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THE DECLARATION OF INDEPENDENCE HAS BEEN REPEALED
By DICK MORRIS
Published on
DickMorris.com on April 6, 2009
On April 2, 2009, the work of July
4, 1776 was nullified at the meeting of the G-20 in London. The joint
communiqué essentially announces a global economic union with uniform
regulations and bylaws for all nations, including the United States.
Henceforth, our SEC, Commodities Trading Commission, Federal Reserve Board and
other regulators will have to march to the beat of drums pounded by the
Financial Stability Board (FSB), a body of central bankers from each of the G-20
states and the European Union.
The mandate conferred on the FSB is remarkable for its scope and
open-endedness. It is to set a "framework of internationally agreed high
standards that a global financial system requires." These standards are to
include the extension of "regulation and oversight to all systemically important
financial institutions, instruments, and markets...[including] systemically
important hedge funds."
Note the key word: "all." If the FSB, in its international wisdom, considers an
institution or company "systemically important", it may regulate and over see
it. This provision extends and internationalizes the proposals of the Obama
Administration to regulate all firms, in whatever sector of the economy that it
deems to be "too big to fail."
The FSB is also charged with "implementing...tough new principles on pay and
compensation and to support sustainable compensation schemes and the corporate
social responsibility of all firms."
That means that the FSB will regulate how much executives are to be paid and
will enforce its idea of corporate social responsibility at "all firms."
The head of the Financial Stability Forum, the precursor to the new FSB, is
Mario Draghi, Italy's central bank president. In a speech on February 21, 2009,
he gave us clues to his thinking. He noted that "the progress we have made in
revising the global regulatory framework...would have been unthinkable just
months ago."
He said that "every financial institution capable of creating systemic risk will
be subject to supervision." He adds that "it is envisaged that, at international
level, the governance of financial institutions, executive compensation, and the
special duties of intermediaries to protect retail investors will be subject to
explicit supervision."
In remarks right before the London conference, Draghi said that while "I don't
see the FSF [now the FSB] as a global regulator at the present time...it should
be a standard setter that coordinates national agencies."
This "coordination of national agencies" and the "setting" of "standards" is an
explicit statement of the mandate the FSB will have over our national regulatory
agencies.
Obama, perhaps feeling guilty for the US role in triggering the international
crisis, has, indeed, given away the store. Now we may no longer look to
presidential appointees, confirmed by the Senate, to make policy for our
economy. These decisions will be made internationally.
And Europe will dominate them. The FSF and, presumably, the FSB, is now
composed of the central bankers of Australia, Canada, France, Germany, Hong
Kong, Italy, Japan, Netherlands, Singapore, Switzerland, the United Kingdom, and
the United States plus representatives of the World Bank, the European Union,
the IMF, and the Organization for Economic Co-operation and Development (OECD).
Europe, in other words, has six of the twelve national members. The G-20 will
enlarge the FSB to include all its member nations, but the pro-European bias
will be clear. The United States, with a GDP three times that of the next
largest G-20 member (Japan), will have one vote. So will Italy.
The Europeans have been trying to get their hands on our financial system for
decades. It is essential to them that they rein in American free enterprise so
that their socialist heaven will not be polluted by vices such as the profit
motive. Now, with President Obama's approval, they have done it.
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