Recalling last episode’s revelations, Sandor’s CCX was effectively shut down in 2010 for having the bad luck of the cap-and-trade bills not passing the US Congress. Discernibly, on account of the Great Recession, the Climategate and, to some extent, the Tea Party movement, the timing was simply terrible and unfortunate. However, time is a great healer, after all. Thus, when all those issues became water under the bridge, the racketeering resumed once again. As I have already hinted at, by 2015 and the COP21 in Paris, the enthusiasm perfusing the minds at these globalist gatherings were able to lift the banksters’ and their puppet environmentalists’ spirits. Yet, this time they were going to make sure their attempts at fulfilling the Agenda 21 would not come to naught. Basically, the swindlers had to multiply their efforts and open new fronts in this ongoing insidious and subversive information war. Simply put, the carbon market gravy train just could and will not stop in its tracks, come hell or high water. To prevent a repeat of that failure, all manner of propaganda and manipulation has been thrown at the masses. Furthermore, more organisations and pledges supported by the usual ‘oiligarchs’, financiers and the stooges that pervade their foundations have been developed. Drawing upon their recognisable tactics, the employment of the Hegelian dialectic and of useful idiots as controlled opposition would not have caught anyone off guard. In any event, what the globalists pulled out of the hat is quite unbelievable, even for their standards, not to mention dumbfoundingly insane. Seeing that this story is shrouded in an intricate plot, a whole instalment of this saga is going to be dedicated solely to this theme. All the same, carrying on with today’s exposition, the Paris Agreement aimed at solving these reliability problems around carbon crediting. As part of this accord, an item that stands out is Article 6, which relates to the “cooperative approaches” that governments can engage in to achieve their national carbon reduction and removal targets. To do this, there are mainly two mechanisms inscribed in this article. As covered by Article 6.2, bilateral agreements for the international transfer of carbon credits between countries are encouraged to curtail GHG emissions, whereas Article 6.4 creates a new multilateral mechanism to replace the old CDM. In spite of being approved in 2015 at COP21, like many of the components of the Paris Agreements, negotiations have taken a long time to be finalised, being concluded only at the 2021 COP26, in Glasgow. To wit, the parties to the UNFCCC (COP) and the Paris Agreement (CMA) devised the following articles: CMA 12a, CMA 12b, and CMA 12c. These new rules cover both government-to-government and government-to-private sector markets. Some early signals suggest these new rules will guide the practices of VCM activities. Be that as it may, this whole infrastructure envisioned by Article 6 is going to take some time to be assembled and in operation. According to a report by the Asian Development Bank, it could take until 2026 – 11 years from the approval of the Paris Agreement – for all the requisite measures to be put in place. This forecast takes into consideration the time span (11 years) between the establishment of the Kyoto Protocol, in 1997, and the start of its first commitment period, in 2008. Up to the most recent conference, COP28 in Dubai, held on December 2023, since the COP26 in Glasgow no further rules and decisions were implemented regarding Article 6. Owing to its coercive nature, compliance markets appear to steer the VCM indirectly. Broadly, mandatory cap-and-trade programmes seem to act as primary markets for allowances, credits or offsets auctioned or freely allocated, while VCMs are resembling secondary markets, even more so with pronounced flourishing of the publicly-traded exchanges. Nevertheless, the size of the entire VCM space pales in comparison with the mandatory schemes’. While the ETSs imposed by governments brought in about $65.6 bn (=69%*$95 bn) in revenue, in 2022, the market value of the global VCM totalled $1.9 bn. Obviously, this is at odds with all the financial markets where the secondary markets are much larger than the primary ones. In any event, this may change with time, as the VCM and the compliance markets keep on fusing with each other into a ‘forcefully voluntary’ apparatus, on a global scale. Sensibly, even this last hyperlinked report, made by Forest Trend’s Ecosystem Marketplace, which provides an updated description of the global VCM and its various aspects, acknowledges that “pre-compliance” was the major factor that propelled the CCX a decade and a half ago. Unmistakably, the profiteers were hoping that a national cap-and-trade programme would be erected and, consequently, the buyers of carbon credits were already on the market to get a sort of early bird discount before prices would inevitably skyrocket once it became mandatory for companies to keep a check on their GHG emissions. Regardless of this obvious motive, the cadre of analysts surveyed by Ecosystem Marketplace (EM) posits that prices, and thereby volume, nowadays are “driven by profoundly different factors” than they were back then. Notwithstanding, the reasons given for their expectation of sustained expansion of VCM activity are all related to following and complying with the climate change hoax and the Paris Agreement, in tandem with the ecological disaster narrative and the SDGs. Stupefyingly, these imbeciles cannot put two and two together and discern that coercion, extortion and chicanery have always been the profound factors. Insofar as international covenants and backstage globalist dealings have dictated this technocracy-esque economic model on businesses, the value of the worldwide VCM is bound to keep on mushrooming. As displayed on the graph above, this growth will continue to encounter some (much needed) obstacles. Due to variances in the trade reporting frequencies of the EM Respondents, as well as this report being concluded well before the end of the year, the data for 2023 is incomplete and goes only till the 21st of November; ergo, only the average prices, during this period, are shown. Moreover, I am going to present the reasons for the slowdown in VCM activity later on. Following suit on recommendations made by the Paris Agreement, in which the decisions on paragraphs 6.2 and 6.4 showed consensus for the need for transactions to address sustainable development, and environmental and social safeguards, both the compliance and the voluntary markets have been adjusting to this goal. Per EM’s study, carbon credits derived from projects that, supposedly, provide environmental and social benefits, the so-called co-benefits, in addition to cutting emissions, carry a premium that is reflected in higher prices when compared to the credits without co-benefits. Similarly, the same thing happens with credits that adhere or not to the SDGs, as indicated by the table above. In view of market participants, on both sides of the trade, wising up to the necessity of investing in high-integrity projects which deliver reliable carbon offsets and assent to the SDGs, it is no wonder the demand for these types of credits is higher than the plain-vanilla ones, so to speak. Bearing this in mind, the variation in volume, value and price that exists among the different project categories signals this preference for high-quality offsets (meaning actual emissions reduction or removal) and adherence to the environmental and social targets, as the previous tables exemplify. This explains the lower price for credits from technology-based projects, such as Transportation or Renewable Energy, since nature-based projects, like those inserted in the Forestry & Land Use or the Household/Community Devices categories, more prevalently produce co-benefits. Pertinently, projects that remove GHGs, whether through natural sequestration from plants or through carbon capture, enjoy a premium over projects which simply claim to avoid emissions. Unquestionably, credits that are real, additional, verifiable and permanent are strongly requested on account of these high-integrity features that the globalist institutions are clamouring for. Needless to say, this development of the VCM concept has been managed by the familiar characters of this story. Having already introduced this topic on the sixth episode of this series, you are aware that the Task Force on Climate-related Financial Disclosures (TCFD) was instituted amid the 2015 COP21 proceedings in Paris by the Forrest Gump of the financial realm, Mark Carney, with Michael Bloomberg being selected as the helmsman. What you may not know is that this was a stepping stone to another initiative which embraces those neglected environmental and social aspects: the Taskforce on Nature-related Financial Disclosures (TNFD). With the momentous COP26, in Glasgow, approaching, the eco-banksters began making their preparations to steer the discussions and negotiations their way. So as to do this, they announced on July 2020 the TNFD was being created, at first having a preparatory phase running from September 2020 until June 2021. Only then was TNFD formally established, commencing its work on October 2021, just before that contemptible climate-related UN summit. After a long-drawn-out design and development process, with several pilot tests and consultations, the TNFD released its recommendations on September 2023. If somehow you have a sneaking suspicion that the TNFD is the same damn thing as the TCFD, plus a few more fearmongering-induced malarkey, you are absolutely correct. According to that review about their recommendations and guidance, the TNFD builds on the work of the TCFD, as well as the ISSB, the GRI and other standard-setting bodies. Once again from the sixth episode of this saga, the ISSB was spawned from the IFRS Foundation, with the support from the WEF’s International Business Council which just so happened to be the entity that hatched the Stakeholder Capitalism Metrics that has impelled the ESG agenda. Whereas, the GRI was founded by Ceres and is credited with devising standards “for corporate reporting on environmental, social and economic performance.” Throughout that origination process of TNFD’s recommendations, a series of developments were concurrently taking place, which inescapably affected the final result. One of these I have already mentioned on the last instalment, which was the announcement made by GRI and the IFRS that they would collaborate to align the ISSB's investor-focused Sustainability Disclosures Standards for the capital markets with the GRI's multi-stakeholder focused sustainability reporting standards. At any rate, there have been many other relevant circumstances. To begin with, on the 9th of June, 2021, the International Integrated Reporting Council (IIRC) and the Sustainability Accounting Standards Board (SASB) officially merged to form the Value Reporting Foundation (VRF), concluding a process that was initiated at the end of November of the previous year. By exploiting the principles-based guidance for reporting structure and content that the IIRC’s Integrated Reporting Framework prescribes, on the one hand, and the SASB Standards’ specific metrics to help stakeholders understand non-financial risks and opportunities in greater detail, on the other hand, this is a match made in heaven. In short, while the former stipulates the how, the latter provides the what. Because of the multitude of frameworks and standards for sustainability disclosure (also called ESG disclosure or non-financial reporting), including climate-related reporting, there has been an effort to consolidate and simplify the corporate reporting system. Sticking to this plan, GRI Chairman Eric Hespenheide affirmed, commenting on the formation of the VRF and the future partnership between these two entities, that the “GRI looks forward to working closely with the Value Reporting Foundation to continue progress towards the vision of a single, coherent system of corporate disclosure.” In turn, this partnership was made public on July 12, 2020, the same month the TNFD began to take form. Nonetheless, more was yet to come, for this ambitious effort gained momentum quite quickly. As a result of their Statement of Intent to Work Together Towards Comprehensive Corporate Reporting, a common standardised reporting framework was now seriously in the making, enabling the overhaul of the economy and the IMFS and, hence, ultimately fulfil Klaus Schwab and his cronies’ utopic dreams. Naturally, one of the facilitators of these discussions was the WEF. In truth, this paper, published on September 2020, almost simultaneously to the launch of the WEF’s Stakeholder Capitalism Metrics, sets out a vision of the elements necessary for an exhaustive corporate reporting procedure which includes both financial accounting and sustainability disclosure, connected via integrated reporting. Perhaps most importantly, this is the first time that the five major players in sustainability disclosure have aligned on a definitive shared vision. Taken together, CDP, CDSB, GRI, IIRC and SASB guide most quantitative and qualitative sustainability disclosures and provide the framework that connects sustainability disclosure to reporting on financial and other capitals – yes, “other capitals”, such as human or natural. Before we move on, allow me to explore those framework- and standard-setting institutions a bit more deeply. Piggybacking on GRI’s concept of environmental disclosure, Paul Dickinson established the Carbon Disclosure Project, now simply styled CDP, in 2000 and has to this day remained its head. CDP works with corporations, cities, states, and regions to help develop carbon emissions reductions strategies and manage their environmental impacts. The decision to change the name to CDP, in 2013, was considered to address the necessity of understanding wider environmental scares beyond the climate change swindle. Even though this organisation manages to finance its operations, in part, through its own services to businesses and the public sector, this only represents a third, more or less, of the total funding; most of it comes from philanthropy, while a bit comes from government grants and from sponsorships. As an offshoot of CDP, the Climate Disclosure Standards Board (CDSB) had been manufacturing a framework for climate risk reporting by corporations, gradually evolving to incorporate disclosures about environmental and social information and technical guidance on climate, water and biodiversity, since its inception at the 2007 WEF’s Annual Meeting in Davos. Seeing that it “was an international consortium of business and environmental NGOs committed to advancing and aligning the global mainstream corporate reporting model to equate natural and social capital with financial capital”, it is hardly surprising to discover that the “CDSB Framework formed the basis for the TCFD recommendations” that prompted this ESG corporate compulsion. Carrying through the IFRS Foundation Trustees’ announcement made at the COP26 in Glasgow that both the CDSB and the VRF were going to be absorbed into the IFRS Foundation by June 2022, the process of taking over CDSB was finalised almost five months earlier, on the 31st of January. This marked the completion of the first part of the undertaking made by these leading investor-focused sustainability disclosure organisations to consolidate into the IFRS Foundation, which actually only culminated on August 1. Creating long-term value requires both a focus on financial and sustainability performance. This means we need tools for measuring sustainability performance just as we have for financial performance. The World Economic Forum and its private sector coalition made a contribution on this front, proposing a core set of ‘Stakeholder Capitalism Metrics’. We are pleased that this effort will provide a basis for the technical work of the ISSB. We look forward to continuing our partnership with the IFRS Foundation in support of the ISSB, during its establishment and as it delivers on its historical mandate.” In view of this amalgamation providing staff and resources to the now expanded IFRS Foundation, the recently conceived board, the ISSB, could have a shot at realising its mission of becoming the global standard-setter for sustainability disclosures for the financial markets. To this point, it was intended that the technical standards and frameworks of the CDSB and the VRF, in conjunction with those of the TCFD and the WEF’s Stakeholder Capitalism Metrics, would bestow the grounds for the technical work of the new board. To facilitate this, by providing recommendations to the ISSB, the Trustees set up the Technical Readiness Working Group (TRWG), which comprised representatives from the CDSB, TCFD, IASB, VRF and the WEF. Until it rolls out its ESG disclosure standards, the ISSB urges businesses and investors to use and support CDSB’s framework and technical guidance on climate, water and biodiversity reporting. In addition, the IFRS, during this period, promotes the utilisation by market participants of the SASB Standards and the continued adoption of the Integrated Reporting Framework to boot. Therefore, the incestuous trait of this state of affairs is plain to see. However, a few more details about these entities’ history ought to be brought up in order to make this point crystal clear. In the midst of the proceedings of The Prince’s Accounting for Sustainability Forum of 2009, the idea of what would become the IIRC a year later was introduced. “The Prince” refers to the now King Charles III of the UK, of course, who established the Accounting for Sustainability (A4S) in 2004. This organisation aims to drive action by finance leaders to fundamentally shift towards “sustainable” business models and a green economy. Inasmuch as the Davos’ crowd and their dystopic vision of society that the stakeholder capitalism paradigm entails are merely the maturation and unfolding of the New World Order envisaged by the Anglo-American Establishment, it is par for the course that the brits are the tip of the spear in the advancement of the globalist agenda. Indeed, Cecil Rhodes would be proud. Owing to the sudden need to restructure the methodology of business administration, compelling companies to abide by the sustainability and inclusivity ideals, the A4S has set out to be at the vanguard of developing practical approaches to accounting. By resorting to research undertaken by the personnel at the Centre for Research into Sustainability (CRIS) – a multidisciplinary, international group of researchers and educators at Royal Holloway, University of London, UK –, A4S would help devise policies and practices to force companies to embed ESG considerations into decision-making at all levels of management. Corroborating this deduction was the A4S’ Executive Chairwoman Jessica Fries, who has led this group since 2008. Essentially, the findings from the research carried out by the CRIS’ faculty, particularly the 2011 case study into the supermarket chain Sainsbury’s by Spence and Rinaldi, shaped “A4S's work to establish the International Integrated Reporting Council (IIRC) and develop an international integrated reporting framework.” In fact, Fries had been a member of the IIRC Governance and Nominations Committee, representing the A4S, till the VRF was absorbed by the IFRS Foundation. Conspicuously, the Sainsbury’s affair has had legs. Prior to being a trustee of the A4S, from 2004 until 2011, Judith Batchelar was “Director of Sainsbury’s Brand with responsibility for all aspects of its product offer, including policy formation on ethical and sustainable sourcing, corporate responsibility and public affairs.” This implies that she has unknowingly been, when all is said and done, a major architect of the stakeholder capitalism model. Other trustees that are worthy of mention are the Special Advisor to the TCFD, Russel Picot, and the former CEO of the IIRC, from 2011 up to 2016, Paul Druckman. Besides this role, Druckman was subsequently a member of the SASB Board and previously had been President of the Institute of Chartered Accountants in England & Wales (ICAEW). Undeniably, accountants have been tremendously pestered by the environmentalists and their masters for their strategic usefulness in pushing this sustainability disclosure agenda. By the same token, the CFOs, who are responsible for overseeing and managing their respective companies’ finances, have also been harassed by these rapscallions. Having said that, the A4S has partnered with some UN bodies and other clubbable organisations to compose the CFO Coalition for the SDGs. Flourishing from the CFO Taskforce for the SDGs, which was launched on December 17, 2019, at the Borsa Italiana, in Milan, the purpose of this initiative was to coordinate the sustainability agenda of CFOs. To accomplish this mission, a set of CFO Principles on Integrated SDG Investments and Finance, and KPIs to set targets and evaluate the implementation of those principles were concocted. Succeeding this taskforce, the CFO Coalition was inaugurated on March 29, 2022, at the UN Global Compact’s Annual Local Network Forum in Dubai. Presently, it boasts 71 members, representing an aggregate $1.5 trn in market cap, and its co-chairs are two executives from Enel, which at the end of 2018 was the second largest power company in the world by revenue, and from the sixth largest asset manager in the world by assets under management – $1,740 bn –, PIMCO (officially, Pacific Investment Management Company LLC). Moreover, as members of the Coalition, the CFOs are committed to implement the CFO Principles inside their respective organisations and to share their experience and learnings with peer CFOs in the broader community of UN Global Compact companies. In turn the Principles were formulated with the collaboration of, among other entities, the UN’s Principles for Responsible Investment (PRI) and the UNEP Finance Initiative (UNEP-FI), which are key partners of the UN Global Compact (UNGC) as well. In all likelihood, you are completely in the dark about the significance of this unholy alliance. Instead of just giving away the ending, let me guide you down this rabbit hole to unveil the origins of the ESG contrivance. Considering the UNGC, this initiative acts as a setting for corporations and their CEOs to assemble and discuss, with the guidance from the UN and intervention from academics, public sector entities and NGOs, how to embrace and pursue the sustainability tenets and goals that the UN has urged since its effective onset on August 12, 2005. Notwithstanding, this ball started rolling all the way back to 1999, when UN Secretary-General Kofi Annan addressed the audience at the WEF’s annual summit in Davos, Switzerland. Because there were elements of the international community that believed in erecting barriers to trade and the open market to protect and favour certain interests of a particular set of well-positioned groups, the global free market that the UN and its affiliated organisations had ostensibly defended was in jeopardy of breaking down. By the way, this conviction in protectionism and central planning has patently remained till this day, which the globalists have laughably claimed to oppose. Visibly, those hurdles are sold to the citizenry of each respective nation with a veil of compassion and solidarity to attain the common good. Far from protecting and trying to fulfil selfish aspirations of some privileged classes, they are merely defending and acting in accordance with the putative universal values pronounced in the Universal Declaration of Human Rights, the International Labour Organization's Declaration on fundamental principles and rights at work, and the Rio Declaration of the United Nations Conference on Environment and Development in 1992 (commonly known as Agenda 21). Ergo, there has been no dispute in regard to the ultimate social, economic and environmental goals. Au contraire, statists and globalists, and C-suite and activists alike have all declared to support the sustainability agenda, albeit the means to pursue it have diverged. Being aware of this situation, the Secretary-General Annan challenged corporate executives to take matters into their own hands. In order to accelerate the materialisation of those objectives, businesses should lobby their governments “to give us [i.e., the UN], the multilateral institutions of which they are all members, the resources and the authority we need to do our job.” Alternatively, they “can uphold human rights and decent labour and environmental standards directly, by [their] own conduct of [their] own business. Admittingly, Annan affirmed that, seeing that “neither side of it can succeed without the other”, this initiative, the UNGC, is vital to sustain the “universal values” so that the “open global market” manages to endure. Whether he was being disingenuous or a simple coincidence, notice the terminology used. In lieu of employing the term free market, he went with open market. Indubitably, the collectivists that dwell in the multilateral institutions and the policy-making bodies at the national and local levels are all in the same page when it comes to the ideology entrenched in their economic and trade policies. Succinctly, the market is only open for those shrewd scoundrels and gutless cowards who consent to the sustainable development deception, consolidating the wealth and dominance of these cronies – 24,243 to be precise, as of February 19, 2024, and counting. Thus, to remain true to their principles and purpose, the C, in UNGC, should really stand for Cartel instead. Despite that, the plot is just getting interesting. In the run up to the June 1992 United Nations Conference on Environment and Development, popularly referred to as the Earth Summit, the UNEP Statement by Banks on the Environment and Sustainable Development was launched on May 1992, in New York, originating the Banking Initiative. Through operating under the auspices of the UNEP, “a broad range of financial institutions, including commercial banks, investment banks, venture capitalists, asset managers, and multi-lateral development banks and agencies” were cast to encourage “the integration of environmental considerations into all aspects of the financial sector’s operations and services.” Afterwards, it was time to beguile the insurance and reinsurance companies. In 1995, the UNEP teamed up with some leading firms from this industry and established the UNEP Statement of Environmental Commitment by the Insurance Industry, with the help from pension funds too. As usual, signatory companies committed “to achieve a balance of economic development, the welfare of people and a sound environment.” Then, these two groups began to cooperate ever more closely from 1999 onwards, until they merged in 2003, founding the UNEP-FI. Even though this initiative has been instrumental in pushing the sustainable development concept on financial institutions as a whole, engendering the Principles for Sustainable Insurance, in 2012, and the Principles for Responsible Banking, in 2019, its most significant project has been the one forged in its early years: the Principles for Responsible Investment. One element of the law governing investment decision-making that is common to all the jurisdictions is the requirement that decision-makers follow the correct process in reaching their decisions. In the common law jurisdictions, this requirement flows from the fiduciary duties of prudence and in the civil law jurisdictions, the duty to seek profitability and otherwise manage investments conscientiously in the interests of beneficiaries. Conforming with the correct process requires decision-makers to have regard to all considerations relevant to the decision, including those that impact upon value. In our view, decision-makers are required to have regard (at some level) to ESG considerations in every decision they make. This is because there is a body of credible evidence demonstrating that such considerations often have a role to play in the proper analysis of investment value.” During the time that the UNGC was constituting its governance framework, in 2005, it partnered with the UNEP-FI to manufacture “the world’s leading proponent of responsible investment.” In other words, the PRI was founded by the world’s largest institutional investors, acting at the Secretary-General Annan’s bidding, with the objective of forcing investors, both asset owners and managers, to go along with the ESG plan.
When this scheme was put in motion, the concept hitherto most similar to ESG was something dubbed “socially responsible investment”. In spite of sounding and looking the same outwardly, the foundations of each movement are different, though not entirely unrelated. Basically, the socially responsible investment kind is grounded on ethical motives, whereas the ESG gambit is promoted as a lucrative proposition. Evoking the words of his boss Kofi Annan, at the occasion of launching the UNGC, the former head of the UNEP-FI Paul Clements-Hunt argued that due to a healthy environment and stable world contributing to a more prosperous economy, the UN’s declared priorities were thereby aligned with the ambitions of investors. All the same, financial institutions were not being easily convinced by the merits of gauging companies’ performance on social and environmental themes. In particular, pension funds were afraid that their fiduciary duties prohibit them from considering “non-financial” factors in their investment decisions. As a result of two pivotal research papers, commissioned by the Asset Management Working Group (AMWG) of the UNEP-FI, released in the beginning of this century, the fund managers were about to come on board. The first one, published in June 2004 at the UN Global Compact Leaders Summit, which is the year after the AMWG was born, was made by this twelve-member group, consisting of mainstream asset management firms and brokerage houses. Albeit long and quite dull, the title of this report, The Materiality of Social, Environmental and Corporate Governance Issues to Equity Pricing, is thought to be the first instance these commonplace words were used together in an official UN publication. In summary, owing to increasing pressure for institutional investors to address these issues, this research was conducted, revealing that the environmental, social and corporate governance aspects were an integral part of successful management, consequently insisting on these being taken into account in financial analysis and in investment management. To address that pesky fiduciary duty ordeal, Freshfields Bruckhaus Deringer LLP, a leading institutional law firm from the UK, produced a report, issued in October 2005, that reasoned that “integrating ESG considerations into an investment analysis so as to more reliably predict financial performance is clearly permissible and is arguably required in all jurisdictions.” Whether we are contemplating common law or civil law jurisdictions, both have rules in some form requiring decision makers to act in the interests of the ultimate beneficiaries. On that account, this assessment argues for examining ESG criteria, not merely to determine the material impact on financial performance, but when it is reasonably believed to be the subject of a clear consensus amongst beneficiaries or when the ESG considerations provide any points of differentiation between equally attractive alternatives. All in all, in their rather simplistic minds, the sustainability-linked notion of responsible investment is more than inoffensive or noble, it is simply good business. In the end, the AMWG, together with some colossal pension funds and other investment firms, established the PRI in 2006, mustering 63 signatories which represented more than $6.5 trn in assets under management (AUM). Needless to say, these figures have skyrocketed since then. As of the end of 2023, the PRI boasted 5,372 signatories, of which 740 were asset owners – i.e., pension funds, insurance companies, foundations, endowments, sovereign wealth funds, development finance institutions, family offices, and some others –, amounting to an AUM total, in round numbers, of $120 trn. Comparing with the other initiatives spawned by the UNEP-FI, one clearly sees that the PRI is the preeminent one. The latest count for the Principles for Sustainable Insurance informs us that it has 159 signatories, including the largest insurance firms in the globe. Although this organisation does not compute the combined asset value of its members, we can infer that it is close to the global grand total of $35.73 trn. Even more impressive, the Principles for Responsible Banking possesses 342 affiliates, constituting $98.7 trn of total assets, which represents approximately 54% of global banking assets. Since we are at it, those $120 trn, as of March 30, 2021, in PRI’s aggregate signatory AUM, when you think about it, is really staggering. Looking at the evolution of the global AUM data, on the surface, the numbers do not appear to be on the money – pun intended! In view of the global AUM figures for 2021 and 2022 being, respectively, $108.6 bn and $98.3 bn, how can the sum total of the AUM of PRI’s members be that much higher? The answer is very straightforward. Those $120 trn reported by the PRI also includes the 740 asset owners mentioned above. For example, in the ranks of the PRI, the fourth largest public pension fund, Caisse des dépôts et consignation, has $1,12 trn in total assets, the podium of the insurance business, Ping An, Allianz and AXA, possess a combined $3.57 trn, the number one sovereign wealth fund, Norway’s Government Pension Fund Global, has accrued $1.55 trn, and even the fifth largest central bank, le Banque de France, carries $2.31 trn in its balance sheet. Right here, these 6 institutions represent $8.5 trn, or thereabouts, in assets. Adding that to the global AUM number for 2021, we get, give or take, $117 trn. Therefore, acknowledging this near overlap, one must conclude that looking for a bank, insurer or investment firm that is not affiliated, in any way, with these supranational entities, is like searching for a needle in a haystack. With the development of principles for the insurance and banking industries, in addition to the PRI, sustainability blueprints now exist for every branch of the financial sector. But it did not stop there. To fast-track financial institutions’ action on decarbonising the global economy, the UNEP-FI has convened several actors from across the financial sector. Starting in 2019, the UN-summoned Net-Zero Asset Owner Alliance was formed in partnership with the PRI; in April 2021, UNEP-FI engendered the Net-Zero Banking Alliance, and the Net-Zero Insurance Alliance was erected in July 2021. All of these member-led alliances unite financial institutions who have committed to achieving net-zero GHG emissions in their portfolios by 2050, in line with the Paris Agreement. Apparently, the globalists have covered all the bases. Every sector of the financial system and the corporate sector have all been captured by the stakeholder capitalists. Now, it is time to go back to the topic of sustainability disclosure, and appreciate how it relates with the carbon trading systems and the technocracy-esque green economy template championed by the banksters and ‘oiligarchs’.
