to force the dollar higher against other currencies. The
effect was to raise US interest rates 300% and rates in the London bank
market by even more. The bank loans to Argentina and other countries had
been made in "floating" rate agreements. If the key international rate in
the London bank market, LIBOR, was low, Argentina would pay a low rate on
its dollar loans. But when it suddenly rose 300% in 1979-1980, many
countries suddenly faced a payments crisis.
It took until 1982 for the crisis to reach default level. At that point,
Washington demanded the IMF be brought in to police a debt collection
process on developing debtor nations. This came to be called the Third World
Debt Crisis. The impression was created that countries like Argentina were
guilty for mismanagement. In reality, whatever political corruption may have
existed in the debtor countries, the corruption of the IMF system and the
petrodollar recycling was far greater. The Volcker interest rate shock
completed the package of destruction of living standards on behalf of dollar
debts.
How did the IMF act in the third world debt crisis? Here is where it becomes
clear that the role of the IMF was to support the dollar hegemony of the
United States, and not to help poor countries get through a temporary debt
problem.
The IMF has been described by some as a tool
of neo-colonialism. That is too mild, as 19th Century British or European
colonialism, however harsh, never managed to accomplish the extent of
devastation and destruction of health and living standards the IMF has done
since the 1970s.
The IMF operates as a supranational agency to take control over helpless
debtor states, to impose economic policies that force the country ever
deeper into debt, while opening the market to foreign, often US capital and
global corporate exploitation. The fact that debtor countries never get out
of their dollar debt, only deeper in, is deliberate. IMF policy in fact
insures this. The dollar debt is a major prop of the dollar system and of
private international banks. When that debt is repaid, banks lose power and
credit contracts. So long as debt grows, bank credit can grow, the paradox
of modern banking.
The tip-off that the real purpose of the IMF is quite different from its
public claims, is that despite repeated proof of the destructiveness of its
policies, called "conditionalities," the IMF has never changed the method it
uses in a target country. There is a reason for that.
Take Argentina as a case in point. In early 2002 Argentina defaulted on
repaying $141 billion in foreign dollar debt. One of the most devastating
economic collapses in modern history ensued. The IMF was crucial. In early
2000 Argentina had turned to the IMF for emergency credit to prevent a
collapse of its currency, then fixed to the strong US dollar. As the dollar
rose, Argentina found its exports trade collapsing. The country went into
recession. The IMF stepped in with a $48 billion "rescue" package. But there
were conditions.
First the government had to agree to severe IMF-dictated cuts in government
spending before it would get any money. State subsidies on food for low
income were ended, triggering food riots. Interest rates exploded in a vain
effort to convince foreign banks and bondholders to not sell. That only
worsened the economic depression. State companies were forced to privatise
to raise money and "promote free market" liberalization. The Buenos Aires
water system was sold for pennies to Enron, as was a pipeline going from
Argentina to Chile.
Washington insisted all the while that Argentina hold to its fixed currency
value, arguing that the trust of foreign bondholders and creditors was the
priority. Meanwhile the country sank into its worst depression in memory, as
millions lost jobs, and bank accounts were in the final stage frozen, so
ordinary citizens could not even draw savings for life necessities.
What exactly does the IMF do when it comes into a crisis country that asks
for emergency lending to overcome a debt or currency crisis? The IMF always
uses the same program, regardless of whether it is Russia or Argentina,
Zimbabwe or South Korea, all very different cultures, economies and
situations. The IMF demands are often referred to as the Washington
Consensus, the name given in 1990 by a US economist and IMF backer, John
Williamson, to describe the IMF method of attack.
IMF medicine almost always includes demands to privatise state industries,
to slash public spending even on health and education, devalue the national
currency against the dollar, and open the country to free flow of
international capital-both in and, especially, out.
First the IMF demands the government in question sign a secret Memorandum of
Understanding with the IMF, in which it agrees to a list of "conditionalities",
the pre-condition for getting any penny of IMF aid. Under todays globalise
free capital markets, banks do not invest in a country that does not have
the IMF seal of approval. So the IMF role is far more than giving some
emergency loan. It determines if a country gets any money from any source at
all-World Bank, private banks and other.
The conditions of an IMF deal are always the same. Privatisation of state
industries is top on the list. The effect of privatisation with a cheap Peso
or Rouble currency is that foreign dollar investors are able to buy up the
prime assets of a country dirt-cheap. Often the lure of under-the-table
deals in privatising their national assets corrupts the politicians involved
in the country. Foreign multinationals can grab profitable mining, oil, or
other national treasures with their dollars.
The case of the Yeltsin government in Russia is classic, with dollar
billionaires emerging overnight on the looting of national assets via
IMF-dictated privatisation. The Clinton Administration backed the process
fully. They knew it turned Russia into a dollar zone, and that was the
intent.
The second demand of the IMF is that a country liberalize, that is open, its
financial and banking markets to foreign investors. This allows high-profile
speculators like George Soros or Citibank or Credit Suisse to come into a
country, run up asset prices in a speculation, take huge profits, as in
Thailand in the mid-1990s, and quickly sell, then exit with huge gains, as
the local economy collapses behind them. Then Western multinationals can
come in after, and take prime assets at very low cost.
