Gods of Money - Wall Street and the Death of the American Century

293 Pages·2016·3.69 MB·English

by  F. William Engdahl

Copyright 2009 F. William Engdahl
All rights reserved. No part of this book may be reproduced or transmitted in any form or by
means, electronic, mechanical, photocopying, recording or otherwise without prior written
permission of the publisher and author.
Edited by Margot L. White
Published by edition.engdahl
Wiesbaden, Germany
0049-611-505-6169
ISBN 978-3-9813263-1-4
eBook ISBN: 978-3-9813263-5-2
Printed in USA
To Stephen J. Lewis who taught me that in the world of international
finance things are rarely what they seem and whose years of tutoring
in the workings of political economy informed this book
And to John Williams, whose relentless dedication to economic
honesty sustained my own work for the past two decades
Table of Contents

Title Page
Copyright Page
Author’s Introduction
CHAPTER ONE:
An American Money Oligarchy Emerges
CHAPTER TWO
J. Pierpont Morgan, America’s First ‘God of Money’
CHAPTER THREE
The Bankers’ Coup D’état creates a Federal Reserve
CHAPTER FOUR
Morgan’s Fed Finances a European War
CHAPTER FIVE
Gold, Conflicting Goals and Rival Empires
CHAPTER SIX
A New Deal, a Great Depression: Rockefellers take charge
CHAPTER SEVEN
For an ‘American Century’: The War & Peace Studies
CHAPTER EIGHT
War and Conflicting Geopolitical Agendas
CHAPTER NINE
The End of Pax Britannica
CHAPTER TEN
Washington Drops the A-Bomb
CHAPTER ELEVEN
Creating the Bretton Woods Dollar System
CHAPTER TWELVE
A National Security State is Born
CHAPTER THIRTEEN
The Dollar Standard takes on the World
CHAPTER FOURTEEN
Nixon walks away from Bretton Woods
CHAPTER FIFTEEN
A Reagan Revolution for the Money Class
CHAPTER SIXTEEN
Greenspan’s ‘Revolution in Finance’ Goes Awry
CHAPTER SEVENTEEN
The End of the Dollar System?
CHAPTER EIGHTEEN
The Theft of a Nation
Author’s Introduction

