This goes into how the powerful of the US screwed with Mexico and Japan. It brings up the notion of currency warfare where the USD must remain the reserve currency no matter how much we owe and don't make. I think the following is the best paragraph;

Today's crisis isn't an accident or from happenstance. It was planned, according to economist and critic F. William Engdahl in his recent article titled "Behind the Panic." To "shape the future of global banking" through creative destruction. Panic incited by a well-designed "long-term strategy." To change the "face of European banking." Weaken it with toxic junk. Asset Backed Securities. Force enough of it into liquidation or cheap enough to buy at fire sale valuations. The idea being to "create three colossal global financial giants - Citigroup, JP Morgan Chase, and Goldman Sachs." Add Bank of America and make it a foursome. Then use their "muscle to ravage European banks." Even if they wreck the US and world economies. Resuscitate them so they can "advance their global agenda over the coming years." To dominate world finance and increase US hegemony in the new century.

http://www.zcommunications.org/znet/viewArticle/19125
=======================

October 14, 2008 By Stephen Lendman

Since 9/11, the notion of an October surprise has been around. The idea going something like this. Another real or manufactured terror attack. The dominant media stokes fear. The public is again traumatized. The Bush administration pledges all effective measures to protect national security. Formerly seizes total power. Suspends the Constitution and declares martial law. Mass detentions follow. Beginning with dissenters and elements of the public considered "dangerous."



This may be coming with the 3rd Infantry's 1st Brigade Combat Team back in the US as of October 1. According to the Army Times, as "an on-call federal response force for natural or manmade emergencies and disasters, including terrorist attacks." Augmented by USNORTHCOM.



According to Wayne Madsen's recent article titled "FEMA sources confirm coming martial law," it gets worse. He cites "knowledgeable" FEMA sources saying that "the Bush administration is putting the final touches on a plan (to declare) martial law in the US with various scenarios anticipated as triggers." Economic collapse. Massive social unrest. Bank closures. Street protests. Violence in response, and another stolen election.



Early in the month, a different October surprise arrived. Not the expected one. Not yet at least. The Wall Street Journal put it this way: "The Dow Jones Industrial Average (DJIA) capped the worst week in its 112-year history with its most volatile day ever, as hopes for a major international bank rescue plan were overwhelmed at day's end by another wave of selling."



The DJIA dropped 22% over the past eight trading sessions. Investors were "shell-shocked." Many spent Friday "trying to protect themselves from further declines. The past week's (October 6 - 10) 18% decline "and Friday's 1018.77 point swing from low to high were the biggest since the Dow was created in 1896." The VIX measure of market fear hit 69.95. By far its highest level ever, and some investors think it may touch 100 in the current climate. Until now, the Dow's worst week was in 1933. Trading volume also set a record at 11.16 billion shares.



"Market crash shakes world" headlined the Financial Times (FT). Mass trauma, fear and uncertainty sent tremors everywhere, and no one knows if Friday ended it. Maybe just began it. First markets crater. Then world economies, and finally the inevitable human fallout. Affecting many tens of millions everywhere. Innocent people paying dearly.



Morning headlines say it all. And they're getting grimmer. On October 10, the Wall Street Journal said the "Market's 7-Day Rout Leaves US Reeling. Stocks in a Slow-Motion Crash....After Year of Declines, Investors Lose $8.4 Trillion of Wealth." Most scary is what's ahead and how much more people can or will tolerate.

<snipped>

http://www.financialsense.com/editorials/engdahl/2008/1009.html
===============

BEHIND THE PANIC:
Financial Warfare over future of global bank power
by F. William Engdahl
October 9, 2008

What’s clear from the behavior of European financial markets over the past two weeks is that the dramatic stories of financial meltdown and panic are deliberately being used by certain influential factions in and outside the EU to shape the future face of global banking in the wake of the US sub-prime and Asset-Backed Security (ABS) debacle. The most interesting development in recent days has been the unified and strong position of the German Chancellor, Finance Minister, Bundesbank and coalition Government, all opposing an American-style EU Superfund bank bailout. Meanwhile Treasury Secretary Henry Paulson pursues his Crony Capitalism to the detriment of the nation and benefit of his cronies in the financial world. It’s an explosive cocktail that need not have been.

