COVID-19 and the PCR Test — No Pandemic, Only Junk Data! By Gavin Phillips

 

COVID-19 and the PCR Test — No Pandemic, Only Junk Data!

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Our world, once thriving with energy and life, has now become a dystopian landscape of barren streets and masked people with a look of foreboding in their eyes.

Governments around the world have enforced unprecedented restrictions on people’s lives, imposing lockdowns that closed down most of society for months at a time. Stopping people from visiting their family, isolating the elderly in care homes and destroying millions of people’s livelihoods.

These draconian laws were brought in to control an alleged pandemic created by a new virus called SARS-CoV-2 that creates the respiratory illness of Covid 19.

The numbers of so called ‘cases’ and deaths ‘attributed to Covid’ are churned out daily by the media fanning the fear. The hurricane force driving this pandemic is the reverse transcription polymerase chain reaction test (RT-PCR). So, it’s vitally important that we understand exactly how the RT-PCR test works and its limitations.

The PCR test was invented by the late American Kary Mullis in the mid 1980’s for which he received the Nobel Prize in 1993 in Chemistry. Mullis died in August 2019.

One of the PCR’s applications is to increase genetic material found in crime scenes in order to help the police identify the criminal. The PCR test increases the amount of genetic material by using a Cycle Threshold (CT). Each CT rate doubles the amount of genetic material.

The CT rate that PCR tests are run at relating to whether someone has SARS-CoV-2 in the sample, is vitally important. Dr. Roger Hodkinson, a pathologist knowledgeable in PCR, told me that PCR tests should be below 32 cycles. If you run a PCR at over 32 CT, you start to get a lot of false positives. The higher the CT the greater the liklihood of false postive results.

The importance of the CT value was shown in a landmark court case in Portugal in November 2020. Four German tourists were forced to quarantine in a hotel in the Azores after one of them tested positive with a PCR test. The Germans brought a court case stating that they were ‘illegally confined’ in the hotel.

The Germans won their case when the Lisbon Appeal Court ruled that they were illegally held in a hotel based on a PCR test. The judges referred to a study of the PCR test by the Oxford Academic at the end of September. The study showed that any asymptomatic person being tested with a PCR test at a 35 CT or higher ‘’the probability of…receiving a false positive is 97% or higher.’’

Although it is unknown exactly at what CT value the German tourist’s PCR test was run at, virtually all European and US labs are running PCR tests at 35 CT or above, often at 40 CT.

The judges were also critical of the fact that the supposed infected person was never seen by a doctor. Only a doctor can make a medical diagnosis. This very important court case was totally ignored by the mainstream media (MSM).

Another problem with PCR tests is getting false positives from the DNA of other organisms, often referred to as cross reactions. There are billions of different DNA’s from the multitude of life forms on our planet. Some of the cells in other organisms will have parts of their genetic sequence that are identical to SARS-CoV-2.  A PCR test can give a positive for a partial genetic sequence match with DNA contamination from a plant, animal or other life form.

This was further verified by the late President of Tanzania John Magufuli. Magufuli wanted to test the reliability of the PCR test. His government randomly obtained samples from different non-human entities. Three that were tested was a goat, a sheep and a pawpaw ( a type of fruit). The samples were given human names and ages. In May 2020 Magufuli stated that the pawpaw and goat tested positive.

Due to the highly sensitive nature of PCR, it can also pick up viral fragments that may represent a recent SARSCoV2 infection. Let’s say you were sick with Covid 19 and then made a full recovery. Even 3 or 4 weeks later, you could still test positive, because the test cannot differentiate between a ’live’ or dead virus.

It’s also incorrect to assume that a positive PCR test equates to a clinical diagnosis of a disease in people. Positive results are not ‘cases’, they are simply positive results, many of which are actually false positives. Never in the history of medicine would a medical diagnosis be based solely on a PCR test. You need the skill and expertise of a doctor to evaluate symptoms and examine the patient. Dr Hodkinson added, “in medicine we don’t treat the numbers, we treat the whole patient”.

We keep hearing the number of supposed ‘cases’ by governments and media worldwide, but a positive PCR is never automatically considered a case in medicine.  A case is someone who is visibly sick and/or is presenting to hospital, not a healthy person who happened to test positive with a test that is prone to many errors.

January 2020 – The Corman/Drosten PCR Protocol

In January 2020 a scientific paper was published by Eurosurveillance which is a scientific journal. Its commonly referred to as the Corman-Drosten paper, although other scientists contributed to it. Both Christian Drosten and Victor Corman are German virologists.

The RT-PCR test protocol in this paper was recommended by the World Health Organization (WHO)  to countries worldwide. This test was incorrectly said to be the ‘Gold Standard’ for testing people for SARS-CoV-2. The established ‘Gold Standard’ is DNA sequencing by the Sanger method.

In November 2020 an extensive review of the Corman-Drosten PCR protocol was carried out by many scientists (PCR experts) and was submitted to Eurosurveillance. The report cited 10 major flaws with the Corman-Drosten paper and asked Eurosurveillance to retract it. I will cover 3 of these major flaws, but a link to the full review report is provided at the end of this article.

  • In January 2020 Drosten did not have a sample of the virus (SARS-CoV-2) to design a PCR test that would accurately test for the virus. The Drosten test was based on, quote ‘’…in silco (theoretical) sequences, supplied by a laboratory in China, because at the time neither control material of infectious (‘live’) or inactivated SARS-CoV-2 nor isolated genomic RNA of the virus was available to the authors.
  • The Drosten paper recommends a CT value of 45 Cycles. As mentioned previously, any PCR test run at 35 CT (or over), will return an enormous number of false positives. Quote …if someone is tested by PCR as positive when a threshold of 35 cycles or higher is used (as is the case in most laboratories in Europe & the US) ( including NHS laboratories in the UK ) , the probability that said person is actually infected is less than 3%, the probability that said result is a false positive is 97%. A reasonable CT value should not exceed 30. …a CT value of 45 is scientifically and diagnostically absolutely meaningless.
  • No Standard Operational Procedure (SOP) for laboratories to run the PCR tests. Quote, There should be a SOP available…so that all laboratories are able to set up the identical same test conditions. To have a validated universal SOP is essential, because it facilitates data comparison within and between countries…It points to flawed science that such an SOP does not exist. The laboratories are thus free to conduct the test as they consider appropriate, resulting in an enormous amount of variation.

It defies belief that the WHO would recommend a PCR protocol with a CT value of 45, unless their intention was to create as many false positives as possible.

German/American Lawyer Dr. Reiner Fuellmich

Reiner Fuellmich is the lawyer who successfully won lawsuits against Deutsche Bank and Volkswagen. Fuellmich created the German Corona Investigative Committee on July 10th 2020 with three other people, with Viviane Fischer and two other attorneys, Dr. Justus P. Hoffman and Antonia Fischer.

They decided to ask three questions. How dangerous is the virus really? How reliable is the Drosten-PCR test? How much damage do these anti-corona (Lockdowns) measures do, both to the economy and to the health and wellbeing of the world’s population?

As Fuellmich says: Now the latter is very easily answered. This is probably the worst crisis that the world has ever been in. With so many people dying…completely in vain, people who didn’t get an operation, surgical procedures that were postponed… doctors and nurses whom I have known for years tell me, Reiner, there’s something wrong, this entire hospital is almost empty, there’s no one here.

… I called a good friend of mine, someone who knows a lot about medicine, Dr. Wolfgang Wodarg.  Wodarg is the doctor who stepped in 12 years ago when we had a very similar situation with the Swine Flu (2009). …the same people who advanced the theory of ‘’everybody’s going to die’’, did it back then. Including Prof Drosten, including Neil Ferguson of Imperial College of London (UK).

They all pushed this story, but eventually that (the Swine Flu) turned out to be just the common flu. By the way, that’s what this looks like, the WHO issued a statement which confirmed Professor John Ioannidis study, from Stanford University, that the Infection Fatality Rate (IFR) of Covid 19 is between 0.14 and 0.15, which is about the same as the flu. Bear in mind that both Ioannidis and wHO based their projections on the worldwide official figures of Covid deaths that are based on the totally flawed PCR tests. Once you remove a large percentage of the deaths as false positives, the IFR would be far lower.

Fuellmich spoke with many other experts, including Professor Sucharit Bhakdi (retired from the University of Mainz) and Dr. Mike Yeadon, former Vice president of Pfizer.

They all came to the same conclusion, whatever we’re dealing with, this is no worse than the common flu.

Fuellmich and his team decided early on to focus on the many flaws with the PCR test as the most important evidence that proves that there was no medical pandemic. As Fuellmich says, There’s a false positive PCR pandemic, not a Covid pandemic. It (the PCR test) is not even approved for diagnostic purposes – that is why this test only has a so-called emergency use authorization in the US, and not full approval.

Fuellmich is part of a team of over 30 lawyers, from Germany, the US and Canada. In the US and Canada, the lawyers will be leading class action lawsuits representing many people whose livelihoods were destroyed by the lockdowns. Fuellmich says that this is a deliberate crime against humanity; ‘’this has nothing to do with the world’s health.’’