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Having finished off the previous instalment by asserting that, after the Kyoto Protocol expired in 2012, voluntary carbon markets were on the cards to replace or supplement the mandatory emissions trading schemes (ETS) that were in place, let me now explore how this all progressed. Be attentive, please, because it may become convoluted. Tracing its origin to a 1966 paper by Thomas Crocker, The Structuring of Atmospheric Pollution Control Systems, the concept of cap-and-trade has haunted us in the last few decades. Ironically, this fellow has snubbed its own brainchild, preferring instead the use of carbon taxes to fight climate change. In addition, he is very sceptic about climate models, claiming that “they are numerical simulations, and as with any numerical simulation, a great deal depends upon what values you attach to unknown parameters.” As elucidated, there was a countless number of projects and stratagems conducted by the familiar environmental organisations and corporations allied with the ‘oiligarchy’ and banking clique to further the fathering of ETSs across the world. Whether regional, national or global, and whether mandatory or voluntary, a myriad of cap-and-trade initiatives began to be devised and implemented. On the one hand, there were those who defended that a global ETS must be erected, eventually. Yet, to arrive at that point, policymakers had to devise them at the regional or national level by decree. Then, a system would be created to allow access between the different geographical carbon trading mechanisms, forging a global cap-and-trade scheme. On the other hand, there were those who argued that, although a worldwide carbon trading system is going to be established sooner or later, this had to be done mostly through non-compulsory means. Likewise, regional and national markets would crop up at first, leading to an inescapable global ETS. Representing the mandatory faction, there was Jonathan Pershing, for instance. Acting as the Director of the World Resources Institute (WRI)’s Climate, Energy and Pollution Program, he contended that the three regional emissions trading programme that were on the pipeline in the US – the Northeast Regional Greenhouse Gas Initiative (RGGI), the Western Climate Initiative (WCI) and the Midwest Governor’s Initiative – could “increase pressure on Washington” to set up a national cap-and-trade system. Discernibly, WRI was a member of the USCAP, the notorious business and NGO coalition pushing this carbon offsets ploy. Sitting on the board of WRI as a Director was also Al Gore, joined by other luminaries, such as Theodore Roosevelt IV and William D. Ruckelhaus, the first US Environmental Protection Agency (EPA) Administrator. While Pershing was at WRI, he was concurrently a facilitator for the RGGI and serving on the California Market Advisory Committee. In turn, this committee was assembled by Governor Schwarzenegger’s Secretary of Environmental Protection, Linda S. Adams, in October 2006, “to develop a multi-sector, market-based compliance system that could permit trading between the European Union Trading System and the Northeast Regional Greenhouse Gas Initiative and others.” Denoting the voluntary camp, one could call upon the several financiers and their institutions, including Al Gore. To wit, Theodore Roosevelt IV who chairs the environmental think tank C2ES, which was a member of the USCAP and has been a chief supporter of various green endeavours, was Chairman of Lehman Brothers’ Council on Climate Change starting from February 2007 up to its collapse. Speaking of the devil, Lehman Bros was a founding member of USCAP, when it was instituted in January 2007. Other examples were delineated on the last episode, such as Goldman’s David Blood and Richard Sandor from CBOE and ICE. Carbon markets have gone through various phases, like many markets, and it has gone through a very fast startup; it reached €100 bn a year very, very quickly and very early on. [T]hen, it got stuck a little bit in neutral by difficult economic times and regulatory uncertainty. What I observe around me right now is a lot of people that have not been engaged in this for a while, or have quietly been engaged, they seem to be back, and they seem to be [in] a mood of optimism and the mood of, I think, we’re back guys, we can take off again.” At any rate, the most predominant organisation to promote ETS at the global scale, either mandatory or voluntary, has been the International Emissions Trading Association (IETA). Presently headed by former Bill Clinton’s climate advisor Dirk Forrister, it not only advocates a global market for carbon dioxide emissions, but also does it for the other purported greenhouse gases (GHGs). To get an idea of how dominant the IETA has been, it was the largest non-government delegation at the 2009 COP15 conference in Copenhagen. Following the adoption of the Kyoto Protocol in December 1997, the IETA was then established in October 1998, with the sponsorship of UNCTAD and the Earth Council, which was chaired by Maurice Strong, to become the successor to the Greenhouse Gas Emissions Trading Policy Forum. Its objectives are to “assist with the development of international standards, protocols and guidelines for, among other things, accreditation, measuring and monitoring of emissions, verification and certification of projects and emission reductions, auditing, and trading of emission allowances and reduction credits.” In IETA’s inaugural meeting, participants included the usual oil companies, UN agencies, financial institutions, environmental organisations, etc., like BP, Shell, NYMEX, IPE, Sandor’s Environmental Financial Products, the WBCSD, and so on. Obviously, as it would continue to happen, its declared mission to create “a plurilateral greenhouse gas emissions market by the year 2000” failed miserably. This endless series of bungle has been impossible to overcome and, thus, forced these swindlers to regroup. Addressing the hinderances they had met up to that point, Andrei Marcu, the founder and first president and CEO of the IETA – now simply an honorary board member –, in a quick interview to Responding to Climate Change (RTCC) – part of the Climate Home News network – admitted that, in spite of progress having stalled, there was “a mood of optimism” and these schemes could “take off again.” This exchange occurred at the 2015 Carbon Expo, from May 26 to 28, as a preparation for the COP 21, in Paris, later in that year. With its first edition in 2009, this colloquium has been organised by the World Bank and the IETA, of course. Frankly speaking, though, we cannot really put it in terms of opposing camps – mandatory versus voluntary. The reality is that these corporations, NGOs and their associates back and finance multiple projects, even if they often seem counterproductive and contradictory amongst each other. Seeing that these groups are not cohesive, with each constituent seeking their own self-interest, they seek a variety of alliances and shift resources to wherever they feel is more advantageous. With that in mind, some USCAP affiliates were also members of the two precursors of the American Coalition for Clean Coal Electricity (ACCCE), the Center for Energy and Economic Development (CEED) and the Americans for Balanced Energy Choices (ABEC). Interestingly, launched on April 17, 2008, ACCCE was “a partnership of the industries involved in producing electricity from coal.” Be that as it may, it vowed to support “the development and deployment of advanced technologies to further reduce the environmental footprint of coal-fueled electricity generation – including advanced technologies to capture and safely store CO2 gases.” As a result of these attempts to cartelise and consolidate the economy, a struggle for power emerged among the differing pressure groups. Due to being aware of the machinations in course which would entail a technocratic revolution, where the corporate overlords and state apparatchiks would take the reins of every market, the weaker and less well-connected had to assemble to try to counter this offensive by the ‘oiligarchical’ and financial elites. Besides coal producers, in those lobbying organisations were utilities, railroads, manufacturers of all sorts and every kind of party in the supply chain that benefited from having that cheap and reliable fuel to boot. Therefore, these smaller players, albeit borrowing some corporatist approaches to get a piece of that glorious globalist action, ended up delaying, as well as complicating, the technocratic plan. Notwithstanding, “in order to save the planet” the globalists would still need to impel “the industrialized civilizations [to] collapse”, as the then co-chairman of the Council of the WEF, among other things, Maurice Strong, so elegantly and eccentrically pictured more than three decades ago, when he and his partners in crime were pushing the still nascent global warming deception and conjuring up the feudalistic Agenda 21. What if a small group of world leaders were to conclude that the principal risk to the Earth comes from the actions of the rich countries? And if the world is to survive, those rich countries would have to sign an agreement reducing their impact on the environment. Will they do it? The group’s conclusion is ‘no’. The rich countries won’t do it. They won’t change. So, in order to save the planet, the group decides: Isn’t the only hope for the planet that the industrialized civilizations collapse? Isn’t it our responsibility to bring that about? Manifestly, the WEF has played that role of megalomaniac syndicate that Strong dreamed up. Once you delve deeply into its history, you will discover that globalist lackeys like Strong propped up the WEF to carry out the tradition set by Cecil Rhodes. If you recall, I showed you that the Anglo-American Establishment was fundamentally the originator of the WEF, through their three stooges: Henry Kissinger, Herman Khan and John Kenneth Galbraith. Nevertheless, it turns out that Maurice Strong was highly influential in this process too, with Klaus Schwab even calling him a mentor on his obituary. All the same, this idea never went away. As a matter of fact, voluntary carbon markets soon became all the rage again. Once the woes that devastated the present-day IMFS, through challenging the prevailing assumptions and models on which the global economic structure laid (especially the developed markets), were eased, though not fixed, those same tricksters jumped back on the climate change bandwagon. Despite that, they have never had to build the green economy from scratch. On account of the infrastructure and beliefs never being completely dismantled, this cadre has always managed to advance this agenda, building upon their previous attempts. Experiencing its ups and downs, the climate change swindle has nonetheless been relentlessly revived and shoved down our throats. Whether you consider California’s case, where a target of 1990 emissions level by 2020 was implemented in September 2006, though the first allowance auction was only carried out on November 2012, or the more recent, ambitious and socialist attempt at the federal level with the Green New Deal, which interestingly coincides with the rise of that annoying little brat Greta Thunberg, this sort of programmes and policies has always stuck around. The next five to 10 years is the most critical time to accelerate the transition to a low-carbon economy. We think capitalism is in danger of falling apart. As a result, the business, which has been fairly reticent in the past about the mechanics of investing sustainably, is planning to increase its visibility. We need to go all in. We are going to be more aggressive because we have to.” After convening for the first time in London, at the IPE’s place, IETA made a habit of arranging annual meetings with carbon market participants – funny that they are now hiding their own history. Initially, these exhibitions were named Carbon Expo, partnered with the World Bank, as we already know. Nowadays, IETA organises Innovate4Climate, Carbon Expo’s sequel, along with regional Carbon Forums in association with the UNFCCC, other UN bodies and international and regional development banks. Recognising the necessity of assuring that the carbon offsets are genuinely produced by actual emissions reduction projects, it was now time to put together industry standards and verifications processes so as to guarantee high-integrity ETS, particularly for voluntary carbon markets (VCM). Naturally, the same old entities were already standing by with those tools to close this putative quality control gap. Basically, there are four main carbon crediting institutions, among a legion of them, that serve both the compliance and the voluntary markets worldwide. For the former they are labelled as Certified Emissions Reductions (CERs), while for the latter they are called Verified Emissions Reductions (VERs). Still, it seems that new initiatives are being set up all the time, as I am going to testify later on. Firstly, the trailblazer has its origins in 1996 and goes by the name American Carbon Registry (ACR). With the assistance of the Environmental Defense Fund (EDF), which sponsored the California Global Warming Solutions Act of 2006 (i.e., Assembly Bill 32) along with the Natural Resources Defense Council – both members of the USCAP –, the Environmental Resources Trust (ETR), a Washington, DC-based nonprofit organisation, was established. Right then, ACR, the first private voluntary GHG registry in the world, was instituted. Undeniably, ACR is a Rockefeller-spawned entity. After all, ETR is a wholly-owned subsidiary of Winrock International. Perhaps you are out of the loop, unable to connect the dots. In short, Winrock is the amalgamation of the words Winthrop Rockefeller, the fourth-born son of John D Rockefeller II. As a result of an incestuous three-way merger between Winrock International Livestock Research and Training Center, his older brother JDR3’s Agricultural Development Council and the Rockefeller Foundation’s International Agricultural Development Service, Winrock International was formed in 1985. Secondly, there is the Climate Action Reserve (CAR). This organisation started in 2001 as the California Climate Action Registry (CCAR), which was developed by the State of California to promote and protect businesses’ early actions to report, manage and reduce their GHG emissions. Only upon the inauguration of California cap-and-trade programme, in 2012, did the CAR crop up and, in conjunction with The Climate Registry (TCR), replace the CCAR. Whereas TCR inherited the task of “providing best-in-class programs and services for measuring and reducing carbon emissions” to governments, businesses, academia and NGOs, the CCAR’s role of a carbon offset registry was passed down to the CAR. Besides California, with the support of its stakeholders, the Climate Action Reserve devises carbon credits for the Washington and international compliance markets, as well as the VCM. Thirdly, launched in 2003, the Gold Standard Foundation modified its methodology, which was originally constructed to adhere to the Kyoto Protocol’s CDM program and its CERs, to then suit the VCMs and their VERs from 2006 onwards. Essentially, the Gold Standard (GS) was forged chiefly by the World Wide Fund for Nature (WWF), which remains a sponsor and a partner of it. For your information, the WWF was constituted by eugenics fanboy Julian Huxley, Prince Bernhard of the Netherlands, founder of the Bilderberg Group and former employee of the IG Farben conglomerate, leading misanthropist Prince Philip of Greece and Denmark, Duke of Edinburgh, and Godfrey A. Rockefeller, great-grandson of William Rockefeller Jr., brother and business associate of John D Rockefeller. Even though its history is a bit murky and intricate, with some more characters worthy of mention, these are the most relevant chaps for our story. Finally, there is the Verified Carbon Standard (VCS), the world’s most widely used GHG crediting programme. Being administered by tax-exempt organisation Verra, at its outset, in 2007, it was known as the Voluntary Carbon Standard until 2018. Furthermore, VCS was concocted by the IETA, the WEF, the WBCSD and the Climate Group too. About the one that is likely totally unfamiliar to you, the Climate Group, suffices to say (for now) that this is a lobbying and networking group where paying members engage with governments, businesses and other institutions to shape the market frameworks that can help stakeholders achieve the Paris Agreement targets. Undoubtedly, this organisation boasts a quintessential stance, getting its funding – for the financial year 2021-2022 – mostly from the typical foundations (45%), corporations (27%) and progressive governments (25%), and being intricately connected to other green, globalist initiatives. All the same, these four premier standards form part of an industry association, dubbed International Carbon Reduction and Offset Alliance (ICROA), which not only accredits entities that offer carbon crediting and emissions reduction services, but also endorses those very same standards. Serving as a testament to the consanguineous nature of this phenomenon, the ICROA is managed by an “independent” secretariat operated within the IETA. In spite of originating in 2008, through the efforts of seven carbon offset providers from Britain, the US and Australia, it only partnered with IETA in 2011. Again, this conflict of interests is staggering. At bottom, these providers were just aiming at cartelising these new-fangled voluntary-ish markets. Similarly, the standard setters and the environmental groups that backed and hatched them later joined this endeavour by creating the Code of Best Practice for the industry. Evidently, this was done in order to consolidate their position and erect barriers to the entry of new standards and offsetting services providers. On this account, they can corral the market and make sure all business flows through this cabal. On page 20, figures 12 and 13, of that report by Ecosystem Marketplace and Bloomberg New Energy Finance, one can clearly detect the dwindling of activity in the VCMs during the 2008-09 GFC. However, as I have expounded before, this has been an ongoing cycle. Catching them by surprise, reality shuttered the lucrative hopes of these guileful, green financiers. As consultancy firm ICF International predicted, the global VCM would grow from 10 mn tons of CO2 in 2005 to 400 mn tons annually by 2010. What actually materialised was a complete debacle, with CCX – “the world’s first and North America’s only active voluntary, legally binding integrated trading system to reduce emissions of all six major greenhouse gases, with offset projects worldwide” –, seeing its trading volumes drying up by 2010. Rather amusingly, Richard Sandor blamed the US Senate inaction on not passing the climate change bills specified in the last episode, such as the Waxman-Markey, for the standstill in the voluntary-ish markets. In any event, as Table 3 of that report referenced above demonstrates, while transaction volumes and values tumbled from 2008 to 2009, declining respectively by 26% and 47%, those statistics experienced the inverse trend for the regulated (i.e., mandatory) markets, up 83% for volume and 7% for value. Indubitably, the Great Recession was vital to annihilate this and other malinvestments that were (voluntarily) generated during the era of the expanding eurodollar system. For nearly a decade there had been a lull in the ETS activity, especially in the VCM segment. At any rate, interest in carbon markets has been facing a resurgence, more emphatically since 2020. Unquestionably, this coincided with the surge of credit, both public and private, that was occasioned during the Covid ‘scamdemic’. Regardless of that respite in the post-GFC voluntary markets, the upward trajectory of the revenues from the whole ETS realm, dominated by the compliance programmes, has been unflagging, as the chart below on the right illustrates. Likewise, that figure shows that the impact of government-enforced carbon taxes on their revenues has too been indefatigable, though at a gentler pace. Because of this push by governments and the globalist supranational institutions, the percentage of GHG emissions that are covered by some kind of mandatory cap-and-trade scheme or carbon tax has reached the noteworthy mark of 23% (i.e., 11.66 GtCO2e), as the graph on the left demonstrates. Still, notice how this progress came in waves, not linearly. All in all, as of March 31, 2023, there were 73 carbon pricing initiatives, meaning ETSs and carbon taxes, already implemented, scheduled for implementation or under consideration across the globe. Comparing to previous years, the development has been remarkable. In 2004, the year before the EU ETS was launched, GHG emissions coverage was only 0.47%., surging to near the 5% level the following year up to 2011. Then, in 2012, when Japan enforced its carbon tax, that statistic jumped to 8.41%. Even though the rest of the decade saw a myriad of direct carbon pricing programmes being implemented, progress was very meagre, with coverage hovering around 12%. That is until China introduced its ETS in 2021, leading to the current figure of 23%. According to the most recent World Bank’s State and Trends of Carbon Pricing report, published during the 2023 Innovate4Climate event in Bilbao, Spain, revenues from carbon taxes and ETSs swelled $10 bn in 2022, reaching almost $95 bn globally. As you can see, the share of revenues yielded from cap-and-trade initiatives has been ballooning impressively, reaching 69% in 2022, with the remainder 31% coming from carbon taxes. Moreover, 44.2% of these global direct carbon pricing revenues, $42 bn, came solely from the EU ETS.
Understandably, China’s ETS boasts the triple of the coverage that the EU ETS offers. Peculiarly, seeing that it adopts 100% free allocation (through technology-specific, emissions-intensity baselines), in effect, the Chinese government collects almost no revenues from it. To all intents and purposes, the eco-financial clique of Sandor, Gore, Marcu and alike has witnessed the materialisation of their artful ruse. Nevertheless, some tweaks had to be done to their action plans. Learning from past mistakes, efforts have been made to guarantee a high level of quality and integrity of carbon credits and their providers, as well as market mechanisms that are credible and pursue the highest standards. In other words, make sure that carbon providers produce projects that truly reduce or remove GHGs. In case you are still bewildered, carbon credits/offsets can represent emission reductions achieved through either avoidance, for instance by capturing methane from landfills, or removal from the atmosphere, such as sequestering carbon through afforestation or directly capturing CO2 from the air and storing it. Specifically, reduction does not necessarily mean an absolute decrease of GHG emissions, but a curtailment of emissions in relation to the business-as-usual scenario. As I have elaborated on before, the 1997 Kyoto Protocol instituted three flexibility mechanisms: the Clean Development Mechanism (CDM), the Joint Implementation (JI) and emissions trading, whether via exchanges or bilateral agreements. In view of coming up short of expectations in both quantitative and qualitative terms, if they wanted to erect a global carbon market, they had to raise their game. Plainly, for a carbon credit to be firmly regarded as an instrument for “effective climate action” (i.e., of high integrity), its claims of emissions reduction or removal must be real, additional, verifiable, and permanent. This means that the emissions cutback achieved (real) would not have happened in the absence of the mechanism (additional), will have been removed or avoided in perpetuity (permanent), and can be traced back to a specific project (verifiable). That being said, surveying the evidence to verify if CDM offsets comply with those requirements, we find out that the results show a grim picture of this programme. Owing to being relatively insignificant in size, the JI mechanism does not justify a review, though we can surmise it has suffered at least the same shortcomings as CDM. Undoubtedly, the most prominent problem to resolve is that of additionality. Despite early-stage research on their lack of stringency provoked some improvements to be made on CDM additionality rules, a 2016 study by the European Commission still found that 85% of CDM projects, generating 73% of the potential 2013-2020 CER supply, had a low likelihood of occasioning carbon credits which are additional and not over-estimated. Believe it or not, this suggests that the implementation of CDM has, in fact, increased GHG emissions. Astonishingly, in the EU alone, emissions increased by over 650 million tonnes of GHG due to the use of spurious CDM credits in the EU ETS – that represents 15.55% (=650/4180 MtCO2e) of total EU’s GHG emissions in 2016. To keep this light, as I always try to do, this episode will be divided into three parts. Having reached the end of the first one, hopefully you have acquired a somewhat comprehensive grasp of the making and evolution of carbon pricing schemes and of the main characters and institutions enriching this story. On the following part, I am going to explore in more detail the series of events, proceedings and perspectives that have effected and affected the carbon markets and the involving regulatory framework that we now have to deal with, particularly the history of the ESG concept. Lastly, I will finish off demonstrating how and explaining why everyone and their mother is jumping on the sustainability and green economy bandwagon, relating all of this to the prospects of this episode’s matter, emissions trading systems. Having got this far, one must feel at least perplexed concerning the sequence of the philosophical downfall that slowly transformed the (somewhat) capitalistic system, posited by the liberal theorists of the 18th and 19th centuries, into the collectivist one we have to endure today. If that was not bad enough, the fact that the principal instigators for this ideological regression have been the very ones who everybody nowadays seems to associate with capitalism and its exploitative nature, surely, has to make one’s head spin. All the same, when one realises that the natural tendency of the elites, both economic and intellectual, is to gravitate towards the political apparatus so as to use its coercive power to encroach on the rest of society, incrementing and consolidating their wealth and status as a consequence, it all begins to make sense. This is precisely what I have been trying to convey in the last four instalments of this series, with this one being the seventh. Yet, there is a lot more to explore. As we have seen in those previous episodes, the international banking cabal, which I have exposed as being the force majeure of globalism (a.k.a. New World Order) and all its guises through the ages, has used the environmental movement and climate change hoax as a gigantic Trojan horse to overhaul the global economic structure entirely. To achieve their goals, which so happen to be the SDGs under the overarching Agenda 21 of the UN, they have to revolutionise the international monetary and financial system (IMFS) altogether. In the end, they hope to implement a system of global governance, using the concept of stakeholder capitalism. Nevertheless, there is still a missing piece to fulfil their totalitarian dream of a technocratic world government. Keep reading if you want to find out, although you may already have an inkling. The dialogue has shifted from viewing climate change as a risk, to seeing the opportunity, and really translating that into a single objective, which is to move our economies to net zero as quickly as possible. That’s a tremendously exciting development because what we have now in private finance is a focus on a clear goal – net zero – and finding the opportunities to advance that and to be rewarded by it.” Continuing the exposition commenced on the last chapter, the central banker and UN special envoy on climate change and finance Mark Carney has taken the initiative to reconstruct the IMFS. To begin with, he has, ostensibly, managed to transform the risks and costs of advancing the policies and projects regarding the green economy paradigm into a lucrative business proposition. Kudos for him! In that January 2021 interview for the UN, Carney talks about the need to employ private finance to achieve the objective of net-zero greenhouse gas (GHG) emissions, where emissions produced equal those removed from the atmosphere. His talking points relied on the main elements of the globalist agenda that entail the reset of the global economic structure. To wit, he voiced the necessity of mandatory carbon disclosures (i.e., ESG metrics), the role of companies to pursue emissions reductions all the way across their value chains, the need for national climate plans, the importance of carbon offsets and the urgency of supporting the developing countries adapt to the new economic model. Through the course of this and the following posts, I am going to elaborate on each one of these points, resuming the elucidation under way from the previous