Of Paper 'Money' and 'Paper' Terrorism

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Proving his antagonist’s point?
Socrates insisted that justice was something other than the “advantage of the stronger” — yet he submitted to an unjust death sentence, thereby apparently validating the idea that citizens have a moral responsibility to submit to officially sanctioned injustice.

“Justice is merely the advantage of the stronger…. Injustice, if it is on a large enough scale, is stronger, firmer, and more masterful than justice.”

~ Thrasymachus the Sophist, as quoted in Plato’s Republic (book I)

Accompanied by the familiar fanfare of self-congratulation, the FBI recently arrested four members of the “sovereign citizen” movement in Las Vegas.

These were not garden-variety “anti-government extremists,” insisted the Bureau; rather, they were a cell of ruthless, heavily armed “paper terrorists” who committed various kinds of financial fraud involving “fictitious obligations” in order to discharge personal debts.

Most people have never heard of “paper terrorism,” a concept invented a little more than a decade ago by federal prosecutors and their enablers in so-called “watchdog” groups (most prominently the Southern Poverty Law Center, a litigation-fueled, self-sustaining scam run by racial ambulance chaser and alleged pervert Morris Dees).

“Paper terrorism” occurs anytime a “public servant” — that is, a tax-supported parasite employed by one of the state’s instruments of extraction, suppression, or punitive violence — finds himself dealing with the inconvenience of a bogus property lien or phony civil judgment.

This is a tactic frequently used by people commonly called “anti-government extremists” but who are actually very talented at mimicking the government’s criminal behavior in pursuit of their private interests.

Ersatz legal documents filed by adherents of “Sovereign Citizen” and “Common Law” movements hardly qualify as weapons of mass destruction; they’re more like low-yield instruments of particularized harassment. Any trouble they cause results from a form of gullibility to which government employees are particularly susceptible — namely, the Vogon-like tendency to take at face value any piece of paper embossed with official-looking insignia and cluttered with impenetrable legal prose.

This is a perfect example of the kind of opportunistic fraud that is the inevitable by-product of omnivorous government. Were it not for the fact that government emits an endless blizzard of paper intended to do exactly the same kind of thing that “paper terrorists” are attempting — that is, to confiscate earnings or property for punitive purposes — the scam run by the latter wouldn’t work. As it is, however, the bogus legal paperwork is sometimes scooped up without a second thought, as if it were so much white confetti in a snowdrift.

Nor is this the only way in which some self-designated “Sovereign Citizen” activists flatter our rulers by earnestly imitating their criminal behavior. Quite frequently the practitioners of “paper terrorism” pursue other scams involving phony cashier’s checks and other spurious financial instruments — a parallel we’ll examine in greater detail anon.

The arrests in Vegas followed three years of arduous undercover work by Nevada’s Joint Terrorism Task Force (JTTF), whose confidential informants boldly infiltrated meetings of the “paper terrorist” cell in its tenebrous lair of diabolical evil — or, as the venue is listed in the arrest warrant, “Denny’s restaurant at Fremont Street and Boulder Highway.”


“Sovereigns” in court: An artist’s rendering of Samuel Davis (left) and Jan Lindsey.

The “Sovereign Citizens Court” in Las Vegas was headed by retired FBI agent-cum-tax resister Jan Allen Lindsey, which is sufficient cause to suspect a set-up. To that we must add the fact that every criminal act allegedly committed in this scheme — such as the sale of unregistered parts to convert semi-automatic rifles into machine guns, and the laundering of large sums supposedly stolen from Wachovia Bank — was done at the initiative of the JTTF’s provocateurs.

This doesn’t mean that the “sovereign citizens” involved in this affair were entirely blameless. It does, however, mean that this incident — like so many recent ones involving the purported interdiction of terrorist plots — was, in effect, a production scripted and stage-directed by the FBI.

Although the Bureau accuses the group of charging $96,000 in fees to launder the supposedly stolen funds through a trust fund, not a penny of actual stolen wealth changed hands.

Let’s be unambiguously clear about one thing: To the extent that “sovereign citizens,” or anybody else, defraud innocent people out of any amount of money or property, they’re committing a crime. When people circulate phony cashier’s checks in exchange for cash or goods, they’re stealing. It’s that simple, and simply wrong. And the morality of the matter is not affected in any way by the fact that generating and circulating phony money and other financial instruments is one of the major activities of the government ruling us.

Just a few weeks before the Feds deployed a small army to round up a handful of people accused of stealing nothing, others in the employ of Leviathan were eagerly acting as accomplices in a $30 billion heist committed on behalf of AIG, which was already in receipt of $130 billion in funds stolen from the taxpayers.

Widely considered the “world’s largest insurance company,” AIG is in fact a taxpayer-supported criminal enterprise, and — what’s much the same thing — a key pillar of the entire political and financial establishment.

At the time of the company’s de facto nationalization last fall, former AIG CEO Maurice Greenberg (who was himself deeply implicated in an Enron-style accounting fraud scandal) quietly admitted that it had lost 90 percent of its advertised value. Greenberg’s estimate was far too modest; AIG’s value is actually best expressed by using a single-digit, donut-shaped number.

