Review of Kevin Freeman's Secret Weapon
Imagine the 401K you have worked your entire life for has been reduced by half in the 2008 financial crisis, and now, has dried up and disappeared all together. You can no longer afford to put your children through college, or buy them that computer they need to complete their studies. Worse yet, you can no longer afford to buy groceries and feed your family due to the soaring inflation and devaluation of the dollar as it has recently been replaced by a foreign reserve currency. Sound like a doomsday prophecy? Kevin Freeman's book paints a grim picture as to what is to come if the United States government does not get its head out of the sand and hands out of the Lobbyist's pockets.
Against the conventional theories for the financial crisis of 2008, Freeman proposes a more sinister cause. He proposes that the impetus for the financial disaster was foreign enemies attacking our critical vulnerabilities; the unregulated financial sector, a metaphorical pampered noble among thieves. With the lack of oversight and loose regulations the Securities Exchange Commission (SEC), Commodities Futures Trading Commission (CFTC), Congress and the intelligence community remind the reader of the three monkeys Mizaru, Kikazaru and Iwazaru, covering their eyes, ears and mouth, that represent the saying "see no evil, hear no evil, speak no evil." In western culture they represent feigning ignorance, turning a blind eye, or looking the other way. From Freeman's explanations this is exactly what is going on. Those that do not have the expertise to understand a problem would rather be in denial and remain blissfully ignorant, or worried about absurdities such as Guam capsizing than focusing on clear and present dangers of financial terrorism. Instead of looking for the actual causes, parties in power place blame on each other and do exactly what the strategic enemy wants us to do; divide our attentions and effort. Meanwhile they are free to divide and conquer with impunity.
Warning
Freeman's main goal is to warn governmental leaders about the threat to the United States and global economic system and educate those in power so as to avoid the otherwise inevitable collapse of the United States economy. With so much at risk, can we afford not to listen and at a minimum dedicate the minimal amount of effort to do what he suggests and at least further investigate what went on? Freeman presents a compelling case that a three pronged financial attack (a sort of financial maneuver warfare) was launched against the United States. He imagines the worst case scenario as any with a mind for security in today's insecure world should. He establishes a three phased attack that took advantage of lack of regulation, greed and erosion of safety measures installed from past lessons during the Great Depression. He points out the risks and threat to not only the United States economy, but how the threat translates to the collapse of the global economic system.
Before framing his phased attack he presents evidence of how viable economic warfare is and has been in the past. He shows exactly how the United States successfully used it in the past, with devastating effects, against our own allies. With it being a proven and effective tactic, why would we arrogantly assume that we would be the only one capable and willing to implement its use? Military strategists are taught to attack an enemy's center of gravity through its critical vulnerabilities. Our enemies know that our military is unmatched and unbeatable in its current state. By attacking the United States through its financial critical vulnerability it can not only dismantle the United States economic system, it can eliminate the U.S. military by wiping out financial capacity to maintain it. Freeman uses the book Unrestricted Warfare written by two senior Chinese military strategists as an example that the Chinese are ready and willing to use financial warfare to destroy the United States economically. Unrestricted warfare delineates a new form of warfare. It acknowledges that warfare is no longer solely in the armed realm and the use of economic warfare is an imperative.
Motive, Means, and Opportunity
Similar to what the legal system uses to analyze suspects, Freeman points out the motive, means and opportunity to conduct financial terrorism. First he establishes the motive, by pointing out the jihadist perspective and that of various terrorist groups publicly calling for the destruction of the United States through all means including, specifically, financial. Freeman highlights the movement of the Arab world to Sharia Compliant Funds (SCF) and their ties to terrorist organizations from funneling funds directly to the terrorist organizations, to known terrorist sitting on SCF's as board members or chair persons. Extremist are not working alone. Freeman connects Iran, Venezuela and Russia as adjuncts in the Islamic-socialist alliance with the intent to bring about the downfall of the U.S. and capitalism as well as the "piggybackers" looking to make fortunes at the expense of the United States.
