Libya: All About Oil, or All About Banking?

ilene's picture

Libya: All About Oil, or All About Banking?

Courtesy of Ellen Brown, originally published at Truthout

Several writers have noted the odd fact that the Libyan rebels took time out from their rebellion in March to create their own central bank - this before they even had a government. Robert Wenzel wrote in the Economic Policy Journal:

I have never before heard of a central bank being created in just a matter of weeks out of a popular uprising. This suggests we have a bit more than a rag tag bunch of rebels running around and that there are some pretty sophisticated influences.

Alex Newman wrote in the New American:

In a statement released last week, the rebels reported on the results of a meeting held on March 19. Among other things, the supposed rag-tag revolutionaries announced the "[d]esignation of the Central Bank of Benghazi as a monetary authority competent in monetary policies in Libya and appointment of a Governor to the Central Bank of Libya, with a temporary headquarters in Benghazi."

Newman quoted CNBC Senior Editor John Carney, who asked, "Is this the first time a revolutionary group has created a central bank while it is still in the midst of fighting the entrenched political power? It certainly seems to indicate how extraordinarily powerful central bankers have become in our era."

Another anomaly involves the official justification for taking up arms against Libya. Supposedly it's about human rights violations, but the evidence is contradictory. According to an article on the Fox News web site on February 28:

As the United Nations works feverishly to condemn Libyan leader Muammar al-Qaddafi for cracking down on protesters, the body's Human Rights Council is poised to adopt a report chock-full of praise for Libya's human rights record.

The review commends Libya for improving educational opportunities, for making human rights a "priority" and for bettering its "constitutional" framework. Several countries, including Iran, Venezuela, North Korea, and Saudi Arabia but also Canada, give Libya positive marks for the legal protections afforded to its citizens - who are now revolting against the regime and facing bloody reprisal.

Whatever might be said of Qaddafi's personal crimes, the Libyan people seem to be thriving. A delegation of medical professionals from Russia, Ukraine and Belarus wrote in anappeal to Russian President Medvedev and Prime Minister Putin that after becoming acquainted with Libyan life, it was their view that in few nations did people live in such comfort:

[Libyans] are entitled to free treatment and their hospitals provide the best in the world of medical equipment. Education in Libya is free, capable young people have the opportunity to study abroad at government expense. When marrying, young couples receive 60,000 Libyan dinars (about 50,000 US dollars) of financial assistance. Non-interest state loans and as practice shows, undated. Due to government subsidies the price of cars is much lower than in Europe and they are affordable for every family. Gasoline and bread cost a penny, no taxes for those who are engaged in agriculture. The Libyan people are quiet and peaceful, are not inclined to drink and are very religious.

They maintained that the international community had been misinformed about the struggle against the regime. "Tell us," they said, "who would not like such a regime?"

Even if that is just propaganda, there is no denying at least one very popular achievement of the Libyan government: it brought water to the desert by building the largest and most expensive irrigation project in history, the $33 billion GMMR (Great Man-Made River) project. Even more than oil, water is crucial to life in Libya. The GMMR provides 70 percent of the population with water for drinking and irrigation, pumping it from Libya's vast underground Nubian Sandstone Aquifer System in the south to populated coastal areas 4,000 kilometers to the north. The Libyan government has done at least some things right.

Another explanation for the assault on Libya is that it is "all about oil," but that theory, too, is problematic. As noted in the National Journal, the country produces only about 2 percent of the world's oil. Saudi Arabia alone has enough spare capacity to make up for any lost production if Libyan oil were to disappear from the market. And if it's all about oil, why the rush to set up a new central bank?

Another provocative bit of data circulating on the net is a 2007 Democracy Now! interview of US Gen. Wesley Clark (Ret.). In it he says that about ten days after September 11, 2001, he was told by a general that the decision had been made to go to war with Iraq. Clark was surprised and asked why. "I don't know!" was the response. "I guess they don't know what else to do!" Later, the same general said they planned to take out seven countries in five years: Iraq, Syria, Lebanon, Libya, Somalia, Sudan and Iran.

What do these seven countries have in common? In the context of banking, one that sticks out is that none of them is listed among the 56 member banks of the Bank for International Settlements (BIS). That evidently puts them outside the long regulatory arm of the central bankers' central bank in Switzerland.

