679 Paul Singer, the Jewish Vulture who ate Argentina

Paul Singer, the Jewish Vulture who ate Argentina

Newsletter published on 17 September 2014

(1) Paul Singer, the Jewish Vulture who ate Argentina
(2) Singer calls Occupy Wall St protestors “aging hippies,
anticapitalists, and anti-Semites"
(3) A Vulture Fund's Cycle of Profits
(4) US Supreme Court backed the Vulture Funds - Ellen Brown
(5) Colonization by Bankruptcy: The High-stakes Chess Match for
Argentina - Ellen Brown
(6) Sovereign debt for territory: A new global elite swap strategy -
Adrian Salbuchi
(7) UN General Assembly sides with Argentine against Vulture funds; US
votoes the resolution
(8) Do You Support Argentina—or the Criminal Speculators?

(1) Paul Singer, the Jewish Vulture who ate Argentina

http://firstlightforum.wordpress.com/2013/11/13/jew-paul-singer-and-the-vulture-fund-capitalist-creeps-coming-your-way-soon-america/

Jew Paul Singer and the “Vulture Fund” capitalist creeps—coming your way
soon America!

{photo}
Notorious Jewish vulture capitalist Paul SingerPaul Elliott Singer (born
August 22, 1944) is the founder and CEO of hedge fund Elliott Management
Corporation and The Paul E. Singer Foundation.
{end photo}

Singer grew up in a Jewish family in Tenafly, New Jersey, one of three
children of a Manhattan pharmacist and a homemaker. He obtained his B.S.
in psychology from the University of Rochester and a J.D. from Harvard
Law School. In 1974, Singer accepted a job as an attorney in the real
estate division of the investment bank Donaldson, Lufkin & Jenrette.

In 1977, Singer founded the hedge fund Elliott Associates L.P. with $1.3
million from various friends and family members. Elliott Management
Corporation oversees Elliott Associates and Elliott International
Limited, which together have more than $21 billion in assets under
management. According to The Guardian, “Elliott’s principal investment
strategy is buying distressed debt cheaply and selling it at a profit or
suing for full payment.” [...]

Purchasing sovereign debts

In 1996, Elliott bought defaulted Peruvian debt for a reported $11.4
million, In 1998, a U.S. court ruled that one could not buy debt with
the sole purpose of suing the debtor. Elliott won a $58 million judgment
in 2000, when the ruling was overturned.

After Argentina defaulted on its debt in 2002, NML Capital, a unit of
Elliott, refused to accept its offer to pay less than 30¢ on the dollar
on debts that originally amounted to over $182 million but that Elliott
assessed were then worth $2.3 billion.

In early October 2012, NML arranged for the seizure of an Argentinian
naval vessel in Ghana, the ARA Libertad, in an effort to force Argentina
to pay its debt. Argentina, however, refused to pay the debt, and
shortly thereafter regained control of the ship and removed it from
Ghanaian waters.

In a November 2012 piece in the Huffington Post, Argentina’s Foreign
Affairs Minister, Hector Timerman, harshly criticized Singer for
attempting to collect on the debt. Calling Singer “the inventor of
vulture funds,” Timerman argued that the $127 million Singer had
received from the Republic of Congo to settle a $400 million debt he had
acquired for $10 million “should be going to build roads, schools and
other poverty reduction programs.”

In his investor letter for the fourth quarter of 2012, Singer described
Argentina’s response to the court’s ruling as “defiant and acrimonious,”
saying that its dismissal of the ruling as “judicial colonialism” was
“puzzling,” given that Argentina had chosen “to submit itself to the
jurisdiction of New York courts and to waive its sovereign immunity.”

In February 2013, the U.S. appeals court heard Argentina’s appeal in the
NML case.

In March 2013, Argentina offered a new plan that was judged unlikely to
be acceptable to the New York court. On August 23, 2013 the U.S. Court
of Appeals for the Second Circuit affirmed the lower cout’s verdict and
dismissed said plan.

‘Philanthropy’

Paul Singer founded the Paul E. Singer Family Foundation, which supports
many charitable projects including the Harvard Graduate School of
Education Singer Prize for Excellence in Secondary Teaching and VH1 Save
The Music Foundation, the Food Bank For New York City, National Gay and
Lesbian Task Force Action Fund, and the New York City Police Foundation.
In addition, Singer, whose gay son married his partner in Massachusetts,
where gay marriage is legal, has donated $425,000 of his own money and
raised another $500,000 to support the drive for legalization of gay
marriage in New York, and in October 2012, Singer donated $250,000 to
the Maryland Marriage Campaign.

Gay rights

Singer has contributed to gay-rights causes and same-sex marriage
campaigns, and has also actively sought to persuade other conservatives
to support gay marriage. He has joined other Wall Street executives in
support of LGBT equality in the workplace as a means of retaining
employees and improving overall business outcomes. He has said that
same-sex marriage promotes “family stability” and said that in a time
when “the institution of marriage in America has utterly collapsed,” the
fact that gay couples want to marry “is kind of a lovely thing and a
cool thing and a wonderful thing.”

In 2012, Singer provided $1 million to start a PAC named American Unity
PAC. According to the New York Times, the PAC’s “sole mission will be to
encourage Republican candidates to support same-sex marriage, in part by
helping them to feel financially shielded from any blowback from
well-funded groups that oppose it.”

Political activity

Singer is an active participant in Republican Party politics. He was a
major contributor to George W. Bush’s presidential campaigns.

