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Old CIA hands like Bush 41 and Robert Gates had a problem in the early 1980s.  Congress had outlawed CIA funded deathsquads, assassinations, false flag operations and other methods beloved of black ops specialists.  

What to do?  Go to your closest ally, Britain, whose like-minded leader, Thatcher, will help you set up an arrangement for plausible deniability.  Go to your favorite like-minded Saudi intelligence thug Prince Bandar to act as procurement agent and bagman for the terrorist cells, assassinations, deathsquads, false flag operations and coups you want engineered.

Wrap the project up as the Al-Yamamah contract to sell jet fighters from near-bankrupt UK defense company BAe (formerly British Aerospace) to Saudi Arabia with kickbacks to accounts of Bandar for spending on black ops worldwide.  Then give BAe lots of Pentagon contracts to fund the process.

Voila!  You can start funding Saddam, the Taliban, Al Qaeda, Osama Bin Laden, the Nicaraguan Contras and other pet projects with no fingerprints!

"Negotiations without arms are like music books without instruments." - Frederick the Great

The above is the favorite quotation of Robert Gates, now defense secretary and in the 1980s the deputy director of the CIA under William Casey.  

The Al-Yamamah contract for the sale of jet fighters from BAe (formerly British Aerospace) to Saudi Arabia caused controversy from the start because it never made any sense.  If you are going to spend tens of billions over a long period on a critical national defense requirement like fighter jets, you don't buy them from a near bankrupt has-been player like BAe.  Until 1982 all Saudi air force planes had come from US defense contractors.  

The Al-Yamamah agreement has always been complicated and its provisions secret between the governments of Britain and Saudi Arabia.  The terms were negotiated by Charles Powell (pronounced pole), then private secretary to Margaret Thatcher and a long time neo-con affiliate, and Prince Bandar, son of the Saudi defense minister and a long time crony of the Bushes.  What is known is that it involved the provision of off-the-books oil from Saudi reserves to British oil companies in a barter for the BAe jet fighters and other aircraft.  In addition, secret agreements provided for large payments to intermediaries who included Prince Bandar, Wafic Said (a Saudi arms dealer), Charles Powell, Mark Thatcher and others.

Over the 20 years since the contract was inked, billions have been paid to the intermediaries, with most of it apparently going to Prince Bandar.  

The chart below provides an outline of the deal structure, including the side agreements.

Saudi procurement from Britain, and particularly BAe, has grown hugely in the years that followed.  In addition, BAe has prospered on its American contacts to gain market share with the Pentagon, rising to become the 6th largest contractor.

In the meanwhile, Prince Bandar, Wafic Said and other Saudis have been tied to some of the most notorious events of the past quarter century, which are all pet projects of the US intelligence operatives.  The list that follows isn't intended to be conclusive, but rather to indicate that a pattern can be discerned.  I expect that a bit of digging into the Mark Thatcher-funded coup attempt in Equatorial Guinea in 2004 would throw up some links to Saudi money too.  Perhaps there are more, but this will do for a start.

  • 1979 financing of the Mujahedeen in Afghanistan

At the instigation of Carter’s National Security Adviser Zbigniew Brzezinski, a US-Pakistani-Saudi network is organized to aid the insurgent mujahadeen, with the Saudis providing a large part of the funds, the US procuring the weapons and providing overall coordination through the CIA, and Pakistani intelligence (the ISI) handling training and indoctrination. Brzezinski blocks a plan to assist moderate resistance groups, and instead channels aid to Muslim extremist factions who he hopes will be effective at undermining Soviet control of Central Asia, saying "It is time to finally sow shit in (the Soviets’) backyard." From 1981, Reagan’s CIA Director William Casey pursues this scheme with even greater enthusiasm. The Pakistani ISI - rather than the CIA - handles nearly all direct contact with the Afghan resistance, and the ISI makes most of the decisions on how to prosecute the war and on which Afghan resistance groups to assist. The ISI funnels the largest share of aid to the ambitious, ruthless Islamic extremist Gulbuddin Hekmatyar, who is more interested in fighting rival mujahadeen factions than taking on the Russians. Hekmatyar will later actively support Osama bin Laden. Moderate-secular groups are marginalized, and some of their leaders are killed by the ISI and its Islamist allies. Richard Murphy, Reagan’s Assistant Secretary of State for the Middle East, later admits "We did spawn a monster in Afghanistan." In the mid-1990’s, a State Department report concludes that this war was the birthplace of the ‘transnational terrorist.’      [hiro1 / hiro4 / berg / lat.Sep.21.2001]

  • 1983 $10 million to the Vatican Bank to support election of the Christian Democrat ticket

[Bandar] is quoted in a recent biography saying that he personally flew $10m in a suitcase to Rome and gave it to a priest at the Vatican Bank, in order to covertly fund the Christian Democrats against the Communists in the 1983 Italian elections.

