Quote of the Day: Whose Conspiracy?

From former economist, blogger and Assistant Secretary of the Treasury for Economic Policy Paul Craig Roberts at this website

What disturbs me is that no one in authority or in the mainstream media has any interest in checking the facts. Instead, those who raise awkward matters are dismissed as conspiracy theorists.

Why this is damning is puzzling. The government’s story of 9/11 is a story of a conspiracy as is the government’s story of the Boston Marathon Bombing. These things happen because of conspiracies. What is at issue is: whose conspiracy? We know from Operation Gladio and Operation Northwoods that governments do engage in murderous conspiracies against their own citizens. Therefore, it is a mistake to conclude that governments do not engage in conspiracies.

One often hears the objection that if 9/11 was a false flag attack, someone would have talked.

Why would they have talked? Only those who organized the conspiracy would know. Why would they undermine their own conspiracy?

Recall William Binney. He developed the surveillance system used by NSA. When he saw that it was being used against the American people, he talked. But he had taken no documents with which to prove his claims, which saved him from successful prosecution but gave him no evidence for his claims. This is why Edward Snowden took the documents and released them. Nevertheless, many see Snowden as a spy who stole national security secrets, not as a whistleblower warning us that the Constitution that protects us is being overthrown.

High level government officials have contradicted parts of the 9/11 official story and the official story that links the invasion of Iraq to 9/11 and to weapons of mass destruction. Transportation Secretary Norman Mineta contradicted Vice President Cheney and the official 9/11 story timeline. Treasury Secretary Paul O’Neill has said that overthrowing Saddam Hussein was the subject of the first cabinet meeting in the George W. Bush administration long before 9/11. He wrote it in a book and told it on CBS News’ 60 Minutes. CNN and other news stations reported it. But it had no effect.

Whistleblowers pay a high price. Many of them are in prison. Obama has prosecuted and imprisoned a record number. Once they are thrown in prison, the question becomes: “Who would believe a criminal?”

As for 9/11 all sorts of people have talked. Over 100 police, firemen and first responders have reported hearing and experiencing a large number of explosions in the Twin Towers. Maintanence personnel report experiencing massive explosions in the sub-basements prior to the building being hit by an airplane. None of this testimony has had any effect on the authorities behind the official story or on the presstitutes.

There are 2,300 architects and engineers who have written to Congress requesting a real investigation. Instead of the request being treated with the respect that 2,300 professionals deserve, the professionals are dismissed as “conspiracy theorists.”

An international panel of scientists have reported the presence of reacted and unreacted nanothermite in the dust of the World Trade Centers. They have offered their samples to government agencies and to scientists for confirmation. No one will touch it. The reason is clear. Today science funding is heavily dependent on the federal government and on private companies that have federal contracts. Scientists understand that speaking out about 9/11 means the termination of their career.

The government has us where it wants us—powerless and disinformed. Most Americans are too uneducated to be able to tell the difference between a building falling down from asymetrical damage and one blowing up. Mainstream journalists cannot question and investigate and keep their jobs. Scientists cannot speak out and continue to be funded. 

Truth telling has been shoved off into the alternative Internet media where I would wager the government runs sites that proclaim wild conspiracies, the purpose of which is to discredit all skeptics.

Was the 1996 Crash Trans World Airline Flight 800 been due to a wayward missile?

First the furor has been about the NSA spying exposé by whistleblower Edward Snowden, and now, another revelation on the alleged US government cover up on the 1996 crash of Trans World Airline Flight 800 

From the Daily Mail

A new documentary about the deadly Trans World Airline Flight 800 featuring interviews with former investigators claims that the official explanation given for the ill-fated flight is wrong.

The flight crashed off the coast of Long Island in 1996, killing all 230 people on board in what is the third-deadliest aviation accident in U.S. history.

The official explanation given by the National Transportation Safety Board was that the crash was caused by a gas tank explosion, but the documentary gives 'solid proof' there was an external detonation, its co-producer said.

