I published Part I of this article (IMF Colonized Korea—the “Agreement”) two weeks ago.
Here’s Part II–the “Evidence” supporting my contention that the IMF colonized South Korea in A.D. 1997. This total article is a long, hard read. It’s not for everyone. But if you want to catch a glimpse of how the world’s central banks and economy really work, this article is worth your time.
In A.D. 1997, like several of the other “Asian Tigers,” South Korea suddenly slid close to financial collapse. To avert national bankruptcy, the IMF offered to provide South Korea with a $55 billion loan “package”—$15.5 billion from the IMF, plus another $40 billion from other creditors that was arranged by the IMF. That loan was premised on Korea’s acceptance of various new rules and some shocking political and economic concessions.
South Korea’s economic survival was guaranteed—if South Korea agreed to surrender much of its economic and political sovereignty to the IMF. Eventually, faced national bankruptcy, Korea’s government accepted the agreement, the “loan” was received, the Korean economy sustained, and sovereignty surrendered.
Although the proposed 46-page IMF agreement was marked “STRICTLY CONFIDENTIAL” and “NOT FOR PUBLIC USE,” the Korean newspaper Chosun published a photocopy of the document on the Internet (http://www.chosun.com/ feature/imfscan/report1.htm). If that report is still available, I can’t find it and it is no longer available at the original 1998 link. However, a description of that report can be found on the IMF website at: https://www.imf.org/external/np/sec/pr/1997/pr9755.htm.
• In A.D. 1998, when I first read the agreement between the IMF and South Korea, I received my first lesson on how “real world” economics works. There were no graphs or mathematical models. The IMF “agreement” was not an exercise in intellect, theory or persuasion—it was pure extortion. Like Don Corleone in the movie The Godfather, the IMF made South Korea an offer it couldn’t refuse.
Many may view the Korea’s plight with indifference. But, it’s apparent that the IMF and/or other central banking entities like the ECB still employ virtually identical strategies in order to extract similar political and economic concessions from any nation—including Greece and the US—that it seduces into massive debt.
The following excerpts are from the pages noted of the IMF/Korea agreement:
- Page 3. “Background. . . . since the beginning of 1997, ‘an unprecedented number of highly leveraged conglomerates have moved into bankruptcy,’ due in part to ‘a weakening in profitability associated with the cyclical downturn.’ These bankruptcies ‘severely weakened the financial system . . . cut the value of the banks’ equity and further reduced their net worth. . . . The weak state of the banking sector has led to successive downgrades of Korean financial institutions by international credit rating agencies and a sharp tightening in the availability of external finance.”
First, South Korea was not threatened with financial ruin because its government had borrowed too much “cheap currency” from the IMF. Korea was threatened with ruin because too many of its conglomerate corporations had borrowed more than they could repay.
Who made the excess loans to South Korea’s conglomerates? Were these loans based on the bankers’ benign intent to help South Korea? Or were the loans made with malignant intent to colonize South Korea?
Second, I suspect the IMF’s “background” explanation contains a fundamental lie. The IMF implies that the troublesome conglomerates were:
1) “highly leveraged“. They’d had access to more credit than their actual economic capacities warranted. Was their access to excessive credit merely a mistake made by the banking system or was excess credit an irresistible bait used to entice the “conglomerates” into a web of debt? Was the excess credit provided by Korean or foreign banks?
2) afflicted by a “cyclical downturn” (a recession) in the economy. The “cyclical downturn” was the “lone gunman” responsible for South Korea’s financial problems); at a time when,
3) there was also a “sharp downturn” in access to credit from foreign banks (who were probably the source of the earlier, excessive credit); which,
4) precipitated the conglomerates’ insolvencies; which,
5) threatened the Korean banking system (which had also made major loans to the conglomerates which would be repudiated if the conglomerates filed for bankruptcy); which,
6) forced the South Korean government to choose to either “do something”—or let their economy collapse and risk the wrath of the South Korean people. The only “something” available for “doing” was to surrender much of South Korean sovereignty and economic control to the IMF—and allow South Korea to become a de facto IMF colony.
That hypothetical chain of events sounds reasonable, but who ultimately provided the excess credit to the unworthy conglomerates?
The “usual suspects” would be the international (not Korean) banking community. That international banking community would almost certainly have strong ties to the IMF.
Q: Why did the Korean conglomerates fail to anticipate the economy’s “cyclical downturn”? If the downturn were unexpected, the conglomerates might have been caught off guard. But, if a downturn was “cyclical,” it follows that the downturn should’ve been expected as part of a predictable business cycle that all major conglomerates and banks should have routinely anticipated and guarded against.
