MatrixLeaks: November 2011

The crisis - no, thank you




The people of Iceland have now twice voted not to repay international debts incurred by banks, and bankers, for which the whole island is being held responsible. With the present turmoil in European capitals, could this be the way forward for other economies?


The small island of Iceland has lessons for the world. It held a referendum in April to decide, more or less, whether ordinary people should pay for the folly of the bankers (and by extension, could governments control the corporate sector if they depended on it for finance). Sixty per cent of the population rejected an agreement negotiated between Iceland, the Netherlands and the UK to pay back the British and Dutch governments for the money they spent to recompense savers with the failed bank Icesave. That was less resistance than the first referendum last spring, when 93% voted no.

The referendum was significant since European governments, pressured by speculators, the IMF and the European Commission, are imposing austerity policies on which their citizens have not voted. Even devotees of deregulation are worried by the degree of the western world’s servitude to unconstrained financial institutions. After the Icelandic referendum, even the liberal Financial Times noted with approval on 13 April that it had been possible to “put citizens before banks”, an idea which does not resonate among European political leaders.




Iceland is an unusually pure example of the dynamics that blocked regulation and caused financial fragility across the developed world for 20 years. In 2007, just before the financial crisis, Iceland’s average income was the fifth highest in the world, 60% above US levels; Reykjavik’s shops were stuffed with luxury goods, its restaurants made London seem cheap, and SUVs choked the narrow streets. Icelanders were the happiest people in the world according to an international study in 2006 (1). Much of this rested on the super-fast growth of three Icelandic banks that rose from small utility institutions in 1998 to being among world’s top 300 banks eight years later, increasing their assets from 100% of GDP in 2000 to almost 800% by 2007, a ratio second only to Switzerland.

The crisis came in September 2008 when money markets seized up after the Lehman meltdown. Within a week, Iceland’s three big banks collapsed and were taken into public ownership. Moody now listed them among the 11 biggest financial collapses in history.

   Towards modernisation


After more than 600 years of foreign rule, Iceland’s social structure was the most feudal of all Nordic countries at the beginning of the 20th century. Fishing dominated the economy, generating most of the foreign-currency earnings and allowing the development of an import-based commercial sector. This created urban economic activities: construction, services, light industry. After the second world war the economy grew strongly, because of Marshall Plan aid (there was a large US-Nato military base); an abundant export commodity, cold-water fish, unusually blessed with high income elasticity of demand; and a small, literate population with a strong sense of national identity.

As Iceland became more prosperous it established a welfare state, in line with the tax-financed Scandinavian model, and by the 1980s had attained a level and a distribution of disposable income equal to the Nordic average. Yet it remained both more regulated and more patron-client-dominated than its European neighbours; a local oligopoly restricted the political and economic landscape.
There is a direct line of descent from the quasi-feudal power structures of the 19th century to the modernised Icelandic capitalism of the later 20th century, when a bloc of 14 families, popularly known as The Octopus, were the economic and political ruling elite. The Octopus controlled imports, transport, banking, insurance, fishing and supplies to the Nato base and provided most top politicians. The families lived like chieftains.

 The Octopus controlled the rightwing Independence Party (IP) which dominated the media and decided on senior appointments in the civil service, police and judiciary. The local, state-owned banks were effectively run by the dominant parties, the IP and the Centre Party or CP (2). Ordinary people had to go through party functionaries to get loans to buy a car, or for foreign exchange for travel abroad. Power networks operated as webs of bullying, sycophancy and distrust, permeated with a macho culture, something like the former Soviet Union.


This traditional order was challenged from within by a neoliberal faction, the Locomotive group, which had coalesced in the early 1970s after law and business administration students at the University of Iceland took over a journal, The Locomotive, and promoted free-market ideas. Their aim was not just to transform the society but also to open career opportunities for themselves, rather than wait for Octopus patronage. At the end of the cold war their position strengthened materially and ideologically, as the communists and social democrats lost public support. The future IP prime minister, Davíð Oddsson, was a prominent member.

Oddsson, born in 1948 with a middle-class background, was elected as an IP councillor to the Reykjavik municipal council in 1974; by 1982 he was mayor of Reykjavik, leading privatisation campaigns, including selling off the municipality’s fishing industry, to the benefit of members of the Locomotive group. In 1991 he led the IP to victory in the general election, and reigned (not too strong a word) as prime minister for 14 years, overseeing the growth of the financial sector, before installing himself as governor of the Central Bank in 2004. He had little experience or interest in the world beyond Iceland. His Locomotive group protégé Geir Haarde, finance minister from 1998 to 2005, took over as prime minister shortly after. These two men most directly steered Iceland’s great experiment to create an international financial centre in the North Atlantic, midway between Europe and America.

   Iceland liberalises


The liberalisation of the economy began in 1994, when accession to the European Economic Area, the free-trade bloc of EU countries, plus Iceland, Lichtenstein and Norway, lifted restrictions on cross-border flows of capital, goods, services and people. The Oddsson government then sold off state-owned assets and deregulated labour. Privatisation began in 1998, implemented by Oddsson and Halldór Ásgrímsson, the leader of the CP. Of the banks, Landsbanki was allocated to IP grandees, Kaupthing to their counterparts in the CP, its coalition partner; foreign bidders were excluded. Later, Glitnir, a private bank formed from the merger of several smaller ones, joined the league.

So Iceland roared into international finance aided globally by abundant cheap credit and free capital mobility, and domestically by strong political backing for the banks. The new banks merged investment banking with commercial banking, so that both shared government guarantees. And the country had low sovereign debt, which gave the banks high marks from the international credit-rating agencies. The major shareholders of Landsbanki, Kaupthing, Glitnir and their spin-offs reversed the earlier political dominance of finance: government policy was now subordinated to the ends of finance.