In 2007, Singer led a financial industry fund-raising effort for Rudolph
Giuliani, first as regional finance chair and later as senior policy
adviser.

In 2007, Singer provided $175,000 to support a petition drive for a
proposed California initiative to apportion the state’s 55 electoral
votes by congressional district. At least 19 of the state’s 53
congressional districts could be expected to vote for a GOP presidential
candidate, enough to change the national results in a close election.

President George W. Bush appointed Singer to serve on the Honorary
Delegation to accompany him to Jerusalem for the celebration of the 60th
anniversary of the State of Israel in May 2008.

In 2011, Singer played a major role in passing legislation that would
allow same-sex marriage in the state of New York by, along with other
major GOP donors, throwing his support behind it. [...]

(2) Singer calls Occupy Wall St protestors “aging hippies,
anticapitalists, and anti-Semites"

http://www.businessweek.com/articles/2014-08-07/argentinas-vulture-paul-singer-is-wall-street-freedom-fighter

Paul Singer will make Argentina Pay

By Max Abelson and Katia Porzecanski   August 07, 2014

[...] Bipartisanship wasn’t in the air at a May dinner in Midtown when
Singer delivered a speech at the annual gala for the Manhattan Institute
for Policy Research, a think tank that promotes “economic choice” and
“individual responsibility.” Singer is chairman of a board that includes
fellow hedge fund billionaire Daniel Loeb and Elliott colleague Jay
Newman, who helps oversee the Argentina investment. Standing in a
ballroom originally built as a bank, Singer complained about “the
rhetoric surrounding the issue of income inequality becoming
increasingly demagogic.” In the audience were two of the evening’s
honorees, Paul Ryan and Jeb Bush, both potential 2016 Republican
presidential candidates.

Singer has given at least $1 million each to the Republican Governors
Association, a political action committee for Mitt Romney, and another
PAC affiliated with strategist Karl Rove. Among his larger concerns are
intrusions on freedom. Even one group that looks like a glaring
exception to his tuxedoed conservatism, American Unity, his PAC
advocating for gay rights, supports “pro-freedom Republicans.” It aims
to spread “freedom for all Americans,” including his son, a doctor. The
two appeared on a panel this year featuring finance executives and their
openly gay sons.

The Manhattan Institute, noted Singer, is “home for those who have the
courage to say what is right and stick with their views, no matter how
intense the pressure to conform to a comforting-yet-false consensus.” He
promised its members will “do what we can to preserve—to prevent—New
York City from becoming, say, New Havana.”

His earlier Institute talks were also short, sharp, and infused with
animus toward the federal government. “Individual liberty, the basic
underpinning of American society, requires constant defense against the
encroachment of the state,” he said at a November 2011 talk, quoting
Citibank’s late chief executive officer, Walter Wriston. At the time,
Occupy Wall Street protesters were still camped downtown in Zuccotti
Park. Singer, standing in black tie in front of a gold-tasseled curtain,
called them “aging hippies, anticapitalists, and anti-Semites,” and
“people desperately in need of potty training.” The crowd clapped, but
he didn’t smile.

Maybe he smiles inside. There are signs now and then that he might enjoy
a kind of humor. At this year’s World Cup, according to a colleague, as
the Argentine national team made its glorious push and its country
teetered toward default, Singer was there, in the stadium. He was
wearing an Argentina jersey.

With Pablo Gonzalez and Kelly Bit

Abelson is a reporter for Bloomberg News in New York.

Porzecanski is a reporter for Bloomberg News in New York. ==

(3) A Vulture Fund's Cycle of Profits

http://firstlightforum.files.wordpress.com/2013/11/vulture-funds-1.jpg

1. Poor country defaults on debt held by creditor country.

2. Vulture fund buys defaulted debt from creditor country for pennies on
the dollar.

3. Vulture fund sues poor country for full amount of debt + interest +
penalties.

4. Vulture fund recoups massive profits of defaulted debt from poor country.

(4) US Supreme Court backed the Vulture Funds - Ellen Brown

From: Ellen Brown <ellenhbrown@gmail.com>
Date: Thu, 14 Aug 2014 15:36:19 +0000

http://truth-out.org/news/item/25570-cry-for-argentina-fiscal-mismanagement-odious-debt-or-pillage

Cry for Argentina: Fiscal Mismanagement, Odious Debt or Pillage?

Thursday, 14 August 2014 09:59

By Ellen Brown

Argentina has now taken the US to The Hague for blocking the country’s
2005 settlement with the bulk of its creditors. The issue underscores
the need for an international mechanism for nations to go bankrupt.
Better yet would be a sustainable global monetary scheme that avoids the
need for sovereign bankruptcy.

Argentina was the richest country in Latin America before decades of
neoliberal and IMF-imposed economic policies drowned it in debt. A
severe crisis in 2001 plunged it into the largest sovereign debt default
in history. In 2005, it renegotiated its debt with most of its creditors
at a 70% “haircut.” But the opportunist “vulture funds,” which had
bought Argentine debt at distressed prices, held out for 100 cents on
the dollar.

Paul Singer’s Elliott Management has spent over a decade aggressively
trying to force Argentina to pay down nearly $1.3 billion in sovereign
debt. Elliott would get about $300 million for bonds that Argentina
claims it picked up for $48 million. Where most creditors have accepted
payment at a 70% loss, Elliott Management would thus get a 600% return.

