[asia-apec 957] Chossudovsky on G7 "Solution" to Global Financial Crisis

[tpl at cheerful.com]

>From: Michel  Chossudovsky <chossudovsky at sprint.ca>
>
>
>THE G7 "SOLUTION" TO THE GLOBAL FINANCIAL CRISIS:
> 	
>A MARSHALL PLAN FOR CREDITORS AND SPECULATORS 
>
>by
>
>Michel Chossudovsky
>
>Professor of Economics, University of Ottawa, author of "The Globalisation
>of Poverty, Impacts of IMF and World Bank Reforms", Third World Network,
>Penang and Zed Books, London, 1997. (The book can be ordered from
>twn at igc.apc.org)  
>
>Copyright by Michel Chossudovsky, Ottawa 1998. All rights reserved. To
>publish or reproduce this text, contact the author at
chossudovsky at sprint.ca  
>
>
>Following the dramatic nosedive of the Russian ruble, financial markets
>around the World had plummeted to abysmally low levels. The Dow Jones
>plunged by 554 points on August 31st, its second largest decline in the
>history of the New York Stock Exchange. In the uncertain wake of "black
>September 1998", G7 ministers of finance had gathered hastily in
>Washington. On their political agenda: a multibillion dollar plan to avert
>the risks of a Worldwide financial meltdown. In the words of its political
>architects US Treasury Secretary Robert Rubin and UK Chancellor of the
>Exchequer Gordon Brown: "we must do more to . . .  limit the swings of
>booms and busts that destroy hope and diminish wealth."1 
>
>Announced by President Bill Clinton in late October, the G7 proposal to
>install a 90 billion-dollar fund "to help protect vulnerable but
>essentially healthy nations" from currency and stock market speculation
>will go down in history as the biggest financial scam of the post-war era. 
>
>Hidden Agenda
>
>Skilfully presented to the international community as a timely "solution"
>to the global financial crisis, the establishment of a "precautionary fund"
>under IMF stewardship proposes to deter "financial turbulence spreading
>from country to country in a contagion process." The underlying objective
>is "to send a clear message to speculators that they may be taking big
>risks if they [short] sell a nation's currency."2
>
>Yet in practice, the G7-IMF artifice accomplishes exactly the opposite
>results. Rather than "taming the speculator" and averting financial
>instability, the existence of billions of dollars stashed away in a
>"precautionary fund" (safely established in anticipation of a crisis) is
>likely to entice speculators to persist in their deadly raids on national
>currencies . . .  
>
>The multibillion dollar fund was not devised (as claimed by its architects)
>to help nations under speculative assault; on the contrary, it constitutes
>a convenient "safety net" for the "institutional speculator." "The money is
>there" to be drawn upon and the speculators know it. If central banks in
>Asia or Latin America (in an abortive attempt to prop up their ailing
>currencies) were to contemplate defaulting on their (forward) foreign
>exchange contracts, the precautionary lines of credit (serving as a
>"backup") would enable banks and financial institutions to swiftly collect
>their multibillion dollar loot. 
>
>In other words, the money "to bail out the speculators" would be readily
>available and accessible well in advance of a currency crisis. Moreover,
>the IMF sponsored "rescue operation" would no longer hinge upon clumsy ad
>hoc negotiations put together hastily in the cruel aftermath of a currency
>devaluation. 
>
>Whereas the IMF would still be called in to impose even harsher economic
>measures, the bailout money would be "available up front": no nervous last
>minute meeting as on Christmas eve (24 December 1997) when Wall Street
>bankers met behind closed doors (under the auspices of the New York Federal
>Reserve Bank) to put the finishing touches on the renegotiation of Korea's
>short-term debt.3
>
>Reducing Risks for Banks and Financial Institutions 
>
>Rather than repelling the speculator, the existence of the precautionary
>fund significantly diminishes the risks of conducting speculative
>operations. Not surprisingly, the global banks and investment houses (well
>versed in the art of financial manipulation through their affiliated hedge
>funds) have unequivocally endorsed the G7-IMF policy initiative. Barely
>analysed by the global media, the scheme will reinforce the command of
>"institutional speculators" over global financial markets as well as their
>leverage in imposing ruthless macroeconomic reforms. 
