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Libya: All About Oil


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or All About Banking?

By Ellen Brown

Several writers have noted the odd fact that the Libyan rebels took time out from their rebellion in March to create their own central bank – this before they even had a government.  Robert Wenzel wrote in the Economic Policy Journal:

I have never before heard of a central bank being created in just a matter of weeks out of a popular uprising.  This suggests we have a bit more than a rag tag bunch of rebels running around and that there are some pretty sophisticated influences.

Alex Newman wrote in the New American:

In astatement released last week, the rebels reported on the results of a meeting held on March 19. Among other things, the supposed rag-tag revolutionaries announced the “[d]esignation of the Central Bank of Benghazi as a monetary authority competent in monetary policies in Libya and appointment of a Governor to the Central Bank of Libya, with a temporary headquarters in Benghazi.”

Newman quoted CNBC senior editor John Carney, who asked, “Is this the first time a revolutionary group has created a central bank while it is still in the midst of fighting the entrenched political power?  It certainly seems to indicate how extraordinarily powerful central bankers have become in our era.”

Another anomaly involves the official justification for taking up arms against Libya.  Supposedly it’s about human rights violations, but the evidence is contradictory.  According to an article on the Fox News website on February 28:

As the United Nations works feverishly to condemn Libyan leader Muammar al-Qaddafi for cracking down on protesters, the body's Human Rights Council is poised to adopt a report chock-full of praise for Libya's human rights record. 

The review commends Libya for improving educational opportunities, for making human rights a "priority" and for bettering its "constitutional" framework. Several countries, including Iran, Venezuela, North Korea, and Saudi Arabia but also Canada, give Libya positive marks for the legal protections afforded to its citizens — who are now revolting against the regime and facing bloody reprisal. 

Whatever might be said of Gaddafi’s personal crimes, the Libyan people seem to be thriving.  A delegation of medical professionals from Russia, Ukraine and Belarus wrote in an appeal to Russian President Medvedev and Prime Minister Putin that after becoming acquainted with Libyan life, it was their view that in few nations did people live in such comfort:  

[Libyans] are entitled to free treatment, and their hospitals provide the best in the world of medical equipment. Education in Libya is free, capable young people have the opportunity to study abroad at government expense. When marrying, young couples receive 60,000 Libyan dinars (about 50,000 U.S. dollars) of financial assistance.  Non-interest state loans, and as practice shows, undated. Due to government subsidies the price of cars is much lower than in Europe, and they are affordable for every family. Gasoline and bread cost a penny, no taxes for those who are engaged in agriculture. The Libyan people are quiet and peaceful, are not inclined to drink, and are very religious. 

They maintained that the international community had been misinformed about the struggle against the regime. “Tell us,” they said, “who would not like such a regime?” 

Even if that is just propaganda, there is no denying at least one very popular achievement of the Libyan government: it brought water to the desert by building the largest and most expensive irrigation project in history, the $33 billion GMMR (Great Man-Made River) project.  Even more than oil, water is crucial to life in Libya.  The GMMR provides 70 percent of the population with water for drinking and irrigation, pumping it from Libya’s vast underground Nubian Sandstone Aquifer System in the south to populated coastal areas 4,000 kilometers to the north.  The Libyan government has done at least some things right.   

Another explanation for the assault on Libya is that it is “all about oil,” but that theory too is problematic.  As noted in the National Journal, the countryproduces only about 2 percent of the world’s oil.  Saudi Arabia alone has enough spare capacity to make up for any lost production if Libyan oil were to disappear from the market.  And if it’s all about oil, why the rush to set up a new central bank?

Another provocative bit of data circulating on the Net is a 2007 “Democracy Now” interview of U.S. General Wesley Clark (Ret.).  In it he says that about 10 days after September 11, 2001, he was told by a general that the decision had been made to go to war with Iraq.  Clark was surprised and asked why.  “I don’t know!” was the response.  “I guess they don’t know what else to do!”  Later, the same general said they planned to take out seven countries in five years: Iraq, Syria, Lebanon, Libya, Somalia, Sudan, and Iran. 

What do these seven countries have in common?  In the context of banking, one that sticks out is that none of them is listed among the 56 member banks of the Bank for International Settlements (BIS).  That evidently puts them outside the long regulatory arm of the central bankers’ central bank in Switzerland. 

The most renegade of the lot could be Libya and Iraq, the two that have actually been attacked.  Kenneth Schortgen Jr., writing on, noted that “[s]ix months before the US moved into Iraq to take down Saddam Hussein, the oil nation had made the move to accept Euros instead of dollars for oil, and this became a threat to the global dominance of the dollar as the reserve currency, and its dominion as the petrodollar.”

