Archive for the ‘Ellen Brown’ Category


Although Venezuela is not technically at war, it is suffering from foreign currency strains triggered by aggressive attacks by a foreign power. US economic sanctions have been going on for years, causing at least $20 billion in losses to the country. About $7 billion of its assets are now being held hostage by the US, which has waged an undeclared war against Venezuela ever since George W. Bush’s failed military coup against President Hugo Chavez in 2002.

Modern Monetary Theory (MMT) is getting significant media attention these days, after Alexandria Ocasio-Cortez said in an interview that it should “be a larger part of our conversation” when it comes to funding the Green New Deal. According to MMT, the government can spend what it needs without worrying about deficits. MMT expert and Bernie Sanders advisor Prof. Stephanie Kelton says the government actually creates money when it spends. The real limit on spending is not an artificially imposed debt ceiling but a lack of labor and materials to do the work, leading to generalized price inflation. Only when that real ceiling is hit does the money need to be taxed back, and then not to fund government spending but to shrink the money supply in an economy that has run out of resources to put the extra money to work.

Predictably, critics have been quick to rebut, calling the trend to endorse MMT “disturbing” and “a joke that’s not funny.” In a February 1st post on The Daily Reckoning,Brian Maher darkly envisioned Bernie Sanders getting elected in 2020 and implementing “Quantitative Easing for the People” based on MMT theories. To debunk the notion that governments can just “print the money” to solve their economic problems, he raise the specter of Venezuela, where “money” is everywhere but bare essentials are out of reach for many, the storefronts are empty, unemployment is at 33%, and inflation is predicted to hit 1,000,000% by the end of the year.

Blogger Arnold Kling also pointed to the Venezuelan hyperinflation. He described MMTas “the doctrine that because the government prints money, it can spend whatever it wants . . . until it can’t.” He said:

To me, the hyperinflation in Venezuela exemplifies what happens when a country reaches the “it can’t” point. The country is not at full employment. But the government can’t seem to spend its way out of difficulty. Somebody should ask these MMT rock stars about the Venezuela example.

I’m not an MMT rock star and won’t try to expound on its subtleties. (I would submit that under existing regulations, the government cannot actually create money when it spends, but that it should be able to. In fact MMTers have acknowledged that problem; but it’s a subject for another article.) What I want to address here is the hyperinflation issue, and why Venezuelan hyperinflation and “QE for the People” are completely different animals.

What Is Different About Venezuela

Venezuela’s problems are not the result of the government issuing money and using it to hire people to build infrastructure, provide essential services and expand economic development. If it were, unemployment would not be at 33 percent and climbing. Venezuela has a problem that the US does not have and will never have: it owes massive debts in a currency it cannot print itself, namely US dollars. When oil (its principal resource) was booming, Venezuela was able to meet its repayment schedule. But when oil plummeted, the government was reduced to printing Venezuelan Bolivars and selling them for US dollars on international currency exchanges. As speculators drove up the price of dollars, more and more printing was required by the government, massively deflating the national currency.


Trump Takes on the Fed

Posted: July 31, 2018 in Ellen Brown


The president has criticized Federal Reserve policy for undermining his attempts to build the economy. The best way to make the central bank serve the needs of the economy is to make it a public utility.

For nearly half a century, presidents have refrained from criticizing the “independent” Federal Reserve; but that was before Donald Trump. In response to a question about Fed interest rate policy in a CNBC interview on July 19, 2018, he shocked commentators by stating, “I’m not thrilled. Because we go up and every time you go up they want to raise rates again. . . . I am not happy about it. . . . I don’t like all of this work that we’re putting into the economy and then I see rates going up.” He acknowledged the central bank’s independence, but the point was made: the Fed was hurting the economy with its…

View original post 1,636 more words


Ellen Brown

April 4, 2018

Bayer and Monsanto have a long history of collusion to poison the ecosystem for profit. The Trump administration should veto their merger not just to protect competitors but to ensure human and planetary survival.

Two new studies from Europe have found that the number of farm birds in France has crashed by a third in just 15 years, with some species being almost eradicated. The collapse in the bird population mirrors the discovery last October that over three-quarters of all flying insects in Germany have vanished in just three decades. Insects are the staple food source of birds, the pollinators of fruits, and the aerators of the soil.

