- It has been evident for some time that the ongoing speculative
attack on Greece, along with such other countries as Spain, Ireland, Portugal,
and Italy, was not primarily a reflection of their economic fundamentals,
nor yet a spontaneous movement of "the market," but rather an
orchestrated action of economic warfare. The dollar had been relentlessly
falling through the late summer and autumn of 2009. It obviously occurred
to various Anglo-American financiers that a diversionary attack on the
euro, starting with some of the weaker Mediterranean or Southern European
economies, would be an ideal means of relieving pressure on the battered
US greenback. Since these degenerate elites are incapable of directly
solving the problem of the dollar through increased production, full employment,
and economic recovery, one of the few alternatives remaining to them is
to create a situation in which the euro is collapsing faster, leaving the
dollar as the beneficiary of some residual flight to quality or safe haven
reflex.
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- This is what emerged during the first week of December
with a speculative assault or bear raid against Greek and Spanish government
bonds as well as the euro itself, accompanied by a scurrilous press campaign
targeting the "PIIGS," an acronym for the countries just named,
coming from inside the bowels of Goldman Sachs. I have discussed this
phenomenon several times over the last two to three weeks on my radio program
on GCN.
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- Now comes concrete proof of this conspiracy in the form
of a Feb. 8 "idea dinner," held at the Manhattan townhouse of
Monness, Crespi, Hardt & Co, a boutique investment bank. Among those
present were SAC Capital Advisors, David Einhorn of Greenlight Capital
(a veteran of the fatal assault on Lehman Brothers in the late summer of
2008), Donald Morgan of Brigade Capital, and, most tellingly, Soros Fund
Management. The consensus that emerged that night over the filet mignon
was that Greek government bonds were the weak flank of the euro, and that
once a Greek debt crisis had been detonated, all outcomes would be bad
for the euro. The assembled predators agreed that Greece was the first
domino in Europe. Donald Morgan was adamant that the Greek contagion could
soon infect all sovereign debt in the world, including national, state,
municipal and all other forms of government debt. This would mean California,
the UK, and the US itself, among many others. The details of this at dinner
were revealed in the headline story of the Wall Street Journal on Friday,
February 26, 2010. (See article at
- http://online.wsj.com/article/SB40001424052748703795004575087741848074392.html
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- Nor was this the only cabal in town intent on attacking
the euro through the week Greek flank. The article cited suggests that
GlobeOp Financial Services and Paulson & Co. are also piling on. The
zombie banks were also heavily engaged. The article reported that Goldman
Sachs, Bank of America-Merrill Lynch, and Barclays Bank of London were
also assisting speculators in placing highly leveraged bearish bets against
the euro. Note that these zombie banks are alive today because of US taxpayer
money, in Barclay's case through AIG.
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- It amounted to a deliberate attempt to create a large-scale
world monetary crisis which would certainly bring with it the dreaded second
wave of the current world economic depression. The creation of monetary
chaos in Europe through the convulsive destruction of the euro under speculative
attack would cripple commodity production in western Europe, severely undermining
one of the dwindling areas of the world economy which are still functioning.
The genocidal implications for humanity ought to be obvious, but the assembled
hedge fund hyenas were not concerned with these consequences.
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- George Soros has been telling every media outlet that
will listen that the euro is doomed to fall apart and break up over the
short run. Soros even has a theory to deploy as part of his speculative
attack. Soros argues that the fatal flaw or original Sin of the euro is
that it was based on a common central bank among the participating countries,
but lacked a common treasury and tax policy. This means that a country
like Greece can no longer defend itself from a speculative attack on its
bonds by the simple expedient of currency devaluation, since there is no
more drachma, and the euro is controlled from Frankfurt, not Athens. British
spokesmen are quick to point out that, even though the financial situation
of London is far worse than that of Athens, the British government is already
devaluing the pound through a downward dirty float.