The most renegade of the lot could be Libya and Iraq, the two that have actually been attacked. Kenneth Schortgen Jr., writing on, noted, "[s]ix months before the US moved into Iraq to take down Saddam Hussein, the oil nation had made the move to accept Euros instead of dollars for oil and this became a threat to the global dominance of the dollar as the reserve currency and its dominion as the petrodollar."

According to a Russian article titled "Bombing of Lybia - Punishment for Ghaddafi for His Attempt to Refuse US Dollar," Qaddaffi made a similarly bold move: he initiated a movement to refuse the dollar and the euro and called on Arab and African nations to use a new currency instead, the gold dinar. Qaddafi suggested establishing a united African continent, with its 200 million people using this single currency. During the past year, the idea was approved by many Arab countries and most African countries. The only opponents were the Republic of South Africa and the head of the League of Arab States. The initiative was viewed negatively by the USA and the European Union, with French President Nicolas Sarkozy calling Libya a threat to the financial security of mankind; but Qaddafi was not swayed and continued his push for the creation of a united Africa.

And that brings us back to the puzzle of the Libyan central bank. In an article posted on the Market Oracle, Eric Encina observed:

One seldom mentioned fact by western politicians and media pundits: the Central Bank of Libya is 100% State Owned.... Currently, the Libyan government creates its own money, the Libyan Dinar, through the facilities of its own central bank. Few can argue that Libya is a sovereign nation with its own great resources, able to sustain its own economic destiny. One major problem for globalist banking cartels is that in order to do business with Libya, they must go through the Libyan Central Bank and its national currency, a place where they have absolutely zero dominion or power-broking ability. Hence, taking down the Central Bank of Libya (CBL) may not appear in the speeches of Obama, Cameron and Sarkozy but this is certainly at the top of the globalist agenda for absorbing Libya into its hive of compliant nations.

Libya not only has oil. According to the International Monetary Fund (IMF), its central bank has nearly 144 tons of gold, in its vaults. With that sort of asset base, who needs the BIS, the IMF and their rules?

All of which prompts a closer look at the BIS rules and their effect on local economies. An article on the BIS web site states that central banks in the Central Bank Governance Network are supposed to have as their single or primary objective "to preserve price stability." They are to be kept independent from government to make sure that political considerations don't interfere with this mandate. "Price stability" means maintaining a stable money supply, even if that means burdening the people with heavy foreign debts. Central banks are discouraged from increasing the money supply by printing money and using it for the benefit of the state, either directly or as loans.

In a 2002 article in Asia Times titled "The BIS vs National Banks," Henry Liu maintained:

BIS regulations serve only the single purpose of strengthening the international private banking system, even at the peril of national economies. The BIS does to national banking systems what the IMF has done to national monetary regimes. National economies under financial globalization no longer serve national interests.

... FDI [foreign direct investment] denominated in foreign currencies, mostly dollars, has condemned many national economies into unbalanced development toward export, merely to make dollar-denominated interest payments to FDI, with little net benefit to the domestic economies.

He added, "Applying the State Theory of Money, any government can fund with its own currency all its domestic developmental needs to maintain full employment without inflation." The "state theory of money" refers to money created by governments rather than private banks.

The presumption of the rule against borrowing from the government's own central bank is that this will be inflationary, while borrowing existing money from foreign banks or the IMF will not. But all banks actually create the money they lend on their books, whether publicly owned or privately owned. Most new money today comes from bank loans. Borrowing it from the government's own central bank has the advantage that the loan is effectively interest free. Eliminating interest has been shown to reduce the cost of public projects by an average of 50 percent.

And that appears to be how the Libyan system works. According to Wikipedia, the functions of the Central Bank of Libya include "issuing and regulating banknotes and coins in Libya" and "managing and issuing all state loans." Libya's wholly state-owned bank can and does issue the national currency and lend it for state purposes.

That would explain where Libya gets the money to provide free education and medical care and to issue each young couple $50,000 in interest-free state loans. It would also explain where the country found the $33 billion to build the GMMR project. Libyans are worried that NATO-led airstrikes are coming perilously close to this pipeline,threatening another humanitarian disaster.

