News & Analysis
2008 Crash Caused by Financial Terrorism?
Financial terrorism suspected in 2008 economic crash ... Evidence outlined in a Pentagon contractor report suggests that financial subversion carried out by unknown parties, such as terrorists or hostile nations, contributed to the 2008 economic crash by covertly using vulnerabilities in the U.S. financial system. The unclassified 2009 report "Economic Warfare: Risks and Responses" by financial analyst Kevin D. Freeman, a copy of which was obtained by The Washington Times, states that "a three-phased attack was planned and is in the process against the United States economy." ... The report concluded that the evidence of an attack is strong enough that "financial terrorism may have cost the global economy as much as $50 trillion." – Washington Times
Dominant Social Theme: Terrorists caused the crisis. Economic difficulties are military ones.
Free-Market Analysis: In the other article in today's issue, we focused on ways that the power elite memes were designed to avoid casting blame on central banks. The idea is to create diversionary blame that can then be parlayed into further government action, usually via regulation. In the case of this report, excerpted above, we see a new twist however.
While Britain's central banker Mervyn King blames the private sector, US financial analyst Kevin Freeman, at the Pentagon's request, has penned a report (excerpt above) that blames foreign enemies for the 2008 financial crisis. This is a fairly brilliant fear-based promotion in our view because like King's positioning, it doesn't merely push blame away from central banks it also opens up another entire venue for state expansion – military growth to combat economic terrorism.
Not only does this meme logically support military expansion, it has ominous free-market implications as well. By treating the current, fallacious system as a kind of "gold standard" that cannot be taken down without an attack, one enshrines what is injurious. The conversation moves beyond remedies from reconfiguration to strategic necessities intended to defend what is evidently and obviously the Western economic system.
Only it is not. The central bank economic system that has been put in place by the Anglo-American elite is far from a free-market system. It begins by printing money-from-nothing and as this fiat-currency circulates, it begins to inflate various markets, certainly the stock market. It also fools entrepreneurs into thinking times are better than they really are – and thus firms begin to over expand while other companies create trivial or non-essential products that would not have been successful in a less simulative environment.
Eventually, the economy, stuffed with paper money, reaches a breaking point, usually because price inflation has begun to be a problem and the central bank has started to raise rates. This in turn weakens the economy, slows the circulation of money and eventually has an impact on the stock market, which usually crashes.
People begin to wake from their Dreamtime at this point, rubbing their eyes and realizing that much of the wealth they had accumulated yesterday is considerably devalued today. In some cases the companies they work for are seen as inessential in the new, sober light of day. Housing markets crash. Whole industries shrink radically. This is the business cycle at work; this is the economic system that is in place currently. And the Western elites certainly understand its functioning.
None of this finds it way into the Pentagon's report. "Outside forces," are apparently responsible. "There is sufficient justification to question whether outside forces triggered, capitalized upon or magnified the economic difficulties of 2008," the report says, according to the Washington Times, explaining that those domestic economic factors would have caused a "normal downturn" but not the "near collapse" of the global economic system that took place.
There are suspects of course. The article recites them: "enemies" of the West (and particularly the US) including Middle Eastern states, Islamic terrorists, hostile members of the Chinese military, or government and organized crime groups in Russia, Venezuela or Iran. "Because of secrecy surrounding global banking and finance, finding the exact identities of the attackers will be difficult."
What are the most likely enemies? "Unfortunately, the two major strategic threats, radical jihadists and the Chinese, are among the best positioned in the economic battle space." (No surprise there.) Also, the report lists as suspects advocates of Islamic law, who have publicly called for opposition to capitalism as a way to promote what they regard as the superiority of Islam. Here's some more from the article:
The report states that federal authorities must further investigate two significant events in the months leading up to the financial crisis. The first phase of the economic attack, the report said, was the escalation of oil prices by speculators from 2007 to mid-2008 that coincided with the housing finance crisis. In the second phase, the stock market collapsed by what the report called a "bear raid" from unidentified sources on Bear Stearns, Lehman Brothers and other Wall Street firms. "This produced a complete collapse in credit availability and almost started a global depression," Mr. Freeman said.