He is quoted saying he did this at the request of the Pope, Lady Thatcher and then head of the CIA, Bill Casey. They wanted him to shift the cash so no western fingerprints would be on it.

  • 1985-1990 sales of weapons and components to Saddam to use against Iran

Iraq's main financial backers were the oil-rich Persian Gulf states, most notably Saudi Arabia ($30.9 billion), Kuwait ($8.2 billion) and the United Arab Emirates ($8 billion).

The Iraq-gate scandal revealed that an Atlanta branch of Italy's largest bank, Banca Nazionale del Lavoro, relying partially on U.S. taxpayer-guaranteed loans, funneled $5 billion to Iraq from 1985 to 1989. In August 1989, when FBI agents finally raided the Atlanta branch of BNL, the branch manager, Christopher Drogoul, was charged with making unauthorized, clandestine, and illegal loans to Iraq—some of which, according to his indictment, were used to purchase arms and weapons technology.

  • 1984-1985 at least $32 million in funding and weapons for the Nicaraguan Contras

What is known from the public record, however, is that on June 20, 1984, Weinberger attended a State Department meeting about the contra operation. His scribbled notes cited the need to "plan for other sources for $." But secrecy would be vital, the defense secretary understood. "Keep US fingerprints off," he wrote. . . .

In 1985, when the Saudis doubled their annual contra gift from $12 million to $25 million, Vessey quickly passed on word to Weinberger again. This time, the record is clear that the Defense Secretary understood that the contribution to buy weapons was part of the larger contra-aid strategy.

"Jack Vessey in office alone," Weinberger wrote on March 13, 1985. "Bandar is giving $25 million to Contras -- so all we need is non-lethal aid."

  • 1984-present funding and arming of Al Qaeda via Pakistan

Osama bin Laden is becoming an important figure in the Afghan jihad. Working closely with the Saudi government, he often travels to Peshawar, where he disburses funds, covers living expenses for foreign Muslim volunteers (jihadis), and establishes a guest house for them. By 1985, he brings in heavy construction equipment from his family's business and begins building training camps, roads, and airfields over the border inside Afghanistan. But he is not yet an imposing presence: "I thought he couldn't lead eight ducks across the street," recalled Saudi Prince Bandar, who met him about this time.     [berg / nykr.Nov.12.2001 / mcder]

  • 2000-2001 funding of the 9/ll hijackers by Bandar's wife, Princess Haifa

   Doubtless one of the connections the senators referred to was the Princess Haifa, the wife of Prince Bandar, Saudi ambassador to the United States for the last twenty years, the longest serving ambassador in Washington. Princess Haifa had been making monthly transfers, $130,000 in all, from her Washington bank account to a needy woman who relayed some of the checks to her husband and another man who assisted and funded the two hijackers who were based in San Diego. (14)

   "The money moved into the family’s bank account beginning in early 2000, just a few months after hijackers Khalid Almidhar and Nawaf Alhazmi arrived in Los Angeles from an Al Qaeda planning summit in Kuala Lumpur, Malaysia, according to the sources. Within days of the terrorists’ arrival in the United States, Al Bayoumi befriended the two men who would eventually hijack American Flight 77, throwing them a welcoming party in San Diego and guaranteeing their lease on an apartment next door to his own. Al Bayoumi also paid $1,500 to cover the first two months of rent for Al Midhar and Alhazmi, although officials said it is possible that the hijackers later repaid the money." (15)

   Prince Bandar and Princess Haifa professed their ignorance of the whole affair.

   Mark Stein speculates about the recent visit Prince Bandar and Princess Haifa paid to George and Laura at the Crawford ranch, where they were received with the accolades usually reserved for heads of state. Bush must have known about the money transfers and Bandar must have known Bush knew, but apparently a good time was had by all.

