William H. HelbigThe Federal Reserve System’s building on Constitution Avenue was completed in 1935 for a total cost of $750,000. The Federal Reserve’s Board of Governors purchased the land from the federal government. A deed, secured from the Treasury Department, relinquished “all the right and title and interest of the United States of America.” 1
At the time, Representative Wright Patman of Texas correctly noted that the federal government did not own the building. Privately owned commercial banks and twelve Reserve Banks owned The Federal Reserve System. Therefore, the building was not tax-exempt from local property taxes. The District of Columbia tax collector took it upon himself to send a property tax notice to the Federal Reserve’s Board of Governors. Of course the Federal Reserve refused to pay and the Fed’s lawyers began a tumultuous storm of legal-speak going all the way back to the original creation of the Fed in 1913, and Woodrow Wilson’s legislative wrangling. When you boil away all of the legalese, the Federal Reserve is an independent department of government. The tax collector reasoned that if the Fed were a part of government, why would the government sell land to itself? After several years, the tax collector sent a notice of delinquent taxes to the fed. It took several more years of legal wrangling until the Federal Reserve System semi-officially became a part of the federal government. Although many politicians believe the Fed is a part of federal government when it wants to be, and vice versa, clearly independent in its decision-making. The Fed can manipulate the money supply as it sees fit to stimulate, stabilize, or slow the economy when needed. However, the chairperson and board can manipulate the money supply as it sees fit for any conceivable reason, even for political purposes. If the Fed prints more money than necessary, then there is too much money chasing too few goods, inflation, and people spend less on items that cost too much. American citizens are now experiencing inflation and recession, as well as high gas and energy costs, as well as an American economy flooded with too much cash.
When George W. Bush came into office in 2001, The Federal Reserve, replete with its ambiguous status, had Alan Greenspan as its chairperson. Interest rates were brought down to all-time record lows, and the money supply, designated M1, was increased to accommodate the expected record borrowing that was about to begin in this so-called republican revolution. In other words, the economy was flooded with cash hot off the Federal Reserve System’s printing presses. Housing appreciated to record levels, and consumers did not hesitate to borrow on these inflated numbers. September 11, 2001 accelerated the borrowing as homeowners in New York City, for example, where buying second homes in Northeastern Pennsylvania, getting second mortgages on the inflated value of their primary homes. These second homes in the country were purchased, driven by the government’s color-coded terror alert system, as a safe-haven from another possible terrorist attack in the city. Amid all of this borrowing frenzy, tax rates were cut to ostensibly make the republicans look like the good guys in what turns out to be the greatest bank robbery of the new millennium. The centerpiece of this housing and sub-prime financial disaster, and the starting point of a very weird sequence of events, begins in August of 2007.
Let us begin with a singular event initiated by Karl Rove, as he submitted his resignation as presidential advisor in August 2007. People usually resign from their jobs for a limited number of reasons, but in this particular case, one could speculate that he simply did not agree with how leadership in the White House was planning the final stage of events in the Middle East. However, his resignation marks the beginning of a weird sequence of related events that get stranger in a sequential fashion.
On August 27, 2007 an entity, or entities, had taken an extremely deep position in the US and European stock markets with both puts and calls, (Short selling), to the tune of billions of dollars. This Option contract began on August 27, and expired on September 21, 2007. Similar insider trading occurred just weeks before the attacks of September 11, 2001 targeting both the parent companies of United and American airlines, and other industries associated with the airline sector. Whoever placed these puts and calls was betting that the markets would move downward by at least 50 percent of present values in August and September of 2007, and in this contract period, the downward movement of the markets would make these options extremely profitable. Only a world-shattering event like a terrorist attack would provide the catalyst for such a market move. Stock traders at the Chicago Board of Option Exchange call these unusual transactions “Bin Laden” option trades, in reference to the fact that perhaps another terrorist attack was in the works against American targets. On the other hand, perhaps, another, more ghastly event was about to take place.