A: The Koreans and most of Asia were beguiled by the label “Asian Tigers”. They were so intoxicated by their previous business success, they didn’t think they could be stopped by the business cycle. Therefore, they borrowed every dime they could find and failed to prudently restrict their use of credit.
Result? When the cyclical/predictable downturn hit, the conglomerates became insolvent and discovered they had more in common with kittens than tigers. The entire Korean banking system trembled. This caused the international bankers to “sharply tighten” Korea’s access to private, foreign credit and almost precipitated a national collapse. The threat of that collapse caused Korean officials to “request” the benefit of IMF loans and protection.
This chain of events sounds a lot like standard sales techniques used by drug dealers. First, they give young girls free drugs to get them addicted. Then, they cut off the free supply. Finally, they virtually force the girls into prostitution to support their addiction.
Foreign banks similarly loaned South Korea more credit (drugs) than it could handle, and then “sharply tightened” the supply of credit to force the South Korean government to “request” a job as an IMF whore. If that metaphor weren’t roughly correct, why would the IMF impose financial and political restrictions that virtually destroyed Korea’s claims of sovereignty?
- Page 4. “The [Korean] authorities’ policy response [to the conglomerates’ bankruptcy] was piecemeal and failed to calm markets…. [and] did little to restore market confidence.” [emph. add.]
That text included the first of fourteen references to the IMF document’s dominant theme: The need to maintain public confidence in the market and financial system.
Why is confidence so vital? Because all modern banking is:
1) Based on debt. Debt is only a promise to pay, but those promises are, irrationally, treated as assets;
2) Overly indebted. Thanks to fractional reserve banking, there are at least nine debt-based dollars in circulation for every “paper” dollar that’s deposited into bank vaults; and,
3) There are NO real, asset-based dollars (gold, silver, or substance) to back up any of it.
The whole, global, fiat-monetary “system” depends on “confidence” because it’s all based on the average man’s irrational belief that the “dollars” in his wallet and bank account are real (backed by assets). That belief is not merely false, it’s a lie. No amount of talking or reasoning is likely to convince most people that their dollars, the debt-based monetary system, and the government that supports it aren’t “real”.
Nevertheless, in the event of a serious financial collapse, circumstances could quickly prove his “dollars” are illusory when he tried to extract his dollars from a bank and discovered that those dollars were not only missing, but had never really existed. Therefore, a financial collapse could be so revealing that it should be avoided at all costs.
- Page 5
To “save” Korea, IMF objectives included:
“… building the conditions for an early return of confidence …”
Note that the IMF was not merely building confidence, it was building “conditions” that would instill public confidence. These “conditions” were structural changes in the Korean political and economic system. Those changes sounds nice enough, but “structural changes” in the “conditions” of an economy or political system can be fairly described as “revolutionary“.
In A.D. 1997, the government of South Korea agreed to accept an IMF-imposed revolution.
(In A.D. 2015, Greece accepted another financial and economic revolution when it agreed to the ECB’s bailout plan.)
“. . . a strong macroeconomic framework designed to continue the orderly adjustment in the external current account;”
I.e., if South Korea and/or its conglomerates couldn’t pay all of their debts when due, these debts would be mercifully “adjusted” to allow more time to repay. But, the “external” debts would be repaid and would not be expunged in bankruptcy. South Korea thereby guaranteed to repay the international bankers who improperly loaned Korea excessive credit in the first place.
“A comprehensive strategy to restructure and recapitalize the financial sector.”
Sounded nice, but it meant the Korean banking system would submit to a reorganization including new (foreign) control. How else could the nearly bankrupt Korean banks “recapitalize” except by borrowing more foreign “money”? Once the Korean banks borrowed excessive foreign currency, they became servants to (and controlled by) foreign lenders.
- Page 6
Korea’s “day-to-day conduct of monetary policy . . . will be implemented in close consultation with the [IMF] staff.”
“Close consultation” meant the IMF would essentially control Korean monetary policy. (I’ll bet the recent Greek agreement with the EU and ECB also requires Greece to submit to “close consultation” with the EU and/or ECB.)
“… [I]ncreases in mineral oil taxes and excises yielding about, ‘A percent of GDP [must] come into effect. Additional measures would focus on reducing current expenditures [government benefits], raising current revenues [taxes] by broadening the tax bases [taxing more people and products] rather than increasing tax rates . . . .”
