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The Goldman
Sachs
Conspiracy.
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Martin A. Armstrong
TCL * r j r t D i x Camp #12513-050
PO Box 2000
Fbrt Dix, New Jersey 0B640
ArTnstronsEcanomics@tiMail.COM
The s t o r i e s about Goldman Sachs and spreading the blame around l i k e i t was a
g i a n t p l o t t o destroy the economy and then create the greatest t r a n s f e r of wealth
i n modern h i s t o r y o r ever under the noses of the Democrats, i s missing the p o i n t .
You have t o r e a l i z e t h a t there was no p l o t t o i n t e n t i o n a l l y create the economic collapse
to make a w i n d f a l l p r o f i t . That i s a s t o r y t h a t could be i n t e n t i o n a l l y planted t o d i v e r t
the t r u t h . This has always been about c r e a t i n g the .perfect trade and r i g g i n g the game.
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The way t o d i s c r e d i t an i s s u e i s (1) attack the; messenger, o r (2) put out the
misinformation t o convert i t i n t o a "conspiracy theory" p o s i t e d by nut jobs. These
are the two attack formations. Look at Scooter Libby. We know t h a t a l l the leaks
came from Dick Cheney. They t r i e d t o get at Lihhy, h i s a i d , but he knew that Bush
would take care o f him i f be h e l d h i s ground. They attacked the press, J u d i t h M i l l e r
of the New York Times, even throwing her i n j a i l on contempt u n t i l she would agree
t o t e s t i f y . So much f o r Woodward & B e r s t e i n p r o t e c t i n g "Deep Throat," They attacked
the messenger and d i v e r t e d the a t t e n t i o n from Cheney.
Now coma the Japanese i n the next decade. How d i d the Japanese cars beat both
the American and German manufacturers? They took the currency r i s k home. Besides
providing a q u a l i t y product, they achieved p r i c e s t a b i l i t y by p r i c i n g the cars i n
d o l l a r s rather than yen, and hedging the currency r i s k . As German cars would r i s e
i n p r i c e , the Japanese were able t o ccmpete and take the market by t a k i n g the " r i s k "
of currency back t o Japan.
I received a c a l l from Mercedes i n Germany. They heard Princeton might have had
something t o do w i t h the Japanese g a i n i n g market-share. I f l e w f o r the meeting t o
S t u t t g a r t . They had tfade another ntistake. They s o l d jthe B r i t i s h pound short assuming
t h a t the Euro would be k i n g . The hedge was devastating the balance sheet. I Jjimediately
advised they l i q u i d a t e the hedge and t o change their: p r i c i n g t o the l o c a l currency
f o r each market s e t t i n g up a hedging desk at home.
vrtiere there was a p l a n and a d i r e c t i v e - The 1971 event was an e v o l u t i o n t h a t was the
product of a time w i t h OPEC t h a t d i s t r a c t e d the world frcm even addressing the f a c t
t h a t currencies f l o a t e d . Hast u n i v e r s i t i e s s t i l l t o H r i e ffey do n o t teach a course
i n hedging. To be a CFO, i t became t r i a l and error,: This i s t h e gap that P r i n c e t o n
Economics f i l l e d . ••
i t had dawned on me perhaps when there was the 1989 Crash. I had c a r r i e d two
c e l l phones many times when the model was r e a c h i n g c r i t i c a l t u r n i n g points as i t
d i d i n 1989. The markets were going nuts, and my ohe c e l l phone ran t h a t was used
p r i m a r i l y f o r very s p e c i a l c l i e n t s . I t was one o f the G5 C e n t r a l Banks asking me
o u t r i g h t what the model was showing and d i d I t h i n k they needed t o intervene? As
T was e x p l a i n i n g the focus was i n Japan and t h a t there would not be any abnormal
c o r r e c t i o n and thus there should not be concern about i n t e r v e n t i o n , my regular c e l l
phone rang. I t was another G5 member asking the same questions.
What became very c l e a r t o me, was they t r u l y had no i d e a what was t a k i n g place
any more than the r e s t o f the world. Everyone was s t r u g g l i n g t o comprehend the new
world t h a t was emerging. Connunism seemed defeated, markets were crashing, and the
general expectation was - Should we be r e j o i c i n g ? i
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Yes, i t i s t r u e that Princeton Economics acted l i k e almost a p r i e s t among
c e n t r a l bankers. How t h a t evolved T w i l l save f o r my memoirs. But what T d i d
l e a r n from the experience was t h a t even a t t h a t l e v e l , they knew l i t t l e more about
what was happening than p r o f e s s i o n a l traders. They were no more the man i n the
clouds l o o k i n g down upon us a l l and p o n t i f i c a t i n g what s h a l l take place next.