So, is this new war all about oil or all about banking? Maybe both - and water as well. With energy, water and ample credit to develop the infrastructure to access them, a nation can be free of the grip of foreign creditors. And that may be the real threat of Libya: it could show the world what is possible. Most countries don't have oil, but new technologies are being developed that could make non-oil-producing nations energy independent, particularly if infrastructure costs are halved by borrowing from the nation's own publicly-owned bank. Energy independence would free governments from the web of the international bankers and of the need to shift production from domestic to foreign markets to service the loans.

If the Qaddafi government goes down, it will be interesting to watch whether the new central bank joins the BIS, whether the nationalized oil industry gets sold off to investors and whether education and health care continue to be free. 

Photo: A line of rebel trucks wait at the western entrance to Ajdabiya, Libya, on April 11, 2011. (Photo: Bryan Denton / The New York Times)

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blindman's picture

this article nails it.

AldousHuxley's picture

Libyans better work their children into making cheap I love NY t-shirts because this free oil from the land of their forefathers thing is ending soon. China is middle class now so middle east /asia minor must become the next lower working slaves.

willien1derland's picture

Question for ZHers: Should the creation of the Libyan Rebel's Central Bank be interpreted as the existence of Weapons of Mass Destruction?

AldousHuxley's picture

Irrelevant question. US overthrows government whenever neocons feel like it. It is like a big game. Not really need more oil. But for fun. Bored old guys.


We have enough geniuses to create the atomic bomb and fly into space but we can't have energy independence? Because invading is cheaper.

Shylockracy's picture

The technology of oppression in a few words: fiat-money, interest-peonage, central-banking, social-engineering, mass-media, primary-dealers, deficit-spending, minority-rule, war.

All hail the one-world cryptocracy!

Seer's picture

I have trouble with the thought that Utopia can spring from the printing press (governments printing their way to prosperity).  Sorry, but the ONLY reason it's working for Lybia is because they have a very precious export (oil), which allows them to import much of what they don't have.  I'm sure that if Print-To-Utopia did in fact work that North Korea wouldn't be the shit hole that it is.

Good intentions don't necessarily translate to "good."  With regards to the Lybian government's project to pumping the aquifer, anyone want to bet that it's being drained faster than it's being recharged?  Building on the unsustainable is a fool's game...

It's just another government, made up of mortals.  No miracles here (nor anywhere else).

As far as technology producing utopia, sorry, ain't going to happen: Technology is a recipe, it's not actual PHYSICAL resources; and, be sure to check out Jevons Paradox.

Holodomor2012's picture

Utopia springs from the blood of Arabs, the anti-white genocidal power of unchecked immigration and anti-white racism, and cheap plastic junk manufactured by yellow mindslaves.  All hail King David!  All hail utopia!

Urban Redneck's picture

Some pieces of the puzzle that don't necessarily fit well with the author's conclusion-


1) In order to sell oil, YOU NEED A BANK, it is not a cash and carry business, especially at $200M per pickup, even JPM & GS doesn't keep that many FRNs around.


2) The uprising in Libya has been supported by high ranking officials of the regime, since the beginning (long before the public Foreign Ministry defections, the MoI threw open the armory doors in Bengazi to the rebels, that is how they were initially armed and what prompted QDaf to begin his bombing campaign).  These individuals understand the need for oil $ to keep both a new government running and an army supplied in the field. 


3) QDaf has always oscillated between Pan-Africanism and Pan-Arabism, Iran has him beet in spades when comes to changing the FIAT of choice in the local oil trade


4) The Saudis (and by extension the GCC- ex UAE, for now) are the primary drivers of the oil for hard currency movement


5) The Russians & Chinese have switched from dollars to Yuan & Rubbles for the huge bilateral energy trade settlements


6) BIS is not a dollar hegemony club, factions can be delineated in $ vs. €, G7 ($, €, ¥, ?, CAD) vs. G20, independent vs. pegged currencies, etc.  See BIS Member list below


Members are the central banks or monetary authorities of:


Algeria, Argentina, Australia, Austria, Belgium, Bosnia and Herzegovina, Brazil, Bulgaria, Canada, Chile, China, Croatia, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hong Kong SAR, Hungary, Iceland, India, Indonesia, Ireland, Israel, Italy, Japan, Korea, Latvia, Lithuania, Macedonia (FYR), Malaysia, Mexico, the Netherlands, New Zealand, Norway, the Philippines, Poland, Portugal, Romania, Russia, Saudi Arabia, Serbia, Singapore, Slovakia, Slovenia, South Africa, Spain, Sweden, Switzerland, Thailand, Turkey, the United Kingdom and the United States, plus the European Central Bank


