Korean War Crisis: Brought To You By Uncle Sam

US military-industrial complex armed North Korea with nuclear weapons.

Paul Joseph Watson | PrisonPlanet | 23 November 2010:

Despite the fact that South Korea admits it fired the first shots that prompted the North to retaliate, the vast majority of the establishment press are feverishly blaming North Korea for a new escalation in the crisis, while failing completely to acknowledge the fact that the whole fiasco was generated as a direct result of Uncle Sam’s policy through two separate administrations to ensure hereditary dictator Kim Jong-Il and his successors acquired the atom bomb.

As we have exhaustively documented, North Korea’s nuclear belligerency was almost exclusively a creation of the U.S. government in that they armed the Stalinist state both directly and indirectly through global arms dealers under their control, namely Dr. Abdul Qadeer Khan. While labeling North Korea as part of the “axis of evil,” the U.S. government was enthusiastically funding its nuclear weapons program at every stage.

Both the Clinton and Bush administrations played a key role in helping Kim Jong-Il develop North Korea’s nuclear prowess from the mid 1990’s onwards.

Just as with Saddam Hussein’s chemical and biological weapons program, it was Donald Rumsfeld who played a key role in arming Kim-Jong-Il.

Rumsfeld was man who presided over a $200 million dollar contract to deliver equipment and services to build two light water reactor stations in North Korea in January 2000 when he was an executive director of ABB (Asea Brown Boveri). Wolfram Eberhardt, a spokesman for ABB confirmed that Rumsfeld was at nearly all the board meetings during his involvement with the company.

Rumsfeld was merely picking up the baton from the Clinton administration, who in 1994 agreed to replace North Korea’s domestically built nuclear reactors with light water nuclear reactors. So-called government-funded ‘experts’ claimed that light water reactors couldn’t be used to make bombs. Not so according to Henry Sokolski, head of the Non-proliferation Policy Education Center in Washington, who stated, “LWRs could be used to produce dozens of bombs’ worth of weapons-grade plutonium in both North Korea and Iran. This is true of all LWRs — a depressing fact U.S. policymakers have managed to block out.”

“These reactors are like all reactors, they have the potential to make weapons. So you might end up supplying the worst nuclear violator with the means to acquire the very weapons we’re trying to prevent it acquiring,” said Sokolski.

The U.S. State Department claimed that the light water reactors could not be used to produce bomb grade material and yet in 2002 urged Russia to end its nuclear co-operation with Iran for the reason that it didn’t want Iran armed with weapons of mass destruction. At the time, Russia was building light water reactors in Iran. According to the State Department, light water reactors in Iran can produce nuclear material but somehow the same rule doesn’t apply in North Korea.

In April 2002, the Bush administration announced that it would release $95 million of American taxpayer’s dollars to begin construction of the ‘harmless’ light water reactors in North Korea. Bush argued that arming the megalomaniac dictator Kim Jong-Il with the potential to produce a hundred nukes a year was, “vital to the national security interests of the United States.” Bush released even more money in January 2003, as was reported by Bloomberg News.

Bush released the funds despite the startling revelation, reported by South Korean newspapers, that a North Korean missile warhead had been found in Alaska.

Construction of the reactors was eventually suspended, but North Korea had an alternative source through which they could obtain the nuclear secrets vital to building an atom bomb arsenal – CIA asset and international arms smuggler AQ Khan.

In 2004, Dr. Abdul Qadeer Khan, the father of Pakistan’s atom bomb program, admitted sharing nuclear technology via a worldwide smuggling network that included facilities in Malaysia that manufactured key parts for centrifuges.

Khan’s collaborator B.S.A. Tahir ran a front company out of Dubai that shipped centrifuge components to North Korea.

Despite Dutch authorities being deeply suspicious of Khan’s activities as far back as 1975, the CIA prevented them from arresting him on two occasions.

“The man was followed for almost ten years and obviously he was a serious problem. But again I was told that the secret services could handle it more effectively,” former Dutch Prime Minister Ruud Lubbers said. “The Hague did not have the final say in the matter. Washington did.”

