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Ellen Brown
The Web of Debt / Op-Ed
Published: Sunday 20 May 2012
“In September 2008, Henry Paulson, former CEO of Goldman Sachs, managed to extort a $700 billion bank bailout from Congress.”

The European Stabilization Mechanism, or How the Goldman Vampire Squid Just Captured Europe

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The Goldman Sachs coup that failed in America has nearly succeeded in Europe—a permanent, irrevocable, unchallengeable bailout for the banks underwritten by the taxpayers.

In September 2008, Henry Paulson, former CEO of Goldman Sachs, managed to extort a $700 billion bank bailout from Congress. But to pull it off, he had to fall on his knees and threaten the collapse of the entire global financial system and the imposition of martial law; and the bailout was a one-time affair. Paulson’s plea for a permanent bailout fund—the Troubled Asset Relief Program or TARP—was opposed by Congress and ultimately rejected.

By December 2011, European Central Bank president Mario Draghi, former vice president of Goldman Sachs Europe, was able to approve a 500 billion Euro bailout for European banks without asking anyone’s permission. And in January 2012, a permanent rescue-funding program called the European Stability Mechanism (ESM) was passed in the dead of night with barely even a mention in the press. The ESM imposes an open-ended debt on EU member governments, putting taxpayers on the hook for whatever the ESM’s Eurocrat overseers demand.

The bankers’ coup has triumphed in Europe seemingly without a fight. The ESM is cheered by Eurozone governments, their creditors, and “the market” alike, because it means investors will keep buying sovereign debt. All is sacrificed to the demands of the creditors, because where else can the money be had to float the crippling debts of the Eurozone governments?

There is another alternative to debt slavery to the banks. But first, a closer look at the nefarious underbelly of the ESM and Goldman’s silent takeover of the ECB . . ..

The Dark Side of the ESM

The ESM is a permanent rescue facility slated to replace the temporary European Financial Stability Facility and European Financial Stabilization Mechanism as soon as Member States representing 90% of the capital commitments have ratified it, something that is expected to happen in July 2012. A December 2011 YouTube video titled “The shocking truth of the pending EU collapse!”, originally posted in German, gives such a revealing look at the ESM that it is worth quoting here at length. It states:

The EU is planning a new treaty called the European Stability Mechanism, or ESM: a treaty of debt . . .. The authorized capital stock shall be 700 billion euros. Question: why 700 billion? [Probable answer: it simply mimicked the $700 billion the U.S. Congress bought into in 2008.]   . . . .

[Article 9]: “. . . ESM Members hereby irrevocably and unconditionally undertake to pay on demand any capital call made on them . . . within seven days of receipt of such demand.” . . . If the ESM needs money, we have seven days to pay. . . . But what does “irrevocably and unconditionally” mean? What if we have a new parliament, one that does not want to transfer money to the ESM? . . . .

[Article 10]: “The Board of Governors may decide to change the authorized capital and amend Article 8 . . . accordingly.” Question: . . . 700 billion is just the beginning? The ESM can stock up the fund as much as it wants to, any time it wants to? And we would then be required under Article 9 to irrevocably and unconditionally pay up?

[Article 27, lines 2-3]: “The ESM, its property, funding, and assets . . . shall enjoy immunity from every form of judicial process . . . .” Question: So the ESM program can sue us, but we can’t challenge it in court?

[Article 27, line 4]: “The property, funding and assets of the ESM shall . . . be immune from search, requisition, confiscation, expropriation, or any other form of seizure, taking or foreclosure by executive, judicial, administrative or legislative action.” Question: . . . [T]his means that neither our governments, nor our legislatures, nor any of our democratic laws have any effect on the ESM organization? That’s a pretty powerful treaty!

[Article 30]: “Governors, alternate Governors, Directors, alternate Directors, the Managing Director and staff members shall be immune from legal process with respect to acts performed by them . . . and shall enjoy inviolability in respect of their official papers and documents.” Question: So anyone involved in the ESM is off the hook? They can’t be held accountable for anything? . . . The treaty establishes a new intergovernmental organization to which we are required to transfer unlimited assets within seven days if it so requests, an organization that can sue us but is immune from all forms of prosecution and whose managers enjoy the same immunity. There are no independent reviewers and no existing laws apply? Governments cannot take action against it? Europe’s national budgets in the hands of one single unelected intergovernmental organization? Is that the future of Europe? Is that the new EU – a Europe devoid of sovereign democracies?

