It Almost Did happen Here!

The Financial Equivalent of 9/11 happened on 9/18, 2008. At 11 o'clock in the morning the Federal Reserve noticed a tremendous drawdown of money market accounts to a tune of $550 billion being drawn out in an hour or two. After opening its "window" and pumping $105 billion into the system they realized they could not stem the tide. That's when we heard the Fed guarantee $250,000 per account .

If they had not stemmed the panic, the Fed estimated that by two o'clock that afternoon, $5.5 trillion would have been drawn out of the money market system of the United States and our entire economy would have vanished and within 24 hours the entire world economy would have collapsed.

In an interview on C-Span yesterday afternoon, Congressman Paul Kanjorski told this story in response to an angry caller who wanted to know why we bailed the banks out. The Congressman told the moderator that there are certain things we don't talk about in Washington. He recalled that the Secretary of the Treasury and the Chairman of the Federal Reserve came up on the Hill to talk to members about what was going on. "It would have been the end of our economic system and our political system as we know it."

At one point, Secretary of the Treasury Paulson told members of congress that if the $700 bailout plan was not passed Martial Law could be declared. This was conveyed by Rep. Brad Sherman from California. Later in interviews with the New York Times, Senators Dodd and Schumer recalled rather obliquely," We have never heard language like this", in describing the horrible scenaros Paulson outlined. Both men refused to repeat exactly what they had been told by Paulson and Bernanke.

During the summer, some bloggers noticed that troops were being brought home to be stationed on active duty within the borders of the United States. Others complained about joint exercises with local police near San Diego, where the military planned to man roadblocks, allegedly to watch for drunken drivers on a holiday. Who knows? A trial run for the real thing. We do know that the legal framework had been created for such an emergency by the Bush White House.