Lubbers stated that Khan was allowed to slip in and out of the Netherlands with the blessing of the CIA, eventually allowing him to become the “primary salesman of an extensive international network for the proliferation of nuclear technology and know-how,” according to George W. Bush himself, and sell nuclear secrets that allowed North Korea to build nuclear bombs.

“Lubbers suspects that Washington allowed Khan’s activities because Pakistan was a key ally in the fight against the Soviets,” reports CFP. “At the time, the US government funded and armed mujahideen such as Osama bin Laden. They were trained by Pakistani intelligence to fight Soviet troops in Afghanistan. Anwar Iqbal, Washington correspondent for the Pakistani newspaper Dawn, told ISN Security Watch that Lubbers’ assertions may be correct. “This was part of a long-term foolish strategy. The US knew Pakistan was developing nuclear weapons but couldn’t care less because it was not going to be used against them. It was a deterrent against India and possibly the Soviets.”

In September 2005 it emerged that the Amsterdam court which sentenced Khan to four years imprisonment in 1983 had lost the legal files pertaining to the case. The court’s vice-president, Judge Anita Leeser, accused the CIA of stealing the files. “Something is not right, we just don’t lose things like that,” she told Dutch news show NOVA. “I find it bewildering that people lose files with a political goal, especially if it is on request of the CIA. It is unheard of.”

In 2005, Pakistani President Pervez Musharaf acknowledged that Khan had provided centrifuges and their designs to North Korea.

Through their policies in aiding North Korea to build light water reactors, and via the CIA asset AQ Khan who was protected at every step of the way while he helped provide North Korea with the means to build a nuclear arsenal, the U.S. government itself is directly complicit in providing North Korean dictator Kim Jong-Il with the nuclear weapons he now threatens to use against U.S. ally South Korea.

North Korea is controlled by a hereditary Stalinist dictatorship that has starved two million of its citizens to death in favor of building a million-man army. Some people put the figure at four million, one-quarter of the population. In the far north of the country there is a network of forced labor gulags where people who have ‘expressed a bland political opinion’ are, along with their entire families, tortured, raped and executed. Horrific bio-chemical experiments are performed on mass numbers of people. Babies are delivered and then stamped to death by the camp guards. If the mother screams while the guards are stamping on the baby’s neck, she is immediately assassinated by a firing squad. These guards are rewarded with bonuses and promotions for ripping out prisoners’ eyeballs.

The North Korean people are enslaved by a government that is using food as a weapon. Perhaps this is why the EU and the United States, via the UN World Food Program, resumed the shipment of hundreds of thousands of tons in food aid at the end of February 2003. This goes directly to the sitting dictatorship, which then decides who gets it by their level of allegiance to the state. Food aid only increases the power of Kim Jong-Il and yet it is veiled by the UN in bleeding heart humanitarian rhetoric. The money goes straight to enabling the North Korean leadership to live in the lap of westernized luxury with casinos and lavish new cars.

President Bush publicly claimed to loathe Kim Jong-Il and yet his administration, like Bill Clinton before him, set the policy to help North Korea obtain nuclear expertise. The U.S. intelligence network also protected AQ Khan and allowed him to provide the means with which North Korea acquired their nuclear capability.

If the tensions between the Koreas were to escalate into all out war, don’t expect the castrated American corporate media to mention how Kim Jong-Il and his successors grew to be such a threat in the first place – with the aid of nuclear weapons enthusiastically supplied by the U.S. government and its surrogates.
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Related:

Ron Paul: Korea Conflict May Be Orchestrated Crisis To Boost Dollar

RAND Corporation lobbied Pentagon for major war to reverse US economy

 

Paul Joseph Watson - Prison Planet.com - Tuesday, November 23, 2010

 

Congressman Ron Paul speculated on the Alex Jones Show today that the war footing between North and South Korea could be an orchestrated crisis to boost the dollar and reverse the US economy, paralleling the RAND Corporation’s call two years ago for the United States to become embroiled in a major war as a means of preventing a double dip recession.