6) Some pundits talk about the IMF being the brain trust of a financial NOW, but while the IMF has gold reserves and makes loans (with expensive conditions in regards to domestic fiscal policy), the IMF is more likely to serve as an implementation organ of  the BIS brain trust, which actually developed the regulatory framework for international banking and focuses on monetary policy (both F/X and interest rate).  Finally BIS’s charter allows increased representation for rising powers (BRIC) to be implemented in an easier fashion than in the IMF.    


panika2008's picture

"Applying the State Theory of Money, any government can fund with its own currency all its domestic developmental needs to maintain full employment without inflation" - bwahaha, too bad it didn't quite work out for the Weimar Germans, Zimbabweans, Yugoslavians and some 100 other peoples plagued with (hyper)inflation of their own government's making.

Lord Koos's picture

All wars are fought over turf or resources (AKA money).  Other reasons put forth by the state are bullshit.  

falak pema's picture

clash of civilization smoke screen. Now a backwardation oriented scream fed on plastic cutter terrorism by surrogate serfs turned rabid contrarians.

nah's picture

the US never should have bombed libya... it really comes down to that


is freedom worth dying for or not... confusing the the libyan civil war with US half interest calls into question our resolve to reign in every other problem of our own making... do we not care if we loose wars


i think we should have let libyans choose their time and place... calling people dictators and then bombing them and not knowing if its something your going to follow thru with... mid east foreign policy


a sure mix to turn the whole region into a israel clone fasist shit hole of ignorant fear

Bartanist's picture

I have said on a number of occasions on several message boards: "If the US government and military were not corrupted by the system they serve, we would be bombing Basel instead of targets in the Middle East". It is the only way to be truly free.

... and what is it with the pyramid motif? ... you'd think those ancient creatures would be able to expand their repertoire a touch... or are they just taunting the stupid by flaunting it?

Rick64's picture

 An article on the BIS web site states that central banks in the Central Bank Governance Network are supposed to have as their single or primary objective "to preserve price stability." They are to be kept independent from government to make sure that political considerations don't interfere with this mandate. "Price stability" means maintaining a stable money supply, even if that means burdening the people with heavy foreign debts. Central banks are discouraged from increasing the money supply by printing money and using it for the benefit of the state, either directly or as loans.

  Everything we are taught reinforces this false premise. How has this worked out so far after centuries? Great if you are part of the banking cartel. Price stability? Are you fucking kidding? Independent from government so they can control the economy to their liking through subversive means.

Rick64's picture

 The Bank of North Dakota is an interesting model. The only state owned bank in the U.S. . 

Old Poor Richard's picture

Can we expect Obama to invade them next?

UninterestedObserver's picture

Of course they created a central bank - who else is going to be the next new buyer of size  for treasuries

Pseudo Anonym's picture

Libya not only has oil. According to IMF, its central bank has nearly 144 tons of gold, in its vaults

not for long.  the hofjuden got Libya's gold now; or soon enough.

vxpatel's picture


Why is the Federal Reserve forking over $220 million in bailout money to the wives of two Morgan Stanley bigwigs?

Bartanist's picture

That really is both sad and funny. The only thing that is more ironic is that money is an ingenious form of slavery used to make people due both productive things and very disturbing things. (Where would the motivations for theft, fraud, most murders, war and most other crimes be without that marvelous invention"money"?). The ladies and their husbands are slaves to money.

My own personal feeling is that there may be privileges that come with the lord high masters of fiat and using that enslavement vapor to engorge the world with waste and destruction ... but it is not for me.

I am sure all of the Wall Street types are very proud of the money the steal (through fraud and embezzlement). It is what defines their lives... but pride is not a virtue. Personally, I like simplicity, to sleep well at night and to wake up in the morning with something worthwhile to do.

Moe Howard's picture

They really are reptiles. I guess I could lie, cheat and steal my way to much more money, but there is something inside me that does not allow me to do so. I think it is called morals.

