Monday, January 10, 2011

Congresswoman Gifford's Assassination Attempt May Not Be What I Appears

The appearance of FBI Director Robert Mueller at the Arizona assassination site might be a puzzle to some. Mueller’s resume is such that whenever the enterprise wants to cover up an ugly situation, they put Bob in charge of the investigation – and Bob is the best clean-up guy around. (BCCI CIA banking investigation, the Noriega-CIA connections, Iran-Contra investigation which cleared the Bush Enterprise of any involvement, 9-11 Investigation, which cleared the Enterprise of it’s involvement).(1)
There is no way to put this gently. Mueller is there to ensure that Enterprise ties to this young shooter are not exposed. They will be found. Researchers need to be vigilant as shortly after these pieces of evidence are uncovered, they will disappear into the “classified information” lock box. The Enterprise requires a major media distraction from any investigation into the discovery of the body Air Force Secretary John Wheeler the III’ body in a dumpster last week.(2) John Wheeler’s assassination was bungled by someone who allowed the body to be discovered, and the Arizona media drama has been put in play as a distraction, nothing more. The assassinations in Arizona are meaningless other than as a distraction for the bigger cover-up.

“Wheeler was the assistant to the Secretary of the Air Force in the George W. Bush Administration. It was the Secretary of the Air Force who discovered that Richard Cheney had set up an alternative chain of command to the nuclear weapons wing of the AF. In the process, six minutemen missiles armed with nuclear warheads were secretly transported from Minot AFB to Barksdale AFB. The later is the chief staging base for the Middle East war. The alarm system for the weapons was deactivated for the transport, something that not even the base commander could authorize. The orders had to have come from above. Many point to Cheney. Before the warheads could be flown via B-52 to the Iraq/Iran theater, the Secretary of the Air Force ordered the stand-down of all B-52 flights. When he discovered the alternative chain of command to Cheney, he fired all military personnel who were involved. Cheney was said to have been livid. The Secretary ordered an investigation of what the AF press release called an oversight, and 70 enlisted men and 5 officers were removed from the Minot nuclear system. At the same time, people involved began to die mysteriously. Wheeler is only the latest casualty.” (3) That said, within weeks and months of the aborted theft being discovered in 2007, at least 4 of the involved crewmembers died, and itt is reported now that 6-8 may be dead.

1. His previous roles documented at September 11 Commission Report: Final Report of the Investigation Into the Muders of Nick Berg, Eugene Armstrong and Jack Hensley, July 2006, EP Heidner, po 301
2., Former Reagan, Bush official killed, police say
Body of John Wheeler was found as garbage truck emptied contents at landfill, 1/3/2011

Tuesday, August 11, 2009

Is Obama a Two Trick Pony?

In reading recent commentaries suggesting that Obama has failed the liberal cause, there may be an impulse to agree. Obama has been noticeably absent in promoting liberalism in the arenas of foreign policy and ‘national security’ (an anachronism for the Orwellian police state nightmare his predecessor ushered in.) It may well be that ‘all the king’s men’ cannot restore what has been stolen from its citizens. It may be that Obama and his cabinet have seen the same future that was envisioned by Dick Cheney and George Bush, and that Obama has heeded the guidance from Dick Cheney that Obama will need the tools created by the neocons and Vulcans to maintain some semblance of civil order when Armageddon falls upon us. If true, this writer weeps for the end of democracy.

Avoiding impulse however, a more thoughtful reflection on the situation at hand is a bit more merciful. Obama has faced the largest and most complex financial crisis in human history, and whether the citizens like the bailouts or not, he has stabilized the tail that wags the dog. He has moved into the number two priority position the healthcare of 50 to 60 million citizens. He has taken on and course corrected the two deepest sets of deep pockets in the world – the financial sector and the healthcare industry. Not a small task for the first 9 months. If any liberal thought this was going to be done without compromise, shame on them for betraying their beliefs.

That said, it’s time for Obama to step up to broader requirements of the Presidency. The President needs to be bigger than his staff is currently allowing him to be. In those areas where he has brought in new blood, it appears there is favorable progress in the advancement of the liberal interpretation of freedom and justice. Where he has maintained the old guard: Robert Gates, Hillary Clinton, and the Goldman Sachs gang - the policies remain the same. Let us never forget that despite their rhetoric, Gates, Clinton, and Goldman Sachs as far back as the mid 1980s, had their fortunes hooked up with the netherworld financial apparatus that paved the way for their current disdain for the U.S. Constitution: the Iran-Contra scandal and its hooks into Mena, Arkansas and the Savings and Loans scandals, the BCCI bank scandal and the laundering of illegal CIA funds for activities clearly prohibited by U.S. law, the collapse of the Soviet Union in 1992 and Hillary’s attempts to secretly siphon off a few hundred million dollars of funds use to bankroll that covert war. These people have been laughing all the way to the bank while trampling on the Constitution. Gates, Clinton, the Israeli money laundering machine represented by Rahm Emanuel, and the long lineage of Senior partners from Goldman Sachs (starting with OSI agent Sydney Weinberg- you laugh, but check) that arranged all of these operations that lie at the core of the “Ugly American” – these represent the old guard in the Whitehouse today. Nothing is changing until they are gone from the Whitehouse. They and their CFR colleagues are close to establishing a global currency (Goldman Sachs owns half the votes already,) and wasting American lives to protect a free trade philosophy that allows them to steal the treasuries of nation-states around the world, and then safeguard those proceeds from taxation in offshore banking communities. They are the treasonous officials that have worked against the American citizens and the U.S. Constitution, and have inflicted unconscionable pain on the world for the sake of personal wealth.

