Saturday, October 11, 2008

International Government Control of Finance

For the 21st time in the last 26 days the President spoke publicly about the current financial crisis. This time, it was following a meeting with finance officials from the G7, Japan, Germany, Italy, France, Britain, Canada, and the United States. The content of their discussions was, “a global response to the credit crisis that will lead toward a "path of stability and long-term growth." (,2933,436415,00.html).

This has been the theme at many meetings of financial and political leaders around the globe. The European Union's economy and finance ministers had a meeting on October 7th to discuss, “a European response to the international financial crisis, ( Great Britain has guaranteed over 430 billion dollars worth of bank debt, and would like the rest of the world to follow suit, ( In the worst case so far, the country of Iceland has nationalized its banking institutions, seized the assets of foreign investors and even foreign governments held therein, and is desperately seeking loans from Sweden, Norway, Russia, and anyone else who can help. At the same time, Great Britain is suing Iceland because some of the frozen assets in its now nationalized banking industry belonged to citizens of Great Britain, and in at least one case, close to 90 million dollars of British taxpayer dollars which had been placed in an Icelandic account has been frozen, (

So now leaders around the world have decided that simply nationalizing the banking and lending industries isn't enough. Calling for the end of “American style capitalism” isn't enough. Freezing their stock markets, covering private debt with public funding, and seizing the private property of foreign investors isn't enough. Now, in order to avoid acting at odds with each other while attempting to rescue us from the current credit crisis, there is increasingly a call for centralized control over the world's finance sectors.

Recently, Ireland insured all the deposits in it's banks in order to, “give a general guarantee that the banks can lend in security and safety,” ( This led to a massive influx of capital from other EU countries into Irish banks, where customers believed their money to be safer. In response, the EU's governing body condemned the move by Ireland saying they, “would like to plead with national governments today not to act unilaterally,” ( Other EU countries are afraid that their citizens will shift their assets to Irish banks, causing their own banks to collapse from lack of operating capital, but they have yet to state publicly the effect this will have on Irish banks when the government is unable to generate enough revenue to insure these deposits now that the total amount held in Irish banks is skyrocketing.

It is this fear that “individual governments” “acting unilaterally” will “contradict or undermine the actions” of each other which those in power are now using to call for central authority. Imagine not only an economy run entirely by the government, but a worldwide economy run by a central governing authority. One which has the power to decide which countries are allowed to lend or borrow money, and how much. One which can set import and export limitations on countries in the interest of international fairness. One which can decide to punitively refuse countries trade agreements because it disagrees with their foreign policy. Instead of spending, saving, lending, and borrowing money as you see fit, you won't just need the government's permission, you'll need the world's. Remember the golden rule.

He who has the gold makes the rules.

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