The Treasury responded, and the ccenments ceased, although Princeton Economics
was perhaps the most respected i n t h i s area because we d i d everything from s c r a t c h .
Even one of the NY papers wrote t h a t P r i c e t o n Economics was one o f the most respected
firms around. The Canadian press had named myself economist of the decade. What was
t h i s a l l about? Foreign Exchange.
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There were a number o f c e n t r a l banks t h a t gave' us Information t h a t they wanted
published, but p o l i t i c a l l y speaking, they could not. T h i s TOE t r u e from Europe t o
A s i a . I gave a l e c t u r e i n Toronto where the C e n t r a l Bank o f Canada came t o l i s t e n
b r i n g i n g perhaps 10 people o r more. I would take questions from the audience, and
they were often about what the c e n t r a l banks were l o o k i n g a t - I would answer, and
everyone turned t o see i f the f o l k s a t the Bank o f Canada f l i n c h e d . The bankers
rare so cold-faced, afterwards, I went up and apologized i f I offended them. My
f r i e n d the head t r a d e r Pete, remarked: "Marty t h a t was a great l e c t u r e , I wish I
could t e l l these morons what you do." Of course Pete was r e f e r r i n g t o the f a c t t h a t
t h e i r hands are t i e d p o l i t i c a l l y . I even had the Finance M i n i s t e r o f Nova S c o t i a
t r y t o argue t h a t the c e n t r a l banks are i n control,'. they j u s t don't speak about i t .
Pete was there a t the same party, so I asked: "WDuld you l i k e t o meet the guy a t
Bank o f Canada?" Pete smiled.
The C e n t r a l Banks are f a r more independent than one expects. They are not part
o f a grand conspiracy. The danger t h a t e x i s t s i s more along the l i n e s o f a Goldman
Sachs t r y i n g t o put f o r t h t h e i r t r a i n e d people f o r p o l i t i c a l jobs. That i s the r e a l
danger. I f the c e n t r a l hanks were on board as some o f the conspiracy theories c l a i m ,
why W5uld GS neefl p o l i t i c a l candidates?
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the R e l i g i o u s Right was there and
furthered the ideas o f K a r l Marx
•3 profoundly. They backed the age
o f the Progressive republicans
T [—•—i 1 r- who perhaps d i d more t o destroy
1M0 P W) 15B \i& 1^- American r i g h t s u n t i l Bush.
J.P. Morgan was seen as e v i l by the Progressive Republicans and he was summoned
before the Senate b a s i c a l l y f o r an i n q u i s i t i o n , Tedxly Roosevelt's Trust-Busting days
saw e v i l - d o e r s everywhere they looked. Morgan was g r i l l e d i n p u b l i c and they t r i e d
t h e i r best t o destroy him. Hftdied s h o r t l y t h e r e a f t e r i n 1913. The Fed was created
e s s e n t i a l l y t o replace Morgan and t o do what he had been doing, stepping i n from time
t o time t o provide s t a b i l i t y ,
A c e n t r a l bank provides the l i q u i d i t y that helps t o smooth out the econonic
s e a s o n a l i t y o f the economy. For example, i n many i n d u s t r i e s , a t l e a s t l / 3 r d o f t h e i r
annual r e t a i l sales takes place a t Christmas time and thus are l i n e d up w i t h the
fourth quarter. Likewise, g a s o l i n e i s consumed core i n the simmer than i n the c o l d
winter. There are j u s t seasonal adjustments that a c e n t r a l bank does help t o smooth
OUt,
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Most people overlook the e n t i r e
purpose o f t h e Federal Reserve, From
i t s o r i g i n , i t was meant t o smooth out •;
the c a p i t a l flows n a t i o n a l l y t h a t had
created t h e Panic o f 1907. U n l i k e t h e
Fed today, i t d i d not buy Government
debt, i t s t a b l i z e d the economy by t h e
purchase o f corporate paper. Each o f
the 12 branches operated independently
and t h e c h a r t t o t h e r i g h t shows the
i n t e r e s t r a t e s o n l y a t the Hew York
Fed, that was t h e dominant branch, not
Washington,
- ^ T ^ C e Real C t u k ^ =
We are doing ourselves a great d i s s e r v i c e by assuming p l o t s and long-term plans
t o even Goldman Sachs and the " c l u b " because they cannot see past t h e next bonus check.
There i s no conspiracy t o c o n t r o l t h e world. Nor i s there a conspiracy t o create a
one world currency, t h a t i s ccming one way o r another"
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There i s a vast dis-information
campaign going on to cloud the r e a l
issues that are t a k i n g place. The more
one throws everything a t the w a l l , the
more i t sounds l i k e j u s t f i c t i o n .
T h i s i s Why you w i l l see a l s o attacks
upon myself because they do not want
you t o understand the core of the r e a l
Golfinan Sachs Conspiracy.
The " c l u b " b e l i e v e d they c o n t r o l l e d the IMF and thus had the i n s i d e t r a c k on
the loans going to Hussia. Edmond Safra i n v i t e d me to j o i n i n w i t h t h e i r Hermitage
C a p i t a l , where a f t e r h i s death, the CEO was banned from Russia by P u t i n . Just l i k e
w i t h RIG, b a i l i n g out RIG was an i n d i r e c t method o f covering the losses at GS, f o r
example.
The IMP support o f Russia was operating the same way. The "club" purchased the
Russian short-term paper a t unbelievable r a t e s o f I n t e r e s t , and they were banking
on the IMF t o make sure t h a t the money kept flowing. I p e r s o n a l l y warned the head
o f Republic National Bank t h a t Russia was going t o c o l l a p s e . He j u s t about laughed,
I was i n v i t e d t o Washington t o the National G a l l e r y t o show me the power of the
" c l u b " and the i n s i d e information they c o n t r o l l e d . They b e l i e v e d they had the IMP
i n the palm of t h e i r hand. You can check the London F i n a n c i a l Times f o r the summer
o f 1998. I d e l i v e r e d t h a t f o r e c a s t t h a t Russia was about t o c o l l a p s e and the FT
put i t on the f r o n t page o f the second s e c t i o n , more-or-less s t a t i n g that i f everyone
l i s t e n e d to Princeton, Russia was doomed. The c o l l a p s e came and w i t h i t , a contagion
t h a t caused massive l i q u i d a t i o n s around the world to cover what could not be covered
w i t h the Russian debt. That created the Long Term C a p i t a l Management c o l l a p s e and
again we f i n d the " c l u b " g e t t i n g the Fed t o b a i l them out, t a k i n g the money i n d i r e c t l y
to pretend they d i d not lose i n the debacle.
The IMF and World Bank have a long-time reputation o f being j u s t a b i t corrupt.
They are used t o create i n d i r e c t flows o f p r o f i t s to the " c l u b " t o avoid the d i r e c t
t r a n s f e r route to prevent most people from seeing what goes on. There are a host o f
problems i n t h i s area, and t h a t included the European Development Bank t h a t spent so
much money on b u i l d i n g a palace i n London, one would be shocked.
The only conspiracy i s t o make money and create guaranteed trades. There i s no
grand master-plan to take everybody' s l i b e r t y . Even the tyranny o f the E n g l i s h k i n g
made every felony death because Hit was cheaper t o , k i l l a p r i s o n e r than t o feed him
f o r l i f e . I t was always about the money' and the "club" i s no d i f f e r e n t .
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Lloyd BLankfein, head o f Goldman Sachs,
goes on the i n t e r n a l speaker-box at GS twice
a week i n recent months t r y i n g t o keep
morale up among the ranks. While everyone
may focus on the "missing month" i n GS's
accounting assuming t h i s i s h i d i n g the l o s s
o f about $1.3 b i l l i o n and the AIG money
t r a n s a c t i o n s , there i s another i s s u e
t h a t i s c l o s e r t o the core s u r v i v a l .
What GS i s r e a l l y t r y i n g t o hide i s the
amount of loans t o i t s own s t a f f t o
help them cover t h e i r own margin
c a l l s , -i .'