It is hard to tell if the rapprochement between the new guard and the old guard is one of necessity or convenience. In either event, Obama needs to ‘step up’ and send a message about the change he was elected to provide. If he’s a two trick pony, the liberals need to know that now. If he’s more, he needs to promote his broader agenda now.

Friday, July 10, 2009

U.S. Juggernaut Rolls over Honduras as it Targets Hugo Chavez

The dark side of democracy is launching its most formidable assault of recent years in its war against the poor in Central America. When the poor of Venezuela put Hugo Chavez in charge of the western hemisphere’s largest oil reserves, they redirected billions of dollars away from the coffers of western investors and, bankers to the needs of the poor in Venezuela, Honduras, Bolivia, Cuba, Ecuador, Dominica and Nicaragua.(1) By sharing Venezuela’s wealth with its neighbors using oil subsidies, Hugo Chavez allowed it’s less fortunate neighbors to focus on meaningful reform, thus initiating a series of events leading to the recent coup in Honduras.
Using this oil subsidy from Venezuela to improve social benefits, President Manuel Zelaya leveraged the benefits to increase the minimum wage in Honduras by 60%, where one of the largest industries is the textile/garment industry, employing 130,000. (2) Historically, one could anticipate such windfalls to find their way to numbered accounts in offshore banks, but Zelaya actually transferred the benefits to those in greatest need. The deal with Venezuela provided benefits for the poor not available from the U.S.

"Honduras will receive access loans worth US$30m for farmers and a donation of 100 tractors from Venezuela, both aimed at improving agricultural productivity. Venezuela will also buy bonds worth US$100m for housing programmes and help to encourage technological development and promote oil exploration." (3)

All this was done in the absence of any viable support being offered from the U.S. (4) More importantly though, Zelaya threatened those who control the wealth in Honduras by asking the poor if they wanted to continue down the path of Hugo Chavez in Venezuela, Evo Morales in Bolivia and Rafael Correa in Ecuador, by allowing a true reform oriented President (Zelaya) to stay in power. Some might argue that it was Zelaya’s pursuit of reform that caused him to be ousted. Alternatively, there are a number of reasons to believe that the removal of Zelaya is nothing more than collateral damage in the wake of the juggernaut being launched at Hugo Chavez. If the takeover could not be ‘justified’ on such weak arguments being currently used, other reasons would have been found. Needless to say, the murkiness of the rationale provided enough leverage for Secretary of State Clinton to not need to push for re-instatement of Zelaya. The ouster of President Manuel Zelaya of Honduras in late June is one of several major yellow flags in the recent international news suggesting that there is a coordinated effort by those that control U.S. foreign policy to remove Hugo Chavez as a threat to American style democracy, and enrich themselves on Venezuelan oil reserves. Rest assured, Hugo Chavez is a real threat to ‘U.S, procedural style democracy.’ By building an international alliance around the world’s largest reserves of hydrocarbons, he and is allies are withdrawing from the World Bank and setting up an independent mutual defense organization. Also important is his withdrawal from the World Bank and its control over the International Centre for Settlement of Investment Disputes (ICSID.) The ICSID is the legal institution that determines what international corporations are to be compensated when a country nationalizes those corporations’ holdings.(5) In 2008, ICSID awarded ExxonMobil $12Billion against a claim that Venezuela contended was worth only a tenth as much ($1.2 Billion).(6) That Venezuela was able to arbitrate a successful agreement without ICSID involvement with the other three companies that had its oil claims nationalized should demonstrate that the World Bank represents an extension of U.S. foreign policy, and is punitive in its actions. Most important though, Hugo Chavez represents the threat that substantive democracy can work. He is Fidel Castro with a $30 trillion oil reserve, and cannot be pushed around by large corporations. He even beat ExxonMobil in court when they tried to freeze Venezuela's international trading accounts. He is the Robin Hood of the Third World nations, and Hillary Clinton is the Sheriff of Nottingham.