This is not a book that explains how to survive the financial crisis or perhaps why gold is a
sound investment in times of turmoil. Others have done that better. This book is not a
conventional account of money and banking or even economics. Rather, it is a history of power,
more precisely, of the colossal abuse of power in the hands of a tiny elite who have constituted
themselves as the “Gods of Money.” This book is a history of the tiny clique of international
bankers who created Wall Street and who control it today, as they did the City of London until
the First World War.
This volume is a chronicle of the rise to positions of unheard-of power on the part of
individuals who considered themselves a power onto themselves, separate and above the mere
laws of man.
The Book of Matthew in the New Testament states, “No one can serve two masters. He will
either hate one and love the other, or be devoted to one and despise the other. You cannot serve
God and mammon.” (Matthew 6:24). From the very beginnings of the founding of the United
States as a Constitutional Republic in 1789 following the War of Independence against Great
Britain, powerful money interests resolved that Biblical conflict by anointing themselves as
simply the “Gods of Money,” a higher law unto themselves, above all other mere mortals. Step-
by-step, through the power of their money, they sought to corrupt the foundations of the
Constitution, attempting to recoup by credit and financial fraud what they had lost on the field
of battle.
In a November 2009 interview with the London Sunday Times, Lloyd Blankfein, the
Chairman and CEO of the world’s most profitable bank, Goldman Sachs, defended his bank’s
record profits at a time when most financial institutions were struggling to survive. He
commented that he was merely a “banker doing God’s work.” More than a century earlier, John
D. Rockefeller, the founder of the Standard Oil monopoly, when asked by a naïve reporter how
he had become the world’s wealthiest man, snapped back without hesitation, “God gave me my
money!”
Books have been written attempting to define the most fundamental question, “what is
money?” The fact that so many different answers and so many different books exist
demonstrates that the true nature of something most of us take for granted, is not at all clear at
least to academic economists.
The reason is the fact that contemporary study of economics as taught in all major
universities in the Western world today has little or nothing to do with economic reality, nor
with the political role of international finance, and its geopolitical agenda, in shaping that
economic reality. That should not be surprising, as the financial powers, the great and powerful
international bankers of the City of London and of Wall Street and their kin, have endowed the
appropriate professorships to ensure that what is taught will protect their order, even going so
far as to endow a Nobel Prize in Economics to serve their interests.
Money is nothing more and nothing less than a political creation, a promise to pay between
two or more parties, enforced, to a greater or lesser degree by the power of a state. Ultimately
money, especially in a world where money is a pure paper commodity—fiat money so-called—
is a question of “confidence,” confidence ultimately in the “full faith and credit of the
Government of the United States of America.” And that confidence has been backed always,
ultimately, by military power, political power, power to buy or control the lawmakers and
administrators—Presidents, Congressmen, judges.
The edifice that has developed within the United States over the course of the past one
hundred and fifty years is one where an inordinately powerful small circle of international
bankers, the powers of Wall Street and the money center banks allied to it, has shaped the lives
of the American public, prepared them for wars far from American shores, literally controlling
what people buy and produce and most dangerously, even what they are allowed to think. The
late American historian, Carroll Quigley noted, “The aim of the international bankers was
nothing less than to create a world system of financial control in private hands able to dominate
the political system of each country and the economy of the world as a whole. This system was
to be controlled in a feudalist fashion by the central banks of the world acting in concert, by
secret agreements arrived at in frequent private meetings and conferences.” (Tragedy & Hope,
p. 324).
In 1862 in the early months of the American Civil War, a memo was discreetly circulated
among England’s wealthy aristocrats and bankers. It stated the cold assessment of the banking
powers of the City of London regarding events in the United States:
“Slavery is likely to be abolished by the war power and all chattel slavery abolished. This I
and my European friends are in favor of, for slavery is but the owning of labor and carries
with it the care of the laborers, while the European plan, led on by England, is that capital
shall control labor by controlling wages. The great debt that the capitalists will see to it is
made out of the war, must be used as a means to control the volume of money. To
accomplish this, the bonds must he used as a banking basis. We are now waiting for the
Secretary of the Treasury to make this recommendation to Congress. It will not do to allow
the greenback, as it is called, to circulate as money any length of time, as we can not
control that. But we can control the bonds and through them the bank issues.” (cited in
Lindbergh, Banking, Currency and the Money Trust)
In 1913, Minnesota Congressman Charles August Lindbergh Sr., father of the famed aviator,
wrote Banking, Currency, and the Money Trust, in which he accurately described the political
agenda of the Wall Street international bankers who were shaping the creation of a new central
bank and with it, control over the nation’s economy.
As a Republican member of the US Congress Lindbergh wrote exposing the secret
machinations of powerful Wall Street financial interests, their efforts to sneak through a piece of
legislation that, more than any other single bill, has shaped the future history of the nation and
much of the World—the Federal Reserve Act. It was passed by an almost empty Congress and
signed into law by President Woodrow Wilson—a crony of Wall Street—on Christmas Eve,
1913. Lindbergh described the influence of what he accurately named the Wall Street Money
Trust in that de facto bankers’ coup d’état:

