Posted by: tristar3research | April 13, 2009

Economic Security Becoming An Important Issue, Finally

As a long time political economist, I’m thrilled that the average intelligence person is beginning to be concerned about economic security as a national threat. Certainly, the unprecedented grab of future taxpayer earnings is a massive threat as is the reality of the use of depression era statues to confer unconstitutional “powers” to unelected officials from the Treasury, FDIC and Fed, etc…

Now, it is even more interesting to see that the DOD is “wargaming” or conducting structured simulations of events that would cause further economic chaos. This article from Politico, kind of the ultimate “Inside the Beltway” site, says it all. They concluded China was the primary threat.

China has already begin diverting Treasury holdings to natural resource acquisitions & stockpiles

China is already aggressively moving away from Treasuries to scarce commodities and stockpiling

China is already an awakened dragon

The Pentagon sponsored a first-of-its-kind war game last month focused not on bullets and bombs — but on how hostile nations might seek to cripple the U.S. economy, a scenario made all the more real by the global financial crisis. But instead of military brass plotting America’s defense, it was hedge-fund managers, professors and executives from at least one investment bank, UBS – all invited by the Pentagon to play out global scenarios that could shift the balance of power between the world’s leading economies. Their efforts were carefully observed and recorded by uniformed military officers and members of the U.S. intelligence community. In the end, there was sobering news for the United States – the savviest economic warrior proved to be China, a growing economic power that strengthened its position the most over the course of the war-game.

But the war gamers apparently did not consider the “Meltdown” that Austrian economists from the Von Mises Institute say is already well underway– that is, an economic security collapse from within.

In the interests of what I’m calling “preconceived cloaking” (NOT PC), participants generally declined to comment on an unclassified exercise!

The Office of the Secretary of Defense hosted the two-day event March 17 and 18 at the Warfare Analysis Laboratory in Laurel, MD. That facility, run by the Johns Hopkins University Applied Physics Laboratory, typically hosts military officials planning intricate combat scenarios. A spokesperson for the Applied Physics Laboratory confirmed the event, and said it was the first purely economic war game the facility has hosted. A Pentagon spokesman would say only that he was not aware of the exercise.The event was unclassified but has not been made public before. It is regarded as so sensitive that several people who participated declined to discuss the details with POLITICO. Said Steven Halliwell, managing director of a hedge fund called River Capital Management, “I’m not prepared to talk about this. I’m sorry, but I can’t talk to you.” Officials at UBS also declined to comment.

Not exactly a cause we can all believe in...

Not exactly a cause we can all believe in...

There was a strange and inexplicable, backward looking nature to the scenarios placed before the war gamers who, in classic CIA tradition, played the roles of “White Cell” actors.

I have already written about some of the “forward-looking” economic security risks, as have some others:

1) the collapse of the dollar subsequent to the loss of reserve currency status;

2) one harebrained idea is to cajole any American with any savings left to purchase “bailout bonds” to save the failing banks;

3) another folly is the proposition of “man-made climate cooling” or “geo engineering” to offset the global warming underway from carbon dioxide emissions- an approach pushed by Obama’s Science Advisor John Holdren; and

4) a chilling one comes simply from our own Treasury which touts the use of “bank stress tests” of the financial soundness of our 19 largest banks, then works with the Fed to supress any information about the “tests” (which they all passed since they set the criteria), and that the former head regulator during the S&L crisis calls “a SHAM” and a “Potempkin village”! I’ll take William Black’s word over Tax Scofflaw Tim Geithner’s word any day…


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s


%d bloggers like this: