Accuracy in Media

Another financial expert is expressing his deep disgust with the Federal Reserve’s decision to print more money and buy more U.S. debt, saying it is a sign that the U.S. capitalist system is moving closer to collapse.

“This is the type of stuff we accused the communist and socialist governments of doing—interfering in free markets through currency manipulation,” declared Zubi Diamond, author of The Wizards of Wall Street. “What the Fed is doing is not good for free market capitalism and it is not good for America.”

In an interview with Accuracy in Media, Diamond went on to say, “The Fed is following the economic models of Third World countries by printing more money and devaluing their currencies. If you keep doing what Third World economies do, eventually you will become a Third World economy.”

The Fed’s new action, labeled “quantitative easing” or QE2, follows a first attempt at “QE,” known as QE1. QE means that the Federal Reserve is printing more money and buying more government debt. In total, according to Investor’s Business Daily, “the Fed will have created $2.5 trillion out of the blue.”

Diamond said the result of the Fed’s policy will be to “increase the debt, devalue our currency and create a bigger problem that won’t solve the crisis.” Eventually, America could “collapse under its own weight of massive debt,” he warned.

The QE2 “will devalue the dollar and lead to higher commodity prices, asset and price inflation. It may even lead to the end of the U.S. dollar as the world reserve currency,” Diamond predicted. He noted that Obama Treasury Secretary Timothy Geithner floated the idea of the dollar losing its status as the world’s reserve currency, “only to backpedal from it when it raised some eyebrows.”

“What is most troubling to me about this,” Diamond added, “is that the Fed’s QE2 is in alignment with George Soros’s agenda to destroy global capitalism.” The decline of the dollar “is what George Soros wants and what he has proposed in the past,” he noted.

Soros, the billionaire hedge fund operator who finances various leftist and Marxist groups, including Media Matters, has made his fortune by betting on the collapse of national economies and currencies. He was convicted of insider trading in France.

Media Matters recently received $1 million from Soros so that it could try to mute the effectiveness of conservative media organizations and personalities, some of them critical of Soros.

In recent Fox News programs, Glenn Beck has been focusing on the decline of the dollar and how Soros has proclaimed that “an orderly decline of the dollar is actually desirable.” Programs like these have made Beck into a top target of Media Matters.

AIM has been warning for years about the intentions of Soros, noting in a 2004 report that he “specializes in weakening or collapsing the currencies of entire nations for his own selfish interests.”

We noted, “Despite his vision of an ‘open society,’ he operates an unregulated ‘hedge fund,’ open only to the super-rich.” His Soros Fund Management is a member of the “founder’s council” of the Managed Funds Association (MFA).

Diamond said that as Soros is betting on a U.S. financial collapse, his net worth and the amount of money under the management of his hedge fund have ballooned. The money that Fed chairman Ben Bernanke is putting into the economy, Diamond said, is designed to “replace the stolen money from American families and the capitalist corporations” under the cover of the financial crisis.

The collapse of capitalism will be “a big pay day for George Soros and members of the Managed Funds Association,” he said. “They are betting against the dollar and moving assets to gold and to the emerging economies. They are betting against U.S. survival as a capitalist nation.”

Referring to the members of the MFA who are betting against the U.S., Diamond asked: “Have you heard them say they want to restore capitalism? No. But you will hear them talk about the ‘new normal’—meaning that we are not going back to capitalism. And this is by design.”

Diamond’s criticism follows the shocking statements of Charles Ortel, managing director of Newport Value Partners, who told AIM that the Federal Reserve plan to buy $600 billion of U.S. Government securities “borders on the criminal” because the impact will be the devaluation of the dollar by 20 percent and the destruction of $10 trillion of household net worth.

Ortel told AIM that the Obama Administration’s “war on capitalism” has become a “war on wealth” under the direction of Fed chairman Ben S. Bernanke.

Republican Rep. Tom Price and Senator-elect Rand Paul have led the criticism of the Federal Reserve, with Paul saying, “With so much blame going around for the current financial crisis it is surprising that so few in the mainstream press have discussed the role of the Federal Reserve System.”

As if to prove the point, the Sunday TV interview shows featured lengthy discussions about proposed budget cuts and federal spending but no detailed examination of the actions of the Federal Reserve.

Charles Ortel had told AIM that the result of the upheaval will be a new “global regulatory regime” to manage the U.S. and other economies. In this regard, talk of global taxes by the United Nations has increased recently and Obama himself endorsed the concept in a document adopted by the September 20-22 U.N. Summit on the Millennium Development Goals.

Senator David Vitter’s Senate resolution 461 would put the Senate on record against any global tax scheme.

Like Ortel, Diamond notes that previous attempts to “save” the economy through the actions of the Federal Reserve have demonstrably failed. Rather than allow the Fed to pour more printed money into the economy, Diamond said that the new Congress should be “following the money paper trail and try to recover as much of the stolen money as possible.” Instead of holding the looters accountable, he said that the Fed is allowing the looters to digest the stolen money and dig us deeper into the hole.”

The Securities and Exchange Commission (SEC), he said, should reinstate regulations designed to protect invested capital from the hedge fund short-sellers. “What is needed is the legal protection for the invested capital, protection for the value of our homes and policies that encourage capitalism and risk taking,” he said. The hedge fund short-sellers should be monitored and regulated like mutual funds, he said.

While Bernanke takes the brunt of Diamond’s critique, Diamond doesn’t lose sight of the President who re-appointed Bernanke to that post.

“President Barack Obama is doing everything he is not supposed to do—and is failing to do the things he is supposed to do—to fix this economic crisis,” he said.

Consider the matter of “stimulus” spending, for example. “Obama got $700 billion in stimulus money, supposedly for shovel ready jobs. But he later admitted there were no shovel ready jobs. So it is just more money down the drain, more debt and deficit, digging us deeper into the hole,” he said.

He concluded, “This is the person the pundits and talking heads on TV insisted is smart and intelligent. Misguided Americans may have inadvertently elected a dummy or an enemy agent as their President. Take your pick.”

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