Plunge protection and rallying shares
Anthony Hilton, Evening Standard
18 March 2003
STOCK markets rallied last week because it looked as if war with Iraq was going to be postponed. Yesterday the markets rallied because it looked like the war was about to begin. The two reasons contradict each other. The explanations do not make sense unless the markets are being rigged.
And who might want to do that? Well the US government would. The last thing President George W Bush needs is for his invasion of Iraq to set off a stock market crash, a collapse in the price of the dollar, a rush into gold or a spike in the price of oil. It is the kind of distraction that could be very unsettling.
The American public's support for Bush's Middle East adventure is not so cast-iron strong that he wants to tempt fate. So, according to the conspiracy theorists, the US authorities have been intervening anonymously in the markets to move them in the direction they want and to burn out any short-term speculators positioned the other way.
So do we believe the conspiracy story? Well, it is known that America has a secret standing committee known unofficially as the 'plunge protection team' which consists of the President, the Secretary of the Treasury, the Federal Reserve chairman Alan Greenspan, various other senior administration officials and the leading movers and shakers of Wall Street. The official purpose of this committee, as detailed a few years ago in the Washington Post, is to stabilise unruly markets for the greater good of the US as a whole. Seeking to prevent a military operation being undermined by panic in the financial markets would appear to be well within its brief.
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