[The] present international banking practice… increases the frauds of the financial elite.”There are no limits to the tricks of the global financial elite. Bolstered by university academics who piously announce that whatever the elite does must be for the benefit of everybody else; toadied to by politicians who are but paid catamites; and secure in the knowledge that the public will never understand what it is not allowed to see, the elite is engaged in a gigantic rip-off. The rip-off starts with the academics claiming that an international corporation helps everybody because a corporation’s profits, in some mysterious way, ‘trickle down’ to the population in general. This is an egregious lie. The lie has three aspects. For a start, the rich never spend all their earnings. Secondly, the real benefit of an economic operation is the very considerable spending power which comes from the jobs of the workers. But what happens if these jobs have been exported by the international corporation, as has happened on a massive scale in the USA? The spending power then stays abroad and cannot be used to buy the admittedly cheaper goods being imported. The argument that the imported goods are cheaper is a cunning one because it ignores the destruction of the domestic spending power as well as the long-term effects of exporting all the skills and technology. Henry Ford, of motor car fame, understood that his workers had to be paid well if they were to be able to buy Ford cars. Unemployed people are not paid at all. Today’s elite, however, does not care if the USA’s millions of ex-workers have nothing with which to buy the cheap imported goods. If the American market can no longer buy, the international corporations cheerfully reflect that they have established themselves abroad and can take advantage of the expanding local markets. As far as the global elite is concerned, Americans can go hang themselves.
But the third aspect of the lie is even more startling. Even when it is operating within, for example, the USA or the UK, the global elite is busily ripping off the economic wealth of a country into tax havens abroad (and so onwards into the pockets of the elite). It is able to do this in several ways particularly by setting up brass-plate corporations which are physically small, perhaps only a desk and computer, but through which millions of dollars can flow. The brass-plate corporation, owned by an international corporation, then buys and sells, or receives income, at any rate that its international corporation owner wants by a method called ‘transfer pricing.’Transfer pricing refers to the usually completely false setting of charges made between related parties (such as brass-plate corporations and their international corporation owners) for goods, services, or use of property (including intangible property such as a trade mark or name). In short, transfer pricing is a fiddle on the global scale and, in this way, the economic wealth created by the corporation ends up in the brass-plate corporation in a tax haven or, more likely, in another brass-plate corporation in another tax haven where the local tax rate is even lower. Now consider some of the facts in the UK. In 2011, Starbucks, the chain of coffee shops, had profits of about £60 million but paid not one penny in tax. It also paid abroad a huge, unreasonable, amount for the use of the Starbuck name. Google paid £6 million in tax recorded turnover of about £400 million when the true figure was at least six times higher. Tax loss to the UK was about £240 million. Top criminal (of those who are known) was Amazon.uk which paid £1.8 million tax on a reported turnover of £207 million when the true turnover was £3.3 billion i.e., sixteen times higher. The multinational corporations use deceitful practices, and exploit the current legislation and lax atmosphere, to move off-shore profits which are clearly generated from economic activity in the UK. A UK House of Commons committee questioned executives from Starbucks, Amazon and Google and found them to be “evasive” and “completely lacking in transparency.” This is House of Commons-speak for lying about a colossal organised fraud. Yet the politicians are also complicit. For a start they have long welcomed the system of transfer pricing and off-shore tax havens from which, as individuals, they undoubtedly benefit. And that explains why the UK tax authorities have been lax in scrutinising and tightening the tax system and its detailed administration. But there’s an even bigger fraud behind all this, namely, present international banking practice which increases the frauds of the financial elite. People think that the international banks lend existing money e.g., the bank’s capital or the deposits of customers. Yet they do not. They create out of nothing (merely by pressing computer buttons) the money they lend and then add interest as well as administration cost. The interest (as distinct from the genuine administration cost) is in effect a colossal tax so that estimates are that 30-35% of the price of every good or service is the cost of interest. Some estimates are even higher. Governments are in ever-increasing debt because the global elite, assisted by compliant politicians, says that money (borrowed at compound interest) must always come from the commercial banks when, in reality, it could easily be borrowed, interest-free, from a national bank. Then, when the governments cannot pay, the elite insists that there be “austerity” thereby smashing jobs, pensions and lives, to pay back the loans. And please notice that even though the physical assets of land, factories, people and technology are still in existence, everybody’s standard of living is forced to collapse so that the elite can be paid back at interest something they created out of nothing. All the time, of course, there are vague, ever-receding promises that things will get better in the far-off future (when they are getting worse), and all this happens because the global elite has got a stranglehold over the thinking in the universities and easily slips money into the pockets of the politicians. Unless the general public wakes up and sets off an intellectual and political revolt, it will find that it has been tricked it into a deep, debt peonage (out of which it will never be able to break) accompanied by a vicious political and social repression. RS/HSN