  • 2004 rigging of pre-election gasoline prices to favor GOP

'Bandar wanted Bush to know that the Saudis hoped to fine-tune oil prices to prime the economy in 2004. What was key, Bandar understood, were the economic conditions before a presidential election.'

  • 2006 funding of the Palestinian Sunni militias in Lebanon

On Jan. 10, the British Daily Telegraph revealed that the CIA "has been authorized to take covert action against Hezbollah as part of a secret plan by George Bush to help the Lebanese government." Bush’s "finding" directs the "CIA and other U.S. intelligence agencies to fund anti-Hezbollah groups in Lebanon and pay for activists who support the Siniora government."

The plot was reportedly cooked up in Washington before Christmas after talks between Bush’s deputy national security adviser Elliot Abrams and Saudi Arabian prince Bandar Ibn Sultan. That was after 2 million people—nearly half of Lebanon’s population—rallied in Beirut Dec. 10 to demand a greater voice for opposition parties in Lebanon’s government.

Abrams was Reagan’s assistant secretary of state for inter-American affairs in the 1980s, when U.S.-trained death squads slaughtered tens of thousands in El Salvador, Honduras and Guatemala. Abrams also arranged Saudi funding for terrorist operations against Nicaragua after the Boland Amendment cut off direct U.S. aid to the contras.
‘Democracy’ or secret government?

Details of the Lebanon plan’s "existence" are "known only to a small circle of White House officials, intelligence officials and members of Congress," the Telegraph reported. So much for democracy in the United States. "The secrecy of the finding means that U.S. involvement in the activities is officially deniable."

The interesting thing about setting up terrorism financing through Saudi friends is that it makes it even easier to direct false flag operations.  Imagine how much better if you deploy a Saudi jihadi to encourage a plot in Lebanon, Iraq, Afghanistan or Gaza!  

Bottom line, I'm suggesting that Al-Yamamah was less about selling jet aircraft and more about providing an off-the-books means of funding global instability and violence with plausible deniability.  Robert Gates, Stephen Hadley, John Negroponte and Condi Rice get to stand in front of Congress and swear that US taxpayer dollars are not being spent on black operations to assassinate, promote deathsquads, instigate coups, finance terrorists and other nasty things that are illegal under US law.  

If the BAe Al-Yamamah contracts act like a moneylaundering facility, those activities are financed and arranged by our friends in Saudi Arabia instead.  BAe gets reimbursed through all the other business being routed its way by the Pentagon.  No fingerprints.

Tony Blair had no choice but to kill the investigation of the BAe payments to Bandar under this interpretation of events.  If I'm right, the British government has been complicit in moneylaundering Pentagon funds through BAe to Saudi intelligence for illegal operations.  That wouldn't look good.

Originally posted to LondonYank on Wed Jun 13, 2007 at 09:36 AM PDT.

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Comment Preferences

  •  by jove (14+ / 0-)

    I think you've got it.

    May be one of the most important things I've ever seen here.

    Don't forget Bandar was given the top-secret war plans for the invasion of Iraq, even before Colin Powell.   This according to Bob Woodward.  

    That's an act of treason right there, on the part of "our" guys.

    But hey, It's Okay If You're a Neocon, right?

    •  I wondered if I should post this (21+ / 0-)

      Thanks for giving me confidence that it isn't just CT but has some substance to it.  I've also passed the lead on to journalists developing the BAe story here in the UK.

      "Victory attained by violence is tantamount to a defeat, for it is momentary." - Mahatma Gandhi

      by LondonYank on Wed Jun 13, 2007 at 09:52:11 AM PDT

      [ Parent ]

      •  This is a very compelling presentation. (7+ / 0-)

        It makes tremendous sense.  I've suspected that there was some sort of network of schemes, but what you've laid out is an elegant corrupting of multiple governments in the service of one grand goal.

        I'm not surprised to find Mark Thatcher's name mentioned in this scandal.  Didn't he go on trial a few years ago for his illegal mercenary activities in Africa?  I seem to remember he was convicted, but I'm really hazy on the details.

        Great work, LY.  Recced and tipped.