 

False flag terrorist attack in Germany could be used for mass arrests of government critis

From Case about Bird Flu 

By Jane Burgermeister (my emphasis)

Following unprecedented protests in Germany, in Stuttgart and Gorleben, against the creeping authoritarianism, the government is trying to exploit an alleged threat to the Berlin’s Reichstag building by Islamic terrorists to bring the economical, political and social life of the country fully under control.

In spite of the fact that there is no credible threat of violence from terrorists– a lawyer defending an 18 year old who put up a “terrorist threat” video has recently said the youth was set up by a German police officer acting as an agent provocateur – at least 33,000 armed police are now patrolling airports and stations in Germany together with unknown numbers of private security guards.

http://www.bild.de/BILD/politik/2010/11/21/terror-alarm-in-deutschland-kann-die-polizei-uns/wirklich-beschuetzen.html

The German police chief Matthias Seeger told the „Frankfurter Allgemeinen Sonntagszeitung“ (FAS) that the police have been given instructions to use their weapons and he is actively encouraging people to shoot and kill anyone suspected as a terrorist.

Interior Minister Thomas de Maiziere has said that he expects a “terrorist” attack between November 20^th and 28^th just as the government is set to pass a draconian budget to allow for huge transfers of the tax payer’s money to the banks under the pretext of having to pay off fraudulent, fractional reserve banking debts.

The focus on the Reichstag in Berlin is highly significant because this building was at the centre of an arson attack on February 28^th, 1933 that Adolf Hitler then used as an excuse to consolidate the Nazi grip on power just before elections in March 1933.

There are many parallels to the Reichstag Fire — which appears also to have been staged according to a book by “XX” — including the armament of the police just one week beforehand.

Marinus van der Lubbe, a young Dutch man, was able to access the Reichstag without any problems, walking through a side door while a police officer who was alerted to the fire by a passerby allowed it to burn for almost half an hour before calling the fire brigade at about 10 pm.

According to historian John Toland (“Adolf Hitler”, page 297), Hermann Göring purged the ranks of the Prussian police, issued them weapons and also gave them explicit instructions to make use of their weapons against protestors on February 20^th just one week before the Reichstag’s Fire. Göring even threatened police who “failed to do their duty” and use their weapons against members of “organizations hostile to the state” with punishment.

Hitler used the Reichstag fire as a pretext to introduce the “decree of the president for the protection of the people and state” on 28^th of February. This suspended the freedom of assembly and expression, authorized wiretaps, houses searches and indefinite detention without warrants and paved the way for mass arrests of opposition figures.

In fact, the Reichstag Fire is considered to mark the start of the Nazi German terror state.

In spite of the evidence that Lubbe was acting alone, Hitler immediately declared the Communists to be responsible. He drove straight to the offices of the “Völkische Beobachter “, a newspaper that his supporters had bought for him in 1919, and ordered the subeditor on night duty to spin the story of the fire in such a way that the Communists and opposition were blamed.

Göring even rewrote the police statement to exaggerate the danger, according to Toland.

Hitler then summoned the cabinet to Göring’s office – a majority were not National Socialists — and that same night a decree was passed that stripped people of Germany all their basic civic rights.

Prince August Wilhelm of Hohenzollern, the son of the last German emperor, who was a big supporter of Hitler, attended the meeting and approved the decree.

Following the Reichstag Fire and the mass arrests, Hitler conducted an election campaign devoid of all concrete policies, appealing to German culture and “destiny”.

It is surely tempting for the government to use the same emergency measures designed to deal with a non existent terrorist threat in Germany to try to crush  growing protests and demands for democracy.

These have reached a scale where the government might only think they can stopped by arresting thousands of key figures in a swift and sudden action.

Even though the Leipzig supreme court established no connection between Lubbe and the Communists, Hitler used the fire to arrest and imprison and often kill political opponents on the basis of the most tenuous of connections.