Oddsson and friends relaxed the state-provided mortgage rules, allowing 90% loans. The newly privatised banks rushed to offer even more generous terms. Income tax and VAT rates were lowered to turn Iceland into a low-tax international financial centre. Bubble dynamics took hold. City planners aimed to move Reykjavik from the trajectory of an ordinary city to that of a world city (despite its small population of 110,000) and approved several grandiose new public and private buildings, saying “If Dubai, why not Reykjavik?”



Iceland’s new banking elite were intent on expanding their ownership of the economy, competing and cooperating with each other. Using their shares as collateral, some took out large loans from their own banks, and bought more shares in the same banks, inflating share prices. It worked like this: Bank A lent to shareholders in Bank B, who bought more shares in B using shares as collateral, raising B’s share price. Bank B returned the favour. The share prices of both banks rose, without new money coming in. The banks not only grew bigger, they grew more and more interconnected. Several dealings of this kind are now under criminal investigation by the special prosecutor, as cases of market manipulation.

Tiny Iceland soon managed to enter the big-bank league, with three banks in the world’s biggest 300 by 2006. The super-abundance of credit allowed people to consume in extravagant celebration of their escape from the earlier decades of credit rationing (on top of the earlier escape from foreign rule as recently as 1944). They saw themselves as fully independent at last, which may explain their happiness ranking. The owners and managers remunerated themselves on an ever-larger scale. The richer they were, the more they attracted political support. Their private jets, roaring in and out of Reykjavik’s airport, seemed to be visual and auditory proof to the part-admiring, part-envious population below.

Income and wealth inequality surged, helped by government policies that shifted the tax burden to the poorer population (3). The bankers made large financial contributions to the governing parties and giant loans to key politicians. The leading Icelandic champion of free-market economics declared in The Wall Street Journal: “Oddsson’s experiment with liberal policies is the greatest success story in the world” (4).

In the euphoria, the dangers of a strategy of “economic growth based on vast foreign borrowing” were overlooked. Icelanders lived out the dictum of Plautus, the third century BC Roman playwright, who had one of his characters declare: “I am a rich man, as long as I do not repay my creditors.”

   The mini-crisis in 2006


In 2006 there were worries in the financial press about the stability of the big banks, which were beginning to have problems raising funds in the money markets (on which their business model depended). Iceland’s current account deficit had soared from 5% of GDP in 2003 to 20% in 2006, one of the highest in the world. The stock market multiplied itself nine times over between 2001 and 2007.
Landsbanki, Kaupthing and Glitnir were operating far beyond the capacity of Iceland’s Central Bank to support them as lender of last resort; their liabilities were real, but many of their assets were dubious.

In February 2006 Fitch downgraded Iceland’s outlook from stable to negative and triggered the 2006 “mini-crisis”: the krona fell sharply, the value of banks’ liabilities in foreign currencies rose, the stock market fell and business defaults rose, and the sustainability of foreign-currency debts became a public problem, The Danske Bank of Copenhagen described Iceland as a “geyser economy” on the point of exploding (5).



Icelandic bankers and politicians brushed aside the crisis. Iceland’s Central Bank took out a loan to double the foreign-exchange reserves, while the Chamber of Commerce, run by representatives of Landsbanki, Kaupthing, Glitnir and their spin-offs, responded with a PR campaign. It paid the American monetary economist Frederic Mishkin $135,000 to lend his name to a report attesting to the stability of Iceland’s banks. It allegedly paid the London Business School economist Richard Portes £58,000 ($95,000) to do the same for a later report. The supply-side economist Arthur Laffer assured the Icelandic business community in 2007 that fast economic growth with a large trade deficit and ballooning foreign debt were signs of success: “Iceland should be a model to the world” (6). The value of the banks’ “assets” was then around eight times greater than Iceland’s GDP.

In the elections of May 2007, the Social Democratic Alliance (SDA) entered a coalition government with the still-dominant IP. To the consternation of many supporters, SDA leaders ditched their pre-election pledges and endorsed the continued expansion of the financial sector.

Though they had survived 2006, Landsbanki, Kaupthing and Glitnir had trouble raising money to fund their asset purchases and repay existing debts, largely denominated in foreign currencies. So Landsbanki pioneered Icesave, an internet-based service that aimed to win retail savings deposits by offering more attractive interest rates than high-street banks. Established in Britain in October 2006, and in the Netherlands 18 months later, Icesave caught the attention of best buy internet finance sites and was soon flooded with deposits. Millions of pounds arrived from Cambridge University, the London Metropolitan Police Authority, even the UK Audit Commission, responsible for overseeing local government funds, as well as 300,000 Icesave depositors in the UK alone.

Icesave entities were legally established as branches, rather than subsidiaries, so they were under the supervision of the Icelandic authorities, rather than their hosts. No one noticed that the Icelandic regulatory agency had a total staff, including receptionist, of only 45 and suffered high turnover as many went on to join the banks, which offered better pay. No one worried much that, because of Iceland’s obligations as a member of the EEA deposit insurance scheme, its population of 320,000 would be responsible for compensating the depositors abroad in the event of failure. Landsbanki’s shareholders reaped the short-term profits while most Icelanders didn’t know anything about Icesave at all.

   Love letters


The second “solution” to difficulties in raising new funds was a way to get more access to liquidity without pledging real assets as collateral. The Big Three sold debt securities to a smaller regional bank, which took these bonds to the Central Bank and borrowed against them, without having to supply further collateral; they then lent back to the initiating big bank. The bonds were called “love letters” — mere promises. By participating in this game and accepting as collateral claims on other Icelandic banks the central bank was conniving in the banks’ strategy of gambling for resurrection.