In this sequence of weird events, Israel bombs Syria on September 6, 2007 in an unprovoked attack. This singular event, secret at first, became public knowledge with lots of fanfare by everyone involved, but not all parties involved ever revealed the mystery target. In fact, as of this writing, it is still a mystery as to what was bombed in Syria. There is speculation of a North Korean / Syrian nuclear site, a large ammunition depot, and/or some very large and unsightly boulders in a vast area of empty desert that urgently needed bombing, or perhaps they would roll into Israel, with great destructive power. There is also speculation that perhaps Israel was attempting to initiate, in tandem with the B-52 bomber and its nuclear-tipped Cruise missiles, a planned attack on both Syria and Iran, thereby beginning hostilities in the Middle East and starting World War 3. However, some courageous military personnel at Barksdale Air Force base blew the whistle on live Nuclear-tipped Cruise missiles under the wings of a B-52 bomber, thereby preventing the beginning of World War 3. It is also seemingly possible that Israel knew of the grounding of the B-52 bomber and may have been attempting to influence world markets by its bombing of Syria. In any case, this strategy did not work and markets remained relatively flat.
Another weird event is reported in the September 9, 2007 edition of the Russian newspaper Pravda. According to the article, American Spy satellite downed in Peru as US nuclear attack on Iran thwarted, a super-secret KH – 13 US spy satellite was apparently brought out of orbit by the US military for the singular purpose of destroying the satellite to prevent it from being used for targeting the above mentioned Cruise missiles somewhere in Iran. The satellite apparently crashes in Peru with reports of hundreds sickened by possible radiation poisoning. The article continues with the possibility of a large divide between the American Military establishment and the Bush/Cheney/Rice junta in the White House.
And lastly, more weird news as Qatar ups its stake on September 23, 2007, in the London Stock Exchange to nearly 24 percent and the United Arab Emirates’ Borse Dubai buys a 28 percent holding from NASDAQ as part of a deal to take over jointly, Nordic operator, OMX. This would appear to the uninitiated, possibly, as a billion dollar bailout. The irony is United States spends roughly $700 billion per year purchasing oil and natural gas from the Middle Eastern oil giants, then labels them terrorists, and then asks them to loan money to stabilize their financial institutions. (A sitcom could be made from this incredibly bizarre story!)
How do all of these weird events relate to the Housing and sub-prime crisis? The mystery people who placed the put option contracts, and who ultimately lost their shirts when the contracts expired, are now apparently looking to make up for staggering losses in their portfolios. Is it possible that elements of the US government, such as the Fed and CIA, were involved in such a nefarious insider trading scandal?
The new buzzword in the financial sector of Wall Street during the 1990s was securitization. By bundling together thousands of loans, mortgages, and basically whatever Wall Street wants to bundle together, and then selling fresh securities based and valued on the bundle, became the fastest growing segment of the new debt market. 2 One must just connect the dots to see that these bundles, consisting of thousands of home loans, were securitized and then possibly placed into the options contracts in August of 2007. The remaining question is then who placed these “Bin Laden” trades using US mortgage bundles? Who has the authority and power to invest these securities? Since the option contracts purchased in August 2007 expired in September 2007, and these unknown entities lost their shirts when the contracts expired on September 21, as the markets did not take a tumble, it would be a matter of mere months before the truth would come out. A surprising revelation is that the fallout was not limited to the United States alone. At the beginning of the 2008 year, SocGen, France’s second largest bank, had reported that it was the victim of fraud by a junior trader that resulted in losses of 4.9 billion euros.3 Also, French, German, and British shares suffered a 350 billion wipeout during the same period. In March, Wall Street was rocked by the announcement that the Fed had offered a $29 billion credit line to none other than Bear Sterns. Treasury Secretary Henry Paulson, in conjunction with the White House, simply called this bailout, for lack of a better term, a “Federal Reserve action.”4
In July, we now see the two huge mortgage giants, Fannie Mae and Freddie Mac, respectively requiring a bailout by the Fed. Both mortgage giants hold or guarantee more than $5 trillion in mortgages. It is readily apparent the Federal Reserve is printing oodles of money, and dumping it into the US economy, which will cause massive inflationary pressure, as a tool to prop up these failing financial institutions. Another tool used by the Fed, but unsubstantiated, but alluded to in several articles by the Washington Post, the Telegraph in London, and the London Observer, is the possibility that the Fed is bolstering the stock market by manipulating the futures markets.5 There is also a rumor of a Plunge Protection Team, ready to step in at a moments notice to stabilize the markets during an emergency such as a market sell-off. Nevertheless, using this same logic, the Fed can really buy anything it desires to pump money into the system. This includes, but is not limited to, real estate, state and local debt, and essentially, any asset including securitized mortgage bundles. If the Fed, and the Bush Administration, is manipulating the market for any reason, political or monetary, or criminal, it is against the federal law to do so, and can open the doors to massive lawsuits, because this manipulation is akin to insider trading activity. If you or I were involved in such activity, we would certainly be looking at a lengthy jail term. To digress, Building 7 at the World Trade Center site was destroyed in the late afternoon of September 11, 2001. This particular building housed the Security and Exchange Commission, as well as other federal and state agencies. The insider trading that took place before 911, and all records of the related financial transactions was conveniently destroyed when all 47 steel columns supporting the building failed with milliseconds of each other, sending the building down neatly into its own foot-print to ostensibly make the clean-up as efficient as possible. To date, no official government explanation exists of this building’s collapse.
