The Golden Truth: Did Henry Paulson Act To Save Goldman Sachs?

Sunday, August 9, 2009

Did Henry Paulson Act To Save Goldman Sachs?

The truth about what really happened last September when AIG was bailed out by the U.S. taxpayer has been revealed by the NY Times. It now appears that Henry Paulson worked very closely with Goldman Sachs CEO Lloyd Blankfein to order to shape the framework used to bail out AIG (from the NY Times):

"While Mr. Paulson spoke to many Wall Street executives during that period, he was in very frequent contact with Lloyd C. Blankfein, Goldman’s chief executive, according to a copy of Mr. Paulson’s calendars acquired by The New York Times through a Freedom of Information Act request...During the week of the A.I.G. bailout alone, Mr. Paulson and Mr. Blankfein spoke two dozen times, the calendars show, far more frequently than Mr. Paulson did with other Wall Street executives."

It now appears that former Goldman CEO Henry Paulson,in acting as Treasury Secretary, was in direct conflict of interest in this role, as he appears to have been in continuous contact with the CEO of his former firm creating a bailout plan which funnelled more than $10 billion in money to Goldman Sachs thru AIG.

In a riveting interrogation of Pauslon during Ccongressional testimony last month, Rep. Cliff Stearns (R-Florida) aggressively questions Paulson's role, conflict of interest and whether or not Paulson should have recused himself from the bailout of AIG, which now appears to be an indirect of bailout of Goldman Sachs (this is must-watch if you have not seen it, as Paulson is clearly unnerved by the Stearn's questions and at one point is unable to form words to answer Stearns):

Rep. Stearns Grills Paulson

We have suspected all along that Paulson, in his bailout of AIG, acted to bailout some Wall Street firms who were exposed to a collapse of AIG. It now appears that he was working closely with Goldman Sachs to make sure this happened. Here is the article from the NY Times so you can decide for yourself:

Did Paulson Bailout Goldman?

Keep in mind that if we could conduct an independent audit of the Federal Reserve, the truth would be exposed for all to see. Understand that AIG is intentionally being kept out of bankruptcy court because AIG would then be subjected to the full disclosure of the legal discovery process. It was not until this point in the Enron bankruptcy that we saw the true fraudulent nature of Enron's off-balance-sheet assets. What would we discover about the nature of AIG's off-balance-sheet derivatives, and specifically Goldman Sachs' exposure to an AIG collapse if AIG were put in chapter 11 bankruptcy the way every other massively insolvent firm is?

5 comments:

EconomicDisconnectSunday, 09 August, 2009
This story turns my stomach. So much going on that should be illegal, but all is ok because of "systemic risk".
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Dave in DenverSunday, 09 August, 2009
My only hope is that someone goes after Paulson legally.
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[Mis]InheritanceMonday, 10 August, 2009
I read the article today. It just confirmed what I had already suspected. Nothing surprising, or new really.

It's very intersting to note how market psychology works. If this story came out in the first week of March whent he market was tanking, you would see plenty of hype surrounding the story. It may even be accompanied by protesting.

Of course, during a bear market rally, stories like these don't stir up nearly as much anger amongst the masses.
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Dave in DenverMonday, 10 August, 2009
(Mis): I agree it just reaffirms what we already knew. But, the NY Times is widely read across the country and puts the spotlight back on the whole situation. A lot of people might has suspected foul play but this confirms it. And the Financial Times brings up the good point that the article only talks about the phone conversations that took place from Paulson's office. What about cell phone conversations and weekend private meetings?
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[Mis]InheritanceTuesday, 11 August, 2009
We can only wonder how far down the rabbit hole goes ....
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Why Gold?

Gold is the world's oldest currency. You exchange your fiat currency (dollars, euros, yen, yuan) into gold as an insurance policy against catastrophic Central Bank and Government policies which serve to destroy the value of fiat currencies and destroy democracy.

Gold can ONLY be considered an investment to the extent that it remains significantly and historically undervalued in relation to the fiat currencies against which its value is measured. Otherwise it remains the world's oldest currency and is completely free from the counterparty risk associated with currency by Government fiat (i.e. fiat currencies rely on a Government's "full faith and credit.")

Quote Of The Month Courtesy of "Jesse"

Unfortunately for Larry Summers, Ben Bernanke, and their friends at the BIS, they have not yet figured out how to print physical gold, silver, and other essential commodities, and the world is reaching the point where it might simply start ignoring the New York based markets with respect to essential commodities such as basic materials, oil, foodstuffs, and the like, as they become increasingly irrelevant, fraudulent, and Orwellian. And then where will the financial engineers be, except with no more excuses and no place to hide?

Here is the link to his entire commentary, well worth a read:

http://jessescrossroadscafe.blogspot.com/2010/07/gold-daily-chart-shock-and-awe-for.html

Great Quote From Jim Rogers On Govt CPI Reporting

JR: I mean, we have inflation now. If you go to the shop, whether it’s groceries, or education or insurance or health care, prices are going up for everything. The government lies about it in the US. Some countries lie, many countries don’t: Australia, China, India and Norway. Many countries don’t lie about it and acknowledge that we have inflation. Others lie about it, the UK and the US, but if you go shopping you know prices are up.

Q: Are you saying that the American Consumer Price Index (CPI) published by the US Bureau of Labor Statistics is a lie?

JR: In my opinion, yes, of course it is. Have you looked at it? They’ve changed their accounting several times in the past few decades. When housing was 20% to 25% of the CPI and housing was going up, they didn’t count it, saying rents weren’t going up, and then when home prices started going down, they counted it. It’s the same with many things. It’s staggering some of the tortuous reasoning that the BLS has used over the past 25 or 30 years. When the price of gasoline goes up, they say it’s not really going up because it’s better gasoline, better quality, therefore you’re getting more for your money. I mean, it’s endless, the stuff that they say and for some reason people sit there, although more and more people are catching on, and accept what the government says.

source: www.clusterstock.com

Quote of the Week

"The primary function of a Central Bank is to engage in the massive transfer of wealth from the middle class to the wealthy elite. The Federal Reserve was set up to do this with the blessing and support of Congress." - Dave in Denver

If you refuse to believe the above, please read "The Creature From Jekyll Island: A Second Look at the Federal Reserve" by G. Edward Griffin and then explain to me why the Senate voted down the Vitter Amendment and Congress refuses to pass a law requiring a full audit of the Fed, even though the Fed is using taxpayer-backed money to bailout Wall Street and Europe.