It would be easy to engineer some fictitious link between the “Islamic terrorists” and Stuttgart 21 protestors or Castor 21 protestors or even between individual opposition figures and bloggers, and so deliver the police chiefs in the know with an excuse to make an arrest.

For example, We Are Change Austria put up statement on their message boards this summer allegedly from me in which I expressed humorous support of Al Qaeda while hiding the email address which would have shown that the message was not from me. WAC first claimed I had put up the message and then denied any message had been posted even though I had a screen shot, which I am sure the governments also made for their files.

Using methods like this, it would be easy to stamp people who have no connection with Al Qaeda as some nebulous supporters of terrorism.

The government might be in a hurry to crack down because the CDU/CSU is set to lose power in spring in an upcoming regional election because of voter frustration over the Stuttgart 21 project.

A false flag attack could allow the conservative government of Bilderberg Angela Merkel to present itself as a “protector of the people” – and if all else fails, the election results can be always be tampered with.

If the CDU/CSU can cling to power, it can axe Merkel and “crown” Defence Minister Karl Theodor zu Guttenberg as Chancellor.

Guttenberg is a key Globalist figure and pushed through plans on November 15^th to transform the German army from a defensive force to an offensive force that can even engage in private armies. These will be much needed to patrol the unruly provinces of new German financial empire emerging as country after country collapses under artificial debt burdens and the other falls under the control of the IMF and EU/Bilderbergs in the euro trap.

Hitler’s most important banker Hjalmar Schacht – a good friend of Max Warburg and involved in the 1931 German “banking crisis” and “budget consolidation” that destroyed the German economy for the profits of the banks — noted that a strong police state was required for any society that gave banks freedom to operate.

Vienna Economics Professor Franz Hörmann explained in an interview in “Der Standard” recently how the banking system is in fact a model for fraud and robbery.

The Globalists must have calculated with the need to use massive police force to crush growing protests at the way the government is taking so much money from the people to hand it to the banks. A false flag Islamic attack on the Reichstag or an airport or station could give them the excuse to close borders and arrest critics.

A relative of the Prince August Wilhelm of Hohenzollern, Karl Friederich, Prince of Hohenzollern, is an influential figure in the CDU and sits or has sat on the board of many of the banks involved in the current banking scandal, including Bayernlb, which bought the Hypo Alpe Adria bank on the advice of the Rothschild Investment bank, overlooking the evidence of fraud.

While Guttenberg, who hails from Charlemagne’s Franconia, might be being groomed to be the new Caesar or Kaiser of the fourth German empire – emergency decrees following a Greek default could permit a EU  dictatorship – the Hohenzollerns have played a prominent role so far in the first three “Holy German Empires” and it cannot be excluded that they will be among the leading figures in the “Fourth Reich” as Prince Adam of Leichtenstein called Germany.

http://en.wikipedia.org/wiki/Millennialism

Prince August Wilhelm of Hohenzollern told a crowd in Hamburg in April 1937 that “his faith in the Fuhrer was not just unshakeable but became stronger day by day.

The Fuhrer just has the wish that the German people follow him with faith— the Fuhrer believes in the loyalty of the Germany people and that is why you cannot disappoint him,” according to Lothar Machtan, historian at the university in Bremen, who wrote “Der Kaisersohn bei Hitler, 2006, Hoffmann und Campe Verlag.

Karl Friedrich is also the Sovereign Grand Master of The Order of The Dragon, which seems to be one of the Globalists secret societies like the Skull and Bones that George Bush belongs to.

http://en.wikipedia.org/wiki/Karl_Friedrich,_Prince_of_Hohenzollern

A key seat for the Hohenzollerns is Nürnberg and Hitler’s first act on entering Vienna in 1938 as part of the annexation was to order the “Spear of Destiny” kept in the museum to be sent to Nürnberg.

