Sovereign Governments Versus The Lords of Finance

Challenging the Bankers Who Operate the Global Casino – Published on Global, by Hazel Henderson, Oct. 22, 2010.

The world has reached a new stage. If governments don’t get together and face down the bankers who operate the global casino, the dominoes will start falling, one by one.

Sovereign governments must heed the lessons of past financial crises described by Liaquat Ahamed in Lords of Finance (2009); Nassim Taleb in The Black Swan (2008); Carmen Reinhart and Ken Rogoff in This Time Is Different (2009); Ellen Brown in Web of Debt (2008); Nomi Prins in It Takes a Pillage (2009); Gillian Tett in Fool’s Gold (2009); and Yves Smith in ECONNED (2010) … // 

… The great transition is occurring worldwide as covered by the Green Transition Scoreboard™ compiled by Ethical Markets Media (US A,, and Brazil, The world is quietly shifting away from Wall Street’s corrupted and debt-choked money circuits to new electronic trading platforms that use free exchange and new currencies. As I wrote in 1993, “Information: The World’s New Currency, Isn’t Scarce!” ( The next info-currencies will be based on real assets and wealth such as KWH (kilowatt hours) as in the Planck Foundation’s Energy for Debt Plan for Iceland I described (IPS) and their Energy Transition Plan with Ethical Markets.

Estimated world trade conducted in barter remains at approximately 25% – but ignored in GDP-based only on money coefficients. Electronic trading is a new multi-trillion valued market opportunity for IT companies, following the paths of eBay, Craigslist, Freecycle, Global Giving, Greengrants, Microplace, Kiva, Zopa, Prosper and other micro-finance and philanthropy sites. Others bypassing Wall Street and the old “financial centers” include local, regional and private company trading platforms like Chicago-based ENTREX, and local currencies like the Schumacher Society’s “berkshares,” Time Banking, and mutual credit groups (see Money Innovation).

To foster the transition from the monopoly of fiat money circuits (now just as bad as gold-based money) to 21st century electronic and local currencies, the G-20 needs to downsize financial sectors. Wall Street and London’s bloated financial sectors have little social purpose and produce nothing. High-frequency trading by computer programs now account for about 70% of Wall Street’s daily trading. Proprietary trading and risk-taking must be separated from government-subsidized deposit-taking banks. The best way to accomplish this is for the G-20 to agree on a less than 1% financial transactions tax (FTT) across the board. There are no good arguments against the FTT (debated since its introduction by economist James Tobin in the 1970s and recommended by Larry Summers in his 1989 paper. FTT is easily collectible, using the computer program on all trading screens (Henderson and Kay, “A foreign exchange transaction reporting system (FXTRS) for Central Banks,” Futures 1999). Money-laundering and tax haven operations in, for example, Switzerland, Liechtenstein, Caymen, the Bahamas, the US states of Delaware and Nevada, Guernsey, Jersey and London can continue to be “shamed” by black-listing in the Financial Authorities Task Force publications.

These initial actions: banning naked derivatives (where bettors don’t own the bonds) and bringing those needed for actual users of oil, commodities, etc., onto transparent exchanges; enacting the FTT; and banning ratings agencies from selling ratings to issuers, will begin the transition process toward the new currencies and transparent electronic trading platforms. Also essential is to break up all too-big-to-fail banks, e.g., the six largest ones in the USA: Bank of America, Citigroup, Goldman Sachs, JP Morgan Chase, Morgan Stanley and Wells Fargo now control 63%of US GDP.

Only if G-20 leaders come together in Toronto and agree on these first steps, can they avoid the next financial crisis already looming. If they cannot summon the courage to shake off the grip of the lords of finance, they will have forfeited what public trust still remains. (full text).

(Hazel Henderson is president of Ethical Markets Media (USA and Brazil) and its Green Transition Scoreboard™. The company is a signatory of the UN Principles of Responsible Investing. Henderson is founder and co-chair of the World Business Academy’s EthicMark® for ethical advertising, author of many books, including the award winning Ethical Markets: Growing the Green Economy (2006) and co-creator of the Calvert-Henderson Quality of Life Indicators).

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