        "Fighting Fascism is Always Cool." -- Amsterdam Weekly, volume three, issue 18

        by Noor B on Wed Jun 13, 2007 at 10:10:28 AM PDT

        [ Parent ]

      •  Excellent Work, LondonYank!!! (6+ / 0-)

        This is a keeper!!!  And now BAE is buying ArmorWorks, which has done such a fine job protecting our folks in the field--Heckuva Job, Bushie!!!

      •  It makes more sense (6+ / 0-)

        than anything I've ever come across regarding this whole nightmare.  

        One of those "of course!" moments.  

        It's not like Bandar needed more money for himself.  

        I wish this would get more attention.  You should post it elsewhere.  People may be afraid to touch it on this site.

      •  Very well done (2+ / 0-)
        Recommended by:
        LondonYank, chigh

        And so much better than The Economist article about this , in the current issue...I just read it last night.
           I was going to search here to see what might have been written about it and here it it, only so much more complete.
        For reference:
        BAE and Saudi Arabia-The plot thickens,June 7th edition

        If the allegations turn out to be true, attention in Britain will turn to who knew what and when. Payments made after 1998, when Britain ratified an OECD convention against bribing foreign officials, would be embarrassing for Mr Blair's government. Even worse would be handouts after 2001, when a law enshrining the convention was passed. Early this year the OECD declared itself disappointed with the feebleness of Britain's law and the lack of political will to prosecute offenders.

        Sources say that such unorthodox arrangements were terminated in more recent contracts. But for Mr Blair, the BBC and Guardian stories raise the possibility that his final weeks in office will be overshadowed by not one but two investigations into corruption, which is not how he envisaged his exit from the world stage.

        Saudi Arabia-Will a row over a British arms deal affect Saudi politics? June 11th, 07

        although relations have come under strain of late: his successor as ambassador to Washington, Prince Turki al-Faisal, resigned his post late last year amid reports that he had objected to Prince Bandar holding private meetings with senior US officials without notifying the embassy; Prince Bandar's security council role has also created rivalry with Prince Saud al-Faisal, the foreign minister, over ultimate control of Saudi Arabia's foreign policy.

        Business as usual
        The UK prime minister, Tony Blair, has sought to keep a lid on the Al-Yamamah affair. An investigation by the Serious Fraud Office (SFO) was aborted at the end of last year, a decision that Mr Blair said was justified by the need to avoid an unnecessary breach with Saudi Arabia, which could have had a damaging impact on national security. The UK government maintains that Saudi Arabia is providing invaluable assistance in combating Islamist terrorism. Following the latest press revelations—which have drawn on material collected by the SFO—Mr Blair has ruled out reopening the investigation.

        Another critical factor in this respect is Saudi Arabia's order for up to 72 Eurofighter Typhoons, manufactured by a consortium led by BAE Systems.

         Kinda helps the arguement that Scooter and Shooter ought to be in jail. Brewster Jennings must have been involved here, and Sibel Edmonds' testimonies would fill in this story I'm sure.
           Thanks again.

  •  Put out that tip jar, girl! (1+ / 0-)
    Recommended by:

    You done REAL good today.


    "When the going gets tough, the tough get 'too big to fail'."

    by New Deal democrat on Wed Jun 13, 2007 at 09:51:16 AM PDT

  •  Yank, this chart is alive today (4+ / 0-)
    Recommended by:
    cotterperson, LondonYank, KenBee, Noor B

    and is funding the Sunni response in Iraq in my opinion. Now that GWB realizes he was backing the wrong horse, the Shiites, in Iraq, he is quickly moving resources to funding Sunnis, at the behest of his Bandar masters.

    Finally, Bandar has taught GWB that there ARE two kinds of Muslims: Shiites and Sunnis, and if he wants to be friends with the Saudis, he needs to back their horse.

    Only in that context can we understand all the "bomb, bomb Iran" songs of the right wing.

    Well? Shall we go? Yes, let's go.

    by whenwego on Wed Jun 13, 2007 at 09:52:52 AM PDT

  •  heard this on tv in uk on recent trip (4+ / 0-)

    not a word here ,back home in the land of the free.Americans are not really giving name rec to the likes of prince bandar,the press dosnt think hes sexy(oh ,thats all the lib press cares about).But,but,he is super rich and owns the Bush fmily,they have their idols too!Why isnt he a household word/name?watch your back londonyank.

    have we hit bottom yet?

    by eddienic on Wed Jun 13, 2007 at 09:54:16 AM PDT

  •  surprise surprise--NOT (3+ / 0-)
    Recommended by:
    LondonYank, theyrereal, duha

    Nice work, LY.

