Let us reject the agreement of the Central Banks to sustain capitalism
By Daniel Campos- La Marx International
In the second half of March, world imperialism creaked. A wave of bankruptcies broke out in the first half of March beginning with the failure of Silicon Valley Bank, a fall so severe that HSBC bought Silicon Valley Bank's UK branch for $1. The crisis of Credit Suisse, one of the 10 largest corporations in the world based in Switzerland, which received a bailout of 54,000 million US$, which did not prevent the continuation of a crisis dynamic on the way to bankruptcy, broke out. Then the crisis in the United States of the First Republic Bank, of the Signature Bank , broke out , and the authorities announced that 186 banks were in danger. In Europe, the Credit Suisse crisisit pushed large Global Corporations like Germany's Deutsche Bank, France's Societe Generale, and Europe's HSBC into crisis.
The dynamics of events opened the largest sequence of crises since the beginning of the world crisis of capitalism in the year 2000, even greater than the events of 2008, when Lehman Brothers went bankrupt, which threatened to bankrupt the Global Corporations that dominate the worldwide economy. If this trend had developed, it would have dragged down Wall Street, and all the world's stock markets. This forced a coordinated intervention by imperialist governments and states to stop the spread of bankruptcies and stop the crisis.
The agreement of the Central Banks
To stop the crisis unleashed on March 19, 2023, a historic agreement was signed between the 6 main Central Banks of the world. The 6 most important Central Banks on a global scale that are the US Federal Reserve (Fed), the Bank of Canada (BofCa), the Bank of England (BofE), the Bank of Japan (BoJ), the European Central Bank (ECB) and the Swiss National Bank (SNB) signed an agreement to put millions of dollars in the pockets of the owners of Global Corporations in order to stop the wave of bankruptcies. This agreement of the Central Banks entered into force on March 20, 2023 with the objective of "saving" Global Corporations, a kind of new round of "Rescue" that introduces the "novelty" that is going to be carried out on a "daily" basis, that is , from now on, day by day, and every day, millions of dollars are granted to Global Corporations.
The mechanism adopted for the implementation of this round of emergency "Bailouts" is through the execution of the mechanism that the capitalists call "swap lines" , that is, the implementation of a "window" that supplies money 24 hours a day to establish and conform a "money security mesh", providing loans for all the world's millionaires and their Global Corporations. Such is the severity of the crisis unleashed in March 2023 that the agreement was held as an emergency on a Sunday afternoon to prevent crack from exploding at the opening of the stock markets on Monday.
An emergency "Bailout" that does not solve anything
The agreement of the Central Banks allowed the capitalist governments to advance in the measures to stop the crisis. In the first place, with this agreement it was possible to carry out the rescue ofCredit Suisse, through the mechanism of a merger with the other major Swiss Global Corporation, the Union of Swiss Banks (UBS). The merger of UBS and Credit Suisse was an operation that involved US$3 billion injected by UBS, and US$100 billion from the Central Bank of Switzerland, money injected with the support of the other central banks. The masses of money immersed in the merger operation between UBS and Credit Suisse are obscene, money aimed at saving big businessmen who live in mansions, have luxury cars, yachts, and private islands, the bailout of 1% oligarchs who they dominate the world economy in a world where billions of people have nothing to eat.
That is to say, in one week of March, more than 5 important banks and one of the largest Global Corporations went bankrupt, with which the greatest sequence of crises occurred, since the beginning of the world crisis of capitalism in the year 2000 even higher than the events of 2008, when Lehman Brothers went bankrupt. And if the agreement of the 6 Central Banks had not been made, the Global Corporations that dominate the world economy would have gone bankrupt and in their fall it would have dragged Wall Street, and all the world's stock markets, a whole process of bankruptcies that led to the return of the Bailouts.
For 15 years, capitalism has lived with an artificial respirator that is the Bailouts . The Bailouts are injections of money that the Central Banks make to the Global Corporations to avoid their bankruptcy, and in general they are economic operations that have been carried out with a periodicity that has varied between several years, or months. At most the urgency of the crises had caused them to occur on a weekly basis. But now the gravity of the crisis is of such magnitude that the agreement implies that the Bailouts will be carried out "every day" that is to say, loans for all the millionaires of the world and their Global Corporations that need dollars .
The crisis does not stop with the agreement of the Central Banks
The return of the bailouts did not solve the problem. At the end of April, a new collapse of First Republic Bank began, bringing the total loss to 95%, which began after the bank revealed that it had lost 100,000 million dollars in deposits as a result of the consequences of the bankruptcy of Silicon Valley Bank (SVB) and Signature Bank last month. The bank's shares fell 30% on Wednesday after halving in value the previous day as last month's bailout operation, in which 11 big banks led by JPMorgan Chase dumped $30 billion, unraveled.
First Republic's announcement of mass layoffs of between 20% and 25% of its workforce and selling assets did not prevent the collapse. From the $115 price that First Republic shares were worth, they dropped to $5.69, a brutal drop. The bank's share listing had to be halted several times in the past two days due to the rapidity of the decline. Despite the desperate, extreme character of the actions of the Central Bank officials that the Heads of global capitalism were compelled to take to sustain capitalism at any cost, the crisis is latent and can reopen at any time.
The agreement of the Central Banks is a fraud and a scam against the peoples of the world
The Central Banks' document praises the intervention of the Swiss authorities in favor of financial stability, by endorsing the takeover of Credit Suisse by its competitor UBS. "It has been a decisive action to restore order in market conditions and guarantee financial stability." The US Treasury Secretary, Janet Yellen, and the Federal Reserve Chairman, Jerome Powell, have also welcomed the backing given by the Swiss authorities to the purchase of Credit Suisse. "We welcome the announcements made today by the Swiss authorities in support of financial stability," they said in a joint statement.
For her part, the Swiss Finance Minister, Karin Keller-Sutter, justified the rescue of Credit Suisse at a press conference based on its systemic nature and that its fall would undoubtedly have had "severe consequences" for global finance. "It is not a bailout, it is a commercial solution, the best solution" , he has defended. The president of the European Central Bank, Christine Lagarde, celebrated on Sunday the "quick action" of the Swiss authorities to facilitate the acquisition of the Credit Suisse banking group , affirming that these decisions will allow "reestablishing orderly market conditions".
But all those statements are lies. They lie to the people in the face, because this money will not guarantee any "financial stability", this money will not go to any home of the millions who suffer from hunger, poverty, and misery in the world. It will go to the pockets of the oligarchs who dominate the world capitalist-imperialist economy, it will go to the pockets of the richest 1% as has always happened. We must repudiate with all our might the irrational immorality that the agreement of the Central Banks means, what we need is to invest those billions of dollars in work, salaries, health and education for millions of the world who need it.
The insurrections and revolutions that are sweeping the world will destroy the Central Bank Agreement and any other reactionary agreement to defend capitalism. We need to defeat these measures by uniting the struggles of the world, from the National Liberation struggle carried out by the people of Ukraine, through the struggle of the people of France, the strikes of the British, Italian, German workers, as well as the struggle of the people of Iran against the dictatorship of the Ayatollahs, etc. On the way to imposing the fight for Global Socialism we will put an end to the measures solely designed to defend the rich and millionaires of the world.
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