Then the banks internationalised the process: the Big Three established subsidiaries in Luxembourg and sold love letters to them. The subsidiaries sold them on to the Central Bank of Luxembourg or the European Central Bank and received cash in return, which they could pass back to the parent bank in Iceland or use themselves. The OECD calculates that just the domestic love letters, between the CBI and the Icelandic banks, incurred losses to the CBI and the Treasury of 13% of GDP (OECD Economic Surveys: Iceland, June 2011).


   Financial collapse


The Icelandic banks fell two weeks after Lehman Brothers. On 29 September 2008, Glitnir approached Oddsson at the Central Bank for help with its looming liquidity problem. To restore confidence, Oddsson instructed the Central Bank to buy 75% of Glitnir’s shares. The effect was not to boost Glitnir but to undermine confidence in Iceland. The country’s rating plunged, and credit lines were withdrawn from Landsbanki and Kaupthing. A run on Icesave’s overseas branches began. Oddsson moved on 7 October 2008 to peg the krona to a basket of currencies at close to the pre-crisis value. With the currency tumbling and in the absence of capital controls, the foreign-exchange reserves were exhausted: the peg lasted for only a few hours, just long enough for those in the know to change their money out of the krona at a much more favourable rate. Inside sources indicate that billions left the currency in these hours. Then the krona was floated, and sank. On 8 October the then UK prime minister, Gordon Brown, froze Landsbanki’s UK assets under the anti-terrorism laws. The stock market, bank bonds, house prices and average income went into free-fall.

The IMF arrived in Reykjavik in October 2008 to prepare a crisis-management programme, the first time the Fund had been called in to rescue a developed economy since Britain in 1976. It offered a conditional loan of $2.1bn to stabilise the krona and backed the British and Dutch governments’ demands that Iceland should honour the obligations of the European deposit-guarantee scheme and recompense them for their bailouts of Icesave depositors.



Iceland’s normally placid population erupted in an angry protest movement, principally targeted at Haarde, Oddsson and the IP, although the SDA’s foreign minister Ingibjörg Gísladóttir was considered tarnished too. Thousands of people assembled in Reykjavik’s main square on freezing Saturday afternoons between October 2008 and January 2009, banged saucepans, linked arms in a circle around the parliament building to demand the government’s resignation, and pelted the building with food.

In January 2009, the IP-SDA coalition broke. To date, Iceland is the only country to have shifted distinctly to the left after the financial crisis. An interim SDA-LGM (Social Democrats-Left Green Movement) government was formed in January 2009 to lead until April’s election. In the election the IP was reduced to 16 seats, despite the overwhelming bias of the electoral system in its favour, its worst result since its formation in 1929.

   Icesave debt rejected


The SDA-LGM government came under immediate pressure to repay the Icesave debt; much of the IMF loan was withheld until Reykjavik agreed. The new government was also divided on whether to apply for full membership of the EU and Eurozone, with most of the SDA strongly in favour. After long negotiations, the government presented the terms they had agreed on the Icesave debt to the parliament in October 2009: ? 5.5bn ($7.8bn), or 50% of Iceland’s GDP, was to be paid to the British and Dutch treasuries between 2016 and 2023.

The party’s health minister resigned in protest, five dissidents refused to vote with the government. The bill was forced through on 30 December 2009, against high feelings in the country. On 5 January 2010 President Grímsson announced that he would not sign it into law, out of respect for the national sentiment. In the ensuing referendum the bill was decisively rejected. In the May 2010 Reykjavik municipal elections, the SDA slumped to 19% and a comedian was elected as the city’s mayor. In October protests resumed, and the coalition conceded the election of a constitutional assembly to draw up a new constitution (the existing one having been inherited from Denmark on independence in 1944). When the election was invalidated by the Supreme Court, the assembly was reconvened as a constitutional council appointed by parliament.

The deal on the table in this April’s second Icesave referendum involved substantial concessions on the part of the British and Dutch governments. After the no vote, the disagreement may have to go to international courts.


   The postponed crisis


The cost of losses on loans and guarantees, added to the cost of restructuring financial organisations, brings the total direct fiscal costs of the crisis to about 20% of GDP, higher than in any other country except Ireland (OECD Economic Surveys, Iceland, June 2011). But the postponement of major public spending cuts until this year has given the economy breathing space; and the sharp devaluation has helped to generate a trade surplus for the first time in many years. So far, Iceland has experienced smaller falls in GDP and employment than big public-spending slashers like Ireland, Estonia and Lithuania. The unemployment rate, only 2% in 2006, has been between 7% and 9% since 2009; but the rate of outmigration, of Icelanders and other European workers (predominantly Polish), has been the highest since 1889. However, the SDA-LGM government has announced drastic cuts in public spending for 2011 and beyond. Local governments have no budget for fresh projects. Hospitals and schools are cutting salaries and sacking employees. The freeze on house repossessions expired in 2010.


   Finance in the driving seat


The IP-SDA government’s decision to provide unlimited bank deposit guarantees illustrates its debt to the financial elite. Had it limited the guarantee to 5m krona ($70,000), it would have protected the entire deposits of 95% of depositors; only the wealthiest 5%, including many politicians, benefited from the unlimited guarantee, which now means further constraints on public spending.

Iceland’s tiny scale seemed to make it easier to challenge the government’s denial of the impending crisis, but the opposite was true. The Oddsson government undertook an extreme privatisation of information. Iceland’s National Economic Institute had a reputation for independent thinking, and Oddsson abolished it in 2002. From then on the banks, international rating companies and the Chamber of Commerce provided almost the only information and running commentary on the state of the economy, present and future.