episode. At any rate, what jumps out from that interview is when the interviewer makes reference to his claim that “the goal of net zero is the greatest commercial opportunity of our time.” In truth, Carney has been recorded affirming this at least twice before. The first instance was on February 27, 2020, even before the Covid ‘scamdemic’ and the Great Reset really started. Then, a few months later on November 8, of that annus horribilis, on occasion of the release of the pre-COP26 report Building a Private Finance System for Net Zero, he went on stating the same line. Looking at the reports made by the institutions that embrace the green agenda, it is easy to see why Carney feels this way. For example, on that pre-COP26 report presented at the Green Horizon Summit, which was hosted by the City of London Corporation with WEF’s backing, total investments required solely to enable a transition in the energy sector is estimated to be $3.5 trn a year, with 70% of that amount applied onto developing countries, while as much as $135 bn annually will flow to carbon capture and biofuel technology, and additional funds will be needed for the research and development of new technologies to boot. Albeit an outwardly high number, do not fret taxpayers. Insofar as the presumed costs of the business-as-usual scenario have been biasedly computed to be skewed on the high side, the inescapable conclusion is that, by 2030, “the benefits of shifting to a low-carbon pathway are estimated at $26 trillion.” Exactly the same skulduggery James Corbett clarified on an article that was glossed over on the previous episode. Notwithstanding, this is only, quite literally, half the story. In 2018, a report published under the responsibility of the Secretary-General of the Organisation for Economic Co-operation and Development (OECD), in collaboration with the United Nations Environment Programme (UNEP) and the World Bank, asserted that $6.9 trn per year, throughout the next decade, was needed to meet both the temperature targets of the Paris Agreement – to limit global temperature increase to well-below 2°C and towards 1.5°C above pre-industrial levels – and the SDGs. Assuming that global GDP grows at an average annual rate of 5.08% (using the figures from Statista) till 2030, totalling $149,022.16 bn, the proportion of spending on sustainable development is expected to be 4.63% of world GDP, being 6.88% in 2022 ($6.9/$100.2184). To give some perspective, global military spending in 2022 added up to 2.24% of world GDP ($2.24/100.2184). This is no random comparison. Owing to learning early on that war was the most efficacious means of inducing the intended changes, besides wealth consolidation, the globalist clique has in many ways approached this agenda with a war economy mentality. Per the then Prince Charles, speaking at the COP26 in Glasgow, “we need a vast military style campaign to marshal the strength of the global private sector, with trillions at its disposal far beyond global GDP”. Intriguingly, the globalist institutions appear to be very worried and interested in solving the problems, allegedly caused by man-made climate change, faced by the developing countries. Evidently, they are acting disingenuously. Unsurprisingly, Mark Carney and his financier cronies are not the only ones insisting that the amounts reportedly needed to aid the developing countries transition to the sustainable development model are in the trillions. As a matter of fact, these banksters are merely following the dictates imposed by the UN. In the wake of the 2009 COP15 held in Copenhagen, Denmark, “developed countries commit to a goal of mobilizing jointly USD 100 billion dollars a year by 2020 to address the needs of developing countries.” To make long story short, sadly for the banking cabal, this has been an abject failure. According to an expert report prepared at the request of the UN Secretary-General, released on December 2020, the $100 bn target was not being met (the latest available data for 2018 was $79 bn). Furthermore, Bonesman John Kerry, who currently acts as the US climate envoy, contended last year that the developed countries might finally meet this pledge this year. Seeing that this goal was not reached in due time, the globalist cadre has now been asserting that the efforts have to be multiplied to make up for those past sluggish undertakings. For missing their mark, that $100 bn a year is now to be seen as a floor. Thus, the estimates made by the UNEP suggest that “adaptation costs alone faced by just developing countries will be in a range of $140 billion to $300 billion per year by 2030, and $280 billion to $500 billion annually by 2050.” On top of that, by adding the costs of mitigation, decarbonisation and “global resiliency” – whatever that means –, for the entire world, “the annual cost will greatly exceed $500 billion and possibly even more than a trillion dollars.” Apparently, the UNEP is low-balling its figures since, as I have already shown, the annual expenditures, through this decade, will have to be close to $7 trn to fulfil the Paris Agreement and achieve the SDGs. Coincidentally, a November 2022 report titled Finance for climate action: Scaling up investment for climate and development, made by the Independent High-Level Expert Group on Climate Finance (IHLEGCF), claims that “[e]merging markets and developing countries other than China will need to spend around $1 trillion per year by 2025 (4.1% of GDP compared with 2.2% in 2019) and about $2.4 trillion per year by 2030 (6.5% of GDP),” to address the challenges “on mitigation, adaptation/resilience/damage, and natural capital.” In line with the OECD report. Interestingly, the IHLEGCF is supported by the UN Economic Commission for Africa, the Brookings Institution, and the Grantham Research Institute on Climate Change and the Environment at the London School of Economics and Political Science (LSE), besides some other foundations, which, this latter, was founded by some notable Fabian socialists, including Sidney and Beatrice Webb. This “independent” group was launched by the COP26 and COP27 Presidencies in July 2022, having Vera Songwe and Lord Nicholas Stern as co-chairs. This last character, Lord Stern, is an experienced trickster where mathematical models relating to the presumed costs of GHG emissions born by society are concerned. Following his stint as Chief Economist and Senior Vice-president of the World Bank, from 2000 to 2003, he went to work for Gordon Brown, then Chancellor of the Exchequer, until 2007. During this period, he conducted studies on the economics of climate change, a creative form of scientism. In October 2006, the Stern Review was published with much ballyhoo. In this landmark report, Stern and his team concluded the usual and expected verdicts that stopping anthropogenic climate change was of paramount importance and an international response was urgent and necessary, all to reduce the costs of the inevitable impacts of climate change, of course. Hence, Stern and his colleagues argued that “international frameworks” would have to be built to help each country play its part in meeting their assumedly common goals. In other words, what the UN and the WEF calls multistakeholder partnerships. Be that as it may, amongst other elements included in those future international frameworks, emissions trading would be a preeminent one. And if the decision to pollute is free, […] then the actual cost there are misleading you because you are seeing them as free. They are really not free. Due to gaining a great deal of popularity, policy makers from around the world began to consider the results of this review rather seriously. On February 13, 2007, Stern gave his testimony on his Review’s findings before the US Senate Energy and Natural Resources Committee. Obviously, he seized this opportunity to profess the alarmist narrative, and open the door for a new market as well. Naturally, he claimed that if we carried on business as usual, the damage of climate change would take a toll of 5% on the global economy every year, on average. However, reducing the risks of that via controlling GHG emissions would only cost 1% of GDP per annum. Accordingly, the strategy to “correct the biggest market failure the world has ever seen” must firstly involve “[p]ricing carbon directly through either tax or carbon trading or implicitly through regulation”. In any event, he ended up determining that because of the “efficiency that comes from using economic instruments, developing a global price for carbon is crucial.” Ergo, an emissions trading scheme must be instituted. In the next month, it was Al Gore’s turn to appear in Congress. Needless to say, he took this chance to advocate for a cap-and-trade system. Basically, far from an expert opinion, it was a mere sales spiel. Nonetheless, this self-proclaimed expert had been working with Stern in his report. Hardly were these events happening in a vacuum. Around this time, there was a series of developments that kicked off in the 90’s and culminated with a bill proposal which, fortunately, never materialised. Despite that, this idea has always lingered around, waiting for the right timing. In 1991, in preparation for the Earth Summit held in Rio de Janeiro, the prominent ‘green oiligarch’ Maurice Strong inaugurated the World Business Council for Sustainable Development (WBCSD). Concurrently, a UN Conference on Trade and Development (UNCTAD) study pushing for international trade in emissions was co-authored by Richard L. Sandor, another eminent character in the carbon trading ruse. Owing to his key role in engineering all sorts of financial derivative products, most noteworthy being the interest rate futures, when he was chief economist and vice president of the Chicago Board of Trade (CBOT), he came to be known as the “father of financial futures”. As part of the 1990 Clean Air Act Amendment, the HW Bush Administration erected a market for trading allowances in sulphur dioxide (SO2) emissions, which are believed to cause acid rain. Guess who was put in charge of devising it? Unmistakably, Sandor took over, acting as chairman of the Chicago Board of Trade Clean Air Committee, from 1991 to 1994, developing the first spot and futures markets for SO2 emission allowances. If that was not enough already, he was also responsible for supervising the annual allowance auctions conducted on behalf of the Environmental Protection Agency (EPA). A few years later, in 1997, the COP3 in Kyoto, Japan, spawned a momentous agreement between the parties. The Kyoto Protocol was adopted on December 11, 1997, and due to a complex ratification process, it entered into force on February 16, 2005. Indeed, the process of ratification took a while because this covenant failed to persuade most governments to act. For instance, the US, under the W. Bush Administration, abandoned this treaty, even though the Clinton Administration had signed it in 1997. The justification was that “the incomplete state of scientific knowledge of the causes of, and solutions to, global climate change and the lack of commercially available technologies for removing and storing carbon dioxide” precluded him from ratifying this protocol, which “exempts 80 percent of the world...from compliance.” Succinctly, the Kyoto Protocol instructs the signatories to limit and cut GHG emissions in accordance with agreed individual targets. By binding emission reduction targets for only 37 industrialised countries and economies in transition and the European Union, the developed countries would have to carry all that burden. Overall, these targets add up to an average 5 per cent emission reduction compared to 1990 levels over the five year period 2008–2012 (the first commitment period). The second commitment period, which lasted from 2013 to 2020, was agreed upon at the 2012 COP28, bringing about the Doha Amendment. All the same, this amendment seems to have been totally futile. Recalling the testimonies of Al Gore and Lord Stern before the US Congress, once the Kyoto Protocol expires at the end of 2012, there would be no need to wait for a new global treaty. To understand this, you have to know that this agreement constituted two market-based mechanisms to trade emission allowances, also known as carbon offsets or carbon credits: the Joint Implementation (JI) and the Clean Development Mechanism (CDM). Perfectly exemplifying the stupidity and uselessness of the cap-and-trade systems, these schemes were not only unsuccessful at limiting GHG emissions, but this pair actually provoked an increase during their implementation period. All in all, “the use of JI may have enabled global GHG emissions to be about 600 million tCO2e higher than they would have otherwise been.” One of the most misleading practices of historians has been to lump together ‘merchants’ (or ‘capitalists’) as if they constituted a homogeneous class having a homogeneous relation to state power. The merchants either were suffered to control or did not control the government at a particular time. In fact, there is no such common interest of merchants as a class. The state is in a position to grant special privileges, monopolies, and subsidies. It can only do so to particular merchants or groups of merchants, and therefore only at the expense of other merchants who are discriminated against.” Fascinatingly, this anti-business agenda, as one would normally regard it as, had the support of some of the largest corporations and financial institutions at that time. Instead of standing for the tenets of capitalism that enabled all the progress and growth we enjoy today, and which are in part thanks to the entrepreneurs that founded these companies, the scoundrels that later on began to permeate their boards have decided to take the path of least resistance and join forces with the state apparatus to consolidate and easily maintain their position in the market. After all, big business loves big government. As Murray Rothbard asserted, for being “in a position to grant special privileges, monopolies, and subsidies”, the state “can only do so to particular merchants or groups of merchants, and therefore only at the expense of other merchants who are discriminated against.” Having said that, by manufacturing the climate change scam which inevitably pertained to combined matters of politics and business, several oligarchical factions competed to get the upper hand. In spite of the environmental movement being captured since, essentially, its inception by the ‘oiligarchy’ and its cronies, they have never had total control over it, nor have they ever been a monolithic collective. For that reason, there has been now and then infighting among the various suits and tree-hugging hippie camps. Seeing that the UN’s institutions were (and still are) packed with pretentious and self-important socialists, the direction of the debate – if one can call it that – about climate change was being steered more and more so by the watermelon socialists. Amidst this struggle for power, the ‘oiligarchs’ and fellow financiers counterattacked, in 1989, with the formation of the Global Climate Coalition (GCC). Indubitably, this was a reaction to the creation of the Intergovernmental Panel on Climate Change (IPCC) by the World Meteorological Organization (WMO) and the UNEP, plus the alarmist testimony before Congress by NASA’s very own James Hansen, where he attributed global warming to the greenhouse effect with a risible 99% confidence, both the year before. According to its website, their mission is “to coordinate business participation in the international policy debate on the issue of global climate change and global warming.” Simply put, to take the helm and steer it in favour of the cabal. To be fair, I am glad they did this, and so should you, because we would be living in squalor by now if those green-gilded comrades had their way. At least we have gained a few years. Nevertheless, this organisation and its members did not deny the greenhouse effect hypothesis nor the AGW/ACC theory. Yet, GCC took a lot of flak, which still goes on till this day, for their slight disagreement with the prevailing dogmas. However, in view of deeming the policy suggestions for tackling these issues as ineffective and destructive, they fought against them. First and foremost, as John Shlaes, the executive director of this institution, put it, the GCC was “concerned that carbon taxes are often promoted on the basis that they offer significant environmental benefits. What must be made clear is that carbon taxes will have little, if any, impact on global carbon dioxide emissions.” Continuing expressing his scepticism about the usefulness of carbon taxes, he argued that this would effect “a shift of carbon-intensive activities to countries without a carbon tax, thereby limiting or negating the desired effect of such a policy.” To finish off, he urged policy makers to acknowledge “that strong economic growth is a prerequisite for continued environmental protection.” Thus, GCC campaigned severely against the ratification of the Kyoto Protocol. At any rate, more public-private partnerships and subsidies for green technologies, please! As soon as the US Congress and the Bush Administration rejected the Kyoto Protocol, for accomplishing its mission, the GCC was deactivated in 2002. Be that as it may, the cabal was about to face other challenges. Without surprise, new sham organisations soon crop up. Before we get to that, we ought to explore the major players behind the GCC. Colour me shocked because “the collection of energy companies, primarily from the coal sector, created the Global Climate Coalition to fight impending climate change regulations.” An instrumental founding member was the American Petroleum Institute, whose executive vice president became chairman of the GCC a few years later. Another powerful founding member was the largest oil company in the world, Exxon, which became ExxonMobil after the two sisters merged in 1999. Joining them were also automotive and other petroleum companies, as well as the National Association of Manufactures which represented both large and small enterprises. As this coalition proudly admitted, the GCC was the main instigators for the US rejecting the Kyoto Protocol. This much was revealed by some documents that emerged in 2005, where it was conceded that this was “in part based on input from you [the Global Climate Coalition]”. Aside from the GCC, there have been a myriad of environmental organisations founded and funded by the globalist clique, in one way or another, as I have evidenced and alluded to many times throughout this series. Inasmuch as the list would be too extensive to give a thorough account, check out this article that discloses, chronologically, the development the most illustrious of such entities. Instead, focusing on the essentials, notice that outfits of the sort of GFANZ, IBC and TCFD are not unprecedented. In reality, there have been institutions that have long tried to transform business practices to instil environmental awareness. One of such organisations was the Coalition for Environmentally Responsible Economies, or CERES, later rebranded as Ceres, having been founded in 1989. Right from its outset, the Ceres Principles were launched, consisting of “a ten-point code of corporate environmental conduct to be publicly endorsed by companies as an environmental mission statement or ethic.” In 1993, the oil company Sunoco became the first Fortune 500 member to adhere to this code. In addition, Ceres originated the Global Reporting Initiative (GRI), in 1997, which fashioned the GRI Standards “for corporate reporting on environmental, social and economic performance.” By the way, its Global Sustainability Standards Board (GSSB) are the first global standards for sustainability reporting. As of 24 March 2022, GRI and the IFRS announced that they would collaborate to align the ISSB's – see previous episode – investor-focused Sustainability Disclosures Standards for the capital markets with the GRI's multi-stakeholder focused sustainability reporting standards. Through its Investor Network on Climate Risk (INCR), now simply labelled Ceres Investor Network, Ceres works with multiple institutional investors, which are 220 of them managing $60 trn in assets, to force corporations to accept the ESG model. Lastly, Ceres has also been very active in producing reports to persuade investors, corporations and financial firms to join the crusade against climate change, promising to be a profitable endeavour. Essentially, these studies are just an exercise in wishful thinking. As Warren Buffett implied, the forecasts always have the authors’ biases embedded into them. Forecasts usually tell us more of the forecaster than of the future.” In any event, the GCC was an exception to the rule. Almost every other group endorses and helps to formulate the professed “scientific consensus” on climate change and its policy agenda. Lamentably, only a few emasculated conservative- and libertarian-inclined think tanks, such as the Heritage Foundation, the Heartland Institute which hosts the annual International Conference on Climate Change, the Institute for Energy Research or the Cato Institute, have had the courage to stand up to these well-funded green behemoths. Notwithstanding, on account of having been financed by some big crony capitalists, including oil barons and businesses like Charles Koch and Exxon, their opposition efforts are gravely restricted. Consequently, the fundamental principles and hypotheses grounding the climate change hoax and the environmental movement in general, are never allowed to be debunked once and for all. As a result, the globalist clique slowly, but incessantly, keeps on fulfilling its plan. On that account, the push for a cap-and-trade system seriously ramped up in the turn of the century. Abiding to the pledge of cutting GHG emissions made in Kyoto, the WBCSD and the UNCTAD, drawing from the latter’s study co-authored by Richard Sandor, referred to above, instituted the International Emissions Trading Association (IETA), in 1999, “to establish a functional international framework for trading in greenhouse gas emission reductions.” Then, starting in 2003, Ceres, through INCR, has hosted conferences to attract institutional investors to the environmental honeypot. In collaboration with the UN, it was called Institutional Investor Summit on Climate Risk. Although it has changed its name as years went by, and the UN collaboration has been on and off, these conferences are still held with the participation of the corporate and financial habitués. Simultaneously, Sandor, the derivatives guru and director on the board of the London International Financial Futures Exchange, founded the Chicago Climate Exchange (CCX) with Maurice Strong on the board, listed on the Chicago Board of Trade. The owner of the CCX is the Climate Exchange Plc group, which in turn owns the European Climate Exchange (ECX). The ECX was launched in 2005 to capitalise on the European Union Emissions Trading Scheme (EU ETS) that was initiated that same year, following a 2003 directive from the European Commission. In 2001, the International Petroleum Exchange (IPE), the world’s leading energy futures and options exchange, was acquired by the Intercontinental Exchange Inc. (ICE), a literal offshore financial centre based in London. A year later, in November 2002, Sandor joined the board of directors of ICE, which so happened to be two months before he debuted the CCX. After CCX and IPE signed a co-operation and licensing agreement on September 21, 2004, it was now possible to trade cash and futures products of carbon emissions in an efficiently liquid venue, the ECX; only in 2010 did the ICE bought out the CCX and its affiliates. All was left to do was to replicate that European model in the US and, then, spread this idea worldwide. Having founded, in 1998, the Environmental Financial Products LLC (EFP), which specialised “in inventing, designing, and developing new financial markets”, this was the predecessor to the CCX. While Sandor was teaching at the Kellogg Graduate School of Management at Northwestern University, he received two grants in 2000 and 2001, totalling $1.17 million “to examine whether an emissions market was feasible in the United States to facilitate significant greenhouse gas reductions.” These funds came from the Joyce Foundation, on whose board of directors the uppity state senator of Illinois Barack Obama sat from 1994 through 2002. Curiously, the treachery behind the cap-and-trade systems was pioneered by the corporate poster child of corruption, Enron. Without Enron, a founding member of the Pew Center on Global Climate Change’s Business Environmental Leadership Council, which was a leading industry front group pushing the Kyoto agenda, the Kyoto Protocol might have never occasioned. Owing to its entire business model being based on dodgy emission allowances, it lobbied governments and UN entities to limit GHG and pollutant discharges, creating more emissions trading markets in the process. Having found stupendous success with the EPA’s $20 billion per year sulphur dioxide cap-and-trade scheme, Enron sought to dominate the US energy market. In view of being a major natural gas trader, if a carbon trading programme was forced on industry, the electric utilities would be pressed to switch from coal to natural gas, producing a gigantic profit windfall for Enron. For having gone against the interests of major industrial and manufacturing companies, like Exxon, it got more than it had bargained for. In the end, the rapacity, cheating and mismanagement caught up to them, and the company closed its doors in 2001. To sum up, Kenneth Lay and his associates loved green a tad too much, becoming too greedy. Established in 1998, the Pew Center on Global Climate Change and its Business Environmental Leadership Council have aimed at advancing the now familiar sustainable development scam. As of 2011, this organisation renamed itself as the Center for Climate and Energy Solutions (C2ES) and is chaired by the investment banker and CFR member Theodore Roosevelt IV, the great-grandson of the former US President, who was also Chairman of Lehman Brothers’ Council on Climate Change from February 2007 until its bankruptcy. Once again, the year 2003 comes to the forefront. That year, the C2ES partnered with Senators John McCain (R, AZ) and Joseph Lieberman (D, CT) to introduce in Congress the first bipartisan bill with provisions for a carbon cap-and-trade system, the Climate Stewardship Act. Due to failing to gain support, these senators tried a total of three times to pass such a bill through Congress, but always with the same outcome – whoopee! – in which the last attempt was co-sponsored by Senator Barack Obama (D, IL). While this was going on, a bunch of corporations, seen by many as some of the biggest polluters – in their brainwashed heads CO2 is a pollutant – in the world, and environmental organisations, including C2ES’ predecessor, teamed up to institute the United States Climate Action Partnership (USCAP), so as to “recommend the prompt enactment of national legislation in the United States to slow, stop, and reverse the growth of greenhouse gas emissions”. To make good on that promise, USCAP members released a report titled A Blueprint for Legislative Action, suggesting a detailed framework for legislation to address climate change. Visibly, this became the backbone of the Wall Street-backed American Clean Energy and Security Act of 2009. More commonly known as the Waxman-Markey bill, after its sponsors, the rat-looking Henry Waxman (D, CA30) and Ed Markey (D, MA7). This bill was the last one of a series that commenced, as we have seen, in 2003 and continued with the Safe Climate Act of 2006 and 2007, both by Waxman, then the Lieberman-Warren Climate Security Act of 2007 and, at last, the President Obama’s campaign promise. All the same, the American Petroleum Institute, which had been reigned by Standard Oil’s successor, ExxonMobil, issued a letter to Congress expressing its disagreement with this bill, reasoning that it would be too punitive for consumers and the economy. Seeing that the USCAP had in its ranks fossil fuel giants of the likes of British Petroleum and Royal Dutch Shell, it is funny how after a century, the Rockefellers and the British and Dutch royal dynasties still bicker with each other to see who reaches the top of the heap. Plainly, Exxon has dominated, being consistently at the top echelon in terms of market capitalisation in America. Finally, another vital character in this tale was Goldman Sachs. In an effort to construct a repeat of the derivatives and the commodities market casinos that had been highly generous to this investment bank, these banksters had gone to great lengths to engender a carbon emissions trading outlet for many years. In fact, they were the most pronounced propellers of this agenda. We don't have a lot more time to deal with climate change… We need the right balance between regulation and market-based approaches.” On the one hand, they were pushing for legislation to create a cap-and-trade programme and producing documents for regulators and politicians to that effect. On the other hand, Goldman was distinctly invested on ‘environment-friendly’ ventures, in carbon credit firms and in the CCX, besides its future owner ICE.