As a “contingency measure,” the Korean government could raise “indirect tax rates and excise tax … by up to 30 percent.”
Translation: South Korea would simultaneously increase the average Korean’s taxes and reduce his governmental benefits. This squeeze would force common Koreans to pay for the excess, incompetence or criminal conspiracies of Korea’s conglomerates, government, and bankers. The conglomerates, government officials, and Korean bankers may have volunteered to become the IMF’s call girls, but the common people were involuntarily drafted into the ranks of IMF streetwalkers.
Taxes rose. More of the South Korean “mice” were drafted to power the “hamster wheels” and all those wheels had to spin faster to generate more interest and profits for the IMF.
- Page 8 Financial Sector Restructuring—the heart of the IMF’s “loan package”.
Remember the famous Baron Rothschild quote, “Give me control of the nation’s money and I care not who controls the government”?
Well, by “restructuring” Korea’s “financial sector,” the IMF assumed de facto control over Korea’s monetary system. The IMF restructuring strategy comprised three broad elements:
- A “clear and firm exit policy” which sought “to ensure the rapid resolution of troubled financial institutions in a manner that minimizes systemic distress and avoids moral hazard. . . . [M]erchant banks that are unable to submit appropriate restructuring plans within 30 days will have their licenses revoked. . . . [T]his policy will include mergers and acquisitions by domestic or foreign institutions. The supervisory authorities [IMF] will review such mergers and acquisitions to ensure that the new groupings are economically viable. This process will entail losses to [Korean] shareholders.”
Q: Who determines what’s “appropriate”?
A: The IMF
Any bank that didn’t toe the IMF line within 30 days would be closed. Financially troubled institutions and banks could be acquired by foreigners. No proposed merger between one or more Korean institutions or banks would be allowed without the IMF’s approval. Korean stockholders were guaranteed to lose money.
- To provide “strong market and supervisory discipline,” the Korean authorities “will request urgent passage of a bill to set up an agency that will consolidate the supervisory functions presently distributed among various agencies. The legislation will give the agency operational independence and adequate resources—in line with [the IMF’s] Core Principles for Effective Banking Supervision—thereby freeing it from outside [non-IMF] interference.”
Who would operate this new, independent, supervisory agency?
Directly or indirectly, the answer would be the IMF. The IMF thereby took control of South Korea’s merchant banking system.
- Because circumstances were said to be “urgent,” there was no time to waste on debate or consideration. Korea was forced to quickly pass laws to create a central, independent bank supervisory agency that is free from “outside” interference of the Korean people or government and subject only to the IMF. I.e., Korea surrendered control of their entire monetary system to a new central agency that sounded very similar to America’s “operationally independent” Federal Reserve System.
- Page 9 “[T]o promote competition and efficiency in the financial sector, the authorities will allow foreigners to establish bank subsidiaries and brokerage houses . . . .”
Thanks to the IMF, South Korea’s previous policy prohibiting foreign banks was abandoned. After the agreement, foreign banks could feed off the Korean people.
South Korea was thereby colonized.
- Page 10 Capital Account Liberalization. “The government has announced that the ceiling on aggregate foreigner’s ownership of listed Korean shares would be increased from 26 percent to . . . 55 percent . . . . The ceiling on individual foreign ownership will be increased from 7 percent to 50 percent…. [and] eliminate restrictions on foreign borrowing by corporations.”
Formerly, the total, maximum foreign investment in any South Korean bank and/or corporation was 26% and the maximum any single foreign entity might own was 7%. Thus, each South Korean bank or corporation had to be owned by at least 74% South Korean investors. That meant South Koreans owned and controlled South Korea corporations.
However, under the IMF agreement, foreigners could own up to 55% of any South Korea corporate entity, and a single foreigner could own up to 50%; two or more foreigners could collectively own up to 55% (controlling interest). Korean corporations, which could previously borrow only from Korean banks, would be allowed to borrow (and become servant to) foreign banks. Korea could be owned, operated and controlled by non-Koreans. (The sun never sets on the IMF empire.)
- Page 14 Staff Appraisal: “The bold actions already undertaken by the government, and expeditious implementation of the government’s [actually, the IMF’s] announced policy package should provide a solid basis for the early return of confidence. Sustaining a strong macroeconomic stance is essential for restoring calm to markets and providing the stable financial conditions to support much-needed structural reforms.”
Translation: The IMF couldn’t “colonize” Korea (i.e., implement “needed structural reforms”) unless the country was sufficiently stable for ordinary Koreans to remain “calm”. I.e., “structural reforms” couldn’t take place if “blood was running in the streets”.