The Goldman Squid Captures the ECB

Last November, without fanfare and barely noticed in the press, former Goldman exec Mario Draghi replaced Jean-Claude Trichet as head of the ECB. Draghi wasted no time doing for the banks what the ECB has refused to do for its member governments—lavish money on them at very cheap rates. French blogger Simon Thorpe reports:

On the 21st of December, the ECB "lent" 489 billion euros to European Banks at the extremely generous rate of just 1% over 3 years. I say "lent", but in reality, they just ran the printing presses. The ECB doesn't have the money to lend. It's Quantitative Easing again.

The money was gobbled up virtually instantaneously by a total of 523 banks. It's complete madness. The ECB hopes that the banks will do something useful with it - like lending the money to the Greeks, who are currently paying 18% to the bond markets to get money. But there are absolutely no strings attached. If the banks decide to pay bonuses with the money, that's fine. Or they might just shift all the money to tax havens.

At 18% interest, debt doubles in just four years. It is this onerous interest burden, not the debt itself that is crippling Greece and other debtor nations. Thorpe proposes the obvious solution:

Why not lend the money to the Greek government directly? Or to the Portuguese government, currently having to borrow money at 11.9%? Or the Hungarian government, currently paying 8.53%. Or the Irish government, currently paying 8.51%? Or the Italian government, who are having to pay 7.06%?

The stock objection to that alternative is that Article 123 of the Lisbon Treaty prevents the ECB from lending to governments. But Thorpe reasons:

My understanding is that Article 123 is there to prevent elected governments from abusing Central Banks by ordering them to print money to finance excessive spending. That, we are told, is why the ECB has to be independent from governments. OK. But what we have now is a million times worse. The ECB is now completely in the hands of the banking sector. "We want half a billion of really cheap money!!" they say. OK, no problem. Mario is here to fix that. And no need to consult anyone. By the time the ECB makes the announcement, the money has already disappeared.

At least if the ECB was working under the supervision of elected governments, we would have some influence when we elect those governments. But the bunch that now has their grubby hands on the instruments of power are now totally out of control.

Goldman Sachs and the financial technocrats have taken over the European ship. Democracy has gone out the window, all in the name of keeping the central bank independent from the “abuses” of government. Yet the government is the people—or it should be. A democratically elected government represents the people. Europeans are being hoodwinked into relinquishing their cherished democracy to a rogue band of financial pirates, and the rest of the world is not far behind.

Rather than ratifying the draconian ESM treaty, Europeans would be better advised to reverse article 123 of the Lisbon treaty. Then the ECB could issue credit directly to its member governments. Alternatively, Eurozone governments could re-establish their economic sovereignty by reviving their publicly owned central banks and using them to issue the credit of the nation for the benefit of the nation, effectively interest-free. This is not a new idea but has been used historically to very good effect, e.g. in Australia through the Commonwealth Bank of Australia and in Canada through the Bank of Canada.

Today the issuance of money and credit has become the private right of vampire rentiers, who are using it to squeeze the lifeblood out of economies. This right needs to be returned to sovereign governments. Credit should be a public utility, dispensed, and managed for the benefit of the people.

Author pic
ABOUT Ellen Brown

Ellen is an attorney, author, and president of the Public Banking Institute. In Web of Debt, her latest of eleven books, she shows how the power to create money has been usurped from the people, and how we can get it back. Her websites are and

Great Article. Bain Capital's

Great Article. Bain Capital's European Vacation. If Romney gets in the plan is to stop the government from doing anything that doesn't directly benefit the FED.

Norman Allen's picture

Anyone doubts that moneybags

Anyone doubts that moneybags are in charge? Moneybags have the world's working poor hostage through the tentacles of their governments, all held by the glue of international banksters money mechanisms. A few untraceable men control the world without armies or cost of running a government. And you thought the Matrix was just a story....

Up against the wall

Up against the wall muthafu*****

Up against the wall muthachfuc****. Tear down the wall mutha****ers! Appropriate their wealth immediately without due process!!

The Greek Left party Syriza,

The Greek Left party Syriza, now ahead in the polls for the June 16 election, promises to nationalize private Greek banks. Bravo. Every so called socialist or "progressive" regime needs to do the same.

Ellen Brown's article is magnificent. What we most need now, however, is a very simple itemization of exactly how much the private banks and private central banks take from us, as individuals and nations. When each citizen can easily understand how much money is being taken out of our pockets, then we will see people's movements everywhere to nationalize and/or reform the banking system.

The "Money Masters" video is 3 1/2 hours long. Ms. Brown, can you boil it down for us to a few clear numbers that everyone can understand? That just might produce a huge movement.