Paradoxically, a number of critical reports were published when the bubble was in the early stages, including one by the CBI. But by 2007-08, when the dangers were acute, reports, including those by the IMF, became noticeably softer in tone. It seems that the official financial institutions, as well as bankers and politicians, understood that the situation was so fragile that just to speak of it might trigger a run on the banks.

In October 2010 the parliament decided to charge Prime Minister Haarde for breach of ministerial responsibility. The permanent finance secretary Baldur Gudlaugsson (former member of the Locomotive group) has been given two years in prison for using inside information for his personal advantage while selling his shares in Landsbanki in September 2008. But the special prosecutor in charge of the investigation of the banks has been working with a team of 60 lawyers and others for the past two years and has so far brought no charges. Meanwhile Oddsson was appointed in September 2009 as editor-in-chief at Morgunblaðið, the leading Iceland daily, and orchestrated coverage of the crisis. A commentator said that was like appointing Nixon editor of The Washington Post after Watergate. Iceland’s elite looks after its own.



   (1) World Database of Happiness, 2006: http://worlddatabaseofhappiness.eur.nl/


   (2) Among the opposition are the Social Democrat Party and the further left Common People’s Party.


   (3) Stefán Ólafsson and Arnaldur Sölvi Kristjánsson, “Income Inequality in a Bubble Economy: the Case of Iceland 1992-2008”, paper presented at the Luxemburg Incomes Study Conference, 28-30 June 2010 ; http://www.lisproject.org/conference/papers/olafsson-kristjansson.pdf


   (4) Hannes Gissurarson, “Miracle on Iceland”, The Wall Street Journal, New York, 29 January 2004.


   (5) Danske Bank, “Iceland: Geyser Crisis”, Copenhagen, 2006.


   Source:  Silla Sigurgeirsdóttir and Robert H Wade    


Robert Wade is professor of political economy at the London School of Economics; Silla Sigurgeirsdottir is lecturer in public policy at the University of Iceland. This is an updated version of “Lessons from Iceland”, first published in the New Left Review, London, September-October 2010





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9/11 Pre-Warnings


Paul Thompson’s Terror Timeline, as well as his updated version of the 9/11 timeline located at www.cooperativeresearch.org, was the key reference material used. For further information regarding the information presented, see original articles used in Thompson’s research, mentioned throughout.

In a press conference on April 13, 2004, President Bush stated, “We knew he [Osama bin Laden] had designs on us, we knew he hated us. But there was nobody in our government, and I don’t think [in] the prior government, that could envision flying airplanes into buildings on such a massive scale.” [Guardian, 4/15/04] He also said, “Had I any inkling whatsoever that the people were going to fly airplanes into buildings, we would have moved heaven and earth to save the country.” [White House, 4/13/04;New York Times, 4/18/04 (C)]
This statement is in direct conflict with a May 15, 2002, statement wherein the White House admitted that Bush was warned about bin Laden’s desire to attack the U.S. by hijacking aircraft in August 2001. [New York Times, 5/16/02, Washington Post, 5/16/02, Guardian, 5/19/02]. There is a massive and growing body of evidence that asserts that the United States government was not only aware of the possibility of the specific scenario of a terrorist air strike/suicide attack, but that it had also received dozens of credible warnings from both international and domestic sources.

Many countries warned the US of imminent terrorist attacks: Afghanistan, Argentina, Britain, Cayman Islands, Egypt, France, Germany, Israel, Italy, Jordan, Morocco, and Russia. Warnings also came from within the United States. Information from our own communications intercepts regarding particular individuals with foreknowledge, previous similarly attempted attacks, and from our own intelligence agents in charge of the investigations of al-Qaeda.


While many of these warning have been covered in the world media a collective analysis and summary context has been avoided by the US corporate media.

   The Actual 9/11 Pre-Warnings


1993: An expert panel commissioned by the Pentagon raised the possibility that an airplane could be used to bomb national landmarks. [Washington Post, 10/2/01]


1994: Two attacks took place that involved using hijacked planes to crash into buildings, including one by an Islamic militant group. In a third attack, a lone pilot crashed a plane at the White House. [New York Times, 10/3/01]

1996-1999: The CIA officer in charge of operations against Al Qaeda from Washington writes, “I speak with firsthand experience (and for several score of CIA officers) when I state categorically that during this time senior White House officials repeatedly refused to act on sound intelligence that provided multiple chances to eliminate Osama bin Laden.” [Los Angeles Times, 12/5/04]

1996-2001: Federal authorities had known that suspected terrorists with ties to bin Laden were receiving flight training at schools in the US and abroad. An Oklahoma City FBI agent sent a memo warning that “large numbers of Middle Eastern males” were getting flight training and could have been planning terrorist attacks. [CBS, 5/30/02] One convicted terrorist confessed that his planned role in a terror attack was to crash a plane into CIA headquarters. [Washington Post, 9/23/01]

Dec 1998: A Time magazine cover story entitled “The Hunt for Osama,” reported that bin Laden may be planning his boldest move yet—a strike on Washington or possibly New York City. [Time, 12/21/98]

February 7, 2001: CIA Director Tenet warned Congress in open testimony that “the threat from terrorism is real, it is immediate, and it is evolving.” He said bin Laden and his global network remained “the most immediate and serious threat” to US interests. “Since 1998 bin Laden has declared that all US citizens are legitimate targets,” he said, adding that bin Laden “is capable of planning multiple attacks with little or no warning.” [Associated Press, 2/7/01; Sunday Herald, 9/23/01]