According to a Russian article titled “Bombing of Lybia – Punishment for Ghaddafi for His Attempt to Refuse US Dollar,” Gadaffi made a similarly bold move: he initiated a movement to refuse the dollar and the euro, and called on Arab and African nations to use a new currency instead, the gold dinar.  Gadaffi suggested establishing a united African continent, with its 200 million people using this single currency.  During the past year, the idea was approved by many Arab countries and most African countries.  The only opponents were the Republic of South Africa and the head of the League of Arab States.  The initiative was viewed negatively by the USA and the European Union, with French president Nicolas Sarkozy calling Libya a threat to the financial security of mankind; but Gaddafi was not swayed and continued his push for the creation of a united Africa.

And that brings us back to the puzzle of the Libyan central bank.  In an article posted on the Market Oracle, Eric Encina observed:

One seldom mentioned fact by western politicians and media pundits: the Central Bank of Libya is 100% State Owned. . . . Currently, the Libyan government creates its own money, the Libyan Dinar, through the facilities of its own central bank. Few can argue that Libya is a sovereign nation with its own great resources, able to sustain its own economic destiny. One major problem for globalist banking cartels is that in order to do business with Libya, they must go through the Libyan Central Bank and its national currency, a place where they have absolutely zero dominion or power-broking ability.  Hence, taking down the Central Bank of Libya (CBL) may not appear in the speeches of Obama, Cameron and Sarkozy but this is certainly at the top of the globalist agenda for absorbing Libya into its hive of compliant nations.

Libya not only has oil.  According to the IMF, its central bank has nearly 144 tons of gold in its vaults.  With that sort of asset base, who needs the BIS, the IMF and their rules? 

All of which prompts a closer look at the BIS rules and their effect on local economies.  An article on the BIS website states that central banks in the Central Bank Governance Network are supposed to have as their single or primary objective “to preserve price stability.”  They are to be kept independent from government to make sure that political considerations don’t interfere with this mandate.  “Price stability” means maintaining a stable money supply, even if that means burdening the people with heavy foreign debts.  Central banks are discouraged from increasing the money supply by printing money and using it for the benefit of the state, either directly or as loans. 

In a 2002 article in Asia Times titled “The BIS vs National Banks,” Henry Liu maintained:   

BIS regulations serve only the single purpose of strengthening the international private banking system, even at the peril of national economies. The BIS does to national banking systems what the IMF has done to national monetary regimes. National economies under financial globalization no longer serve national interests. 

. . . FDI [foreign direct investment] denominated in foreign currencies, mostly dollars, has condemned many national economies into unbalanced development toward export, merely to make dollar-denominated interest payments to FDI, with little net benefit to the domestic economies. 

He added, “Applying the State Theory of Money, any government can fund with its own currency all its domestic developmental needs to maintain full employment without inflation.”  The “state theory of money” refers to money created by governments rather than private banks.

The presumption of the rule against borrowing from the government’s own central bank is that this will be inflationary, while borrowing existing money from foreign banks or the IMF will not.  But all banks actually create the money they lend on their books, whether publicly-owned or privately-owned.  Most new money today comes from bank loans.  Borrowing it from the government’s own central bank has the advantage that the loan is effectively interest-free.  Eliminating interest has been shown to reduce the cost of public projects by an average of 50%.   

And that appears to be how the Libyan system works.  According to Wikipedia, the functions of the Central Bank of Libya include “issuing and regulating banknotes and coins in Libya” and “managing and issuing all state loans.”  Libya’s wholly state-owned bank can and does issue the national currency and lend it for state purposes. 

That would explain where Libya gets the money to provide free education and medical care, and to issue each young couple $50,000 in interest-free state loans.  It would also explain where the country found the $33 billion to build the Great Man-Made River project.  Libyans are worried that NATO-led air strikes are coming perilously close to this pipeline, threatening another humanitarian disaster.                

So is this new war all about oil or all about banking?  Maybe both – and water as well.  With energy, water, and ample credit to develop the infrastructure to access them, a nation can be free of the grip of foreign creditors.  And that may be the real threat of Libya: it could show the world what is possible.  Most countries don’t have oil, but new technologies are being developed that could make non-oil-producing nations energy-independent, particularly if infrastructure costs are halved by borrowing from the nation’s own publicly-owned bank.  Energy independence would free governments from the web of the international bankers, and of the need to shift production from domestic to foreign markets to service the loans. 

If the Gaddafi government goes down, it will be interesting to watch whether the new central bank joins the BIS, whether the nationalized oil industry gets sold off to investors, and whether education and health care continue to be free.