Motive
Freeman provides several examples of actual or attempted attacks on the U.S financial system. His examples include: Iranian President Mahmoud Ahmadinejad calling the Iranian calendar year "The Year of Economic Jihad." Chinese banks washing North Korean counterfeit U.S. currency. Russian mob ties to Iran, and China coordinating attacks. Two men caught moving enough counterfeit U.S. treasury bonds that would have made them the fourth largest debtor in the world. "Each of the bonds was worth $500 million, plus ten Kennedy bonds with the face value of $1 billion [each]." A $1 billion dollar mafia-run bond con was discovered by the Italians found to be run in coordination with Venezuela's central bank. The Russians approached the Chinese "asking them to dump shares in Fannie Mae and Freddie Mac in order to press the U.S. government to bail out the mortgage companies," thus weakening and further indebting the country. The Russians later dumped $65.6 billion in shares. The last example I will highlight is the finance ministers of Russia, China, Iran and the Arab states discussing a direct "attack on the U.S Treasury and the U.S. dollar through dumping of U.S. treasury bonds [that] would send the American economy spiraling downward, possibly leading to a downgrade of U.S. debt," the rise of interest rates and the collapse of the U.S. economy.
Means
After establishing the motive, Freeman methodically establishes the means with evidence and excerpts from leading financial experts. Freeman argues oil manipulation, currency and debt manipulation, bear raids, credit default swaps, naked short selling, sovereign wealth funds, dark markets, dark pools and sponsored access, algorithmic trading, rogue traders and Arboon are the means by which financial terrorists will be able to crush America's economic system. Many of these practices are allowed due to, the very enemy we are trying to protect against, lobbying in congress. The most alarming were credit default swaps (CDS), naked short selling and Arboon.
Credit default swaps were "described by Warren Buffet as `financial weapons of mass destruction,'" and "instruments of destruction that ought to be outlawed" by George Soros. The problems with CDS is they are completely unregulated and lack any supervisory oversight and enable people to buy insurance in assets without any interest in what is being insured and most importantly, Freeman claims they are a self-fulfilling prophecy. "A strong buying interest is reflected in higher prices; the more demand for insurance, the higher the premiums. In turn, the higher the premiums are because additional buying or greater risk. "As a result, the market must conclude that the risk of default rose, which in turn raises CDS prices even higher." The No cost to borrow and no accountability make CDS vulnerable to market manipulation. The appearance of higher risk can make it increasingly difficult for companies to establish lines of credit. If companies are over leveraged they can be forced into liquidation to pay their debts.
Naked short selling is another nefarious tool in the financial terrorist's arsenal. Short selling requires a person to borrow or purchase shares before they are sold. Naked short selling is selling shares of a company that you do not own. It is illegal, but with the Securities Exchange Commission (SEC) asleep at the wheel, it is never enforced. Freeman points out many examples of its use. In one case the owner bought all of his shares, roughly 1.1 million, only to watch as his stock continue to trade 60 million shares over the next few days while he had not sold a single share. Clear manipulation and violation of the law and the SEC does nothing. Markets can be destabilized by massive short selling. Basic laws of supply and demand dictate the outcome. The effects are artificially driving up the supply and as well as driving down the price. Short selling is so destructive that it is completely banned in some European countries with more bans being contemplated daily.
While short selling is a valuable tool for financial jihadist, it presents a disorienting dilemma for them. The dilemma is that while short selling is a vital tool in the jihadi arsenal, Sharia law prohibits Muslims from selling what they do not own. Well, where there is religion, there are those that are willing to twist it to serve their needs; enter Arboon. Arboon is an Islamic version of short selling. By "holding currencies instead of futures, and buying non-debt heavy S&P 500 stocks to avoid interest problems," Muslims can justify circumventing their own rules. While any one of these tactics may create havoc when used in isolation, the compound effects of using them in an integrated attack would be enough to completely wipe out the U.S. economy as we now know it.
Opportunity
Freeman claims that the consistent weakening of regulation has been self-destructive and inviting attack. He claims "selective deregulation of financial markets, failures of government oversight, and deficiencies in the overall regulatory regime created glaring vulnerabilities in the U.S economy." Examples he gives are: The uptick rule, the housing bubble, debt, the repeal of Glass-Seagall, unregulated derivatives, unregulated naked short selling, The Madoff exemption, accounting trickery, and the National Market System initiative.
The uptick rule which was a lesson hard-learned in the Great Depression that says short sales can only occur if the last price was on an upswing. This prevented short sellers "from accelerating a declining market by exhausting all remaining bids at one price level, causing successfully lower prices established by long sellers." The repeal of Glass-Steagall, which clearly separated investment banks from commercial banks and prevented commercial banks from becoming over leveraged and losing all their customers everyday checking and savings, enabled banks to become over leverages and ripe for attack.