Summation

I would like you to consider a question.

Why do you think that governments around the world ignored the hundreds of scientists that were telling them about the many flaws that the PCR test has relating to testing people for SARS-CoV-2?

One thing we now know for certain, there never was a pandemic. There was the illusion of a pandemic created by the PCR testing fraud. The mass testing of millions of healthy people which produced millions of false positives. In unison with a campaign of fear promoted by governments through the media.

Recently I was walking with my 3 yr. old niece Emily in a large town in the UK. What was once a bustling shopping centre was now just rows of closed shops. I recalled that there was an open-air food vendor marketplace which was open.

As we drew closer, we could hear someone singing. There was a well-dressed young lady, an aspiring singer and actress. She then started singing ‘’Somewhere over the Rainbow’’ from the Wizard of Oz.  She sang quite beautifully so quite a crowd had gathered.

For those few minutes everyone’s hearts and spirits were lifted, even Emily started dancing. I began thinking of the performing arts, the dancers, actors, singers and theatre. So many people’s lives have been damaged by these appalling and unnecessary lockdowns.

We have learned a few important lessons from this though. Firstly, our need as human beings to embrace each other. To reach out to each other, have a hug, shake hands and talk to each other without a disgusting mask on.

It has also shown us that we should never allow any government to take away our inalienable human rights ever again. We should never allow a government to dictate to us where we can go or who we can see. Governments should never be allowed to force us to take experimental vaccines in order to access public services, or to travel anywhere we chose to go.

Let’s rise up and remove the shackles of false fear and embrace each other. In the immortal words of Martin Luther King Let freedom ring…from every mountainside, let freedom ring. when we allow freedom ring, when we let it ring from every village and every hamlet, from every state and every city…we will be…free at last. Free at last.

In the spirit of celebrating our humanity, I would like to leave you with part of the beautiful poem ‘’Song of Myself’’ by Walt Whitman

I depart as air—I shake my white locks at the runaway sun;
I effuse my flesh in eddies, and drift it in lacy jags.

I bequeathe myself to the dirt, to grow from the grass I love;
If you want me again, look for me under your boot-soles.

You will hardly know who I am, or what I mean;
But I shall be good health to you nevertheless,
And filter and fibre your blood.

Failing to fetch me at first, keep encouraged;
Missing me one place, search another;
I stop somewhere, waiting for you.

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Sources

Dr. Roger Hodkinson and Klaus Steger reviewed the PCR science, Portuguese Appeal Court

https://www.rt.com/op-ed/507937-covid-pcr-test-fail/

The Corman-Drosten review paper

Notes

Dr. Reiner Fuellmich reviewed the section about his work in an email exchange with Gavin Phillips.

Featured image is from Shutterstock


Sweden Says PCR Tests “Cannot be Used to Determine Whether Someone Is Contagious”

 

Sweden Says PCR Tests “Cannot be Used to Determine Whether Someone Is Contagious”

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According to the Swedish Public Health Agency, PCR technology cannot distinguish between viruses capable of infecting cells and viruses that have been neutralized in the immune system. As a result, these tests “cannot be used to determine whether someone is contagious or not.” They emphasize what many other experts in the field have been emphasizing during the entire pandemic, that,

“RNA from the virus can often be detected for weeks (sometimes months) after the illness but does not mean that you are still contagious. There are also several  scientific studies that suggest that the contagion of COVID-19 is greatest at the disease period.”

Even if RNA is detected at anytime, this does not mean you are infectious and capable of infecting others.

This is true, PCR tests can be positive for up to 100 days after an exposure to the virus. PCR tests do nothing more than confirm the presence of fragments of viral RNA of the target SARS CO-V2 virus in someone’s nose. While a person with COVID-19 is infectious for a one-to-two week period, non-viable (harmless) viral SARS CO-V2 fragments remain in the nose and can be detected by a PCR test for up to 100 days after exposure.

A recent article published in The Lancet medical journal explains that PCR tests can be “positive” for up to five times longer than the time an infected person is actually infectious. They explain that up to 75% of “positive” individuals are most likely post-infectious.

As a result the Swedish government recommends assessing COVID infections, and freedom from infections,

based on stable clinical improvement with freedom from fever for at least two days and that at least seven days have past since the onset of symptoms. For those who have had more pronounced symptoms, at least 14 days after the illness and for the very sickest, individual assessment by the treating doctor.”

