The Big Read: Financial Terrorism


Wednesday, November 02, 2016 3.06PM / By @Alatenumo

Financial Terrorism
Elizabeth Fernando was left with no choice than to resign two days after the Bolivian Electoral Commission declared her winner of the Presidential election. By the time she had finished making her victory speech, the Boliviano currency had crashed by 12% while the yield on the government bond jumped to 15%. The market had truly spoken. Reflecting on the saga, Fernando said, "My country was attacked by Financial Terrorists. They are destroying my country and my frightened people have taken to the streets." When Fernando campaigned to be President, she crisscrossed the country promising free healthcare, free education and a guaranteed basic income for every working age Bolivian citizen. In response to these pledges, the Bolivian people cast their vote for Fernando. However, on the other side of the world, this pledge wasn't well received by some financiers who decided to vote with their money, which led to the economic crash.

The phrase financial terrorism was popularised by Max Keiser, in a speech made to students at Erasmus University in Rotterdam

. During the speech, Keiser said, “To suggest that there is any moral or ethical aspect to anything that’s going on now is to be completely naive about the fact that we live in an era dominated by financial terrorists. Terrorists. Terrorists. Terrorists [...] They’re here to kill you and themselves."

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Who Is A Financial Terrorist?
A number of commentators are at a loss as to why certain aspects of the finance world have been described as terrorism. To get a clearer understanding of financial terrorism, parallels can be drawn with the more common form of terrorism that exists today. "If one is asked to sketch a terrorist on a piece of paper, one would probably draw a picture of a brown-skinned man of Middle Eastern extraction wearing a turban and living in a cave," says Debo Asiwaju, a political risk analyst at Linus Analytics Partners, "A financial terrorist doesn't fit this stereotype; he is more likely to be a white male with greasy hair wearing a suit working on the 30th floor of a building somewhere in the Financial district of Manhattan or London."

A key characteristic of terrorism is the use of violent means to achieve an ideological end. Unlike White terrorism, which uses physical and mental violence to promote the ideology of white supremacy, or Islamic terrorism, which uses physical violence to establish a Caliphate, financial terrorism uses economic violence to usher in neo-liberalism. Fabio Xavier, a currency trader at Hubris Capital LLC told Alatenumo Times, "We are driven by the ideology of capitalism and we are prepared to die to defend the absoluteness of the Market." Felix, a senior manager in the City who declined to provide his surname is in agreement, "The Market has no moral limit and should never be questioned." The predominant religion of these financial zealots is Dollaranity, which is symbolised by the bronze calf sculpture, situated a few minutes’ walk from Wall Street. Stuart Atkinson, the Chief High Priest of the Mammon Fellowship in Manhattan says, "The god of money is very bloodthirsty and has to be appeased with the bones and blood of poor people, many of whom live in developing countries, hence the fascination of financial terrorists with these countries."

Conventional terrorists have their own idea of utopia. Those engaged in financial terrorism long for a world with no trade unions, a flexible labour force, widening gap between the rich and poor, an eradicated welfare state, tax cuts for the rich, privatisation, zero regulation, free trade and an independent central bank. Professor Nick Williams of the Psychology Department at University of Teddington says, "It is wrong to generalise all supporters of capitalism as terrorists; a financial terrorist is a psychopath who will result to economic violence to achieve his bucket list.” 

Weapon of Choice
Terrorists use a variety of weapons to achieve their goals. For instance, members of the Mujahedeen prefer to use suicide vests and White supremacists prefer the gun. The financial terrorist also has his weapon of choice. "When we want to force our ideology on government’s, we use currencies, bonds and our nuclear option - derivatives," says Simon Cameron an emerging market currency trader at Ravenous Global Inc. Financial weapons such as derivatives were used to devastating effect by these terrorists in the build up to the Great Recession.

Modus Operandi
Financial terrorists can be classified into three groups. The first type is the financial bomber, who takes risky bets, which often result in financial explosions of biblical proportions. The scale of the financial blast is usually toxic enough to scare governments into bailing out the terrorist. The second type is the financial fraudster who engages in fraudulent activities like mortgage fraud, Libor fraud, gold fixing, flash crashes, money laundering, currency rigging and rogue trading. The third group, which will be explored in more detail, is the Political Financial Terrorist (PFT). The PFT terrorises governments into making a choice between implementing market reforms or facing the consequences of a crashed economy.

"The Political Financial Terrorist is a very interesting character," says Roger Van Zyl, a financial terrorist based in South Africa, "Unlike Al Qaeda, the weapons of our warfare are not carnal, they are mighty enough to pull down governments. We enjoy using our positions in currencies and bonds to scare the shit out of governments." The PFT views the world as a battlefield and thrives on installing leaders sympathetic to their neo-liberal ideology. If a politician opposes or abandons neo-liberalism and embraces a more equal society, the PFT will strike. "Terrorists have a tendency to label anyone who deviates from their ideology infidels, traitors or apostates. The financial terrorist is no different; he labels those sceptical of capitalism as populists, socialists or conspiracy theorists" says Chris Faure, the Chief Economist at Myopic Ventures.

When a leader engages in a "populist" activity or intervenes with the workings of the market, the PFT hits back by orchestrating a crash of the country's financial market. "If the country we plan to attack has no capital controls, we will deliberately knock a couple of percentage points of the stock market. This will act as a warning for the leader to toe the line," says Roberto Vieira, Managing Director of Toronto-based vulture fund Vieira Viper Associates. "If the political leaders refuse to budge, we will attack the country’s currency and bond market. Once interest rates start to skyrocket and the currency of the target country loses value, the citizens will rise up and put pressure on the government to step in line," he says.

