- (LPAC) -- The final disintegration of the global monetary
system was but a hair's breadth away on January 21 and 22 of this year.
Stock markets all around the world dropped precipitously on Monday the
21st, except for markets in the U.S., which were closed for the Martin
Luther King holiday. Faced with the prospect of a bloodbath in the U.S.
markets when they opened on Tuesday, the Federal Reserve made a pre-emptive
emergency interest-rate cut of three-quarters of a point. This cut, undoubtedly
combined with more covert market-supporting operations, stopped a meltdown
of the stock market, but this apparent success came at the expense of accelerating
a much larger problem, the hyperinflationary collapse of the U.S. dollar.
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- Just days after these dramatic events, French banking
giant Société Générale announced at a January
24 press conference, that it had lost euro 7 billion, of which euro 5 billion
was blamed on what the bank described as "an exceptional fraud"
by a junior equity derivatives trader, Jérôme Kerviel. The
bank insisted that Kerviel had not only placed bets far beyond his authority,
but had somehow used his knowledge of the bank's control procedures "to
conceal these positions through a scheme of elaborate fictitious transactions."
Société Générale officials insisted that it
was a case of "isolated fraud," and that Kerviel had acted alone.
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- The bank's disclaimers did not ring true, calling to
mind the string of events in the early 1990s where failures at banks such
as Barings and Kidder Peabody were blamed on what Lyndon LaRouche characterized
as "loan assassins," individuals designated to be public scapegoats
for much larger and more systemic problems. The case drew the attention
of the Paris Bureau of Executive Intelligence Review magazine,
and an EIR reporter who attended the press conference found the
bank's story hard to swallow. Société Générale,
after all, had a world-class reputation as a derivatives dealer, and had
that very month been given Risk magazine's award as the equity
derivatives house of the year for 2008. The idea that Société
Générale's vaunted expertise could have been completely outflanked
by a single junior trader acting all alone, did not seem plausible, so EIR began
to dig further.
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- In explanations provided by Société Générale
at its press conference and subsequent reports, the bank claimed to have
discovered the "fraudulent positions" between January 18 and
January 20, but rather than informing the police or judicial authorities,
the leadership of the bank instead went to Christian Noyer, the head of
France's central bank, the Banque de France, and to Gerard Rameix, the
head of the French Authority of Financial Markets. Noyer is a friend and
collaborator of Jean Claude Trichet, the head of the European Central Bank,
and a man whose role in operations against the dollar have been publicly
criticized by Lyndon LaRouche. Neither French President Nicholas Sarkozy
nor his Prime Minister were informed until January 23.
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- Instead, what the bank did, it said, was unwind these
allegedly fraudulent positions over a three-day period, a period which
just happened to coincide with the precipitous drop in worldwide stock
markets on January 21, causing the huge loss. The bank said it had to rush
the unwinding in order to publish its results for 2007.
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- However, the context in which these actions occurred
lead EIR to suspect that, far from being a case of fraud by a
lone junior trader, the Société Générale affair
was actually an inside job aimed at luring the United States into a hyperinflationary
trap for the purpose of ending its role as a world power. With the demise
of the global financial system last year, the Anglo-Dutch financial oligarchy
has launched an all-out assault on the United States, as part of a political
move to end the power of nation- states and create a global empire. The
City of London's game-plan is to induce the United States to flood its
markets with liquidity in the name of preventing losses, and thereby triggering
a hyperinflationary explosion that would bring the brunt of the global
financial collapse down on the U.S. One key player in this war, as identified
by LaRouche, is Trichet's European Central Bank.
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- President Sarkozy was reportedly livid with anger that
he had not been alerted to this crisis, and that actions had been taken
behind his back. There have been indications in France, notably from Jacques
Attali, that there were moves afoot between the French and American circles
around the NYSE Euronext financial market (this is the entity formed by
the merger between the New York Stock Exchange and the Paris-based Euronext)
to make Paris the leading financial center in Europe, displacing London.
Worth noting in this context is that Sarkozy has been virtually at war
with the European Central Bank over its refusal to lower interest rates.
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- Much remains to be uncovered about this affair, including
the possibility of a significant role by the City of London. Although Société
Générale is based in Paris, it does its derivatives trading
out of London. It would appear, at this early stage of the investigation,
that, far from being the result of fraud by a lone trader, the Société
Générale affair is actually a part of an all-out war being
waged between the City of London and its allies at the European Central
Bank, and an opposing transatlantic faction centered around the NYSE Euronext
market.
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