Even if and when RNA from the the virus is detected, which the PCR test does quite well, whether or not a sample is actually infectious (containing a viable virus, capable of replicating) needs to be confirmed by lab culture. Only 44% of the “positive” samples using a Ct of 18 returned a viable lab culture, according to Dr. Jared Bullard, a paediatric infectious disease specialist and a current witness for the Manitoba government. The Manitoba government is being sued for the measures they’ve taken to combat COVID.

What is a Ct? It refers to cycle threshold. The PCR tests are not designed to detect and identify active infectious disease. Instead, it identifies genetic material, be it partial, alive, or even dead. PCR amplifies this material in samples to find traces of COVID-19.  If the sample taken from a nasal swab contains a large amount of COVID virus it will react positive after only a few cycles of amplification, while a smaller sample with small amounts of genetic material will require more cycles to amplify enough of the genetic material to get a positive result. Since the PCR test amplifies traces of COVID-19 through cycles, a lower number of cycles needed to get a positive result suggests the presence of a higher viral load for the person being tested and therefore a higher contagion potential.

An article published in the journal Clinical Infectious Diseases found that among positive PCR samples with a cycle count over 35, only 3 percent of the samples showed viral replication. This can be interpreted as, if someone tests positive via PCR when a Ct of 35 or higher is used,  the probability that said person is actually infected is less than 3%, and the probability that said result is a false positive is 97%. In this case false positive means a person is not infectious or capable of transmitting the virus to others. (source)

Dr. Anthony Fauci himself told This Week in Virology in July 2020, “If you get a cycle threshold of 35 or more … the chances of it being replication-competent are minuscule.” Why then has our national testing standard never reflected this? PCR providers should work with other labs to perform a random viral culture, as mentioned by Bullard above, on those who received positive results, to validate their tests in terms of being an indicator of infectiousness.

There are many questions to be asked here. Labs are not supplying Ct information associated with each test. In some cases should labs be counting “positive” results as “cases” when they come from a high Ct number? We just found out that high Ct numbers around 30+ can often be non infectious or incapable of spreading the virus, this nuance is important considering public health policy is being decided off of cases alone.

What percentage of cases have been a result of a lower cycle threshold, let’s say below 20? These would be the cases, at least some of them, that would be more accurate in identifying a person who is actually infectious. If these tests, as the Swedish government says, cannot be used properly to identify an infectious person, even at a low Ct why haven’t we just put measures in place that apply to symptomatically sick people?

Manitoba has confirmed that it utilizes Ct’s of up to 40, and even 45 in some cases. It’s an important question given the fact that health policy has been based on the number of cases present in a region.

Here in Ontario, Canada outdoor amenities like golf courses, basketball courts, tennis courts, parks and more have been closed based on case counts, even though COVID spreading outdoors is extremely unlikely.

Indoors, infected individuals who are asymptomatic are more than an order of magnitude less likely to spread the disease compared to symptomatic COVID-19 patients. A meta-analysis of 54 studies from around the world found that within households – where none of the safeguards that restaurants are required to apply are typically applied – symptomatic patients passed on the disease to household members in 18 percent of instances, while asymptomatic patients passed on the disease to household members in 0.7 percent of instances.

This is why many academics have urged authorities to stop the testing of asymptomatic individuals. Combine this fact with the fact that the chances of asymptomatic spread is low, and with the fact that there is a lack of clarity around PCR testing, and we see why doctors are bring up the question.

Health policy has been guided and dictated by the number of “cases.” It’s why lockdowns and mask mandates have been put in place regardless of the damage they cause and have caused. What if the majority of “positive” cases during this pandemic have been people who are not capable of spreading the disease – who are not even sick? It would represent an astronomical mistake on the part of multiple governments and the World Health Organization (WHO). Should we not be focusing on perhaps limiting the spread via symptomatic people, instead of punishing and restricting the rights and freedoms of people who are not sick?

This has been an issue for quite some time, as far back as 2007, Gina Kolata published an article in the New York Times about how declaring virus pandemics based on PCR tests can end in a disaster. The article was titled Faith in Quick Test Leads to Epidemic That Wasn’t. You can read that full story here if the previous link doesn’t work.

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How We Got Omnipotent Government

 

How We Got Omnipotent Government

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We have all been born and raised under a government that wields the power of assassination. State-sponsored assassinations at the hands of the U.S. government — and specifically the Pentagon and the CIA — have become a rather ho-hum affair. They have become fully accepted as part and parcel of American life. 

Yet, when we stop to reflect on this phenomenon, we can’t help but come to the realization that this is truly an extraordinary power. It is an omnipotent power that enables the federal government to snuff out a person’s life simply on a determination that he is a communist, a terrorist, a threat to “national security,” or whatever other designation the government establishes.