The chief suspect in this mass extinction is the aggressive use of neonicotinoid pesticides, particularly imidacloprid and clothianidin, both made by German-based chemical giant Bayer. These pesticides, along with toxic glyphosate herbicides (Roundup), have delivered a one-two punch against Monarch butterflies, honeybees and birds. But rather than banning these toxic chemicals, on March 21st the EU approved the $66 billion merger of Bayer and Monsanto, the US agribusiness giant producing Roundup and the genetically modified (GMO) seeds that have reduced seed diversity globally. The merger will make the Bayer-Monsanto conglomerate the largest seed and pesticide company in the world, giving it enormous power to control farm practices, putting private profits over the public interest.

As Sen. Elizabeth Warren (D.-Mass.) noted in a speech in December before the Open Markets Institute, massive companies are merging into huge market-dominating entities that invest a share of their profits in lobbying and financing political campaigns, shaping the political system to their own ends. She called on the Trump administration to veto the Bayer-Monsanto merger, which is still under antitrust scrutiny and has yet to be approved in the US. 

A 2016 survey of Trump’s voter base found that over half disapproved of the Monsanto/Bayer merger, fearing it would result in higher food prices and higher costs for farmers. Before 1990, there were 600 or more small independent seed businesses globally, many of them family owned. By 2009, only about 100 survived; and seed prices had more than doubled. But reining in these powerful conglomerates is more than just a question of economics. It may be a question of the survival of life on this planet. 

While Bayer’s neonicotinoid pesticides wipe out insects and birds, Monsanto’s glyphosate has been linked to over 40 human diseases, including cancer. Its GMO seeds have been genetically modified to survive this toxic herbicide, but the plants absorb it into their tissues; and in the humans who eat them, glyphosate disrupts the endocrine system and the balance of gut bacteria, damages DNA and is a driver of cancerous mutations. Researchers summarizing a 2014 study of glyphosates in the Journal of Organic Systems linked them to the huge increase in chronic diseases in the United States, with the percentage of GMO corn and soy planted in the US showed highly significant correlations with hypertension, stroke, diabetes, obesity, lipoprotein metabolism disorder, Alzheimer’s, Parkinson’s, multiple sclerosis, hepatitis C, end stage renal disease, acute kidney failure, cancers of the thyroid, liver, bladder, pancreas, kidney and myeloid leukaemia. But regulators have turned a blind eye, captured by corporate lobbyists and a political agenda that has more to do with power and control them protecting the health of the people.

The Trump administration has already approved a merger between former rivals Dow and DuPont, and has signed off on the takeover of Swiss pesticide giant Syngenta by ChemChina.  If Monsanto/Bayer gets approved as well, just three corporations will dominate the majority of the world’s seed and pesticide markets, giving them enormous power to continue poisoning the planet at the expense of its living inhabitants.

The Shady History of Bayer and the Petrochemical Cartel

To understand the magnitude of this threat, it is necessary to delve into some history. This is not the first time Monsanto and Bayer have joined forces. In both world wars, they made explosives and poisonous gases using shared technologies that they sold to both sides. After World War II, they united as MOBAY (MonsantoBayer) and supplied the ingredients for Agent Orange in the Vietnam War.

In fact corporate mergers and cartels have played a central role in Bayer’s history. In 1904, it joined with German giants BASF and AGFA to form the first chemical cartel. After World War I, Germany’s entire chemical industry was merged to become I.G. Farben. By the beginning of World War II, I.G. Farben was the largest industrial corporation in Europe, the largest chemical company in the world, and part of the most gigantic and powerful cartel in all history.