  •  one of the best diary topics (9+ / 0-)

    I've seen here, ever.

    If people don't understand these types of networks, they don't understand the cause of many of the problems Americans are dying for today.  Bandar Bush is deep into it all.

    It's also important for people to understand that the corrupt networks are the same ones there have been problems from, for the last 25-30 years!  Same crooks.  Same networks.

    If you look at Sibel Edmonds' information (one of the most gagged whistleblowers of all time), she provides info on another nexus of the networks, Turkey.  

    It becomes apparant that there are networks involving officials from US, UK, Saudi Arabia, UAE, Kuwait, Turkey, Israel, Egypt, Pakistan, Afghanistan, etc. where there are activities like funnelling funds for arms transfers and weapons smuggling, drug running (i.e. Air America), setting up and directing militant groups, black ops, spying, and the like.

    "There have been tyrants, and murderers, and for a time they can seem invincible. But in the end they always fall. Think of it. Always." -- Mahatma Gandhi

    by duha on Wed Jun 13, 2007 at 10:21:05 AM PDT

    •  These networks... (1+ / 0-)
      Recommended by:

      ...go back farther than that.  During the interwar years, the US became materially involved in a number of networks the British had set up before the war.  The US went farther, though, and networked with a variety of German interests due to pre-war German involvement in Latin America, which led to things like the ITT-Farben connections and a few deals that led to the rise of the House of
      Bush.  All the current networks can be traced to those interwar networks.

      It is to Madame Justice that I dedicate this concerto.

      by rifek on Thu Jun 14, 2007 at 06:02:26 PM PDT

      [ Parent ]

  •  Excellent diary (5+ / 0-)

    And don't forget, the Saudi's nuclear weapons program! According to The Guardian:

    Saudi Arabia, in response to the current upheaval in the Middle East, has embarked on a strategic review that includes acquiring nuclear weapons, the Guardian has learned....

    United Nations officials and nuclear arms analysts said the Saudi review reflected profound insecurities generated by the volatility in the Middle East, Riyadh's estrangement with Washington and the weakening of its reliance on the US nuclear umbrella.

    They pointed to the Saudi worries about an Iranian programme and to the absence of any international pressure on Israel, which has an estimated 200 nuclear devices....

    Four years ago, Saudi Arabia sent a defence team to Pakistan to tour its secret nuclear facilities and to be briefed by Abdul Qader Khan, the father of Pakistan's nuclear bomb.

    By the way, your link to Wikipedia includes the following on the Al-Yamamah contract:

    The UK National Audit Office investigated the contracts and has so far never released its conclusions - the only NAO report ever to be withheld.

  •  Great post! (7+ / 0-)

    Have you seen this? Just in case it gets "disappeared", here's a quote:

    Divisions continue among top officials about the way forward on Iran. [...] Cheney and officials close to him, especially Elliot Abrams at the National Security Council, still believe that their military-based "solution" will ultimately prove necessary. They have, however, suffered a recent setback in what we have described as their "Sunni strategy" to build support from the US’ conservative Sunni Arab allies (Saudi Arabia, Egypt, Jordan and the Gulf States) for a belligerent approach to Iran. [...] Abrams worked closely with Prince Bandar bin-Sultan, the Saudi National Security Adviser, to push this plan forward. We hear that this has now been shelved at the insistence, we are told, of Saudi King Abdullah. The latter has distanced himself from Bandar [...]

  •  Dangerous Waters (4+ / 0-)
    Recommended by:
    stonemason, KenBee, duha, kafkananda

    The players in the game of power play to win. These people are not "bad" they just like to play--it may seem silly but, frankly, I've hung out with some players and that is what motivates them and gives them pleasure.

    You are outlining a vast criminal conspiracy. Alas, there are many of those. You don't have to search far for criminal conspiracies at every level of society only they are not really criminal unless the perpetrators are caught--and they are very, very, rarely caught--the only time they are is when they've offended a more powerful competitor or boss.

