The ECB’s Noose Around Greece: How Central Banks Harness Governments

[marmar]

The ECB’s Noose Around Greece: How Central Banks Harness Governments
Posted on March 10, 2015 by Ellen Brown


Remember when the infamous Goldman Sachs delivered a thinly-veiled threat to the Greek Parliament in December, warning them to elect a pro-austerity prime minister or risk having central bank liquidity cut off to their banks? (See January 6th post here.) It seems the European Central Bank (headed by Mario Draghi, former managing director of Goldman Sachs International) has now made good on the threat.

The week after the leftwing Syriza candidate Alexis Tsipras was sworn in as prime minister, the ECB announced that it would no longer accept Greek government bonds and government-guaranteed debts as collateral for central bank loans to Greek banks. The banks were reduced to getting their central bank liquidity through “Emergency Liquidity Assistance” (ELA), which is at high interest rates and can also be terminated by the ECB at will.

In an interview reported in the German magazine Der Spiegel on March 6th, Alexis Tsipras said that the ECB was “holding a noose around Greece’s neck.” If the ECB continued its hardball tactics, he warned, “it will be back to the thriller we saw before February” (referring to the market turmoil accompanying negotiations before a four-month bailout extension was finally agreed to).

The noose around Greece’s neck is this: the ECB will not accept Greek bonds as collateral for the central bank liquidity all banks need, until the new Syriza government accepts the very stringent austerity program imposed by the troika (the EU Commission, ECB and IMF). That means selling off public assets (including ports, airports, electric and petroleum companies), slashing salaries and pensions, drastically increasing taxes and dismantling social services, while creating special funds to save the banking system. ...............(more)

http://ellenbrown.com/2015/03/10/the-ecbs-noose-around-greece-how-central-banks-harness-governments/

[abelenkpe]

1. K&R

[geek tragedy]

2. Ellen Brown is a fan of Nazi Germany, just saying.

http://www.webofdebt.com/articles/bankrupt-germany.php

Or so it seemed. Hitler and the National Socialists, who came to power in 1933, thwarted the international banking cartel by issuing their own money. In this they took their cue from Abraham Lincoln, who funded the American Civil War with government-issued paper money called "Greenbacks." Hitler began his national credit program by devising a plan of public works. Projects earmarked for funding included flood control, repair of public buildings and private residences, and construction of new buildings, roads, bridges, canals, and port facilities. The projected cost of the various programs was fixed at one billion units of the national currency. One billion non-inflationary bills of exchange, called Labor Treasury Certificates, were then issued against this cost. Millions of people were put to work on these projects, and the workers were paid with the Treasury Certificates. This government-issued money wasn't backed by gold, but it was backed by something of real value. It was essentially a receipt for labor and materials delivered to the government. Hitler said, "for every mark that was issued we required the equivalent of a mark's worth of work done or goods produced." The workers then spent the Certificates on other goods and services, creating more jobs for more people.

Within two years, the unemployment problem had been solved and the country was back on its feet. It had a solid, stable currency, no debt, and no inflation, at a time when millions of people in the United States and other Western countries were still out of work and living on welfare. Germany even managed to restore foreign trade, although it was denied foreign credit and was faced with an economic boycott abroad. It did this by using a barter system: equipment and commodities were exchanged directly with other countries, circumventing the international banks. This system of direct exchange occurred without debt and without trade deficits. Germany's economic experiment, like Lincoln's, was short-lived; but it left some lasting monuments to its success, including the famous Autobahn, the world's first extensive superhighway.1

Hjalmar Schacht, who was then head of the German central bank, is quoted in a bit of wit that sums up the German version of the "Greenback" miracle. An American banker had commented, "Dr. Schacht, you should come to America. We've lots of money and that's real banking." Schacht replied, "You should come to Berlin. We don't have money. That's real banking."2

Ellen Brown is a National Socialist. And she praises the policies driven by Germany's Military Industrial Complex under Hitler.