A cartel is a grouping of companies bound by agreements designed to restrict competition and keep prices high. The dark history of the I.G. Farben cartel was detailed in a 1974 book titled World Without Cancer by G. Edward Griffin, who also wrote the best-selling Creature from Jekyll Island on the shady history of the Federal Reserve. Griffin quoted from a book titled Treason’s Peace by Howard Ambruster, an American chemical engineer who had studied the close relations between the German chemical trust and certain American corporations. Ambruster warned:

Farben is no mere industrial enterprise conducted by Germans for the extraction of profits at home and abroad. Rather, it is and must be recognized as a cabalistic organization which, through foreign subsidiaries and secret tie-ups, operates a far-flung and highly efficient espionage machine — the ultimate purpose being world conquest . . . and a world superstate directed by Farben.109

The I.G. Farben cartel arose out of the international oil industry. Coal tar or crude oil is the source material for most commercial chemical products, including those used in drugs and explosives. I.G. Farben established cartel agreements with hundreds of American companies. They had little choice but to capitulate after the Rockefeller empire, represented by Standard Oil of New Jersey, had done so, since they could not hope to compete with the Rockefeller/I.G. combination.

The Rockefeller group’s greatest influence was exerted through international finance and investment banking, putting them in control of a wide spectrum of industry. Their influence was particularly heavy in pharmaceuticals. The directors of the American I.G. Chemical Company included Paul M. Warburg, brother of a director of the parent company in Germany and a chief architect of the Federal Reserve System.

The I.G. Farben cartel was technically disbanded at the Nuremberg War Trials following World War II, but in fact it merely split into three new companies — Bayer, Hoescht and BASF — which remain pharmaceutical giants today. In order to conceal its checkered history, Bayer orchestrated a merger with Monsanto in 1954, giving rise to the MOBAY Corporation. In 1964, the US Justice Department filed an antitrust lawsuit against MOBAY and insisted that it be broken up, but the companies continued to work together unofficially.

In Seeds of Destruction: The Hidden Agenda of Genetic Manipulation (2007), William Engdahl states that global food control and depopulation became US strategic policy under Rockefeller protégé Henry Kissinger, who was Secretary of State in the 1970s. Along with oil geopolitics, these policies were to be the new “solution” to the threats to US global power and continued US access to cheap raw materials from the developing world. “Control oil and you control nations,” Kissinger notoriously declared. “Control food and you control the people.”

Global food control has nearly been achieved, by reducing seed diversity and establishing proprietary control with GMO seeds distributed by only a few transnational corporations led by Monsanto; and by a massive taxpayer-subsidized propaganda campaign in support of GMO seeds and neurotoxic pesticides. A de facto cartel of giant chemical, drug, oil, banking and insurance companies connected by interlocking directorates reaps the profits at both ends, by waging a very lucrative pharmaceutical assault on the diseases created by their toxic agricultural chemicals.

Going Organic: The Russian Approach

In the end, the Green Revolution engineered by Henry Kissinger to control markets and ensure US economic dominance may be our nemesis. While the US struggles to maintain its hegemony by economic coercion and military force, Russia is winning the battle for the health of the people and the environment. Vladimir Putin has banned GMOs and has set out to make Russia the world’s leading supplier of organic food.



Ellen Brown

February 27, 2018

One Belt, One Road,” China’s $1 trillion infrastructure initiative, is a massive undertaking of highways, pipelines, transmission lines, ports, power stations, fiber optics, and railroads connecting China to Central Asia, Europe and Africa. According to Dan Slane, a former advisor in President Trump’s transition team, “It is the largest infrastructure project initiated by one nation in the history of the world and is designed to enable China to become the dominant economic power in the world.” In a January 29th article titled “Trump’s Plan a Recipe for Failure, Former Infrastructure Advisor Says,” he added, “If we don’t get our act together very soon, we should all be brushing up on our Mandarin.”

On Monday, February 12th, President Trump’s own infrastructure initiative was finally unveiled. Perhaps to trump China’s $1 trillion mega-project, the Administration has now upped the ante from $1 trillion to $1.5 trillion, or at least so the initiative is billed. But as Donald Cohen observes in The American Prospect, it’s really only $200 billion, the sole sum that is to come from federal funding; and it’s not even that after factoring in the billions in tax cuts in infrastructure-related projects. The rest of the $1.5 trillion is to come from cities, states, and private investors; and since city and state coffers are depleted, that chiefly means private investors. The focus of the Administration’s plan is on public-private partnerships, which as Slane notes are not suitable for many of the most critical infrastructure projects, since they lack the sort of ongoing funding stream such as a toll or fee that would attract private investors. Public-private partnerships also drive up costs compared to financing with municipal bonds.