    If you accept an underworld of black-operatives and secret funds (and it is obvious that it is true) then you are coming to dangerous territory. This brings us to 9/11 for which I allege nothing except to point out that (and you can check it for yourself) that there was no formal investigation using forensic science of either the plane crashes (such investigations are required), the building collapses (it would be normal to check carefully the structural problems that caused the collapse of not only the two towers but Building 7 as well--the NIST report does not qualify as an investigation), or the crime itself. The closest to an investigation was the 9/11 Commission which started with the conclusion that the government/press story was completely correct in every detail and its only task was to make sure that there were better procedures in place and, most significantly, to cover all-asses--in short, assign blame nowhere. Even stating what I just stated is not allowed in any "polite" forum and certainly not in the mainstream press. Similarly your allegations on Bandar will continue to be ignored in the U.S. at least.

  •  Brilliant Work! I wish I had a sock puppet (2+ / 0-)
    Recommended by:
    LondonYank, theyrereal

    so he could rec you too!

  •  oh finally (4+ / 0-)
    Recommended by:
    LondonYank, KenBee, duha, Noor B

    the diary I've waited for comes along.  Thank you.  I am so fatigued of seeing things credited as genuine "hostilities" against US which I know reek of black ops.

    I don't want to go OT, but similar to your report we see things in Mexico which I don't buy.  Reporter Allyn Hunt's May 18 column in the Guadalajara Reporter recounts a long list of "drug wars horrors" lately seen in the country (e.g. decapitated heads dropped on disco floors) and then ends the article with this:

    A twist is given to this incomplete list of mayhem by a Michoacan law enforcement official who says that some authorities believe a number of these murders have not been committed by drug thugs.  He said, anonymously, for obvious reasons, that "There are a lot of copycats out there  What they're doing is copying the techniques of drug gangs to disguise the settling of scores, the carrying out of long running feuds, getting revenge against anemies" that have nothing to do with narcotics.  What facts shaped this belief, he declined to say.

    I can't help wondering how many of these horrors as well as others worldwide are not related to this:

    The U.S. government is training soldiers in upwards of 70 countries at any given time. The most transparent, and consequently well known of these training programs is the Pentagon's International Military Education and Training Program (IMET). Recent graduates as well as soldiers soon to be trained by this program come from countries at war or with horrific human rights records, including Indonesia, Rwanda, Sierra Leone, Congo, and Cote d'Ivoire.

    We have to wonder about the line of work "graduates" go into after their training.

    You are so courageous to speak up about this.  I think most US people have no idea how much war is a part of the US GDP:

    Of the active conflicts in 1999, the United States supplied arms or military technology to parties in more than 92% of them --39 out of 42. In over one-third of these conflicts - 18 out of 42 - the United States provided from 10% to 90% of the arms imported by one side of the dispute.

    And those are only the ones on which figures are supplied.  Thanks to your sleuthing here, we may entertain the idea that the figure is even higher.

    If the US is to even survive as a nation, we have a collective reckoning as to how we make our national living.

  •  asdf (4+ / 0-)
    Recommended by:
    LondonYank, theyrereal, Noor B, dotsright

    You bring up the thing that separates me, paradigm-wise, from most Democrats:  Congress.

    Please let me know - I'm not asking this rhetorically - could Congress possibly not all know this?

    This is why anymore, the more anyone in Congress makes appeal to Democratic voters, the more wary I am of them.  Because of what they don't say.

    I simply can not believe in a gossipy hub like Washington D.C. that they do not know every bit of information that you have provided above about Black Ops and much more.  But they largely carry on as if it were not happening, instead speaking in terms of all this "defense" as a necessary evil.  

    Or the credit bubble, and hedge funds.  Again kindly suffer a question from a lifelong artist-not-economist who has only recently been extensively reading on the credit bubble in general and hedge funds in particular.  If you might have the time, I made a comment on a different diary concerning how the housing market is being eaten alive in the US.  This is because the "structured finance" industry attached to hedge funds has created the debt-marketing mechanisms which create a situation where extortionary interest is the dietary mainstay of the finance market.  Because they have techniques to slough off problem debt in the wink of an eye (derivatives) they seek unstable (i.e. extortionary) debt for its high yield, supposing their financial impunity for ability to disappear bad debt through derivative maneuvres.  This imho is what led to so many financially failing US people losing their homes.

