Skip to comments.2008 Financial Terrorism – Conspiracy or part of The Perfect Storm? (Phases 1 and 2)
Posted on 03/04/2011 3:08:15 PM PST by Starman417
In Sept, 2008, I penned the post, the US Economy: A Perfect Storm of Housing and Lending Events. This overview of how we managed to bring ourselves to the precarious cliff of a failed economy revealed it was not a single issue, but a combination of many events - including political pressure on lenders for homeownership, relaxing of GSE lending criteria, regulation/deregulation, and profit motivation by financial institutions - leading to an out of whack supply vs demand, driving up housing values to unsustainable and dangerous levels.
It never crossed my mind that financial terrorism could be another element to be factored in. So when the WA Times wrote of an unclassified Pentagon report by Kevin D. Freeman, my head perked up.
Since that time, I've tried to dissect what many here, and elsewhere, have dismissed as a report they consider simply a distraction from ill thought US fiscal policies and irresponsibility by both Congress and Wall Street alike, and fueled to a frenzy by irresponsible homeowners.
Be assured that the Freeman report does not dismiss irresponsibility for US fiscal policies and events. Rather, he frames his three Phrase hypothesis upon the premise that our self-induced fragile and unsustainable fiscal trajectory, combined with opaque global trading practices, was easily exploited for purposes of financial terrorism. And several out of the norm trading activities - such as an oil spike that wouldn't traditionally happen, the bear runs at US financial institutions, and the disappearance of a hefty amount of money in the markets in a short time - were enough to raise suspicion.
It can be said that most conspiracy theories contain variations and glimmers of truth. So, to be as analytical as I can, without slinging political arrows, I offer you my thoughts on the first two of three Phases of the Freeman theory of Financial Terrorism as an element in the global 2008 economic crash.
Under normal conditions, an economic actor would seek to maximize returns and would therefore slow any price rise to reduce suspicion and minimize negative impacts on demand. A desire to spike prices may imply other intentions more in line with the oil as a weapon theory.
To summarize, the end goal of Phase 1 was simple to generate enough excess wealth to launch Phase 2; bear raids on the markets. This starts with the assumption that the spike in oil prices in late 2007 and 2008 were not as a result of the usual supply/demand reasoning, but of speculation. Growth seemed to be leveling, and drilling activity had increased. So in hindsight, without disruption of crude, speculation was a likely explanation for a tripling of prices in a very short time.
Instead of using the more traditional hedge funds to drive up prices, a newer mechanism was flourishing the Sovereign Wealth Funds (SWFs).
A Sovereign Wealth Fund (SWF) is a state-owned investment fund composed of financial assets such as stocks, bonds, real estate, or other financial instruments funded by foreign exchange assets. These assets can include: balance of payments surpluses, official foreign currency operations, the proceeds of privatizations, fiscal surpluses, and/or receipts resulting from commodity exports.‖
Since 2005, at least 17 sovereign wealth funds have been created. As other countries grow their currency reserves they will seek greater returns. Their growth has also been skyrocketed by rising commodity prices especially oil & gas, especially between the years of 2003 2008.
44% of all SWFs are in the Middle East, and 61% of the funding sources for these SWF's are oil and gas related. These new power brokers have not only the motive to drive up oil prices, they have the means. According to Dr. Gal Luft, Executive Director of the Institute for the Analysis of Global Security - when testifying before House Committee on Foreign Affairs - they have been pouring billions into Western economies' hedge funds, private equity funds, real estate and other natural western resources. They were estimated to hold approx $3.5 trillion in western assets at that hearing, and predicted to balloon to $10 to $15 trillion within a decade.
This is an amount equivalent to the entire US GDP.
Contrary to popular political beliefs, oil prices are out of our regulatory control. Instead, they are determined on a global basis, effected through non-transparent trading, and regulated outside the United States borders.
But one US corporation, Intercontinental Exchange (ICE), founded by young entrepreneuer, Jeffrey Sprecher in 2000, has been taking the brunt of Congressional Dems blame, with accusations of oil speculation. Sen. Maria Cantwell, along with Maine's Olympia Snow, had introduced legislation meant to give the CFTC more authority over the juggernaut that ICE has become since it's creation. Before that, it was a Feinstein/Levin/Snow bill.
ICE was founded as an energy clearing house and online trading market for energy commodies, including partnering with Chicago Climate Exchange (and it's links to Al Gore, Obama and Goldman Sachs) in 2006. In a letter to Sen. Feinstein, Sprecher protests Congressional charges about transparency, saying "Not only does ICE provide an audit trail but it provides one that cannot be replicated by other parts of the OTC marketplace (voice brokers, bilateral trading parties, etc.)."
But how much transparency is enough, when it comes to financial terrorist attacks? And is it energy clearing houses, such as ICE, that become unwitting (or witting) accomplices for SWFs putting excess revenues into hedge funds that positively speculate on increased oil prices?
(Excerpt) Read more at floppingaces.net...
I suspect Soros but I also suspect nations working with him.
I had put this theory forth when it was happening in 2008 but I had no real proof, just feelings. It was just too perfectly timed in relation to the election.
Many of us here on FR were already asking questions about these events, in Sept. of 08, and talking about how suspicious the timing was for that 'financial collapse', occurring just before the elections.
I remember a lot of FReepers talking about odd patterns in the markets.
There was a sell-off, and that could have been a story in 2008. Now it’s distraction propaganda. The economy is dying for lack of manufacturing, and the government will either default or hyperinflate.
‘I had put this theory forth when it was happening in 2008 but I had no real proof, just feelings. It was just too perfectly timed in relation to the election.’-————
I screamed it to the rooftops and all over the internet! And of course it was purposefully done to Bush, and in the favor of their Muslim Brother, Obama, right on que when Obama started losing favor, right when?..... after Palin was announced.
I can see Soros working with Sovereign Wealth Funds of Islamic countries to bring down the U.S. He would be cackling all the way to the bank like the evil Dr. No he is.