. Even the Democrats w i l l do nothing against Golctaan Sachs because they need
them t o be able t o continue t o f l o a t t h e i r expected t r i l l i o n s o f new debt. Who
w i l l get i t s o l d i f G o l r t o n Sachs goes t o j a i l ? The courts are owned by the
"club" and t h a t i s evidenced by an attempt i n New york t o f i l e a major l a w s u i t
on a c l a s s a c t i o n b a s i s a g a i n s t M e r i l l Lynch s e v e r a l years ago. The s u i t was
given t o Judge P o l l a c k who dismissed the l a w s u i t p r o t e c t i n g the Investment Banks
and the excuse was a c l e v e r weaving o f l e g a l p r i n c i p l e s t h a t were h i g h l y doubtful
and the Southern D i s t r i c t o f New York w i l l not a l l o w such s u i t s . You cannot p r e v a i l
i n New York ever against t h e " c l u b " or the government. They enjoy a 99% v i c t o r y
r a t e s and a l l other courts w i l l back them up. So Goldtoan Sachs has reached the
l e v e l o f being untouchable, and the p o l i t i c i a n s w i l l a l l o w t h i s t o go on because
i t serves t h e i r purpose. They need somebody t o s e l l t h e i r debt. I t i s c a l l e d a
Primary Dealer,
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more. Ha demonstrated t h a t never do c i t i z e n s win, and t h a t the decisions o f t e n
c o n t r a d i c t t h e . l a s t one, and every lawyer I ever spoke to about New York, says
the same thing. The Judges manipulate the r u l i n g s so t h a t the Government never \ ..
loses. We are no b e t t e r than a banana r e p u b l i c w i t h nuclear weapons. You j u s t
cannot invest i n a system t h a t i s rigged. This i s the code word t h a t Judge Sonya
Satomayor made - "Judges make p o l i c y . " When policy o b j e c t i v e s are t h a t the s t a t e
must always win, then there i s no r u l e o f law. That i s tyranny- So the courts
are f i r m l y w i t h i n the: hands o f the "club" and the p o l i t i c i a n s w i l l do nothing.
In f a c t , where the Senate has oversight CCTrmittees f o r the CIA, Homeland S e c u r i t y ,
and j u s t about every other department, there i s no such committee t h a t assumes any
oversight committee f o l l o w i n g j u d i c i a l r u l i n g s . Write you any Senator, T e l l him
you were t r e a t e d u n f a i r l y by a judge. I f he responds, he w i l l t e l l you he dees not
i n t e r f e r e w i t h the courts. Thus, you have no r i g h t s t o property a t a l l , f o r the
judges can do as they l i k e , whenever they l i k e , and t h a t serves the government
very n i c e l y . That i s why there are no o v e r s i g h t committees t o ensure you are t r e a t e d
f a i r l y . Even i f everyone voted tomorrow and demanded t o change t h i s law, judges are
not subject t o vote, and they c l a i m they have the f i n a l say as t o what any law means.
Goldman Sachs c o n t r o l s the courts i n New York- That i s even more powerful t h a t the
Fed.
The concentration o f c a p i t a l i n
sectors w i t h i n an economy i s what nc*
creates innovation. A l i o n w i l l take
down a zebra f o r a meal, and we can
pronounce i t i s unjust, and we shouk
a l l be a vegetarian, but t h a t i s not
the design o f nature. C a p i t a l w i l l i t
f a c t concentrate and i t i s the f a l l
of t h a t sector t h a t creates the next
wave o f innovation. The F i n a n c i a l
sector peaked, Goldman Sachs may now
appear i n v i n c i b l e , but even they w i l l
f a l l f o r t h e i r own s e l f - i n t e r e s t i s
t h e i r undoing. They can pass a law
and prevent s h o r t - s e l l i n g i n t h e i r
stock as Paulson d i d before: But i t
w i l l not a l t e r the game,
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tej mil ; When we look aL Uie performance
OfHit 1—3* H|BII '""a Uaf -vi.ie u n e e «DfH 1 * 1 * gar cno f-s H i •
of iGoldman Sachs shares, tha s t ^ d a r d
t e c h n i c a l a n a l y s t s w i l l focus on the
o l d double bottom a t 150, and see t h i s
as the w a l l o f r e s i s t a n c e . This i s by
far not a 100% r e s u l t . Often t h i s i s
faded and t h a t a t times w i l l s u c k e r - i n
new buyers j u s t i n time f o r the sheer
collapse.
Hie government should outlaw what Goldman Sachs, i s doing. E i t h e r you a r e a bank,
a broker-dealer- market-maker, o r a hedge fund. You cannot be everything r o l l e d - u p
f
Morgan claims t o be r e t u r n i n g t o the broker-dealer model and away from the high
r i s k o f p r o p r i e t a r y t r a d i n g . Goldman Sachs sees only: the mcney, not the business
model. The advice of i t s former Chairmen who have h e l d the l o f t y places o f p u b l i c
o f f i c e are no more educated i n the r e a l world economy than any politician;:.They have
presumed power i s t o manipulate and t o h e l l w i t h the f r e e markets. They views are
no d i f f e r e n t than t h e i r p o l i t i c a l c o n s p i r a t o r s .
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