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- Given Soros's infamous track record, he must be taken
seriously. In 1992, Soros became world famous through his attack on the
European Rate Mechanism, which he executed by a highly leveraged speculative
assault on the British pound, at the time one of the weaker members of
the ERM. Soros' speculative attack led to a pound devaluation and the
ragged breakup of the ERM, and netted Soros £1 billion in profits.
It was as if Soros had personally stolen a £20 note from every man,
woman, and child in Britain. The speculative gains were no doubt gratifying,
but the overriding political purpose of the assault was to sabotage that
phase of European monetary policy.
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- The London Economist has gone out of its way to mock
Spanish Prime Minister Zapatero's remark that Spain was under international
speculative attack. Press organs of the city of London and Wall Street
have ridiculed the Greeks as a nation of paranoid conspiracy theorists.
And yet, the revelations made so far are strong circumstantial evidence
of pre-concert, as Lincoln would say. Even the US Department of Justice
has been forced to send letters to the participants in the infamous "idea
dinner," warning them not to destroy any of their records and thus
putting them on notice that they are under investigation. While we should
not have any illusions about the prosecutorial zeal of Attorney General
Eric Holder, who once represented the international financial bandit Marc
Rich, this is at least a beginning. Spanish and Italian judges are noted
for their independence, and one of or more them may wish to examine the
activities of Soros, Goldman Sachs, and their hedge fund allies.
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- Greece does not need an austerity program, as the Greek
labor movement has eloquently argued in the course of their successful
and admirable general strike last week. Greece does not need a bailout
from Germany, the sinister International Monetary Fund, or from anyone
else. Least of all does Greece need to accept the advice of Austrian school
or Chicago schools charlatans who recommend the catharsis of a deflationary
crash that would destroy an entire generation through unemployment, poverty,
and despair. Greece needs to defend itself with a 1% Tobin tax on all
derivatives and other financial transactions. Greece should take the lead
in outlawing credit default swaps, which amount to issuing insurance without
meeting the capital requirements of being an insurance company. Greece
needs to enforce EU and national antitrust laws. If Soros and his gang
succeed in breaking up the euro, Greece should make the best of it by immediately
imposing heavy-duty exchange controls and capital controls to protect the
new drachma, on the model of Malaysia a dozen years ago. Greece should
shut down domestic zombie banks and seize its central bank and use it to
issue 0% credit for industrial and agricultural hard commodity production.
If the Greeks made plain what they intend to do if they are forced to
fall back on the drachma, the financiers who fear such an example would
have another reason to relent.
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- Another obvious expedient is that of a bear squeeze or
short squeeze. Soros, Goldman Sachs, and their gang of hedge fund allies
have now used derivatives to establish short positions against Greek bonds
and the euro, betting that these latter will go down. Political pressure
is now being brought to bear on the European Central Bank and the Greek
central bank to undertake an unannounced large-scale purchase of Greek
bonds and euros in the forward market, causing the Wall Street predators
to lose their bets, thus punishing them severely with extravagant losses.
This is normal central bank practice, and it will be astounding if the
Greeks do not execute such a maneuver very soon.
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- The world now faces a stark choice between two alternatives,
with Wall Street forcing the issue. The first is that the zombie banks
and hedge funds, having been saved and bailed out by national states and
their taxpayers, will repay the favor by driving the national states and
all forms of state, provincial, and local government into bankruptcy.
This will be synonymous with the destruction of modern civilization itself.
The second and preferred alternative is that the national states summon
the political will to use the inherent powers of government to place the
zombie banks, hedge funds, and related purveyors of derivatives into bankruptcy
receivership and shut them down once and for all, relying in the future
on nationalized central banks for the provision of credit. The second
alternative would allow the preservation of modern civilization as we have
known it. But in the meantime, the derivatives-based speculative attack
on the southern flank of the euro has accelerated the arrival of the second
wave of depression, which now appears likely to strike the world before
the end of 2010.
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