[One curious connection between the World Bank and the coup in Honduras comes with role of former Honduras Banco Futuro President Jaime Chavez, who on two occasions has hosted religious revivals in Miami, and used General Romeo Vasquez – the leader of the coup – as a guest speaker. (7) Banco Futuro was absorbed by the Bank Latin American Financial Services (Lafise) Group, owned by close friend of the Bush family Roberto Zamora. Zamora and Jaime Chavez have their names sprinkled across a range of World Bank meetings and seminars. Zamora is also a middle man for the U.S. Overseas Private Investment Corp. Through Lafise, he gets loans from OPIC, makes loans to Central American developers, and does well off the interest. Zamora helps developers build five star hotels with OPIC loans (8)– Hugo Chavez and Manuel Zelaya use oil revenues to help farmers, build infrastructure, raise minimum wage. LAFISE is a major holder of Honduran debt. (9)Jaime Chavez also operates as a ‘consultant’ on money-laundering.(10) Another pundit associated with this bank crowd is Octavio Sanchez, former Minister and defender of the takeover. ]

The key issues are:

  • Hugo Chavez’s control of Venezuelan oil wealth has created a financial counterweight to U.S. control of Central and South America, allowing local politicians to make decisions which favor their own constituencies rather than the international investors;
  • This counterweight is in the process of wresting legal control away from World Bank courts where pro-U.S. investors usually have their way with third world nationalizations. Other nations in the Americas and Africa are taking note and following suit;
  • Venezuela has recently completed taking effective control of "all" aspects of its oil industry by taking over controlling interest in services;
  • The U.S. has failed in its efforts to takeover Iraqi oil, and has been pushed out of its behind-the-scenes control of Russian oil. Its national policy advisors are desperate to secure long term ‘control’ over global oil reserves.

The response appears to be a series of quiet initiatives within the U.S. foreign policy to isolate and remove Hugo Chavez. In many respects, the actions mirror activities undertaken to bring down the collapse of the Soviet Union in 1991, and take over its oil industry. Moreover, the reader should not forget the terrible "carpet of bombs’ that the U.S. was able to promise to rain down on the Taliban when it dared to announce departure from its deal with Enron on the Afghan pipeline - a promise made several months before September 11, 2001.
  • Removing Manuel Zelaya begins a political isolation process; Removing Zelaya maintains U.S. control over its military bases in Honduras used so effectively to host the anti-Sandinista (Contras) forces in the rebellion that destabilized Nicaragua. The Central American ALBA coalition can expect more of the same, whereas under Zelaya that would not happen;
  • The purportedly illicit $134 billion in U.S. bonds confiscated in Italy in June of this year were suggested by the Italian officials to be targeting Venezuela. The background to these bonds is explained elsewhere, but essentially it is speculated that the funds support the takeover of Venezuelan oil.(11)
  • U.S. based oil platform contractors are stopping the pumping of oil, reducing flow of oil and revenues to Venezuela;(12)
  • Fitch is lowering the credit rating, increasing the costs to Venezuela of its bonds, and citing the ‘rising risk of fiscal crisis’; (13) With oil prices on the rise, it is hard to envisualize the fiscal crisis Fitch is referring to.
  • There has been inexplicable market speculation occurring around the Venezuelan bonds, above and beyond normal market demand.(14)

The recent announcement by the U.S. Central Intelligence Agency that it intends on hiring a ‘bench’ of financial experts in derivatives should only confirm that it is going to engage in actions to financially destabilize its perceived enemies and pursue its goals.(15)

Anyone anticipating that President Obama - while expressing ‘outrage’ at the coup – will actually do anything about it should review history. The reality appears to be that Obama has arranged a quid pro quo with Wall Street that trades control of foreign policy to Wall Street in exchange for his ability to finance his domestic initiatives. Franklin Roosevelt arranged for financing of the New Deal with Wall Street in the wake of the attempted coup by the Liberty League. In Roosevelt’s case, the bankers were spared embarrassment, prison, and even execution for treason in exchange for their support of the New Deal. Obama has comparable leverage over the investment bankers with the recent Wall Street scandals, but he still has to give them something. Venezuelan oil reserves of 310 billion barrels should give them the incentive they need.(16) It appears as though Hugo Chavez’s head is part of that deal. Zelaya is just collateral damage.