“Ever since the Civil War Congress has allowed the bankers to control financial
legislation. The membership of the Finance Committee in the Senate (now the Banking and
Currency Committee) and the Committee on Banking and Currency in the House have
been made up chiefly of bankers, their agents, and their attorneys. These committees have
controlled the nature of bills to be reported, the extent of them, and the debates that were to
be held on them when they were being considered in the Senate and the House.”
(Lindbergh, op. cit, Appendix).
In 1917 Lindbergh wrote a widely read pamphlet, Why is Your Country at War?, in which he
laid the blame at the door of “high finance” for America’s involvement in what came to be
known as World War I. For his courage and accurate expose of the role of the Money Trust in
leading America into the war, the press, controlled by Wall Street, labeled Lindbergh a traitor.
His political career was destroyed by the Money Trust he had fought.
One international Wall Street bank, J. P. Morgan & Co., in violation of US neutrality, became
the banker to Britain and France at the outset of the war in Europe and, through its influence on
Woodrow Wilson’s administration, was able to manipulate the media accounts of events to
create a war fever in an unknowing American populace that had been deeply skeptical of the
need to go to war.
The US Secretary of State, William Jennings Bryan, an unappreciated figure in American
politics, gained a large national political following by opposing Wall Street “plutocracy” and
defending the Western states’ silver interests of that day against the Wall Street and London
gold standard. Bryan resigned as Secretary of State in 1915 in protest at what he rightly saw as a
cynical manipulation by the President and his advisers—especially the press controlled by Wall
Street bankers close to Morgan, to bring the United States into the war at a time the House of
Morgan faced possible financial ruin owing to its huge loans to Great Britain and France. The
Money Trust of Wall Street saw war as the entrée to financial influence in Europe, filling the
vacuum left by a bankrupt Britain. It was the first step in creating what became the “American
Century.”
Between the creation of the First Bank of the United States by Treasury Secretary Hamilton
in 1791 as a private bank, and the creation of the Federal Reserve in December 1913—also a
privately-owned central bank—a small group of extremely wealthy families had emerged,
earlier referred to as America’s Sixty Families. The wealth and power of these families were
tied to their ability to control the money of the new nation, to create shortages of money at will,
leading to panics and even depressions, in order to expand and consolidate their power over the
nation. It was they who financed wars and the expansion of the United States beyond its borders
when, after the Spanish-American War of 1898, America became a de facto imperial power by
annexing the Philippines as a gateway to the lucrative trade of China and Asia.
In the period from the outbreak of the “war to make the world safe for democracy” in August
1914, until the end of the Second World War in May 1945— contrary to the claims of standard
and ‘approved’ history texts—the world underwent a titanic struggle between two world
powers, the United States and Germany, over which would succeed the failing British Empire as
global hegemon. The interests that shaped the American challenge were above all concentrated
in Wall Street, among the Gods of Money. The individual faces changed. The House of Morgan
dominated until its crisis in 1931. Thereafter, the Rockefeller group and their banks emerged as
the unchallenged leaders of the emerging American domination of the globe, proclaimed as
“The American Century” in 1941 by one of their own, Henry Luce of Time-Life.
Since 1945 American hegemony, or more accurately an American imperium, has rested on
two firm pillars of support. The first pillar has been the role of the dollar as unchallenged world
reserve currency in which New York’s Wall Street is the center of global finance, the “banker to
the world.” The second and complementary pillar has been the role of the Pentagon and the
unchallenged dominance of American military power.
What is poorly understood is how the two pillars fit together seamlessly within one and the
same power structure, a power structure that is driven by the money interests. It is driven above
all by Wall Street and the special breed of international bankers who institutionalized their rule
in organizations such as the Pilgrims Society, the Council on Foreign Relations, the Bilderberg
Meetings, the Trilateral Commission and other private and select organs of their control.
The crisis which broke in summer of 2007, initially around the securitization of high-risk
“sub-prime” home mortgages has rocked the foundations of the financial system as no other
crisis in history to date. For those wishing to understand how the same Wall Street banks that
caused the crisis through their unfettered greed and drive for ever greater control over the world,
emerged—at taxpayer expense—even more profitable, this book provides an introduction into
the inner-workings of the money power.
The book is the result of some thirty years of research and writing on the theme of money and
power. It follows the sequence of books I have written relating to the statement in the 1970’s
attributed to then-Secretary of State Henry Kissinger, a protégé of the powerful Rockefeller
circles. He declared, “If you control the oil, you control entire nations; if you control the food,
you control the people; if you control the money, you control the entire world.” In my two
previous books—A Century of War: Anglo-American Oil Politics and the New World Order, and
Seeds of Destruction: The Hidden Agenda of Genetic Manipulation—I undertook to analyze the
first two of Kissinger’s now famous dictum. This book analyzes the third, the attempt to control
the money of the world.
The book chronicles the rise of the American Century from the period following the Civil
War, as J. P. Morgan emerged as a force in New York finance, to the debacle today that signals,
as harsh as it may sound, the death of that American Century. Much as with the Roman Empire
in the third and fourth centuries, the causes of that decline were the same—a system based
increasingly on power and plunder, extension of empire, whether formal as with Rome or
informal as with the American Century.
A former Goldman Sachs Wall Street banker described the culture that dominates Wall Street
as “completely money-obsessed. I was like a donkey driven forward by the biggest, juiciest
carrot I could imagine. Money is the way you define your success… It’s an addiction.”
The ultimate question is what will follow the crisis of the dollar and of Wall Street. As we
begin the second decade of this century, it is increasingly clear to much of the thinking people
across the world that the American “sole Superpower,” so triumphantly proclaimed at the end of
the Cold War twenty years before, was in deep crisis. Its financial power had become a pale
shadow of what it had been only three years before. Its military, awesome in technology, was
cracking at the edges, stretched to the breaking point in wars its own citizens little understood.
In 2010 the American Century was in a crisis more profound and fundamental that its elites
would recognize, at least publicly.
As President, Barack Obama made clear he was every bit as much beholden to the powers of
Wall Street and the big banks as was Woodrow Wilson and most every President, with the
possible exception of John Kennedy, since the Civil War. Only when a disease is fully
diagnosed and understood can it be treated. This book is an attempt to help ordinary citizens in
that diagnosis.
- F. William Engdahl, February 2010
CHAPTER ONE:

An American Money Oligarchy Emerges

Money will cease to be the master and become the servant of humanity. Democracy will rise
superior to the money power.
- Abraham Lincoln shortly before his assassination in 18651
A global crisis with a long history
On July 29, 2007 the head of the German banking regulator, Bafin, and the German Minister of
Finance held a press conference to announce that the State, together with leading private and
public banks, was organizing an emergency rescue of Germany’s IKB Deutsche Industriebank.
IKB was a bank originally set up in 1924 to facilitate payment of German industrial war
reparations under the Dawes Plan. The latest crisis marked the second time in its history that the
IKB played an historic role in the context of unsound American banking practices.
This time, however, much as the collapse of the Vienna Credit Anstalt in 1931 had been the
proximate trigger for a global chain-reaction banking collapse that led to the Great Depression
and ultimately to world war, the 2007 collapse of the relatively obscure Duesseldorf business
lender triggered a similar global chain reaction. The chain reaction from the collapse of the mid-
size IKB created a global systemic financial crisis which, by 2009, looked likely to exceed the
tragic dimensions of the Great Depression before its ravages would be complete.
IKB’s troubles had originated with its investment in the new, exotic high-yielding securities
issued by New York banks called subprime mortgage-backed securities. What were these?
Where did they come from? Subprime mortgage-backed securities were created from a
convoluted process, as follows:
- taking hundreds, or thousands, of ordinary real estate home mortgages, bought at a
discount from issuing American banks;
- using the monthly mortgage payment flows to create an entirely new synthetic bond or
debenture;
- insuring its component payment flows from possible default through specialized insurers,
including AIG;
- and having them rated by the only three rating agencies which enjoyed a de facto
monopoly on such ratings (all three based in New York);
- Finally, selling the new Mortgage-Backed Securities, now rated AAA to governments,
pension funds and unwary investors around the world in search of high gains. Thereby
banks believed they had found a magic route to risk-free super-profits.
Subprime mortgage-backed securities were the culmination of the growing usurpation by
private American banks of power – not merely over the economy of the United States, but over
the economy of the entire world. The process, dubbed “securitization” by its creating Wall
Street banks, was intended to give a new lease on life to the overwhelming American
domination of global capital markets, the major pillar of American power since the country
emerged victorious in 1945.
“Securitization” — the idea that normal bank debt risk could be removed from the bank’s
own balance sheet and organized to spread risks of loan defaults so widely that it could never
again threaten the kind of crises that had spread after Credit Anstalt collapsed in 1931 — was a
mad illusion. Asset-backed Securitization was based on fundamental assumptions about future
American power, assumptions that dated all the way back to the emergence of the United States
as the major industrial rival of the German Reich following the American Civil War in the
1860’s.
The global crisis that was triggered by the payment problems of a small German bank in 2007
had roots in a deeply flawed financial and banking power called the Dollar System, earlier
referred to as the Bretton Woods System. To understand the true origins of America’s colossal