In 2008 the big banks were “too big to fail,” but now in 2012 bank “criminals” seem to be “too big to jail.”
According to a Dec. 11, USA Today story, the British banking giant Hong Kong and Shanghai Banking Corporation (HSBC) agreed to pay a record $1.92 billion settlement after a broad investigation by U.S. federal and state authorities found the bank violated federal laws by laundering money from Mexican drug trafficking and processing banned transactions on behalf of Iran, Libya, Sudan and Burma.
Between 2006 and 2010, Mexican drug traffickers laundered at least $881 million in illegal proceeds through accounts in HSBC’s U.S. arm, according to the story. The bank reportedly supplied a billion dollars to a firm whose founder had ties to Al-Qaeda and shipped billions in cash from Mexico to the United States, despite warnings the money was coming from drug cartels. Earlier this year, a Senate investigation concluded that HSBC provided a “gateway for terrorists to gain access to U.S. dollars and the U.S. financial system.”
However, unlike the fairytales shown to us on TV and in the movies, no one involved with the bank has been indicted. When asked by Amy Goodman on NPR’s Democracy Now! “What does the Justice Department, what does the Obama administration, gain by not actually holding HSBC accountable?” Matt Taibbi, author of the book Griftopia: A Story of Bankers, Politicians, and the Most Audacious Power Grab in American History, answered: “I really believe–and I think a lot of people believe this–that the Obama administration sincerely accepts the rationale that to aggressively prosecute crimes committed by this small group of too-big-to-fail banks would undermine confidence in the global financial system and that they therefore have to give them a pass on all sorts of things …”
So because HSBC is “too big to fail,” all of its managers are “too big to jail.” On the other hand, according to Mr. Taibbi, “There are 50,000 marijuana possession cases in New York City alone every year. And here we have a bank that laundered $800 million of drug money, and they can’t find a way to put anybody in jail for that.”
When a Black man is caught with 28 grams of cocaine, he goes straight to jail for five years and most of his citizenship rights are taken from him, forever. Too bad “Honest Abe” overlooked the “fine print” in the Thirteenth Amendment, which gave America the right to impose involuntary servitude on any Black “convicted of a crime.”
Without the dirty international bankers to launder the drug money, drug trafficking on a large scale would cease. It is the HSBCs of the world that finance the drug trade and the drugs that infest the Black communities and ensnare our young Black males for the new prison plantation system. So now the Honorable Minister Louis Farrakhan has to bring the F.O.I. into drug-torn neighborhoods to clean up the mess hatched by these international hoodlum bankers.
However, I must at least give Presidents Abraham Lincoln and John F. Kennedy credit for going up against the International Bankers–but for doing so, they were assassinated. And maybe that is why President Obama is reluctant to take on Wall Street, the International Bankers and the Federal Reserve System.
In a seemingly unrelated but indeed intrinsically related story, on Dec. 12, Federal Reserve chairman Ben Bernanke announced more quantitative easing at a rate of $45 billion a month on top of the $40 billion announced in September. This means that the Fed will print up some additional money and pump that money into the system at an initial rate of $85 billion per month, but after the receiving banks loan this money out using the “fractional reserve” multiplier, there could be a $850 billion or more increase in the supply of money each month used to make purchases of existing goods and services. Hyperinflation could be the result, if all of this money winds up on the main streets of America.
However, recent revelations brought forward by Senator Bernie Sanders may indicate that much of this money will be pocketed by just a few big bankers and foreign banks like HSBC and will never be part of our local economies to spur spending and reduce unemployment. On June 12, 2012, Sen. Sanders revealed a report by the Government Accountability Office (GAO), which stated that more than $4 trillion in near-zero-interest Federal Reserve loans and other financial assistance went to the banks and businesses of at least 18 current and former Federal Reserve regional bank directors in the aftermath of the 2008 financial collapse. This $4 trillion that went to bailout banks–using money printed out of thin air by the Federal Reserve–was in addition to the $700 billion bailout money “stolen” from the Treasury Department at the end of the Bush administration.
But that’s not all. On July 25, 2011, Senator Sanders revealed more of the secrets of the Federal Reserve. As a result of another GAO audit, “we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world,” said Sanders. “This is a clear case of socialism for the rich and rugged, you’re-on-your-own individualism for everyone else.” Among the investigation’s key findings is that the Fed unilaterally provided trillions of dollars in financial assistance to foreign banks and corporations from South Korea to Scotland, according to the GAO report released on July 21, 2011. “No agency of the United States government should be allowed to bailout a foreign bank or corporation without the direct approval of Congress and the president,” Sen. Sanders said.
And according to the report, the Fed provided conflict-of-interest waivers to employees and private contractors so that they could keep investments in the same financial institutions and corporations that were given emergency loans. For example, the CEO of JP Morgan Chase served on the New York Fed’s board of directors at the same time that his bank received more than $390 billion in financial assistance from the Fed. Moreover, JP Morgan Chase served as one of the clearing banks for the Fed’s emergency lending programs.
So when HSBC forks over $1.9 billion to the courts with one hand, they simply have to reach out to “our” Federal Reserve and get a zero percent interest “loan” for the same $1.9 billion with the other. So while the bankers are printing and passing around this money to each other in the trillions without doing any work, the Black man on the street is forced to work for pennies or risk being locked up forever, if he crosses any of the “Jim Crow” lines and barriers placed before him to keep him fenced-in and poverty-stricken.
We know we are opening up a can of worms when we bring up the Federal Reserve. If you don’t understand how this “Beast” called the Federal Reserve works, don’t feel bad. Most Americans do not know how private banks get money from the “Federal Reserve System” and most politicians dare not question why. Who is afraid of the Federal Reserve? Answer: Everyone on Capitol Hill. Who can challenge this “Beast?” Answer: The Honorable Minister Louis Farrakhan, the people’s champion.
(Dr. Ridgely A. Mu’min Muhammad is an agricultural economist and National Student Minister of Agriculture and manager of Muhammad Farms for the Nation of Islam. He can be reached at [email protected].)