In the meantime, DNA tests have revealed that Hitler himself was highly likely an offspring of the Rothschilds as has long been rumoured.

http://www.dailymail.co.uk/news/worldnews/article-1305414/Hitler-descended-Jews-Africans-DNA-tests-reveal.html

Together with Ludwig Wittgenstein, the son of one the richest men in Austria, the armaments manufacturer and Rothschild associate, Karl Wittgenstein, Hitler attended the Real Gymnasium in Linz just a stone’s throw from the Rothschild Castle in Ybbs.

The Hohenzollerns, Rothschilds…here they all are again.

Pentagon, Military Actively War Gaming ‘Large Scale Economic Breakdown’ and ‘Civil Unrest’

From SHTFplan:

The majority of Americans believe that recent government intervention into financial markets, the economy and corporate insolvency has reversed the economic downturn which was described by former Treasury Secretary Hank Paulson as being “on the brink” in 2008. The stimulus, bailouts and unrelenting quantitative easing by the Federal Reserve have thus far been perceived as having averted the further erosion of the U.S. real estate and equities markets. And though the Federal Reserve and economic analysts have recently readjusted their economic growth forecasts downward for the next six months, Americans no longer have to worry about, as Rep. Brad Sherman (D-CA) said on the house floor in October of 2008, the sky falling, multi-thousand point drops in stock markets and martial law in America.

The recovery - if our government, the Federal Reserve and mainstream media are to be believed - is on the road to recovery - albeit slowly and with some more pain ahead.

If we’ve “prevented economic collapse” and “avoided the depression many feared,” according to President Obama, inquiring minds are asking why the Pentagon and US Military are actively and aggressively engaged in planning responsive action to large scale economic breakdown and civil unrest scenarios:

Ever since the crash of 2008 the defense intelligence establishment has really been paying a lot of attention to global markets and how they can serve as a threat to U.S. national security interests. At one upcoming seminar next month they’re taking a look at a lot of the issues.

source: see CNBC video report below

According to the report, the Army has spent time on financial market trading floors with JP Morgan and others, in the hopes that they can learn more about how a financial and economic attack may occur, and what the ramifications of such attacks on US stocks and bonds may be.

The Army, in a year-long war games series called Unified Quest 2011, is looking at a variety of possibilities and how to deal with them, including:

* the implications of “large scale economic breakdown” inside of the United States
* how to maintain “domestic order amid civil unrest”
* and ways to deal with fragmented global power and drastically lower budgets





Though the activities of global governments in recent years could potentially be chalked up to standard national security preparedness and contingency planning, the most alarming indicator that the U.S. government is not just looking at one-in-a-million possibilities in terms of economic collapse is the training of several thousand U.S. Army soldiers to respond to domestic policing and enforcement issues that may include evacuation, detainment and riot response. The real possibility of the need to deploy U.S. military under martial law exists, and the U.S. government is spending millions of dollars training and equipping soldiers to do so if necessary.

For those who may have their doubts about some of the scenarios these soldiers are training for, we point out the sign being held by one of the riot role players below.

(Photo taken by U.S. Airforce Tech. Sgt. Brian E. Christiansen, North Carolina National Guard at Vigilant Guard training exercise Ft. Richardson, Alaska - April 2010)

Will you be the one facing off against highly trained U.S. military personnel holding a “Food Now” sign at an inner city riot?

The U.S. government and many of their counterparts around the world are getting ready - just in case - maybe you should be too. Read More

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Related:

Invasion of the Land Grabbers

U.S.-based multinational corporations are buying up massive chunks of Africa.

By Joice Biazoto

In These Times, November 22, 2010

Suppose that, one day, a foreign investor decided to buy a vast tract of fertile land in the United States. Suppose all that is grown or produced on that land, and all profits made, would be shipped directly overseas. Worse, imagine that those Americans who had been living off that land for decades, maybe centuries, would be forced to move and given little to no compensation.
Such an event would undoubtedly spark public outrage, yet this scenario is not far from reality—only the roles are reversed. American companies have recently been investing heavily in foreign land, and many involved in the worldwide struggle against hunger believe that is a cause for concern. What investors call “agricultural development” is described by critics as “land grabbing,” which they say undermines food security in developing countries.