1. "With no petroleum resources, Honduras signed a generous oil subsidy deal with Venezuela, and then last year joined the emergent regional trade bloc, ALBA, the Bolivarian Alternative for the Americas. Inspired by Venezuela it now has Bolivia, Cuba, Nicaragua, Dominica and Ecuador as members. Simultaneously, Zelaya implemented domestic reform policies, significantly increasing the minimum wage of workers and teachers’ salaries, while stepping up spending in health care and education." Crossing the Rubicon in Latin America, Honduran Coup: Target Left? , Roger Burbach, July 3, 2009,

2. Latin American Countries Worlds Apart in Economic Downturn ,Mariana Minaya, Online NewsHour, March 13, 2009,

3. Honduras joins a club promoted by Venezuela and Cuba, The Economist Intelligence Unit ViewsWire, October 20, 2008,

4. "Mr Zelaya has openly recognised that his approach to Venezuela was the result of a lack of support from the US, the multilateral agencies and domestic business for his economic initiatives. In contrast, Venezuela's financial aid is not conditional on economic policy considerations, nor will Mr Chávez object to decisions taken by Mr Zelaya's government" Ibid.,

5. The Uncertain Future of ICSID in Latin America , Ignacio Vincentelli, Duke Law School; University of Miami School of Law; Catholic University Andres Bello, February 20, 2009

6. Exxon Is Demanding Ten Times its Investment, Says Venezuelan Oil Minister , James Suggett,, 18 February 2008,


8. Zamora Lafise Group Built Hotel in Honduras, Agency ACAN-EFE, January 8, 2007.

9. Lafise bank was concentrated in Panama, PrensaNews, Translated from - CITY OF PANAMA (DPA).

10. A Torrent of Dirty Dollars (How the Dutch do offshore banking. Forget about Panama for stashing away unreported money. From Netherlands Antilles, funds under a Dutch company can find their way back to the US tax-free. ), JONATHAN BEATY AND RICHARD HORNIK, June 24, 2001,,9171,150811,00.html

11. $134Billion Suitcase Bomb, E.P. Heidner, June 22, 2009

12, "State oil company Petroleos de Venezuela SA, or PDVSA, has fallen behind on billions of dollars in payments to foreign and domestic oil contractors - prompting some, such as Dallas, Texas-based oil driller Ensco International Corp., to halt their Venezuela operations. Such moves could decrease oil production just when Venezuela needs those revenues most." From Venezuela loses billions despite Chavez's controls, Rachel Jones, AP, June 18, 2009;

13. Venezuela State Oil Company PDVSA Ratings Cut By FitchFrom BB- to B+, Caracas, July 7,2009, Latin American Herald Tribune staff. "CARACAS -- The "rising risk of fiscal crisis in Venezuela" has adverse rating implications for Petroleos de Venezuela, S.A. (PDVSA), according to Fitch Rating Service, which has downgraded the foreign and local currency Issuer Default Ratings (IDRs) and outstanding debt ratings of PDVSA from BB- to B+."

14. "The magnitude of the effect of the interest rate differential adjusted for the rate of depreciation of the black market exchange rate on the black market premium is greater than the value taken by any of the countries in the original Fishelson (1988) study.This suggests that speculative motives may be particularly important in the Venezuelan black market for dollars." page15 from THE BLACK MARKET FOR DOLLARS IN VENEZUELA, SAMUEL MALONE AND ENRIQUE TER HORST, Universidad de los Andes in Bogota, Colombia,Enrique ter Horst is a professor of Finance at the IESA in Caracas, Venezuela.

15. CIA Recruiting Laid-Off Bankers in NYC, June 18, 2009,

16. "PDVSA factory in Carabobo, Venezuela. Venezuela has 77.5 billion barrels (1.232×1010 m3) of conventional oil reserves according to PDVSA figures, the largest in the Western Hemisphere and making up approximately half the total. This puts Venezuela as fifth in the world in proven reserves of conventional oil. By also including an estimated 235 billion barrels (3.74×1010 m3) of tar-like extra heavy crude oil in the Orinoco Belt region, Venezuela claims to hold the largest hydrocarbon reserves in the world. Venezuela also has 150 trillion cubic feet of natural gas reserves." Wikipedia

Thursday, June 25, 2009

$134Billion Suitcase Bomb

For two decades, U.S. security forces worried endlessly about the surfacing of the infamous ‘suitcase nuclear weapons’ built by the Soviet Union. In June 2009, a suitcase carrying a weapon of mass destruction - $134 billion of bearer bonds – was confiscated as it was being smuggled into Switzerland. Without any additional reported facts – which seems to be where this story will end-up - the source and destination of the $134 billion in bearer bonds will probably remain a mystery. There are however, adequate clues in the initial reports to provide insight for speculation:

  1. An extremely powerful organization is making a major commitment to a financial strategy with global implications. Given the value of the bonds in question, this strategy is certainly being backed with a nod and wink by a central bank or treasury somewhere. The bonds are designated as intergovernmental, and somewhere in the process, a U.S. central bank or Treasury official would have been required to support the scam, if it indeed it was a scam. Any one organizing a scam of this magnitude would have considered and planned for verification of the bonds – meaning someone in the U.S. Treasury is involved in this. Otherwise, one has to question why anyone would create such perfect and expensive forgeries with such a fatal flaw in execution of the plan.
  2. The Italian police were "trailing" the holders of the bonds, suggesting a long term investigation was behind the arrests. Discovering these bonds was not an accident, and there is a lot more information to be had but is not being released.
  3. The Italian police or press referenced a ‘bond scam’ being run by the ‘Mafia’ with the Venezuelan Central bank, accusations for which the bank has denied any involvement. The Venezuelan Central bank would not be the bank validating the legitimacy of the bonds, but as explained below, would be the initial target.
  4. The two carriers with Japanese passports displayed the behavior of typical low level, dispensable resources who were allowed to be released from incarceration, and subsequently disappeared. (Odd, since a $134 billion of bonds illegally deployed can do more damage than a small nuclear weapon, and even a phony nuclear device will keep you in prison for a long time.) Whoever is behind the trafficking has a lot of ‘influence’ with multiple government agencies
  5. Significant press coverage has been totally stifled, considering the potential risk for global devastation this ‘suitcase bomb’ had. The five corporations that control most of the western media are all tightly linked in a network that supports U.S. covert operations. (1)The Mafia does not have that level of influence. – the U.S. and Israeli governments do.

Can the bonds be real?

There is a lot of speculation on the internet that these bonds are not forgeries, given that neither the Italians nor German officials thought they were forgeries, but there are those nagging facts that say it is impossible for them to be real, unless they were issued covertly. The U.S. Treasury has denied the bonds are real. There are a lot of bloggers that want to discount the possibility that these bonds are real, simply on the basis of "there is no official record of these existing." So what pieces of data do we have that suggest that the U.S. government has covertly issued bonds in that order of magnitude in the past? At this point of course, it all depends on who you chose to believe, the officials of the U.S. government, or independent historians and researchers.

  1. Start with the impeccably documented research of Sterling and Peggy Seagrave, Gold Warriors, who have documented how the Imperial Treasury of Japan was confiscated by U.S. bankers and President Truman in the aftermath of World War II, and subsequently the balance was taken from Ferdinand Marcos in 1985 by Reagan, Bush and Kissinger. Estimates vary, but at one point, we have estimates that can put the value of that treasury easily over $200 billion. Under international law, confiscation was illegal, so there are not a lot of U.S. officials stepping up to admit this.(2)
  2. Then move the story line to Mrs. V.K. Durham, wife of widely reported CIA covert fund manager Russell Hermann, who claims in sworn testimony, and provides actual documents of the transfers, that Greenspan and Bush with the assistance of Goldman Sachs, generated around $240 billion in covert bonds in 1991. Documents show the bonds were sent to Israel, where they were converted to yen and deutschemarks. (3)Following on Mrs. Durham’s claims, the reader must research the status of the deutschemark in 1991. From 1990 to 1991, the Bundesbank increased it’s currency printing costs from DM190 million to DM331 million while increasing the interest rates to reduce money supply. (4) The German monetary policy failed inexplicably in this timeframe, unless one considers $120 billion in deutschemarks created covertly by Greenspan, Bush, Rubin and Friedman.
  3. Move the story line to Andrei Kozlov, First Deputy Head of Russia’s Central Bank, who was heading an investigation into the loss and reported the theft at 400 billion rubles from the Central Bank in 1991. (Not to be confused with a similar scam run out of Chechnya in 1992 on a much smaller order of magnitude.) These rubles were stolen by someone putting hard currency securities in remote Chechen banks as collateral for Russian loans and then making the collateral notes disappear from the remote banks at the same time the funds were being withdrawn. At official exchange rates at the time, 400 billion rubles was about $240 billion.(5)
  4. Turn then to the highly respected consultant to the CIA, Claire Sterling who unabashedly points out that the collapse of Russia in 1991 was directly managed by intelligence agencies.
    "The fact that scarcely anyone outside Russia has heard of the Great Ruble Scam may be explained partly by its seemingly unbelievable details, but partly, too, by Western reluctance to touch exquisitely sensitive political nerves. Western governments rejoicing in the collapse of the evil empire wanted to assume, and to all appearances did assume, that all the evils in an emerging democracy emanated from politicians identified with the fallen communist state. Not one was prepared to acknowledge indelicate evidence to the contrary. The ability of three or four characters to mount such a planet wide operation, their extraordinary impact on what was still a world superpower, and their singular immunity from beginning to end suggest the guiding hand of not just one, but several intelligence agencies." (6)
  5. Look at the widely unreported claims that in the 1990s, the US covertly introduced hundreds of tonnes of gold into the market on at least four occasions, representing somewhere between $120-140 billion in bonds.(7) The two lawsuits that could have opened this story were shut down prematurely – the FBI records related to the Reginald Howe lawsuit were destroyed on 9/11, and a similar suit by Donald W. Doyle of Blanchard in which Barrick Gold was a primary defendant was settled out-of-court in 2006 and sealed under agreement.
  6. General Earl Cock’s ‘deathbed’ deposition in April 2000 describes Citibank’s and John Reed’s central involvement in Project Hammer in the last quarter of 1991 as being funded with $223 billion dollars, of mostly CIA moneys. Cocke also references the use of baby bonds to collaterize these funds, which are 10 year bonds. Cocke describes the source of these funds as "accounts, participants or players" with the accounts converting to bank ownership upon the death of the controlling party, and then to the government. This matches exactly what Sterling and Peggy Seagrave claim happens to the gold accounts
    opened by agents of the US.(8)

