How To Destabilize A Region

[traelin0]

First, you must sell allegedly "friendly" governments lots of weapons. You know, aircraft, missiles, guns, ammunition, that sort of stuff. It helps a lot if the governments have money, and it helps even more if you can convince them to peg their currencies in some way to yours, and they have something you want (think oil.)

Next, having accomplished the currency peg and sales of arms, you then allow your banks to engage in rampant speculation and fraud. You let them counterfeit your currency with impunity by issuing credit unbacked by anything (which spends exactly the same as does currency, and thus is an effective naked short upon it), so long as they bribe Congress sufficiently with "campaign contributions." This is all legal, of course, and where it isn't you change the law (such as through the CFMA) so it becomes legal.

Having done that, you let your Central Bank pontificate about how "rising stock prices" are good for the economy and "animal spirits." You intentionally fail to mention, however, that speculative price and value are not the same thing, and that said companies are drowning in debt to the point that you now need to pay $12 for $1 worth of actual underlying assets, after debt is subtracted. This, incidentally, is three times the level of speculative premium you had in 2007, just before the market blew up.

In order to support this speculative bubble (which your President is dumb enough to crow about in his "State of the Union" speech) you intentionally flood the market with "liquidity" (that's a fancy name for "cheap loans.") Speculators figure this game out immediately and start driving up the price of everything - not just stocks. Cotton quadruples in price. Wheat, corn, oats, copper, oil - all have a rocket strapped to their ass and lit.

Read more here.