Financial Warfare Exposed: Soros, Goldman Sachs, Hedge Funds Attack Greece to Smash Euro

Tarpley

It has been evident for some time that the ongoing speculative attack on Greece, along with such other countries as Spain, Ireland, Portugal, and Italy, was not primarily a reflection of their economic
fundamentals, nor yet a spontaneous movement of “the market,” but
rather an orchestrated action of economic warfare. The dollar had been
relentlessly falling through the late summer and autumn of 2009. It
obviously occurred to various Anglo-American financiers that a
diversionary attack on the euro, starting with some of the weaker
Mediterranean or Southern European economies, would be an ideal means
of relieving pressure on the battered US greenback. Since these
degenerate elites are incapable of directly solving the problem of the
dollar through increased production, full employment, and economic
recovery, one of the few alternatives remaining to them is to create a
situation in which the euro is collapsing faster, leaving the dollar as
the beneficiary of some residual flight to quality or safe haven reflex.

This is what emerged during the first week of December with a speculative assault or bear raid against Greek and Spanish government bonds as well as the euro itself, accompanied by a scurrilous press
campaign targeting the “PIIGS,” an acronym for the countries just
named, coming from inside the bowels of Goldman Sachs. I have discussed
this phenomenon several times over the last two to three weeks on my
radio program on GCN.

Now comes concrete proof of this conspiracy in the form of a Feb. 8 “idea dinner,” held at the Manhattan townhouse of Monness, Crespi, Hardt & Co, a boutique investment bank. Among those present were
SAC Capital Advisors, David Einhorn of Greenlight Capital (a veteran of
the fatal assault on Lehman Brothers in the late summer of 2008),
Donald Morgan of Brigade Capital, and, most tellingly, Soros Fund
Management. The consensus that emerged that night over the filet mignon
was that Greek government bonds were the weak flank of the euro, and
that once a Greek debt crisis had been detonated, all outcomes would be
bad for the euro. The assembled predators agreed that Greece was the
first domino in Europe. Donald Morgan was adamant that the Greek
contagion could soon infect all sovereign debt in the world, including
national, state, municipal and all other forms of government debt. This
would mean California, the UK, and the US itself, among many others.
The details of this at dinner were revealed in the headline story of
the Wall Street Journal on Friday, February 26, 2010. (See article)

Nor was this the only cabal in town intent on attacking the euro through the week Greek flank. The article cited suggests that GlobeOp Financial Services and Paulson & Co. are also piling on. The zombie
banks were also heavily engaged. The article reported that Goldman
Sachs, Bank of America-Merrill Lynch, and Barclays Bank of London were
also assisting speculators in placing highly leveraged bearish bets
against the euro. Note that these zombie banks are alive today because
of US taxpayer money, in Barclay’s case through AIG.

It amounted to a deliberate attempt to create a large-scale world monetary crisis which would certainly bring with it the dreaded second wave of the current world economic depression. The creation of monetary
chaos in Europe through the convulsive destruction of the euro under
speculative attack would cripple commodity production in western
Europe, severely undermining one of the dwindling areas of the world
economy which are still functioning. The genocidal implications for
humanity ought to be obvious, but the assembled hedge fund hyenas were
not concerned with these consequences.

George Soros has been telling every media outlet that will listen that the euro is doomed to fall apart and break up over the short run. Soros even has a theory to deploy as part of his speculative attack.
Soros argues that the fatal flaw or original Sin of the euro is that it
was based on a common central bank among the participating countries,
but lacked a common treasury and tax policy. This means that a country
like Greece can no longer defend itself from a speculative attack on
its bonds by the simple expedient of currency devaluation, since there
is no more drachma, and the euro is controlled from Frankfurt, not
Athens. British spokesmen are quick to point out that, even though the
financial situation of London is far worse than that of Athens, the
British government is already devaluing the pound through a downward
dirty float.