Great article that absolutely

Great article that absolutely nails the situation. What the European Governments that ratify this agreement are doing is a form of treason and I hope that the general public wakes up to what is going on and stops it before it is too late. Even then as the problem is systemic it will only be a matter of time before the system collapses and then those that have caused the suffering will be held accountable. The weakness of power is that it requires those it is being used over to consent to it....when the consent is withdrawn the power becomes ineffective.

Sounds like the antichrist

Sounds like the antichrist has risen to doom us all 99% at what point did the civilized world become so corrupt so disfunctional and godless?
Burn them at the stake it is the only way to purge us of this Satanic blowjob
masters that make the rules. We need a new vision with less capitalism and more 99% involvement. I like the eminent domain idea of taking properties.

Brown's article lays it all

Brown's article lays it all out, that is the formilization into law what was being practiced all along. The money master bankers of the world, have decided it is now safe for them to reveal themselves to us as our real masters and to show that our elected governments are really just the middle men as they go about collecting taxes and turning them over to the bankers and borrowing for the people as middle men again from these same vampires. As Brown points out the people could do this for themselves responsibly at the next to nothing interest rates afforded bankers if they had their own bank. These bankers are the most obscene individuals mankind has ever fostered throughout history and that's saying a lot considering mankinds history. Eventually the masses will awake and throw off their yoke of servitude to these scam artists and place price tags on their heads as the perpitraitors of most of humanities evils. Notice how these acts of law always seem to be being passed in the dead of night or when no one is looking.... just as the U.S.Federal Reserve was brought into being at the insistance of the large commercial bankers..."Banking was created in inequity and born of sin.... if you wish to be the slaves of bankers and pay the cost of that slavery then let bankers continue to control credit and the issuance of money." There's a great video on the web called "The Money Masters" that lays it all out, how banking got started and how it has fought the people to gain world dominance over them for their own profit and power without regard to who lives in misery or dies in misery. Remember war is/was one of their greatest money makers, though I imagine wars will cease when the bankers have completed their dominance of the world's economy and we're all working for them via the debts they hold over everything and every person. Want a little freedom, quit using credit for immediate gratification and save enough money to buy whatever it is you can't live without... and watch the money masters video.

Grinder Monkey's picture

The banks are bamboozling us

The banks are bamboozling us with simple arithmetic. If you look at a simple loan over a ten, twenty or thirty year period using an amortization schedule on an electronic spread sheet and consider the interest that accumulates to the lender chances are you will pass on the deal. Ms. Brown's comment that at 18% interest the cost of the loan (the interest accrued) doubles in a mere four years is an example. The banks are not making loans because the numbers just don't work for them any longer , the simple loans are just boring, lengthy and unprofitable. They have become intoxicated with derivatives and other exotic financial "instruments" that have the potential to yield greater profit in shorter periods of time. These schemes use more convoluted math, namely calculus to divine events and future trends. This is why market hysteria sets in when nations like Greece suddenly catch on to the scam and walk away. Walking away from the banks is the best approach. They no longer provide any benefit to their depositors or the governments that subsidize their outrageous behavior.

Boris Badenov's picture

Jail, why aren't they IN

Jail, why aren't they IN JAIL!!!!

They own the jails and own

They own the jails and own the judges!

Super article. And needed

Super article. And needed for the honing down of this very serious matter. If we went after the cells with SWAT instead of the cells using the paradigm shifting cultural landscape against us, the simple enough technology, both covert and overt might turn into openness and caring replacing the Old Guard's turnstiles. William Binney, Indira Singh, Tommy Tamm are just a few, but we need to realize the machine 'membranes,' too, are designed to function ideally in a commonwealth scenario, the parallel processing in particular. It is not used for it, the commonwealth, the niches where it belongs and should stay, the way it is manipulated and maintained in mechanical networks detracting from human networks. The cells of human cognition must outweigh the cells that, currently, occupy the electronic landscape, but it is a lesson on complementary, obviously not formally understood, and so, without form. The late Francisco J. Varela is one of my heroes.

I think something that may

I think something that may happen is that the people will vote in those who oppose global bank domination, and simply default. They'll then start their own community banks and use the money in a way that benefits themselves. There isn't anything a bank can do when the people change the rules.

9-16-08 is the day Henry

9-16-08 is the day Henry Paulson should have been imprisoned in the Capitol basement jail cell for contempt of Congress for demanding a $770 Million Bailout for the Wall Street thieves with NO questions asked, No judicial review, NO administrative agency review.



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