These historical facts have been summarized here to illustrate that the U.S. Government does indeed have and move massive, massive amounts of currency around covertly because the objectives of these financial manipulations run counter to U.S. law, and the origins of these funds are illegal. No nation will admit criminality until the statute of limitations runs out. The next question requiring an answer then is: Why would covert pro-U.S. forces be running these bonds? While the hypothesis of the bonds being used to claim TARP funds is interesting, the strategy of substituting one form of worthless U.S. debt for another does not seem plausible. On the other hand, there is a rich history of that links the plot to Venezuela, as the original press reports did.

Bonds and Venezuelan Oil

The international movement of major blocks of capital has at least twice before been associated with the takeover of large oil interests. The great success of the 1991 covert bond issuance was the transfer of ownership of Russian oil and gas interests to western investors cloaked behind holding companies and offshore banks.(9) In 1998, the collapse of the Russian market (which drove the LTCM financial crisis) was again engineered in an effort to force the Russians into a debt for equity swap for the Baltic Oil pipeline. The 1998 gambit failed, and the Russians simply defaulted on their debt rather than turn over control of the pipeline, and shortly thereafter, U.S.-Russian relations began an ongoing deterioration. One can look at additional covert financial programs where governments were unhinged by engineered financial crises: Chile in the 1980s and Mexico in the 1990s - where previously ‘nationalized companies’ were returned to private investors in debt for equity swaps.(10) The beneficiaries of this were privileged western investors who took over restructured operations that were rebuilt with taxpayer dollars from Russia, Chile and Mexico – and did so for pennies on the dollars. This history is relevant because a similar scenario is unfolding in Venezuela today, where an array of unknown western based investors are converting U.S. debt into Venezuelan debt in an illegal market with the expectation that a crushing debt load will drive Hugo Chavez out of office, and force Venezuela to swap equity in its primary valuable asset – state-oil company Petroleos de Venezuela SA, or PdVSA - to satisfy its growing debt.

Key to understanding this strategy is that the exchange market where this is occurring is ambiguously legal for some purposes, and more often than not illegal for most purposes. Currency exchange for Venezuelan ‘bolivars’ is tightly regulated by the Chavez government to prevent capital flight and tax avoidance, and for Venezuelans to get dollars through the official channels for purposes that do not align with Chavez’s vision of social investment is very expensive. As a result, dollars are in high demand, and are procured through an officially sanctioned back-door. The Venezuelan government has created a safety valve process (permuta) in which Venezuelan denominated bonds can be swapped for dollar denominated bonds at an uncontrolled rate in a market, and that exchange consist of hundreds of small ‘cambios’ that collect demand and funnel them through large money aggregators. A lot of this demand – but not all -is illegal under Venezuelan law. Hence, the bonds brought to the exchange for Venezuelan debt are being laundered under less than stringent governance, making bonds like those confiscated in Italy more likely to be accepted in these swaps. Chavez is gambling that the US dollar will be devalued, and western investors are betting Chavez’s hold on political power will be disrupted before the dollars collapses.

The largest permuta laundry appears to have been headed up by a former regulatory officer of the U.S. Federal Reserve (Atlanta), in charge of several Latin American countries, through Florida-based Rosemont P. Corporation, also known as Rosemont Money Services. He has recently been indicted for money-laundering, but the ‘parallel market’ (the newest euphemism for ‘black market’) continues, albeit at a more constrained pace.
Rosemont was indicted for accepting $900,000 of drug money to move through the permuta process, but there are preliminary indicators that the DEA indictment will not stick, and the indictment was meant more to disable a major player in the exchange mechanism than to cripple any particular drug cartel. Disrupting the exchange mechanism impedes the flow of capital to the Chavez government. This impediment creates inabilities for the Chavez regime to compensate foreign contractors, forcing them to turn off support for the state oil industry, which in turn reduces oil production and thus state revenues. Seven of nine off-shore oil rigs have been shut down in this manner, and the remaining two will probably be shut down in the near future. As the economy is destabilized with less oil revenue, there is increased likelihood of another coup attempt. Investors have seen this scenario before, in Chile in the 1980s and Mexico in the 1990s, where government takeovers by the upper classes ousted democracies inclined to support the interests of broader constituencies, by causing mass unrest through economic destabilization. In the wake of those upper class takeovers, the nationalized assets were exchanged for nation’s foreign debt, usually at prices that significantly enriched foreign investors at indigenous taxpayer expense.