Moreover, the former CEO of Goldman Sachs Asset Management, David Blood, along with two other Goldmanites, Mark Ferguson and Peter Harris, got together with the prophet/profit Al Gore and his minion, Peter S. Knight, to set up the London-based investment fund, Generation Investment Management (GMI), which insiders cleverly styled as “Blood and Gore”. Taking advantage of the hoax they, especially Al Gore, helped to fabricate, the GMI has invested in putative green projects and businesses that accumulate carbon credits. Therefore, selling these offsets through the carbon emissions markets has been exceedingly lucrative to eco-banksters Hank Paulson and his ilk. No wonder they have been hyperactive in pushing these schemes. Subsequent to his lengthy run on the Defense and State Departments, Paul Wolfowitz, the Straussian neocon of the Project for the New American Century that got its “new Pearl Harbor” wish realised, remained in the DC swamp and became president of the World Bank from June 2005 to June 2007. In this period, Wolfowitz forged the Carbon Finance Organization, which still carries on under the label Climate Change Fund Management Unit. In the midst of those 2007 congressional hearings alluded to above, Wolfowitz bang the drum for $100 bn aid for carbon-reducing programmes to the developing countries. Furthermore, he avowed to push for a global carbon emissions trading system, within a year, worth $200 bn. On the next day, Jeroen Ven der Veer, the then CEO of Royal Dutch Shell, replicated the call for a global cap-and-trade system. As luck would have it, these schemes were constantly hampered, with CCX being dissolved in 2010, though the EU ETS regrettably survived. Perhaps, it was because of the people, particularly the non-elite “merchants” – hinting at Rothbard’s quote –, and some reporters wising up and seeing through this despicable profiteering. After all, the truth always comes out sooner or later and, that being the case, occasionally some of the racketeers bite the dust, as it happened to the CEO of the biggest carbon credit certifier, Verra, where former Goldman Sachs’ carbon chief, Ken Newcombe, is a director. Alternatively, the GFC might have conceded us a reprieve. Were it not for the economic debacle that ensued, maybe they could have already promoted this cap-and-trade swindle, plus the broad Agenda 21, successfully by now. As a silver lining, the banking cabal’s hubris spawned one scheme too many and, consequently, it delayed the implementation of the globalist plan. Be that as it may, as the saying goes, if at first you do not succeed, try, try again. Alas, they definitely have kept at it, even though the Kyoto Protocol expired in 2012. As Al Gore pointed out in his testimony to Congress, they were already preparing for this, adamantly pressing for voluntary initiatives. Still, their tenacity is really something to behold. But so is mine. Until next time! As I have demonstrated, the technocratic agenda is not about saving the earth, nor about helping the public and nor even about making money. In reality, its grand overarching purpose is the complete control over every aspect of our daily life, so as to institute a formidably inescapable neofeudalistic structure to administer society and all its countless affairs. To achieve this, the globalist cabal and their sycophants have eagerly and diligently been at work, trying out various scares, boogeymen and humbugs to manipulate the populace to acquiesce, willingly, their liberty and natural rights to the progressively collectivist governments. Amazingly, even though all those cabal-promoted hoaxes having been debunked, for being so preposterous and baseless, a long time ago, they have never vanished popular consciousness. Au contraire, they have been crucial, to this day, in forming the core of public opinion, permitting the elite to carry out their totalitarian agenda on a planetary scale. Hardly has a hobgoblin been more useful to the globalist agenda than the alleged prospects of environmental catastrophe. Whenever resistance and disagreement to their initiatives appears, the politicians, scholars and talking heads compliant to the NWO institutions pushing for their globalist-driven policies whip out their trump card. Somewhere along these lines, they reply that their policies must be enacted to protect the environment or to fight climate change. In recent years, this has even gone to the ludicrous extreme of calling climate change systemically racist and, thus, we must seek ‘climate justice’. Therefore, more welfare programmes and wealth redistribution schemes have to be implemented, especially from the rich to the poor countries. Undoubtedly, more efforts for a global consolidation of powers would have to be pursued. We are grateful to the Washington Post, The New York Times, Time Magazine and other great publications whose directors have attended our meetings and respected their promises of discretion for almost forty years. It would have been impossible for us to develop our plan for the world if we had been subjected to the lights of publicity during those years. But, the world is now more sophisticated and prepared to march towards a world government. The supranational sovereignty of an intellectual elite and world bankers is surely preferable to the national auto-determination practiced in past centuries.” Remarkably, despite the fact that the main sponsors of the world government movement have for several occasions confessed their true intentions, the population at large has incredibly dismissed it entirely. On one of such occasions, albeit a disputed one, the scion David Rockefeller admitted to having been working for the formation of a world government commanded by “an intellectual elite and world bankers”. Regardless, in his memoirs he avowed to being an ‘internationalist’. Recalling the previous posts, the UN has always been intended to eventually acquire the functions of a proper world government. Building upon the Club of Rome’s “world problematique”, which they considered “humanity itself” the culprits, and a myriad of other ‘oiligarchy’-sponsored environmental conferences, the infamous 1992 Earth Summit in Rio de Janeiro spawned off, besides the despicable United Nation Framework Convention on Climate Change – which limited the terms of reference to the possible causes of climate change as being solely anthropogenic –, the Agenda 21. To engender a policy framework to fulfil their plan for a sustainable world, at the Earth Summit they came out with a series of objectives to preserve, not just the global commons, but “human settlements” too. Obviously, as time passed, every economic activity and aspects of human behaviour have been regarded as part of or impacting the global commons to justify their totalitarian aspirations. Hence global commons began to mean anything that the globalist cabal wanted to govern. In the September 2011 issue of Our Planet, the UN offered a simple description of the global commons as “the shared resources that no one owns but all life relies upon.” Then, in 2013, the UN Systems Task Team expanded on this and published Global governance and governance of the global commons in the global partnership for development beyond 2015 where it was asserted that, according to international law, the four global commons are “the High Seas, the Atmosphere, the Antarctica and the Outer Space”; notwithstanding, the list had casually been enlarged, containing “[r]esources of interest or value to the welfare of the community of nations — such as tropical rain forests and biodiversity”; however, the UN admitted that it could be defined “even more broadly, including science, education, information and peace.” As the Covid-19 ‘scamdemic’ raged on, the globalist institutions showed us their true colours and shamelessly displayed their ambitions, intensifying their efforts and resolve to achieve their technocratic goals. On that account, the definition of global commons had to be extended. In April 2020, the Rothschild-backed bank, called the Global Environment Facility (GEF), took the view “to protect our global commons [. . .] humanity must develop new ways of doing business to deliver transformational change in food, energy, urban, and production and consumption systems.” That being said, because every aspect of human activity affects the environment and potentially hinders sustainable development, nothing is left outside of their scope. A few months later, in December 2020, Secretary General of the UN Antonio Gutteres really fleshed out the global commons concept. Speaking to an audience gathered at Columbia University, the pivotal academic institution in the 1930’s development of the Technocracy, Inc. movement, in addition to agreeing with the GEF definition, he declared that they “have a blueprint: the 2030 Agenda, the Sustainable Development Goals and the Paris Agreement on climate change.” From the multitude of environmental and climate conferences held in the 1980’s and 90’s, the UN adopted the Millennium Development Goals, giving way, in 2015, to the United Nation’s full adoption of the Sustainable Development Goals (SDGs). While the former included 8 goals, the latter consists of “17 goals broken down into 169 targets and seeks to realize inclusive and equitable economic, social and environmental sustainable development.” In spite of its intentions appearing honourable to the unsuspected crowd, the truth is these goals serve the tyrannical and megalomanic wishes of the cabal. As I am going to show, these vague platitudes can be molded to legitimise any proposed collectivist initiative. This is the point the World Economic Forum (WEF) enters the picture. Founded in 1971, as the European Management Forum, by Ernst Stavro Blofeld impersonator Klaus Schwab, changing to its current name in 1987, it has strived to be “the International Organization for Public-Private Cooperation.” Initially, Schwab focused the meetings on how European firms could catch up with US management practices. He also developed and promoted the ‘stakeholder’ management approach, which based corporate success on managers taking account of everyone’s interests: not merely shareholders, clients and customers, but employees and the communities within which they operate, including government. Nevertheless, he realised he had the chance to develop and promote his own vision of management, which went beyond the traditional profit-maximisation motive. In an interview recorded in 2007, at the WEF’s headquarters in Geneva, Schwab affirmed that to tackle the planetary issues affecting the global commons, “we need today in the world […] corporations which are engaging into making this world a better place, not only to serve the shareholders” and customers, but their employees and communities within which they operate, including government. Moreover, he laid out the vision of his Forum, stating that the WEF is “a foundation bringing together key decision makers from all walks of life to address the challenges on the global agenda.” Discernibly, the global agenda he hints at is the Agenda 2030 and its SDGs as waypoints along the path to completion of the master plan for the 21st century: Agenda 21. To achieve this, Schwab proposed a new economic model, dubbed stakeholder capitalism. In a December 2019 article titled What Kind of Capitalism Do We Want?, this concept “first proposed a half-century ago, positions private corporations as trustees of society, and is clearly the best response to today’s social and environmental challenges.” All the same, this model has been around since the beginning of the Forum/Symposium. Indeed, in 1973, participants spontaneously took the initiative to draft a “Code of Ethics” based on Schwab’s stakeholder philosophy, with the text being unanimously approved in the final session of the Symposium. This Davos Manifesto declares that corporations must serve the interests of all stakeholders, with negotiations and concessions amongst the various parts to reach some form of harmony. A. The purpose of professional management is to serve clients, shareholders, workers and employees, as well as societies, and to harmonize the different interests of the stakeholders.” Perhaps, before we move on, I ought to take a little detour to expose the real, unauthorised history of the WEF. After attaining doctorate degrees in engineering and economics, Schwab went to Harvard in 1965 to study government and business. Whilst being there, he would attend Kissinger’s “International seminar” which was funded by the CIA via a known conduit. Through this process, Klaus Schwab would be introduced to a group of men who were actively trying to influence European public policy by any and all methods, including using the fear of impending nuclear doom. Recognising his potential straight away, they would be there for Schwab all through the founding of the World Economic Forum, with Herman Kahn, Henry Kissinger and John Kenneth Galbraith bringing perceived credibility to the project. It was not easy for Schwab alone to explain to European elites what he intended to do, so he would bring Kahn and Galbraith to Europe to persuade other important players to become part of the project. Owing to those three individuals being instruments of the Deep State Milieux, namely the Council on Foreign Relations, they sought to subject the world under the Anglo-American establishment. As a result, they wanted to keep Europe under their sphere of influence, being a steppingstone so that they would go on to unite Europe with America, followed by the remaining superstates, into a New World Order designed by the powerful and obsequious globalist agents. Getting back on track, since stakeholder capitalism means looking out for the interests of society at large, one may wonder how this is any different from the numerous branches of collectivism that were explored on the last episode of this series. The answer is, plainly, the differences boil down to the irrelevant minutiae. What really matters is that, just like the socialist, progressive and technocracy movements have attempted to abolish individuals’ liberties and natural rights in favour of a despotic form of government ruled by the intellectual and monied elites, so does Schwab’s stakeholder capitalism. To my understanding, stakeholder capitalism is the conceptual amalgamation of Frederick Taylor’s scientific management, Benito Mussolini’s corporatism, Fabian socialism and the ‘oiligarchs’’ environmentalism. Who are these stakeholders, then? Simply put, by taking a look at its partners, this moniker involves businesses, governments, banking institutions and alike, hedge funds and other investment firms, “philanthropic” foundations, NGOs, media, as well as trade unions, academia, religious leaders and social entrepreneurs – the latter is a nicer term for activists like Greta Thunberg –; not to mention think tanks, though only indirectly represented. As Herr Schwab proudly confessed, “we penetrate the cabinets.” When we discover that the WEF’s Young Global Leaders programme has actually been tied to the CIA since its inception, it becomes clear why Klaus is so proud of all that penetration. Seeing that Schwab’s WEF is simply the leading front organisation to push and pursue the goals set on the Agenda 21, we quickly find out that this economic model is one of the SDGs. Scrolling to the last one of the 17 SDGs, specifically item 17.16, the UN claims that multi-stakeholder partnerships are essential to “mobilize and share knowledge, expertise, technology and financial resources, to support the achievement of the sustainable development goals in all countries”. Once again, this is just an evolution of an idea formulated on the Agenda 21. On item 8.2, the basis for action for integrating environment and development at the policy, planning and management levels, “the responsibility for bringing about changes lies with Governments in partnership with the private sector and local authorities, and in collaboration with national, regional and international organizations,” all aiming at “global partnership for sustainable development” (Preamble). Furthermore, item 17.13 of the SDGs, states that “global macroeconomic stability” has to be enhanced “through policy coordination and policy coherence”. Interestingly, keeping to their Orwellian tradition, the definition of macroeconomic stability has changed to suit their agendas. Whereas it used to mean “full employment and stable economic growth, accompanied by low inflation,” the UN has announced that is no longer the case. Governments and legislators must “develop smart economic policies that foster sustainable and inclusive economic growth, and address challenges to economic stability including climate change” so as to meet SDG requirements. A first step towards the integration of sustainability into economic management is the establishment of better measurement of the crucial role of the environment as a source of natural capital[. . . .] A common framework needs to be developed whereby the contributions made by all sectors and activities of society, that are not included in the conventional national accounts, are included[. . . .] A programme to develop national systems of integrated environmental and economic accounting in all countries is proposed.” Following the broad instructions embedded on the Agenda 21 to the letter, the WEF has played a crucial role in revolutionising the whole economic system. Written in 1992, the clearly stated plan was to create “natural capital” that shifts “sustainability into economic management”. All sectors and all society will be involved in this effort to transform nature into financial capital. By proposing the development of “national systems of integrated environmental and economic accounting in all countries”, the cabal seeks to complete the transformation of Earth and all of its natural resources into a centralised system of economic control. As Whitney Webb explained in her excellent article, Wall Street’s Takeover of Nature Advances with Launch of New Asset Class, that is precisely what has happened. By once again misusing the concept of the global commons, the banksters have created Natural Asset Companies (NACs). These will allegedly “[p]reserve and restore the natural assets that ultimately underpin the ability for there to be life on Earth.” This allusion to caring for the global commons all sounds wonderful, but when we consider its impact upon the oceans’ depths by deep-sea mining, for example, it is really just the creation of new markets, while concern for environmental destruction barely registers. Being an anarcho-capitalist myself I am all for the privatisation of all land, all bodies of water and every commodity, provided that the laws are applied and judged equally. Unsurprisingly, this is not the opinion of the globalists. Due to being enlightened geniuses, boasting superior knowledge and skills, in comparison to the rest of us common mortals, they would rather have an unelected, international agency, which they would design and finance. On that account, the decision to give the green or red light to projects that relate to their jurisdiction and purview would be extremely swayed by the interests of these globalist, stakeholder capitalists. After all, this clique is the “trustee of the material universe for future generations.” Continuing with the case of the oceans, the International Seabed Authority (ISA) has been given the responsibility to manage the high seas, including the seabed where it has the distinct duty to “organize and control all mineral-resources-related activities in the Area for the benefit of humankind as a whole.” On their document presenting their strategic plan for the period 2019-2023, they say that to stick to the UN’s 2030 Agenda, their most relevant SDG is number 14 – Conserve and sustainably use the oceans, seas and marine resources. Complying with its “role as custodian of the common heritage of mankind,” ISA vows it will “[s]trengthen cooperation and coordination with other relevant international organizations and stakeholders in order to [. . .] effectively safeguard the legitimate interests of members of ISA and contractors.” All of this “in order to promote investment […] in deep sea mining activities”. In the space of a few short decades, broad concepts have evolved into narrow principles of international law that, when applied, create a regulatory framework for controlled access to all resources in the oceans. What was once a genuinely global resource is now the sole province of the network of stakeholder capitalists. Essentially, this is the global governance sought by the elite. As the UN think piece aforementioned declared, “stewardship of the global commons cannot be carried out without global governance.” In short, the offer from our overlords is straightforward. In exchange for submitting to their will and allowing them sole possession of everything (the global commons), they will take care of us. As far as they are concerned, “[y]ou’ll own nothing” and you’d better “be happy” with it. Although the WEF did insist that this was based on an article , written by the young global leader Ida Auken, merely entertaining an hypothetical scenario for the near-future, the truth is that the-powers-that-be are seriously advancing and implementing such a scenario, in the form of “smart cities”. Be that as it may, this may or may be not have the design of 15-minute cites, at least we can safely bet this idea is inspiring the WEF-associated urban planners’ futurescape – wait till you get to the 2060-90 period, that is when it gets extraordinarily bizarre, like something out of Huxley’s Brave New World. Not to dwell too much on this topic, but these cities look awfully a lot like Jeremy Bentham’s panopticon template of a prison. Curiously, is it not a spectacular case of serendipity that the Covid-19 ‘scamdemic’ opened the window of opportunity for Schwab and the rest of the stakeholder capitalists to execute their long-awaited plan? As soon as the first meaningless PCR tests in Europe and North America were coming back positive, Schwab began to salivate just thinking about what this would entail. Almost immediately, the Great Reset was launched. As you may guess, this initiative is just more of the same globalist smooth-talking banalities. In addition to “help inform all those determining the future state of global relations, the direction of national economies, the priorities of societies, the nature of business models and the management of a global commons”, it will “build a new social contract that honours the dignity of every human being.” Evidently, in view of being the “trustees of society”, they do not need the commoners’ signatures or consent to validate that contract. By abiding to the overarching Agenda 21, where it is laid out how “human settlements” will be planned, constructed and managed by a public-private partnership, we are being increasingly being shoved around like cattle, while our governments and policymakers have been taking over every economic aspect, even the most elemental ones. Unmistakably, under the veil of environmentalism, sustainability, equality or some other vacuous buzzword, they are transforming society into a technocratic prison planet. Just remember what has been happening in the Netherlands, the second biggest exporter of agricultural products. Because of the paranoia prompted by the climate change alarmism, the Dutch government has been fiercely trying to shut down 3,000 farms. The rationale is “to cut nitrogen oxide emissions” that, for being an ostensible greenhouse gas, are supposedly contributing to the warming of the planet (and sometimes cooling and other times to extreme weather events). Perhaps I should take another detour to briefly explain my scepticism, though still very relevant for today’s topic. Despite being regarded nowadays as an axiomatic and unassailable fact, becoming de facto sacrilegious to doubt it, the truth of the matter is that the anthropogenic climate change (ACC) – it used to be anthropogenic global warming until round about the noughties – theory is just that, a theory; and a rather risible one, if its consequences had not been so horrific. As James Corbett put it, “climate change is unfalsifiable woo-woo pseudoscience”. At its basis, the ACC theory leans on the atmospheric greenhouse effect hypothesis. When the greenhouse gases (GHGs), such as water vapor, carbon dioxide and nitrogen oxide, absorb infrared radiation and re-emit it back to the Earth’s surface, they increase the Earth’s energy balance, leading to warming; or so the story goes. Therefore, the more GHGs in the atmosphere, the more warming will ensue. However, there is a slight problem with this hypothesis. As Ned Nikolov and Karl Zeller brilliantly demonstrated, the belief that atmospheric gases regulate the planets’, not just Earth’s, average temperature is complete nonsense. Go ahead and watch Nikolov give his presentation on his findings, where he elucidates the audience on how it is all about the energy received by solar activity and the atmospheric pressure at each planet. As a result, they did humanity a huge service by proving, using the laws of thermodynamics, that the globe’s temperature and climate are utterly independent of atmospheric composition. Needless to say, since the climate alarmism camp only has biasedly programmed computer models, a mass propaganda apparatus (mainstream media) and fallacious arguments, like appeals to authority and circular reasoning, as weapons, they attack the detractors with absurd pseudoscience. Be careful with what you believe or they might diagnose you with science denialism. By exploiting the deception of climate change and, consequently, their crafty mission of pursuing “sustainable development”, a planetary system of global governance is currently being established under the auspices of technocratic-esque stakeholder capitalism. Whether their propagandists market it as Build Back Better, the Great Reset or the Green New Deal, or whatever slogan they choose to sell it as, they are all the same dystopic agenda. Concerning these initiatives that purport to transition the energy system into a green one, “the idea that windmills, solar panels and unicorn farts are a magical pixie dust capable of transforming the human population from greedy, fat-cat crapitalists [sic] raping the planet for fun and profit into peace-loving, Kumbaya communists living in perfect harmony with nature” is unquestionably a scam. Naturally, the ‘oiligarchs’ and their watermelon comrades have not changed their old ways. Nevertheless, in view of managing to conceal the reality that the environment movement has been fuelled, quite literally, by oil, while calling any critic a “Big Oil shill!”, the masses have fallen for it hook, line, and sinker. Despite the energy transition agenda costing trillions of dollars, and wholly disrupting and ruining our well-being and way of life, the globalist boffins assure us that executing their “green energy” plans will actually save us trillions of dollars. To reach this conclusion, all these experts had to do was to employ outrageous assumptions on their models and studies that have no basis in reality. By doing this, they can fabricate the evidence that support their predetermined conclusions. Incredibly, the truth is just the complete opposite of their claims. Switching to the “green economy” (another term for sustainable development) not only severely hinders the economic structure, resulting in lower productivity and, ergo, purchasing power and material welfare, but it gravely harms the environment. Adhering to the technocratic ideals, by making energy even more scarce, those with their hands on the energy spigot will have the ultimate control over society, deciding when, where and how to allocate scarce energy supplies to the public. Obviously, this greenwashing hype involves more than virtue-signalling to consumers. Even if business executives are in total disagreement with this strategy, they are being corralled into the globalist agenda. If they want to keep their doors open, they must comply with the stakeholder capitalism model. The law has been perverted by the influence of two entirely different causes – stupid greed and false philanthropy.” Indeed, the transformation of the global economy is well underway. The entire stakeholder clique is, understandably, committed to the project. What disagreements exist only extend to who gets what. On the whole, there is no opposition to the new global economic model. As Whitney Webb pointed out, “[t]he ultimate goal of NACs is not sustainability or conservation — it is the financialization of nature, i.e., turning nature into a commodity that can be used to keep the current, corrupt Wall Street economy booming under the guise of protecting the environment and preventing its further degradation.” By enabling investors to acquire assets primarily in developing nations, multinational corporations and financial funds will hoover up the global commons and other resources. According to the Intrinsic Exchange Group (IEG), the Rockefeller-backed entity responsible for devising the new-fangled NACs, which aims at converting Earth into a commodity market underpinning a new global asset portfolio, nature is projected to be worth $4,000 trn. Through putting their guile to “good” use, every time the cabal wants to take charge of some market or commodity, the list of global commons subject to global governance just gets a little bit larger. Which, with the justification that sustainability, equality and inclusivity have to be guaranteed, is something fairly simple to do. This will be achieved using Stakeholder Capitalism Metrics, where assets and business ventures will be rated using environmental, social and governance (ESG) benchmarks for sustainable business performance. Any business requiring market finance, perhaps through issuing climate bonds, or maybe green bonds for European ventures, will need a healthy ESG rating to issue those bonds. In combination, financial initiatives like NACs and ESGs are converting SDGs into market regulations. In the midst of the legendary 2015 COP21 summit, where the infamous Paris Agreement was born, and already building upon the Agenda 2030, which was passed at the September 25, 2015 United Nations Summit on Sustainable Development, the then Bank of England Governor, Mark Carney, got the ESG ball rolling. Simultaneously acting as chairman of the Financial Stability Board (FSB), the Task Force on Climate-related Financial Disclosures (TCFD) was founded under the leadership of billionaire, former NYC mayor and the UN special envoy for cities and climate change Michael Bloomberg. Keeping to the agenda, the TCFD “will develop voluntary, consistent climate-related financial risk disclosures for use by companies in providing information to lenders, insurers, investors and other stakeholders.” Fast forwarding to the post-Great Reset paradigm, in preparation to the 2021 COP26 summit in Glasgow, the pivotal character Mark Carney once again took the lead at taking another step to the fulfilment of the globalist nightmare. This time acting as the UN special envoy for climate action and finance, substituting Bloomberg, besides being on the Board of Trustees of the WEF, he established, still with the help of Bloomberg, the Glasgow Financial Alliance for Net Zero. On its mission statement, these banksters pledge “to expand the number of net zero-committed financial institutions”. Speaking of which, “net-zero” is just another duplicitous buzzword that hides its true totalitarian and technocratic purpose; just wait until they start pursuing the “absolute zero” goal. On November 5, 2021, concurrently to the COP26, the International Business Council (IBC) of the WEF, the very same entity responsible for coming up, on September 2020, with the Stakeholder Capitalism Metrics, released a statement welcoming “the recent announcement from the IFRS Foundation on the establishment of the International Sustainability Standards Board (ISSB).” The International Financial Reporting Standards Foundation or IFRS Foundation is a nonprofit organization that oversees financial reporting standard-setting, having as main objectives the development and promotion of the International Financial Reporting Standards (IFRS), through the International Accounting Standards Board (IASB), for accounting standards and now the International Sustainability Standards Board for sustainability-related standards. Undeniably, the collective TCFD’s, GFANZ’s and IBC’s endeavour, in order to be successful, had to lobby the regulatory and standard-setting agencies to demand businesses to comply with these new rules and regulations inspired by Klaus Schwab’s stakeholder capitalism. Therefore, on May 12, 2021, the IBC, which is chaired by Bank of America’s chairman and CEO, Brian Moynihan, had vowed to support the IFRS Foundation in its efforts to establish a “co-ordinated, global comprehensive corporate reporting system that includes sustainability standards.” By the look of things, it seems that the financial elite is having their tyrannical wish come true. How nice for them! All the same, they still want more. As I have already mentioned, the Covid-19 scare allowed the enormously felicitous chance for the cabal to carry out their megalomaniacal plan. Showing a great sense of timing and clairvoyance, on June 2019, the UN and the WEF signed “a Strategic Partnership Framework outlining areas of cooperation to deepen institutional engagement and jointly accelerate the implementation of the 2030 Agenda for Sustainable Development.” Among other areas, this partnership focuses on “digital cooperation”. The objective is to address the challenges posed by the Fourth Industrial Revolution, which entails the transhumanist vison of “merging the physical, digital and biological worlds”. Moreover, this partnership seeks to advance “digital governance and digital inclusiveness.” In its 2015 Davos executive summary, the WEF illustrated how the stakeholder capitalists had manufactured a narrative to reshape the context of our daily lives. As the centre of attention, the objective was to institute the precepts for their claimed jurisdiction of the global commons. Lamentably, they were finding tremendous difficulty “to significantly improve the management and governance of critical global commons, most notably natural resources and cyberspace.” Thus far, we have already dealt with the natural resources, particularly the oceans and the seabed. Notwithstanding, the process for creating regulated markets for all global commons is the same. Firstly, the globalist elite, acting as “the trustees of society” and “of the material universe for future generations”, will administer the global commons. Once declared to be among the “shared resources all life relies upon”, some puppet organisation is appointed to oversee access to the new regulated market. Finally, if projects pass muster, regarding the ESG metrics, the authorities and the banks will approve and fund those initiatives. Even though the global Big Data market is projected to grow to $745.15 bn by 2030, from $271.83 billion in 2022, and the staggering value of all of our personal data is, believe it or not, inestimable, the monetary gain and wealth increment is not their main source of motivation. What they are truly after is to control the cyberspace, both its content and its access. Noticeably, it is no accident that the drive to tag every citizen with a Digital ID has been very active. Regardless of the Covid era’s contact tracing systems that achieved nothing in terms of public health, our neo-feudal busybodies have kept at it. Up to this point, this should be hardly surprising, given that this framework is critical to ultimately achieve the globalist agenda. In fact, by managing and monitoring the Internet’s usage, they can turn their biggest weakness into their greatest strength. Till now, the people have been fairly able to organise, share information and, most importantly, criticise the policies and agendas of the elites. By governing the cyberspace’s access, any dissent will not be tolerated. As punishment, once they manage to reform the international monetary and financial system (IMFS) under their totalitarian modules, instead of precluding you from using your IoT appliances and devices that are connected to the corporate-controlled “smart grid”, they could merely shut down your ability to purchase any good or service, or to send and receive money. Of course, the UN and the other New World Order institutions disguise their true intentions under virtuous and commendable wording, as depicted above. As I am going to bring to light on the next instalment, there is more to revolutionising the IMFS than the lame excuse of ending poverty.