>
>A Marshall Plan for the Speculator 
>
>A colossal amount of money has been allocated (from tax payers' wallets) to
>"financing" future speculative assaults: the 90 billion dollar scheme
>constitutes a "Marshall Plan for institutional speculators" representing an
>amount (in real terms) roughly equal to the entire budget of the Marshall
>Plan (86.6 billion dollars at 1995 prices) allocated between 1948 and 1951
>to the post-War reconstruction of Western Europe.4
>
>Yet in sharp contrast to the Marshall Plan, the money transferred under
>both the Asian bailouts (more than $100 billion) and the proposed G7-IMF
>precautionary fund ($90 billion) contribute "to lining the pockets" of the
>global banks leading to an unprecedented accumulation of money wealth. None
>of this money will be channelled into rehabilitating the shattered
>economies of developing countries. Under the new IMF Facility for
>contingency financing, international banks and financial institutions will
>be  able to swiftly collect debts (from developing countries) initially up
>to the 90 billion dollars ceiling.
>
>Of this amount, some 30-40 billion dollars have already been carefully set
>aside to ensure that Brazil (following massive capital flight) does not
>default to its Wall Street creditors. In return, President Fernando
>Henrique Cardoso, faithful to his financial masters, has committed the
>Brazilian government to sweeping austerity measures which will drive large
>sectors of Brazil's population (including the middle classes) into abysmal
>poverty. In this regard, the IMF's economic therapy in Brazil promises to
>be more unmerciful than that applied in Asia. In turn, the cost of
>servicing the precautionary line of credit will be substantially higher. 
>
>The remaining 50-60 billion dollars is available to be used to "finance"
>future speculative raids and bailout agreements (eg. in Latin America, the
>Middle East and South Asia) leading to the concurrent dismantling of
>national-level monetary policy. This destructive process, however, does not
>terminate once the 90 billion dollar ceiling has been reached: once the
>money has been used up, the precautionary fund (established as a "standing
>arrangement") can if required be replenished (with contributions from G7
>countries).  
>
>A Massive Transfer of Money Wealth
>
>The transfer of wealth resulting from currency speculation is unprecedented
>in modern history. Solely in Asia, more than 100 billion dollars of foreign
>exchange reserves have been confiscated since mid-1997. Another 90 billion
>dollars are envisaged under the precautionary scheme. And these amounts do
>not include the collection of private debts nor the value of assets
>appropriated by Western capital under the privatisation programmes
>(estimated for Russia alone to be more than five times the Marshall plan).
>In return, Russia will receive a meagre 500 million in US Food Aid on
>condition it faithfully conforms to the IMF's economic agenda.
>
>The Demise of Monetary Policy 
>
>Through their decision, G7 leaders have sanctioned the destruction of
>monetary policy and the derogation of national economic sovereignty.
>Through the manipulation of currency markets, billions of dollars of money
>wealth will be transferred from the vaults of central banks into private
>financial hands. 
>Total available foreign exchange reserves in the vaults of the World's
>central banks is less than the daily forex turnover of more than 1,200
>billion dollars. A small number of global creditors will control money
>creation. 
>
>In turn, this demise of central banks has contributed to dramatically
>boosting the levels of global debt while furthering the process of economic
>and social collapse. G7 political leaders bear a heavy burden of
>responsibility in adopting a scheme which contributes to aggravating the
>global economic crisis. Moreover, they have blatantly misled the
>international community on the likely consequences of the multibillion
>dollar precautionary fund. 
>
>Boosting the Levels of Global Debt
>
>The speculative assaults not only boost the levels of external debt in
>developing countries (eg. Korea, Indonesia, Brazil), they also contribute
>to heightening the debt burden in G7 countries: the financing of the
>bailouts (under the multibillion precautionary fund) will largely come from
>the public purse requiring the issuing by G7 governments of vast amounts of
>public debt. Ironically, the latter will be underwritten by the same
>investment banks routinely involved in the speculative assaults. 