The Framers and the American people in 1789 were totally opposed to living under a government that wielded the power of assassination. Don’t forget, after all, that after the break from England, Americans had lived under the Articles of Confederation for some ten years. Under the Articles, the federal government’s powers were so weak that it didn’t even have the power to tax, much less the power to assassinate.

That’s the way our American ancestors wanted it. They believed that the biggest threat to their freedom and well-being lay not with some foreign regime but rather from their very own government. That’s why they chose to live under a government with very few and very limited powers. In doing so, they felt safer and more secure.

When the delegates met in Philadelphia in what became known as the Constitutional Convention, it was with the purpose of simple amending the Articles to make the system work more efficiently. Instead, they came up with a proposal for a different type of governmental system — a limited-government republic — which would replace the Articles. 

The American people were leery because the federal government under this new system would have more powers, including the power to tax. They were concerned that this new government would end up destroying their freedom and their well-being.

But proponents of the Constitution assured Americans that this would not be a government that wielded general powers — that is, powers that would enable federal officials to do whatever they wanted in the best interests of the nation. Instead, its powers would be limited to the few powers enumerated in the Constitution itself.

The American people were especially concerned about the power of assassination. The last thing they wanted was to live under a government that wielded the power to snuff out people’s lives for arbitrary reasons. In fact, if Americans had been told that this new federal government would wield the power of assassination, they never would have approved the deal. They would instead have continued operating under the Articles of Confederation.

Americans ended up approving the deal and accepting the new government under the assumption that its powers would be limited to those enumerated in the Constitution, which did not include the power of assassination.

To ensure that federal officials got the message, however, Americans demanded the enactment of the Bill of Rights, which included an express prohibition against assassination within the Fifth Amendment, which reads in part: “No person shall be deprived of life without due process of law.”

Due process of law is a term that stretches all the way back to Magna Carta in the year 1215. Over many centuries of resistance by British subjects against their own kings, due process came to encompass two principles: notice and trial. 

Thus, under the Fifth Amendment before the federal government could assassinate someone, it would be required to provide him with formal notice of the offense for which they wish to assassinate him and then guarantee him a trial to determine whether he in fact was guilty of committing the offense. 

Notice something important about the Fifth Amendment: Its protections apply to everyone, not just American citizens.

With the Sixth Amendment, the accused could elect to have a jury of ordinary citizens, rather than a judge or tribunal, determine his guilt or innocence. Our American ancestors simply didn’t trust judges or tribunals to make that decision. 

Since a jury’s verdict of acquittal was final and non-appealable, juries were also empowered with the ability to judge the law itself in criminal cases. If they found the purported offense unconscionable, they could elect to acquit even if the accused had actually committed it, in which case there was nothing the judge or the government could do about it. The accused would walk out of the courtroom a free person.

After World War II, the federal government was converted into a third type of governmental system — a national-security state. Under this type of government, the federal government — specifically the CIA and the Pentagon — acquired the omnipotent power of assassination. 

The conversion to a national-security state was justified under the rubric of the Cold War. The idea was that since the Soviet Union and the communist world were able to operate with omnipotent powers, including the power of assassination, the only way to prevent America from being conquered by the communists would be to adopt their same type of governmental structure — a national-security state, which came with the omnipotent power of assassination. 

The conversion to a national-security state was done through legislation, not through constitutional amendment. Nonetheless, owing to the overwhelming and ever-growing power of the national-security establishment — i.e., the military, the CIA, and the NSA — the legislative conversion to a national-security state was held to operate as a nullification of the Fifth Amendment. 

Today, the Pentagon’s and the CIA’s power of assassination is omnipotent. They are the final determiners of whether any particular person is going to have his life snuffed out. Their power of assassination is non-reviewable by any court in the land, including the nation’s highest court, the U.S. Supreme Court.

And that’s how we have come to live under omnipotent government, a type of governmental structure that wields the power to assassinate anyone it wants with impunity, simply by designating a person a communist, a terrorist, a threat to “national security,” or whatever. 

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Jacob G. Hornberger is founder and president of The Future of Freedom Foundation. He was born and raised in Laredo, Texas, and received his B.A. in economics from Virginia Military Institute and his law degree from the University of Texas. He was a trial attorney for twelve years in Texas. He also was an adjunct professor at the University of Dallas, where he taught law and economics. In 1987, Mr. Hornberger left the practice of law to become director of programs at the Foundation for Economic Education. He has advanced freedom and free markets on talk-radio stations all across the country as well as on Fox News’ Neil Cavuto and Greta van Susteren shows and he appeared as a regular commentator on Judge Andrew Napolitano’s show Freedom Watch. View these interviews at LewRockwell.com and from Full Context. Send him email.