In June of 2001, German intelligence warned the CIA, Britain’s intelligence agency, and Israel’s Mossad that Middle Eastern terrorists were planning to hijack commercial aircraft and use them as weapons to attack “American and Israeli symbols which stand out.” A later article quoted unnamed German intelligence sources, stating that the information was coming from Echelon surveillance technology, and that British intelligence had access to the same warnings. However, there were other informational sources, including specific information and hints given to, but not reported by, Western and Near Eastern news media six months before 9/11. [Frankfurter Allgemeine Zeitung, 9/11/01; Washington Post, 9/14/01; Fox News, 5/17/02]

June 28, 2001: George Tenet wrote an intelligence summary to Condeleezza Rice stating: “It is highly likely that a significant al-Qaeda attack is in the near future, within several weeks” [Washington Post, 2/17/02]. This warning was shared with “senior Bush administration officials” in early July. [9/11 Congressional Inquiry, 9/18/02]

July 5, 2001: Richard Clark gave a direct warning to the FAA, to increase their security measures. The FAA refused to take such action. [New Yorker, 1/14/02]

June-July 2001: President Bush, Vice President Cheney, and national security aides were given briefs with headlines such as “Bin Laden Threats Are Real” and “Bin Laden Planning High Profile Attacks.” The exact contents of these briefings remain classified, but according to the 9/11 Commission, they consistently predicted upcoming attacks that would occur “on a catastrophic level, indicating that they would cause the world to be in turmoil, consisting of possible multiple—but not necessarily simultaneous—attacks.” CIA Director Tenet later recalled that by late July, he felt that President Bush and other officials grasped the urgency of what they were being told. [9/11 Commission Report, 4/13/04 (B)] But Deputy CIA Director John McLaughlin, later stated that he felt a great tension, peaking within these months, between the Bush administration’s apparent misunderstanding of terrorism issues and his sense of great urgency. McLaughlin and others were frustrated when inexperienced Bush officials questioned the validity of certain intelligence findings. Two unnamed, veteran Counter Terrorism Center officers deeply involved in bin Laden issues, were so worried about an impending disaster, that they considered resigning and going public with their concerns. [9/11 Commission Report, 3/24/04 (C)] Dale Watson, head of counter terrorism at the FBI, wished he had “500 analysts looking at Osama bin Laden threat information instead of two.” [9/11 Commission Report, 4/13/04 (B)

July 5, 2001: At issue is a July 5, 2001 meeting between Ashcroft and acting FBI Director Tom Pickard. That month, the threat of an al-Qaida attack was so high; the White House summoned the FBI and domestic agencies and warned them to be on alert. Yet, Pickard testified to the 9/11 commission that when he tried to brief Ashcroft just a week later, on July 12, about the terror threat inside the United States, he got the “brush-off. “[MSNBC, 6/22/04]

July 10, 2001: A Phoenix FBI agent sent a memorandum warning of Middle Eastern men taking flight lessons. He suspected bin Laden’s followers and recommended a national program to check visas of suspicious flight-school students. The memo was sent to two FBI counter-terrorism offices, but no action was taken. [9/11 Congressional Inquiry, 7/24/03] Vice President Cheney said in May 2002, that he was opposed to releasing this memo to congressional leaders or to the media and public. [CNN, 5/20/02]

July 16, 2001: British spy agencies sent a report to British Prime Minister Tony Blair and other top officials warning that al-Qaeda was in “the final stages” of preparing a terrorist attack in the West. The prediction was “based on intelligence gleaned not just from [British intelligence] but also from US agencies, including the CIA and the National Security Agency”. The report stated that there was “an acute awareness” that an attack was “a very serious threat.” [Times of London, 6/14/02]

In July of 2001: President Bush took the unusual step of sleeping on board an aircraft carrier off the coast of Italy after receiving a warning from the Egyptian government that the summit of world leaders in the city of Genoa would be targeted by al Qaeda. [New York Times, 9/26/01] The Italians meanwhile highly publicized their heightened security measures of increased police presence, antiaircraft batteries, and flying fighter jets. Apparently the press coverage of defenses caused al-Qaeda to cancel the attack. [BBC, 7/18/01, CNN, 7/18/01, Los Angeles Times, 9/27/01]


On July 26, 2001: Attorney General Ashcroft stopped flying commercial airlines due to a threat assessment. [CBS, 7/26/01] The report of this warning was omitted from the 9/11 Commission Report [Griffin 5/22/05].

Late July 2001: CBS reported, “Just days after [Mohamed] Atta return[s] to the U.S. from Spain, Egyptian intelligence in Cairo says it received a report from one of its operatives in Afghanistan that 20 al-Qaeda members had slipped into the US and four of them had received flight training on Cessnas.” Egypt passed on the message to the CIA but never received a request for further information. [CBS News, 10/9/02]

Late July 2001: Taliban Foreign Minister Wakil Ahmed Muttawakil was given information regarding a large attack on targets inside America, from the leader of the rebel Islamic Movement of Uzbekistan (IMU), Tahir Yildash. Muttawakil relayed this information to the U.S. consul general, yet wasn’t taken seriously. One source blamed this on the administration’s “warning fatigue.” [Independent, 9/7/02; Reuters, 9/7/02]

Aug 6, 2001: President Bush received a classified intelligence briefing at his Crawford, Texas ranch, warning that bin Laden might be planning to hijack commercial airliners. The memo was titled “Bin Laden Determined to Strike in US”. The entire memo focused on the possibility of terrorist attacks inside the US and specifically mentioned the World Trade Center. Yet Bush later stated that the briefing “said nothing about an attack on America.” [Newsweek, 5/27/02; New York Times, 5/15/02,  Washington Post, 4/11/04White House, 4/11/04Intelligence Briefing, 8/6/01]

Early August 2001: Britain gave the US another warning about an al-Qaeda attack. The previous British warning on July 16, 2001, was vague as to method, but this warning specified multiple airplane hijackings. This warning was said to have reached President Bush. [Sunday Herald, 5/19/02]