In June 2014, the US Supreme Court declined to hear an appeal of a New
York court’s order blocking payment to the other creditors until the
vulture funds had been paid. That action propelled Argentina into
default for the second time in this century – and the eighth time since
1827. On August 7, 2014, Argentina asked the International Court of
Justice in the Hague to take action against the United States over the
dispute.

Who is at fault? The global financial press blames Argentina’s own
fiscal mismanagement, but Argentina maintains that it is willing and
able to pay its other creditors. The fault lies rather with the vulture
funds and the US court system, which insist on an extortionate payout
even if it means jeopardizing the international resolution mechanism for
insolvent countries. If creditors know that a few holdout vultures can
trigger a default, they are unlikely to settle with other insolvent
nations in the future.

Blame has also been laid at the feet of the IMF and the international
banking system for failing to come up with a fair resolution mechanism
for countries that go bankrupt. And at a more fundamental level, blame
lies with a global debt-based monetary scheme that forces bankruptcy on
some nations as a mathematical necessity. As in a game of musical
chairs, some players must default.

Most money today comes into circulation in the form of bank credit or
debt. Debt at interest always grows faster than the money supply, since
more is always owed back than was created in the original loan. There is
never enough money to go around without adding to the debt burden. As
economist Michael Hudson points out, the debt overhang grows
exponentially until it becomes impossible to repay. The country is then
forced to default.

Fiscal Mismanagement or Odious Debt?

  Besides impossibility of performance, there is another defense
Argentina could raise in international court – that of “odious debt.”
Also known as illegitimate debt, this legal theory holds that national
debt incurred by a regime for purposes that do not serve the best
interests of the nation should not be enforceable.

The defense has been used successfully by a number of countries,
including Ecuador in December 2008, when President Rafael Correa
declared that its debt had been contracted by corrupt and despotic prior
regimes. The odious-debt defense allowed Ecuador to reduce the sum owed
by 70%.

In a compelling article in Global Research in November 2006, Adrian
Salbuchi made a similar case for Argentina. He traced the country’s
problems back to 1976, when its foreign debt was just under US $6
billion and represented only a small portion of the country’s GDP. In
that year:

     An illegal and de facto military-civilian regime ousted the
constitutionally elected government of president María Isabel Martínez
de Perón [and] named as economy minister, José Martinez de Hoz, who had
close ties with, and the respect of, powerful international private
banking interests. With the Junta’s full backing, he systematically
implemented a series of highly destructive, speculative, illegitimate –
even illegal – economic and financial policies and legislation, which
increased Public Debt almost eightfold to US$ 46 billion in a few short
years. This intimately tied-in to the interests of major international
banking and oil circles which, at that time, needed to urgently re-cycle
huge volumes of “Petrodollars” generated by the 1973 and 1979 Oil
Crises. Those capital in-flows were not invested in industrial
production or infrastructure, but rather were used to fuel speculation
in local financial markets by local and international banks and traders
who were able to take advantage of very high local interest rates in
Argentine Pesos tied to stable and unrealistic medium-term US Dollar
exchange rates.

Salbuchi detailed Argentina’s fall from there into what became a $200
billion debt trap. Large tranches of this debt, he maintained, were
“odious debt” and should not have to be paid:

     Making the Argentine State – i.e., the people of Argentina –
weather the full brunt of this storm is tantamount to financial genocide
and terrorism. . . . The people of Argentina are presently undergoing
severe hardship with over 50% of the population submerged in poverty . .
. . Basic universal law gives the Argentine people the right to
legitimately defend their interests against the various multinational
and supranational players which, abusing the huge power that they wield,
directly and/or indirectly imposed complex actions and strategies
leading to the Public Debt problem.

Of President Nestor Kirchner’s surprise 2006 payment of the full $10
billion owed to the IMF, Salbuchi wrote cynically:

      This key institution was instrumental in promoting and auditing
the macroeconomic policies of the Argentine Government for decades. . .
. Many analysts consider that . . . the IMF was to Argentina what Arthur
Andersen was to Enron, the difference being that Andersen was dissolved
and closed down, whilst the IMF continues preaching its misconceived
doctrines and exerts leverage. . . . [T]he IMF’s primary purpose is to
exert political pressure on indebted governments, acting as a veritable
coercing agency on behalf of major international banks.

Sovereign Bankruptcy and the “Global Economic Reset”

Needless to say, the IMF was not closed down. Rather, it has gone on to
become the international regulator of sovereign debt, which has reached
crisis levels globally. Total debt, public and private, has grown by
over 40% since 2007, to $100 trillion. The US national debt alone has
grown from $10 trillion in 2008 to over $17.6 trillion today.

At the World Economic Forum in Davos in January 2014, IMF Managing
Director Christine Lagarde spoke of the need for a global economic
“reset.”  National debts have to be “reset” or “readjusted” periodically
so that creditors can keep collecting on their exponentially growing
interest claims, in a global financial scheme based on credit created
privately by banks and lent at interest. More interest-bearing debt must
continually be incurred, until debt overwhelms the system and it again
needs to be reset to keep the usury game going.

Sovereign debt (or national) in particular needs periodic “resets,”
because unlike for individuals and corporations, there is no legal
mechanism for countries to go bankrupt. Individuals and corporations
have assets that can be liquidated by a bankruptcy court and distributed
equitably to creditors. But countries cannot be liquidated and sold off
– except by IMF-style “structural readjustment,” which can force the
sale of national assets at fire sale prices.