This is what happened to Asia in the 1990s. The IMF and US Treasury, which
actually determines US IMF policy, began strong pressure on the fast-growing
East Asia "Tiger" economies in 1993, to remove national controls on capital
flows. They argued it would help Asia get large sums of money to invest.
What it did was give US pension funds and big banks a huge new market for
speculation. Too much money flowed in, and an unhealthy real estate bubble
grew. It burst when Soros and other US speculators deliberately pulled the
plug in 1997, triggering the Asia crisis. The end result was that for the
first time, Asian economies were forced to turn to the IMF to be rescued.
But the IMF did not "rescue" any Asian economy in 1998. It rescued
international banks and hedge fund speculators. In Indonesia, the IMF
demanded the government raise interest rates to 80%, on the argument that
would keep foreign investors from leaving, and stabilize the situation. In
fact, as critics like Joseph Stiglitz charged at the time, the IMF interest
rate demands guaranteed a full-blown collapse of the Indonesian and other
Asian banking systems
.
Once the IMF got control of South Korea, one of the strongest industrial
economies in the world, it demanded break-up of large industry
conglomerates, charging "corruption" and "crony capitalism." In fact,
Washington hoped to weaken a growing competitor and open the door for US
companies like GM or Ford to take over. In part it worked, until Korea and
other regional economies were strong enough to re-impose national controls.
Malaysia openly defied the IMF demands and imposed currency controls during
the crisis. The damage to Malaysia was minimal as a result, a great
embarrassment to the IMF.
The next step for IMF conditions, is the demand a country turn to
"market-based" domestic prices. This is code for eliminating government
subsidies or price controls. Often developing countries have
state-subsidized fuel or food or other necessities for their people. In 1998
the IMF demanded, for example, that Indonesia remove state food subsidies
for the poor. The idea of "market-based price" is itself a fiction. A market
is man-made. The market in Switzerland or Denmark or Japan is different from
the market in Cuba or Cameroon. What the IMF is after is a slashing of state
budgets to minimize the state role in the economy and make a target country
defenceless against foreign takeover of its key assets. The government share
in the fragile economy is cut also, in order to insure foreign banks get
their "pound of flesh."
Finally the IMF demands the country devalue its currency, and massively,
often by 60-70% or more. Here the argument is that this will make its
exports "more competitive" and bring more income to repay the foreign dollar
debts. This is a crucial part of the IMF Washington Consensus medicine. If,
say, Chile devalues the Peso in half, or the Republic of Congo, it must
export twice as many tons of copper to earn the same dollar of export
surplus. For the giant multinationals in the industrial world, it means the
cost of raw materials has become cheaper by half.
Over the past twenty years since the IMF stepped in to play the major role
in reorganising developing countries, world raw materials prices have been
dramatically depressed, even though demand has risen. The reason is that
countries of Africa, Latin America and elsewhere are mainly raw materials
exporters, and their commodities, like oil, are all exported in dollars.
They need to earn dollars to repay dollar debts. The IMF policies have
driven their raw material prices, measured in dollars, drastically lower.
This has been deliberate, but is never admitted. The IMF is an
agency of American dollar domination of the global economy, not an agency to
help developing countries.
None of this is exaggeration, unfortunately. IMF defenders
claim that "market liberalization" has resulted in major economic growth
over the past 20 years in developing countries. The reality is opposite. In
a study done by Joseph Stiglitz when he was at the World Bank, between 1989
and 1997 the GDP of every country in the former Soviet Union had fallen to
levels of 30% to 80% of that before the collapse of state controls, with the
sole exception of Poland. The level in Russia was only 60% that in 1989. GDP
had collapsed 40%, and unemployment went from 2 million to 60 million. The
rapid privatisation without adequate legal and institutional safeguards such
as unemployment insurance or health insurance, led to social catastrophe
comparable to wartime. IMF demands to free capital movement allowed new
Russian dollar oligarchs such as Berezovsky to plunder billions of dollars
and put it into secret bank accounts in Cyprus or Liechtenstein, while they
bought luxury villas in Monte Carlo.
The IMF record in Africa is as outrageous and destructive. In Zimbabwe, the
IMF demanded the government privatise certain state companies and cut
subsidies on food, education and health care to get IMF aid. The government
complied with most demands, and then the IMF accused it of funding the war
in the Democratic Republic of Congo, using that as an excuse to deny giving
Zimbabwe loans. In Kenya the IMF earlier demanded that specific individuals
be named to the government of Moi, people friendly to Western interests.
Washington then charged these governments being "corrupt," which
conveniently blinds Western opinion from realizing the moral travesty-taking
place under IMF auspices.