>
>In other words, the G7 proposal is conducive to a massive increase in the
>levels of public debt while at the same time creating conditions which
>accelerate the collapse of production and employment. The latter in turn
>trigger the accumulation of large amounts of personal (household) debts,
>nonperforming loans of small and medium sized enterprises, etc., leading to
>bankruptcies and loan forfeiture.  
>
>The "Privatisation" of the IMF Bailouts
>
>The 90 billion dollar deal was hastily put together by US Treasury
>officials following consultations behind closed doors with the
>representatives of the World's largest banks and brokerage houses. The
>precautionary facility is to provide "short-term" contingency financing at
>substantially higher interest rates (300 to 500 base points above the IMF
>standard lending rates). 
>
>In other words, financing will be available at 3 percent (or more) above
>the current IMF soft lending rate of 4.7 percent. This pattern imposed by
>the US Congress in October (in relation to the $18 billion US contribution
>to the fund) violates the statutes of the IMF as an intergovernmental body;
>it derogates the Bretton Woods agreement of 1944. While it increases the
>burden of servicing the debt under the bailout, it also reduces the
>repayment period (ie. from the standard three to 10 years to one to 2.5
>years). In other words, the bailout money provided under the fund would
>(within a short period of time) have to be rescheduled with private lending
>institutions at market rates of interest.  
>
>In other words, the G7-IMF scheme not only artificially inflates the debt
>burden (by hiking up interest rates), it also establishes conditions which
>favour the eventual "privatisation" of the bailouts. In this context,
>"policy conditionalities" would be negotiated by the global banks (rather
>than by the IMF): "[M]echanisms could be designed ahead of time to ensure
>the timely involvement of the private [banking] sector in providing
>liquidity support to countries in times of financial stress."5
>
>Overhauling the IMF
>
>The banks have hinted that what they really want is a de facto  private
>sector bureaucracy (which they can more effectively control) rather than a
>cumbersome intergovernmental body. This overhaul of the IMF is to be
>carefully supervised by the US Treasury acting on behalf of Wall Street. In
>other words, the IMF has also been brought more directly under the
>political trusteeship of the US Administration in blatant violation of its
>intergovernmental status. Overshadowing the IMF (and limiting its authority
>to conduct future negotiations with member governments), the Congressional
>appropriation bill had identified precise loan "conditionalities" to be
>inserted in future IMF bailouts (including provisions which facilitate the
>dumping of US grain surpluses as well as the "enactment of bankruptcy laws
>that treat foreigners fairly").
>
>Speculators call the Shots on Crisis Management
>
>After the meltdown of Wall Street on Black Monday 31st of August 1998, G7
>leaders had pointed nervously to the need for "taming financial markets."
>Proposals to control the unfettered movement of money had been put forth.
>British Prime Minister Tony Blair highlighting the shortcomings of the IMF,
>had called for an overhaul of the Bretton Woods institutions: "the existing
>system has not served us terribly well . . . "6 
>
>Mea culpa by renowned speculator George Soros: "financial markets are
>inherently unstable, which can cause tremendous damage to society."7
>Frictions between the Bretton Woods sister organisations had also surfaced
>at their annual meetings in October 1998. In an admonishing statement, the
>Senior Vice President of the World Bank Joseph Stiglitz publically
>expressed his disapproval of the Washington consensus. 
>
>In the meantime, despite renewed stock market instability in developing
>countries, the storm had temporarily settled on Wall Street much to the
>relief of New York's major brokerage houses. Caving in to the demands of
>the global banks, the issue of capital controls had been casually dropped
>from the political agenda: "the new buzz-words are `sequencing', `orderly
>capital account liberalisation', `regulations, yes, restrictions, no'."8
>
>A new invigorated "Washington consensus" was in the making. The unfettered
>movement of capital was presented as the sole means to achieving global
>prosperity. According to UBS-SBC George Blum and Citigroup's William Rhodes
>speaking on behalf of some 300 global banks and brokerage houses: "capital
>controls will seriously damage medium-term prospects for raising standards
>of living".9
>
>Neoliberal economic policy was alive, speculators rather than elected
>politicians were calling the shots. G7 leaders together with the Bretton
>Woods institutions had formally invited the  global banks "to be involved
>appropriately in crisis management and resolution".10 In an absurd logic,
>those who foster financial turbulence are called in to identify policies
>which attenuate financial turbulence . . .  
