Secret Cabal Controlling High-Risk Investments
By Jeffrey Smith
In an event that has caused wide notice and comment, The New York Times has published a major story on the largely secret group of bankers who direct the powerful—and, many say, dangerous—derivatives market.
“Derivatives” refers to complex financial instruments whose value is based on underlying assets or pools of assets. Over the years, proponents such as former Federal Reserve Chairman Alan Greenspan have argued that derivatives act as insurance against market volatility. However, critics say they are amount to gambling done outside the realm of regulation. Those with knowledge of the market say that despite the often published figure of $600 to $700 trillion of liability, the actual value of the derivatives market is well over $1 quadrillion, or $1,000 trillion.
The Times article, titled “A Secretive Banking Elite Rules Trade in Derivatives,” states what patriots and leading patriotic publications have been saying for decades: that a hidden group of banking and financial figures controls key markets outside of the public view, while engaging in activities which have strongly negative effects on the nation at large.
The article details the existence of a NewYork-based control group, which meets monthly to monitor the clearinghouses that are allowed to trade in derivatives. At least one clearinghouse—like many of the leading financial institutions—is based offshore, outside of the United States.
Critics, many of whom are leading patriots, say that derivatives have severely distorted the financial picture, worsening the industrial decline of the nation. They also contend derivatives pose a severe threat, due to the debt liability they represent.
Large parts of the Times article focused on the many efforts by the control group to limit any competitors’ entry into the market as well as public knowledge of what has been going on, including the extreme profits and the liability exposure the derivative markets represent for the U.S. economy and the world financial markets.
When the article first became available, just after printing on Dec. 11, it attracted major attention and with its publication on the front page of Times’ Sunday edition, the article caused a shockwave of reaction and controversy on the web. Financial and patriot websites quickly filled with comments and analysis of the article’s key elements.
Many of the comments and controversy also centered on what some felt the Times had failed to cover in the article: How key Rothschild interests and the British, especially the activities of the London banks, are not mentioned in the article.
Since the development of the derivative markets, many financial and patriotic observers have noted that 60 percent to 80 percent of derivatives are actually traded through the old City of London banks, which place the activity beyond the reach of U.S. law.
For the last four decades a constellation of leading patriots, including Mary Cain, Mary Davidson, Don Bell and especially Richard Kelly Hoskins, have warned Americans about the mounting bad public policies and lax law enforcement in financial markets, with limited effect. Many now feel the derivatives are the latest stage in a long political and financial devolution made possible by the general lack of adherence to the teachings of the patriotic movement. The derivatives now pose by far the most serious danger to the U.S. economy and world markets in history, according to these experts.
Seasoned observers also note that the London banks have attracted billions of investor dollars from the United Sates and elsewhere because of their powerful and secret practices, which greatly limit public and government knowledge of what is occurring.
Moreover, many of those close to the market say the derivative trading was designed to be outside of standard public view, leading to trading in derivatives often described as being done in “black pools” rather than in open, observable trading.
Jeffrey Smith is a correspondent for AFP’s East Coast Bureau and lives in NewYork City.
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(Issue # 52, December 27, 2010)