The Crisis of Civilization

"This civilization in its current form can not survive the 21st Century"

The Crisis of Civilization is a documentary feature film investigating how global crises like ecological disaster, financial meltdown, dwindling oil reserves, terrorism and food shortages are converging symptoms of a single, failed global system.

Directed by Dean Puckett
Animations by Lucca Benney
Based on the Book by Nafeez Mosaddeq Ahmed :http://crisisofcivilization.com/book/

US Dollar Will Be DeThroned As World's Defacto Currency

Canadian billionaire businessman Ned Goodman predicts the end of the U.S. Dollar as the world's reserve currency. He predicts the transition out of the U.S. Dollar will become, "...quite ugly."

Lecture at Cambridge House's Toronto Resource Investment Conference 2013 on Thursday, September 12, 2013.

"In my view, the dollar is about to become dethroned as the world's de facto currency. I'll tell you how I came to that conclusion so quickly... the new President of China, Xi Jinping, his first visit on the day of his becoming President, was at his request to meet with Mr. Putin. And he immediately made a deal with Mr. Putin to get all the oil that he needs, which he can buy in Renminbi."

"We're headed to a period of stagflation, maybe serious inflation, but stagflation for sure, and the United States will be losing the privilege to print at its will, the world's reserve currency. A period that's going to be very inflationary, and I can tell you that before that happens, it is likely that it is going to get quite ugly." - Ned Goodman

The Gold Is Gone - Germanys' Access To Its Gold Denied

Courtesy Of: Russia Today

The world is losing trust in the dollar as a safe haven. 

A major blow came after Germany's Bundesbank demanded the repatriation of a big chunk of its gold being held in the US. 

Because as RT's Gayane Chichakyan reports, some are concerned the assets of foreign nations in the Federal Reserve are not secure or even there. 

The Germans were infuriated when the US Federal reserve didn't even let them examine their own assets properly. 

Peter Boehringer, the founder and chairman of 'German Precious Metal Association', says that's a bad sign.

The International Banking Cartel

Courtesy Of: PressTV

A look at the International Banking Cartel led by the Bank for International Settlement (in Basel, Switzerland) known as the bank of central banks (58 central banks) and The US Federal reserve System. 

Also a look at banking tycoons: from the Rothschild family in Europe to JP Morgan and others in the US. How banks not only control governments but also appoint politicians through huge campaign donations. 

Governments at the service of the major banks, the best example: the Obama administration and the history's biggest bail out of the same institutions that caused the Great Recession.

Four Horseman Of The Banking Cartel

They Rule The World

Courtesy Of Press TV

Rothchilds family are worth over 100 trillion dollars. This name Rothchild comes from Germany, The Rothchilds real family name is really Bauer. This Family changed the last name to match the name of a old Masonic German bank. 

There are 13 Families that rule the world

Capitalism Has Failed The World

Courtesy Of Al-Jazeera

It seems that mistakes made in Wall Street and the City of London are paid for by people around the world, but can we govern greed within the realm of capitalism or is it all just money down the drain? Is austerity really needed? Can we trust the banks?

Lord Turner said: “I’m not an egalitarian, I’m not a socialist, but I am worried about the sheer extent of the inequality that’s now growing. I think finance is part of that story.”

Lord Turner was at the helm of the UK’s Financial Services Authority (FSA) in the wake of the financial meltdown and is now trying to find ground-breaking solutions to global problems at the Institute of New Economic Thinking. Hasan challenges a man at the heart of rethinking the global economic system about his past experience, his present thoughts, and our future.

“I am concerned that we have not been radical enough in our reform,” concluded Lord Turner.

But he also sounded a note of hope based on some of the new ideas and policies coming out from previously orthodox bastions of economic thinking.

Joining our discussion are: Jon Moulton, a venture capitalist and the founder of the private equity firm Better Capital. He has nurtured a reputation for forthrightness even to point of challenging his private equity peers for abusing tax regimes. He is also one of the few men in the City of London who warned about the impending crash before it happened; Professor Costas Lapavitsas, who teaches economics at the School of Oriental and African Studies (SOAS) at the University of London and is the author of several notable books on the crash and its consequences including Crisis in the Eurozone and Financialisation in Crisis; and Ann Pettifor, the director of PRIME (Policy Research in Macroeconomics),

and a fellow of the New Economics Foundation. She was one of the first to warn about the debt crisis in her bookThe Coming First World Debt Crisis, and is also well-known for her leadership of the successful worldwide campaign to cancel developing world debt - Jubilee 2000.