A Sovereign Debt Restructuring Mechanism ( SDRM) was proposed by the IMF
in the early 2000s, but it was quickly killed by Wall Street and the
U.S. Treasury. The IMF is working on a new version of the SDRM, but
critics say it could be more destabilizingthan the earlier version.

Meanwhile, the IMF has backed collective action clauses (CACs) designed
to allow a country to negotiate with most of its creditors in a way that
generally brings all of them into the net. But CACs can be challenged,
and that is what happened in the case of the latest Argentine
bankruptcy. According to Harvard Professor Jeffrey Frankel:

     [T]he US court rulings’ indulgence of a parochial instinct to
enforce written contracts will undermine the possibility of negotiated
restructuring in future debt crises.

We are back, he says, to square one.

Better than redesigning the sovereign bankruptcy mechanism might be to
redesign the global monetary scheme in a way that avoids the continual
need for a bankruptcy mechanism.  A government does not need to borrow
its money supply from private banks that create it as credit on their
books. A sovereign government can issue its own currency, debt-free. But
that interesting topic must wait for a follow-up article. Stay tuned.

(5) Colonization by Bankruptcy: The High-stakes Chess Match for
Argentina - Ellen Brown

Subject: [MARKETING] Colonization by Bankruptcy: High-stakes Chess for
Argentina
Date: Thu, 28 Aug 2014 18:27:58 +0000 From: Ellen Brown
<ellenhbrown@gmail.com>

Colonization by Bankruptcy: The High-stakes Chess Match for Argentina

By Ellen Brown

Posted on Aug 28, 2014

http://www.truthdig.com/report/item/colonization_by_bankruptcy_high-stakes_chess_for_argentina_20140828

     If Argentina were in a high-stakes chess match, the country’s
actions this week would be the equivalent of flipping over all the
pieces on the board.

     – David Dayen, Fiscal Times, August 22, 2014

Argentina is playing hardball with the vulture funds, which have been
trying to force it into an involuntary bankruptcy. The vultures are
demanding what amounts to a 600% return on bonds bought for pennies on
the dollar, defeating a 2005 settlement in which 92% of creditors agreed
to accept a 70% haircut on their bonds. A US court has backed the
vulture funds; but last week, Argentina sidestepped its jurisdiction by
transferring the trustee for payment from Bank of New York Mellon to its
own central bank. That play, if approved by the Argentine Congress, will
allow the country to continue making payments under its 2005 settlement,
avoiding default on the majority of its bonds.

Argentina is already foreclosed from international capital markets, so
it doesn’t have much to lose by thwarting the US court system. Similar
bold moves by Ecuador and Iceland have left those countries in
substantially better shape than Greece, which went along with the
agendas of the international financiers.

The upside for Argentina was captured by President Fernandez in a
nationwide speech on August 19th. Struggling to hold back tears,
according to Bloomberg, she said:

     When it comes to the sovereignty of our country and the conviction
that we can no longer be extorted and that we can’t become burdened with
debt again, we are emerging as Argentines.

     . . . If I signed what they’re trying to make me sign, the bomb
wouldn’t explode now but rather there would surely be applause,
marvelous headlines in the papers. But we would enter into the infernal
cycle of debt which we’ve been subject to for so long.

The Endgame: Patagonia in the Crosshairs

The deeper implications of that infernal debt cycle were explored by
Argentine political analyst Adrian Salbuchi in an August 12th article
titled “Sovereign Debt for Territory: A New Global Elite Swap Strategy.”
Where territories were once captured by military might, he maintains
that today they are being annexed by debt. The still-evolving plan is to
drive destitute nations into an international bankruptcy court whose
decisions would have the force of law throughout the world. The court
could then do with whole countries what US bankruptcy courts do with
businesses: sell off their assets, including their real estate.
Sovereign territories could be acquired as the spoils of bankruptcy
without a shot being fired.

Global financiers and interlocking megacorporations are increasingly
supplanting governments on the international stage. An international
bankruptcy court would be one more institution making that takeover
legally binding and enforceable. Governments can say no to the
strong-arm tactics of the global bankers’ collection agency, the IMF. An
international bankruptcy court would allow creditors to force a nation
into bankruptcy, where territories could be involuntarily sold off in
the same way that assets of bankrupt corporations are.

For Argentina, says Salbuchi, the likely prize is its very rich
Patagonia region, long a favorite settlement target for ex-pats. When
Argentina suffered a massive default in 2001, the global press,
including Time and The New York Times, went so far as to propose that
Patagonia be ceded from the country as a defaulted debt payment mechanism.

The New York Times article followed one published in the Buenos Aires
financial newspaper El Cronista Comercial called “Debt for Territory,”
which described a proposal by a US consultant to then-president Eduardo
Duhalde for swapping public debt for government land. It said:

     [T]he idea would be to transform our public debt default into
direct equity investment in which creditors can become land owners where
they can develop industrial, agricultural and real estate projects. . .
. There could be surprising candidates for this idea: during the
Alfonsin Administration, the Japanese studied an investment master plan
in Argentine land in order to promote emigration.  The proposal was also
considered in Israel.

Salbuchi notes that ceding Patagonia from Argentina was first suggested
in 1896 by Theodor Herzl, founder of the Zionist movement, as a second
settlement for that movement.