Stock market falls of 7 to 10% a day make for dramatic news headlines and serve to foster a broad sense of unease bordering on panic among ordinary citizens. The events of the last two weeks among EU banks since the dramatic state rescues of Hypo Real Estate, Dexia and Fortis banks, and the announcement by UK Chancellor of the Exchequer, Alistair Darling of a radical shift in policy in dealing with troubled UK banks, have begun to reveal the outline of a distinctly different European response to what in effect is a crisis ‘Made in USA.’

There is serious ground to believe that US Goldman Sachs ex CEO Henry Paulson, as Treasury Secretary, is not stupid. There is also serious ground to believe that he is actually moving according to a well-thought-out long-term strategy. Events as they are now unfolding in the EU tend to confirm that. As one senior European banker put it to me in private discussion, ‘There is an all-out war going on between the United States and the EU to define the future face of European banking.’

In this banker’s view, the ongoing attempt of Italian Prime Minister Silvio Berlusconi and France’s Nicholas Sarkosy to get an EU common ‘fund’, with perhaps upwards of $300 billion to rescue troubled banks, would de facto play directly into Paulson and the US establishment’s long-term strategy, by in effect weakening the banks and repaying US-originated Asset Backed Securities held by EU banks.

Using panic to centralize power

As I document in my forthcoming book, Power of Money: The Rise and Decline of the American Century, in every major US financial panic since at least the Panic of 1835, the titans of Wall Street—most especially until 1929, the House of JP Morgan—have deliberately triggered bank panics behind the scenes in order to consolidate their grip on US banking. The private banks used the panics to control Washington policy including the exact definition of the private ownership of the new Federal Reserve in 1913, and to consolidate their control over industry such as US Steel, Caterpillar, Westinghouse and the like. They are, in short, old hands at such financial warfare to increase their power.

Now they must do something similar on a global scale to be able to continue to dominate global finance, the heart of the power of the American Century.

That process of using panics to centralize their private power created an extremely powerful, concentration of financial and economic power in a few private hands, the same hands which created the influential US foreign policy think-tank, the New York Council on Foreign Relations in 1919 to guide the ascent of the American Century, as Time founder Henry Luce called it in a pivotal 1941 essay.

It’s becoming increasingly obvious that people like Henry Paulson, who by the way was one of the most aggressive practitioners of the ABS revolution on Wall Street before becoming Treasury Secretary, are operating on motives beyond their over-proportional sense of greed. Paulson’s own background is interesting in that context. Back in the early 1970’s Paulson started his career working for a rather notorious man named John Erlichman, Nixon’s ruthless adviser who created the Plumbers’ Unit during the Watergate era to silence opponents of the President, and was left by Nixon to ‘twist in the wind’ for it in prison.

<snipped>

I don’t put much stock into the notion that Bush created the crisis. Or one thing, the arrogance and incompetence is a much simpler theory and doesn’t leave as many lose ends as the MIH theory, especially given how much damage its doing to the GOP election.

But these articles go a long way to challenge that assertion. This may also be part of the intention behind the bail out, to provide no-strings cash to the banks just mentioned in order to buy out the troubled European Banks. Yes, THIS makes sense.

In the grand schema of things, Germany and France are no different from Iran or Iraq. The only real difference is he can’t invade them militarily. But the truth is that the Euro block has been the greatest threat to US hegemony in a way Iraq could only dream of, by having the power, influence, and historical position to establish economic independence. It’s one of the things the World Bank and the WTO has been extremely aggressive with, even attacking US interests if it served Pax America to do so. But the more trade deals we set up with India and China, the more skeptical Europe becomes.

So Bush has latched onto notions of economic warfare to launch the battle for dominance over the European Block.