World Bank Corruption Deceit and Greed

Note: This video was not part of the below article.

By James Turnage

Thomas Jefferson wrote in a letter to John Taylor in 1816:  “And I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.”

The World Bank was constructed to lend money to the developing countries of the world.  It was designed to help put an end to world poverty.  A whistleblower by the name of Karen Hudes, former Chief Council for the World Bank for 12 years, claims the organization is filled with corruption, deceit, and greed.

Ms. Hudes says that the World Bank, in collusion with major banking institutions all over the world, is funneling the money to unscrupulous individuals, as well as to the executives of the bank itself.   The bulk of funds never reaches the people for which it is intended.

Ms. Hudes, a lawyer herself, witnessed securities fraud.  Full disclosure of 180 billion dollars-worth of bonds was never made to investors.  It was her job to ensure financial statements for investors were accurate.  She followed the corporate ladder, and reported her findings to the audit committee.  When she received no response, she took her information to the U.S. Treasury Department.  Once again, she was ignored.  When she went to the United States Congress, Senator Richard Luger, Republican from Indiana, sent three letters to the World Bank, asking them not to fire her.  The promptly fired her.

She says that it became obvious to her that Congress had no knowledge of the World Bank’s operations.  Three additional Congressmen asked the General Accounting Office, the GAO, to investigate.

Ms. Hudes claimed the money was ‘going everywhere,’ because when anyone reported the misappropriation of funds, they were fired.  She cited one instance when 900 million dollars was supposed to go to the poor in the Philippines, and instead it was diverted to a man by the name of “Lucio Tonn,” who was behind on his loan payments.  The Philippine National Bank, which never received the money, eventually went bankrupt, and a 500 million dollar bailout ensued.

She says she was attempting to unveil a massive cover-up, that went all the way to Congress, and included 188 ministers of finance around the world.  She claims the result of all the corruption will be a currency war.

Ms. Hudes says there are several World Bank whistleblowers, including the United Kingdom, Mexico, India, and Ethiopia, and that they are all reporting the same information.  The institution is corrupt from top to bottom.

She was asked by Abby Martin of ‘RT’ if she had gone to the financial publications.  Ms. Hudes said she had, but she discovered they were owned by one major conglomerate, which includes nearly all the financial institutions in the world.  She stated that the aim of the Banking community is to control the people of the world and their finances.

She told of the ‘Federal Institute of Technology, in Zurich, Switzerland, where three mathematicians looked at corporate data from 43,000 trans-national companies.  Through complicated maneuvers, they increased their financial power 10 fold, and own 40 percent of the assets of all companies traded on the financial markets of the world, and 60 percent of the earnings yearly.  In many countries, the money being printed has no value.

Ms. Martin said these institutions are obviously laundering money, and hiding much of it in ‘offshore’ accounts.  There is no oversight for most of the institutions, including the World Bank, and that they control geopolitics by controlling many of the world’s governments.

Ms. Hudes said that during the 2012 presidential election, she went to CBS news with information regarding Robert Zellig.  Zellig was the man who would have headed Mitt Romney’s transition team.  He was allegedly part of the Bank’s corrupted management.  CBS declined, saying that “the American people don’t need to know.”  She said that in this way, they were also controlling voters.

When Ms. Martin asked her for names, Hudes said that they were the owners of institutions such as ‘Goldman-Sachs,’ and the ‘Bank of America.’  She further stated that they were all one enormous financial entity, dominating the economic future of the world.

Ms. Martin asked why she hasn’t been singled out, as were Edward Snowden or Bradley Manning.  Ms. Hudes said it may be because all the whistleblowers are working together.  She is surprised that Snowden has received so much attention, because the media is controlled by the government.  The mainstream media is not trusted by the American people, which was shown in a survey.  70 percent of the country said they did not believe what was reported in the news.

The World Bank was created at the 1944 Bretton Woods Conference, along with three other institutions, including the International Monetary Fund (IMF). The World Bank and the IMF are both based in Washington DC, and work closely with each other.