Another article published in 2002 was one by IMF deputy manager Anne
Krueger titled “Should Countries Like Argentina Be Able to Declare
Themselves Bankrupt?” It was posted on the IMF website and proposed some
“new and creative ideas” on what to do about Argentina. Krueger said,
“the lesson is clear: we need better incentives to bring debtors and
creditors together before manageable problems turn into full-blown
crises,” adding that the IMF believes “this could be done by learning
from corporate bankruptcy regimes like Chapter 11 in the US”.

These ideas were developed in greater detail by Ms. Krueger in an IMF
essay titled “A New Approach to Debt Restructuring,” and by Harvard
professor Richard N. Cooper in a 2002 article titled “Chapter 11 for
Countries” published in Foreign Affairs (“mouthpiece of the powerful New
York-Based Elite think-tank, Council on Foreign Relations”). Salbuchi
writes:

     Here, Cooper very matter-of-factly recommends that “only if the
debtor nation cannot restore its financial health are its assets
liquidated and the proceeds distributed to its creditors – again under
the guidance of a (global) court” (!).

In Argentina’s recent tangle with the vulture funds, Ms. Krueger and the
mainstream media have come out in apparent defense of Argentina,
recommending restraint by the US court. But according to Salbuchi, this
does not represent a change in policy. Rather, the concern is that
overly heavy-handed treatment may kill the golden goose:

     . . . [I] n today’s delicate post-2008 banking system, a new and
less controllable sovereign debt crisis could thwart the global elite’s
plans for an “orderly transition towards a new global legal
architecture” that will allow orderly liquidation of financially-failed
states like Argentina. Especially if such debt were to be collateralized
by its national territory (what else is left!?)

Breaking Free from the Sovereign Debt Trap

Salbuchi traces Argentina’s debt crisis back to 1955, when President
Juan Domingo Perón was ousted in a very bloody US/UK/mega-bank-sponsored
military coup:

     Perón was hated for his insistence on not indebting Argentina with
the mega-bankers: in 1946 he rejected joining the International Monetary
Fund (IMF); in 1953 he fully paid off all of Argentina’s sovereign debt.
So, once the mega-bankers got rid of him in 1956, they shoved Argentina
into the IMF and created the “Paris Club” to engineer decades-worth of
sovereign debt for vanquished Argentina, something they’ve been doing
until today.

Many countries have been subjected to similar treatment, as John Perkins
documents in his blockbuster exposé Confessions of an Economic Hit Man.
When the country cannot pay, the IMF sweeps in with refinancing
agreements with strings attached, including selling off public assets
and slashing public services in order to divert government revenues into
foreign debt service.

Even without pressure from economic hit men, however, governments
routinely indebt themselves for much more than they can ever hope to
repay. Why do they do it? Salbuchi writes:

     Here, Western economists, bankers, traders, Ivy League academics
and professors, Nobel laureates and the mainstream media have a quick
and monolithic reply: because all nations need“investment and investors”
if they wish to build highways, power plants, schools, airports,
hospitals, raise armies, service infrastructures and a long list of et
ceteras . . . .

     But more and more people are starting to ask a fundamental
common-sense question: why should governments indebt themselves in hard
currencies, decades into the future with global mega-bankers, when they
could just as well finance these projects and needs far more safely by
issuing the proper amounts of their own local sovereign currency instead?

Neoliberal experts shout back that government-created money devalues the
currency, inflates the money supply, and destroys economies. But does
it? Or is it the debt service on money created privately by banks, along
with other forms of “rent” on capital, that create inflation and destroy
economies? As Prof. Michael Hudson points out:

     These financial claims on wealth – bonds, mortgages and bank loans
– are lent out to become somebody else’s debts in an exponentially
expanding process.  . . . [E]conomies have been obliged to pay their
debts by cutting back new research, development and new physical
reinvestment. This is the essence of IMF austerity plans, in which the
currency is “stabilized” by further international borrowing on terms
that destabilize the economy at large. Such cutbacks in long-term
investment also are the product of corporate raids financed by
high-interest junk bonds. The debts created by businesses, consumers and
national economies cutting back their long-term direct investment leaves
these entities even less able to carry their mounting debt burden.

Spiraling debt also results in price inflation, since businesses have to
raise their prices to cover the interest and fees on the debt.

 From Sovereign Debt to Monetary Sovereignty

For governments to escape this austerity trap, they need to spend not
less but more money on the tangible capital formation that increases
physical productivity. But where to get the investment money without
getting sucked into the debt vortex? Where can Argentina get funding if
the country is shut out of international capital markets?

The common-sense response, as Salbuchi observes, is for governments to
issue the money they need directly. But “printing money” raises outcries
that can be difficult to overcome politically. An alternative that can
have virtually the same effect is for nations to borrow money issued by
their own publicly-owned banks. Public banks generate credit just as
private banks do; but unlike private lenders, they return interest and
profits to the economy. Their mandate is to serve the public, and that
is where their profits go. Funding through their own government-issued
currencies and publicly-owned banks has been successfully pursued by
many countries historically, including Australia, New Zealand, Canada,
Germany, China, Russia, Korea and Japan. (For more on this, see The
Public Bank Solution.)

Countries do need to be able to buy foreign products that they cannot
acquire or produce domestically, and for that they need a form of
currency or an international credit line that other nations will accept.
But countries are increasingly breaking away from the oil- and
weapons-backed US dollar as global reserve currency. To resolve the
mutually-destructive currency wars will probably take a new Bretton
Woods Accord. But that is another subject for a later article.