Many eye-witnesses claimed they had seen a streak of fire heading towards the plane before it crashed. Theories have suggested it was a missile strike from a terrorist or U.S. Navy vessel, and that the incident was subject to a government cover-up.

But now the producers of TWA FLIGHT 800, which premieres on July 17, the anniversary of the crash, on cable network EPIX, said they have more than just eye-witness statements to call on.

'Of course, everyone knows about the eyewitness statements, but we also have corroborating information from the radar data, and the radar data shows a(n) asymmetric explosion coming out of that plane - something that didn't happen in the official theory,' Tom Stalcup told CNN's New Day.

Are crashing markets and increasing number of political exposes indicative of imploding governments?

Ex-World Bank Insider: Corruption in the Global financial system Centered on the US Federal Reserve

One doesn’t need to be a conspiracy theorist or an insider to know this

From theNewAmerican.com

A former insider at the World Bank, ex-Senior Counsel Karen Hudes, says the global financial system is dominated by a small group of corrupt, power-hungry figures centered around the privately owned U.S. Federal Reserve. The network has seized control of the media to cover up its crimes, too, she explained. In an interview with The New American, Hudes said that when she tried to blow the whistle on multiple problems at the World Bank, she was fired for her efforts. Now, along with a network of fellow whistleblowers, Hudes is determined to expose and end the corruption. And she is confident of success.

Citing an explosive 2011 Swiss study published in the PLOS ONE journal on the “network of global corporate control,” Hudes pointed out that a small group of entities — mostly financial institutions and especially central banks — exert a massive amount of influence over the international economy from behind the scenes. “What is really going on is that the world’s resources are being dominated by this group,” she explained, adding that the “corrupt power grabbers” have managed to dominate the media as well. “They’re being allowed to do it.”

According to the peer-reviewed paper, which presented the first global investigation of ownership architecture in the international economy, transnational corporations form a “giant bow-tie structure.” A large portion of control, meanwhile, “flows to a small tightly-knit core of financial institutions.” The researchers described the core as an “economic ‘super-entity’” that raises important issues for policymakers and researchers. Of course, the implications are enormous for citizens as well.

Hudes, an attorney who spent some two decades working in the World Bank’s legal department, has observed the machinations of the network up close. “I realized we were now dealing with something known as state capture, which is where the institutions of government are co-opted by the group that’s corrupt,” she told The New American in a phone interview. “The pillars of the U.S. government — some of them — are dysfunctional because of state capture; this is a big story, this is a big cover up.”

At the heart of the network, Hudes said, are 147 financial institutions and central banks — especially the Federal Reserve, which was created by Congress but is owned by essentially a cartel of private banks. “This is a story about how the international financial system was secretly gamed, mostly by central banks — they’re the ones we are talking about,” she explained. “The central bankers have been gaming the system. I would say that this is a power grab.”

The Fed in particular is at the very center of the network and the coverup, Hudes continued, citing a policy and oversight body that includes top government and Fed officials. Central bankers have also been manipulating gold prices, she added, echoing widespread concerns that The New American has documented extensively. Indeed, even the inaccurate World Bank financial statements that Hudes has been trying to expose are linked to the U.S. central bank, she said.

Read the rest here.

All we need is to see the direction of policies, specifically from bail-outs, bail-ins, inflationism and other various forms of financial repression as well as anti-competitive measures to recognize the presence of such dynamic. In short, just follow the money trail.

Paper ‘Wall Street’ Gold versus Physical ‘Real’ Gold

Casey Research economist Bud Conrad suggests that the recent flash crash in gold may have been engineered.

Can markets really be influenced by big players? Well, was the LIBOR rate accurately reported by huge banks? Have players ever tried to corner markets? The answer to all the above, unfortunately, is yes.