>
>In turn, the broader structural causes of the economic crisis remain
>unheralded. Blinded by neoliberal dogma, policy makers are unable to
>distinguish between "solutions" and "causes." Public opinion is misled.
>Lost in the barrage of self-serving media reports on the deadly
>consequences of "economic contagion", the  precise "market mechanisms"
>which trigger financial instability are barely mentioned. 
>
>Despite mounting criticism directed against the Bretton Woods institutions,
>the G7 decision not only upholds but strengthens the IMF's lethal economic
>medicine as the unequivocal "solution" when in fact it is the "cause" of
>economic collapse and financial turmoil. 
>
>With the exception of token rhetorical statements on the destabilising
>impacts of currency and stock market speculation, no concrete revisions of
>the macroeconomic agenda have been put forth. The G7-IMF precautionary fund
>"entrenches" the rights of  speculators"; it provides an unconditional
>"green light" to financial institutions to "short sell" national currencies
>all over the world. 
>
>Dismantling the State: Towards the Development of a Private Sector
>Bureaucracy  
>
>The global banks decide on what constitutes a "politically correct"
>economic agenda. The new "financial architecture" is to be based on the
>removal of all remaining barriers to capital movements. 
>
>According to Alan Greenspan, chairman of the US Federal Reserve Board,
>financial markets are too complex for public regulators to oversee:
>"Twenty-first century regulation is going to increasingly have to rely on
>private counterparty surveillance to achieve safety and soundness [of
>financial markets] . . . "11
>
>More generally, the tendency is toward a system of "private regulation"
>(under the direct control of banks and MNCs) in which governments and
>intergovernmental bodies would play a subsidiary role. In other words, the
>stranglehold of creditors over the State apparatus in all major regions of
>the world (including North America and Western Europe) is conducive to the
>development of a private sector bureaucracy which oversees activities
>previously under State jurisdiction.
>
>This dismantling of the State, however, is not limited to the privatisation
>of social programmes and public utilities, corporate capital also aspires
>to eventually acquire control over all State- supported "civil society
>activities." Cultural activities, the performing arts, sports, community
>services, etc., would be transformed into profit making ventures. In this
>regard, the proposed Multilateral Agreement on Investment (MAI) purports to
>deregulate foreign investment, dismantle State institutions and transform
>all State supported "civil society activities" (eg. at municipal level)
>into money making operations.
>
>"Taming the Tigers" 
>
>In parallel with the forced removal of impediments on the movement of
>capital through the disruption of currency markets,  the political power
>brokers of the "free market" will continue their relentless drive to
>entrench the rights of banks and corporations in several legally binding
>agreements including the Multilateral Agreement on Investment (now under
>WTO auspices) and the equally controversial amendment of the IMF articles
>on capital account liberalisation. 
>
>Combined with overt political pressures by Washington, the G7-IMF
>multibillion dollar fund will also be used to finance future speculative
>assaults on countries such as China (including Hong Kong), Malaysia,
>Taiwan, Chile and more recently Russia (under Prime Minister Primakov)
>which have defied the "free market" by adopting foreign exchange
>restrictions and/or controls on speculative transactions. The Taiwan
>authorities, for instance, took measures "to prevent illegal trading of
>funds managed by George Soros which have been blamed for causing the local
>stock market to fall."12 Hong Kong has introduced measures which curb
>short-selling of stocks and currency speculation.13 
>
>The G7 scheme (coupled with the decision not to hamper the movement of
>money) is intent on weakening these initiatives and destabilising
>local-level capitalism; the ultimate objective is to deregulate currency
>markets, break down remaining impediments to the movement of capital and
>dismantle State control over monetary policy. 
