Thanks to Robert J. Frasconi for this Associated Press article. Iranian banks use SWIFT to clear their transactions. SWIFT is a neutral institution. “SWIFT handles cross-border payments for more than 10,000 financial institutions and corporations in 210 countries.” SWIFT stands for Society for Worldwide Interbank Financial Telecommunications. “Established in 1973, the essential but little-known hub is overseen by major central banks, including the Federal Reserve and the European Central Bank.”
If the U.S. and/or Europe gets SWIFT to cut off the Iranians, this provides a means by which the government could cut off Iranian banks from transactions and wallop the Iranian economy until Iran created alternative means of clearing. The Iranians could do that fairly quickly, I believe, just as they are now arranging barter deals for oil.
The U.S. does not directly control SWIFT. “The Obama administration is divided over whether the possible gain is worth the risk in trying to threaten SWIFT into kicking out a member country…” “People familiar with the talks say a compromise is possible in which SWIFT would voluntarily bar or restrict Iranian transfers.” “But if SWIFT fails to act on its own, the United States expects Europe to require it to terminate services for Iranian banks, one Obama administration official said.”
I’ll leave it to specialists in international law to debate whether or not such an act is an act of war. In common sense terms, it’s a form of blockade, which is an act of war. It blockades financial transactions that are the flip side of transactions and trade in goods. A blockade of goods is an act of war, and if blocking the finance accomplishes the same end, it too is an act of war. If the U.S. were to jam all communications in or to Iran, it would be a communications blockade. Here the U.S. is debating adding to its financial blockade of Iran. It can make the FED play its part, but the FED would no doubt bow to the U.S. government on this. In the same way, SWIFT may bow “voluntarily”.
The empire is corrupting everything in its path, and that includes institutions for peaceful commerce, domestic and international. It is corrupting the domestic economy in many ways. Banks spy on customers. Police become militarized. People are rewarded for spying on other people. I doubt that most people make the connection between American empire and their loss of freedom of movement, spontaneity, speech, rights, due process, free markets and privacy at home. But they are two sides of the same coin.
Government is not your friend. Government is never your friend. Government corrupted social welfare relations with Social Security. It corrupted health care with Medicare. These make it seem as if government is your friend when it is not. We are seeing the same kind of corruption penetrating everywhere.
If you would like to read a few passages by great intellects of the past that underscore that government is not your friend, go here. Click on the quotes listed at the right. I particularly like John Milton’s both for their insight and their age (1651).
9:16 am on February 15, 2012