There's an even bigger problem with the legal structure of the futures market: even the segregated funds on deposit can be pilfered by the broker for the brokerage's other obligations. That is what happened to MF Global customers under Mr. Corzine. (I had an account with a predecessor company called Man Financial – the "MF" in the name. I also had an account with Refco, which is now defunct. Fortunately, the daggers did not hit my account, since I was not a holder when the catastrophes occurred.) My take: the futures market is dangerous, and not a place for beginners.

One last note: after the Bankruptcy Act of 2005, the regulations support the brokers, not the investors, when there are questions of legality about losses in individual investment accounts.

The recent actions in the gold markets reveals of the stark difference between paper gold and physical gold markets.

Paper gold markets have essentially been influenced by Wall Street, who in turn are influenced by policymakers such as the FED and central bank cartel, as well as, the governments via regulations and mandates.

In contrast, the physical gold represents real demand and supply which involves the consuming and investing public and real inventories around the world.

So when gold prices suffered a quasi price crash, instead of triggering a wave of selling spree, retail participants rose to the occasion and used such opportunity to accumulate with such ferocity. 

Of course it would be a mistake to view retail buying as non-investments or as non-investors as media commonly portrays. 

Said differently panic selling in Wall Street extrapolated to the inverse scenario—panic buying in the global physical market as shown by the chart from US Global Investors.

In short, the gold flash crash demonstrated the contrasting actions between politically backed financial institutions and of non political influenced individuals.

There has been more accounts of rapid depletion of gold inventories as a result of the flash crash. Premium on physical gold continues to rise, particularly in Asia as of this writing, as a result to supply constraints

Even prior to the flash crash, physical markets kept showing signs of vigorous demand, so the crash shouldn’t have happened, but it did.

This tell us that the parallel universe or patent disparity between gold’s paper markets and the physical markets implies of the anomalous nature with the current pricing dynamics of gold. 

Thus logic supports the idea that there has been an ongoing suppression-manipulation scheme against gold prices or an undeclared war on gold.

And it would also signify a mistake to assert otherwise.  

We don’t really need conspiracy theories, for the simple reason that manipulation of the marketplace has been legitimated and a principal tool used for implementing social policies.

Proof? From Ben Bernanke’s 2010 speech: (bold mine)

Notably, since December 2008, the FOMC has held its target for the federal funds rate in a range of 0 to 25 basis points. Moreover, since March 2009, the Committee has consistently stated its expectation that economic conditions are likely to warrant exceptionally low policy rates for an extended period. Partially in response to FOMC communications, futures markets quotes suggest that investors are not anticipating significant policy tightening by the Federal Reserve for quite some time. Market expectations for continued accommodative policy have in turn helped reduce interest rates on a range of short- and medium-term financial instruments to quite low levels, indeed not far above the zero lower bound on nominal interest rates in many cases.

The FOMC has also acted to improve market functioning and to push longer-term interest rates lower through its large-scale purchases of agency debt, agency mortgage-backed securities (MBS), and longer-term Treasury securities, of which the Federal Reserve currently holds more than $2 trillion.

Or from a recent speech

The expected path of short-term real interest rates is, of course, influenced by monetary policy, both the current stance of policy and market participants' expectations of how policy will evolve. The stance of monetary policy at any given time, in turn, is driven largely by the economic outlook, the risks surrounding that outlook, and at times other factors, such as whether the zero lower bound on nominal interest rates is binding

The above speeches showcases how the FED works to influence the interest rate markets and thereby financial and economic forces. They are direct manipulations on the bond markets and indirect manipulations on other financial instruments.

 

Market manipulation has also been acknowledged by authorities. The New York Fed bragged about how FED policies has boosted US stock markets.  Japan’s finance minister recently said that they have a target for their stock markets.

Governments have also been engaged in banning short sales in both the stock markets and the bond markets to influence prices. Have this not been manipulation?

Here is a recent one.

From the Financial Times

It’s called the law of unintended consequences. Last November, European regulators were fed up with hedge funds using the derivatives market to bet against sovereigns so they imposed a ban on outright speculation.

But fund managers, not being ones to roll over and play nice for regulators, have found other ways to express the same view – this time in a way that analysts warn could increase borrowing costs for the banking sector.