>
>Speculators and Creditors get Cold Feet
>
>By legitimising mechanisms which boost global debt and destabilise national
>economies, G7 policy makers have also "sown the seeds of destruction." The
>creation of unsurmountable debts is backfiring on the World's most powerful
>financial actors. The resulting dislocations in production, the "drying up"
>of consumer markets (following the simultaneous collapse in the standard of
>living in a large number of countries) has resulted in a proliferation of
>nonperforming loans. 
>
>The inexorable accumulation of global wealth has backlashed on the real
>economy leading to the disengagement of human and material resources.
>Physical assets stand idle or are withdrawn from the market process
>resulting in plant closures, layoffs and corporate bankruptcies. Poverty
>and unemployment are the result of massive overproduction (marked by
>overcapacity) in virtually all sectors of activity.  
>
>The speculators are caught in the twirl: in a cruel irony, financial
>turmoil is backfiring on the financial institutions which provoked market
>instability in the first place. Bank losses are not limited to Korea, Japan
>or China; some of the West's largest financial institutions (involved in
>shaky investment deals, high risk trade in hedge funds, "heavy exposure" to
>emerging market debt, etc.) are now getting "a bitter taste of their own
>economic medicine." 
>
>Heavy bank losses have also triggered the layoff of thousands of employees
>on Wall Street. At J. P Morgan, Merrill Lynch and Credit Suisse- First
>Boston, etc., previously affluent and successful brokers have been
>ruthlessly driven onto the streets. 
>
>The Destabilising Impacts of the Hedge Funds 
>
>Some of the World's largest banks and brokerage houses on both sides of the
>Atlantic have incurred heavy losses: Citigroup, Bank America, the Dresdner
>and Deutsche banks (hit by massive default on Russian debt), UBS-SBC,
>Credit Lyonnais, Merrill Lynch, ING Baring, Credit Suisse- First Boston, to
>name but a few. Most of these banks can be considered as "institutional
>speculators" with formal links to their numerous affiliated hedge funds.
>UBS is under investigation in Switzerland for its shady deals with the LTCM
>hedge fund; Bank America, the largest US bank, has declared a 1.4 billion
>credit loss following the demise of its Wall Street hedge fund D. E. Shaw.14
>
>Rather than curbing speculative trade, the G7-IMF precautionary fund
>provides a "green light" to the hedge funds routinely involved in
>speculative operations. A large share of these hedge funds operate from
>offshore banking havens to escape government regulation and taxes. 
>
>The political consensus among G7 ministers of finance is that it would be
>unwise to regulate the hedge funds. Echoing Wall Street and the US Federal
>Reserve Board, the Bank of England has urged hedge funds "to regulate
>themselves" underscoring the fact that "tighter regulation of hedge funds
>could prove self-defeating."  
>
>The dramatic rescue by a consortium of Wall Street firms of the LTCM hedge
>fund in September 1998 (crippled with debts of more than three billion
>dollars) is but the tip of the iceberg in a global cobweb of over four
>thousand hedge funds. LTCM was run by a former Salomon Brothers executive,
>John Meriwether. 
>
>Described as "pool partnerships of wealthy investors", the hedge funds were
>created and bred by the financial establishment, serving the interests of
>the banks, corporations and rich individuals. They have become an integral
>part of the structures of investment banking with "reported capital" of
>some 300 billion dollars. However, through "highly leveraged operations",
>this  capital of 300 billion has been multiplied to reach astronomical
>figures: LTCM's fund manager John Meriwether, for instance, had invested
>500 million for every million in capital with operations totalling an
>estimated "exposure" of 200 billion dollars. The latter amount is the
>"exposure" (through shady investments in emerging markets) of a single
>hedge fund out of a total of four thousand hedge funds!  Needless to say, a
>large share of hedge fund business transacted in the offshore banking
>havens goes unreported. 
>
>The hedge funds have contacts in high places; they also wield considerable
>influence in determining the direction of G7 reforms. They have the ability
>of moving  billions of dollars around the world overnight overshadowing the
>powers of governments. Their operations are predicated on the manipulation
>of market forces: the hedge funds capture large amounts of wealth from the
>real economy ultimately leading to the accumulation of enormous debts and
>the demise of productive activity. 