Traditionally, the World Bank has been headed by a citizen of the United States, while the IMF has been led by a European citizen.

The World Bank has two primary divisions.  The International Bank for Reconstruction and Development (IBRD) has 188 member countries, while the International Development Association (IDA) has 172 members.  Each member state of IBRD should be also a member of the International Monetary Fund (IMF) and only members of IBRD are allowed to join other institutions within the Bank (such as IDA).

The World Bank requires sovereign immunity from countries it deals with.   Sovereign immunity waives a holder from all legal liability for their actions. It is proposed that this immunity from responsibility is a “shield which The World Bank wants to resort to, for escaping accountability and security by the people.”  As the United States has veto power, it can prevent the World Bank from taking action against its interests.

With no accountability, it’s easy for the World Bank to be filled with corruption, deceit, and greed.

Network Of Global Corporate Control

A Giant Bow-tie Structure, A Tightly-knit Core Of Financial Institutions

By Stefania Vitali, James B. Glattfelder,  Stefano Battiston

The structure of the control network of transnational corporations affects global market competition and financial stability. So far, only small national samples were studied and there was no appropriate methodology to assess control globally. We present the first investigation of the architecture of the international ownership network, along with the computation of the control held by each global player.

We find that transnational corporations form a giant bow-tie structure and that a large portion of control flows to a small tightly-knit core of financial institutions. This core can be seen as an economic “super-entity” that raises new important issues both for researchers and policy makers.

Introduction

A common intuition among scholars and in the media sees the global economy as being dominated by a handful of powerful transnational corporations (TNCs). However, this has not been confirmed or rejected with explicit numbers. A quantitative investigation is not a trivial task because firms may exert control over other firms via a web of direct and indirect ownership relations which extends over many countries.

Therefore, a complex network analysis [1] is needed in order to uncover the structure of control and its implications. Recently, economic networks have attracted growing attention [2], e.g., networks oftrade [3], products [4], credit [5], [6], stock prices [7] and boards of directors [8], [9].

This literature has also analyzed ownership networks [10], [11], but has neglected the structure of control at a global level. Even the corporate governance literature has only studied small national business groups [12]. Certainly, it is intuitive that every large corporation has a pyramid of subsidiaries below and a number of shareholders above. However, economic theory does not offer models that predict how TNCs globally connect to each other. Three alternative hypotheses can be formulated. TNCs may remain isolated, cluster in separated coalitions, or form a giant connected component, possibly with a core-periphery structure. So far, this issue has remained unaddressed, notwithstanding its important implications for policy making. Indeed, mutual ownership relations among firms within the same sector can, in some cases, jeopardize market competition [13], [14]. Moreover, linkages among financial institutions have been recognized to have ambiguous effects on their financial fragility [15], [16]. Verifying to what extent these implications hold true in the global economy is per se an unexplored field of research and is beyond the scope of this article. However, a necessary precondition to such investigations is to uncover the worldwide structure of corporate control. This was never performed before and it is the aim of the present work.

Methods

Ownership refers to a person or a firm owning another firm entirely or partially. Let  denote the ownership matrix, where the component  is the percentage of ownership that the owner (or shareholder)  holds in firm . This corresponds to a directed weighted graph with firms represented as nodes and ownership ties as links. If, in turn, firm  owns  shares of firm , then firm  has an indirect ownership of firm  (Figure 1 A). In the simplest case, this amounts trivially to the product of the shares of direct ownership . If we now consider the economic value  of firms (e.g., operating revenue in USD), an amount  is associated to  in the direct case, and  in the indirect case. This computation can be extended to a generic graph, with some important caveats [17], Appendix S1, Sections 3.1 and 3.2

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Figure 1. Ownership and Control.