AldousHuxley's picture

To become a CEO or wife of a CEO of wall st. bank, they give you an interview where you have to prostitute your retired mother to the highest bidder. Jews get around this by waiting until their mothers pass away before applying for the job.


vxpatel's picture

they sleep well too....w/ lots of sleeping pills


Hephasteus's picture

Let's see. I posted a little list of non rothchilds owned central banks.

There are now only 5 nations on the world left without a Rothschild controlled central bank: Iran; North Korea; Sudan; Cuba; and Libya.

They got less than a year left before clock runs out and they are may not even be batting 200 before libya is done.

So you're central banking story here kinds of puts fucking jerseys on the players.

palmereldritch's picture

So now we know who really wrote that Axis of Evil speech.

"Axis of evil" is a term initially used by the former United States President George W. Bush in his State of the Union Address on January 29, 2002 and often repeated throughout his presidency, describing governments that he accused of helping terrorism and seeking weapons of mass destruction. Bush labeled Iran, Iraq and North Korea as the axis of evil.

[Tweaked by] Bolton: "Beyond the Axis of Evil"

John R. Bolton

On May 6, 2002 future United States UN Ambassador John R. Bolton gave a speech entitled "Beyond the Axis of Evil". In it he added three more nations to be grouped with the already mentioned rogue states: Libya, Syria, and Cuba. The criteria for inclusion in this grouping were: "state sponsors of terrorism that are pursuing or who have the potential to pursue weapons of mass destruction (WMD) or have the capability to do so in violation of their treaty obligations". The speech was widely reported as an expansion of the original axis of evil.

[To further include] Rice: Outposts of Tyranny

In January 2005, at the beginning of Bush's second term as President, the incoming Secretary of State, Condoleezza Rice, made a speech regarding the newly termed outposts of tyranny, a list of six countries deemed most repressive. This included the two remaining Axis members, as well as Cuba, Belarus, Zimbabwe and Myanmar. Outposts of Tyranny today!

[April 13, 2011] Belarussian authorities arrested a man who allegedly detonated the bomb that killed 12 people Monday in the Minsk subway, and the former Soviet republic's president said his political opponents should be questioned about whether any of them were behind the attack.

Probably just more al Qaeda freedom fighters waging war against WMDs in rogue banking nations...

After an initial outburst of capitalist reform from 1991–1994, including privatization of state enterprises, creation of institutions of private property, and entrepreneurship, Belarus under Lukashenko has greatly slowed its pace of privatization and other market reforms, emphasizing the need for a "socially oriented market economy." About 80% of all industry remains in state hands, and foreign investment has been hindered by a climate hostile to business. The banks, which had been privatized after independence, were renationalized under Lukashenko.

Monetary Policy

In spite of the Central Bank Law passed in 1994 guaranteeing its independence, President Lukashenko has a power to nominate and dismiss the Chairman of the NBB. and to formulate monetary and foreign exchange policy. Over the past years, preferential credits, administrative price setting, and decline of the interests rate spread below 15 percentage points in the second quarter of 1997 resulted in damaging consequences to enterprises and especially banks. As the process of exhaustion of the Central Bank's hard currency reserves exhibits a dangerous tendency, government introduced restrictions on currency transactions. These have resulted in inconvertibility of the Belarusian ruble for the current transactions since March 1998.

Hephasteus's picture

Ya isn't it weird how all the countries that don't have rothchilds central banks how their presidents or leaders are just crazy as batshit? Do you think there might be external forces that makes them just a tad bit off thier rocker?

"state sponsors of terrorism that are pursuing or who have the potential to pursue weapons of mass destruction (WMD) or have the capability to do so in violation of their treaty obligations".

America was first to have nuclear weapons. Weapons of mass destruction. England and US were first to have plastic explosives making mass destruction take a few pounds of c4 instead of hundreds of pounds of black powder. Making nitrocellulose based cartridges possible, making machine guns possible. Amercia needs to preach about weapons of mass destruction about as much as son of sam needs to preach about gun control.

palmereldritch's picture

I'm still trying to digest the contents of the material in this link posted a few days ago by a commenter on CogDiss's article An Inconvenient Truth.

Fascinanting stuff.

You not only have to follow the money but more importantly, the history of money...

