Nuking US Financial Markets

On the 20th of October in Shanghai at the APEC conference, U.S. President George Bush told leaders of the 21 nations assembled there for an annual summit meeting, that the terrorists who struck the World Trade Center were trying to bring about a collapse of world markets. It was the first time he had suggested that the terrorist network Al Qaeda was seeking to “shatter confidence in the world economic system.” He then called on businesses around the world to join the fight against terrorism, while acknowledging that new security measures and limits on border crossings ran the risk of undermining world commerce. “Terrorists want to turn the openness of the global economy against itself,” he said in a speech to chief executives, who held their own meetings in parallel with those of the government leaders. “We must not let them.”

At the same time, the entire U.S. Congress appears to have been "high" on something other than anthrax spores when they reviewed the provisions of H.R. 3004, Financial Anti-Terrorism Act of 2001 and S. 1510, The U.S.A. Act of 2001. The foregoing is apparent because they are about to authorize the theoretical equivalent of "hara-kiri" with the U.S. financial markets as they rip up the United States Constitution in their psychedelic panic and cocaine induced confusion from the "aroma" of all those tainted funds that are about to be forfeited under the newly expanded powers in the war against terrorism.

These proposals will substantially broaden the powers of U.S. law enforcement agencies to seek the forfeiture of funds held in United States financial institutions and/or foreign institutions in United States dollars.

Forfeiture is equivalent to a 100% tax.

If these powers become enshrined in law, the United States financial markets will witness one of the largest flights of capital in its history. The Eurodollar and Eurobond markets were created by similar knee jerk hysteria, only then it was a product of the cold war.

If in this panic, the United States relies on the same feds that have been derelict in their direction of the war on drugs for the past two decades, the war on terrorism might be dead on arrival.

American servicemen will once again have died in vain!

The C.Y.A. "bureaurats" that brought us Ruby Ridge, Waco, Wen Ho Lee, Robert Hansen, and COINTELPRO Nouveaux spent the better part of the last decade emasculating the U.S. national intelligence community and military establishment through their international expansion of authority.

While the Feds were busy opening offices in almost every country in the world in their war against international crime, they failed to see the real threats that America and the West were about to face. For example, the 127 page U.S. Department of Justice's National Money Laundering Strategy For 2000 prepared in March of 2000 used the term "terrorism" only 2 times in the text and once in its footnotes.

While the U.S. Commission on National Security in the 21st Century was preparing drafts in the late 1990's to protect the United States against future risks to the American populace, others were thinking about how to maximize forfeitures.

Unfortunately, these federal "bureaurats" have used their political acumen and years of experience on Capitol Hill to blamestorm their past failures on legislative and judicial obstacles rather than on their own bumbling incompetence in an increasingly globalized, complex world.

These same bureaucratic incompetents that should be the targets of the first National Science Foundation grant on human euthanasia have recycled their previous money laundering "vision" by inserting the word terrorism a few more times and selling it to Congress. What next? A grass roots campaign organized by Mothers Against Box Cutters?

More forfeitures will not lead to less terrorism! Forfeiture is 100% taxation. 100% taxation is confiscation.

If these proposals only confiscated the assets of terrorists, there would be no risk of massive capital flight. Unfortunately, the special interest lobbyists for the criminally negligent bureaucracy have expanded these powers of forfeiture to almost any conceivable crime committed in the United States or, for that matter, any part of the world.

One might argue that additional powers are required to deal with the extraordinary events of the 11th of September. Fine, but let us not lose sight of the fact that these broad powers, granted under the auspices of National Security are meant to deal only with extraordinary circumstances. Unfortunately, if not carefull, we run the risk of institutionalizing extraordinary powers for dealing with less than extraordinary circumstances, as conditions return to a reasonable state of normalness.

Adam Smith wrote in 1776 that if you tax (say, "forfeit") movable capital it will be concealed or removed. Worse, some forms of capital are more concealable and removable than others, so a tax on capital, even on all capital, is necessarily non-uniform. Knowing the quantity of mobile capital requires a deep inquisition as no people could support. Today with instant electronic encrypted international fund transfers, the availability to avoid and evade taxes on mobile capital has outrun even Smith's vivid insights.

The criminally negligent bureaucrat's response is to call for more enforcement, and to scapegoat financial institutions. They also call for worldwide thought control to give it moral authority and general support. The end of this thought control is to criminalize commerce. The moral of the story — To impose a false, self-serving morality on others is itself immoral in the worst way.

We have come far downhill since Adam Smith gave people credit for not supporting deep inquisitions into private affairs. How he would boggle at the inquisitions supported or tolerated today.

H.R. 3004, Financial Anti-Terrorism Act of 2001 and S. 1510, The U.S.A. Act of 2001 have nothing to do with the War On Terrorism. They have everything to do with un-elected bureaucrats attempting to impose a worldwide intelligence network with vast powers of search and seizure that will do little to stop terrorism. They will simply institutionalize another McCarthy style witch hunt against "the usual group of suspects" that will do little to safeguard the United States against future attacks.

In the near term, the victim of these "latter day patriots" will be the U.S. financial markets as H.R. 3004 and S. 1510 will combine to start a chain reaction that will drain foreign deposits from U.S. bank accounts, shift correspondent banking relationships from US dollars to other major currencies, and lead the United States further into economic recession. Sadly, the U.S. Coalition Empire will be undermined from within by the economic erosion caused by these "latter day patriots".

October 26, 2001