Running the risk of sounding like a broken record, the genesis of our collectivist and tyrannical society can be traced back to the Progressive era of the late 19th and early 20th centuries. What were once free, thriving and dynamic capitalist economies, as soon the Great War broke out, the Western countries instantly forewent their (classical) liberal tenets, quickly adopting a despotic stance instead. Regrettably, the shackles of progressivism have never been broken since, having at most been loosen for some periods. Even though I have already touched on this subject, I think I should delve deeper into it and give a more detail account of the degeneration from laissez-faire capitalism (a.k.a. classical liberalism) to the increasingly top-down administration of society. This is of paramount importance to understand how we got here and where we are heading. Albeit an American-born movement, the seeds of progressivism came from the German states, in essence. Having studied German state theory of such philosophers as Georg WF Hegel – the boche who came up with the Hegelian dialectic alluded to in the previous instalment – and Johann Bluntschli, as well as being taught by Richard T. Ely who was educated at German universities, Woodrow Wilson, of all people, was the initiator of likely the most fundamental element of progressivism: the administrative state. Despite playing a vital role in the pursuit and attainment of progressive goals, the rationale for the formation of an expert class to administer the governance of the State was much more unpretentious. Wanting to get rid of the “spoils system” that had been prevailing since the presidency of Andrew Jackson, the urge for civil service reform materialised at first during the Civil War, though it culminated only in 1883 with the enactment of the Pendleton Act. In April of 1864, when Senator Charles Sumner (R., Mass), a Boston Brahmin and a leader of the Radical Republicans, introduced a bill for tenure and open examinations, to be administered by a federal civil service commission, the civil service reform movement started. Interestingly, this batch of Reformers was almost consanguineous. Akin to Senator Sumner, the overwhelming majority constituted the older and highly educated Northeastern elite. Moreover, this group of sanctimonious elitists spent most of their life concentrated solely on this endeavour of implementing a more efficient form of administration. Take the example of Representative Thomas Allen Jenckes (R., RI.). In December 1865, as a result of being in correspondence with British civil service Reformers, he introduced a bill in the House modelled after their programme. Fortunately, it failed to gain much traction. Notwithstanding, a year later, he resubmitted a reform bill. However, this time he extolled the example of Prussian bureaucratic efficiency recently displayed in the Austro-Prussian War. At any rate, the civil service Reformers got their way in the end, dismantling the spoils system. Now that the terrain had just been manured and primed to sustain the administrative state and, more saliently, the Progressive era, all was needed was for someone to lay the seeds. As I have already mentioned, future US President Woodrow Wilson took the lead, and was followed by another ideologue named Frank Goodnow. Basically, Wilson wanted to import the Prussian model of administration into the US, just like his ideological fellow, Representative Jenckes. Be that as it may, Wilson did not just want to do away with the spoils system because it was inefficient or haphazard. Astutely, the Progressives began building upon this inclination against the influence of politics in administration and make it part of a thoughtful, comprehensive critique of American constitutionalism and part of a broader argument for political reform. In 1887, Wilson published his seminal essay, The Study of Administration, where the case for separating politics and administration and for freeing administration from the confines of constitutional law is made explicitly for the first time in the US. Like Wilson, Goodnow also believed that history had made obsolete the Founders' dedication to protecting individual natural rights and their consequent design of a carefully limited form of federal government. Hence, both of them argued that government needed to adjust its very purpose and organisation to accommodate modern necessities. Clearly, this is where the absurd axiom ‘living document’ comes from. For Wilson and his ilk, the Constitution is a living, organic entity that evolves to adapt to its ever-changing surroundings. The trouble with the theory is that government is not a machine, but a living thing. It falls, not under the theory of the universe, but under the theory of organic life. It is accountable to Darwin, not to Newton. It is modified by its environment, necessitated by its tasks, shaped to its functions by the sheer pressure of life. No living thing can have its organs offset against each other, as checks, and live." For Progressives, there was something special about civil servants that somehow raised them above the ordinary self-interestedness of human nature. Such confidence came from the faith that the progressive power of history, a core tenet for all collectivist doctrines, had generated an honest and credible cadre of public servants to the highest standards of objectivity and expertise. Simply put, the advocates of progressivism had to either destroy or ignore the US Constitution. Indeed, the administrative state is not simply unconstitutional, it is anti-constitutional. In its structure and operation, it represents a system of government that cannot be reconciled with constitutional government. In effect, the modern administrative state destroys the separation of powers by uniting all the powers of the State in its hands. As Article I of the Constitution declares: “All legislative Powers herein granted shall be vested in a Congress of the United States.” The people, in establishing the Constitution, delegated the power to make laws to Congress alone. The non-delegation doctrine, which holds that the legislature cannot delegate its legislative powers to any other hands, is a logical conclusion of the Founders’ understanding of government by consent of the governed. Since, the people delegated legislative authority specifically to Congress, it cannot turn around and pass that authority to any other set of hands. As the political philosopher John Locke wrote in 1690, the legislature holds authority “only to make laws, and not to make legislators.” Thus, the administrative state has no constitutional authority. At most, all administrative agencies would fall within the purview of the executive branch and be answerable to the President in his constitutional role of enforcing the nation’s laws. How, then, did this vast bureaucracy come to wield such sweeping powers to make the rules that govern us? Over the course of the past century, Congress abandoned its legislative function and delegated its legislative powers to the unelected bureaucracy. In spite of still passing resolutions that were officially called laws, these have generally taken the form of sweeping grants of authority empowering agencies to craft rules and fill in the details of unfinished legislation. Thanks to congressional delegation of legislative power and the judiciary’s acquiescence in the growth of the administrative state, agencies craft rules and regulations in what amounts to an alternative legislative process. While they enforce these rules as they see fit, the judiciary defers to the agency’s interpretation of its own rules in adjudication. For all intents and purposes, the administrative state has become the central institution of national authority, not just in the US but in the rest of the so-called liberal democracies, wrecking the very essence of the original definition of liberalism. Eventually, liberalism became to be defined in modern parlance as a variety of collectivism, with Merriam-Webster dictionary claiming the former to being a very relevant synonym of the latter. In lieu of an understanding of rights grounded in nature, where the individual possesses them prior to the formation of government, Progressives like Goodnow postulated that rights are granted by government itself. This is the crux of the issue. Unsurprisingly, the ideals and thinkers that influenced Progressives did inspire other collectivist camps to boot. The rot that contaminated the philosophical space spawning progressivism thereby had already occasioned socialism, in all its various strains. Furthermore, this domain never ceased to be tainted, with these different doctrines soiling one another on account of their overlap. At last, this relentless ideological decay brought about the loathsome concept of technocracy. To begin with, there appears to be some confusion to what technocracy actually is. In reality, much like the concepts of liberalism, capitalism or socialism, this moniker has had several definitions, though very similar. All in all, technocracy can be interpreted as the management of society by a class of experts, applying scientific principles to yield the most efficient results. Still, this concept mutates in accordance with each groups’ particular worldview. Although this term had already been used in 1895 for the first time, according to Merriam-Webster, William Henry Smyth, a California engineer, is usually credited with employing the word technocracy in 1919 to describe “the rule of the people made effective through the agency of their servants, the scientists and engineers.” This definition was devised in the article ‘Technocracy’ – Ways and Means to Gain Industrial Democracy, in May 1919, in the Journal of Industrial Management. All the same, he had already published two previous articles in the same venue, in the same year, referring the word technocracy. Owing to being a disciple of Frederick Winslow Taylor, who began developing his theory of scientific management in the 1880’s, culminating in 1911 with the publishing of The Principles of Scientific Management, Smyth was associated with the Scientific Management Efficiency Engineers and the Taylor Society that came out of the Great War. However, as the title of his paper referenced above indicates, he was a proponent of industrial democracy. In short, this term became popularised by the 1897 book Industrial Democracy, in which the authors, the highly influential British social reformers Sidney and Beatrice Webb, used it to refer to 1) “the combination of administrative efficiency and popular control” by trade unions, and 2) “the method of collective bargaining”. In time, its meaning assimilated the German expression Wirtschaftsdemokratie which, although was the German equivalent of the Webb’s definition, it predominantly alludes to co-determination. In turn, co-determination, according to its originators, is primarily the practice where workers of an industry or sector, and their unions, enter the negotiations and debates for the making of policies that affect them. Nowadays, this term brings up the micro level, dealing with the practice where workers of an enterprise have the right to vote for representatives on the board of directors in a company. This is important to point out because it becomes obvious that all this new-fangled and revolutionary movements that cropped up during, and even before, the Progressive era are all offspring of the same collectivist notions and theorists. Despite breeding the most brilliant thinkers ever, the Age of Enlightenment produced an equal, if not greater, number of utopians and crusaders whose teachings continue to torment us till this day. Having said this, philosophers such as utopian socialist Henri de Saint-Simon and the secular humanist and father of positivism Auguste Comte anticipated a predictive science of society that would allow for the perfection of government as a rational system of administration. In addition, even though the idea of snubbing politics and replacing it with technical-scientific rationality such that the “the government of persons is replaced by the administration of things” is often associated with St. Simon, the originator of the phrase, in fact, was the infamous Karl Marx’ partner in crime Friedrich Engels, who believed that the communist state would be an overseer of production rather than a referee of political conflicts. If the natural tendencies of mankind are so bad that it is not safe to permit people to be free, how is it that the tendencies of these organizers are always good? Do not the legislators and their appointed agents also belong to the human race? Or do they believe that they themselves are made of a finer clay than the rest of mankind? The organizers maintain that society, when left undirected, rushes headlong to its inevitable destruction because the instincts of the people are so perverse. The legislators claim to stop this suicidal course and to give it a saner direction. Apparently, then, the legislators and the organizers have received from Heaven an intelligence and virtue that place them beyond and above mankind; if so, let them show their titles to this superiority.” While there was much agreement among the various factions of the progressive movement, a point of heightened contention was whether the administration of society should be more technocratic or democratic, as evidenced by the famous debate between Walter Lippmann, the socialist and co-editor of the New Republic magazine, and the former postmillennial pietist John Dewey. Unmistakably, this putative debate was extremely constrained in terms of the philosophical range; purposefully so. On the one hand, Lippman did not trust in the abilities of the common men to handle their own affairs nor to decide what is best for the common interest of society. Consequently, he reasoned that, to get the best results, an expert class had to take over the helm and destroy individual self-government. After all, the legislators and their appointed agents “are made of a finer clay”. On the other hand, for being a humanist that supposedly believed in the potential of autonomous individuals to make rational decisions for the betterment of mankind, Dewey posited that the governance of society should be more democratic. Regardless of that, he absolutely agreed with Lippman that an expert class ought to direct policy on the basis of social scientific knowledge. Due to being all the rage, a myriad of groups were formed that adhered to the general concept of technocracy. One of such organisations was the still-active Industrial Workers of the World (IWW), whose members were nicknamed Wobblies because of their lifestyle of hopping freight trains to get to the “sites of struggle.” Considering their ideology, one might assert that the IWW belongs to technocracy’s – or is it socialist? – branch of industrial democracy; specifically, the Wobblies defended co-determination through the role of whole-industry trade unions. Evidently, they followed the same line as William Smyth, who viewed industrial democracy as a paradigm where engineers, scientists and technologists are incorporated in the decision-making process through existing firms. Yet, on account of being a radical socialist syndicate, the IWW put special emphasis on the workers’ interests. Moreover, the influential humanist John Dewey founded, with some other progressive luminaries, the New School for Social Research (NSSR), later renamed The New School. Insofar this institution’s prominent figures were reformist educators of the likes of Dewey, their aim was to introduce into the minds of the next generations of intellectuals and professors their revolutionary concepts and methodologies. Closer to the mark is the concern among these “democratic” theorists that a technological society, by virtue of its complexity, makes specialised knowledge a necessity in a way that justifies the exclusion of the average citizen. Undeniably, this school has been financed, at least in part, by the usual coterie of globalist entities, such as the Rockefeller Foundation, which goes on until today. Another cofounder of the NSSR was economist Thorstein Veblen, to many considered the father of technocracy. Seeing that Veblen had the misfortune of being raised in the progressive environment of that epoch, coincidentally being a graduate student at John Hopkins with fellow traveller Woodrow Wilson, he obviously developed the same kind of brainless beliefs and fallacious theories as the rest of the progressive savants. Drawing inspiration from the same old idealogues and applying it to his field, Veblen originated the school of institutional economics; and his assumptions heralded the inception of evolutionary economics, which is essentially a case of old wine in a new bottle. In his initial two hits, The Theory of the Leisure Class (1899) and The Theory of Business Enterprise (1904), Veblen expressed his perspective on the ills of contemporary society. Because of people’s desire to impress others and emulate the lifestyle of the wealthy, they, Veblen argued, engage in “conspicuous consumption” and “conspicuous leisure” so as to gain or signal status. As a result, “conspicuous waste” often ensues. Although, Veblen was strongly opposed to this inefficient use of resources, blaming it on the “business classes” and financiers, he valued their contribution to the progress made in the industrial age. Nevertheless, he felt, hitting at the alleged progressive power of history, they were no longer capable of managing the modern industrial society. Inasmuch as some institutions are to some extent more “ceremonial” than others, they would have to be more “instrumental” by making use of technology to reduce inefficiencies. At first, Veblen argued that the workers must be the architects of the necessary social change that would create economic and industrial reform. However, as luck would have it, after a momentous encounter, he gradually shifted his focus away from workers towards technocratic engineers and technologists as the drivers of change. In spite of Howard Scott, the charismatic leader of the most prominent technocratic group to be erected, affirming to having never come into contact with Veblen nor ever reading his work before they met in September 1918, due to being unmasked a few years later as a charlatan, we can hardly believe his word. In his 1977 book, Technocracy and the American Dream: The Technocrat Movement, 1900-1941, historian William E. Akin claims that Scott arrived in Greenwich Village, New York City, just before the close of World War I, where he spent much of his time rubbing shoulders with progressives, including Veblen and Charles P. Steinmetz. Apparently, “Scott absorbed many of Veblen’s fundamental themes. Veblen’s scientific positivism and technological determinism was basic to Scott’s subsequent thought.” Besides that, owing to Scott’s short stint as research director for the IWW in 1920, it is safe to assume that he was not a stranger to the teachings of scientific management or socialism, nor their spin-offs like industrial democracy. According to Scott, his cadre “never had any use for Taylor or any of the efficiency or scientific management crowd.” Ostensibly, this rift was barely due to some quibble. Whereas the Taylorists merely wanted to achieve the highest degree of efficiency in production, Scott and his followers and colleagues at the Technical Alliance sought to completely revolutionise how society was structured and functioned, as well as believing that “the only way to be really efficient is to eliminate [human toil] entirely”. We have always contended that Marxian communism, so far as this Continent is concerned, is so far to the right that it is bourgeois.” Casting an illustrious collective of progressive comrades, Howard Scott established the Technical Alliance study group in July 1918, in New York City. In its ranks, as part of the temporary organising committee, were distinguished figures such as Thorstein Veblen, Charles P. Steinmetz, who was head of the research section at the General Electric Company of America, and writer Stuart Chase, whose 1932 book The New Deal served as inspiration for Franklin Roosevelt’s political programme. The bulk of this committee was made up of engineers, educators and other technicians from the fields of physics, mathematics and biology. Through combining their professional background and clout too, the Technical Alliance began to gain prominence and popularity. By setting up a truly unique and consolidated movement, setting itself apart from the other progressive camps, but especially from socialism, Scott and his fellows ended up, rather incredibly, pushing the concept of technocracy to the forefront of collectivist ideas. In that eventful year of 1918, Veblen joined The Dial magazine as an editor, where he would stay till the following year. According to Scott, he met Veblen for the first time in September 1918, at the Faculty Club of Columbia University. At this meeting, among others, two co-founders of the NSSR, economist Alvin Johnson and historian James Harvey Robinson, were present. In the end, it was agreed “that a series of seminar dinners be held in which Veblen would undertake to bring the economists and sociologists, if [Scott] would make a similar undertaking to bring a number of scientists, technologists and engineers.” Patently, all of these collectivist organisations, at least the major ones, were all intertwined. Indeed, the membership overlap present in these groups, whether they regarded themselves as socialist, progressive, democratic, technocratic or even liberal, or a combination of them like democratic socialist or the oxymoron social liberal, is only made more explicit by the fact that they have the same patrons, either directly or indirectly. A case in point, per Scott, Veblen’s salary at the NSSR was made possible thanks to the donations from heiress Dorothy Whitney; the same Dorothy Whitney who funded the creation of the leading New Republic magazine, which had been helping to spread progressive propaganda. In any event, of all the articles produced by Veblen during his tenure in The Dial, the ones noteworthy to make reference to, considering the matters being discussed in this post, were those which wound up being compiled into the 1921 book titled The Engineers and the Price System. Here, Veblen surmised the gist of his reasoning, presenting the climaxing notions and beliefs of his career. As if it was written by Marx or Engels, Veblen contended in his outlandish magnum opus that there would eventually be an American “Soviet of technicians”, which would only be accepted after revolutionary action. Firstly, engineers would plan a general strike to “incapacitate the country’s productive industry sufficiently.” Then, the business owners, financiers and the managerial class would see the need for this “new order of production”, and a “self-selected, but inclusive, Soviet of technicians” could effectively “take over the economic affairs of the country… [and] take care of the material welfare of the underlying population.” In short, so far as regards the technical requirements of the case, the situation is ready for a self-selected, but inclusive, Soviet of technicians to take over the economic affairs of the country and to allow and disallow what they may agree on; provided always that they live within the requirements of that state of the industrial arts whose keepers they are, and provided that their pretensions continue to have the support of the industrial rank and file; which comes near saying that their Soviet must consistently and effectually take care of the material welfare of the underlying population.” Regurgitating the typical progressive cacophony, Veblen asserted that technicians, who are part of and master the industrial side of the economy, would realise that to optimise the productive structure and reduce waste to its minimum they would have to take over the ownership of the businesses from the absentee owners. Obviously, since there are vested interests and accepted notions and precepts on how to conduct business which adhere to the “price-system”, the transition might take a while, not likely to happen in the calculable future. On account of his disdain to “the business logic of the price-system”, one can discernibly see the overlap and perhaps influence that the technocrats, in turn, exerted on Veblen. After ironically succumbing to some financial pressure in 1921, Scott carried on, nonetheless, his endeavour so that one day his dream of a North American Technate, where the price-system would be replaced by an economic unit designed around energy measurements, would come to fruition. During this torpid period, while Scott was rooming with M. King Hubbert, later known as the father of “Peak Oil”, Scott and former Alliance member Walter Rautenstrauch, chairman of Columbia’s prestigious Department of Industrial Engineering (the first of its kind in the United States) instituted the Committee on Technocracy. Then, Rautenstrauch introduced Scott to Nicholas Murray Butler, who was the President of Columbia in 1932. In view of being totally smitten by their ground-breaking ideas, and considering that Butler shared the same goal of remaking the world, he invited the Committee to establish itself in Columbia so as to conduct research into the history of American industrial development, as seen through a complex series of energy measurements. Sadly, for them, when muckrakers and snoopy busybodies began to dig deeper into the roots of this movement and its members, particularly Scott’s, there appeared to be some trickery going on. Ultimately, seeing that he was possibly being played, his ego needed protection from these salient attacks. Thus, Butler kicked the Committee out from his campus after a year. All the same, Scott and his gang had already drawn up the papers to form Technocracy Incorporated, in the fall of 1932. Therefore, when they were expelled from Columbia, they picked themselves up and continued to advance their cause. That being so, technocracy for them was defined, for instance in the Technocrat Magazine Vol. 3 No. 4, as “[t]he science of social engineering, the scientific operation of the entire social mechanism to produce and distribute goods and services to the entire population of this continent.” Furthermore, they believed the “Price System” had to be abandoned since “price and abundance are incompatible; the greater the abundance the smaller the price.” Thereby, they reached the conclusion that “[i]n a real abundance there can be no price at all.” In their 1934 Technocracy Study Course, they declared that “Technocracy finds that the production and distribution of an abundance of physical wealth on a Continental scale for the use of all Continental citizens can only be accomplished by a Continental technological control, a governance of function, a Technate.” Hence, there would be a “central headquarter” in each continent, staffed with “technically trained personnel” to administrate the “entire social operation, and all records of production and distribution” for the Technate. All social, industrial and technological “functions” were said to be interdependent and, consequently, the entire functional system could be centrally planned and managed. Ergo, the Technate would supposedly operate through careful control of the various “Functional Sequences”, as depicted in the next chart. As you may guess, there is a lot to take in and digest to understand this movement completely. Even though it is important to know, a thorough analysis would have to be done. However, that is not the point of this piece. Still, Iain Davis’ Substack article gives a rather marvellous account. According to him, their desire to restructure society in accordance with individuals’ “peck-rights” would engender the perfect form of crony capitalism, which is just another, more modern form of feudalism. As defined by them, peck-rights are the spectrum of technical skills and ability to lead, whether they are innate or a product of their environment. In other words, an elite deemed capable and specialised in all scientific and technical fields would command all the various “Functional Sequences” that compose the Technate. In their apparent naiveté, the technocrats ignored the “elite theory” of Vilfredo Pareto, Gaetano Mosca, Roberto Michels and others, which demonstrated that political power is wielded by those who control resources. Like the technocrats, the elite theorists posited that aristocracies (a.k.a., oligarchies) were merely the result of some kind of meritocracy. At any rate, because the elite theorists acknowledged power could be corrupted and abused, the chief belief of progressivism in the civil servants’/administrators’/soviets’ lack of self-interestedness and commitment to the common good and efficiency maximisation was absolutely demolished. Unlike elite theory, the technocrats were seemingly unaware, or chose to ignore, the likelihood of this corruption remaining in their preposterous technocratic system. Similar to Veblen’s reasoning, Technocracy Inc. maintained that under the present “Price System” the business side of the economy, i.e., the captains of industry and their banking cronies, unfairly acquired the lion’s share of the wealth, while the actual workers, who produced the “Physical Wealth”, i.e., the goods and services, got the minute remainder. To resolve this injustice, the focus would shift to “converting available energy into use-forms and services.” This question brings us to a subject exceedingly difficult to discuss: for habits of thought and connotations differ fundamentally in the world of business, banking, and politics from those that obtain in the world of science, technology, and the field of materially productive work. Items of ownership, credit, debt, monetary units of value — dollars, shillings, etc. — or interest rates and relations, expressed as prices, constitute the realities in the former world; but they are unreal and fictitious items in the latter, where energy, resources, materials, rates of energy conversion, and use-forms constitute the real and basic things with which men deal.” Nevertheless, Howard Scott rejected Veblen’s “Soviet of Technicians” concept, simply on account of Scott not wanting his brainchild to be associated with any political movement. Seeing that they envisaged “an operating social mechanism of a technological socialization for the distribution of abundance”, Scott and his pals insisted that “social change on this Continent [(North America)] would take an entirely different pattern and would not be analogous to the development in any other part of the world.” Owing to being in vogue after the backing from Butler and the Columbia University, several copycats surfed this wave, forming their own technocratic organisations to rival Scott’s. Almost 30 groups, so the story goes, suddenly sprung up in the US. In addition, a myriad of publications, mostly magazines, started being published, though only one was edited by Technocracy Inc (displayed as the first image above). Denoting the mood at that time, Scott confessed that “18 or more of [Technocracy Inc.’] ex-members and associates” held a high position in FDR’s administration. Must we not forget that FDR’s presidency was the one that ushered in the full implementation of the modern administrative state, which was contemplated, as explained, by the progressive intellectuals of prior generations. Exemplifying one of the main points deduced from this examination, that the various branches of progressivism and socialism are just distinctions without a difference, several progressive and socialist highbrows visited the Soviet Union in the interwar period, having nothing but praises for that gruesome regime. Unsurprisingly, some of them influenced, worked for, or merely adulated the FDR administration and its final blow to classical liberalism. A case in point was Stuart Chase who, as I mentioned before, created the moniker “New Deal” from his book title. To finish that book, he had the brilliant idea to drop the line: “Why should Russians have all the fun remaking a world?” These were the sort of degenerates who were permeating government halls, academic circles, editorial offices, labour unions and even Christian churches, not to mention civil rights organisations like the American Civil Liberties Union, of Western nations, and steadily more so. Still, this should have been expected since they had the same financial backers as their soviet comrades. Today the path to total dictatorship in the United States can be laid by strictly legal means, unseen and unheard by the Congress, the President, or the people… Therefore, hardly was the case that McCarthyism was a notorious witch hunt made up of unsubstantiated charges of communist infiltration on the various areas of the US society, from the government to non-profit organizations and from academia to Hollywood. As matter of fact, zeroing in on the administrative state, the policy making bodies and agencies were swamped with nincompoops who held collectivist views, which may fairly be regarded as ‘un-American’. As a matter of fact, Senator Joseph McCarthy (R., WI.) was not the trailblazer. He was just following the trail of breadcrumbs left by the House Un-American Activities Committee and then the Reece Committee. Regrettably, McCarthy and his followers, such as Senator William E. Jenner (R., IN.), simply did not know precisely what they were up against and how politics and public opinion had gone downhill for the previous 100 years or so. Incessantly keeping its path downwards, this collectivist and totalitarian snowball will not stop till it reaches the technocratic hell. Thankfully, Technocracy Inc.’s necessity for keeping continuously and instantaneously updated registries of every good in the economy was, in the 1930’s, not just audacious, but borderline insane. Be that as it may, in contrast to those days, the economic order envisioned by the technocrats, in which energy is budgeted, priced and traded by unelected panels of scientists and technologists is not an absurd pipe dream any longer. Poignantly, Harold Loeb, the eldest son of Albert Loeb, whose father Solomon cofounded the major investment bank Kuhn, Loeb & Company, and of scion Rose Guggenheim from the renowned mining and philanthropic Guggenheim family, was unbelievably prescient. This technocratic crony, when he was not involved in some government enterprise or hanging out in the progressive haute monde, he busied himself expressing into writing how he visualised a technocratic future. Accordingly, he wrote the classic utopian novel Life in a Technocracy, where, among other things, drawing from Social Darwinism, he prophesied the emergence of the transhumanist movement. Technocracy envisages another form of domestication, a form in which man may become more than man… Technocracy is designed to develop the so-called higher faculties in every man and not to make each man resigned to the lot into which he may be born… Through breeding with specific individuals for specific purposes… A technocracy, then, should in time produce a race of men superior in quality to any now known on earth…” In conclusion, believe it or not, McCarthy was right (sort of)! See ya, folks, on the next episode.