Sometimes PFTs are more proactive and will strike earlier in order to influence the election of a market-friendly leader such as the case in the build up to the presidential election in Felavia Republic. This election pitched Jose Santos, the Princeton-educated former IMF economist against Felipe Rodriquez, a retired bus driver. Three weeks before the presidential election, the opinion polls suggested that Rodriquez would win the election. In response to the polls, the financial terrorists panicked. "I was in a state of shock because Rodriquez policies were sympathetic to the poor and his election would have prevented the sale of the country's strategic assets to some of my friends," says Kate May, a partner in charge of strategic investments at Ignoramus Economica.

Within 24 hours after the release of the opinion poll, the country was shaken to its foundation. According to Serena Gomez, a civil servant, “I had never seen anything like this before. I almost had a heart attack when our currency crashed by 6% within ten minutes. I was told it was caused by someone's fat finger." The crash swayed the election in favour of Santos as many Rodriquez supporters jumped ship. "When I saw the mayhem, I made up my mind to vote for Santos. It is better to have a President who will not be in the firing range of the financial terrorist," says Juan Neymar, a former campaign supervisor for Felipe Rodriquez. Three months after Santos's election as President, the terrorists increased the Felavia Stock Exchange Index increased by 10%.

The South African Connection
South Africa is described by a number of commentators as the Ground Zero of political financial terrorism. Ever since the country freed itself from the shackles of Apartheid, it has become a battleground for financial terrorists. Shortly after Mandela was released from prison, the financial terrorists attacked the rand (which fell by 10%) because they feared that he might implement the terms of the Freedom Charter. A few years later, the rand crashed again when Mandela appointed Trevor Manuel as South Africa's Finance Minister in 1996. This was partly because the financial terrorists were uncomfortable with the appointment of a non-white Finance Minister who had a limited economics background. In December 2015, the South African Government sacked Finance Minister, Nhlanhla Nene and replaced him with David Van Rooyen, who was not known to many financial terrorists. In response, the rand hit a new low dropping by 5.7% against the dollar. This put pressure on the government to find a "suitable" replacement. The terrorists were eventually appeased when Pravin Gordhan, a 'man widely respected by the market' took over. "Whenever a person in a developing country is reported in the press as being widely respected by the market, it is often a code word for a puppet who is answerable to his or her paymasters in Washington, London and Wall Street," says Makele Biko, a civil rights activist based in Soweto.

In August 2016, less than 24 hours after the South African police summoned the "widely respected" Pravin Gordhan to answer questions relating to activities carried out while he was in charge of the tax collecting agency, the rand plunged by almost 3% , thus making it the worst performing currency out of the 31 major and developing-nation currencies monitored by Bloomberg. Edward Gates, a Senior Vice President at Vampire Sucks said, "If Pravin is removed from office and charged, we will make sure that South Africa's credit rating is downgraded and that the rand crashes. Even if Pravin dies, we expect the Government to resurrect him from the dead and ensure that he continues to perform his duty as Finance Minister."

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Overcoming Financial Terrorism
Financial terrorism is currently an integral part of the world system, but some are optimistic that this menace can be curtailed. Pastor Ajibade Cole of Christ Outreach Temple located a few blocks away from Wall Street says, "To solve this problem, there needs to be what Martin Luther King called a revolution of values. Unfortunately, money has replaced God in our society and it is about time for the god of mammon to be burnt down, ground in fire and scattered in the red sea. We need to move from a money oriented society to a people oriented society." Others blame the media for the financial terrorist success. The media and financial terrorists have a symbiotic relationship. The terrorists give the media access to their activities and in return the media give the terrorist good coverage when they strike. "The media should starve these terrorists of airtime," says Father Dennis, a priest at the Holy Cross of the Saints Mission, "How can it be that it is not a news item when a child dies of hunger, but it is front page news when the yield on a government bond increases by 75 basis point? How can it be that the market is humanised, while the poor are dehumanised? How can it be that free trade is celebrated, while fair trade is ignored?"

Governments around the world, especially those in the West have what it takes to put an end to the destructive activities of financial terrorists, but many lack the willpower to do so. Politicians in a number of countries have been "captured" by the financial jihadists. Several Parliamentarians and Congressmen are on the payroll of financial terrorists. "There is obviously a conflict of interest. How do you expect a government official to legislate against financial terrorism if his livelihood is financed by financial militias?" says Alan Gills, an advocate for good governance. According to the Institute For Lobbying Affairs, between 2000 and 2015, the total amount spent by financial terrorists lobbying government officials in the West was $1.5bn. There has also been an emerging trend whereby retired financial terrorists move into government positions and former politicians morph into financial terrorists. A research paper recently published by Stamp Out The Revolving Doors, notes that in the first nine months of 2016, over a thousand political financial terrorists moved into government positions around the world.

Some believe that tackling financial terrorism is a lost cause and energy should be expended in making it less appealing to the future generation. "Financial terrorism is not going to end anytime soon because we live in an age where rugged individualism and aspiration are the names of the game," says Dr. Jean-Pierre Sarkozy, the outgoing Dean of Insensate Business School, "People are programmed to aspire to drive flashy cars, live in big houses and wear expensive jewellery. That's why I'm not surprised that financial terrorism is the most popular course in business schools." Trevor Franklin, a former financial terrorist who now teaches in a high school in California thinks parents can play a critical role in discouraging their children from turning to financial terrorism. "Parents need to teach their children that while the pursuit of wealth is not immoral, it is immoral if it is done at the expense of humanity. After all, for what shall it profit a man to gain the whole world and lose his soul?"


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