The appearance of massively large blocks of U.S. bonds in the permuta - whether counterfeit or not – suggests a single player is attempting to dominate this market.
"No one truly understands what the source of the dollars is in these transactions. Most of the money is coming from offshore accounts," said Brian Stoeckert, who runs an anti-money laundering consulting firm." (11)
By shutting down the big players in the permuta exchange, and bringing in new, controlled exchange players, covert operatives can start aggregating Venezuelan debt with virtually no risk by using bonds whose authenticity can be denied if necessary, or argued as real if necessary. International debt settlement happens behind locked doors, and no one ever gets to find out what the settlement terms are.(12) Most of the funds and individuals who were behind the 1991 takeover of Russian oil are still around, and represent the most likely candidates for running this scenario again.(13) This scenario is classic U.S. covert policy: disrupt the economy and force the democratic government into debt; drive the debt to unmanageable proportions, and then cut off funding and call in the loans. The ensuing economic disruptions result in a takeover and force the government into bankruptcy proceedings. Western investors take over the key national assets for pennies on the dollar. This strategy is tried, tested and trusted.

Who then, might one ask, replaces the Rosemont P Corporation. Fortunately, J Aron, the subsidiary of Goldman Sachs that deals with its foreign exchange business is in an enviable position. Because of its oil and coffee trading business, J Aron has numerous contacts in Venezuela. Because of Rule 35 of the Commodity Futures Trading Act, these bond swap trades fall into the category of unregulated business.(14) Goldman Sachs clearly has the connections to the U.S. Treasury. It was Rubin and Friedman of Goldman Sachs in 1991 who facilitated the Bush/Greenspan issuance of covert bonds.(15) While plausible, this is –of course –only speculation.


  1. See Who Controls the Media? Professor John Lye, October 8, 2004, also National Organization of Women, also see Chapter 13, THE SEPTEMBER 11 COMMISSION REPORT Final Report of the Investigation Into the Murders of Nicholas Berg, Eugene Armstrong and Jack Hensley, EP Heidner, 2008
  2. see Gold Warriors: America’s Secret Recovery of Yamashita’s Gold, Sterling and Peggy Seagrave, Verso, 2005, p. 358. Most cursory reviews of this amount forget that 280,000 tonnes is less than 140 years of annual production. When one considers that treasuries and personal fortunes of South East Asia and China were plundered over 50 years by the Japanese army, this number should not be inconceivable.
  3. V.K. Durham presents substantial photographic evidence of these crimes on her website, and it can also be located at Tom Flocco’s website as well. see; also conduct a search engine query on "VK Durham"
  4. David Marsh, The Bundesbank: The Bank the Rules Europe, 1992, Mandarin Paperbacks, pp 24 and 85.
  5. "The West is not very highly concerned with the threat of cyber terrorism," Regnum News Agency, December 15, 2006,
  6. Thieves World, Claire Sterling, Simon and Schuster, 1994, p.202
  7. see footnote 25 in Collateral Damage (Part 2): The Subprime Crisis and the Terrorist Attacks on September 11, 2001, E.P. Heidner, 2008.
  8. Brigadier General Erle Cocke’s deposition in US District Court, Southern District of New York, April 13, 2000, April 13, 2000, (as provided in photostat version in Guyatt’s Project Hammer Files)
  9. Collateral Damage: U.S. Covert Operations and the Terrorist Attacks on September 11, 2001, E.P Heidner, 2008
  10. see The Blood Bankers, James S Henry, 2003, Chapter 7; Banking on Dictatorship
  11. US Money Laundering Case Halts Venezuela Forex Trading , Darcy Crowe, Dow Jones Newswires, MARCH 27, 2009;
  12. The writer challenges the reader to try to find a summary of how the international debt crisis was resolved in 1990.
  13. The names of the investors are found in Collateral Damage: U.S. Covert Operations and the Terrorist Attacks on September 11, 2001
  15. Collateral Damage (Part 2): The Subprime Crisis and the Terrorist Attacks on September 11, 2001, E.P. Heidner, 2008.

Friday, June 5, 2009

End-Game for Financial Crisis

In reviewing bailout history, the fairly obvious conclusion should be that Obama will be forced into a debt for equity swap by the major global holders of US Treasuries, as was done in Chile in the 1980s and Mexico in the 1990s.(1) If history is repeated, one can safely assume the same investors who hid their funds offshore to avoid taxation will now buy out those assets whose liabilities have been absorbed by the taxpayer, and also get them for dimes on the dollar. One can also safely bet that Goldman-Sachs will manage the transactions for a hefty profit.