Land grabbing is nothing new, according to Flavio Valente, secretary general of Food First Information and Action Network (FIAN) International, a nonprofit that advocates for the right to food. “But recently, the practice of land grabbing has been intensifying and affecting the most vulnerable—peasants, farmers and indigenous people,” Valente says.


The Food and Agriculture Organization of the United Nations (FAO) estimates more than 75,000 square miles have been acquired by foreign interests in Africa alone. A 2010 field study conducted by FIAN in Ethiopia found that the equivalent of up to 20 percent of the country’s arable land has been bought by or made available to foreign investors.


American companies are among those making land deals in Africa. New York-based Jarch Capital, bought an area the size of Dubai from a warlord in South Sudan last year, and Dominion Farms Ltd., which bought swampland in Kenya in 2003 to turn it into a rice plantation, has reportedly intentionally flooded local farms to force the relocation of farmers.


Despite promises of creating jobs and increasing food production, foreign investment hardly ever benefits local communities because it aims to secure crops and profits for those back home, the FIAN report states.
Food security advocates say that even initiatives touted for presenting solutions to the land-grabbing problem, such as the World Bank’s Principles for Responsible Agricultural Development, fail to address the lack of concrete mechanisms to hold companies and governments accountable. “These principles, which are meant to be voluntary and self-regulated by the private sector, distract from the fact that what is needed is mandatory and strict state regulation of investors in several policy fields, such as financial markets and agriculture,” says Sofia Monsalve Suárez, land program coordinator at FIAN International.


Resolutions to regulate foreign land acquisition exist, but are ineffective and weak, Valente says. He is hopeful that the Committee on World Food Security (CFS), a United Nations body which last year became more attuned to indigenous and peasant interests, will act.


“The CFS is the only organization with a clear mandate to uphold food security, and each country gets one vote,” Valente says. “Facilitating the participation of those most affected [by land-grabbing] was the first step; now we must see if those voices will actually be heard.”

Eurointelligence Daily Briefing - 23 November 2010: "Another mishandled bailout spooks the markets"

Another mishandled bailout spooks the markets

• Markets rally, then reverse gains, as investors to a bailout agreement that is notoriously short on details;
• an increasing number of market participants are now expectation contagion to Portugal , and some fear that Spain, too, might be in danger;
• El Pais carries a comment this morning, criticising that the anti-crisis response lacks a sense of unity;
• in Ireland, meanwhile, the bailout has given rise to a political crisis, as Cowen is forced to call elections in January;
• some backbenchers of his party may be trying to replace him immediately, according to one news report;
• Garret Fitzgerald predicts that the opposition will vote in favour of the budget;
• Reuters has details about the German proposals for investor bail-ins through the use of collective action clauses;
• a debate is now under way about how to break up the euro: Stanley Black argues that the ECB should consider differential interest rates;
• Gideon Rachman, meanwhile, argues that Germany might pull out in the end.

___________________________________________________________

This is the Daily Briefing from www.eurointelligence.com
_________________

Related:

IMF and banks poised to strip Ireland of assets: biggest act of plunder since Cromwell.

Irish Clash with Cops as IMF Readies Austerity Plan

Ireland: Cowen to dissolve government

“The Irish government faced imminent collapse on Monday, only a day after it signed off on a $100 billion bailout, setting the stage for a new election early next year and injecting the threat of political instability into a European financial crisis that already has markets on edge. Confronted with high-level defections from his governing coalition, Prime Minister Brian Cowen said he would dissolve the government after passage of the country’s crucial 2011 budget early in December.” [editor’s note: If only that meant what it sounds like! Unfortunately, it just means elections and a shake-up - TLK] (11/22/10) 

Deficit Lies From Europe - Portugal Edition

Portugal's budget deficit and public debt are higher than those reported by the government, which is trying to regain investor confidence amid a debt crisis, the leader the main opposition party said on Saturday.