As I have set to demonstrate in the previous instalment of this series, although in a succinct fashion, the course of global affairs, in all its industries, sectors, fields and domains, has been steered by an unholy alliance. Tracing its roots to the 19th century, its genesis was made up of powerful and influential loyalists to the British throne, major bankers and brokers, as well as industry magnates, of which the petroleum tycoons have exerted the greatest influence. In that regard, John D. Rockefeller and his descendants have mastered the art of moulding policies and practices to their advantage. Continuing with this exposition, the Great War and the experiments carried out in this period made a definite and lasting impression on this clique. Undoubtedly, it set off a paradigm shift that prolongs to this day. Little by little, the cabal has conquered and absorbed ever more resources, sway and privileges to the detriment of everyone else’s natural rights and liberties. Casting upon their success in the petrol business, the ‘oiligarchy’ had the brilliant idea of branching out to the field of medicine. In 1901, the Rockefeller Institute for Medical Research was established and had as its first director Simon Flexner, who was a pathology professor at the University of Pennsylvania. Coincidentally, his brother, Abraham, who was an educator, was hired by the Carnegie Foundation for the Advancement of Teaching to write a report on the state of the American medical education system. Accordingly, the seminal study that came to be known as the Flexner Report was released in 1910. Along with the various examinations on medical research funded by the Rockefeller and Carnegie foundations, a total turnaround of the practice of medicine was accomplished with great success in the end. Hence, the traditional forms of healthcare that resorted to un-patentable natural remedies and cures, namely Naturopathy or Homeopathy, were downgraded as quackery. To please the patrons, the grantees that produced these inquiries unsurprisingly concluded that only drug-based allopathic medicine, requiring expensive medical procedures and lengthy hospital stays, was to be taken seriously. Besides being a profitable endeavour on its own, the fact that the allopathic drugs were (and still are) a by-product of the petrochemical industry which, as the name indicates, was itself partially an offshoot of the petroleum business, this occasioned very lucrative synergies. Ever since then, new-fangled by-products and gainful synergies spawned from these and other industries too have been generated. Due to possessing an unbridled ambition to fulfil their objectives, once the oil, chemical, pharmaceutical and medical industries, and the banking system to boot, were under their command, the cabal aimed at controlling other strategic sectors. Therefore, the cabal’s next step was to have domain over the production of food. To begin with, they engendered the Green Revolution. Starting in 1943, when plant geneticist and Rockefeller Foundation researcher Norman Borlaug and his team arrived in Mexico, for whatever increase in yields it brought about, it also created markets for the petrochemical industry. In addition, it gave rise to the “ABCD” seed cartel of Archer-Daniels-Midland, Bunge, Cargill and Louis-Dreyfus. As a result, these companies, along with their associated interests in the food packaging and processing industry, formed the core of American "agribusiness", a concept developed at Harvard Business School in the 1950’s, with the help of research conducted by Wassily Leontief for the Rockefeller Foundation. Building upon this, the ‘oiligarchy’ initiated the Gene Revolution, with the main characters involved being almost identical to the players in the Green Revolution. Besides the familiar names associated with the ‘oiligarchy’, such as Dow AgroScience, DuPont Biotechnology, and, of course, Monsanto, two other players shared the spoils of the GMO bonanza. These were Bayer CropScience and BASF PlantScience, the offspring of the German industrial conglomerate IG Farben, which had long been a partner in crime of the Rockefellers and the other ‘oiligarchs’. Needless to say, these ventures have all been funded by the Rockefeller Foundation and fellow philanthropists at the Ford Foundation, the Bill & Melinda Gates Foundation and like-minded organisations. Indeed, the international banking cabal has jumped from success to success, taking control over more and more industries and markets. Nevertheless, these sociopaths are not done yet. What they eventually seek is the monopolisation of life itself – and I am not simply referring to the process of patenting the human gene pool. [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 to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private 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 which were themselves private corporations.” Although it sounds ludicrous and hard to believe, this global conspiracy has certainly been in the making, pushing levers behind the scenes and in the shadows. Obviously, this secretive and covert modus operandi has to be the case. If they want to carry out their plans for world domination, then the public must be kept uninformed and oblivious, in a state of complete deception. Be that as it may, to a certain extent, the population has itself to blame. Over the years, there have been many people that have revealed this information to the public. In 1966, the Georgetown University historian Carroll Quigley did just that. What makes his testimony even more fascinating and heightens his credibility is the fact that he actually espoused their goals. However, in view of sounding rather fanciful, not to mention a herculean task, to the unsuspected crowd, they simply dismiss this swindle outright. At any rate, as Quigley affirmed, the goal of the banking cartel was to restore the medieval economic system and social structure called feudalism, or at least some semblance of it. This entailed that the progress made since and triggered by the Enlightenment and its ideals were to be reversed. Several questions come to mind. Why would they do this? What is their rationale? How would they accomplish this? are the most pertinent and necessary to ask and to look for the answers. Notwithstanding, the readers by getting this far already have a pretty good inkling of what is going on. In fact, they are already in the know with regards to the first question. All the same, owing to being very nuanced and complex, a straight answer to each one cannot be given. In reality, there are many facets and variables at play. On top of that, they are all intertwined. Consequently, I have to constantly be going back and forth and jumping from one theme to another, but this is all in a day’s work. On that account, let me go back to the turn of the 20th century, when establishing tax-free foundations became fashionable. The reason these were created was for them to be agents of change via the guise of philanthropy. In any event, hardly is the case that all charitable organisations have a secret evil agenda, or even that those founded and funded by this globalist elite never engage in actual altruistic and humanitarian work. Indeed, it is the beneficence that is displayed most of the time that has managed to fool the public. Drawing inspiration from financier and the business partner of JP Morgan’s father, George Peabody, dubbed “the father of modern philanthropy”, Rockefeller’s General Education Board, and later on his Foundation, and the Carnegie Foundation for the Advancement of Teaching (mentioned on the previous post) were modelled after the Peabody Education Fund. Naturally, these charities were not meant to merely provide education to the poor or to improve its quality and scope for the masses. Unmistakably, they had ulterior motives. Fortunately, these motives were revealed in the early 1950’s by the Reece Committee, which was a Congressional investigation into the activities of these tax-free foundations. Beginning with congressman Edward E. Cox and then B. Carroll Reece taking the helm in April 1954, Norman Dodd, who had a vast experience in Wall Street, was picked to be director of research in 1953. In his final report, he concluded that these entities and their trustees intended to revolutionise, silently and imperceptibly, the way society thought and functioned. Obviously, to achieve this, the control of education and schooling was crucial. In spite of Peabody being the pioneer, Rockefeller and Carnegie were the real trailblazers, perfecting this method of using charity as a vehicle for social reform and advancing their own megalomaniacal interests. Albeit keen on administering the nation’s education system, they soon realised that this was not enough. As Norman Dodd discovered, once the trustees got together to discuss how to pursue their goals, they deduced that war was the most effective means. Exactly what Bernard Baruch figured out after the Great War. When the Armistice ensued in 1918, the cabal hurried to preclude the return to the pre-war status quo. Plainly, the commonalty had to be taught the previous individualistic and true capitalistic paradigm was obsolete. If you will, laissez faire became démodé. In truth, a new world order had just emerged. At the outset, though, this clique had to find, wait for or manufacture some major conflict – not some small one of the likes of the Spanish-American War – and the citizenry had to be persuaded and deceived into supporting a belligerent stance. In point of fact, the ball started rolling in the 1890’s, set in motion by JP Morgan and his associates. Thus, the crusade on educational reform and ideological transformation needed to be complemented with other fronts. In addition to gaining the helm of the State Department and its foreign policy, which was essential to involve the nation in the war, the elite had to infiltrate and subjugate the rest of the government and steer the conduction of scientific debate and research of strategic fields, specially economic thought. Visibly, this is where Milner’s Kindergarten and the groups formed to create the world envisioned by Cecil Rhodes enter the picture. To this whole apparatus that aims at establishing what was later labelled the New World Order (NWO), war is nothing more than a means to an end. As a matter of fact, the use of war, conflict and armed insurrection are one of its primary methods to work towards the goal of one world government under the control of the banking and corporate elite. Once you know this, even mainstream interpretations of history render this glaringly obvious. Every significant conflict ends in a negotiated peace conference and every negotiation establishes further centralisation of power within larger regional bodies or intergovernmental organisations, consistently eroding sovereignty and consolidating power. Evidently, war is a racket. Following the end of WWI, representatives of the NWO, who formed the core of the American and British delegations to the Paris Peace Conference, convened to expand the system of international think tanks that would enable them to rule from the shadows to this day. At Versailles, the British and US historical staffs took the occasion to create a permanent organisation to agitate for the desired constitution of the Anglo-American Empire. The new group, the Institute of International Affairs, was formed at a meeting at the Majestic Hotel in Paris on May 30, 1919. The British branch, which received royal ascent in 1920, became the Royal Institute of International Affairs (RIIA). On the other side of the pond, the American branch was formed as the Council on Foreign Relations (CFR) in 1921, having as its honorary chairman the lawyer Elihu Root, who had the honour of having both the Morgans and the Carnegies as clients – also, after his stint in government as Secretary of War and of State under the McKinley and the Teddy Roosevelt administrations, respectively, he headed the Carnegie Endowment for International Peace and was vice-president of the Pilgrims Society after the Great War. Although the CFR had in its ranks many financiers, industrialists and lawyers, who helped finance this new institution, from the onset it was reigned by the House of Morgan. Only later, from the 1930’s onwards did it become a Rockefeller affair. During a war, the conflict does not restrict itself to boots on the ground, armoured vehicles, navy ships and fighter jets. Amongst other features, there is an information war, not just towards the enemy, but towards the fellow countrymen. Taking seed money from his scion wife Dorothy Whitney, who belonged to the politically well-connected Whitney family and closely allied with the Morgans, Willard W. Straight, partner of J.P. Morgan & Co., founded the New Republic magazine. Initially, it went along the lines of Teddy Roosevelt’s New Nationalism due to its most influential editor, Herbert David Croly, being a veteran collectivist and Rooseveltian theoretician. His other two co-editors were Walter Edward Weyl, another scholar of the New Nationalism, and the young, ambitious former official of the Intercollegiate Socialist Society, the future pundit Walter Lippmann. However, as Woodrow Wilson was preparing to lead the US into WWI, this magazine became an enthusiastic supporter of it, and practically a spokesman for the Wilson war effort, the wartime collectivist economy, and the envisaged new society shaped by the war. The common interests very largely elude public opinion entirely, and can be managed only by a specialized class whose personal interests reach beyond the locality.” Despite the alteration in its editorial direction, this was merely a tiny change of course and absolutely unsurprising. Before there was a progressive movement, or before it acquired a high level of popularity in academia and society in general, its leading intellectuals were engaged to other collectivist camps. For instance, the most prominent progressivist of this era was Professor John Dewey of Columbia University, who was a postmillennial pietist before becoming a pragmatist and secular humanist, as well as a key figure in the globalist-led front for educational reform. In spite of the Christian creed dropping out of the picture, the intellectuals and activists continued to possess the same evangelical zeal for the salvation of the world that their parents and they themselves had once possessed. In short, the world would (and must still) be saved through progressivism and statism. Another striking example was the lad Lippmann. Once at the New Republic, this socialist helped lead the parade of progressive and socialist sages in favour of the US joining the Allies’ bellicose endeavour. Contemplating the centralised war economies that the warring nations in Europe were experiencing, the New Republic eagerly looked forward to the imminent collectivisation in America, surely expecting “immense gains in national efficiency and happiness.” Curiously, while they were aware the central planning in Europe was being done through tyrannical means, in the other side of the Atlantic Ocean those means would achieve democratic ends, somehow. Hardly had President Wilson announced the US entry into WWI when Lippman started his attempt at weaselling out of the conscription he advocated for. Through his political connections and intense pleading, he got his draft exemption and went to Washington instead. Initially, he was there to help run the war as assistant to the Secretary of War Newton D. Baker. Yet, a few months later, he was sent to help direct “Colonel” Edward Mandell House's secret conclave of historians and social scientists, known as The Inquiry, setting out to plan the blueprint of the future peace treaty and the post-war order. Because of its nature, The Inquiry was swamped either with members of various groups linked with the Rhodes Crowd and the Houses of Morgan and Rockefeller, or with future pupils of Milner’s Kindergarten and associates of the ‘oiligarchy’-Wall Street-established think tanks. In view of needing to push a set of policies which must be accepted by their citizenry, filling these organisations with like-minded collectivist intellectuals was of paramount importance. In 1922, surmising from his experience and precisely exemplifying the intelligentsia’s belief, Lippmann concluded that for democracy to function efficiently, public opinion had to be manipulated into accepting the narratives and agendas of an elite, through “a specialized class whose personal interests reach beyond the locality.” Who controls the past controls the future. Who controls the present controls the past.” Sadly, the cabal never ceased to engage in an information war against the populace to enslave Mankind under a world government. Ergo, they never stopped originating new think tanks and foundations to accomplish this mission, expanding incessantly the Deep State Milieux, of which the RIIA is their muse, acting as the model for the milieux that followed. Exactly, the secretive manner the discussions and talks proceed abide by the Chatham House Rule, named after the RIIA’s address. Speaking of which, the RIIA, epitomising the method of working of these NWO organisations, set up a committee to supervise writing a multi-volume history of the Paris Peace Conference. Indubitably, this committee was financed by a gift from Thomas W. Lamont, a Morgan partner. In a complete Orwellian fashion, they figured out if they sought to control the world in the future, they must control the masses’ understanding of History, both contemporary and past events. Throughout the ages, the elites have come up with different theses for justifying their privileged and supercilious posture. In ancient times, the rulers were deemed to be blessed with the unique ability to hear, read and interpret the divine commands or were themselves descendants of the gods. Fast-forwarding to the Middle Ages and the medieval period, the level of absurdity dimed down. At this time, it was asserted that the kings had the God-given right to rule over their subjects. Now, with the advent of liberalism and the secular State, in the modern era, religion was substituted by science, allegedly. Instead of religious dogmas and beliefs, society would function according to professed scientific grounds. As I have demonstrated, this resulted in the ideological revolution for the socialisation of the economy. Furthermore, a scientific explanation for the meteoric rise of the highly successful industrialists and financiers, reaching and even surpassing the level of prominence of the old royal dynasties in Europe, was promptly required. Spawning from biological evolution theory, Darwinism in particular, eugenics served the clique’s wishes like a charm. After reading his half-cousin work, Francis Galton began to apply Darwin’s theory to humans. As a matter of fact, eugenics was coined by Galton, basically meaning “well-born”. These cousins drew inspiration from a bunch of ideas that were circulating around the 1850’s. When studying hereditary characteristics in pea plants, Gregor Mendel was able to determine that certain characteristics were being passed on and that these could be determined and predicted. Meanwhile, Herbert Spencer was talking about the “survival of the fittest” with the same thread running through there. Therefore, Galton is essentially taking all of these ideas, plus observing and identifying patterns. Essentially, he came up with this concept that through studying human characteristics one could, if he chose to, breed superior human beings. Evidently, eugenics is a movement among the elite to eradicate what they regard as the inferior classes, i.e., the lower social, racial and ethnic classes. On the whole, anyone who fails to reach their standards must be kept in check or eradicated. What they aim to do is genetically engineer themselves to a superior level, leaving the remaining population that they permit to exist beneath them powerless, without the potential nor the skills to overthrow them. Patently, the peasants must always be subservient to their lords. Fuelled by the endorsement of America's rich and powerful, the field of eugenics transformed from the peculiar novelty for a few bookworms into the social cause of an entire generation. By the 1920’s, everyone who was anyone was extolling the need to eradicate the defective “germ-plasm” of the lower stock from the human population. Accordingly, a variety of projects and policies were pursued and enacted to effect this wicked cause. What started in the British countryside with Galton, made across the Atlantic with a roar only due to the efforts by the Harvard-trained zoologist Charles Davenport. After asking the Carnegie Institute for funding, at the Cold Spring Harbor Laboratory they set up an institute to study eugenics. Eventually, with some Harriman and Rockefeller money in the mix, this evolved into the Eugenics Records Office. Established in 1910, its mission was to register the genetic background of every single man, woman and child in America (and, in due time, the world), so that every person could be categorised by their family line and assigned a genetic rating. Once completed, those with the lowest eugenic value could be eliminated from the gene pool. Owing to their support of forced sterilisation and other policies of that sort, as well as the cabal’s financing and backing of the despotic and totalitarian movements emerging in Europe, eugenicists’ days were numbered. Seeing that by the mid-1930’s eugenics was synonymous with the most terribly inhumane practices of that day, viewed as being part only in an evil regime like the one in Germany at the time, its advocates had to disguise themselves. As American Eugenics Society co-founder Frederick Osborne wrote: “Eugenic goals are most likely to be attained under a name other than eugenics.” Thus, he moved the American Eugenics Society into the offices of John D. Rockefeller III's Population Council, becoming its president in 1957. Following the steps of his father and grandfather before him, JDR3 had learned to use philanthropy and largesse as a mask for his true intention: control. Luckily for us, that mask fell when he penned a draft of the Council's charter revealing the organisation's true purpose. According to him, the Council would “promote research and apply existing knowledge to help develop such changes in the attitudes, habits and environmental pressures affecting the life of human beings, so that within every social and economic grouping, parents who are above the average in intelligence, quality of personality and affection will tend to have larger than average families.” Clearly, one immediately reckons that the population control narrative can easily be mistaken for the environmental movement. Indeed, because the idea of having a bunch of intellectual snobs and their pretentious financiers classifying our worthiness as human beings is deemed horribly appalling by any sane person, they had to repackage it and sell it to the public under a different brand; one that gathered massive support by the general population. At the moment, it is probable that the indirect effect of civilisation is dysgenic instead of eugenic; and in any case it seems likely that the dead weight of genetic stupidity, physical weakness, mental instability, and disease-proneness, which already exist in the human species, will prove too great a burden for real progress to be achieved. Thus even though it is quite true that any radical eugenic policy will be for many years politically and psychologically impossible, it will be important for UNESCO to see that the eugenic problem is examined with the greatest care, and that the public mind is informed of the issues at stake so that much that now is unthinkable may at least become thinkable.” Joining the Rockefellers in shaping the international environmental movement were their fellow ‘oiligarchs’ across the Old World. In turn, facilitating the transition from eugenics to population control to environmentalism was committed eugenicist Julian Huxley – President of the British Eugenics Society from 1959 to 1962 –, brother of Brave New World – how apropos – author Aldous Huxley and grandson of ‘Darwin's bulldog’ TH Huxley. In 1946, as the founding director of the United Nations Educational, Scientific and Cultural Organization (UNESCO), Huxley wrote in the agency's founding document about the need to find ways to make the tenets of eugenics politically viable once more. Manifestly, the United Nations, which Rockefeller-donated address is not even under the jurisdiction of any form of government, is the entity that will one day be the world government. That being the case, UNESCO is its division of indoctrination, working to manipulate the countries’ educational systems and integrate media outlets to adhere to the cabal’s globalist message and quest. Having said this, eugenics mutated into the new, more sanctimonious and sweeping rendition. Now, the clique could kill two birds with one stone. In fact, killing has been a major part of their plan. The ‘feeble-minded’ would still be culled, while the NWO elite would gain more control, power and consolidation. As we can see, this is what happened and was made possible by the masses’ acquiescence. In 1972, the privately funded think tank Club of Rome (CoR) published The Limits to Growth. As we saw with the SARS-CoV-2/COVID-19 hoax, the CoR used computer models to predict what it decreed were the complex problems faced by the entire planet: the “world problematique”. The opinions offered by the CoR derived from the commissioned work of the Massachusetts Institute of Technology’s system dynamic World3 model. This model assumed that the growing global population would deplete natural resources and pollute the environment to the point where “overshoot and collapse” would inevitably occur.
Far from a scientific fact, this was simply a suggested scenario. So far, none of the predictions made by the World3 model have come to pass. The scientific debate on the claims and statistical trickery made in The Limits to Growth has been prolific. However, ignoring all doubts, the World3 model was the pivotal aspect of the paradigm of the sustainable development and environmental policies. As always, the Rockefeller family and the remaining ‘oiligarchs’ and ‘banksters’ were there to provide the funding and organisational patronage to steer this burgeoning movement toward their own goals. Perplexingly, the colossal level of hypocrisy hardly makes anyone pause. After spending almost a century extracting the resources from the ground and manufacturing the goods that made them incredibly wealthy, and polluting the planet in its process, now these magnates dare to blame Humanity as a whole for the purported crimes of resource depletion, pollution and ecological catastrophe. Inevitably, the CoR summed up their rationale the best: “The real enemy, then, is humanity itself” (page 115). Unquestionably, the anthropogenic climate change theory – before that it was labelled Global Warming and before that the narrative was Global Cooling – is merely the thesis of this Hegelian dialectic. In summary, the Hegelian dialectic consists of a synthetic solution (synthesis) being presented to two contradictory propositions (thesis and antithesis). The synthesis is advanced only when the people being manipulated take the proposition that introduces the pre-determined agenda. Ergo, for the antithesis of the climate change swindle is to essentially go back to the precarious living of the medieval period at best, the populace will gravitate to the more passable prearranged solution which is to implement ridiculous ‘green’ schemes such as the Green New Deal and the Energy Transition. Inevitably, these initiatives are mere Trojan horses to surreptitiously slip what the banking cabal really clamours for: all individuals and countries to submit their sovereignty to the unelected, totalitarian UN. To conclude, this topic leads us to the issue of neo-feudalism warned by Carroll Quigley above. Consequently, their endgame is to finally implement the century-old vision of Technocracy. On account of this theme’s intricacy, there is a lot to discuss and, hence, we will have to continue another day, on the next episode. After presenting the evolution of the monetary order and its various systems throughout the ages, one can clearly understand that there has always been a tug of war between the defenders of full-reserve banking and laissez faire capitalism, and the central planning and socialism advocates. Whatever their label and approach, the socialistic evils have, sad to say, been winning major battles, conquering over every realm of society. Nevertheless, gold never ceased to play its roles of inflation hedge and safe haven. As I have demonstrated, the “barbarous relic” has accompanied the colossal credit creation triggered by the inception of the eurodollar system and then totally unleashed with the end of the Bretton Woods (BW) arrangement. To conclude this series, I am thereby going to expose the entities manoeuvring to get us disconnected from a sound monetary regime and what they are aiming at. Since the title of this instalment gives away the chief culprit, I might as well just say it: the international banking cabal. Our story begins in the 19th century, although it really started far much earlier. In fact, these evils have accompanied societies since humans developed and organised themselves in the form of civilisations. Be that as it may, the point of this article is not to thoroughly examine or to give a complete description of the mechanisms of control that our rulers have exerted on us. Still, suffices to say that the powers that be, whoever they have been, have always tried to enslave the public and administer our lives, in order to fulfil their objectives, such as acquire more land and natural resources, and consolidate their wealth and dominance. All the same, the current rendition of this tale began to take shape in the late 1800’s. Subsequent to his passage in a cotton farm in the Natal region of South Africa, in 1870, Cecil Rhodes decided to follow his brother Herbert in pursuing a life in the mining centre of South Africa, Kimberley, a year later. On account of his peculiar personality and rather weak demeanour, there was not much to expect from him. Unbelievably, though, this would set the beginning of the construction of the world we live in today. Whilst spending eight years, from 1873 to 1881, between Kimberley and Oxford getting a college degree, Rhodes’ imperial aspirations began to take shape. In 1877, he wrote Confession of Faith in which he laid out his vision. In this manifesto, he contends that the best thing that could have happened to anyone was to be under the rule of the British Empire and its intelligentsia, seeing that the Anglo-Saxon race and culture were superior to all others. Ultimately, the result of such endeavour would be peace on Earth. Obviously, being a man of his time, Rhodes was a white supremacist and nationalist extremist. In spite of being rightly considered repugnant today, it should be noted that his views were shared by the majority. Consequently, he saw imperialism as a moral virtue. Therefore, any action that promoted Anglo-American imperialist expansion, no matter what harm it inflicted upon the people, was seen by Rhodes and his fellow society members as righteous. I contend that we are the finest race in the world and that the more of the world we inhabit the better it is for the human race. Basing upon the British model of empire, the bulk of Rhodes’ fortune was set aside to create a single, one world government. Having quitted the cotton farming business to join the booming mining industry turned out to be a masterful move, netting him one of the biggest fortunes, of not only his era, but ever seen. Evidently, this allowed him to bequeath his immense wealth to create a number of projects, including both public foundations and a secret society. On the whole, this Anglo-Saxon empire would be ruled from its centre by an Anglo-American elite who would exercise their control by covertly collaborating with, and manipulating, the world’s political, economic, scientific and cultural leaders. To set about his mission to rule the world, he convened his elite group made up of royalty, colonialists, soldiers, bureaucrats, industrialists, spies, bankers, historians, scientists, artists, authors, politicians and others. In 1891, Rhodes, William T. Stead (influential editor and journalist), Lord Nathan Rothschild (banker, politician & Rhodes’ trustee) and Reginald Baliol Brett (Lord Esher, a close friend and advisor to Queen Victoria and later King Edward VII and King George V) met to set their plan for global dominance in motion. Drawing inspiration from the Jesuits, this apparatus was to be organised on the basis of ‘rings within rings’. Following the development of the principal group, the Society of the Elect, other working groups were gradually spawned, forming many rings. Plainly, the outer rings were not to know of the existence of the inner ones. The constituent groups came to be known by many names: Milner’s Kindergarten, The Round Table Group, the Rhodes Crowd, the Times Crowd, The Chatham House Crowd, All Souls Group and the Cliveden set have all been names given to various organisations within this secret society over the years. Immediately, they started their recruitment drive. By inviting the colonial administrator and powerful policy advisor, Lord Alfred Milner, the Society of the Elect was born. Due to being the inner ring, this was to be the most important and, hence, the most secretive component of what is now mostly known as the Round Table Movement. The next group they formed, which would remain closest to the seat of power, was the Association of Helpers. In 1902, two months after Rhodes death, the Rhodes Crowd formed the transatlantic Pilgrims Society. Once again, Rhodes aim had always been to unite the English-speaking world. Accordingly, this group was established to create the special relationship between the US and the UK, eventually bonding them together as one. Discernibly, these efforts were mainly pursued by loyal subjects to the British throne. Notwithstanding, on the other side of the pond, the economic powerhouse that is the US was generating a batch of its own flair of insanely rich and powerful sociopaths. Because of the discovery of vast deposits of petroleum in the fields of Pennsylvania and Ohio, coupled with several innovative by-products and applications that were appearing in the second half of the 19th century, such as plastics, kerosene or the diesel engine, petrol became the fundamental resource, enabling our modern way of life. Without oil, most of the basic goods and services we take for granted, like toothbrushes and air travel, would either be more expensive or of inferior quality, or even impossible for the many, rendering them luxuries only attainable by the few. Needless to say, the burgeoning oil industry, with all its potential, led to a cut-throat competition to conquer to largest market share possible. In the end, the son of smooth-talking conman, and ostensibly carrying on with his legacy, John D. Rockefeller emerged as the kingpin of, as James Corbett dubbed, the ‘oiligarchy’. At any rate, John Rockefeller did not become the richest man on the planet simply by playing fair and being a good sport, or merely through his insightful and superlative entrepreneurship. There were always dealings with railroad companies and refineries to consolidate the oil market, plus the occasional political favouring. In any event, this prescient visionary was able to build an empire that rivalled the dynastic families in Europe. Even though the British and the Dutch royals, in partnership with the Rothschild family, of course, who were also engaged with the Nobel brothers in the Caspian Sea, ventured in the oil industry by the end of the century, forming the predecessors of British Petroleum and Royal Dutch Shell, respectively, they feared being priced out of the market. For likely enticing the wrath of Rockefeller, whose Standard Oil already had a 90% share of both the global oil refining and its marketing, as well as a third of all the oil wells, they had to operate secretively. However, by the end of the first decade of the new century, these oil barons buried the hatchet and joined hands to achieve their mutual interests. As J.D. Rockefeller once proclaimed, “competition is a sin.” Thus, the ‘oiligarchy’ was born. Moreover, industrialists from other areas, primarily railroads and banking tycoons, had emulated the mentality and strategy of Rockefeller, amassing great fortunes as a result. In lieu of believing in competition, which is one of the chief characteristics of capitalism, these fellows insisted on cooperation. The objective was to monopolise or cartelise the markets. Understandably, the public started to become increasingly annoyed by the astronomical rise of these fat cats and captains of industry. By irritating the envious side of human nature, the average Joe and Jane took the view that they had come to wealth rather illegitimately. Ergo, these magnates were labelled ‘robber barons’. Albeit treacherous and deceitful at times, the truth is that the period after the American Civil War (1861-1865) and the Franco-Prussian War (1870-1871) lasting until the break of the Great War (1914-1918), which is known as Gilded Age in America and as Belle Époque in Europe, saw the greatest technological progress and economic development ever seen. Consequently, the (relative) gains in the living standards that occurred in this era were and have to this day been unmatched. Regardless, socialism and the collectivist principles were already running rampant through society, shaping public opinion. For that reason, a distaste for capitalism was emerging. As the 1904 cartoon above illustrates, Rockefeller’s Standard Oil was seen as a mythical, Leviathan-like creature that was engulfing every aspect of society, from its competitors to Congress and the White House and from Wall Street to foreign markets. Ironically, this turned out to be a self-fulfilling prophecy. Although Rockefeller and the other ‘captains’ overall stayed out of politics, particularly at the federal level, this was about to change. Firstly, in 1902, he established the General Education Board to help implement Frederick Taylor Gates' vision for the country school of tomorrow, with a staggering $180 million endowment. Befriending him in 1889, this Baptist minister, who would go on to be Rockefeller’s most trusted philanthropic adviser, wrote a short tract, The Country School of Tomorrow, that laid out the Rockefeller plan for education. In this manifesto, he wanted to veer the people away from science and the arts. In line with this plan, JDR intended not to have a nation of thinkers, but a nation of workers. Curiously, the attentive reader will note that 1902 was the same year that the transatlantic Pilgrim Society was established. Despite being nothing more than a coincidence, it denotes the mood of that time. Whereas in the 1800’s railroad conspiracies and predatory pricing had been enough to assure the ‘oiligarchs' supremacy, by the time that the British crown, the Dutch royal family, the Rothschilds and the other European ‘oiligarchs’ began opening up the Middle East and the Far East to oil exploration in the early 20th century, the goal was no longer to maximize profits or control the oil industry. As a matter of fact, it was to control and shape the world itself, all of its resources, its environment and its people to boot. Gradually, the ‘oiligarchy’ and Milner’s Kindergarten, which had those industry moguls and financiers in its ranks, began to blend. What followed was a series of developments that cemented Cecil Rhodes vision. In a nutshell, in 1905, Andrew Carnegie, steel magnate and close to Rockefeller since his beginnings in the railroad business, established the Carnegie Foundation for the Advancement of Teaching, a tax-free foundation. Learning from his crony, in 1910, JDR decided to create his own tax-free entity, the Rockefeller Foundation, where he would organise his philanthropic projects. Meantime, Lord Milner and his kinder were busy expanding Round Table groups through the rest of the British Empire possessions. Since industrialists and businessmen in general inevitably depended on the banks for financing, the financiers were, and always have been, the pivotal characters in this story. Because of their privilege to originate credit, with a mere fraction of gold or silver backing it – in that period –, the banksters have been the bosses. Obviously, while the financiers would rack up interests on the industries that they funded and in the deals that they brokered, so too would the industry magnates acquire positions in the financial sector. For instance, the Rockefellers' story perfectly mirrored that of their fellow ‘oiligarchs’, the Rothschilds. Whereas the Rothschilds had supplemented their banking fortune with their oil interests, the Rockefellers supplemented their oil fortune with banking interests. [Nathan Mayer] Rothschild is the lord and master of the money markets of the world and virtually lord and master of everything else.” Furthermore, a huge banking crisis wreaking havoc was the excuse that the banksters needed to attain their almost century-old goal of erecting a central bank in the US. After going through three failed experiments – the Bank of North America, the First Bank of the United States and the Second Bank of the United States – during the initial decades of this new Federation, the international banking clique was very aware that the American crowd was not easily duped on matters of money and finance. Insofar as the citizenry kept their resolve and love for liberty, and the independent and individualistic spirit so characteristic of American Exceptionalism, this cabal would see their attempts foiled. By the dawn of the 20th century, the bulk of the money in the American economy had been centralised in the hands of a few magnates, each with a near-monopoly on a certain industry. There are the Astors in real estate; the Carnegies and the Schwabs in steel; the Harrimans, Stanfords and Vanderbilts in railroads; the Mellons and the Rockefellers in oil. As all of these families start to consolidate their fortunes, they gravitate naturally to the banking sector. In this capacity, they form a network of financial interests and institutions that centred largely around one man. Having rescued the US Treasury in 1895, by propping up the national gold reserves, the banking scion John Pierpont Morgan, was progressively viewed as America's informal central banker, in the absence of an actual central bank. Notwithstanding, this was too big a task for just one man. Therefore, the foremost financier at that time provoked the Panic of 1907, causing severe turmoil and financial ruin. In that year, Morgan begins spreading rumours about the precarious finances of the Knickerbocker Trust Company. On account of this institution being an intimidating competitor of J.P. Morgan and Company, it had to be squashed. The resulting crisis shook the US financial system to its core. Using his overbearing influence, Morgan boldly offers to help underwrite some of the faltering banks and brokerages, after locking 120 of the country's biggest bankers in his library and forcing them to reach a deal on a $25 mn loan to keep the banking system afloat. However, this perfidiously cunning move was not about Knickerbocker or any other particular rival. Actually, this was just a step aiming at the construction of a banking cartel. What that banking panic precipitated was a shift in the public’s perception, besides the consolidation of the financial sector. As the 1910 cartoon above represents, J.P. Morgan and Company was regarded as the central bank. By reading the description, “why should Uncle Sam establish one, when Uncle Pierpont is already on the job?”, one clearly realises the crowd was aware of the machinations going on and that this topic was on top of the agenda. In that eventful year of 1910, representatives from the main financial houses with interests in the US, which also happened to be the greatest financiers in the globe, got together in Jekyll Island, Georgia, to formulate their plan for the creation of a central bank in their own terms. Interestingly, the man who called the rendezvous Senator Nelson Aldrich, the father-in-law and business partner of billionaire heir to the Rockefeller dynasty, John D. Rockefeller, Jr. In view of being a central figure on the influential Senate Finance Committee, where he oversaw the nation's monetary policy, Aldrich was referred to in the press as the ‘General Manager of the Nation’. Unsurprisingly, the points discussed in this encounter were not to be disclosed. The next year, Aldrich presented his proposal for the erection of a central bank to Congress. Initially, the National Reserve Association, which was the name picked in the original “Aldrich Plan”, failed to round up enough support. As Alfred Owen Crozier’s portrayal demonstrated, the giant octopus that the press was employing to depict John Rockefeller and his Standard Oil was in fact becoming reality, albeit with the ‘money trust’ playing the role of that beast. All the same, the public hatred toward these financial institutions was unprecedented. Hence, there was an overwhelming consensus in the country for establishing a central bank. Yet, there were many different interests in pushing this and everyone had their own purpose behind advocating for a central bank. Although the public, suspicious of Senator Aldrich's banking connections, ultimately reject the Jekyll Island cabal's “Aldrich Plan”, the cabal does not give up. By revising and renaming their plan, giving it a new public face, that of Representative Carter Glass and Senator Robert Owen, the newly retitled Federal Reserve Act passes through Congress and into the White House. With their man in the Oval Office after the 1912 election, Woodrow Wilson signs it into law on December 23, 1913, and the Fed begins operations the subsequent year. Just eight months after the creation of the Federal Reserve, World War One ensues in Europe. Inasmuch as the US got itself involved in the war somehow, this was to be the first full test of Wall Street’s newly acquired powers. After the felicitous attack on the Lusitania, this clique got its wish. The [War Industries Board] experience had a great influence upon the thinking of business and government. [The] WIB had demonstrated the effectiveness of industrial cooperation and the advantage of government planning and direction. We helped inter the extreme dogmas of laissez faire, which had for so long molded American economic and political thought. Our experience taught that government direction of the economy need not be inefficient or undemocratic, and suggested that in time of danger it was imperative. This lesson was applied fifteen years later when the New Deal drew upon the experience of the WIB to mobilize the economic resources of the nation to meet the emergency of the great depression.” Naturally, the Great War was a boon for this powerful elite. Not just financially, but ideologically. As Bernard Baruch confessed in his memoir, the war efforts carried out by the government, of which he was instrumental in leading through the War Industries Board, had proved, in his opinion, the superiority of “industrial cooperation and the advantage of government planning and direction.”