[edit:stoopid typo]

Pseudo Anonym's picture

There are now only 5 nations

you're forgetting China

JollyRoger's picture

Sudan has been in need of a "humanitarian" mission for years.  What are they waiting for?

savagegoose's picture

wow lucky gadaffy , h4e gets to kill his own cebtral banker, living the aMERICAN DREAM

pragmatic hobo's picture

Libyan Rebels needs their own Central Bank to get access to Bernanke's free money spigot. I wonder who is advising the rebels ... GS? JPM? ... they must be reaping some hefty fees.

Myzery's picture

It's still largely about oil (natural resources). To write Libya off as only a "2%" of production, might not be wise.


Libya at #5 reserves per capita. Pretty good bang for the buck, eh?


Don't forget that giant aquifier too....


But of course, banking and natural resources go hand-and-hand.


Let's welcome our new member, Libya! 

destiny's picture

When there's sarkozy, there's oil, gold etc...when there's oil, there are banks...not just any bank...the gang's banks...the Joe Dalton's banks...this is not a surprise...

jointhewave's picture

Follow the money and you have your answer about Libya.

On second thought, check out this video 'Morgan Stanley 'Top 1%' Skinny Blonde Rips Off America!' at (


It's amazing how easy it is to FLEECE this Country and laugh all the way to the bank!

starfish's picture

So is the US a revived roman empire?

AldousHuxley's picture

When US military goes on an offensive instead of defending, it is all about stealing natural resources. In Libya's case, it is oil.


That is the way of the empires...Spanish, French, British...




Tenma13's picture

If they control the banking system, are they not able to determine the price and currency for purchasing oil?  

walküre's picture

The US military has been on offensive since the creation of the Fed.

A Fed without military is like a car without engine. It's useless.

Geez, putting history into proper context has never been easier.

What is the fucking point to a central bank and a reserve currency if you don't have firepower to beat the world into submission so the world accepts that fact?

Myzery's picture

Ahhhhh.... so Fiat currency IS backed by something.....



The use of force.



walküre's picture

Force, intimidation, threats, manipulation, violence, propaganda .. you name it!

What is money? How do I get you to give to me what I want from you for the piece of paper that I hold in my hand? You know I'm able to print that paper endlessly. You know it's backed by a promise. But I want your stuff, your resources, your IP, your land possibly and all I have is this paper! Besides, my friends want to get some of the paper back for the services they provide when you and I make the deal. Stuff for paper.

Well, you better know that if you refuse to take my paper that has the name of my country on it that I have means and ways to make you take it. So, let's all agree on the fact that this paper is really what it is and that we can use the paper to get the deal done OR ELSE...

Fuck, if you don't take the paper or ask me anymore questions, I will go to the next guy who happens to be your long term enemy and take his stuff for my paper and tell him that we will protect him from you and your kind.

Now, do you take my paper?

Thank you. Ah, and by the way when the other guy calls you and says something about a pact or something to that extent that he supposedly has with us, just ignore it. He will ignore your story too!

Fuck, this is American imperialism.


AldousHuxley's picture

Swiss francs are not backed by active military and have gained 40% against the dollar last 10 years.

If US spends all of their military resources to up maintain the reserve status, then US is playing for a loss. US relies on military because leaders are desparate.

The failure within last decade was that Bush necon powers even failed to profit from invasion of Iraq. Iran won. Iran successfully put abuffer between them and US by draining US powers in Iraq. We are currently fighting on 4 fronts while crude prices are sky rocketing. Meanwhile, US is letting China is build up their military.

It is much better to lead the world by convincing them to use the dollar without having to prove it using military might.



Seer's picture

"Swiss francs are not backed by active military"

Want to wager on this?  Perhaps not backed by an active military from Switzerland, but I can assure you that, with TPTB money hanging out there,  the US military would be deployed for "humanitarian" reasons...

AldousHuxley's picture

Switzerland is backed by need for a neutral party to wager bets on. Even Nazis did not attack their bookie's shop.

Incursion into middle east is not defense but occupation. That's a different type of backing. Al Queda is not complaining about Hong Kong or Switzerland. But US bankers (zionistas) who waste money then steal oil to replenish credit.

Sunshine n Lollipops's picture

But...but...Georgie said they hate us for our freedoms!

Holodomor2012's picture

Good book by a regretful, well-decorated, retired, shabbos goy.