In any case, as Yves Smith observes, private equity firms are not much interested in public assets; and to the extent that they are, they are more interested in privatizing existing infrastructure than in funding the new development that is at the heart of the president’s plan. Moreover, local officials and local businessmen are now leery of privatization deals. They know the price of quick cash is to be bled dry with user charges and profit guarantees.

The White House says its initiative is not a take-it-or-leave-it proposal but is the start of a negotiation, and that the president is “open to new sources of funding.” But no one in Congress seems to have a viable proposal. Perhaps it is time to look more closely at how China does it . . . .

China’s Secret Funding Source: The Deep Pocket of Its State-owned Banks

While American politicians argue endlessly about where to find the money, China has been forging full steam ahead with its mega-projects. A case in point is its 12,000 miles of high-speed rail, built in a mere decade while American politicians were still trying to fund much more modest rail projects. The money largely came from loans from China’s state-owned banks. The country’s five largest banks are majority-owned by the central government, and they lend principally to large, state-owned enterprises.

Where do the banks get the money? Basically, they print it. Not directly. Not obviously. But as the Bank of England has acknowledged, banks do not merely recycle existing deposits but actually create the money they lend by writing it into their borrowers’ deposit accounts. Incoming deposits are needed to balance the books, but at some point these deposits originated in the deposit accounts of other banks; and since the Chinese government owns most of the country’s banks, it can aim this funding fire hose at its most pressing national needs.

China’s central bank, the People’s Bank of China, issues money for infrastructure in an even more direct way. It has turned to an innovative form of quantitative easing in which liquidity is directed not at propping up the biggest banks but at “surgical strikes” into the most productive sectors of the economy. Citigroup chief economist Willem Buiter calls this “qualitative easing” to distinguish it from the quantitative easing engaged in by Western central banks. According to a 2014 Wall Street Journal article:

In China’s context, such so-called qualitative easing happens when the People’s Bank of China adds riskier assets to its balance sheet – such as by relending to the agriculture sector and small businesses and offering cheap loans for low-return infrastructure projects – while maintaining a normal pace of balance-sheet expansion [loan creation]. . . .

The purpose of China’s qualitative easing is to provide affordable financing to select sectors, and it reflects Beijing’s intention to dictate interest rates for some sectors, Citigroup’s economists said. They added that while such a policy would also put inflationary pressure on the economy, the impact is less pronounced than the U.S.-style quantitative easing.

Among the targets of these surgical strikes with central bank financing is the One Belt, One Road initiative. According to a May 2015 article in Bloomberg:

Instead of turning the liquidity sprinkler on full-throttle for the whole garden, the PBOC is aiming its hose at specific parts. The latest innovations include plans to bolster the market for local government bonds and the recapitalisation of policy banks so they can boost lending to government-favoured projects. . . .



by Ellen Brown

This is the second in a two-part article on the debt burden America’s students face. Read Part 1 here.

The lending business is heavily stacked against student borrowers. Bigger players can borrow for almost nothing, and if their investments don’t work out, they can put their corporate shells through bankruptcy and walk away. Not so with students. Their loan rates are high and if they cannot pay, their debts are not normally dischargeable in bankruptcy. Rather, the debts compound and can dog them for life, compromising not only their own futures but the economy itself.

“Students should not be asked to pay more on their debt than they can afford,” said Donald Trump on the presidential campaign trail in October 2016. “And the debt should not be an albatross around their necks for the rest of their lives.” But as Matt Taibbi points out in a December 15 article, a number of proposed federal changes will make it harder, not easier, for students to escape their debts, including wiping out some existing income-based repayment plans, harsher terms for graduate student loans, ending a program to cancel the debt of students defrauded by ripoff diploma mills, and strengthening “loan rehabilitation” – the recycling of defaulted loans into new, much larger loans on which the borrower usually winds up paying only interest and never touching the principal. The agents arranging these loans can get fat commissions of up to 16 percent, an example of the perverse incentives created in the lucrative student loan market. Servicers often profit more when borrowers default than when they pay smaller amounts over a longer time, so they have an incentive to encourage delinquencies, pushing students into default rather than rescheduling their loans. It has been estimated that the government spends $38 for every $1 it recovers from defaulted debt. The other $37 goes to the debt collectors.