Unlike 911, records do exist of this second occurrence of insider trading in late August 2007. This author would like to ask anyone who has knowledge of this insider trading activity to please come forward and implicate the people involved. People are losing their homes, jobs, and retirement in America, so a few elite people at the top of the food chain can enrich themselves at the expense of the middle class. It was only a matter of time before the financial institutions, and possibly the Fed, involved in this insider trading fraud would eventually out themselves by the failure of these aforementioned institutions. They had no choice other than to concoct a far-reaching story blaming the debacle on the sub-prime disaster and housing crisis. The citizens of these respective countries are the victims of crimes perpetrated by the very government officials they elected to represent them. In the United States, this economic disaster has left the country wide open to foreign investors who are now buying US real estate and businesses at a bargain basement prices. It is possible that government officials, or just inept decision making by a bunch of “upper-crust C-student from Yale who know no history or geography” preplanned this debacle.6
It is essentially clear who the players are in this insider-trading swindle, with the United States, France, Germany, and England on one side, and on the other side, China, Russia, and the Middle Eastern oil giants. Since the sides are clearly defined, when someone wins in the markets, then someone loses. It should now be readily apparent that the covert attempt to bomb Iran was designed not only to annihilate nuclear power generation sites and military infrastructure in Iran, but it was also designed to manipulate markets around the world and transfer money from the evil people to the good people, speaking in very George Bush terms, and perhaps stabilize the failing American dollar along the way. Since Iran has switched to other currencies to sell its natural gas and oil, this attack would have destroyed much of Iran’s will to accept currencies other than the US Petrodollar. As one can remember, in November of 2000, Saddam Hussein had switched to other currencies to sell his crude oil to the world, noticeably the Euro, and look at the price he paid. The United States was able to get away with such monetary behavior before the advent of the Euro, since the dollar was the reserve (fiat) currency of the world. However, the nascent European Union was formed in a manner to combat and compete with the US dollar for global supremacy. The United States and its current administration is now learning a lesson in European fiscal responsibility, and has been put on notice, that the dollar is no longer the only sheriff in town.
It is this author’s supposition that the top-secret Dick Cheney Energy Task Force meeting contains not only the Bush Administration’s national energy policy, which is the invasion and occupation of Afghanistan and Iraq, and the subsequent takeover and management of the respective oil fields and pipelines contained in those countries, as well as the combined strategy to reel in rogue nations like Iran to ostensibly insure that their energy reserves are sold for the US Petrodollar only.Notes
- Greider, William. Secrets of the Temple. Touchstone. New York: Touchstone, 1987
- Phillips, Kevin. Bad Money. New York: Penguin Group, 2008.
- Shanker, Sitaraman & Robinson, Blaise. Did SocGen trades trigger a market rout, Fed cut? Reuters
- Rob, Gregg. Treasury details key role in Bear Sterns bailout. MarketWatch. April 2, 2008.
- “Three Ways to Avoid Wall Street”, Monday Morning, November 9, 2007.
- Vonnegut, Kurt. A Man without a Country. New York: Random House, 2007.