Debt Is A “Financial Weapon” Used to Subordinate Developing Countries

 

Debt Is A “Financial Weapon” Used to Subordinate Developing Countries

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“The total amount of third world debt has already been repaid six times over in interest.”(1)

As of 2020, the total amount of debt owed by developing countries was $11 trillion.(2) The cost of interest on this debt was hundreds of billions of dollars per year, or over $1 billion per day. This is many times greater than the aid given by rich countries.(3) This post summarises the main reasons why countries should not have to repay all of their debts.

Borrowing Money for Weapons: Paying For Your Corrupt Boss’ Crimes 

“For years, rich countries willingly provided loans to the dictatorship in our country. Now, we are asked to pay for the bullets which were fired at us.”(4)

A close look at the reasons for lending in specific cases highlights the unfairness of the system. It has been estimated that from 1960-1987, developing countries borrowed $400 billion to spend on weapons. Much of Iraq’s debt was due to money lent to finance Saddam Hussein’s war with Iran in the 1980s.(5) We saw in earlier posts that most money spent on weapons by the poorest countries comes straight back to much richer countries, lining the pockets of shareholders and executives of weapons companies.(6) The Indonesian dictator, Suharto, received loans for tanks and warplanes that were used to slaughter hundreds of thousands of people. The Indonesian people are expected to repay those loans. The same is true of many countries that used to be run by dictators. Britain and the US helped to keep these dictators in power, against the wishes of their people, yet the people are still expected to repay their dictators’ debts.  

We saw in an earlier post that sanctions (depriving a country of basic essentials) can cause devastation, yet people from many countries, including Iraq, Panama and Vietnam, have been expected to repay loans whilst suffering from sanctions imposed by rich nations.

White Elephants – The money goes to companies and consultants from rich countries 

Large amounts of money has been lent to finance huge projects that are of little value to ordinary people. These are known as white elephants. The most obvious of these would be nuclear power plants that were finished 20 years behind schedule and cost many times their original estimate, producing some of the most expensive energy on Earth. Forty-five thousand dams have been built, displacing fifty million people and costing $2 trillion. Many went way over budget, such as a South American dam that was expected to cost $3.6 billion but ended up costing $21 billion. It was described by the former Paraguayan minister of energy as “possibly the largest fraud in the history of capitalism.” Some dams were designed so badly that they unexpectedly flooded thousands of square miles of land, and produce much less energy than expected. Where private contractors are running these powerplants, governments have ended up with contracts where they have to pay for energy that is not used.

Railroads have been constructed that run “from no place to nowhere.” Again, many of the loans for these projects went into the pockets of wealthy shareholders and executives of construction companies in rich countries, together with consultants from those countries. There is even a capital city in Nigeria called Abuja that was built in the middle of nowhere and seemed for many years to have no purpose. The Nigerian people have a joke about the city. They ask God if ordinary people will ever see the benefits of Abuja. He responds “Not in my lifetime.”(7)

The System Is Rigged Against Borrowing Countries 

When a developing country borrows money from international lenders, it usually does so using an established currency, such as US dollars. The exchange rate with its own currency can fluctuate. Some borrowing countries are actually encouraged to change their exchange rate (this is known as devaluing their currency) making loans more expensive to repay. The interest rate is often high and can also fluctuate.

Some loans are used to grow crops for export, but the price of these crops also varies. In 1999, Nicaraguan coffee sold for $1.44 per pound. By 2002, this price had dropped to $0.40 per pound. This means they have to sell three times as much coffee to pay their debts. All three of these factors, exchange rate, interest rate and prices, are beyond the control of the borrowing country – they are controlled by traders and banks in rich countries. In theory these rates can go either way, but in practice poor countries have repeatedly lost out.(8) Conditions can easily change sufficiently that poor countries can no longer afford to repay debts, through no fault of their own.

If the price of coffee drops below the price of production, then it does not matter how much coffee is sold – there is zero profit, and coffee sales cannot be used to repay the debt. Most developing countries have provided enough coffee, cocoa, cotton, cobalt, gold, oil and diamonds (and everything else that they export) to pay back their original loans many times over, yet they still have huge debts. Unlike businesses, countries cannot declare bankruptcy. Banks try not to write-off debts, so they keep lending ever-more money to borrowers to pay off their earlier debts, together with the interest on those debts. The debt just keeps getting bigger. An observer in Nigeria pointed out:

“We borrowed $5 billion. We have paid back $16 billion, but we still owe $28 billion”.