Nevertheless, because AIG was and remains deeply entwined in the multi-national criminal enterprise called modern finance, and its demise would result in injury to a lot of powerful people who donate to political campaigns, the Federal Reserve issued $130 billion to keep the firm in operation.

This was the moral equivalent of stealing the same amount from private savings accounts, pensions, and investments. More than $50 billion of the $130 billion bail-out was “laundered” through AIG on behalf of the firm’s cohorts in crime (or “counter-parties,” to use the Banksters’ preferred euphemism) — the elitist criminals running Goldman Sachs (aka the Shadow Treasury Department), Merrill Lynch, Morgan Stanley, and various European banking interests, such as Deutsche Bank and the Royal Bank of Scotland.


The criminal elite: AIG’s Maurice Greenberg (right), seen here with Robert Rubin (left) and David Rockefeller (center) at a 1998 meeting of the Council on Foreign Relations.

The $130 billion slopped in AIG’s trough was the product of just one of many, many such acts of subtle larceny committed since last September, a period that witnessed an $8 trillion crime spree carried out by the Fed and the Treasury Department on behalf of insolvent financial institutions in order to protect them from the consequences of their fraudulent accounting practices.

On February 26, AIG handed the Treasury Department the equivalent of a $30 billion ransom notea “strictly confidential” 21-page document entitled “AIG: Is the Risk Systemic?” That document insisted that denying AIG another $30 billion pilfered by government from the productive class would have lethal consequences to the global economy: Because of the “inter-linkages and interdependencies” in the international financial system, the “entire system” could be brought down “if one player is eliminated, or a cluster of failures occurs at once.”

Speaking of the term “cluster”….

There is a profoundly vulgar eleven-letter compound word involving the term “cluster,” often heard falling from the lips of people with a military background, that perfectly describes the system referred to by AIG. Now the firm and its, ahem, partners in this Fed-abetted orgy of financial corruption insist that the rest of us have to pay the bill and clean up after them.

In describing the source of its collapse, AIG’s sensibilities are too chaste to permit its analysts to employ the appropriate “f-word”: “Fraud.”

The document describes how AIG’s AAA credit rating “was used to backstop a $2 trillion financial products trading business” that grew out of “an over-reliance on U.S. residential mortgage-backed securities in its investment portfolios….”

In other words:

AIG, which is the world’s largest insurer of investment securities, was investing its operating capital in the same feculent pool of mortgage-backed securities it was insuring. And it was carrying on this fraudulent enterprise behind an unearned AAA credit rating. In this way it became a central player in the multi-trillion-dollar “derivatives” market.

The following illustration comes as close as anything I’ve seen to a suitable description of the derivatives market:

Take a group of mortgage loans, most of them squishy with impending failure and pungent with ripening fraud; “securitize” them into a bond; then place that bond between two mirrors that face each other in such a way that the mutual reflections appear to trail off into infinity.

Now, rather than selling the bad mortgage bond, you sell as many reflections of that bond as you can, counting each sale as “profit.” This scam, which eventually entangles municipal governments, pension funds, and countless others, will continue as long as easy credit continues to flow, and you can maintain the pretense that the original bond has marketable value. And this requires that the criminally fraudulent enterprise that issued that instrument maintain its own supposed viability.

As AIG tells the story, this is where the rest of us come in. Unless the Treasury Department and Fed continue to steal from what the rest of us have earned and saved in order to continue making regular payments to AIG, the company will collapse, starting a catastrophic chain reaction in the derivatives market. Ultimately, the entire economy will bleed to death when the house of mirrors called the derivatives market becomes a supernova of razor-sharp shards.

Stalin’s infamous dictum about one death being a tragedy and a million deaths a statistic captures just the most horrifying variation on a key political principle: If a crime is big enough, it becomes official policy. Steal $10,000 from the local bank, and you’re a felon; steal $8 trillion on behalf of the banks, and you’re a federal policy-maker.

“Terrorism,” as the term is commonly used, refers to the privatization of the lethal political violence carried out by way of government monopoly.

Those accused of “paper terrorism” are following that logic in bureaucratic fashion. They emulate the behavior of the Federal Reserve and its seraglio of fractional reserve banks by creating worthless but official-looking financial paper, and they mimic the behavior of the banking system’s enforcement mechanism by filing legal documents intended to punish those who don’t play along in the scheme by exchanging valuable goods and services for worthless paper.

The only material difference between what the government does, and what “sovereign citizens” attempt to do, is that captured in Thrasymachus’s notorious statement that “justice is the advantage of the stronger”: Our Rulers can force us to use the ugly, innately worthless scrip and slugs they call “money,” and to submit to the endless larceny they commit through inflation and taxation. They also have the means to pursue those who infringe on their criminal monopoly.

It should be obvious, but is worth pointing out anyway, that all of this criminal nonsense is an outgrowth of the evil system of fiat money and income taxation inflicted on Americans in annus horribilis 1913. It would be worth the pain of a deep but relatively brief depression to bring that system to an end. Alas, those who presume to rule us are doing their best to prevent such a desirable outcome.

William Norman Grigg [send him mail] writes the Pro Libertate blog.

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