The third phase is what Mr. Freeman states in the report was the main source of the economic system's vulnerability. "We have taken on massive public debt as the government was the only party who could access capital markets in late 2008 and early 2009," he said, placing the U.S. dollar's global reserve currency status at grave risk. "This is the ‘end game' if the goal is to destroy America," Mr. Freeman said, noting that in his view China's military "has been advocating the potential for an economic attack on the U.S. for 12 years or longer as evidenced by the publication of the book Unrestricted Warfare in 1999."
Additional evidence provided by Mr. Freeman includes the statement in 2008 by Treasury Secretary Henry M. Paulson Jr. that the Russians had approached the Chinese with a plan to dump its holdings of bonds by the federally backed mortgage companies Fannie Mae and Freddie Mac. Among the financial instruments that may have been used in the economic warfare scenario are credit default swaps, unregulated and untraceable contracts by which a buyer pays the seller a fee and in exchange is paid off in a bond or a loan. The report said credit default swaps are "ideal bear-raid tools" and "have the power to determine the financial viability of companies."
Another economic warfare tool that was linked in the report to the 2008 crash is what is called "naked short-selling" of stock, defined as short-selling financial shares without borrowing them ... In a section of who was behind the collapse, the report says determining the actors is difficult because of banking and financial trading secrecy. "The reality of the situation today is that foreign-based hedge funds perpetrating bear raid strategies could do so virtually unmonitored and unregulated on behalf of enemies of the United States," the report says.
The last paragraph is most interesting, providing as it does, an argument for investigating unregulated hedge funds. Regulating hedge funds has been on the "agenda" for a while now and this report will provide more ammunition for those who want hedge funds (and black pools, etc.) pried open. "Transparency" is the new normal for everyone but the Bank for International Settlements (see other article, today).
Conclusion: This is a most cynical presentation, in our view. Modern crashes are a result of central bank monetary stimulation. Variants of the 2008 crash occurred on a lesser scale in 2000, in 1987, in the 1970s, in 1969, in 1963 and, of course, in 1929. Are we to believe that financial terrorism is responsible for each of these slumps? Or only in 2008? It is obvious nonsense, and yet few if any have bothered to point out the repetitive occurrence of modern-day crashes – which would put the presentation into question. Instead, we have no doubt the report will be used for yet more Draconian regulation and to haul the Pentagon directly into economic matters, creating a kind economic-industrial complex to go along with the military-industrial complex and all the rest. Or perhaps the system, struggling as it is, will merely collapse before this takes place. Doubtless, it will still be blamed on an "enemy." Desperation?
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Posted by Randy on 03/09/11 11:35 PM
An alternate view- find the video showing clown Congressman Grayson grilling the bigger clown Bernanke about the july 15th take down of commodities and rocketing $ as it was about to waterfall.
The upshot was " days before the event, $500bil in currency swaps were affected by the Fed/ central banks. Bernanke said it was just a coincidence in timing. Grayson, to his credit, laughed in his face. Nearly 3 yeras after the fact, this story is too pat.
The $ turned on a dime and went to the moon without any warning. Commodities went to the basement- all of them. Oil was at 147. All they did was buy a few years. It blew up in their faces. Worse conditions from here.
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Posted by B. Davis on 03/05/11 06:16 PM
It is my belief, the federal reserve with aid provided by other government bureau's , such as the CIA and help from the mega banks (central banking) engineered and put into effect the mechanism that caused the "Flash Crash" of 2008.
I am uncertain if they wanted to create as much havoc around the globe as actually happened or if they failed to accurately predict the lighning fast reactions from every financial market on the planet to their attempt to manage a controlled crash. I honestly believe they would attempt such a stunt in order to build a model for future use at what ever time they determine as the neccessary time to gain absolute control.
Of course there would have be other events in play to make it the right time or neccessary time. One of those events could be revolution or a crisis of gigantic proportions. It could be events they planned or a surprise event.
