Babylon's Bankers


November 29, 2014 By Joseph P. Farrell

This article was shared by some regular readers here, including some in the SE Pacific and in India, and it's a significant development. First, a little context. You'll recall that last in last Wednesday's News and Views from the Nefarium I outlined French National Front leader Marie Le Pen's letter to the governor of the French central bank, outlining not only a problem for repatriating all of France's gold reserves currently held by foreign banks (reading between the lines: all French gold on deposit with the New York Federal Reserve Bank), as well as a sweeping program to audit all secret central bank agreements made by the Bank of France with any other private or international bank. Reading between the lines a bit again, this would seem to invoke the principle of disclosure against the European Central Bank, arguably a sovereign entity given the complete lack of any need for its transparency. In this, it is an extension of the BIS (Bank of International Settlements) and its sovereign status. You'll recall that Le Pen's argument was rather subtle: if central banks have by whatever charter gained a monopoly status over a nation's currency and economy, then they owe a responsibility to the people they ostensibly represent. In other words, the moral requirement supersedes any legal charter or negotiation that may have instituted it. In short, no matter what treaties may have been signed, if they have negotiated away this responsibility, they are null and void.

Now that, of course, is reading a lot into Le Pen's letter, but nonetheless, I think it is a legitimate interpretation of the implications of her remarks; bad news for shadowy and murky institutions like the European Central Bank or BIS. Le Pen, in other words, wants not only a repatriation of France's gold, but she wants what is, in effect, an open audit of the major institutions of western finance, including its most secretive ones.The implied argument here is: can we trust these institutions (and countries) with France's gold if they are not willing or able to be transparent in their relationships and agreements? Answer: no we cannot.

And all of this comes at at time when the American-inspired economic sanctions on Russia are working a deleterious effect on France's economy.

So in all this light, consider this article:

Mistral row: France risks losing Rafale contract in India

One need go no further than the first two paragraphs to see what the long term implications for France's significant arms industry - and therefore for the already struggling French economy - are:

"France risks losing a contract to supply 126 fighter jets to India due to its refusal to deliver Mistral-class ships to Russia, a leading French analyst told the Delovoi Peterburg website. French officials said this week that they will not deliver the first Mistral-class amphibious warship that Russia had ordered as part of a $1.7 billion agreement for weapons sale.

"The biggest repercussion would be a loss of reputation for France as a reliable supplier, Arnaud Dubien, a Russia research associate at the Institut de relations Internationales et Strategiques said. 'Officials from the French Ministry of Defence, in private conversations acknowledge that if they fail to deliver the Mistral to Russia, then France will lose its contract to supply 126 fighter jets to India,' Dubien said.

But as Mr. K.L., one of the people who shared this article with us, put it to me in his email: the BRICSA bloc are standing together. Well, maybe not quite together, but that could be the long term result. For if France is viewed as an unreliable supplier on the basis of pressures from the USA and Germany, this will hardly incline India (or other BRICSA bloc countries) to turn from France to the USA or Germany for their military needs. This will leave them with two alternatives: (1) turn to other BRICSA bloc suppliers like Russia or China, or (2) like Brazil has done with some of its military needs, develop its own indigenous military infrastructures, including military aircraft. India faces a touch choice in the interim, but to my mind it will already be clear in New Delhi what the long term demands, and that is a hefty beefing-up of India's indigenous military-air industry. France, of course, gains nothing from either course of action, and hence, gains nothing from the Washington-inspired sanctions on Russia, unless of course it wants to take up the slack and buy the French aircraft itself, which is, of course, extremely unlikely.

In short, India has served hard, and in Europe, France (and neighbors Germany and Italy) are looking hard at the long-term consequences of subservience to London and Washington. This is yet another story to watch in the on-going and developing Cold War, 2.0.

See you on the flip side...

(My thanks to all of you in India and the Pacific Southeast who shared this article.)