Page 2 of 2 9/11: Currency joins insider trades claims
By Lars Schall
"Specifically, the currency component of M1 caught my eye, because while working on a money laundering project in late 2003 I noticed an extraordinarily rapid increase in the data for July / August 2001.
"The currency component of M1 is a measure of currency circulating outside of banks. ... (T)he currency component of M1 is cash - Federal Reserve Notes - circulating outside of banks. It can go up because people withdraw cash out of their bank accounts.
"As of late 2003, when I was working on this stuff at the Fed, from June to August 2001, this measure (in the non-seasonally
adjusted data) posted the largest growth rate for a June to August 2001 since World War II. In the seasonally adjusted data (data adjusted for seasonal monthly trends), August 2001 was the third fastest growing single month in the 650-plus months since World War II, trailing only December 1999 (Y2K, along with other relevant things) and January 1991 (the onset of US military action in Iraq, as well as an important enforcement month in the BCCI money laundering scandal).
"It also seems curious that January 2000 turned up as the fourth fastest growing month, and November 1980 as the fifth fastest growing month, since World War II."
LS: Did you ring the alarm?
WB: Well, not exactly. But I had also noticed that the Federal Reserve Board had issued a non-routine supervisory letter to the Reserve Banks on August 2, 2001, urging them to continue to scrutinize suspicious activity reports. This letter arrived during the surge in currency shipments related to the data above, as well as a spike upward in the number of suspicious activity reports being filed by depository institutions. Terrorism and its financing were not mentioned specifically in the letter, but they were known to be part of the realm of suspicious activity.
In a draft primer I was writing on money laundering, I asked why the Board issued this letter, and was asked to answer the question. I called Board staff in a relevant area, asked if it was related to any intelligence warnings of a heightened risk of a terrorist attack, and was planning (in good conscience, not in a "gotcha" sort of way) to talk about the currency shipments and the need to investigate them for relationships to the events of 9/11.
LS: What happened to you afterwards?
WB: The call was shorter than I expected. A week later my money laundering assignment was terminated, and I lost my credentials for access to confidential information. A month later my position in the bank was eliminated.
LS: Thank you.
On August 28, I wrote for this article the following media inquiry to Michelle Smith, a senior spokesperson for the Federal Reserve Board in Washington D.C.:
Dear Ms Smith, My name is Lars Schall, I am a financial journalist for Asia Times Online in Hong Kong. Related to an investigation that I am conducting I became aware of this anomaly in USD currency production in the summer of 2001. The graph shows the change over a ten-week period prior to 9/11 ($18 billion vs $8 billion):
Federal Reserve notes in circulation (aka US dollars); change over weeks preceding September 11, 2001.
(Blue, 2001; Red, 5-year average (196-2000)
May I ask you on behalf of the Federal Reserve for an official explanation, please? May I also ask you why William Bergman was fired as a Federal Reserve economist after he discovered this anomaly?
Kind regards, Lars Schall.
The response of the Federal Reserve in Washington DC equaled the Arabic number of zero.
On the same day I showed that graph also to Jack Gutt at the New York Federal Reserve’s press office in order to ask him afterwards: "May I ask you on behalf of the Federal Reserve (New York) for an official explanation, please? Apparently, most of this anomaly occurred at the NY Fed."
The response of NY Fed was zero as well.
So I asked William Bergman, who is now the Director of Research at the Institute for Truth in Accounting, the following additional questions for this article:
LS: What is the official explanation for the staggering increase in USD currency in circulation stated by the Fed?
WB: I don't believe there is any "official" explanation for the surge in currency in circulation in July/August 2001.
LS: Do you consider it as one possible alternative explanation that covert operations were on their way in the summer of 2001 on the ground in Af/Pak, where cash would rule the place going forward?
WB: Yes, I do. In light of the history of the actual use of currency in covert operations (such as those in Iran in 1953), evidence that currency was indeed used in operations in Central Asia soon after 9/11, a number of research sources suggesting operations like those were already possibly underway before 9/11, other research indicating US negotiations over energy issues in Afghanistan were breaking down in August 2001 (including reported military threats from the US), and recent statements by a Senate leader that raised questions whether cash support for Afghanistan President Hamid Karzai began before he became president (just a couple months or so after 9/11) - the possibility that cash was being used in military and/or covert operations already underway in Central Asia seems possible, and worth investigating.
LS: What could be other explanations?
WB: Other explanations could certainly include a blooming banking crisis in Argentina in 2001. But Argentina wasn't just in a banking crisis, it was also in the middle of a political and money laundering crisis with possible links to the questions at hand. Accelerated shipments of currency to Argentina could have included shipments relating to parties of interest in an honest investigation of 9/11, and those Argentina shipments were certainly not all of the extraordinary $5+ billion increase in currency in circulation in July/August 2001.
Another possible explanation relates to recent developments in a FOIA [Freedom of Information Act] lawsuit in Florida, where the Broward Bulldog has sought records from the FBI relating to evidence of alleged 9/11 hijacker visits and other connections to a family that fled the US in late August 2001. Senator Robert Graham's recent declaration in that lawsuit raises some rather harrowing questions. [1]
This case is valuable of its own accord, and also highlights a broader issue. Anyone with advance knowledge of the events of 9/11 could well have been concerned with not only exiting the US, but taking money with them as well. In a declared national emergency or time of war, assets can be frozen and seized in banks and other financial institutions. In fact, we did take some those actions after 9/11.
So there is an incentive to take assets out of places they are at risk of seizure, if you know something is coming. Following the money on that score could have helped us identify parties with advance knowledge of, if not responsibility for, the events of 9/11. But we don't have evidence that any such investigation has taken place, either with respect to flight capital like this, or for any covert operation use of currency in Central Asia in July/August 2001.
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