Friday, December 3, 2010

Real information on EXIM BANK, Robbing Blind the American People

Tbilisi - "Georgia, U.S. Export-Import Bank in Talks on $200 Million Green Car Plan"

Georgia is in talks with the US EXPORT-IMPORT BANK on plans to spend as much as $200 million on electric and hybrid cars in a bid to create the first "green government" in the former Soviet republics. The government plans to buy about 4,000 cars in the next three to four years from producers such as General Motors Co., Ford Motor Co. and Toyota Motor Corp., says the Georgian Economy Minister, Vera Kobalia.

Well, YES, well yes if it is carried out under the direction of the Department of Defence [DOD] through the Federal Finance Bank [FFB]. A lot of this business is done through loans to buy our weapons hardware and software over in foreign countries, with GIANT loans handed out like regime savers by our Export-Import Bank [Exim] so they can afford our death-delivery manufactured goods. These loans are guaranteed by our FFB and there is ABSOLUTELY NO ACCOUNTABILITY!!!  And then you wonder why some people with little if any education, who cannot even speak their own language, are being placed in high positions in the Georgian government, such as Minister of Economy.

Meanwhile, American taxpayers are being ROBBED BLIND and Georgians being forced to flee their own country out of fear or inability to survive. A major broker of Exim deals in Europe is the consultancy agency MCKINSEY COMPANY [much like Goldman Sachs but about power more than money], which has close CIA and DOD connections in Azerbaijan and other countries, especially Afghanistan. Aircraft, aerospace, satellites, telecommunications and its infrastructure, weapons, nuclear power plants, hydroelectric dams, jet fuel production [especially in the world king of high quality hi-speed jet fuel for aerospace and commercial jet planes, NIGERIA, the king of kings of jet fuel], aluminum processing complexes, etc., are the domain of Exim loans.

How CBOs [Certificates of Beneficial Ownership] play a role in this dreadful sacrifice of our national treasury: [1982], and that is yet another can of worms to open up [to be continued].

"Financing - To finance its purchases of agency debt and loan assets and its direct loans to guaranteed borrowers, the FFB may either sell its own securities directly to the public or it may borrow from the Treasury. Although, according to the bank's charter, the FFB may borrow only $15 billion from the public at any time, it may, with the Secretary's approval, borrow without limit from the Treasury. Originally, it was thought that the FFB would borrow from the Treasury on an interim basis, repaying these borrowings periodically through the sale of its own securities in the market. It was assumed that the bank's securities would pay the same low interest rates paid by the Treasury on its own obligations."

Consider the following two examples. The Export-Import Bank (Eximbank) has the authority to borrow to finance direct loans to promote exports of American goods. Eximbank may borrow from the FFB, by selling a bond to it, and then use the funds to make a direct loan to the national airline of a foreign country to help it buy a U.S.-built commercial jetliner. The loan from the FFB to Eximbank is treated as a means of financing, and has no effects on the unified budget. The direct loan by Eximbank to the foreign airline, however, is recorded as outlay in the Eximbank budget and in the unified budget totals.

Contrast that transaction with the following one:

The Department of Defence issues a guarantee to the same foreign government for a loan to finance the purchase by that nation's armed forces of U.S.-made military equipment. The loan is financed by the FFB. In this case no outlays are recorded in the unified budget, although the transaction was initiated by the Defence Department." Since the FFB borrows all its funds from the Treasury, it has practically unlimited available funds. This has enabled the FFB to increase greatly the scope of its operations without having to seek Congressional approval for increases in borrowing authority. For example, at the end of fiscal year 1981, all but $10,000 of the FFB's total holdings of $107.3 billion of agency debt, loan assets, and direct loans to guaranteed borrowers had been financed by borrowing from the Treasury. This is over seven times what the FFB could have financed if it had been limited to its initial $15 billion of authority to borrow from the public."

My, how the FFB-Exim Bank matrix has grown! Far back in 2001 the following was written:

"When it was initially established, the Bank was capitalized by an appropriation of $1 billion from the U.S. Treasury. The Bank also is authorized to borrow up to $6 billion directly from the Treasury, and it may draw upon a substantial line of credit with the Federal Financing Bank (FFB). (The Federal Financing Bank is a part of the Department of the Treasury and obtains its funds from regular Treasury issues.)

Eximbank uses its Treasury borrowings to finance its short-term needs, and repays the Treasury quarterly from loan repayments and by borrowing from the FFB on a medium- and long-term basis. The Bank's authority to lend, guarantee, and insure is limited to a total of $75 billion. Eximbank's direct loans are charged at their full value against the $75 billion limitation. When it was initially established, the Bank was capitalized by an appropriation of $1billion from the U.S. Treasury. The Bank also is authorized to borrow up to $6 billion directly from the Treasury, and it may draw upon a substantial [unlimited] line of credit with the Federal Financing Bank (FFB). (The Federal Financing Bank is a part of the Department of the Treasury and obtains its funds from regular Treasury issues.)

"As part of its direct lending program, the Bank has a tied aid "war chest" it uses to counter specific projects that are receiving foreign officially subsidized export financing. Tied aid credits and mixed credits are two of the primary methods whereby governments provide their exporters with official assistance to promote exports. Tied aid credits include loans and grants which reduce financing costs below market rates for exporters and which are tied to the procurement of goods and services from the donor country.  Mixed credits combine concessional government financing (funds at below market rates or terms) with commercial or near-commercial funds to produce an overall rate that is lower than market-based interest rates and carries more lenient loan terms. The United States does tie substantial amounts of its agricultural and military aid to U.S. goods, but it generally has avoided using such financing to promote American capital goods exports."

How much of the British arms race and British Aerospace [BAE] military global trading focus is part of this slush fund of FFB Bank goodies funnelled through the Exim Bank loans? THE GUARDIAN newspaper of London has written much on the export certification and bank loan scandals which have had the misfortune of bringing heaps of attention upon themselves. BAE is now more of a presence near the Pentagon in the weapons loop around Washington DC than a member of the Airbus Consortium of Europe!

The Exim Bank and the FFB can drain our Treasury with no checks or balances, and without virtually any public accountability, if they deem it necessary to do so. Of course, they have many methods of putting their inconsequential loans on the public record for their integrity to appear intact. The FFB, aka Federal Finance Bank, is the best darned tool the Department of Defence could ever have wished for, it is like weapons of war paradise for the killer class!  Good reading material, Becker & McClenahan, two experts on the Exim Bank, about the EXPORT IMPORT BANK 1934-2000, published by Cambridge Books in 2000.


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