The securitization of student debt has compounded these problems. Like mortgages, student loans have been pooled and packaged into new financial products that are sold as student loan asset-backed securities (SLABS). Although a 2010 bill largely eliminated private banks and lenders from the federal student loan business, the “student loan industrial complex” has created a $200 billion market that allows banks to cash in on student loans without issuing them. About 80 percent of SLABS are government-guaranteed. Banks can sell, trade or bet on these securities, just as they did with mortgage-backed securities; and they create the same sort of twisted incentives for loan servicing that occurred with mortgages.

According to the Consumer Financial Protection Bureau (CFPB), virtually all borrowers with federal student loans are currently eligible to make monthly payments indexed to their earnings. That means there should be no defaults among student borrowers. Yet one in four borrowers is now in default or struggling to stay current. Why? Student borrowers are reporting widespread mishandling of accounts, unexplained exorbitant fees, and outright deception as they are bullied into default, tactics similar to those that homeowners faced in the foreclosure crisis. The reports reveal a repeat of the abuses of the foreclosure fraud era: many borrowers are unable to obtain basic information about their accounts, are frequently misled, are surprised with unexpected late fees, and often are pushed into default. Servicers lose paperwork or misapply payments. When errors arise, borrowers find it difficult to have them corrected.




by Ellen Brown

Higher education has been financialized, transformed from a public service into a lucrative cash cow for private investors.

The advantages of slavery by debt over “chattel” slavery – ownership of humans as a property right – were set out in an infamous document called the Hazard Circular, reportedly circulated by British banking interests among their American banking counterparts during the American Civil War. It read in part:

Slavery is likely to be abolished by the war power and chattel slavery destroyed. This, I and my European friends are glad of, for slavery is but the owning of labor and carries with it the care of the laborers, while the European plan, led by England, is that capital shall control labor by controlling wages.

Slaves had to be housed, fed and cared for. “Free” men housed and fed themselves. For the more dangerous jobs, such as mining, Irish immigrants were used rather than black slaves, because the Irish were expendable. Free men could be kept enslaved by debt, by paying them wages that were insufficient to meet their costs of living. On how to control wages, the Hazard Circular went on:

This can be done by controlling the money. The great debt that capitalists will see to it is made out of the war, must be used as a means to control the volume of money. . . . It will not do to allow the greenback, as it is called, to circulate as money any length of time, as we cannot control that.

The government, too, had to be enslaved by debt. It could not be allowed to simply issue the money it needed to meet its budget, as Lincoln’s government did with its greenbacks (government-issued US Notes). The greenback program was terminated after the war, forcing the government to borrow from banks – banks that created the money themselves, just as the government had been doing. Only about 10% of the “banknotes” then issued by banks were actually backed by gold. The rest were effectively counterfeit. The difference between government-created and bank-created money was that the government issued it and spent it on the federal budget, creating demand and stimulating the economy. Banks issued money and lent it, at interest. More had to be paid back than was lent, keeping the supply of money tight and keeping both workers and the government in debt.




Sovereign Debt Jubilee, Japanese-Style

Japan has found a way to write off nearly half its national debt without creating inflation. We could do that too.

Let’s face it. There is no way the US government is ever going to pay back a $20 trillion federal debt. The taxpayers will just continue to pay interest on it, year after year.

A lot of interest.

If the Federal Reserve raises the fed funds rate to 3.5% and sells its federal securities into the market, as it is proposing to do, by 2026 the projected tab will be $830 billion annually. That’s nearly $1 trillion owed by the taxpayers every year, just for interest.

Personal income taxes are at record highs, ringing in at $550 billion in the first four months of fiscal year 2017, or $1.6 trillion annually. But even at those high levels, handing over $830 billion to bondholders will wipe out over half the annual personal income tax take. Yet what is the alternative?