    And Congress not only realizes this, but is up to their elbows in their own hedge fund pursuits.  But do you see them standing up objecting to how the poor are eaten alive?  Not much (have I missed anything?).  Katrina was actually a huge windfall for these financial markets, producing more shaky debt for the credit bubble's consumption.  This, in the trade, is called "expanding finance" or "creating wealth."

    Because what most Democrats fail to understand, due to most of us being born of working class families who think of debt as a problem rather than a commodity, we Democrats fail to see what might motivate Congress to, for instance, keep funding the war.  We think money is represented by tangible wealth and therefore that debt is a problem, but it can now be argued that debt is liquidity:

    Some years back (1999) I proposed the concept of an "Infinite Multiplier Effect." Having been unleashed from traditional bank reserve and capital requirements (not to mention a gold standard!), contemporary (electronic) finance (certainly including non-banks) had evolved to the point of attaining the potential for unfettered expansion. This potential is now being fulfilled.
    Today, (unrestricted) securities market finance/liquidity circulates through an expansive and increasingly non-transparent Credit system (certainly including Wall Street, "repos", securities and derivatives markets, and off-balance sheet "special purpose vehicles," along with foreign central banks). From securities transaction to securities transaction, this process creates myriad new debt instrument IOUs through a multitude of lending processes (some financing the real economy but most financing the securities and asset markets). This unchecked expansion of a broad range of sophisticated securities market-based liabilities, intermediated globally through various types of institutions and vehicles, now comprises the vast majority of system "liquidity." This finance cannot be readily accounted for or monitored, let alone regulated by monetary authorities.
    Today, "money" or "liquidity" cannot even be adequately defined, let alone monitored and regulated. Worse yet, in this Credit-induced boom-time euphoria, rabid ideologues (ok, think Kudlow and Laffer) equate free markets in goods and services (the Economic Sphere) with a "free" marketplace in unrestricted finance (the Financial Sphere). Checks and Balances and the Separation of Powers are recognized as absolutely paramount to a healthy democracy, yet these principles are somehow viewed with intense disdain when it comes to modern finance-based Capitalism. To be sure, when exuberance in the private-sector’s capacity to create wealth (and expand finance!) reaches its most fanatical extremes, there will be general antipathy toward any effective governmental monetary control. A great amount of historical precedent has me convinced that unchecked money and Credit pose the greatest risk to free market Capitalism.

    In other words, the fact that we have a nearly nine trillion national debt is not a problem to Congress.  Because where there's that much debt as war produces, someone not only gets to scoop up interest... shuffled through the deck of the "structured finance" industry it can pay off innumerable parties.  Unlimitedly so.  Why then kill the perfect beast (credit bubble) that eats shaky promises and excretes interest payments?  I don't see how Congress either has impetus to ever pay off the debt or ever stop funding the war that feeds the beast.  

    See this link:  they are the very people who are receiving revenues to manage the debt market, hence where the money ends up from all the borrowing for war:

    What do three former US Treasury secretaries, one time secretary of state Madeleine Albright, a former US ambassador to the United Nations and ex Spanish prime minister Jose Maria Aznar have in common?

    They have all been recruited by powerful hedge funds or private equity firms since departing government, while Albright has opened her own hedge fund: Albright Capital Management.

    The secrecy surrounding such investment firms and media headlines about the vast riches generated by SAC Capital Advisors, the Blackstone Group and the Carlyle Group among others have only added to their mystique.

    Pardon me cribbing from my previous comment but as you see the thread was dead by the time I got there and I'm not just wanting to hear myself type - I really would appreciate your thoughts.

    •  I'm with you in wondering how the bubble sustains (3+ / 0-)
      Recommended by:
      stonemason, Noor B, dotsright

      going forward.  At some point the music stops.  

      I was talking to an old friend yesterday about the difference between liquidity and credit.  Liquidity used to mean excess savings for investment but has been changed lately to include finance for investment.  This is an error.  When bad things happen and the market gets scared, credit will evaporate.  Then liquidity will collapse.  

      What we don't know is when.  I've predicted 10 of the past two recessions, so I don't have credibility on timing.