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  1. Richard Lefew says:

    Excellent article.  This is the most informative article I've found on Libya.  The mainstream media is busy pumping out lies, and rumors on Qaddafi, which I've checked. . . no truth to any of it.  I've heard Fox News claim that Qaddafi has "stolen" all the oil wealth, using the income to build "Palaces", and fund an extravagant lifestyle (the exact opposite is the truth).
    I've investigated the Terrorism connections.  Qaddafi was framed up in the 1980's in 2 false flag opperations.  The first was a night club bombing in W. Germany, blammed on Qaddafi (which was more likely a Mossad operation, it bore all their hallmarks), second was the Lockerbee bombing.  Libya and Qaddafi had nothing to do with either of these events.
    I think it really stinks that a country can acheive such success, with his flourishing social programs, and be punished for it.  Libya may be the only country in the world with such a broad spectrum of free government services, while maintaining bugetary surpluses every year.  They also completed major infrastructure improvements (water project) with their own funding, without going into ANY DEBT.  They own all their assets, without any DEBT.
    This is an amazing feat, and Qaddafi should be praised.  The guy's a freaking hero.  He's done exactly what I wish our government would do.
    Dirty bankers just can't stand to see a Nation thrive.  They hate Nationalism.

  2. This is very interesting, thank you for a great article.

  3. Rothschild and Windsors, the enemies of humanity.

  4. The "oil" red herring is trotted out regularly. What is often not said is that Iraq's oil was for sale, on the open market, and anyone could buy it. At the time, it was around 20 dollars a barrel, with about 3-5 dollars being the cost of removinga barrel from the ground. If the goal was to control that 3-5 dollar figure, the effort was pointless. The Oil Bourse takes care of all "profit" from the slaves work, as they can raise the price by the 3-5 dollars and pifer the profit without setting foot near the wells – owing the dereks isn't reason to invade.
    Ellen is right, this is about the central bank, world currency, and then end of using oil prices as a way of keeping inflation low for the dollar.
    The muslim countries are countries that are problematic, as they loan without compound interest – an act against god according to the central bankers. So the must go.

  5. michael mazur says:

    A really good article, Ellen, answered some unexpressed questions. To respond to some of the content; the new central bank will join the BIS, and the nationalised oil industry will get sold off to investors (thieves), and education and health care will be privatised.
    All three events are as predictable as that the sun will rise tomorrow, for the purpose of the global web of private  central banks is to reduce the people of the world to grinding poverty, being phase one, as that means total helplessness, followed by phase two, which is extermination of nearly all of humanity.
    People need to go the UN Sec Council Resolution 1973 and read it to see that US/NATO are completely in breach of it; brazenly interpreting as they please, knowing full well that the private bankster owned media, whether corporate or state, will not enlighten the public as to the precise provisions of it.
    The UN Sec General, Ban Ki Moon, is not reported as complaining that the US/NATO are flagrantly in breach of the provisions of Res 1973, acting as if it didn't exist ! He's in on the war crime against Libya too !
    Off course the useful idiot lefties will smugly say that it is about the oil, they always do, but Saddam Hussein did respond, correctly, that they can't drink the stuff, they have to sell it ! Oil then in mar03 was $30, but once the bombs started to drop, an artificial scarcity was created in the media, and though there have been the swings in price over the eight years, they have not returned to that $30, and now with this criminal assault on Libya, the impression is once again fostered in the public mind that there is a shortage.
    None of the bankster media will correct that false impression, as they like to see havoc in the lives of the world's people, leading to distress and impoverishment and chaos.
    Briefly about Germany; it was in fact that in early 1933 Hitler told the private central bank in Germany that from then on he would issue the currency for all loans and debts interest free. Between 1934 and 1938, Germany went from economic backwater to Europe's powerhouse, solely because they had got rid of the bankster parasites.
    That example would be infectious to other European powers, and so Germany had to die – literally, to be an example to the world's other govts also to not even think of throwing off the banksters' shackles.
    But Germany paid the ultimate price, as that example of being free of these intergenerational bankster criminals cost them an utterly destroyed country, as well as an attempt by the bankster proxies, the Allies, to exterminate the remnant post war population, when more died of neglect and starvation between 1945-50 – 9,000,000, than were killed between 1939-45, 6,000,000. No, not THAT 6,000,000, which is fiction.
    The same phenomenon was observed for Iraq, hence the impoverishment of the people of Iraq, as is being seen now for Libya. The same banksters as in 1945 are using the same AngloAmerican axis, with the French now as add ons, to attempt to impose private central banking on Libya.
    Maybe the Germans don't want to be part of this because they really know why 15,000,000 of them were murdered, 1939-50.
    Watch out Iran, as you will be a prize bigger for these natural bankster criminals than Libya and Iraq combined. 

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