Japan seems to have found one. While the US government is busy driving up its “sovereign” debt and the interest owed on it, Japan has been canceling its debt at the rate of $720 billion (¥80tn) per year. How? By selling the debt to its own central bank, which returns the interest to the government. While most central banks have ended their quantitative easing programs and are planning to sell their federal securities, the Bank of Japan continues to aggressively buy its government’s debt. An interest-free debt owed to oneself that is rolled over from year to year is effectively void – a debt “jubilee.” As noted by fund manager Eric Lonergan in a February 2017 article:

The Bank of Japan is in the process of owning most of the outstanding government debt of Japan (it currently owns around 40%). BoJ holdings are part of the consolidated government balance sheet. So its holdings are in fact the accounting equivalent of a debt cancellation. If I buy back my own mortgage, I don’t have a mortgage.

If the Federal Reserve followed the same policy and bought 40% of the US national debt, the Fed would be holding $8 trillion in federal securities, three times its current holdings from its quantitative easing programs.

Eight trillion dollars in money created on a computer screen! Monetarists would be aghast. Surely that would trigger runaway hyperinflation!

But if Japan’s experience is any indication, it wouldn’t. Japan has a record low inflation rate of .02 percent. That’s not 2 percent, the Fed’s target inflation rate, but 1/100th of 2 percent – almost zero. Japan also has an unemployment rate that is at a 22-year low of 2.8%, and the yen was up nearly 6% for the year against the dollar as of April 2017.

Selling the government’s debt to its own central bank has not succeeded in driving up Japanese prices, even though that was the BoJ’s expressed intent. Meanwhile, the economy is doing well. In a February 2017 article in Mother Jones titled “The Enduring Mystery of Japan’s Economy,” Kevin Drum notes that over the past two decades, Japan’s gross domestic product per capita has grown steadily and is up by 20 percent. He writes:

It’s true that Japan has suffered through two decades of low growth . . . . [But] despite its persistently low inflation, Japan’s economy is doing fine. Their GDP per working-age adult is actually higher than ours. So why are they growing so much more slowly than we are? It’s just simple demographics . . . Japan is aging fast. Its working-age population peaked in 1997 and has been declining ever since. Fewer workers means a lower GDP even if those workers are as productive as anyone in the world.

Joseph Stiglitz, former chief economist for the World Bank, concurs. In a June 2013 article titled “Japan Is a Model, Not a Cautionary Tale,” he wrote:

Along many dimensions — greater income equality, longer life expectancy, lower unemployment, greater investments in children’s education and health, and even greater productivity relative to the size of the labor force — Japan has done better than the United States.

That is not to say that all is idyllic in Japan. Forty percent of Japanese workers lack secure full-time employment, adequate pensions and health insurance. But the point underscored here is that large-scale digital money-printing by the central bank used to buy back the government’s debt has not inflated prices, the alleged concern preventing other countries from doing it. Quantitative easing simply does not inflate the circulating money supply. In Japan, as in the US, QE is just an asset swap that occurs in the reserve accounts of banks. Government securities are swapped for reserves, which cannot be spent or lent into the consumer economy but can only be lent to other banks or used to buy more government securities.

The Bank of Japan is under heavy pressure to join the other central banks and start tightening the money supply, reversing the “accommodations” made after the 2008 banking crisis. But it is holding firm and is forging ahead with its bond-buying program. Reporting on the Bank of Japan’s policy meeting on June 15, 2017, The Financial Times stated that BoJ Governor Kuroda “refused to be drawn on an exit strategy from easy monetary policy, despite growing pressure from politicians, markets and the local media to set one out. He said the BoJ was still far from its 2 per cent inflation goal and the circumstances of a future exit were too uncertain.”

Rather than unwinding their securities purchases, the other central banks might do well to take a lesson from Japan and cancel their own governments’ debts. We have entered a new century and a new millennium. Ancient civilizations celebrated a changing of the guard with widespread debt cancellation. It is time for a twenty-first century jubilee from the crippling debts of governments, which could then work on generating some debt relief for their citizens.


Ellen Brown is an attorney, founder of the Public Banking Institute, a Senior Fellow of the Democracy Collaborative, and author of twelve books including Web of Debt and The Public Bank Solution. She also co-hosts a radio program on PRN.FM called “It’s Our Money.” Her 300+ blog articles are posted at <;.

300+ blog articles are posted at

300+ blog articles are posted at