(6) Sovereign debt for territory: A new global elite swap strategy -
Adrian Salbuchi

http://rt.com/op-edge/179772-sovereign-debt-for-territory/

Sovereign debt for territory: A new global elite swap strategy

Adrian Salbuchi is a political analyst, author, speaker and radio/TV
commentator in Argentina.

August 12, 2014 13:07

In recent decades, dozens of sovereign nations have fallen into
ever-deepening trouble by becoming indebted with the “private megabank
over-world” for amounts far, far in excess of what they can ever pay back.

Is this due to bankers’ professional malpractice coupled with government
mismanagement on a truly grand scale? Or are we seeing global power
elite long-term planners slowly achieving their goals?
It takes two to dance the tango

Recurrent sovereign debt crises reflect neither “over-lending mistakes”
by bankers and investors, nor “innocence” on the part of successive
governments in deeply indebted nations.

Rather, it all ties in with a global model for domination driven by a
system of perpetual national debt which I have called “The Shylock Model”.

As with the tango which requires rhythm and bravado, Argentina is again
dancing centre-stage to global mega-bankers’ financial tunes after
falling into a new “technical default”. Not just because the country is
unable to pay off its massive public debt by heeding the “rules of the
game” as written and continuously re-vamped by global usurers, but now
with added legal immorality and judicial indecency on the part of New
York’s Second District Manhattan Court presided by Judge Daniel Griesa.

Griesa has shown no qualms in putting US law at the service of immoral
parasitic “bankers and investors” such as Paul Singer of the Elliott/NML
Fund and Mark Brodsky of the Aurelius Fund.

The mainstream media inside and outside Argentina refer to these
parasitic money “sloshers” as “vulture funds”; a conceptual mistake
because one might then be led to believe that other funds and bankers -
Goldman Sachs, HSBC, Citigroup, JPMorgan Chase, Deutsche Bank, George
Soros, Rothschild, Warburg - are not “vultures” when, in fact, the very
foundations of today’s global banking system lie on parasitic
pro-vulture rules and laws coupled with an overpowering lack of moral
values.

Sovereign debt

Sovereign debts are a major problem in just about every country in the
world, including the US, UK and EU nations. So much so, those debts have
become a Damocles’ Swords threatening the livelihood of untold billions
of workers around the world.

One often wonders why governments indebt themselves for so much more
than they can ever hope to pay… Here, Western economists, bankers,
traders, Ivy League academics and professors, Nobel laureates and the
mainstream media have a quick and monolithic reply: because all nations
need “investment and investors” if they wish to build highways, power
plants, schools, airports, hospitals, raise armies, service
infrastructures and a long list of et ceteras, economic and national
activities are all about.

But more and more people are starting to ask a fundamental common-sense
question: why should governments indebt themselves in hard currencies,
decades into the future with global mega-bankers, when they could just
as well finance these projects and needs far more safely by issuing the
proper amounts of their own local sovereign currency instead?

Here is where all the above “experts” go berserk & ballistic, shouting
back: “Issue currency? Are you crazy?? That’s against the “rules & laws”
of economics!!! Issuing national sovereign currency to finance the real
economy’s monetary needs leads to inflation and lost jobs and chaos and…
(puts us nice mega-bankers out of a job…)!!.” That’s when they all
gang-up into noisy “The sky is falling! The sky is falling!!” mode.

Then you ask them: What happens when countries default on their
unpayable sovereign debts - as they invariably and repeatedly do - not
just in Argentina, but in Brazil, Spain, Venezuela, France, Costa Rica,
Peru, El Salvador, Portugal, Russia, Bolivia, Iceland, Turkey, Greece,
Cyprus, Thailand, Nigeria, Mexico, and Indonesia?

Again the voice of the “experts”: “Then countries must “restructure”
their debts kicking them forwards 20, 40 or more years into the future,
so that your great, great, great grandchildren can continue paying
them”. Oh, I see!

The truth is that countries need public spending to maintain their
economies resilient and buoyant, their citizens working, prospering and
happy; their nation-states sovereign, strong and secure.

OK: happy, secure and working populations cannot be defined as a formula
that can be readily integrated into “expert” economists’ spreadsheets.
However, there’s a basic truth that should be obvious by now: Finance
(which is the virtual world of bankers, investments, speculation and
usury) should always be fully subordinated to the Real Economy (which is
the world of work, production, buildings, milk & bread and services).

All this begs the obvious question: Since governments have a natural
tendency to overspend and end up getting themselves into too much debt,
which is the better option then:

- that their “red numbers” (aka sovereign debt) should be owed to
themselves; their own nation-states (debt in local currency that in the
last instance can be written off, even if a bad bout of inflation cannot
be stopped, countries can always revamp their currencies as Argentina
repeatedly did over the past forty years), whereby the whole “debt
crisis” basically becomes a short-term internal affair (albeit
painful!), or…

- to convert those “red numbers” into foreign currency debt (US Dollars
or Euro) fully controlled by powerful far-away, well-organized
creditor-technocrats and global mega-bankers sitting at the FED and IMF
in Washington DC; the European Central Bank in Frankfurt; or perched in
eager expectation in their Wall Street vulture nests?
Fool me once, shame on you; fool me twice, shame on me

This tongue-twister, which famously proved too much for Baby Bush to
muster, is a fitting description of how the hellish sovereign debt
system really works in the long-term.

Argentina’s recurrent defaults and debt restructuring go back many
decades. For brevity’s sake, let’s just point to 1956 right after
President Juan Domingo Perón was ousted by a very bloody 1955 US-UK (and
mega-banker) sponsored military coup.