Indeed, the end of laissez faire was approaching rather fast; perhaps it had already materialised. Lamentably, the socialist and collectivist ideals were taking over the world. Unquestionably, the philanthropists, intellectuals and social reformers dwelling in the foundations and think tanks established by Milner’s Kindergarten, the ‘oiligarchs’ and the major financiers played a decisive part in this paradigm shift and in the unfolding process that followed throughout the next decades, till this day. Accordingly, several of those important developments happened in response to the Great Depression. In addition to all the government interventionism and central planning inspired by Positive Economics, and the creation of a myriad of federal agencies and legislation that continues to this day, most notably, the global economy abandoned the gold, or any other metallic, standard. To be continued… Continuing the perusal set off on the first episode of this second instalment of this three-part series, I am going to focus on the factors determining the price of gold in this post-BW eurodollar paradigm. After showing how the gold market is structured, in terms of the various venues, the different asset classes and the paper vs physical markets dichotomy, I am now going to demonstrate how exactly the Eurodollar beasts affect the gold price. As I mentioned at the end of Part I, the heart of the matter is the London Gold Lending Market, where bullion and central banks gather to carry out gold lending and gold swap activities. Due to these operations being very opaque and secretive, who is actually participating and how much true gold, in lieu of the paper “synthetic” kind, is being submitted in these trades are big unknowns. Be that as it may, that does not stop or prevent us from figuring out and inspecting the determinants governing the performance of gold throughout time. Having said this, there are three facets that, so as to become discernible, depend on the time interval. On that account, I take the view the analysis ought to be divided into the long, the medium and the short terms, with each stretch possessing a unique factor. Starting with the longest term, in the long run, inflation – the real one, without the quotation marks – has been the most obvious influence. Despite the common belief nowadays that the price of gold has failed to keep up with the rate of price surges because of the compelling credibility of central banks, with some even disregarding inflation altogether, the truth is that gold has played its role of inflation hedge pretty well since President Nixon put the final nail in the coffin of Bretton Woods. Using the Fed’s Financial Accounts (Z.1) data as a proxy for the whole world, we can easily discern that gold has done its job. Albeit far from being a perfect method, it is better to just stick to the US. In fact, the global aggregate data of credit to the non-financial sector has only been collected by the Bank for International Settlements (BIS) since the fourth quarter of 2001; not to mention the debt securities figures which ignore the Emerging Market countries completely. Besides, the American economy may be viewed as a representative sample of the global economy, owing to being a mean, between the blossoming, jovial developing countries, and the stagnant, decrepit European and Japanese markets. Thus, from the moment the convertibility to gold was terminated, total credit of US origin (chart above) has had a compounded annual growth rate (CAGR) of about 8.25% (from Q3 1971 to Q3 2022). Comparing to gold’s performance, beginning in August 1971 and up to December 16, 2022, its CAGR amounts to 7.6% (next graph on the left). Hence, judging solely from these statistics, one can claim that gold is a tiny bit undervalued. Examining the following graphs further, clearly the price of gold does not track the expansion of debt, which has been smooth and relentless, though with an important inflection caused by the GFC. Ostensibly, it has its own boom and bust cycles. During the Great Inflation, gold’s CAGR was 40.2%. In turn, total credit (in the US) ballooned on average 11.79% annually. Then, at the time debt was increasing at an annual average of 9.20%, which became known as the Great Moderation – from Q1 1982 to Q4 2007 –, gold grew at a rate of just 2.9%. Moreover, at the aftermath of the GFC, starting in the winter of 2009 and ending in the summer of 2011, the yearly pace of credit expansion was merely 0.69%, while the corresponding figure for gold was a gigantic 31.4%. At last, keeping the Q1 2009 as the base, until Q3 2020, when gold reached its all-time high, its CAGR came to 7%, and until the recent local maximum reached in March of this year, this statistic added up to 5.9%. In comparison, respectively to those same intervals, debt accrued 3.54% and 3.94%. In the end, it is unquestionable that inflation does not explain by itself alone the ebbs and flows of the price of gold. Nevertheless, in the long run, the gold price ultimately catches up to the profligate behaviour of the economic agents. Therefore, this raises the question of what then has a more impactful sway on gold in a more direct fashion. By and large, the answer is the investors’ expectations for the average yield of the risk-free assets, adjusted for inflation of course, in the near, foreseeable future. Applying this to the actual world, the main determinant in the medium term is the real yield of the 10-year US Treasury note, which trades with the label TIPS (Treasury Inflation-Protected Securities). Unsurprisingly, this is no accident. Insofar as Treasuries are the most liquid assets in the world, they possess the most “pristine” characteristics in collateral terms, rendering them the safest financial instruments and, consequently, the risk-free asset class. Even though the 5-year tenor could be used too, the 10-year maturity is the benchmark and, therefore, it carries the most liquidity of all the Treasury notes and bonds. As a result, the longer note presents the most precise depiction of current events and accurate representation of the market expectations. As the previous chart suggests, as speculation for weaker growth intensifies, gold becomes more attractive. In detail, the real interest rate is the average rate of return, adjusting for inflation, that investors are expecting to see in their investments in the predictable future. Typified by the yield of the 10-year TIPS exhibited above in blue, the lower the yield goes (notice that the left scale is inverted), the higher gold appreciates. Evidently, as I thoroughly demonstrated in a previous post, the investor viewpoint is not sufficient to justify the rates of interest. In reality, the Eurodollar beasts put the liquidity risk at the helm, commanding the direction of the yields of bonds and other securities, as well as the interest rates of loans. In addition, for having not even two decades worth of data, seeing that the TIPS have only been around since 2003, we have to resort to other kinds of figures. Accordingly, we can turn to the measured “inflation” rates, instead of the expected ones employed by the TIPS. Unfortunately, this is not the correct way of calculating the real interest rates. At any rate, due to being the only alternative, it will have to do the job. Looking at the chart below, which uses the 5-year rolling average “inflation” to compute the real yield of the 10-year US Treasury note since 1805 (dark blue line), the same tendency noted before remains true. Although this is a neat and interesting graph, with a lot of good information, for the sake of argument, we can pass over the light blue line representing the federal debt to GDP ratio and focus solely on the numbers after 1970. So, remembering the gold chart displayed before, one can straightforwardly observe that the lower the real yield falls, the more does the gold price soar, and vice versa. However, this too is not enough to fully describe the movements of the price of gold. As we have seen, gold has these moments when it just soars quickly and vigorously, and other periods when it collapses intensely and unexpectedly. Ergo, there is a fierce factor influencing the gold market in the short run. In spite of being rather imperceptible, I am going to reveal the most important determinant of the price of gold in the short term is the liquidity conditions in the inner workings of the global financial system, also known as the eurodollar. As the next graph shows, the relationship seems to be spurious. To be fair, it is most of the time. Notwithstanding, this relation comes to light during periods of financial distress. In order to explain this, I have to bring into service the gold lending and leasing and the gold swaps trading. As a matter of fact, these transactions, which I alluded to on Part I, in view of being mainly conducted with a great deal of secrecy by and assistance from the wizards in that fancy building on Threadneedle Street, in London, are without any doubt terribly misunderstood. Thus, allow me to shed some light into these shady operations. Firstly, a brief exploration of the gold swaps market. Although there had been some gold swaps that happened earlier in the 19th century, at least for the one in 1925 there is some detailed information about it. Upon reading the first chapter of this series, on the History of money, you will recognize the year 1925 for its significance. In this year, the UK went back to the gold standard after abandoning it in the beginning of the Great War. Wishing to reinstate the classic gold standard parity, Winston Churchill caused some severe strain in financial markets and in the economy. Failing to account for the wartime inflation, proved to be a horrible mistake for prompting a deflationary shock. Regardless of that, the Fed stood ready to aid its homologue across the pond, the BoE, in trying to defend the pre-war parity, despite all of those difficulties. Because there was not enough gold to support it, the attentive and sceptic market participants began to lose faith in the BoE’s ability to sustain the old parity. Ergo, so as to dupe the market, when the gold was being taken out of its vaults, the BoE had to tap into other sources of the “barbarous relic”. In this manner, one of the ways to accomplish this assignment was that gold swap, in 1925. Basically, what happened was the Federal Reserve Bank of New York, on behalf of the Federal Reserve system, made $200 mn of gold bullion available to the Bank of England for its disposal in whatever transactions it might take in defending sterling at that pre-war parity price. In accounting terms, this meant that the BoE took those $200 mn in gold then sell them in the market for sterling at the price that it wished to defend. Subsequently, they put the sterling currency into an account in London on behalf of the Federal Reserve Bank of New York. Hence, what really happened was gold disappeared from New York and ended up as cash in the UK denomination, in London. However, for accounting purposes, the New York Fed showed a “gold receivable” where gold used to be. Simply put, what is happening is the gold is coming off the US central bank’s possession, but not off its balance sheet. All the same, in the perspective of the monetary authorities, there are legitimate reasons for it. By taking the expression “as good as gold” literally, they deem a collateralized account on behalf of a counterparty central bank as good as having gold. Due to a default from a central bank being improbable, one could make the case for this indistinction. In other words, if the New York Fed have asked for its gold back, the BoE would not refuse. 15. Central bank officials indicated that they considered information on gold loans and swaps to be highly market-sensitive, in view of the limited number of participants in such transactions. Thus, they considered that the SDDS reserves template should not require the separate disclosure of such information but should instead treat all monetary gold assets, including gold on loan or subject to swap agreements, as a single data item." In the modern conventions, that is still the case. Reading the above ruling, which was proclaimed by the International Monetary Fund (IMF) in 1999, when this question was raised, the convention states that on official reports to the IMF, central banks and other government official agencies are not required to disclose how much gold they have, as distinct from gold swaps or gold receivables. For not having to differentiate the physical from the paper gold, they can just shove it all in the same line item. Thereby, these procedures leave the public in the dark about how much gold has been swapped and how much truly remains in custody. Despite spurring a lot of interesse, I am not going to address the justifications that central bankers give to withhold this information. Instead, I am saving it for the next instalment. Be that as it may, gold swaps are operations almost exclusively restricted to central banks. Furthermore, the BIS has been a big player in gold trading activities since its inception, in 1930, with disclosures provided since 2010 showing that it has taken tonnes of gold from commercial bullion banks via swaps. Yet, this has decreased considerably in recent months. With the advent of the eurodollar regime, and really the 1980’s forward, we started to see a lot of gold lending and gold leasing. As the title of this series hints at, the financial engineering created by the Eurodollar beasts brought about several innovative instruments. Undoubtedly, gold was not spared. Judging it to be a mutually beneficial transaction, central banks as one counterparty owning gold and gold producers as the ones that go out there into the world and actually dig up the commodity from the ground, come together to participate in this gold leasing market. Having to face the prospects of falling gold prices, the gold miners are going to be interested in hedging, to lock in the price where it is. Seeing that there is a significant time lag in the process of producing gold, the desire to hedge is understandable. To wit, after gold is prospected and extracted, which is very time consuming, it still needs to be assayed, measured and, lastly, refined and purified. Only then can it be marketable and sold to bullion investors, including central banks. In a gold lease arrangement, a miner or gold producer sells forward future production to lock in whatever price, akin to hedging. In order to sell forward, the producer has to borrow existing bullion from somewhere. For a long time, the only holders of such large inventories of gold have been central banks and bullion banks. So, an increase in gold leasing dislodges formerly dormant stores of physical gold from central banks, acting as an added supply of gold onto the markets. Naturally, central and bullion banks, acting as the intermediaries, were more than happy to make their gold stores yield them a nice cashflow. Similar to this leasing arrangement, the gold lending activity functions in the same fashion. Notwithstanding, it is a purely financial affair. In a gold lending relationship, the bank uses the unallocated gold as collateral for cash (in whichever currency is needed, which is one of the appeals of using bullion for collateral). Now, the gold is in the hands of an intermediary that, apart from any haircut set with the borrower, has to protect its position from associated risks. Consequently, the cash lending bank will either sell the gold outright, since it only has to replace metal at the end of the agreement, or hedge its collateral position (based on the cost of selling futures). Like the gold swap business, the accounting rules are such that the central bank continues to “hold” gold on its books, in spite of the lending and leasing operations that moved that metal into the marketplace. Thus, the market has actual gold, albeit mostly of the paper type, sold into it while central banks report no loss of supply, under the line “Gold and Gold Receivables”. Once again, these are opaque transactions, nobody really knows what has been leased or lent out and what remains in the coffers. All in all, the reason central banks want to engage in these procedures is because gold does not pay interest. By participating in these gold market arrangements, they manage to turn what is a non-interest-bearing asset into an interest-bearing asset. Although that is not a big deal for somebody like the US Federal Reserve. For some of the smaller central banks, there are needs and requirements that mandate them to earn money on their assets. Afterall, a central bank is still a bank. As a result, it has to earn some money if it wants to at least cover its own expenses. For the gold market, the end result is exactly the same whether swapping, lending or leasing gold. It acts as an agent to disgorge previously inactive supply into the physical or paper markets, or both. Gold that was until that time sitting idle in an unallocated account has now entered the market through physical (dumping by the cash lender/collateral holder) or, most likely, paper (hedging the collateral holdings) markets. Unsurprisingly, this leads to plenty of people in the goldbug community presuming that there is a secret conspiracy of central bankers, intentionally working with one another, conspiring to suppress the gold price. Even though this would require a deep inspection, the goldbugs make a really good point. Having said that, if that is not what is happening, an explanation on some of the apparently irrational moves in gold prices is needed. For some strange reason, right around 8 o’clock in the morning, New York time, it is very common to see what some people call gold pukes. Abruptly, somebody sells hundreds or thousands of contracts all at once in the futures market. As any competent futures trader knows, those transactions happening all at once rather than gradually is going to dramatically affect the price. Surveying for a more simple, prosaic interpretation, one only needs to look at the plumbing of the financial system and understand how it runs. Going back to the arrangement between gold lending and leasing between a central bank and a mining company, there is no risk for a central bank in price. In this prosaic line of thought, there is no legitimate reason for them to take an interest in price. By its very nature, the gold lending and leasing operations have negative effects on price, without having anything to do with monetary policy of any central bank around the world. Due to dislodging previously idle, stored gold onto the marketplace, when an uptick in lending and leasing ensues, for whatever reason, it is price negative. Therefore, it has nothing to do with manipulation. Plainly, it is just the natural supply and demand mechanics of the way this eurodollar system has been constructed. As the charts below show, represented by the repo fails volume, when stress in the interbank functioning (a.k.a. the “plumbing”) intensifies, gold is negatively impacted. Weirdly, this flies in the face of most investors and observers, since the precious metal is taken for a safe-haven during times of turmoil. Nevertheless, it still fulfils this role, though the beasts of the Eurodollar apparatus get the upper hand over goldbugs in moments of severe strain. Unmistakably, one immediately grasps that these gold pukes line up rather well with repo market fails. As a reminder, these fails are nothing more than an indication of collateral problems inside the eurodollar system. If we think about gold as it pertains to these lending and leasing businesses, it is sort of a collateralised loan where somebody can borrow a financial asset – in this case, gold sitting idle at a central bank – and use it to help alleviate a collateral shortage system wide. To recall the inner workings of this financial system, the banks and other financial entities use the wholesale interbank markets, of which the repo is the main one of the secured type (from now on used as a pars pro toto for all the secured wholesale interbanking activities), to finance their operations. Since these operations, which include all kinds of asset-backed securities and OTC products, involve massive amounts of funding and smoothly liquid markets as well, they are very dependent on counterparties. In times of anxiety, fears of counterparties failing, something that is never supposed to happen, starts to happen. Ergo, delivery failures in the repo system create an absolute crisis for a bank, where they urgently need cash, no matter what. When a financial institution with funding capacity enters this affair of lending cash against gold to another entity with funding needs, it has no interest in holding that gold. Owing to storage fees and price downside risks, the cash lender will prefer to get rid of the gold, either via OTC or futures markets. Challenging common sense, if they have no interest in acquiring gold, why would they use it then? The answer is the desperate borrower is putting gold towards the cash lender on the opposite side, frankly, because they have no other choice. A commercial bank or some other institution that is running into collateral issues in the repo market might draw from their store of gold, or whomever else’s store of gold they can find, as a last resort collateralised method to get the much-desired cash, mostly in the form of US dollars. Thus, if somebody is lending cash against gold, with the sole intention to use gold for something else, that entity has over-collateralised its lend/lease deal. For instance, say a bank is doing $100 worth of gold lending with a hedge fund, the former puts on a 10% haircut on the collateralised gold and gives the cash in return. In this scenario, seeing that the bank is over-collateralised (on account that it does not want to hold gold), there is nothing to stop it from dumping it all at once in the morning. Its only obligation in that lending contract is to return some form of gold, either physical or paper, at some future date, to the hedge fund. In essence, the bank does not care what the price is, merely moving on from the gold completely. Succinctly, the more the repo market system is stressed in terms of a collateral shortage, the more people must appeal to last resort alternatives, including gold. This means the amount of gold lending (dislodging previously stored-up and off-market supply of metal – both paper and physical) jumps. As a result, owing to the connection between funding market illiquidity and collateral issues, the gold price ultimately tumbles precipitously, seemingly, out of nowhere. Taking the following graph into consideration, one immediately realises that there is some significant correlation between the BoE gold holdings and the price of gold. Despite not always signifying causation, I think we can confidently claim there is some degree of it. Except, it is not in the causal direction most goldbugs surmise. Indeed, bearing in mind all the reasoning presented above, it is not the English central bank that manipulates the price of this “relic” by flooding the market with its vast reserves of gold. Afterall, the BoE is the second biggest custodian of the precious metal worldwide, only bested by the New York Fed. Au contraire, the inventory of gold in the BoE simply follows the lead set by the metal.