Given Soros’s infamous track record, he must be taken seriously. In 1992, Soros became world famous through his attack on the European Rate Mechanism, which he executed by a highly leveraged speculative assault
on the British pound, at the time one of the weaker members of the ERM.
Soros’ speculative attack led to a pound devaluation and the ragged
breakup of the ERM, and netted Soros £1 billion in profits. It was as
if Soros had personally stolen a £20 note from every man, woman, and
child in Britain. The speculative gains were no doubt gratifying, but
the overriding political purpose of the assault was to sabotage that
phase of European monetary policy.

The London Economist has gone out of its way to mock Spanish Prime Minister Zapatero’s remark that Spain was under international speculative attack. Press organs of the city of London and Wall Street
have ridiculed the Greeks as a nation of paranoid conspiracy theorists.
And yet, the revelations made so far are strong circumstantial evidence
of pre-concert, as Lincoln would say. Even the US Department of Justice
has been forced to send letters to the participants in the infamous
“idea dinner,” warning them not to destroy any of their records and
thus putting them on notice that they are under investigation. While we
should not have any illusions about the prosecutorial zeal of Attorney
General Eric Holder, who once represented the international financial
bandit Marc Rich, this is at least a beginning. Spanish and Italian
judges are noted for their independence, and one of or more them may
wish to examine the activities of Soros, Goldman Sachs, and their hedge
fund allies.

Greece does not need an austerity program, as the Greek labor movement has eloquently argued in the course of their successful and admirable general strike last week. Greece does not need a bailout from
Germany, the sinister International Monetary Fund, or from anyone else.
Least of all does Greece need to accept the advice of Austrian school
or Chicago schools charlatans who recommend the catharsis of a
deflationary crash that would destroy an entire generation through
unemployment, poverty, and despair. Greece needs to defend itself with
a 1% Tobin tax on all derivatives and other financial transactions.
Greece should take the lead in outlawing credit default swaps, which
amount to issuing insurance without meeting the capital requirements of
being an insurance company. Greece needs to enforce EU and national
antitrust laws. If Soros and his gang succeed in breaking up the euro,
Greece should make the best of it by immediately imposing heavy-duty
exchange controls and capital controls to protect the new drachma, on
the model of Malaysia a dozen years ago. Greece should shut down
domestic zombie banks and seize its central bank and use it to issue 0%
credit for industrial and agricultural hard commodity production. If
the Greeks made plain what they intend to do if they are forced to fall
back on the drachma, the financiers who fear such an example would have
another reason to relent.

Another obvious expedient is that of a bear squeeze or short squeeze. Soros, Goldman Sachs, and their gang of hedge fund allies have now used derivatives to establish short positions against Greek bonds
and the euro, betting that these latter will go down. Political
pressure is now being brought to bear on the European Central Bank and
the Greek central bank to undertake an unannounced large-scale purchase
of Greek bonds and euros in the forward market, causing the Wall Street
predators to lose their bets, thus punishing them severely with
extravagant losses. This is normal central bank practice, and it will
be astounding if the Greeks do not execute such a maneuver very soon.

The world now faces a stark choice between two alternatives, with Wall Street forcing the issue. The first is that the zombie banks and hedge funds, having been saved and bailed out by national states and
their taxpayers, will repay the favor by driving the national states
and all forms of state, provincial, and local government into
bankruptcy. This will be synonymous with the destruction of modern
civilization itself. The second and preferred alternative is that the
national states summon the political will to use the inherent powers of
government to place the zombie banks, hedge funds, and related
purveyors of derivatives into bankruptcy receivership and shut them
down once and for all, relying in the future on nationalized central
banks for the provision of credit. The second alternative would allow
the preservation of modern civilization as we have known it. But in the
meantime, the derivatives-based speculative attack on the southern
flank of the euro has accelerated the arrival of the second wave of
depression, which now appears likely to strike the world before the end
of 2010..