August, 2001: Russian President Vladimir Putin warned the US that suicide pilots were training for attacks on US targets. [Fox News, 5/17/02] The head of Russian intelligence also later stated, “We had clearly warned them” on several occasions, but they “did not pay the necessary attention.” [Agence France-Presse, 9/16/01]

Late Summer, 2001: Jordanian intelligence (the GID) made a communications intercept and relayed it to Washington. The message stated that a major attack, code-named “The Big Wedding,” had been planned inside the US and that aircraft would be used. “When it became clear that the information was embarrassing to Bush administration officials and congressmen who at first denied that there had been any such warnings before September 11, senior Jordanian officials backed away from their earlier confirmations.” [International Herald Tribune, 5/21/02 Christian Science Monitor, 5/23/02]

On September 10, 2001, a group of top Pentagon officials received an urgent warning which prompted them to cancel their flight plans for the following morning. [Newsweek, 9/17/01] The 9/11 Commission Report omitted this report. [Griffin, 5/22/05]

Given all the pre-warnings and information available before 9/11 it seems unconscionable that on May 16, 2002, National Security Advisor Condoleezza Rice could still claim to the press: “I don’t think anybody could have predicted that these people would take an airplane and slam it into the World Trade Center, take another one and slam it into the Pentagon, that they would try to use an airplane as a missile.” She added that “even in retrospect” there was “nothing” to suggest that. [White House, 5/16/02] On June 7, 2002, President Bush stated, “Based on everything I’ve seen, I do not believe anyone could have prevented the horror of September the 11th.” [Sydney Morning Herald, 6/8/02]

With so many warnings, it is difficult to explain inaction as mere incompetence. The existence of all of these warnings suggests, at least, that people within the US government knew the attacks were coming and deliberately allowed them to happen. This evidence would, however, be consistent with an even more frightening scenario— that the attacks were orchestrated by, or with the help of, people within our government.



   Additional Sources:


Paul Thompson, “The Terror Timeline: Year by Year, Day by Day, Minute by Minute: A Comprehensive Chronicle of the Road to 9/11—and America’s Response,” Regan Books, September 1, 2004.

Jim Marrs, “Inside Job: Unmasking the Conspiracies of 9/11,” Origin Press, June 2004.

The 9/11 Commissioners, “The 9/11 Commission Report: Final Report of the National Commission on Terrorists Attacks Upon the United States,” W.W Norton & Company, Inc.

Griffin, David Ray, “The 9/11 Commission Report: A 571-page lie,” http://www.911truth.org/index.php?topic=911commission
May 22, 2005




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Iran - the next target?



Israel’s all-powerful lobby in Washington, the American Israel Public Affairs Committee (AIPAC), an organization composed of Israeli collaborators, infiltrators, and outright traitors to the United States, is steamrolling through the House of Representatives H.R. 1905, which would prohibit the President of the United States, the Secretary of State, members of the U.S. Foreign Service, or any special envoy from engaging in any sort of diplomatic contact, official or unofficial, with any member or agent of the government of Iran. Only when the President informs the requisite committees may he proceed with engaging on diplomatic contact with Iran. Israel has de facto control over the foreign affairs committees of Congress, so any White House notification of the need to contact Iranian officials would be instantly transmitted to Binyamin Netanyahu’s office in Jerusalem and Israel would then circumvent any U.S.-Iranian contact. AIPAC, with its resolution, is further making the United States a vassal of the Jewish state.




Israel’s strategy is to make certain that its plans to attack Iran’s nuclear facilities and, perhaps other targets, meet no opposition from diplomatic circles in the United States… Israel has placed its own interests well beyond and in contravention of those of the United States.


Faced with the prospect of an Israeli attack on Iran, backed by Saudi Arabia – Israel’s secret ally in the region – has had ripple effects across the Middle East and Asia.

Countries in Asia are scrambling to join the Shanghai Cooperation Organization (SCO) as full members. Confronted by a belligerent United States, NATO, and Israel intent on toppling the governments of Syria and Iran, the economic, cultural, and de facto collective security pact that comprises Russia, China, Kazakhstan, Kyrgyzstan, Uzbekistan, and Tajikistan announced after its prime ministers' summit in St. Petersburg that SCO would soon be opening its doors for full membership for Pakistan, Iran, and India. The Asian nations want to freeze the United States out of interference in Asia.

Ahead of the St. Petersburg summit, Russia and China strongly warned the West against any military attack on Iran. The words being used in international diplomacy are reminiscent of the Cold War era, however, it is the West that is playing to role of the aggressor, albeit an aggressor led around by Israel and its intelligence spies and assets embedded in the upper echelons of governments in Washington, London, Paris, Berlin, and within the United Nations hierarchy.

Even America's vassal state of Afghanistan, eager to break free of the bonds of NATO and Washington, has attained observer status in SCO. Recent comments by the deputy commander of NATO training in Afghanistan, U.S. Army Major General Peter Fuller, that the Afghan government leadership is erratic, ungrateful, and isolated from reality because President Hamid Karzai said Afghanistan would side with Pakistan in an American war on Pakistan, resulted in Fuller’s firing. Fuller’s comments also resulted in Karzai asking for observer status in SCO as American aggression against the Muslim world and opposition to sovereignty for Palestine has seen Washington’s standing around the world plummet.

Another nation where the CIA, Pentagon, has their agents creeping and crawling, Mongolia, is also a SCO observer. There are also SCO "partners in dialogue" -- nations that could attain SCO observer or membership status in the future. Partners in dialogue nations include Belarus, Sri Lanka, and one that should worry Tel Aviv and Washington, Turkey, a NATO member. Moscow and Ankara agree that Turkey should eventually become a full SCO member. Turkey has close historical and cultural links with the Turkic nations of central Asia and with many of the autonomous Turkic republics of Russia, including Tuva, Bashkortostan, and Adygeya.