Rich People Keep Stealing the Money 

Nigeria provides a good case study of debt and capital flight. The best estimate of the total wealth stolen by corrupt dictators and their cronies since 1960 in Nigeria is $120 billion.(9) This is enough to repay their debts many times over. The same is true in many poor countries. Two leading experts wrote:

“Of the money borrowed by African governments in recent decades, more than half departed in the same year, with a significant portion of it winding up in private accounts at the very banks that provided the loans in the first place”(10)

The Destructive Power of Compound Interest 

The effect of compound interest on loans to developing countries is extremely important. If a country borrowed $1 million in 1980 at 7% interest, the total debt would now be approximately $16 million. When interest rates are very high, the debt increases more rapidly. If we re-do the same calculation at 14% interest, the total debt would be $250 million. If the interest rate on a loan is even one per cent too high, then the borrower pays a considerable amount of extra interest over a long period of time.

The system of excessive interest on international loans is a deliberate mechanism to transfer wealth from poor countries to rich ones, or from governments to rich people. In the 1980’s and 1990’s, many South American countries experienced serious problems due to excessive interest on their debts.(11) In an extreme example, the Argentinian government was paying 45% interest on loans (known as dollar bonds). Many of these bonds were owned by wealthy Argentinians. The leading expert on the system, Michael Hudson, has explained that these bonds are actually a complex mechanism to help the rich take their money out of the country.(12)

It’s All About Conditions 

Most people think of loans as having two parts, the capital and the interest. In the international world there is a third part – the conditions that come with the loan. This is arguably the most important part. Countries that want to borrow can be more easily persuaded to follow the guidance of advisors from rich countries, to privatise their industries, and to open up their markets for further exploitation by big corporations. In order to qualify to have the debts written off, countries have to implement these same policies.(13) The manipulation of these debts is a means of helping rich countries and their corporations take control of resources and trade in poor countries. Many of these countries have effectively been conquered economically.

Governments from developing countries have been advised to decrease spending on basic necessities (known as austerity), but at the same time they have been forced to keep paying their debts. Nicaragua spends four times as much on debt as on education.(14) One expert on Mozambique said:

“A large share of the government revenues of Mozambique have to be spent on servicing the debt. Little is left for health, education and water provision.”(15)

The interests of banks and investors are considered more important than the lives and health of billions of people. 

Debts can, and should, be written off 

If we write off all debts that were spent on weapons, that were used to support murderous dictators, that were stashed in personal offshore bank accounts in tax havens, that were spent on grand schemes of little benefit to the population, that lined the pockets of Western consultants, or that have grown enormously due to excessive compound interest, the amount outstanding would be very much less than the amount that rich countries still want repaid. If we then deduct the amount already repaid, it would almost certainly be less than zero. Governments and banks in rich countries do not want to do these calculations, because they do not want to admit that the whole system is so corrupt. When researchers examine in detail what happened to the original money that was loaned to specific countries, they conclude that much of the outstanding debt should be canceled.(16) For example, when loans to Ecuador were analysed, some of them violated international law, as well as domestic laws in lending countries, and laws in Ecuador.(17) In total, $3 billion of Ecuador’s debt was illegitimate. The technical term for this is odious debt.

Writing off debts is nothing new. This has been a regular process for thousands of years,(18) and various multi-billion dollar loans to the US and Europe have been written off over the years.(19) Our politicians occasionally write off some of the debts of the poorest countries, but they are rarely as generous as they claim. In some cases, aid is reduced by the same amount as the debt written off, so poor countries get no real benefit. Some schemes do not end debts altogether. They merely reduce them to a level that rich countries consider ‘sustainable.’ What this really means is the greatest amount of interest that can be extorted each year without quite tipping a country into revolution and civil war. The debt written off in recent years is just a small fraction of the amount owed.(20)

The propaganda related to debt is very powerful. Most people have been conditioned to believe that we all have a moral obligation to repay debts.(21) The idea that debts are a powerful mechanism for controlling or exploiting others is rarely discussed. We need to change the whole framework of discussions around debts, and force lenders to accept responsibility for their criminal or unethical practices. In business, it is accepted that debts can be written off. Lenders accept that when they make a loan, there is a risk that they will not get their money back. The same should be true of international lending.

This is a Huge Problem for Some Rich Countries Too

These issues became much more apparent to people in rich countries, when Greece was forced to pursue austerity, in 2010, as a condition of its debt arrangements. Portugal, Ireland, Italy and Spain also suffered. This had devastating consequences for the people of these countries, particularly the poor. Their situation is particularly difficult as they use the Euro as their currency, which gives them much less control over their finances.