[marmar]

4. First off, I think there's a context problem here ......

...... Secondly, what the hell does it have to do with the OP? ..... Just sayin'

[geek tragedy]

5. This is a person who praises Hitler for

fighting an international conspiracy of bankers.

Does that kind of rhetoric sound . . . familiar?

She is quite popular at st0rmfr0nt.

[marmar]

6. I don't think she's praising Hitler - that's hyperbole for propaganda purposes.

....... perhaps you need to find a more clever tool to distract from the OP discussion.

[geek tragedy]

7. What, her theory that the ECB is evil for wanting to be paid back?

Amazing how the ECB held a gun to Greece's head and forced it to borrow money rather than taxing the rich.

The arguments against austerity are very powerful and true. But we don't need st0rmfr0nt's favorite economist to get us there.

Greek sovereign debt is a very risky asset. I don't know anyone who would treat it as money-good collateral for a loan.

[jwirr]

9. Years ago banks in Iowa would not help farmers unless the farmers did it their way. Well it turned

out that the advice of the bankers was not good and many farmers lost their farms. The farmers paid the price but the bankers paid nothing.

I do not support any Nazi but I want to know when the bankers are going to be help accountable for their bad advice and investments? Don't they have some responsibility here?

[geek tragedy]

11. Banks that don't give good advice and force their debtors into

insolvency don't get repaid.

[jwirr]

12. When it is a farm they do - the farm is sold and they are first in line.

[geek tragedy]

13. So the theory is that banks don't want to be repaid and they'd rather

be farmers?

[jwirr]

14. Do you know how valuable an Iowa farm is? No the banks put them up for auction. The problem is

not that they want to be farmers it is that they thought they were better farmers than the real ones. And they used their power as the money holders to force farmers to do it their way.

Look there are whole books related to the idea that credit cards and other means of loans are not honest with their card holders. Elizabeth Warren wrote one herself. The financial industry is at the moment paying huge fines for dishonest deals that they have made. And they get paid back in a way that in itself is not exactly on the up and up - they sell debt. I am thinking that the EU is more than likely handling their business in the same way. They are going to the casino and we are paying.

All I want is reform that addresses the industries responsibility. The last time they had trouble it was the mess with the house mortgages. What is it now? When are we going to make them as accountable for their actions as we are supposed to be?

[geek tragedy]

15. Banks should be more heavily regulated, I agree.

They have a right to be repaid, not to deceive and abuse.

[jwirr]

16. Thank you - that was my only point.

[geek tragedy]

10. Guess what ethnic group she claims was behind the banker conspiracy.

Drawing a blank, or thinking "oh shit, really?"

Really.

http://ellenbrown.com/2007/09/11/whats-the-wizard-of-oz-got-to-do-with-money-reform/

Before World War I, two opposing systems of political economy competed for dominance in the United States. One was the New York financial district, which came to symbolize American finance. Its most important address was 23 Wall Street, known as the “House of Morgan.” Mr. J. P. Morgan was an agent of private Jewish banking interests. Since private financiers controlled the gold, they established a national currency based on the “gold standard.” Today the gold standard has been eliminated, and the global economy is based on funny money. This allows an increase of debt as never before in world history.

The other system dated back to Benjamin Franklin. It operated out of Philadelphia, which was the USA’s first capitol before the capitol was moved to Washington. At one of the Constitutional Conventions, Franklin’s “Society for Political Inquiries” planned an economy that would free us from economic slavery to England. In response, England sent troops to enforce the private Jewish bankers’ power, thus sparking the War Of Independence. The Philadelphia faction favored a bank on a model established in provincial Pennsylvania. In this model, a state office issued or lent money, collected the interest, and returned it to the provincial government to be used in place of taxes. President Lincoln returned to the colonial system of government-issued money during the Civil War, but the bankers assassinated him and reclaimed control of the money machine.

[Nuclear Unicorn]

3. Could / would our Federal Reserve ever do something similar in the US?

[geek tragedy]

8. Do what, not accept the safest financial assets on the planet

as collateral?

To put it another way, would you accept Greek sovereign debt as collateral for a loan you gave someone?