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A Plot At The Brink
Of A Dark Age

1-28-8
 
(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.
 
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.
 
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.
 
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.
 
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.
 
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.
 
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.
 
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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