Perón was hated for his insistence on not indebting Argentina with the
mega-bankers: in 1946 he rejected joining the International Monetary
Fund (IMF); in 1953 he fully paid off all of Argentina’s sovereign debt.
So, once the mega-bankers got rid of him in 1956, they shoved Argentina
into the IMF and created the “Paris Club” to engineer decades-worth of
sovereign debt for vanquished Argentina, something they’ve been doing
until today.

But each sovereign-debt crisis cycle became shorter, more virulent and
more toxic.

By December 2001, Argentina had collapsed financially sinking into the
largest sovereign debt default in history. Immediately, the IMF’s deputy
manager Anne Krueger proposed some “new and creative ideas” on what to
do about Argentina.

She published them in 2002 in an article on the IMF’s website: “Should
Countries like Argentina be able to declare themselves bankrupt?”, in
which she said that “the lesson is clear: we need better incentives to
bring debtors and creditors together before manageable problems turn
into full-blown crises”, adding that the IMF believes “this could be
done by learning from corporate bankruptcy regimes like Chapter 11 in
the US”.

She pointed this out as “a possible new approach”, adding that “of
course many practical and political obstacles to getting such an
approach up and running” needed to be overcome, the “key features would
need the force of law throughout the world”, creating “a predictable
(global) legal framework”.

 From the stance of global mega-bankers’ geopolitical long-term
planners, Ms Krueger’s proposal consisted of first gradually driving
countries into receivership, and then sequentially into full-fledged
bankruptcy.

Then as if nations were private corporations like Enron or WorldCom -
they could be broken up into as many “digestible” pieces as possible, to
be gobbled up by international creditors in some global vulture-fest
banquet.

These ideas were developed in greater detail in her IMF essay, “A New
Approach to Debt Restructuring”, and in a “Foreign Affairs” (mouthpiece
of the powerful New York-Based Elite think-tank, Council on Foreign
Relations) article published in July/August 2002 by Harvard professor
Richard N Cooper: “Chapter 11 for Countries”.

Here, Cooper very matter-of-factly recommends that “only if the debtor
nation cannot restore its financial health are its assets liquidated and
the proceeds distributed to its creditors – again under the guidance of
a (global) court” (!).

During those turbulent years, the global press – Time and The New York
Times, for example – even suggested that the immensely rich Patagonia
southern region should secede from Argentina as a defaulted debt payment
mechanism.

In June 2005, however, a new sovereign debt bond mega-swap was
instrumented by Argentina’s new president, Nestor Kirchner, and his
Finance Minister Roberto Lavagna.

However, as Argentina became more and more structurally mired in debt,
its sovereign debt crisis cycle grew shorter and shorter so that by 2010
a new debt crisis was in the books involving yet more debt
reengineering, this time by President Cristina Kirchner and her Economy
Minister (and today prosecuted Vice President) Amado Boudou.

But that too failed to hold for long, and today Singer’s NML/Elliot Fund
and Brodsky’s Aurelius Fund have pushed Argentina again into default,
this time with the legal backing of local Manhattan Federal Judge Griesa
and the US Supreme Court.

The very fact that today the fate of Argentina’s sovereign debt lies
with the US Judiciary is an eloquent sign of things to come.

Don’t kill the hen that lays golden eggs!

Surprisingly, Ms Krueger recently came out in “defense” of Argentina
recommending Judge Griesa and his “Vulture Nest” boys should not act
hastily killing off the Argentine hen that lays golden eggs.

In an article published July 2014, she warns that the “US Supreme
Court’s decision on Argentina adds a new wrinkle, and may very well
further increase the risk attached to holding sovereign debt and this,
to the cost of issuing it.”

The specialized and mainstream media - Financial Times, New York Times,
Wall Street Journal, The Economist - are also recommending Judge Griesa
and his vulture chicks to show more restraint because in today’s
delicate post-2008 banking system, a new and less controllable sovereign
debt crisis could thwart the global elite’s plans for an “orderly
transition towards a new global legal architecture” that will allow
orderly liquidation of financially-failed states like Argentina.
Especially if such debt were to be collateralized by its national
territory (what else is left!?)

Will yet another sovereign debt bond mega-swap be imposed upon
Argentina, this time with large swathes of its national territory –
especially Patagonia – being used as collateral guarantee?

That would mean that in a few years’ time the Shylocks in Wall Street
and London will do everything they can to yet again push Argentina into
default, since that would pave the way for them to “legally” take over
its territory cashing in on their collateral as “compensation”.

Remember: usurer Shylock drooled at the mouth whilst sharpening his
knife preparing to cut deep into Merchant Antonio’s heart. He didn’t
give a damn about the 3000 ducats owed him: he just wanted the pound of
flesh “legally” his.

Is this what the coming “Sovereign Debt Model” will look like?

If we tie this all in with what the unfolding of “Act III” in the
on-going Israel-Palestine crisis whereby re-settling millions of Israeli
civilians into southern Argentina might be on the drawing board, we can
then begin to understand how nicely Argentina’s next debt crisis will
tie in: The global Rothschild’s, Warburg’s, Lazard’s, Soros,
Rockefellers will be able to “legally” take over Patagonia, and then
“legally” hand it over to whomever they wish without a single shot being
fired!

If this is what’s really happening behind-the-curtains regarding
Argentina, does anybody believe it will stop there?

Beware Greece, Italy, France, Germany, Spain, Mexico, Korea, Japan,
Ukraine, Brazil, South Africa – the world government is marching in!