      "Victory attained by violence is tantamount to a defeat, for it is momentary." - Mahatma Gandhi

      by LondonYank on Wed Jun 13, 2007 at 03:00:14 PM PDT

      [ Parent ]

      •  see the rats jumping ship (2+ / 0-)
        Recommended by:
        LondonYank, Noor B

        At some point the music stops

        What is so ugly, so scary, is how angry the rest of the world is going to be at the average US citizen when markets such as the burgeoning Chinese stock market fall flat.  I've read reports that in some areas of China maids and taxi drivers are quitting their jobs to play the stock market (selecting stocks on such rarified information as their lucky number).  The foreign central banks (fcb's) of Asia are said to be buying US debt at recklessly inflated values.  There will be a global wrath towards the US come the crash.

        Which may be why the Treasury reports expatriations now at over 30,000/month.  The rich see it coming and are getting frightened of the stupidity of it all, while the folks manning the trailer parks mostly don't even know the credit bubble situation exists.  For the cause of maybe bringing this discussion to the broader public, I continue to study.  

  •  LY: How true is it that Bandar Bush's wife (1+ / 0-)
    Recommended by:

    was involved in transferring funds to some of the 9/11 hijackers?  Is that speculation, rumor or is it solid?  If it can be considered true then it leads me to some very unsettling thoughts regarding 9/11 given all his other connections and associations described in your excellent presentation.

    The intrinsic nature of Power is such that those who seek it most are least qualified to wield it.

    by mojo workin on Fri Jun 15, 2007 at 06:52:49 AM PDT

    •  It is true (1+ / 0-)
      Recommended by:

      and the evidence of the transfers provided in the records of Riggs Bank (where both Bandar, his wife and the two terrorist hijackers had accounts - coincidentally, I'm sure) were forwarded to the FBI.  Naturally after a thorough investigation - cough, cough - it was found that the transfers were purely innocent, kind hearted genorosity on the part of Princess Haifa.

      Yes, this is unsettling.  But we've always known deep down that the truth would be, haven't we?

      From CNN:

      A U.S. government official said it is not unusual for wealthy Saudi families to send money to less affluent Saudi students. In addition, the official said, that money often is sent through the Saudi Embassy.

      Adel Al-Jubeir, a foreign policy adviser to Saudi Crown Prince Abdullah, told CNN that Princess Haifa Al-Faisal, wife of Saudi Ambassador, Prince Bandar bin Sultan, is "a very generous woman" who supports many charitable causes.

      The princess, however, never sent any money directly to the two hijackers, Al-Jubeir said. An investigation by her office has found the princess sent money to a woman on her charity recipient list and that woman then sent the money to the students.

      Al-Faisal does not know who the woman is or why she was on her list, Al-Jubeir said.

      "The FBI investigated this matter six months ago [and] the embassy cooperated with them fully," Al-Jubeir said.

      He compared the embassy's situation to that of any U.S. bank in which the hijackers might have had an account. The bank, he said, would be no more guilty of aiding the hijackers than is the Saudi embassy.

      "Victory attained by violence is tantamount to a defeat, for it is momentary." - Mahatma Gandhi

      by LondonYank on Fri Jun 15, 2007 at 07:09:48 AM PDT

      [ Parent ]

      •  Wow (2+ / 0-)
        Recommended by:
        LondonYank, stonemason

        Thanks - I think - now I feel even more queasy than normal when thinking about this stuff.

        You are right, deep down I had a hunch that the truth surrounding 9/11 would be something very dark and unsettling, much more so than the officially sanctioned story.  Each time I see more discussion like this, the closer I get to being convinced...

        The intrinsic nature of Power is such that those who seek it most are least qualified to wield it.

        by mojo workin on Fri Jun 15, 2007 at 08:03:23 AM PDT

        [ Parent ]

  •  Finally someone pieces it together (1+ / 0-)
    Recommended by:

    The pieces were all out there from the past-BCCI, the Italian Bank with Vatican connections and the guy who got busted for it in the 80s. Knew it was too big an operation over too many continents to have been completely shut down.
     Know anything about bogus software co. Q-tech owned and operated by an Al Quadi-who supposedly had ties to Cheney adn terrorism. Chertoff did investigation on (About 2.5 wks of work)then qickly concluded there was no connection. after taht he was promptly named to Homeland Sec.
      Also was bank in Canada not recently connected with terrorism?

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