Turkey has grown tired of Israeli interference in its internal and external affairs, as witnessed by the vicious and bloody Israeli attack on the Turkish Gaza aid vessel, the Mavi Marmara; Mossad support for Kurdish PKK terrorist attacks in Turkey; and covert Israeli entanglement in the Ergenekon "deep state" network in Turkey.

Iran has now seen Israel's most-open secret ally, Saudi Arabia, appoint the former Egyptian intelligence chief and close Netanyahu friend, Omar Suleiman, as an adviser to Saudi heir apparent, Crown Prince Nayef bin Abdul Aziz al-Saud, who is also the Interior Minister. The Jerusalem-Riyadh axis is being further cemented as the Obama administration is shifting 4,000 troops from Iraq to Kuwait and beefing up other U.S. military assets in Bahrain -- home of the U.S. Fifth Fleet – and Qatar, United Arab Emirates, and Oman. The CIA and Pentagon have set up Predator drone bases in Djibouti, Seychelles, Ethiopia, and, reportedly, Saudi Arabia.

The president-elect of Kyrgyzstan, Prime Minister Almazbek Atambaev, has announced he wants the U.S. and NATO to leave the Manas Transit Center airbase in his country after the current lease expires in 2014. Already, Soros-funded non-governmental organization (NGO) agents in Kyrgyzstan are attempting to suggest that under the new Kyrgyz constitution, Atambaev does not have the authority to close the base. It is this type of U.S. interference in the affairs of the nations of Asia that has SCO readying an expansion of its membership to include two nations that have received direct U.S. military threats: Iran and Pakistan. Suspicion of U.S. intentions and military plans has also made Washington’s request to enter SCO as a partner in dialogue a dead issue. Washington’s interest in attending SCO summits as a “partner” says more about the CIA’s inability to crack into the inner workings of SCO, even through erstwhile “allies” like Afghanistan, Pakistan, and Mongolia, than in having any great desire to “dialogue” with SCO members and observers. After all, AIPAC and its minions have managed to jam through the U.S. House a law that prohibits any U.S. diplomatic contact with Tehran’s officials.

President Obama is under tremendous pressure from the Israel Lobby during an election year to support an Israeli military strike on Iran, action that will inevitably lead the United States military in the Gulf region into war against Iran on behalf of the Tel Aviv/west Jerusalem regime. At the G-20 summit in Cannes, French President Nicolas Sarkozy was overheard telling Obama, "I cannot bear Netanyahu, he's a liar." To which Obama replied, "you're fed up, but I have to deal with him every day."


The Sarkozy-Obama interchange is instructive. Obama did not disagree that Netanyahu is a patent liar who will do anything or say anything to advance Israeli and global Zionist interests over all else, even to the point of lying about a bogus Iranian nuclear weapons threat to promote a military attack on Iran.

Israel, using its agents of influence in the UN delegations of the United States, Britain, Germany, Canada, Sweden, and the Netherlands, has ensured that International Atomic Energy Agency (IAEA) Director General Yukiya Amano has tainted his agency's report on Iranian nuclear developments in a manner that would have never been tolerated by his predecessor, Mohammed ElBaradei. Amano certainly took no interest in the fact that his own nation, Japan, was secretly producing nuclear weapons at the Fukushima nuclear complex in contravention of IAEA rules. The aftermath of the destructive earthquake in Japan laid open the secret work going on at Fukushima. Amano is perfectly willing to act as a cipher for Israel and the Israel Lobby in "discovering" IAEA violations by Iran.

The Bulletin of Atomic Scientist's "Doomsday Clock," a measure of how close the world is to nuclear war, now stands at six minutes until midnight. With the machinations of Israel toward Iran, the internal meltdown of Obama's White House staff with the demotion of chief of staff Bill Daley, and the invitation by SCO to Iran to come under the protective security umbrella of Russia and China, the clock has just jumped ahead several minutes.




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Enough War!



In the name of real Peace and the very future of all our lives, we all must join together and stop the insanity of the US military from illegally planning to invade yet another country, Iran, for more lies and deceit, while mainstream controlled media continue to report Orwellian propaganda of “Doublespeak.” This is part of an on-going and larger series of wars that Michel Chossudovsky notes “would lead to the integration of these separate war theaters, eventually leading towards a broader Middle East-Central Asian war.”

Given the huge health crises and enormous degradation of our environment we already have, we would never survive this planned global war scenario. As it is now, the illegal weapons already in use, such as bombs with radioactive Depleted Uranium (used in Gaza, Iraq, and Afghanistan), have already caused massive deaths and genetic malformation. This is not confined to the mid-East, as these poisons travel throughout the globe in the air we breathe and in the entire food chain. In addition, there is a new US Navy weapon ready to cause more havoc: An electromagnetic railgun “that can shoot a missile 100 miles at eight time the speed of sound…with a range that is up to 20 times greater than that of a conventional weapon.”(1) The harm to all of us is colossal.