(7) UN General Assembly sides with Argentine against Vulture funds; US
votoes the resolution

http://en.ria.ru/politics/20140910/192790022/UN-General-Assembly-Votes-to-Negotiate-Sovereign-Debt.html

UN General Assembly Votes to Negotiate Sovereign Debt Restructuring

03:54 10/09/2014

UNITED NATIONS, September 10 (RIA Novosti) - Reacting to Argentina's
battle about its past debts with what it calls predatory hedge funds,
the UN General Assembly on Tuesday approved a resolution by 124 votes to
11, with 41 abstaining, which "decides to elaborate and adopt through a
process of intergovernmental negotiations, as a matter of priority
during its sixty-ninth session, a multilateral legal framework for
sovereign debt restructuring processes."

The United States voted against the resolution, sponsored by the Group
of 77 and China, saying that it would introduce uncertainty into
financial markets.

Argentina's foreign minister Hector Timerman said, after the vote, that
“the time has come to give a legal framework to the financial system for
restructuring sovereign debt that respects the majority of creditors and
which allows countries to come out of crises in a sustainable manner.”

The resolution adopted Tuesday cites “the work carried out by the
International Monetary Fund in 2003, with the support of the
International Monetary and Financial Committee, to formulate a proposal
for a sovereign debt restructuring mechanism.”

The framework's goal, the resolution adopted Tuesday says, is
“increasing the efficiency, stability and predictability of the
international financial system and achieving sustained, inclusive and
equitable economic growth and sustainable development, in accordance
with national circumstances and priorities.”

(8) Do You Support Argentina—or the Criminal Speculators?

http://larouchepac.com/node/31187

July 1, 2014 - 11:15AM

A battle to the death is ongoing between Argentina and two of the most
notorious hedge funds, NML Capital and Aurelius Capital Management, and
its outcome will determine whether humanity plunges into disaster and
probably annihilates itself in a thermonuclear world war, or whether we
get our act together in time and put a new, just world economic order on
the agenda.

What is going on?

On the one side, are the unscrupulous mega-speculators, whose greed is
insatiable, and who are part of the Anglo-American-dominated imperialist
grouping, those attempting to establish a world empire. Part of this is
the 24/7 spying on citizens by the NSA and the GCHQ, as well as the
Transatlantic Trade and Investment Partnership (TTIP), which would give
all power to the multinationals and the "Too Big To Fail" banks, at the
expense of the right of sovereign governments to protect the general
welfare of their citizens. It also includes the eastward expansion of
NATO and the EU, the strategy of encirclement of Russia and China, and
the acute danger of a third, thermonuclear world war, which could wipe
out the human race.

One of the hedge funds, NML Capital Fund, is demanding a payment of $832
million on the bonds it purchased in default at the scrap price of $48.7
million only six years ago -- a profit of 1,608%! That would force
Argentina into bankruptcy, and could very well trigger a systemic crisis
of the global financial system.

On the other side stands Argentina, which has emphasized and proven that
it wants to pay its debts, but in such a way that the Argentine economy
maintains the growth needed to be able to do that. This was also, by the
way, the argument by the late Deutsche Bank chairman Hermann Abs at the
London Debt Conference in 1953, on the subject of restructuring the
German debt. Argentina has made it clear in an international advertising
campaign, that it is paying and will continue to pay, but under
conditions that do not kill off its own population and economy. The
murderous ruling by the U.S. Supreme Court in support of the hedge funds
has triggered an unprecedented wave of solidarity with Argentina: the
Organization of American States (OAS) -- except for the United States;
the G77, with its 133 member states; MERCOSUR (the Southern Common
Market); UNASUR (the Union of South American Nations); China, Russia,
France, and even 100+ British parliamentarians -- i.e., the majority of
mankind -- are all defending Argentina's rights against the usurers. The
crucial question here is: Is international law, as it evolved from the
Peace of Westphalia in 1648, and as expressed in the UN Charter, still
valid, or not? Can and must a sovereign government defend the general
welfare of its citizens, or do criminal speculators have the right to
use all means, as Shakespeare depicted so vividly in "The Merchant of
Venice," to demand the debtor's "pound of flesh," even if that means
that the person dies?

There is a breathtaking process underway now among the BRICS countries
(Russia, China, India, Brazil, South Africa) and Ibero-America, in which
these States are constructing a new, just world economic order, based on
building up the real economy, scientific and technological progress, and
a vision of the future. This is the idea of a World Land-Bridge that
will join peoples and nations: The program that the Civil Rights
Solidarity Movement (BüSo) in Germany, as well as its sister
organizations elsewhere in Europe (Movisol in Italy, S &P in France; EAP
in Sweden, Schiller Institute in Denmark, etc.) have been working on for
years is now on the agenda. That is a perspective for the future, and
thus provides the framework for ending wars as a means of conflict
resolution.

The only thing that the trans-Atlantic camp has to offer is the
sacrifice of the common good, of the happiness and the life of its
people, in favor of a Frankenstein monster, "the stability of the
market," to which anything and everything should be sacrificed, but
which is itself hopelessly bankrupt. This system does exactly what Pope
Francis says: It kills. You could also call it satanic.

In the struggle between Argentina and the hedge funds, there is no
middle ground. Which side are the European governments on? We want an
answer! We want official statements! Now!

Signers:

Helga Zepp-LaRouche, Chairman, Schiller Institute