Six months on from the ban on buying naked sovereign CDS protection – where the investor does not own the underlying government bond – it is clear that negative bets against large financials have emerged as a partial replacement.

A CDS, or credit default swap, protects the buyer against the risk of a company or government going into default. The instrument is worth more if the risks of default is perceived to be higher.

Investors are buying protection on European banks on the basis that banks and sovereigns are so intimately linked that any increased risk of a sovereign default will increase the value of a bank CDS in a similar way to a sovereign CDS.

Using organized force or governments to prevent markets from clearing or from revealing their real conditions are manipulations. Government's actions,  thereby, signify as the ultimate perpetrators of insider trading and of picking winners and losers.

So if the stocks and bond markets have been subjected to interventions, or may I say manipulations, directly or indirectly, then why should the gold-commodity markets be any different?

As I recently wrote,

A famous politician once said, You can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all the time.

The pushback from the gold bear raid as seen in the physical gold market implies that the governments and their apologists cannot fool all the people all the time.

With Ben Bernanke, Who Needs Conspiracy Theories?

Populist economic writer John Mauldin is contemptuous of conspiracy theorists. He writes, (bold mine)

I find the belief that there is a “Plunge Protection Team” simply bizarre. You know, the guys who are supposed to control the stock market? The “Working Group on Financial Markets”? If there is one somewhere, deep in the bowels of government, they are the most incompetent conspirators ever assembled. And no one has come forth and spilled the beans in a memoir after 25 years? Puh-leeze!

A conspiracy theory, according to Wikipedia.org, purports to explain an important social, political, or economic event as being caused or covered up by a covert group or organization.

On the other hand, the “Plunge Protection Team” (PPT) or otherwise known as the “Working Group on Financial markets” was created by ex US President Ronald Reagan via Executive Order 12631 which according to Wikipedia.org, “was used to express the opinion that the Working Group was being used to prop up the markets during downturn”. 

Of course, technically speaking the EO 12631 didn’t explicitly say direct control.

One of the main the stated purpose of the group according to the Federal Register 

Recognizing the goals of enhancing the integrity, efficiency, orderliness, and competitiveness of our Nation's financial markets and maintaining investor confidence, the Working Group shall identify and consider:

(1) the major issues raised by the numerous studies on the events in the financial markets surrounding October 19, 1987, and any of those recommendations that have the potential to achieve the goals noted above; and  

(2) the actions, including governmental actions under existing laws and regulations (such as policy coordination and contingency planning), that are appropriate to carry out these recommendations.

(bold added)

In short, the US government can justify her actions to “carry out” “any of those recommendations that have the potential to achieve the goals” through opaque legal semantics.

So contra Mr. Mauldin, by edict, the Working Group on Financial Markets, a.k.a  PPT, is a legally constituted entity which therefore exists, unless a new edict has been made to repeal them.

As to whether or not this group represents “a conspiracy theory” is another matter.

And it would likewise be equally misguided to look into “the deep in the bowels of government” for attempts to control the stock and or financial markets. All one needs is to open one's eyes.

The above chart exhibits the tight correlation between the Fed’s balance sheet and the S&P 500 as I earlier pointed out. 

Have Fed policies not caused or contributed to the rising stock markets?

Last July, the New York Fed even bragged about how Fed policies has had “an outsized impact on equities relative to other asset classes” that has boosted returns by 50% as I earlier posted here.

Let us read directly from the incumbent Fed Chair Ben Bernanke, first when he still was in the academia: (bold mine)

There's no denying that a collapse in stock prices today would pose serious macroeconomic challenges for the United States. Consumer spending would slow, and the U.S. economy would become less of a magnet for foreign investors. Economic growth, which in any case has recently been at unsustainable levels, would decline somewhat. History proves, however, that a smart central bank can protect the economy and the financial sector from the nastier side effects of a stock market collapse.

So Mr. Bernanke believes then that supporting the stock market has been a requirement for “smart” central bankers.