Take the official World Bank debt statistics and it
becomes obvious that the IMF game is to support the dollar. The first debt
crisis in the Third World erupted in 1982. The IMF stepped in to "stabilize"
the debt problem. Since then, the foreign debts of developing countries have
risen exponentially. In Argentina, the earlier "success" of the IMF, foreign
debt stood at $62 billion in 1990. In 2000 it was $146 billion. Brazil's
foreign debt has gone from $120 billion to $240 billion in the same time.
Iran, isolated from the IMF system by US sanctions, is one of the few
developing countries, which has managed to reduce its foreign debt.
The total foreign dollar debt of all low and middle-income countries rose
from $1.4 trillion in 1990 to $2.5 trillion in 2000, almost double. In most
cases, the unpayable interest costs on the debts were merely added to the
amount of principal owed foreign lenders, at compound interest rate, of
course. With compound interest charges often 10% to 15% per year, the debt
grows exponentially.
The result is a Ponzi debt pyramid, in which the more a country pays, the
more it owes. Bankers call it "interest capitalization." It is no different
from the plight of a poor shopkeeper debtor who is forced to turn to a mafia
loan shark to survive and ends up paying more and more at ever more
interest, until he is bankrupt and the mafia takes all his possessions. The
IMF and banks know only some 80% of Third World debts can ever be repaid.
They care only about the legal fiction and the ability to use the debt as a
lever to grab assets cheaply. According to the World Bank, between 1980 and
1986, for a group of 109 debtor countries, payment of interest alone to the
creditors on foreign debts totalled $326 billion. Repayment of principal on
the same debts totalled another $322 billion, for a combined capital flow
out to the New York and other creditor banks, in debt service, of $658
billions on an original debt of $430 billion. Yet, despite this enormous
effort, these 109 debtors still owed the banks a sum of $882 billion in
1986. This was because of the pyramid effect of compound interest, interest
capitalization and Volcker's floating rate policy.
In 1990 the developing world repaid some $150 billion in interest on dollar
debt, three times all aid received. This was a huge boost to the dollar
credit system, which lends on the basis of assuming it will be repaid the
entire $2.5 trillion third world debt. The IMF allows that myth to continue.
Occupied Iraq today must still "honour" billions in debts of the Hussein
era, many to the former Soviet Union, despite its devastated situation.
Russia is still forced to admit billions in debt from the Soviet era to
Western agencies. Under the IMF system, debt is more sacred than
human life.
The vicious trick in all IMF-led "debt restructuring," is that so long as a
debtor is able to pay interest on its loans, the creditor banks in New York
or London or elsewhere do not have to declare their loan in default. Even if
they know it never will be repaid, they treat it as if it were a fully good
credit, and use it as capital collateral for further bank lending. The
banking system of the dollar world is to a major degree propped up by the
pyramid of unpayable third world loans from Africa to Indonesia to Argentina
to Croatia.
There has been a dramatic slowdown in economic growth in developing
economies over the past two decades since the IMF was brought in to police
the debtor states in 1982. There is a direct link. In Latin America, if we
take per capita GDP growth, there was a growth of 75% between 1960 and 1980.
In the following 20 years to 2000, per capita GDP grew a mere 6%.
In Sub-Sahara Africa, per capita GDP grew by 36% in the two-decade period to
1980. Then, it fell by a staggering 15% the next two decades. According to
the World Bank itself, some 300 million Africans, almost half of the
Continent, survive on less than ? 0.65 a day. IMF-dictated cuts in national
health care have resulted in rising infant mortality across the Continent.
In 2002 Malawi underwent famine. It coincided with the April 2002 decision
by the IMF to suspend Malawi on allegations of "corruption." The IMF had
ordered Malawi's government to sell its grain reserves in order to repay a
South African bank loan of the National Food Reserve Agency. The IMF also
ordered export of maize to service debt, ignoring a developing famine
crisis. The IMF piously denied it played any role in the famine crisis
however.
For Arab states, including Algeria, Morocco, GDP growth per capita swung
from a plus 175% between 1960-1980 to a minus 2% in the following two
decades, a staggering collapse.
The only apparent exception to this negative trend is East Asia including
China. Here growth was faster between 1980 and 2000. But the reason is the
including of China, which saw a 400% increase in GDP and accounts for 83% of
the region's population. China has adamantly refused any dealings with the
IMF, and runs a controlled state-guided economy with full currency controls,
hardly an IMF model state.
Globalisation is a word used today, often without precision. If we use the
word globalisation to refer to the entire process of IMF and WTO-led
neo-colonialism under the Dollar System, then it is a descriptive term. It
describes the creation of a global dollar imperium, a Pax Americana.
Establishment critics of the IMF system such as Joseph Stiglitz, himself a
former Clinton adviser and World Bank official, make accurate charges
against the IMF. They assume, however, that it is merely misguided policy
that leads to the problems. The entire IMF institution, along with the World
Bank and WTO, however, have been deliberately developed to advance this
globalisation of the Dollar System, the second pillar of Pax Americana after
the military power. It is no mistaken policy, no result of bureaucratic
blunders. That is the crucial point to be understood. The IMF exists to
support the Dollar System.
Cromwell (material collated from F. William Engdahl) Public Citizen
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