Fearing Run on USD, Goldman's Collapse, Did Paulson Not Rig Markets?


"Paulson is either the luckiest Treasury secretary in history or he is a manipulator of the highest order."

Former Treasury Secretary Hank Paulson says he feared a run on the dollar during the financial turmoil in Fall 2008. But at that time we were told that the dollar was going up because of investments seeking "safe haven" and "a flight to quality."

We all knew it made no sense for the currency of a country at the center of a credit crisis to be rising in value. People run away from countries in debt crises, not toward them.

We know that U.S. Treasury debt and the dollar made totally counterintuitive moves because someone made that happen.

We know that JPMorgan Chase and HSBC sold 10% of the world's annual gold production and 25% of annual silver production in one month.

We know there were at least half a trillion dollars of currency swaps.

So when Paulson feared a run on the dollar, can we believe that he sat back and did nothing? Can we believe that, as he did nothing about it, a miracle happened—gold fell 25% and the dollar rose by an almost equal amount and Treasuries rallied?

If Paulson feared a run on the dollar, he surely did something to prevent it. That is, he was responsible for ordering manipulation of markets so they behaved in a totally counterintuitive way.

I hate to buy Paulson's book and make him any richer but it may be worthwhile to read it closely for a tacit or otherwise admission of gold market manipulation.

Paulson is either the luckiest Treasury secretary in history or he is a manipulator of the highest order. Given that he was previously CEO of Goldman Sachs, I think he wouldn't even know how to keep his hands off the markets.

Paulson told the Financial Times he feared that Goldman Sachs would collapse. Considering that he held $200 million in Goldman Sachs shares, I wonder if anyone is going to look at what his real motives were for saving the country with wall-to-wall market manipulation.

Related Articles

Get Our Streetwise Reports Newsletter Free

A valid email address is required to subscribe