>
>Combined with the plight of the peripheral bond markets, a failure of the
>hedge funds would backlash on the entire structure of Western banking
>including its more than 55 offshore facilities (eg. Cayman Islands,
>Bermuda, Luxemburg, etc.). In turn, stock market instability threatens the
>future of mutual funds and pension funds (many of which also include
>speculative investments in their portfolio). 
>
>The Merger Frenzy
>
>The G7's "new financial architecture" favours an atmosphere of  cutthroat
>competition leading to a new wave of mega-mergers and acquisitions. In
>turn, the merger frenzy has contributed to  artificially boosting the New
>York Stock Exchange to new record heights. The multibillion spoils of
>currency and stock market speculation are channelled toward the acquisition
>of real assets: the enormous cash reserves accruing to institutional
>speculators are also recycled toward the financing of corporate mergers
>including the purchase of state assets under the numerous privatisation
>programmes. 
>
>In turn, currency speculation in emerging markets has favoured the
>dislocation of national capitalism in Asia and Latin America and the demise
>and subordination of the local economic elites leading to an unprecedented
>concentration of global economic and financial power. In the wake of the
>IMF sponsored bailouts, global corporations --out on a lucrative shopping
>spree in Asia-- have acquired control over numerous "troubled" national
>enterprises and financial institutions. 
>
>Global Alliances
>
>The formation of new "global alliances" between European and American
>capital has rapidly changed the balance of power in the World market. With
>the merger boom, British and German banking interests have (inter alia)
>joined hands with Wall Street leading to the formation of powerful
>financial giants.
>
>Banker's Trust-Deutsche Bank, BP-Amoco, Daimler-Chrysler, to name but a
>few: the mega-mergers are proceeding at a very rapid pace in banking,
>mining, oil and gas, etc., as well as in the "high tech" industries
>(computers, telecommunications, electronics, bio- genetics). The
>mega-mergers are also contributing to redefining the geopolitical landscape
>of the post-Cold war era. Whereas the former Soviet Union has been defeated
>as a superpower, the onslaught of the Asian currency crisis has
>significantly undermined the economic dominion of Japan in the Asia-Pacific
>region. 
>
>In turn, the Euro-American banking conglomerates are shareholders in the
>World's largest industrial corporations (eg. Deutsche Bank has a sizeable
>stake in Daimler-Chrysler), they also oversee the restructuring of national
>economies (under the bailout agreements) in Eastern Europe, the Balkans,
>Latin America and South East Asia. These "Atlantic corporate alliances" in
>banking and industry seek to edge out weaker competitors including their
>Japanese rivals. Moreover, financial deregulation has also opened up the
>Japanese economy to corporate buyouts by Western investment banks.
>Supported by the G7-IMF economic agenda, the expansion of Euro-American
>capital into new frontiers is contributing to undermining Japan's position
>as an economic power. 
>
>Economic Falsehoods
>
>A "false consciousness" has invaded all spheres of critical debate and
>discussion which masks the workings of the global economic system; at the
>same token, it also prevents the international community from acknowledging
>its devastating impacts on people all over the World. What are the causes
>of the crisis as well as the powerful financial interests which are
>responsible for financial turbulence and economic dislocation? 
>
>Public opinion has been skilfully misled: the Western economy is said to be
>"healthy"; "economic infection" is "spreading" from  Asia and Russia
>(designated as "sick economies"); politicians, mainstream economists and
>the Western media have contributed to trivialising and distorting the
>causes of the global economic crisis, not to mention the formulation of
>stylised "solutions": "we must stave off the growing flu because flu proves
>to be contagious." 