(A&B) Direct and indirect ownership. (A) Firm  has  percent of direct ownership in firm . Through , it has also an indirect ownership in  and . (B) With cycles one has to take into account the recursive paths, see Appendix S1, Section 3.1. (C&D) Threshold model. (C) Percentages of ownership are indicated along the links. (D) If a shareholder has ownership exceeding a threshold (e.g. ), it has full control (100%) and the others have none (0%). More conservative model of control are also considered see Appendix S1, Section 3.1.

doi:10.1371/journal.pone.0025995.g001

Each shareholder has the right to a fraction of the firm revenue (dividend) and to a voice in the decision making process (e.g., voting rights at the shareholder meetings). Thus the larger the ownership share  in a firm, the larger is the associated control over it, denoted as . Intuitively, control corresponds to the chances of seeing one’s own interest prevailing in the business strategy of the firm. Control  is usually computed from ownership  with a simple threshold rule: the majority shareholder has full control. In the example of Figure 1 C, D, this yields  in the direct case and  in the indirect case. As a robustness check, we tested also more conservative models where minorities keep some control (see Appendix S1, Section 3.1). In analogy to ownership, the extension to a generic graph is the notion of network control: . This sums up the value controlled by  through its shares in , plus the value controlled indirectly via the network control of . Thus, network control has the meaning of the total amount of economic value over which  has an influence (e.g.  in Figure 1 D).

Because of indirect links, control flows upstream from many firms and can result in some shareholders becoming very powerful. However, especially in graphs with many cycles (see Figures 1 Band S4 in Appendix S1), the computation of , in the basic formulation detailed above, severely overestimates the control assigned to actors in two cases: firms that are part of cycles (or cross-shareholding structures), and shareholders that are upstream of these structures. An illustration of the problem on a simple network example, together with the details of the method are provided in Appendix S1, Sections 3.2–3.4. A partial solution for small networks was provided in [18]. Previous work on large control networks used a different network construction method and neglected this issue entirely [11], Appendix S1, Sections 2 and 3.5. In this paper, by building on [11], we develop a new methodology to overcome the problem of control overestimation, which can be employed to compute control in large networks.

Results

We start from a list of 43060 TNCs identified according to the OECD definition, taken from a sample of about 30 million economic actors contained in the Orbis 2007 database (see Appendix S1, Section 2). We then apply a recursive search (Figure S1 and Section 2 in Appendix S1) which singles out, for the first time to our knowledge, the network of all the ownership pathways originating from and pointing to TNCs (Figure S2 in Appendix S1). The resulting TNC network includes 600508 nodes and 1006987 ownership ties.

Notice that this data set fundamentally differs from the ones analyzed in [11] (which considered only listed companies in separate countries and their direct shareholders). Here we are interested in the true global ownership network and many TNCs are not listed companies (see also Appendix S1, Section 2).

Network Topology

The computation of control requires a prior analysis of the topology. In terms of connectivity, the network consists of many small connected components, but the largest one (3/4 of all nodes) contains all the top TNCs by economic value, accounting for 94.2% of the total TNC operating revenue (Table 1). Besides the usual network statistics (Figures S5 and S6 in Appendix S1), two topological properties are the most relevant to the focus of this work. The first is the abundance of cycles of length two (mutual cross-shareholdings) or greater (Figure S7 and Section 7 in Appendix S1), which are well studied motifs in corporate governance [19]. A generalization is a strongly connected component (SCC), i.e., a set of firms in which every member owns directly and/or indirectly shares in every other member. This kind of structures, so far observed only in small samples, has explanations such as anti-takeover strategies, reduction of transaction costs, risk sharing, increasing trust and groups of interest [20]. No matter its origin, however, it weakens market competition [13], [14]. The second characteristics is that the largest connect component contains only one dominant strongly connected component (1347 nodes). Thus, similar to the WWW, the TNC network has a bow-tie structure [21] (see Figure 2 A and Appendix S1, Section 6). Its peculiarity is that the strongly connected component, or core, is very small compared to the other sections of the bow-tie, and that the out-section is significantly larger than the in-section and the tubes and tendrils (Figure 2 B and Table 1). The core is also very densely connected, with members having, on average, ties to 20 other members (Figure 2 C, D). As a result, about 3/4 of the ownership of firms in the core remains in the hands of firms of the core itself. In other words, this is a tightly-knit group of corporations that cumulatively hold the majority share of each other.

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Figure 2. Network topology.