From Bernanke’s 2010 Jackson Hole speech on the Portfolio Balance channel (bold mine)

I see the evidence as most favorable to the view that such purchases work primarily through the so-called portfolio balance channel, which holds that once short-term interest rates have reached zero, the Federal Reserve's purchases of longer-term securities affect financial conditions by changing the quantity and mix of financial assets held by the public. Specifically, the Fed's strategy relies on the presumption that different financial assets are not perfect substitutes in investors' portfolios, so that changes in the net supply of an asset available to investors affect its yield and those of broadly similar assets…

So current policy has been meant to cause, if not influence, the “quantity and mix of financial assets held by the public.” Mr. Bernanke’s belief then has now been actualized through ZIRP and QE policies.

Two days ago Ben Bernanke on the wealth effect at the semi annual monetary policy report to the Congress (bold mine)

Monetary policy is providing important support to the recovery while keeping inflation close to the FOMC's 2 percent objective. Notably, keeping longer-term interest rates low has helped spark recovery in the housing market and led to increased sales and production of automobiles and other durable goods. By raising employment and household wealth--for example, through higher home prices--these developments have in turn supported consumer sentiment and spending.

In short, whether the stock and/or housing markets both of which constitutes household wealth, FED policies have been designed to control or to influence prices in support of these sectors.

Central bankers all over the world, in fact, has mimicked or assimilated the Greenspan-Bernanke doctrine.

In May of 2012 the Bank of Japan reportedly bought record amounts of ETFs. Central banks from Israel, South Korea and Czech Republic have jumped also into the stock market buying bandwagon. Whether as investment or as policy, government intervention on stock markets or financial markets serves to support them. 

Is this a conspiracy theory? Apparently not. Because such policies have become explicit (and not covert), from which again, the intent has been to cause or attempt to control prices of financial markets—as the stock and the housing markets—supposedly to promote the wealth effect theory. (In reality the wealth effect theory is a camouflage to advance the interests of welfare warfare state and the banking cartel whose relationship is underwritten by the US Federal Reserve)

In short, we don’t need conspiracy theories, the continued enforcement of Bernanke’s creed has been enough to tell those who are willing to listen that financial markets including the stock markets are being administered, managed or manipulated for political and secondarily economic objectives.

Wealth effect policies are, in reality, unsustainable asset bubble inflation policies.

Was the IMF Chief Jailed for Discovering that Gold held by the US has Vanished?

That’s what Russia claims, according to the Eutimes.net

A new report prepared for Prime Minister Putin by the Federal Security Service (FSB) says that former International Monetary Fund (IMF) Chief Dominique Strauss-Kahn was charged and jailed in the US for sex crimes on May 14th after his discovery that all of the gold held in the United States Bullion Depository located at Fort Knox was ‘missing and/or unaccounted’ for.

According to this FSB secret report, Strauss-Kahn had become “increasingly concerned” earlier this month after the United States began “stalling” its pledged delivery to the IMF of 191.3 tons of gold agreed to under the Second Amendment of the Articles of Agreement signed by the Executive Board in April 1978 that were to be sold to fund what are called Special Drawing Rights (SDRs) as an alternative to what are called reserve currencies.

This FSB report further states that upon Strauss-Kahn raising his concerns with American government officialsclose to President Obama he was ‘contacted’ by ‘rogue elements’ within the Central Intelligence Agency (CIA) who provided him ‘firm evidence’ that all of the gold reported to be held by the US ‘was gone’.

Upon Strauss-Kahn receiving the CIA evidence, this report continues, he made immediate arrangements to leave the US for Paris, but when contacted by agents working for France’s General Directorate for External Security (DGSE) that American authorities were seeking his capture he fled to New York City’s JFK airport following these agents directive not to take his cell-phone because US police could track his exact location.

Read the rest here

I wouldn’t know how valid this report is. One thing for sure, whether it is Russia, the US or the IMF, all appears to be dogged by credibility problems.