Reprinted from www.libertylobby.org, home of The SPOTLIGHT archive
Council on Foreign Relations Predicting Major Market Upheaval
By George Nicholas
If you hocked your house to bet on the stock exchange, you should be aware that in their soundproof conference rooms, the money magnates who style themselves "masters of the universe" -- the elders of the Council on Foreign Relations (CFR) and Bilderberg -- have started holding rehearsals for an anticipated breakdown of the U.S. financial markets.
The CFR's trial-run "simulation" scenario for such a financial apocalypse, developed by Dr. Roger Kubarych, an econo mist and senior fellow of the CFR, is based on the assumption that a concatenation of bad news -- a sudden spurt in inflation figures, plunging computer and software sales, reports of sharp increases in loan defaults, and a simultaneous sell-off of mutual funds -- might well trigger an avalanche of stock-market losses, leading to a generalized panic.
Kubarych has presented his financial "doomsday" game theory both to leading CFR and Bilderberg business barons. Their consensus: In such a crisis, the Federal Reserve must ride to the rescue, by providing "whatever liquidity [cash] may be needed to save the U.S. payments system," Wall Street sources say.
But under the law, the Fed is authorized to manage the money supply only by buying or selling bonds.
The Kubarych scenario, and the unanimity with which some of the world's top financiers reacted to it, gives new life to a question that has been haunting Wall Street for years: Is Fed Chairman Alan Greenspan, whose indifference to legal niceties is well known, keeping the money supply brimming over with secretly -- and illegally -- generated billions in U.S. currency?
The question is timely, because a number of the "crisis signals" postulated by the Kubarych scenario are already looming on the horizon. So-called "core inflation" figures are up, and the high-tech markets are in a slump, leading to sharp losses in stockholder assets.
Most importantly, a number of major banks are reporting a rising tide of loan defaults.
First Union Corp., the sixth largest U.S. money-center, revealed in regulatory filings that it had over $700 million of "impaired" (i.e. non-performing) loans on its books at the end of the third quarter, a whopping 11 percent increase over the previous year.
First Union, long regarded as one of nation's fastest-growing and most prosperous banks, reacted to the crisis by closing 90 branches, firing 2,350 employees, shutting its Money Store subsidiary, and watching helplessly as its stock fell by 50 percent.
Other banks report similar problems.
Not since the recession of 1990 has Wall Street seen such a rapid deterioration in credit quality, veteran brokers say.
The credit ratings of a record 470 corporations were sharply downgraded in the year 2000, as the number of "noncurrent" (i.e. unpaid) commercial and industrial loans rose by a whopping 38.7 percent over the preceding year, according to data released by the Federal Deposit Insurance Corporation.
"If you still think stocks will make you rich, go buy some," said Demeter "Dim my" LaRoque, a retired New York Stock Exchange floor trader. "But take my advice, don't bet the farm on them."