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Posted by Jeff F. on 03/04/11 07:59 PM
Don't blame "financial terrorists" for pushing over our vulnerable system, instead, operate the system prudently so it will not be vulnerable!
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Posted by Joe on 03/04/11 10:04 AM
If we find out it was white guys with neckties and not turbans, can we still call it terrorism?
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Posted by Msbetz on 03/03/11 05:53 PM
Take a look at the Ford foundation and Geithner senior in the 60's, Obama's mother and microlending and Soros money manipulation.
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Posted by Patricia on 03/03/11 03:29 PM
Another great article! Thanks DB..."Transparency" is the new normal for everyone but the Bank for International Settlements...
No surprise there...The Global Elite at it's best!
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Posted by 10hawks on 03/03/11 03:12 PM
It should be noted that the term "financial terrorist" was coined
by Max Keiser, the financial pundit and television host who
presents at RT (Russia Today) and PressTv; an American ex-pat business man living in Paris, he has also made documentary films for AlJazeera. Max has recently suggested that the bankster miscreants should be tried and executed, by guillotine.
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Posted by Wayne on 03/03/11 01:51 PM
@MetaCynic
"The Fed spawned housing bubble was replete with fraud from beginning to end, yet the all powerful army of regulators and prosecutors chose not to investigate. There was fraud in loan origination, property appraisal, securitization, bond ratings and now foreclosures. As reward for their steadfast failure to pursue the real financial terrorists, our protectors now want even more power to ferret out non existent financial terrorists.
Isn't it interesting that the whistle was blown repeatedly on mega billion dollar financial fraudster, Bernie Madoff, but the SEC focused its vast resources on prosecuting Martha Stewart for allegedly lying about a $40,000 transaction?
Since bureaucrats have a genius for ineffectively searching for terrorists in all the wrong places, maybe we will see the cancer boxes and feel ups metastasize from the airports and spread throughout the land. One never knows where those dastardly financial terrorists will choose to turn up next. So, in the spirit of scan and grope, customers to the storefront offices of loan officers, tranche specialists, precious metals dealers and the like will get the loving airport treatment."
You have it, with one exception.
Bureaucrats don't have a genius for looking in the wrong places for terrorists. Bureaucrats are part of the "real" terrorists, and have a genius for misdirecting the public's anger from their partners.
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Posted by Jon on 03/03/11 10:44 AM
Could someone tell me what I should thing about the video mentioned by /propagare/?
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Posted by MetaCynic on 03/03/11 09:34 AM
The Fed spawned housing bubble was replete with fraud from beginning to end, yet the all powerful army of regulators and prosecutors chose not to investigate. There was fraud in loan origination, property appraisal, securitization, bond ratings and now foreclosures. As reward for their steadfast failure to pursue the real financial terrorists, our protectors now want even more power to ferret out non existent financial terrorists.
Isn't it interesting that the whistle was blown repeatedly on mega billion dollar financial fraudster, Bernie Madoff, but the SEC focused its vast resources on prosecuting Martha Stewart for allegedly lying about a $40,000 transaction?
Since bureaucrats have a genius for ineffectively searching for terrorists in all the wrong places, maybe we will see the cancer boxes and feel ups metastasize from the airports and spread throughout the land. One never knows where those dastardly financial terrorists will choose to turn up next. So, in the spirit of scan and grope, customers to the storefront offices of loan officers, tranche specialists, precious metals dealers and the like will get the loving airport treatment.
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Posted by Propagare on 03/03/11 08:19 AM
As an follow-up to my own post, hopefuly a better English explanation:
Rep. Kanjorski: $550 Billion Disappeared in "Electronic Run On the Banks":
Click to view link
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Posted by Propagare on 03/03/11 08:15 AM
Finally!
I want to mention this:
*** Click to view link – The real moment the financial crisis began?
Please consider to take the time to look into it and tell me your thoughts.
Thank You in advance! All the best from a German friend.