A golden rule for all countries should be to borrow as little as possible in foreign currencies. If a country can create its own currency, it can be used to pay local people to do most of the things needed for development. It is straightforward to set up a national healthcare network, to set up a national system of schools and universities, to train doctors and engineers, to build a country’s infrastructure, or to begin the process of industrialization. It has been done successfully even in very poor countries. Forcing countries to borrow money denominated in US$ is a deliberate strategy by the US to maintain its power.(22)

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This article was first posted on medium.com/elephantsintheroom

Rod Driver is a part-time academic who is particularly interested in de-bunking modern-day US and British propaganda, and explaining war, terrorism, economics and poverty, without the nonsense in the mainstream media. 

He is a frequent contributor to Global Research.

Notes

1) Didier Rod, comment in European Parliament, 25 April, 2002, at https://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+CRE+20020425+ITEMS+DOC+XML+V0//EN&language=EN 

2) Homi Kharas, ‘What to do about the coming debt crisis in developing countries’, Brookings, 13 April 2020, at https://www.brookings.edu/blog/future-development/2020/04/13/what-to-do-about-the-coming-debt-crisis-in-developing-countries/

This is defined as emerging market and developing country debt. 

Larry Elliott, ‘Debt in developing countries has doubled in les than a decade’, The Guardian, 16 August 2020, at https://www.theguardian.com/world/2020/aug/16/debt-in-developing-countries-has-doubled-in-less-than-a-decade 

3) David Harvey, A Brief History of Neoliberalism, 2005, p.193

4) Noha El Shoky, Egyptians for a Sovereign Debt Audit, at www.jubileedebt.org.uk

5) James S. Henry, The Blood Bankers, p.344

6) How It All Began, at www.jubileeresearch.org

7) James S. Henry, The Blood Bankers, Chapter 1

8) James S. Henry, The Blood Bankers, 2003, pp.207-215

Faisal Islam, ‘Class A Capitalists’, The Observer, 21 April 2002, athttp://observer.guardian.co.uk/drugs/story/0,,686664,00.html

ICO, ‘Historical Data on the Global Coffee Trade’, International Coffee Organization, at http://www.ico.org/historical/1990%20onwards/PDF/3a-prices-growers.pdf 

9) Jack Blum, cited in Kamari Clarke and Deborah Thomas, Globalization and Race: Transformations in the Cultural Production of Blackness, 2006

10) James Boyce and Leonce Ndikumana, Africa’s odious debts: How foreign loans and capital flight bled a continent, 2011

11) ‘The Mexican 1982 Debt Crisis’, Rabobank, 19 Sep 2013, at https://economics.rabobank.com/publications/2013/september/the-mexican-1982-debt-crisis/ 

12) Michael Hudson, Argentina back on the debt train’, 23 July 2018, at https://michael-hudson.com/2018/07/argentina-back-on-the-debt-train/

13) Anup Shah, ‘$40 billion debt write-off is not a historic breakthrough’, Global Issues, 10 July 2005, at http://www.globalissues.org/article/544/40-billion-debt-write-off-is-not-a-historic-breakthrough 

14) Ngaire Woods, The Globalizers: The IMF, the World Bank, and their Borrowers, 2007, p.168

15) Dr. Eufrigina dos Reis, Mozambique Debt Group, at https://jubileedebt.org.uk/

16) Joseph Hanlon, ‘How much debt must be cancelled?’, Journal of International Development, Vol. 12, Issue 6, pp. 877 – 901, August 2000

17) ‘Debt Resistors’, Jubilee Debt Campaign, at https://jubileedebt.org.uk/the-debt-crisis/debt-resistors

18) David Graeber, Debt: The first 5,000 years

Michael Hudson and Harold Crooks, ‘Bronze age redux: On debt, clean slates and what the ancients have to teach U’, Counterpunch, 1 May 2018, at https://www.counterpunch.org/2018/05/01/bronze-age-redux-on-debt-clean-slates-and-what-the-ancients-have-to-teach-u/

19) Joseph Hanlon, ‘How Much Debt Must Be Cancelled’, Journal of International Development, Vol. 12, No. 6, pp.877-901

20) ‘The Basics About Debt’, at www.jubileedebtcampaign.org.uk/?lid=98

21) Eric Toussaint, The Debt System: A history of sovereign debts and their repudiation, 2019

22) ‘Michael Hudson discusses the IMF and World Bank: Partners in economic backwardness’, interview by Bonnie Faulkner, 4 July 2019, at https://www.nakedcapitalism.com/2019/07/michael-hudson-discusses-the-imf-and-world-bank-partners-in-backwardness.html

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