>
>Freezing Speculative Transactions
>
>The most urgent task consists in subjecting financial markets to public
>scrutiny and social control. A Tobin tax will not suffice in reversing the
>tide of destruction: "financial disarmament" requires freezing (nationally
>and internationally) the entire gamut of speculative instruments,
>dismantling the hedge funds, reintroducing controls on the international
>movement of money and progressively breaking down the structures of
>offshore banking which provide a safe haven to "dirty money" and the flight
>of undeclared corporate profits. While these "preventive measures" do not
>constitute a (long-term) "solution" to the global economic crisis, they
>would nonetheless contribute to significantly slowing down the accumulation
>of money wealth and attenuating the devastating impacts of currency and
>stock market speculation on millions of people. In the words of Malaysia's
>Prime Minister Mohamad Mahathir: "unless [speculative] currency trading is
>recognised as the root cause of the present problem, corrective actions
>cannot be made . . . Cosmetic adjustments will not do any good at all."15
>
>Dismantling the Washington Consensus
>
>Beyond the adoption of short-term "preventive" measures geared toward
>freezing speculative trade,  far-reaching changes in the structures of the
>global economic system are required, which reverse the concentration of
>financial power and restore the democratic control of society over the
>levers of economic policy. As a first step, the "Washington consensus" must
>be broken, the IMF's lethal economic medicine must be discarded; in turn
>the mechanics of macroeconomic reform must be reversed requiring the
>establishment of "an expansionary economic agenda" geared toward restoring
>wages and alleviating global poverty.   
>
>Of crucial importance is the concurrent "democratisation of central banks."
>Under the present setup, creditors and speculators control money creation
>including the financing of State economic and social programmes, the
>payment of wages, etc. In other words, what is at stake is not only the
>cancellation of enormous public debts held by private financial
>institutions but also the "re-appropriation" by society of monetary policy,
>--ie. the democratic control by society of money creation and the process
>of financing economic and social development.
>
>In turn, the process of dismantling the Washington consensus will also
>require (in close coordination with the process of "financial disarmament")
>the continued struggle against a number of legally binding international
>agreements (eg. under WTO and IMF auspices) which establish an "enabling
>environment" for MNCs and global banks. 
>Notes 
>
>1. Quoted in Financial Times, London, 31 October-1 November 1998. See also
>G7 Communique, October 30, 1998.
> 
>2. David Sanger, Wealthy Nations back Plan to Speed Help to the Weak', New
>York Times, 31 October 1998. 
>
>3. See Financial Times, London, 27-28 December 1997, p. 3. 
>
>4. See US Bureau of Labour Statistics, Purchasing Power of the Dollar,
>1950-1995. The Marshall Plan transferred 13 billion dollars of US aid from
>1948 to 1951, equivalent to 86.6 billion dollars at 1995 prices. See also
>Barry Eichengreen and J. Bradford de Long, The Marshall Plan: History's
>most Successful Structural Adjustment Programme, CEPR discussion paper, May
>1992. 
>5. IMF, Strengthening the Architecture of the International Monetary
>System, Washington, October 1998, p. 5. 
>
>6. Financial Times, 21 September 1998, p. 1.
>
>7. Reuters (press dispatch), 10 November 1998.
>
>8. See Robert Wade, Behind the Big Push for Free Movement of Capital, Third
>World Resurgence, No. 98, October 1998.  
>
>9. Institute of International Finance, Press Release, Tokyo, 13 September
>1998.  
>
>10. G7 Communique, October 30, 1998.
>
>11. Quoted in "Greenspan urges Repair of Global Architecture", American
>Banker, October 1998.
> 
>12. Martin Khor. "Tide turning on Financial Free Market", Third World
>Resurgence, no. 98, 1996, p. 32.
>
>13. Ibid.
>
>14. Financial Times, London, 15 October 1998, p. 1. 
>
>15 Mohamad Mahatir, quoted in the Strait Times, 3 November 1998.
> 
>
>    Michel Chossudovsky
>    
>    Department of Economics,
>    University of Ottawa, 
>    Ottawa, K1N6N5
>
>    Voice box: 1-613-562-5800, ext. 1415
>    Fax: 1-514-425-6224
>    E-Mail: chossudovsky at sprint.ca
>
>http://www.voicenet.co.jp/~friede/ines/special/fwar_frm.htm
>http://www.interlog.com/~cjazz/chossd.htm  
>http://www.heise.de/tp/english/special/eco/  
>http://heise.xlink.de/tp/english/special/eco/6099/1.html#anchor1
>