This implies that economic colonization is a fine art: first, create a very serious threat of national bankruptcy; second, prevent that bankruptcy to prevent unpredictable populist forces from seizing control in the chaos; and third, under the guise of “saving” a nation, restore enough calm where the public will sit still while their nation is “restructured” into an economic colony.
(Reading the Korea-IMF agreement in A.D. 1998, I was reminded of what happened to the U.S.A. after the “Great Depression” and “New Deal” of A.D. 1933. Was that when our government sold our money, banking, and sovereignty to foreign bankers for a “political and financial restructuring”? Or does our own sale of sovereignty remain to be done at some later date?)
“It will also be critical for the major political leaders, who have pledged their support for the policy package, to garner public support for the program.”
This is the only point in the IMF document where the word “critical” was used. Again, the “critical” need for “public support” is just another way of reiterating the need for public “confidence”.
Confident natives aren’t “restless”.
“Restless” natives riot, kill people and destroy corporate property. That’s bad for bidness.
- Page 15 The IMF “policy package” also mandated elimination of “government intervention in lending decisions or subsidies and tax privileges to bail out individual corporations.”
Apparently, prior to Korea’s 1997 crash, the Korean government routinely bailed out favored (“too big to fail”?) Korean corporations which slipped into financial difficulty. The IMF said this kind of government favoritism was wrong and would be stopped.
But. What would happen when the spoiled, wealthy Korean corporations couldn’t get the bail-out money they needed to survive from the Korean government? They’d go to the Korean banking system which, for all practical purposes, was now owned and operated by the IMF. And I’ll guarantee that the IMF gave the necessary money to corporations it favored—provided those corporations sang the IMF’s party line.
Point: By disrupting previous financial alliances between Korean corporations and the Korean government, the IMF diminished the government’s power and relevance over private corporations, and subtly created an incentive for Korean corporations to ally themselves with the IMF. Under the IMF’s “beneficence,” what had previously been “nationalistic” Korean corporations would evolve into “multinational” (IMF) corporations with loyalty to no national government or people—except the IMF (and now, the New World Order.)
Can you say, “Divide and conquer,” boys and girls?
- Page 16 “The present broad reform and liberalization program . . . will be key to building the financial and corporate sectors that are needed for Korea to meet the challenges of globalization.”
Apparently, the IMF’s real objective was not to “help” Korea remain Korean or sovereign, but to “help” Korea to become “globalized”, colonized, and “homogenized” into the undifferentiated mass of “useless eaters” who will one day populate the New World Order and spin the hamster wheels. (“Better living through banking,” hmm?)
• Page 31 “To support these objectives and policies the International Monetary Fund grants this stand-by arrangement in accordance with the following provisions:
“For a period of three years … Korea will have the right to make purchases from the Fund in an amount equivalent to SDR (Special Drawing Right) 15,500 million ….”
However, if Korea violates any of the terms of the IMF policy, “Korea will not make purchases under this stand-by arrangement.”
In other words, if Korea didn’t play nice, the IMF would withhold the credit needed to keep Koreans calm enough to suppress their urge to hang their government officials for treason.
The cowardly Korean government sold Korea to the IMF for a bowl of pottage. Korea actually bought nothing from the IMF except an illusion of (false) confidence to be instilled among the Korean people. In return for this magnificent illusion, Korea surrendered its sovereignty and banking system to control by the IMF.
Again, remember what Baron Rothschild once said: “Give me control of a nation’s money and I don’t care who controls the laws”? Well, the IMF had gained control over South Korea’s money.
In essence, by cooperating with the IMF, the Korean government:
1) exploited its own people;
2) feared their people would discover the exploitation and lynch the government; and therefore,
3) sold Korea to the highest bidder (the IMF) to conceal the exploitation and save the government officials’ skins.
Korea’s rich and powerful were afraid they’d be held accountable for their financial misdeeds and, rather than face the music, they sold their country for 15.5 million of the IMF’s Special Drawing Rights. (How much is that in pieces of silver?)
• Page 38 “[T]he contagion effects of developments in Southeast Asia contributed to the current crisis . . . .”
The regional economic problems simultaneously faced by Indonesia and Japan helped create a panic (failure in confidence) in the Asian economy in general and Korea, in particular.
Point: Because this fractional reserve, debt-based monetary system is (unknown to the public) built on nothing more substantial than promises (debt), it is extraordinarily fragile and vulnerable to any loss of public confidence that the promises will be kept since that loss is contagious. At some point, falling confidence in the promises to pay (debt-instruments) can cause prices to fall sufficiently to precipitate panic, panic begets more sales, and prices fall further, creating a dangerous, self-destructive downward spiral.