Click to view link
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Posted by Bob on 03/03/11 01:00 AM
Bionic Mosquito wrote
"Another example of the failure of prohibition laws. It appears, had China legalized and taxed (the taxation not my preferred option, but one the state would have taken) the opium trade, much of this sad history could have been avoided."
Your thinking is terribly wrong. The problem with China was their rulers inability to develop a strong military capable of protecting China and its national interests.
V. Blank (a.k.a. Lenin) always liked to say: " Who gets and/or destroys whom". This is from day one communist one understood and respected power, specifically the military one.
Following the WWII and the appearance of nuclear weapons, the world developed certain unwritten rules for international peace and confrontations. Specifically, Soviet military doctrine up to late 1960s was designed to fight a nuclear war. I know this the first-hand. I spent sometimes in a rocket unit armed with nukes. We were ready to use them at the first opportunity. But later, the Soviet leadership became so corrupt that the entire country just collapsed.
Now, the entire geopolitical landscape has change dramatically
-The present China does understand that a military confrontation with America is inevitable. It also remembers the past injustices and humiliations. There are some past debts to settle...
- Russia is about to go "a Libya way" with totally unpredictable consequences.
- The old "peaceful coexistence" theme is not valid anymore.
Yes, it is a totally new ballgame with unknown rules.
Reply from The Daily Bell
Always war. There is nothing participants in the Anglosphere's military-industrial complex will not attempt to justify.
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Posted by Spek on 03/02/11 10:44 PM
Some Americans are taking action,
SNIP
"We believe wholeheartedly in the framework of Constitutional Law, and that no government or supranational entity has the right to overstep Constitutional boundaries for any reason, regardless of supposed intentions or mandates. We do not recognize the self proclaimed authority of corporately created and managed entities such as the Federal Reserve, the IMF, or the World Bank. We are fully opposed to the practice of fractional reserve banking, fiat currency, central banking, and other fraudulent financial Ponzi schemes. We stand against the forced centralization of countries and cultures and the erasure of national sovereignty. We believe that the first step in defending against such economic and political manipulation is to create an alternative system that safeguards the values of free markets and free peoples. We are a natural extension of the Liberty Movement which is already making great headway in American society today.
Our goal is not to centralize authority in this movement, but to encourage individual awareness, and individual action. We hope to provide the knowledge and tools necessary to make it possible for anyone, from the average working American, to the successful private business owner, to become their own leader, taking actions in their own neighborhoods and towns with the purpose of forming viable trade networks, eventually decoupling and shielding themselves from the diseased economy currently in place."
END SNIP
Click to view link
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Posted by Capn Mike on 03/02/11 10:27 PM
As usual, Danforth and the bug are spot on! Well done guys. Having said that I gotta ask: "Where's Clayton?"
Reply from The Daily Bell
Left long ago.
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Posted by Wayne on 03/02/11 09:36 PM
Perhaps you will enjoy reading about the creator of the current banking lunacy.
Click to view link
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Posted by Rmcnnlly on 03/02/11 09:26 PM
Outright lies and obfiscation on the part of the banking cabal! Obviously they are showing their hand now on their next plan of continued financial terrorism.
They are showing signs of wiping out our accounts electronically. Take this as a clear warning to begin making paper copies of your bank accounts, IRA's, 401K's and all manner of banking records. The legal crooks are even telling you what their next move is! That's how bold they operate! B--tards!
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Posted by Tobeyoung on 03/02/11 09:21 PM
Consider that the EURO was designed to fail at an opportune time in its future. Check Bernard Connoly's book for which he was fired titled "The Rotten Heart Of Europe". Consider that the interest rate of the EURO was raised a second time just the month before the crisis in the USA, with funds rapidly moving to the EURO.
The elites of Europe know that nations have been and can be manipulated financially. But some 22 of the largest economies have now come under the Financial Standards Board now centered in Germany, Frankfort I believe, by treaty thru our president. Soon our national banks will be receiving directives from it.
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Posted by Paul on 03/02/11 07:56 PM
Once again, you hit the nail right on the head. They keep asking us to ignore the elephant in the room, even though we smell peanunts........
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