To be more precise, it is heavily influenced by the liquidity conditions of the financial structure. When the Eurodollar beasts are becoming increasingly distressed, gold attracts more demand, resulting in higher prices. Before we go any further, let me remind you that the BoE gold holdings are not just its own, but belong to other central banks and bullion banks too. With this said, as the interest in the precious metal rises, the activity in the gold market surges as well. Since it is the BoE we are examining, then it is the Loco London, OTC gold venue that is experiencing a lot of business. As I demonstrated on Part I, in all likelihood the ensuing enlargement of the gold holdings takes the form of synthetic unallocated gold. Likewise, we can assume the COMEX behaves the same way because, as I expounded on the first part, the magnitude of their fractional reserve trading is equivalent. Evidently, the more the demand for gold heightens, the more will gold, physical and paper, show up in the BoE balance sheet, akin to COMEX stocks (click on Comex Data, then Inventory Data). Chiefly, this increment in demand occurs on account of the medium term factor, the fall in real interest rates, as I have already clarified. Visibly, the same is true in reverse. In any event, the repo fails resulting in more gold lending facet is also discernible in the last chart. In periods of noticeable strain, especially financial crises such as the GFC in 2008 and the European sovereign crisis in 2011 – unfortunately, the BoE only began publishing this type of numbers in 2011, so we have no monthly data for 2008 –, the utilisation of gold as collateral, in the repo market, is multiplied. Hence, BoE gold reserves are drained pronouncedly. Nevertheless, the same did not occur in 2020. Perhaps, on account of the crushing constraint only lasting about a month, being over before the banksters managed to persuade the snail-like bureaucrats to let them exploit some of that shiny unallocated gold. In conclusion, the three paramount determinants of the price of gold are inflation, the real yield of the risk-free asset and the smoothness of the financial system. Each one has its effect perceptible on the long, the medium and the short terms, respectively. Taken together, we realise that gold resembles a volcano. After laying dormant for most of the time, it then slowly starts to move, gradually gaining momentum until it bursts to the sky. By the same token, the performance of this metal is the mirror image of an inflationary boom and bust cycle. As the booming phase of the cycle runs its course, everyone cheers the increment in economic activity, indulging on credit, while being utterly oblivious to its future inescapable collapse. Consequently, when the boom turns to bust, suddenly, the inflation becomes obvious and the statistics for labour, economic output and productivity turned out to be just an illusion. For this reason, sensing the imminent financial ruin, or feeling it even, investors and the general public to boot will seek a safe-haven. Therefore, gold always prevails in the end. On the next and final instalment, I am going to give my final remarks. In addition, I am going to take a dive into the Gold Pools and other shenanigans orchestrated by the central banks, and how it all relates. Resuming the history of gold where we left off in the first part, this second instalment is completely dedicated to understanding the factors influencing the price of gold since the advent of the eurodollar system. Specifically, even though this monetary and financial revolution had cropped up in the 1950’s, those factors only took the helm on August 15, 1971, when the gold window was closed by President Richard Nixon. Since the end of the Bretton Woods system (BWS) and all currencies in the world became detached from gold, the era of fiat currencies started. However, gold was not dismissed and forgotten. In lieu of having its price fixed to the US dollar and indirectly to the other currencies – in the BWS, the dollar was pegged at 35$ per ounce of gold with all other currencies having each one its own peg to the dollar –, gold became subject to market forces just like any other asset. When inquiring financial analysts and investors, including goldbugs, on the reasons to acquiring gold, they respond that the precious metal acts as a hedge against inflation and as a safe-haven. In other words, they project the gold price to follow the expansion of the (debt-based) money supply. Nevertheless, they commit a terrible mistake by equating inflation with “inflation” – i.e., a general rise in prices, Machiavellianly computed in government statistics like the CPI. In reality, gold has performed its functions rather well, despite the alleged inertia during the occasional bursts of “inflation”. As the graph above shows, the relation between gold and “inflation” is not clear, at all. Naturally, this bewilders most observers and frustrates gold standard advocates. In view of being unaware of the dominance of the Eurodollar beasts and instead putting the central banks at the centre of the monetary world, the goldbugs presume either that there is some trickery going on or that the central banks’ credibility is persuading speculators and investors to stay away from gold. Taking the latter into account, some analysts think gold has not reacted to the recent surge in the CPI, of most countries, because the central banks are hiking rates and quashing the market’s inflationary expectations. Thus, due to trusting the capabilities of the monetary authorities and forecasting a higher yield paradigm, the participants are being lured into other assets that bear interest. Simply put, this is utter nonsense. Making the words of the author of the article just referenced, Claudio Grass, my own, “I do not believe that short-term price considerations should play a pivotal role in the decision-making process of investors who hold gold for the right reasons and who understand why they do. What is important, however, is to look beyond the mainstream headlines and to be able to separate the signal from the noise.” Indeed, that is exactly what I am going to do now. To be fair, it does involve some trickery, though, totally legal. All the same, there is a method to this madness. Disclaimers aside, let’s dig in. To begin with, the international gold price usually refers to the price of gold quoted in US Dollars per troy ounce as traded on the 24-hour global wholesale gold market. During the entire business week, gold is traded non-stop globally, allowing the incessant quoting of international gold prices, from Sunday night London time all the way through to Friday night. Depending on the context, this international gold price sometimes refers to a spot gold market quote, such as spot gold traded in the London over-the-counter (OTC) market, and at other times may refer to the front month of a gold futures contract price as traded on the US Commodity Exchange (COMEX). Some years ago, an academic paper has determined that gold price discovery is jointly driven by London OTC spot gold market trading and COMEX gold futures trading, and that the “international gold price” is derived from a combination of London OTC gold prices and COMEX gold futures prices. In general, the higher the trading volume and liquidity in a specific asset market, the more that market contributes to discovering prices for that asset. Obviously, this is also true of the global gold market. Between them, the London OTC (a.k.a. Loco London) and New York trading venues account for the vast majority of global gold trading volume, and in 2021, the London OTC venue, which englobes spot, forwards and options trading, represented approximately 45% of the global gold market turnover, while COMEX accounted for a further 32%. Although this pair holds the dominance of the market, their supremacy is crumbling down quickly. Demonstrably, that academic paper points out that in 2015, the London OTC market gathered 78% of global gold market trading volume, while COMEX had a mere 8% share of the marketplace. Fundamentally, the two reasons for this occurrence are the demand for gold being increasingly coming from the East, mainly China and India, and the regulatory burden imposed after the GFC is forcing a shift towards exchange trading, which includes futures markets such as the COMEX or the SHFE. On that account, beyond the London OTC gold market and the COMEX, all the other gold secondary trading venues negotiate with the price settled in London and New York. Ergo, they are considered price takers. Still, the trend is for these exchanges to turn progressively into price setters, contributing more to the price discovery mechanisms, as the balance of power swings eastward. Furthermore, the international gold price can also at times be referring to the LBMA Gold Price benchmark price – LBMA is an abbreviation for London Bullion Market Association –, as derived during the London daily gold price auctions (morning and afternoon auctions). Before it got this name, in 2015, it was called the London Gold Fix, which had been clouded by mistrust and even repudiation for a very long time. Ultimately, this led to its restructuring and rebranding, albeit not managing to shake off its reputation, rightly so. Therefore, insofar as they are all similar in magnitude, this international price could be referencing a spot gold price, a futures gold price, or an auctioned gold price. Be that as it may, the trio can each one be considered a benchmark. In spite of having been found, as we have just seen, to have lower trading volumes, COMEX presents a larger influence on price discovery than Loco London. This is most likely due to a combination of factors such as COMEX’ accessibility and extended trading hours via use of the GLOBEX platform, the higher transparency of futures trading compared to OTC trading, and the lower transaction costs and ease of leverage in COMEX trading. Conversely, the London OTC gold market has limited trading hours (during London business hours), barriers to wider participation since it is an opaque wholesale market without central clearing, and trading spreads that are dictated by a small number of LBMA bullion bank market-makers and a handful of London-based commodity brokerages. Hence, efforts are being made so that the exchange-traded contracts of the London Metals Exchange gain prominence, in order for London to keep the “terminal market” epithet. To make long story short, the international gold price is fundamentally set by paper gold markets. In other words, it is set by non-physical gold derivatives. Based on their respective gold market structures, Loco London and COMEX are both paper gold markets. Perversely, the supply of and demand for physical gold plays no role in setting the gold price. Because of this, physical gold transactions in all other gold markets just accept the gold prices that are discovered in these paper gold markets. On the one hand, London OTC gold market predominantly involves the trading of synthetic unallocated gold, where trades are cash-settled and not physically delivered (i.e., no delivery of physical gold). Due to convention, unallocated gold positions are merely a series of claims on bullion banks where the holder is an unsecured creditor of the bank, and the bank has a liability to that claim holder for an amount of gold. In turn, the holder, takes on credit risk towards the bullion bank. As a result, London OTC gold market is nothing more than a venue for trading gold credits, employing fractional reserve gold trading with colossal amounts of paper gold born ex nihilo. On the other hand, COMEX only trades exchange-based gold futures contracts, rendering it, unmistakably, a derivatives market. However, less than 1% of COMEX gold futures contracts are usually registered to take delivery. Perhaps this why this venue only stores 1 of every 600 oz in existence worldwide, even though, as I have exposed, the COMEX contributes the most to the discovery of the international gold price. Seeing that very little physical gold is ever delivered on COMEX, and even less physical gold is withdrawn from its approved gold vaults, COMEX registered gold stocks are relatively small. COMEX gold trading also employs significant leverage. In their paper, Hauptfleisch, Putniņš, and Lucey state that “such trades [on COMEX] contribute disproportionately to price discovery”. Note that the COMEX gold futures market is actually a 24-hour market, but its liquidity is highest during US trading hours. Turning to Loco London, nearly the entire trading volume of the London OTC gold market represents trading in unallocated gold, which merely represents a claim by a position holder on a bullion bank for a certain amount of gold, a claim which is rarely exercised. In addition, traders, speculators and investors in unallocated gold positions virtually never take delivery of physical gold. Consequently, Loco London trades also predominantly cash-settle. In 2013, this was confirmed by a UK HMRC/LBMA/LPPM Memorandum of Understanding affirming that in the London gold market “investors acquire an interest in the metals, although in most situations, physical delivery will not occur and in 95% of trades, trading in unallocated metals will be undertaken.” Before that, in 2011, the then LBMA CEO Stuart Murray also confirmed – interestingly, the page has been deleted, but one can find it in the archive – that “various investors hold very substantial amounts [of] unallocated gold and silver in the London vaults” – emphasis mine. Clearly, what Stuart Murray failed to explain is that unallocated gold and silver do not exist in a vault because they are not physical. As Dentons law firm reinforced what we already knew, those are simply paper claims on bullion banks for a quantity of gold and silver that the banks are obliged to find somewhere, if the claimant wanted to execute the claim. To sum up, given COMEX trading gold futures and London trading synthetic unallocated gold, both the London and COMEX gold markets essentially trade gold derivatives, or paper gold instruments, and by extension, the international gold price is being determined in these paper gold markets. (…) the reality of unallocated bullion trading is that buyers and sellers rarely intend for physical delivery to ever take place. Unallocated bullion is used as a means to have ‘synthetic’ holdings of gold and so obtain exposure to the price of gold by reference to the London gold fixing. (…) According to the LBMA bullion bankers who established the reporting of London gold clearing statistics, the then London Precious Metal Clearing Limited (LPMCL) chairman, Peter Fava, and JP Morgan’s Peter Smith, these LBMA gold clearing statistics include trading activities such as “leveraged speculative forward bets on the gold price” and “investment fund spot price exposure via unallocated positions”, activities which are merely side bets on the gold price. Nevertheless, the deficiency of the clearing statistics is explained by the fact that they do not measure individual transactions, gauging instead the metal that is transferred from one clearing account to another on a net basis. Besides that, there are other factors in play: 1) the premature termination of a forward contract, which precludes the transfer of any metal and, hence, being counted for the clearing statistics; 2) spot transactions usually being netted against exchange for physicals (EFP), which swap the original exposure to the spot London market with a futures contract, offsetting the initial OTC transaction by moving the position to the exchange; and 3) for having greater efficiency, the banks have chosen to replace the old FX-based systems, which tracked individual transactions, to this netting one. Unlike the reporting of clearing statistics, the LBMA does not publish gold trading volumes on a regular basis. Notwithstanding, it did publish a one-off gold trading survey covering Q1 2011. Here, it was revealed that during the first quarter of 2011, 10.9 bn oz of gold (340,000 tonnes) were traded in the London OTC gold market. During the same period, 1.18 bn oz of gold (36,700 tonnes) were cleared in the London OTC gold market. This would suggest a trading turnover to clearing turnover ratio in the ballpark of 10:1. In the absence of live trading data, we can take this 10:1 ratio as a proxy and continue to use it as a multiplier to the LBMA London Gold Market daily clearing statistics, which are published on a monthly basis. For example, average daily clearing volumes in the London Gold Market in October 2022, which is the last reported month, totalled 18.3 mn ounces. Converting to tonnages, there was 571.875 tonnes of gold cleared per day in London. On a 10:1 trading to clearing multiple, that is the equivalent to 5,719 tonnes of gold traded per day, or 1.48 mn tonnes of gold traded per year. Owing to storing only around 8,000 tonnes of gold, most of which represents static holdings of central banks – 5,000 tonnes in the Bank of England (BoE) –, ETFs and other holders, the London OTC gold trading activities are totally disconnected from the underlying physical gold holdings. To get a sense of the absurdity, this suggests that approximately 71.5% of the gold kept in the London vaults was being traded. Comparing it to the S&P 500 equities, one of the most traded asset categories in the world, in December 2022, up to the 16th, the average daily volume was $6,714.72 mn. Using the total market capitalization figure at the end of September of $46,460,463.2 mn, this implies that only about 0.01% of the shares of the largest American corporations trade daily, on average. To cement the ridiculousness, just 205,238 tonnes of gold are estimated to having ever been mined throughout history. In terms of yearly numbers, in the last ten years, gold supply increased on average 4,632 tonnes, 3,409 of which being freshly mined. On the flip side, the average for the gold demand has been 4,314 tonnes.
Remarkably, this would indicate, if it was real, that 2.8% or thereabouts of all the gold in the globe is transacted in London, every day. Keeping in mind that almost half (46%) of the gold is held in the form of jewellery, it appears that 5.16% of the non-jewellery gold trades daily, while a huge 12.58% of all the gold bars and coins in the world seem to “change hands” every day, just in London. Thus, the trading of nearly 5,719 tonnes of gold per day within the London gold market has nothing to do with the physical gold market. Calculating for the whole 2021, total trading volume in the London gold market is estimated to have been in the neighbourhood of 1.38 mn tonnes of gold, while the trading volume of the 100 oz COMEX gold futures reached 41.9 mn contracts, equivalent to 188,325 tonnes. For those paying attention, these figures are insane. Ipso facto, on a daily average, gold trading in New York and London are, respectively, more or less 44 and 319 times the annual amount demanded by jewellers, bullion investors and other manufacturers that need or desire the real thing. Similarly, this trading represents roughly 41 and 297 times the annual gold supply, in New York and London venues respectively. Consequently, gold trading volume on the London OTC gold market, in 2021, was about 7.3 times the turnover in the COMEX 100 oz gold futures market. Finally, in August of last year, the combined gold stock, including paper claims, of all the COMEX depositories added up to 37,486,859 ounces, or 1,171.5 tonnes. For those keeping score, with approximately 8,000 tonnes of gold in London (or under it), the Loco London to COMEX ratio comes to 6.83, being close to the trading volume one. Therefore, we can safely assume their fractional reserve trading is identical in magnitude in these two trading channels. Moving on, now that the basic concepts have been laid out, it is time to present the heart of the matter. As an inheritance of the all-powerful British Empire, the London Gold Lending Market, which is a global marketplace, revolves around the BoE. Here, central banks and commercial bullion banks interact in the execution of obscure gold lending and gold swap transactions that increase the available supply of gold. Unsurprisingly, the bullion banks dubbed this scheme of smuggling a few pieces of gold to show their customers and the suits as liquidity provision. Evidently, few if any transactional details about the gold lending market are ever made public. Likewise gold lending and gold swaps are not reported distinctly from central bank gold holdings. In this mad, clown world we live in, gold held and gold lent/swapped is merely reported as one line item of ‘Gold and Gold Receivables’ on central banks’ balance sheets. Therefore, the real state of central bank gold holdings is concealed for any central bank engaged in gold lending or gold swaps. Notwithstanding, gold lending and swaps provide borrowed physical gold for bullion banks to engage in leveraged fractional reserve bullion banking and trading to boot, mostly in London and New York, where the international spot gold price is predominantly determined. On that account, gold lending and swaps, the leveraged and fractional reserve nature of gold trading, and the lack of transparency and accountability, all align to have a potentially depressing effect on the gold price. Or do they? For having still a lot to say and already surpassing the three thousand word count, I am taking a breather and come back to it a couple of days from now. In this day and age, of all the fields that make up the vast concepts of science and human knowledge, you are hard pressed to find one that is more misunderstood than Economics. Of course, there are several fields that have been corrupted by malicious endeavours to foil the public’s freethinking and pursuit of the truth. Although there is much to add about this, I am going to stick with the theme of this series, which is money. Indeed, monetary economics has been, in my humble opinion, an utter disservice to us all, whether we are aware of it or not, since the dawn of civilization. To make matters worse, I contend the neglect and failure to correctly and honestly assess matters of money and exchange has only got more pronounced. Yet, it is not the case that scrupulous and precise reasoning has never been made, divulged or even applied in the real world. Notwithstanding, the powerful vicious intents of our overlords have been quite successful at thwarting the truth from reaching the masses, keeping us in a continual state of confusion and oblivion. The purpose of this three-part series is to clarify the definition, usefulness and history of money. If you are familiar with my work, perhaps you already know what I mean by the term “money”. As the title hints at, gold and to a slightly lesser degree silver are the purest, most complete forms of money. On this first instalment, I will go through the History of money, examining its evolution, from the ancient times until just before we arrived at this abortion of a system dubbed eurodollar. Then, in the second part, I am going to expose the contraptions behind the gold market and its pricing mechanisms. To finish off, taking from what I have found out, I will announce my verdict on the machinations and intentions of the-powers-that-be to muddle the perceptions of the masses on this current, irrational and ignoble state of affairs, in addition to halt the emergence of a well-grounded and fair monetary regime. Before we had the currency we all use nowadays, barter was the first system of exchange, consisting of trading goods directly, tit for tat. For instance, I will give you one cow and you give me five bottles of wine because that is kind of a fair exchange on cows and wine. As one can easily ascertain, it gets tricky. Thus, someone had to invent a solution to this double coincidence of wants, as it is labelled. Accordingly, this thing called money was born. As time went by, different populations used different media of exchange. While some would use salt, others would use shells. Ultimately, people came to the conclusion that gold and silver were the greatest contenders to play the role of money. For all we know, roughly 5,000 years ago, the Babylonians started using gold and silver as their predominant form of currency. Still, the pieces of gold and silver that they were using were odd sizes and weights. In other words, odd purities. Ergo, trade was still difficult seeing that the currency units were not interchangeable, where each unit is the same as the next. According to many historians, only in 7th century BC the first standardly minted and fungible coins appeared. King Alyattes of Lydia, in what is today Turkey, issued a form of coinage made of electrum, a natural mixture of gold and silver. One of the reasons that we are in the financial mess that we are today globally is that people do not understand the difference between currency and money. On the one hand, currency is a medium of exchange, a unit of account, it is portable, durable, divisible, and something called fungible, which essentially means that each unit is the same as the next unit. On the other hand, money is all of those things plus a store of value over a long period of time. Even financial planners, bankers, your accountant, they do not understand the difference between currency and money. The currency in your pocket is a medium of exchange and a unit of account due to having numbers on it. Moreover, it is somewhat durable (certainly not anywhere close to gold and silver durability), portable, divisible in that you can make change, and it is fungible. For example, a dollar or a euro in my pocket buys the same amount as a dollar or a euro in your pocket. Be that as it may, in view of the possibility, or rather the inevitability, the amount of currency keeps on expanding, there is a continuous dilution of its value. On that account, your wealth is transferred, indirectly, to the receivers of the freshly created currency. Unsurprisingly, the biggest beneficiaries of this phenomenon, the Cantillon effect, are the biggest borrowers, i.e., governments, financial institutions and their cronies. The reason that gold and silver are the optima forms of money is because of their properties. Besides storing large amounts of value in a very small area, they are units of account, fungible in their pure state, extremely durable – they do not corrode –, very portable and clean and hygienic – unlike crude oil or coal –, and, for being highly scarce, their value maintains fairly stable over time, functioning as a tremendously reliable store of value. Attesting to its durability, the same gold the Babylonians were using in trade is still here with us today. Over the last 5,000 years, only gold and silver have maintained their purchasing power. During this period, there have been thousands upon thousands of fiat currencies, which are unbacked by gold or silver, having all gone to zero. Believe it or not, it has been a 100% failure rate. Nevertheless, the first recorded use of paper money was purported to be in the country of China during the 11th century AD as a means of reducing the need to carry heavy and cumbersome strings of metallic coins to conduct transactions. Similar to making a deposit at a modern bank, individuals would transfer their coins to a trustworthy party and then receive a note denoting how much money they had deposited. Then, the note could be redeemed for currency at a later date. At the same time, parts of Europe were still using metal coins as their sole form of currency until the 16th century. Colonial acquisitions of new territories via European conquest provided new sources of precious metals and enabled European nations to keep minting a greater quantity of coins. However, banks eventually started using paper banknotes for depositors and borrowers to carry around in place of metal coins. These notes could be taken to the bank at any time and exchanged for their face value in metal (usually silver or gold) coins. This paper money could be used to buy goods and services. In this way, it operated much like currency does today in the modern world. However, it was issued by banks and private institutions, not governments nor central banks, which are now responsible for issuing paper money in most countries. In spite of the proper “classical gold standard era” having begun in the United Kingdom in 1821 and then spreading to France, Germany, Switzerland, the United States and so on, the UK, along with Portugal, were already in a de facto gold standard. In this system, which officially began in 1870, each government pegged its national currency to a fixed weight in gold. For example, by 1834, US dollars were convertible to gold at a rate of $20.67 per ounce. These parity rates were used to price international transactions. Other countries later joined to gain access to Western trade markets. There were many interruptions in the gold standard, especially during wartime, and many countries experimented with bimetallic (gold and silver) standards. Governments frequently spent more than their gold reserves could back, and suspensions of national gold standards were extremely common. In addition, governments struggled to correctly peg the relationship between their national currencies and gold without creating distortions. Finally, as long as banks operated on a fractional reserve scheme, besides the recurrent boom and bust cycles generated by the expansion of credit, there was a permanent state of instability in the monetary system, with the threat of financial panics and bank runs relentlessly hovering over the horizon. Naturally, sooner or later, the bankers would harvest the turmoil and insolvencies that they sowed. Those who insist that a reserve currency need to take the form of a physical commodity are misguidingly backing a relic of a time when governments were less trustworthy in these matters than they are now, and when it was the fashion to imitate uncritically the system which had been established in England and had seemed to work so well during the second quarter of the nineteenth century.” For that reason, the gold standard slowly eroded during the 20th century. This began with World War I and then the distress provoked by the erroneous pound sterling peg to gold the British implemented in 1925, so as to return to the gold standard at the pre-WWI peg. Because the belief in the gold standard had already practically vanished by the time the depths of the Great Depression were baffling and wrecking the lives of everyone, on September 21, 1931, the UK government took its country out of the gold standard, rendering the global reserve currency, the pound sterling, a fiat currency. Indubitably, it was not long till the other countries followed suit. In 1932, 23 more countries abandoned the gold standard, then the US on April 20, 1933, and France in 1936. Curiously, before departing the gold standard, President Roosevelt made sure the public was not going to panic and indulge on a gold buying spree by mandating the citizenry to renounce their gold. Simply put, our true wealth is our time and freedom to put our abilities to work. Furthermore, money is just a tool for trading our time and fruits of our labour and ventures, acting as a container to store our economic energy until we are ready to deploy it. However, the whole world has been turned away from real money and has been fooled into using a deceitful imposter, called fiat, which is silently stealing our two most valuable assets: our time and our freedom. Sadly, we lost having things of value be our currency, replacing it with plain numbers and accounts. But trust me, it is not real. In point of fact, whenever the financial system entered a crisis or merely were cracks showing up, the culprits, a.k.a., the (fractional reserve) banking cabal and its governmental puppets were always quick to pin the blame on the gold reserve and its rigidity. This is a colossal failure, and maybe an intentional one, at realising that an unhampered and solid monetary arrangement is a vital element for a well-functioning economy and free society to boot. This finger pointing should come as no surprise. As Milton Friedman succinctly surmised in the 1980 speech titled Myths that Conceal Reality, as part of the Free to Choose series, the free market is forced to be the scape goat whenever the bust ensues and takes its toll. According to the 1976 Nobel Prize in Economics recipient, the condemnation of the private enterprise happens because “[it] has no press agents, the free market has no press agents; the government has a great many press agents, the Federal Reserve has a great many press agents.” Back in the day, when the economy operated on some sort of “hard” money regime, currencies were a fixed weight of gold, silver or even base metals. Before the advent of paper money, when the sovereigns were lost in profligacy, in order to fulfil their liabilities, they could ask the minters to either clip and reduce the size of the coins or, better yet, dilute the value of them by meshing the precious metals with a base one, like nickel or copper. Afterwards, during the classical gold standard, when banks gave out credit, in the form of paper money, without the full backing of gold or silver, the real value of the currency would dwindle. That is to say, if the banks’ customers, and the populace generally speaking, wised up to the innate state of bankruptcy that the banks were consistently on, they would run to these institutions and demand to have their hard-earned money (i.e., gold and silver) back before the house of cards collapsed. Evidently, as one might expect, this has occurred repeatedly for being an inherent feature of the system. Nevertheless, in the mid-19th century, there were a prominent group of economists, who were followers of the writings of David Ricardo that together became to be known as the British Currency School. In essence, they contended that the excessive issuance of banknotes was a major cause of rising prices, and believed that, in order to restrict circulation, issuers of new banknotes should be required to hold an equivalent value of gold in reserve. On the opposite side, there was the British Banking School that defended the “banking principle”, which consisted of banks maintaining the convertibility of their banknotes into specie (gold) by keeping “adequate” reserves. As a result, it is impossible to overissue banknotes against sound commercial paper with fixed short term (90 days or less) maturities. Moreover, currency issuance, they asserted, could be naturally restricted by the desire of bank depositors to redeem their notes for gold. Clearly, the Currency School with its “currency principle” were sort of proto-Austrian, while the Banking School was proto-Keynesian. The former argued against inflation and for full backing of the currency with gold or silver. Conversely, the latter supported fractional reserve banking, though it recommended banking supervision by the central bank to curtail the moral hazard that this regime caused. The Banking School once more resembles the modern Positive Economics offspring, in this case the Monetarists, when it professes that the financial cycle has to be smoothed. Specifically, the discount rate offered by the central bank has to rise above the market rate in normal times and fall below it in crisis times. Unmistakably, this is also akin to the Keynesian belief that fiscal and/or monetary authorities ought to “hit the brakes” when the economy is “overheating” and “hit the gas pedal” when it is “overcooling”, so to speak, to restore growth to its natural rate of full employment equilibrium. Despite winning the battle in 1844 against the Banking School by implementing a 100% reserve backing of banknote issue, their subsequent mistakes and incomplete endeavours in the Peel’s Act cost them the war. Namely, it gave monopoly power on the issuance of banknotes to the Bank of England (BoE) and failed to comprehend that demand deposits also pertain to the money supply. For these reasons, the BoE would take advantage of its monopolistic privileges, beginning a large-scale expansion of its deposit-banking activities. Hence, this monetary ballooning fuelled a speculative bubble that caused a drain on the specie reserves of the bank and resulted in severe panics in 1847. In addition, the fact that the BoE was permitted to inflate pretty much uncontrollably through demand deposits, and that this Act remained valid until the outbreak of the WWI in 1914, there were two other banking panics that sprang in 1857 and 1866. As a response, the English government decided to suspend on both occasions, as it did in 1847, the full reserve backing requirement to preclude the deflationary spiral. Unfortunately, the perception that the contemporaries were left with was that the “banking principle” was superior and central banks were fundamental to a well-functioning economy and financial system. Naturally, this resulted in the disappearance of the Currency School. Even though the Peelites were ostensibly free market advocates, this absurdity to submit to the BoE exclusive rights to expand the money supply had horrific effects. Among them, the main one was that the private issuance of paper money gradually faded away, having completely ceased in 1921. Therefore, a crucial step towards the centralisation and control of money by the banking cabal had just been taken. In this manner, the next phase was to separate credit origination from the shackles of gold and silver. In 1873, Walter Bagehot published his immensely influential book titled Lombard Street, awarding him the accolade: “prophet of central banking”. Albeit a believer in the gold standard, though likely just agnostic to it, his conclusions and suggestions were the antithesis of a proper, stable financial system, not to mention the tenets of property rights and laissez faire capitalism. Afterall, he was a proponent of central banking. Still, he argued the central bank should only exist as a lender of last resort, providing liquidity to those banks which really did not manage to find lenders in the market despite presenting good collateral. As his dictum goes: “lend freely against good collateral at a high [discount] rate”. Insofar as central banking advocates come, Bagehot seems to be of the most reasonable kind, even more so than the British Currency School. Precisely, he apparently contrasted starkly with his coevals. As the 19th century approached its zenith, the trend was for the economist and banking classes to grow increasingly disheartened with the gold standard and capitalism as well. The types of Bagehot were ostensibly a dying breed. In the same year that Bagehot published his magnum opus, US President Ulysses S. Grant and his cabinet were set to implement the Coinage Act of 1873, which put the American economy back in the gold standard after divorcing from it during the Civil War. Among the voices critical of this move was John Austin Steven, who was born into a prominent banking family and close to the political establishment. Writing to the New York Times, he affirmed “gold is a relic of barbarism to be tabooed by all civilized nation.” Those who advocate the return to a gold standard do not always appreciate along what different lines our actual practice has been drifting. If we restore the gold standard, are we to return also to the pre-war conceptions of bank-rate, allowing the tides of gold to play what tricks they like with the internal price-level, and abandoning the attempt to moderate the disastrous influence of the credit-cycle on the stability of prices and employment? Or are we to continue and develop the experimental innovations of our present policy, ignoring the "bank ration" and, if necessary, allowing unmoved a piling up of gold reserves far beyond our requirements or their depletion far below them? Unquestionably, Keynes was not the first to think of gold as a “relic of barbarism”. Indeed, there have been many others. From the Marxists and the 18th century utopian socialists to the chartalists – followers of the scientific charlatan Georg Friedrich Knapp and precursor of the Modern Monetary Theory – the mood was surely getting progressively averse to a free market, “hard” money regime.
Bearing a less radical approach, there were those, so as to tap into other sources of money, who rallied for a bimetallic standard, such as former US Secretary of the Treasury and three-time Democratic nominee for President, William Jennings Bryan. Furthermore, in lieu of abandoning the gold standard in 1933, President Roosevelt considered introducing a bimetallic regime. Inasmuch as the currency is backed 100% by the gold and silver, there is no dispute on my part. To bring this first part to an end, when the Armistice drew the Great War to a close, the return to some sort of metallic regime was in doubt. Since Europe was devastated after the war, governments were planning on spending greatly, in addition to having to pay colossal debt expenses, politicians delayed the reinstatement of the gold standard for a few years. Because the UK, which was the global hegemon at the time, refused to account for the inflation, its policy makers came up with some creative solutions to protect the pre-war parity of $4.86/£1 and pretend that the inflation had never happened. As you will see on the next instalments, this tradition has never died out. More emphatically, though, the technocratic, progressive and socialist movements were appealing more and more to the masses. Thus, economists and politicians wanted to have a shot at engineering the economic structure, “to stabilise prices” and “control inflation”. On this account, controlling the monetary system was essential. As Keynes pleaded above, we had to disregard the gold standard in order to “moderate the disastrous influence of the credit-cycle on the stability of prices and employment”. What a fool! |
AuthorDaniel Gomes Luís Archives
March 2024
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