(A) A bow-tie consists of in-section (IN), out-section (OUT), strongly connected component or core (SCC), and tubes and tendrils (T&T). (B) Bow-tie structure of the largest connected component (LCC) and other connected components (OCC). Each section volume scales logarithmically with the share of its TNCs operating revenue. In parenthesis, percentage of operating revenue and number of TNCs, cfr. Table 1. (C) SCC layout of the SCC (1318 nodes and 12191 links). Node size scales logarithmically with operation revenue, node color with network control (from yellow to red). Link color scales with weight. (D) Zoom on some major TNCs in the financial sector. Some cycles are highlighted.

doi:10.1371/journal.pone.0025995.g002

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Table 1. Bow-tie statistics.

doi:10.1371/journal.pone.0025995.t001

Notice that the cross-country analysis of [11] found that only a few of the national ownership networks are bow-ties, and, importantly, for the Anglo-Saxon countries, the main strongly connected components are big compared to the network size.

Concentration of Control

The topological analysis carried out so far does not consider the diverse economic value of firms. We thus compute the network control that economic actors (including TNCs) gain over the TNCs’ value (operating revenue) and we address the question of how much this control is concentrated and who are the top control holders. See Figure S3 in Appendix S1 for the distribution of control and operating revenue.

It should be noticed that, although scholars have long measured the concentration of wealth and income [22], there is no prior quantitative estimation for control. Constructing a Lorenz-like curve (Figure 3) allows one to identify the fraction  of top holders holding cumulatively  of the total network control. Thus, the smaller this fraction, the higher the concentration. In principle, one could expect inequality of control to be comparable to inequality of income across households and firms, since shares of most corporations are publicly accessible in stock markets. In contrast, we find that only  top holders accumulate  of the control over the value of all TNCs (see also the list of the top  holders in Table S1 of Appendix S1). The corresponding level of concentration is , to be compared with  for operating revenue. Other sensible comparisons include: income distribution in developed countries with  [22] and corporate revenue in Fortune1000 ( in 2009). This means that network control is much more unequally distributed than wealth. In particular, the top ranked actors hold a control ten times bigger than what could be expected based on their wealth. The results are robust with respect to the models used to estimate control, see Figure 3 and Tables S2 and S3 in Appendix S1.

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Figure 3. Concentration of network control and operating revenue.

Economic actors (TNCs and shareholders) are sorted by descending importance, as given by . A data point located at () corresponds to a fraction  of top economic actors cumulatively holding the fraction  of network control, value or operating revenue. The different curves refer to network control computed with three models (LM, TM, RM), see Appendix S1, Section 3.1, and operating revenue. The horizontal line denotes a value of  equal to . The level of concentration is determined by the  value of the intersection between each curve and the horizontal line. The scale is semi-log.

doi:10.1371/journal.pone.0025995.g003

Discussion

The fact that control is highly concentrated in the hands of few top holders does not determine if and how they are interconnected. It is only by combining topology with control ranking that we obtain a full characterization of the structure of control. A first question we are now able to answer is where the top actors are located in the bow-tie. As the reader may by now suspect, powerful actors tend to belong to the core. In fact, the location of a TNC in the network does matter. For instance, a randomly chosen TNC in the core has about  chance of also being among the top holders, compared to, e.g.,  for the in-section (Table S4 in Appendix S1). A second question concerns what share of total control each component of the bow-tie holds. We find that, despite its small size, the core holds collectively a large fraction of the total network control. In detail, nearly  of the control over the economic value of TNCs in the world is held, via a complicated web of ownership relations, by a group of  TNCs in the core, which has almost full control over itself. The top holders within the core can thus be thought of as an economic “super-entity” in the global network of corporations. A relevant additional fact at this point is that  of the core are financial intermediaries. Figure 2 D shows a small subset of well-known financial players and their links, providing an idea of the level of entanglement of the entire core.

This remarkable finding raises at least two questions that are fundamental to the understanding of the functioning of the global economy. Firstly, what are the implication for global financial stability? It is known that financial institutions establish financial contracts, such as lending or credit derivatives, with several other institutions. This allows them to diversify risk, but, at the same time, it also exposes them to contagion [15]. Unfortunately, information on these contracts is usually not disclosed due to strategic reasons. However, in various countries, the existence of such financial ties is correlated with the existence of ownership relations [23]. Thus, in the hypothesis that the structure of the ownership network is a good proxy for that of the financial network, this implies that the global financial network is also very intricate. Recent works have shown that when a financial network is very densely connected it is prone to systemic risk [16], [24]. Indeed, while in good times the network is seemingly robust, in bad times firms go into distress simultaneously. This knife-edgeproperty [25], [26] was witnessed during the recent financial turmoil.