Once anyone dares to report the Emperor is parading around in his birthday suit, the entire population will suddenly admit seeing the Emperor’s tinkler. At that point, the crowd will howl for the heads of the guys who charged taxpayers exorbitant fees to drape their favorite Emperor in nonexistent clothing (fiat currency) . . . and the game would be up.
When I first read the IMF “policy package” closely, I couldn’t help feeling a measure of remorse—not only for Korea, but also for every other nation seduced by the IMF and it’s patrons—the central banks and multinational corporations. We’ve all been hustled. Americans pay some tax money to support the IMF. Foreign nations who receive excessive IMF loans will eventually surrender their economic wealth and political sovereignty.
And most fantastic of all, we are all being impoverished through the use of “loans” of nonexistent “money”. You and I work long hours—we surrender our lives—to be paid in the pottage of intrinsically worthless paper and digital “money”. Korea and other banker beneficiaries (like Greece) surrender their political sovereignty and economic wealth to borrow the intrinsically worthless pottage (fiat currency) that we worked to “earn”. Only a handful of bankers and multinational corporations benefit from this financial con-game. The rest of the world is driven deeper and deeper into debt, dependence and poverty.
And what is a “con-game”? It’s a “confidence game”—a racket designed to extort wealth and property from the producers and lawful owners for the benefit of a nonproductive criminal element. And what word appeared fourteen times in the original IMF-Korean document?
Public confidence must be maintained in the financial system. At all costs. At any cost.
Why? Because the fiat monetary system is a con-game. Lose the confidence, and the system collapses and falls back into the hands of producers rather than parasites.
What is the confidence in? It’s in the promises in every paper debt-instrument that the debt will be repayed. We accept the central bankers’ and IMF’s paper debt instruments because we are “confident” that those debts will one day be repaid.
But what happens if the debt becomes so large, people begin to realize that the debt can’t ever be repaid in full. Confidence begins to erode.
What happens if the public comes to understand that the only payment that the central bankers will ever provide is more paper debt-instruments—but never real assets like gold and silver? Confidence begins to erode.
What happens if enough people realize that the entire monetary system is nothing but a con-game? Confidence begins to erode.
And what happens if we lose enough confidence in a fiat monetary system that’s unworthy of our trust? Confidence collapses. The bankers head for countries with no extradition treaties. The people look for folks to blame and possibly lynch. Nations, and possibly the world, degrade into panic, chaos and poverty as they await the arrival of a new set of smooth-talking bankers to restore “confidence”.
• Once you start studying the money system, the implications are so fantastic that you may doubt the evidence and your own sanity before you’ll believe your eyes. The Korean/IMF agreement of A.D. 1997 helps expose and illustrate the irrational truths about banking and debt-based monetary systems.
I know that studying just excerpts of that original article is tedious and boring. And yet, if you’re willing to see, the evidence therein is undeniable. The world’s entire financial system is a con-game. We are being systematically impoverished and virtually enslaved by the people who serve or control the monetary system.
When I first wrote this article in A.D. 1998, I was simultaneously convinced that:
1) the monetary system was a con-game run by criminal elements; and
2) almost totally unable to believe that first conclusion.
After all, how could such a massive fraud continue without the average American having a clue?
Today, I look at the system and wonder how anyone could not believe it. We all have clues. To some degree, we all know. Still, if we embrace the truth and lose confidence in the fundamental lie (that the debts will be repaid), the whole house of cards will collapse around our heads.
So, who dares to believe the truth while standing within a cathedral built of lies?
P.S. Near the apparent end of the Greek bailout drama, an August 18th, A.D. 2015 headline from the Associated Press read: “Greece gives German firm rights to run 14 airports”. According to that article,
“Greece has agreed to sell to a German company the rights to operate 14 regional airports. The deal is the first in a wave of privatizations the government had until recently opposed but needs to make to qualify for bailout loans.”
And what will Greece will receive as “bailout loans”? Pieces of paper. Debt-instruments. Promises to pay.
What will Greece give up in return?
Their ownership of productive properties, their sovereignty and standing as an independent nation.
Greece has just been colonized by a debt-agreement with the EU and/or ECB—just as South Korea was colonized by the IMF in A.D. 1997—and more than likely, just like several other, overly-indebted nations have also been colonized in the past 18 years.
Welcome to the New World Order.