Freeman fears China dumping its U.S. debt. By doing so, it would destroy the United States economy. While that may be a viable strategy for China, an assumption he is making is that other nations would not want to buy from a historically stable nation that has a high credit rating. If China dumped all its U.S. debt, by conventional reasoning it would decrease the price of bonds due to a huge surplus on the market and, in turn, it would force yields up. On the other hand in a strategy of war and attrition a strategist will likely have to sacrifice a company of men in order to win the war and save thousands. China could sacrifice a portion of its wealth, much like a monopoly would lower prices in order to eliminate the competition and then have free reign to raise prices as high as it likes eventually recouping the smaller initial losses from lowering the price. China has repeatedly called for a new world reserve currency to replace the U.S. dollar. This would be the perfect way to get that goal accomplished. While the immediate financial damage may be painful, the long run gain would far exceed any initial loss.
Roadmap
Freeman explains in depth how the three phased attack started and theorizes how it will end. Phase one was the speculative run-up in oil prices. The second phase was the "unprecedented manipulation of the stock markets and credit markets" with bear raids, credit defaults swaps, naked short selling and lobbyers success in manipulating congress into recent catastrophic regulatory changes such as the uptick rule and other regulatory loopholes that prevent the downward spiral of the market. The third phase entails a repeating phase one and two to include an attack on the dollar to include dumping treasuries, reserves and a coordinated attack on the validity of maintaining the dollar as a world reserve currency. The attack on the dollar would be relatively easy as the U.S. government is printing it faster than the ink can dry. The only thing keeping the dollar afloat is the fact that currently there is no alternative. Once the BRIC countries in conjunction with their Arab cohorts are able to set up an alternate reserve currency the end result for the United States will be devastating. "The U.S. would re-import hyperinflation, [...]interest rates would skyrocket and we could be looking at the "end of America."
Conclusion
While some of Freeman's evidence is subjective, can we afford to ignore it? Common sense dictates rules like the uptick rule for short selling were put in place from hard lessons learned and are logically a necessity. Taking some of the basic common sense approaches to strengthening America's critical vulnerabilities is prudent and an imperative not only for America but the global economy. America must protect itself internally as well as externally from those that seek the end of capitalism. Critical vulnerabilities in America's financial system represent a great danger to not only the world economy, but the continued push toward multilateral global governance. If America's economy should collapse it would take with it a portion of Europe as well as Asian countries. With countries struggling and focusing internally on maintaining the basic necessities of their citizens, they could ill afford to dedicate the exorbitant amounts of time, effort and resources toward the progression of external issues such as human rights, or climate change. Instead of the major countries working together to find a global solution they may end up fighting world war three to maintain the status quo. Overall, Freeman presents enough evidence to, at the very least, warrant further investigation.
Anthony Ripley
Loading your book clubs
There was a problem loading your book clubs. Please try again.
Not in a club? Learn more
Join or create book clubs
Choose books together
Track your books
Bring your club to Amazon Book Clubs, start a new book club and invite your friends to join, or find a club that’s right for you for free.
Download the free Kindle app and start reading Kindle books instantly on your smartphone, tablet, or computer - no Kindle device required. Learn more
Read instantly on your browser with Kindle Cloud Reader.
Using your mobile phone camera - scan the code below and download the Kindle app.
Flip to back Flip to front
Follow the Author
Something went wrong. Please try your request again later.
| Price | New from | Used from |
|
Audible Audiobook, Unabridged
"Please retry" |
$0.00
| Free with your Audible trial | |
|
Audio CD, Audiobook, Unabridged
"Please retry" | $3.35 | — |
Great on Kindle
Great Experience. Great Value.
Putting our best book forward
Each Great on Kindle book offers a great reading experience, at a better value than print to keep your wallet happy.
Explore your book, then jump right back to where you left off with Page Flip.
View high quality images that let you zoom in to take a closer look.
Enjoy features only possible in digital – start reading right away, carry your library with you, adjust the font, create shareable notes and highlights, and more.
Discover additional details about the events, people, and places in your book, with Wikipedia integration.
Get the free Kindle app: 
Enjoy a great reading experience when you buy the Kindle edition of this book.
Learn more about Great on Kindle, available in select categories.
Book recommendations, author interviews, editors' picks, and more. Read it now.
Frequently bought together
$23.15
Get it as soon as Tuesday, Nov 8
Only 2 left in stock (more on the way).
Total price:
To see our price, add these items to your cart.
Choose items to buy together.
Customers who viewed this item also viewed
Page 1 of 1 Start overPage 1 of 1
About the author
Follow authors to get new release updates, plus improved recommendations.
Customer reviews
Top reviews from other countries
Calypso
Overblown Conspiracy Theory
Reviewed in the United Kingdom 🇬🇧 on September 21, 2012