Pedro Passos Coelho told a meeting of his Social Democratic Party items like state-run companies' debts were not included in the overall public debt, which the government puts at 82 percent of gross domestic product this year.

He said that the "true" total public debt stood as high as 112 percent of GDP, while the budget deficit should be at 9.5 percent of GDP, far above the minority Socialist government's target of 7.3 percent for the end of the year.

"The state has for many years been removing from the budget a series of activities, which has made a large part of our numbers fictitious," he said in televised remarks.'

Read more...

Strikes planned in Portugal, the next victim of banker fraud

Take all the metal you can, but it won't break Morgan Chase

From GATA, 22 November 2010 e:

By: Chris Powell, Secretary/Treasurer, GATA 

Dear Friend of GATA and Gold (and Silver):

Noting J.P. Morgan Chase & Co.'s central role in suppressing the price of the monetary metals, particularly silver, the international journalist and provocateur Max Keiser has been waging a campaign to smash the market-manipulating investment bank by persuading civic-minded people to buy and take possession of at least 1 ounce of the precious metal. A comic excerpt from Keiser's recent program on the Russia Today television network promotes the campaign at YouTube here:

Of course GATA applauds anything that gets people out of paper claims and into real metal, but we're skeptical that even the exhaustion of public inventories of silver and the explosion of the huge short positions nominally on Morgan Chase's books will hurt the bank very much.

For those short positions, like the overwhelming interest rate derivative positions on the books of Morgan Chase, are probably not Morgan Chase's own at all but rather the U.S. government's. Certainly no financial institution would undertake such disproportionate positions -- positions that essentially make Morgan Chase both the silver market and the interest-rate market -- without effective assurance that government would backstop those positions. No other investment bank has undertaken such disproportionate positions.

So much of the spending and lending by the Federal Reserve, Treasury Department, and Exchange Stabilization Fund is secret that there can be nothing outlandish about such suspicions. No one can deny that the government also has intimate and secret communications with J.P. Morgan Chase & Co. about the markets. After all, the bank is a primary dealer in U.S. government securities and often acts openly on behalf of the U.S. government and thus in effect has access to virtually infinite amounts of money for market intervention.

Indeed, there is long history along these lines, since even before creation of the Federal Reserve, J.P. Morgan himself -- the banker, not the bank -- functioned in extremis as the central bank of the United States. And in her prize-winning biography, "Morgan, American Financier," the writer Jean Strouse reported that Morgan's first big score in the financial markets was his cornering the gold market in New York during the Civil War. Further, Morgan's monopolizing of industries was a major cause of enactment of anti-trust law.

Yes, exhausting the metal available for delivery could blow up the commodity futures markets, an admirable objective insofar as those markets, overloaded with derivatives, long have been largely mechanisms of price suppression. (See the British economist Peter Warburton's 2001 essay discerning this: http://www.gata.org/node/8303.)

But if the metal runs out, the commodity exchanges will change their rules or implement rules already adopted requiring cash settlement and prohibiting new long positions. The government can cover any amount of such settlements in cash through its agents. This sort of thing has been done before and can be done again.

In short, take the metal out of the banking system -- yes, all you can. That will make market manipulation a lot more difficult and drag it into the open. But you won't crush J.P. Morgan Chase, for the investment bank is the government and the government is the investment bank.

The big objective here is to take control of the government away from the bankers and return it to the people. This is just the latest round in an old political struggle -- the struggle between the financial interests and the producing interests -- that has been simmering in the United States since William Jennings Bryan made it the center of his presidential campaign in 1896.

Advocating free coinage of silver back then, Bryan told the Democratic National Convention in Chicago that went on to nominate him: "Those who are opposed to this proposition tell us that the issue of paper money is a function of the bank and that the government ought to go out of the banking business. I stand with Jefferson rather than with them, and tell them, as he did, that the issue of money is a function of the government and that the banks should go out of the governing business."

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

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