Secondly, what are the implications for market competition? Since many TNCs in the core have overlapping domains of activity, the fact that they are connected by ownership relations could facilitate the formation of blocs, which would hamper market competition [14]. Remarkably, the existence of such a core in the global market was never documented before and thus, so far, no scientific study demonstrates or excludes that this international “super-entity” has ever acted as a bloc. However, some examples suggest that this is not an unlikely scenario. For instance, previous studies have shown how even small cross-shareholding structures, at a national level, can affect market competition in sectors such as airline, automobile and steel, as well as the financial one [13],[14]. At the same time, antitrust institutions around the world (e.g., the UK Office of Fair Trade) closely monitor complex ownership structures within their national borders. The fact that international data sets as well as methods to handle large networks became available only very recently, may explain how this finding could go unnoticed for so long.

Two issues are worth being addressed here. One may question the idea of putting together data of ownership across countries with diverse legal settings. However, previous empirical work shows that of all possible determinants affecting ownership relations in different countries (e.g., tax rules, level of corruption, institutional settings, etc.), only the level of investor protection is statistically relevant [27]. In any case, it is remarkable that our results on concentration are robust with respect to three very different models used to infer control from ownership. The second issue concerns the control that financial institutions effectively exert. According to some theoretical arguments, in general, financial institutions do not invest in equity shares in order to exert control. However, there is also empirical evidence of the opposite [23], Appendix S1, Section 8.1. Our results show that, globally, top holders are at least in the position to exert considerable control, either formally (e.g., voting in shareholder and board meetings) or via informal negotiations.

Beyond the relevance of these results for economics and policy making, our methodology can be applied to identify key nodes in any real-world network in which a scalar quantity (e.g., resources or energy) flows along directed weighted links. From an empirical point of view, a bow-tie structure with a very small and influential core is a new observation in the study of complex networks. We conjecture that it may be present in other types of networks where “rich-get-richer” mechanisms are at work (although a degree preferential-attachment [1] alone does not produce a bow-tie). However, the fact that the core is so densely connected could be seen as a generalization of the “rich-club phenomenon” with control in the role of degree [3], [28], Appendix S1, Section 8.2. These related open issues could be possibly understood by introducing control in a “fitness model” [29] of network evolution.

Supporting Information

Appendix_S1.pdf

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Supporting material: Acronyms and abbreviations, Data and TNC Network Detection, Network Control, Degree and Strength Distribution Analysis, Connected Components Analysis, Bow-Tie Component Size, Strongly Connected Component Analysis, Network Control Concentration, Additional Tables.

Appendix S1.

Supporting material: Acronyms and abbreviations, Data and TNC Network Detection, Network Control, Degree and Strength Distribution Analysis, Connected Components Analysis, Bow-Tie Component Size, Strongly Connected Component Analysis, Network Control Concentration, Additional Tables.

doi:10.1371/journal.pone.0025995.s001

(PDF)

Acknowledgments

Authors acknowledge F. Schweitzer and C. Tessone for valuable feedback, D. Garcia for generating the 3D figures, and the program Cuttlefish used for networks layout.

Author ContributionsConceived and designed the experiments: SB. Analyzed the data: SV JBG. Wrote the paper: SB SV JBG.

Citation: Vitali S, Glattfelder JB, Battiston S (2011) The Network of Global Corporate Control. PLoS ONE 6(10): e25995. doi:10.1371/journal.pone.0025995

Editor: Alejandro Raul Hernandez Montoya, Universidad Veracruzana, Mexico

Received: March 29, 2011; Accepted: September 15, 2011; Published: October 26, 2011

Copyright: © 2011 Vitali et al. This is an open-access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.

Funding: The authors acknowledge financial support from the ETH Competence Center “Coping with Crises in Complex Socio-Economic Systems” (CCSS) through ETH Research Grant CH1-01-08-2; the European Commission FP7 FET Open Project “FOC” No. 255987. The funders had no role in study design, data collection and analysis, decision to publish, or preparation of the manuscript.

Competing interests: The authors have declared that no competing interests exist.

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