Just in case any one was asking....

1.see The Blood Bankers, James S. Henry, 2003. Chapet 7: Banking on Dictatorship

Wednesday, February 18, 2009

Does Anyone Care about Greenspan’s Opinion?

Alan Greenspan is at it again. After having pumped up the American economy with the theft of the Philippine (Ferdinand Marcos) treasury, and then having encouraged the financial markets into believing the risk of derivatives and the subprime market were being managed to the point of eliminating any risk, he is delivering his final coup d' grace. For anyone still listening to him, he urges the Obama administration to kneel at the altar of ‘senior debt’ and sacrifice generations of children to economic slavery.

"The former Fed chairman said temporary government ownership would "allow the government to transfer toxic assets to a bad bank without the problem of how to price them." But he cautioned that holders of senior debt – bonds that would be paid off before other claims – might have to be protected even in the event of nationalisation. "You would have to be very careful about imposing any loss on senior creditors of any bank taken under government control because it could impact the senior debt of all other banks," he said. "This is a credit crisis and it is essential to preserve an anchor for the financing of the system. That anchor is the senior debt."(1)

In other words, Alan Greenspan said “ we should be careful not to expose the names of those responsible for the bad debt by transferring these toxic assets with any semblance of transparency. ” Moreover, “taxpayers should provide Treasury securities to the ‘big’ investors who collaborated with these big banks so they can be held harmless.” Possibly, he could be paraphrased to be saying “it’s acceptable to fore go capitalist principle as long as we continue to hold sacred the principle of senior debt” without talking about who owns that senior debt.

The truth is, Greenspan bought prosperity and stumbled through several financial crises using the leverage of the stolen Marcos treasury, never contemplating the consequence of using illegal capital. No one can unwind this current debt crisis because at its bottom is a source of illegal financing that no President can admit to. Not being able to unwind it, the newest plan is to launder it by giving all the ‘big’ bankers squeaky-clean T-bills under a bank nationalization program.

The “anchor” for financing the system is trust, not the principle of senior debt. There are over 7,000 banks in the U.S., and about 10 that are bankrupt. The public hears about the 400 recipients of TARP, as if the system is collapsing, but most of those 400 admit they don’t need it. 95% of the money goes to the top 10. If trust is the anchor, let’s trust the 6,990 trustworthy banks who most of Americans deal with. If Obama wants to nationalize the top 10 in an effort to put a suffering, dying man out of his misery let’s not enrich the people who created that misery.

1. Greenspan backs bank nationalisation, Krishna Guha and Edward Luce, Financial Times, February 18, 2009.

Saturday, February 7, 2009

Leon Panetta - a Retracted Endorsement

During Leon's recent confirmation hearing, he went on record to state that the new administration's policy would differ from those of Bush & Cheney, and he would order an end to 'harsh' interrogation techniques, and allow the Red Cross access to CIA prisoners.(1) In my earlier commentary, I defended his lack of intelligence experience because I really believed that bringing in an outsider would foster change in one of the most corrupt institutions in the U.S: the CIA. Since his recent arrival Leon Panetta has not only publicly acknowledged his stance of "not" prosecuting war criminals, but has gone on to state that at times, the U.S. may need to resort to those tactics again "if we had a ticking bomb situation".
"I think they made some wrong decisions, I think they made mistakes," he said. "I think sometimes they believe the ends justifies the means, and that's where people sometimes go wrong." Panetta said he thinks that in the fear of another Sept. 11-style attack, Bush administration officials thought, "We can't be bothered with legalisms." Panetta said, however, that he believes the greatest weapon the United States has against terrorists is its moral authority and commitment to the rule of law." (2)
The CIA cannot be above the law, and yet his testimony suggests he believes it is. Torturers (past or future) must be brought to trial! A jury - not the President, not a Congressional panel - must decide their fate. A jury may find them innocent, but that is the role of the dice any one who breaks the law must face, regardless of their intentions. The argument "they were just following orders" has been pretty well stripped of any validity. The concept that the CIA director can go to the president for "authorization" to torture people is something he says the prior administration was wrong to do, but is a privilege he reserves for himself. Panetta now degrades the essence of "moral authority" he wants to reference.
About this time Obama is probably feeling a lot like the Biblical character Lot, who searched the city of Sodom for 10 righteous people. Mr President: take a clue from Lot - if you want to find good people - you have to look for people who haven't spent the last 20 years in New York and Washington.
1. Panetta is Open to Extreme Methods in Certain CIA Cases, Mark Mazetti, New York Times, February 6, 2009, p.A16.
2. Panetta Says CIA Interrogators Won't Face Prosecution, AP, February 06, 2009