Italy: Government guaranteed by Goldman Sachs

When the Monti government will kick off, ministers and under-secretaries will be raising their glasses. However, they won’t be toasting with champagne, but with the Coca-Cola. Indeed, Mario Monti is a member of the International Advisory Board of the U.S. multinational, that is to say the committee of experts that advise it on how to increment the huge profits already made thanks to its lion’s share of the global soft drink and bottled water industry. Yet when he was European Commissioner for Competition, Mario Monti filed a suit against Coca-Cola for abusing its virtual monopoly power. The dispute ended in a settlement in 2004, but the multinational remained on such good terms with Monti that two years later it hired him as a consultant.

In New York, the advent of the Monti government will be celebrated with sumptuous champagne, especially at Goldman Sachs’, one of the largest investment banks in the world, where Mario Monti serves as international advisor. The banking group specializes in financial derivatives, tools whose value is based on that of other goods, including agricultural commodities, speculative mechanisms which on one hand helped to pull in huge profits, and on the other hand caused international grain prices to skyrocket, condemning over one billion people to starvation.

Goldman Sachs was one of the principal authors of the international fraud scheme of sub-prime loans which in the United States were granted to people on economically shaky ground. They were turned into high-yield junk bonds, which were mixed with more reliable assets and packaged into a "financial sausage." Guaranteed by the major rating agencies (Moodys, Standard & Poors and Fitch), the toxic "sausages" were acquired by pension funds and other institutional investors, thus spreading among small investors around the world.

Governments Don’t Rule the World, Goldman Sachs Does, Says Trader

The explosion of the speculative bubble in 2008 led to worldwide bankruptcies, credit restrictions, fall in productive investment, and to subsequent restructuring to reduce labor costs, thereby ushering in higher unemployment and poverty. The Goldman Sachs consultants can also be thanked for all this, including Monti, who even speculated on government injections using public money for the "rescue" of the banks responsible for causing the crisis. When the SEC, the U.S. government agency monitoring the financial markets, charged Goldman Sachs of criminal fraud, the bird had already flown.

After helping to cause the financial crisis in the United States, which quickly sprawled to Europe, Goldman Sachs speculated on the European crisis. Three months ago, August 16, it sent a 54-page classified report to its largest customers, warning them of the imminent crisis escalation in the euro area and giving them specific instructions on how to make money with the crisis. This same technique was applied during the credit crisis: while publicly it hyped "financial sausages" as a maximum reliability investment, in private the bank advised its largest customers to dispose of them as fast as possible.

In August, the report on the financial crisis in Europe was received by a few hundred large global investors, while remaining a secret for the others. The Wall Street Journal broke the news on September 1st, but released nothing more than a few excerpts of a general nature. Anticipating that European banks would require a minimum capital of 1 000 billion dollars to be rescued, the report advised "investors in financial derivative products to take full advantage of the crisis in Europe." To be sure, Goldman Sachs did not simply gaze into its crystal ball; it took a hand-on approach to the mechanisms of the crisis unfurling over Italy. The crisis will be dealt with by what the secretary of the Italian Democratic Party, Pier Luigi Bersani, defined as "a trustworthy government of high technical merit." Who could possibly doubt it? After all, an international advisor to Goldman Sachs will be at the helm.