It is imperative that we immediately cease and desist being collectively silent. Many of us have grown up seeing the tragic consequences of one war after another. Millions around the world have lost their lives in conflagrations that only enrich the bankers’ and other elites’ coffers tremendously by “playing” both sides against each other. They are the only winners, yet most people never find this out.
Throughout all of this, our country heads immanently for a planned bankruptcy and total ruination.
Millions are unemployed. Millions have illegally lost their homes. Millions are destitute. Millions are ill with a myriad of illnesses that were created in some secret bioweapons lab. Millions of us have been subjected to chronic EMF/RF exposure and other systemic poisons that disrupt our ability to think clearly or to be healthy. Millions of our children are at grave risk, and often go to bed ill and hungry every night. The green toilet paper “money” that is being printed, with no real financial backing or assets, hasn’t been sustainable for quite some time. The financial rigging and massive theft of our taxpayer dollars done behind the scenes are off the scale.
In all of this, no one questions the out-of-control war machine expenditures that eat of more than 75 percent of the US budget. War is profitable for the elites, but wrecks everything else. All indications of a thriving or vigorous economy are long gone. All social services are deliberately trashed: education, health and elder care. Infrastructure is crumbling around the country. Thousands of teachers have been fired. Hundreds of schools are closing. Other schools are being privatized with worthless curricula. In terms of education, this really translates into “every child left behind.” A poorly educated population cannot make any informed decisions about critical issues.
The illegal and covert Geoengineering of our planet is the most important survival issue facing all of us. It has wrecked our water and soil with toxic levels of aluminum, barium, strontium, other heavy metals, and self-replicating synthetic nano-organisms. These are also found in dangerous levels in our blood and are major contributing factors in staggering levels of cancers, cardiovascular and respiratory diseases.
The air we all breathe is now a plasma state, as Clifford Carnicom has noted in public lectures. This makes it easy for clandestine weather modification operations to disrupt our central nervous system and brain function. In addition, independent research shows that changes in the invisible Electromagnetic Frequency spectrum can induce disease.(2) Clifford Carnicom, one of the world’s leading independent researcher on this, calls this “the biggest crime of all time.”(3) Chemicals and other poisons rain down on us constantly, while environmental laws are trashed. Federal, state, and international laws are gutted. The police no longer “protect and serve.” They have become military mercenaries who beat, batter, Taser, and often kill unarmed and innocent citizens. No one is held accountable for these crimes, while the elites and insiders continue to create their planned mayhem and hate.




Over the past decade, the weapons of destruction raining down on civilian Iraqis, Afghanis, Gaza citizens, Pakistanis, and Libyans is an epic tragedy. There is no humanitarian aid, peace, prosperity, or health for anyone. These war plans were decided by insiders –long before the nightmare False Flag criminal operations and devastation of September 11, 2001. Tragically, these countries are in on-going turmoil that is brought to them for no rational reason. It is all for the greed of natural resources and to create worldwide chaos, hate, and fear.
I grew up in New York City. As a child, I had the good fortune to have friends and classmates from many different cultures. We all got along. We learned different languages and customs. There was peace and harmony amongst us even with a great variety of cultures and religions. In fact, we all so enjoyed learning about each other’s differences! These enriched our lives. Our city was a melting pot; and it created a great and delicious “stew” of the best of our diversities.
In this respect, we must cheer New York City’s Metropolitan Museum of Art for the November 1st re-opening of their 15 New Galleries for the Art of the Arab Lands, Turkey, Iran, and Central Asia. This has been an eight-year major project of renovation and expansion. Anyone who is nearby should make several visits to see these gorgeous pieces. It is far too much for one day; but several trips will enrich your appreciation of the vast beauty of Islamic art. The Met’s Fall Calendar notes that this “new geographic orientation signals a revised perspective on the collection by recognizing that the monumentality of Islam did not create a single, monolithic artistic expression but instead connected a vast geographic expanse through centuries of change and cultural influence.”(page 6) If you’re too far away, here’s a visual link:  http://www.metmuseum.org/exhibitions/listings/2011/new-galleries-for-the-art-of-the-arab-lands-turkey-iran-central-asia-and-later-south-asia 

Art is the very best of what a society leaves to posterity. In the larger sense, this creativity –in all its varied aspects that also include music, literature, and poetry– has the potential to unite us in understanding, compassion, caring, and ethical conduct. This is the best of human behavior. We always have that potential within us: to create harmony and love. This is what we must do, and what we must teach our innocent children –before it is too late.
We must recreate human harmony again for all of us.
It is our ethical and moral responsibility to see that our own countries are not all brought down by perpetual war and hate to create the nightmares of global banking, and global rule by a small group of psychopaths bent on destroying the sovereignty of all our countries.
We do have the courage to do this!
I urge everyone to stop shopping and pay attention to the real world outside of your own small circle. Think about the bigger picture of doing something vital to save our countries from some vast conflagration. We are all expendable for their warped and demented plans. I call for a 5-day National Strike before Thanksgiving: from Nov. 10-15. Shop locally. The buck stops at the cash register: don’t buy products that cause harm! Don’t purchase anything that has added taxes. Read the labels, and avoid poisonous ingredients. Stay home. Be with those you love. This would be something for which we could truly give thanks: the cessation of imperial wars, government criminality and corruption, famine, and hate. Peace will only come to all of us when the systemic violence of patriarchal societies is replaced with what the brilliant social scientist and author Dr. Riane Eisler calls a “partnership” one.(4) Peace requires vigilance. This can be a real test of our courage and real human potential.


  Notes:

1.  “US Navy fires the railgun that can shoot a missile at eight times the speed of sound for the 1,000th time.” Diagrams and photos are included in this article. Nov. 2, 2011. London. Daily Mail: http://www.dailymail.co.uk/news/article-2056782/US-Navy-fires-electromagnetic-railgun-1-000th-time.html

2. Clifford Carnicom. “A New Form: Frequency Induced Disease.” March 8, 2011:  http://www.carnicominstitute.org/articles/bio2011-3.htm

3. Clifford Carnicom. “The Biggest Crime of All Time.” March 1, 2011: http://www.carnicominstitute.org/articles/bio2011-2.htm

4.  Riane Eisler. “The Partnership Way” and “The Real Wealth of Nations.” See also: http://www.partnershipway.org/




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