Was it irresponsible lending by the banks? Insufficient regulation? Excessively loose monetary policy by the Fed? There are many theories for what caused the global financial crisis of 2008.
But now there’s a new and very novel thesis to add to this list. In a truly bizarre report written in 2009 and released this week, the Pentagon argues that “financial terrorism” lay behind the great crash.
When I first saw this I thought it was a joke, but since respectable media outlets such as the UK Daily Mail and the Washington Times have also written about it, if I have been spoofed, I am at least in good company.
Here are some highlights from the report, which you can read in full at the bottom of this post. If you haven’t read any good science fiction for a while, I suggest that you take a look.
The preliminary conclusions of this research suggest that, without question, there were actors who had the motive to harm the US economy…
The hypothesis under consideration is that a three-pronged attack is underway, with two of those phases completed to date.
The first phase was a speculative run-up in oil prices that generated as much as $2 trillion of excess wealth for oil-producing nations, filling the coffers of Sovereign Wealth Funds, especially those that follow Shariah Compliant Finance. This phase appears to have begun in 2007 and lasted through June 2008.
Note the spooky allusion here to “shariah finance” — which by the way is an obsession shared by many right wingers in the US who are convinced that President Obama is a Muslim whose secret agenda is to destroy democracy and implement “shariah law”. But I digress. Back to the report:
The second phase appears to have begun in 2008 with a series of bear raids targeting U.S. financial services firms that appeared to be systemically significant. An initial bear raid against Bear Stearns was successful in forcing the firm to near bankruptcy. It was acquired by JP Morgan Chase and the systemic risk was averted briefly. Similar bear raids were conducted against various other firms during the summer, each ending in an acquisition… While substantial, unusual trading activity can be identified, the source of the bear raids has not been traceable to date due to serious transparency gaps for hedge funds, trading pools, sponsored access, and sovereign wealth funds.
Again, while we can’t say for sure, it looks like the sovereign wealth funds done it. And by the way, did we mention that most of them are Muslims from the Middle East?
The risk of a Phase Three has quickly emerged, suggesting a potential direct economic attack on the U.S. Treasury and U.S. dollar. Such an event has already been discussed by finance ministers in major emerging market nations such as China and Russia as well as Iran and the Arab states. A focused effort to collapse the dollar by dumping Treasury bonds has grave implications including the possibility of a downgrading of U.S. debt forcing rapidly rising interest rates and a collapse of the American economy. In short, a bear raid against the U.S. financial system remains possible and may even be likely.
Oh, and we’d also like to point out that the commies in Russia and China are teaming up with the Arabs to destroy our financial system. But wait, that’s not all!
The recent seizure of $134 billion face value in supposedly counterfeit U.S. Federal Reserve bonds underscores the reality of the economic threat. This may be as significant as the Japanese radio intercepts were before December 1941.
Yes, we still haven’t forgiven the Japs for Pearl Harbor either.
The hypothesis discussed in this paper suggests the very real possibility that financial terrorism may have cost the global economy as much as $50 trillion, roughly 1000 times greater than Bernie Madoff’s fund and equal to nearly four years of American productive output…
Potential suspects include the vast and growing Sovereign Wealth Funds, supported by substantial excess oil revenues. While a number of experts have attempted to dismiss out of hand any fears of nefarious activity by Sovereign Funds, this ignores the reality that government owned funds are or will be political in nature over time.
As a case in point, Venezuela‘s acquisition of CITGO that began in 1986 and was completed in 1990 was considered very benign. Since then, however, Hugo Chavez rose to power with an agenda to harm the United States and destroy capitalism. Imagine the impact if CITGO were more strategically significant. The point being that even currently friendly sovereign funds could over time become unfriendly. This is especially true in nations with strong radical jihad movements.
Got the point yet? The rest of the report is full of ominous sounding titles like “Those with Subversive Motives”, “The Motive of Financial Jihad” and “Collapse the Dollar, Bankrupt the Treasury”.
Now, in all seriousness the report is not quite 100% nonsense and it probably makes sense for the Pentagon to look at issues like the possibility of economic terrorism. But it’s strange that so much of the report focuses on murky conspiracy theories and there is no mention anywhere of any real economic terrorists like the CEOs of Wall Street investment banks. Funny that.
In any case, naturally the conspiracy theorists are jumping all over this one:
This is a landmark paper and one that should never be lost in the mirage of papers that are lost on the internet. We recommend a read and book mark of this paper for years to come.
We believe that Kevin Freeman has got it absolutely spot when it comes to the three phase attack on the US economy. And third phase is yet to be revealed which most analysts expect to begin in Oct 2011 via a direct and surgical strike at US treasury bonds and dollar assets leaving the economy of US gasping for air.
We also believe that ones who perpetrated this attack will make sure that this paper is lost among all the other papers and may even do an attack on our servers to bring down all traces of references.
By the way, the aliens told me the same thing. Read this report at your own risk.
49755779 Economic Warfare Risks and Responses by Kevin D Freeman