Former Fed analyst
questions M1 currency component spike prior to 9/11
by Ed Hass
March 22, 2007 - William Bergman worked at the Federal
Reserve Bank of Chicago from July 1990 until early 2004.
He served as an economist for eight years, and then moved
to a senior analyst position in a new department
researching financial market and payment system risk
policy issues. In late 2003, he was asked to consider an
assignment in the money laundering area. Bergman accepted
the assignment, underwent a background check, received
credentials affording access to confidential banking
information, and began working in the area. He was told
that he was part of the fight against
terrorism and that he had been asking good
One aspect of the assignment to the money laundering area
was for Bergman to develop a paper that, if accepted,
could serve as a reference source for the Federal Reserve
Bergman decided to begin his new assignment by developing
a 40 question Q&A in order to introduce himself and
anyone else new to the money laundering area to the
topic. He thought that the Q&A could serve as a
primer that dealt with the fundamentals, including some
history on money laundering, recent legal developments in
the area, and the role of banking regulators.
After submitting his draft to a supervisor, Bergman
received approval of his work and was told that it could
be considered as a reference. However, in his Q&A,
Bergman left one question without an answer. That is to
say that Bergman submitted his 40 question Q&A with
40 questions, but only 39 answers. The supervisor that
reviewed the draft told Bergman that he should continue
his work by answering the only remaining unanswered
question in the draft.
What prompted the unanswered question that Bergman
incorporated into his draft? Bergman had noted that the
Board of Governors of the Federal Reserve had issued
supervisory letters to the 12 Reserve Banks in the weeks
after September 11, 2001 urging scrutiny of suspicious
activity reports in tracking terrorism activity and
financing. However, Bergman also noticed that the Board
of Governors had issued a similar letter, albeit one that
did not refer explicitly to terrorism, on August 2,
2001<>. According to Bergman, terrorism and
terrorist financing were known to be part of
suspicious activity however, and the August
2, 2001 supervisory letter clearly called for scrutiny of
suspicious activity, which implies and includes the
tracking of terrorism activity and financing. The
unanswered question on Bergmans 40 question Q&A
asked why the Board had issued the August 2, 2001 letter
- a very fair, logical, and important question that has
yet to be answered to this day.
Given the fact that the supervisor gave him the green
light and directed him to find the answer regarding the
August 2, 2001 supervisory letter, Bergman decided that
the best method to discover the answer was to contact the
staff of the Board of Governors of the Federal Reserve
directly. In December 2003 he called the Board and
inquired about the meaning and motivation behind the
August 2, 2001 letter. Within two weeks his assignment
was abruptly terminated and his credentials canceled.
At the time I was also looking into and asking questions
about currency flows. I thought these questions were
worth pursuing, and was planning to raise them when I
made the above-noted phone call to the Board of
Governors. The currency component of M1 (Federal Reserve
Notes circulating outside of banks) rose especially
rapidly in July and August 2001. In fact, up to and
including August 2001, that month (August 2001) was one
of the three fastest growing months for the currency
component of M1 since 1947, on a seasonally adjusted
basis, even on the heels of significantly above-average
growth in July 2001. Much of the July-August surge (over
$5 billion above-average) seems to have been in the $100
denomination. Among other explanations, persons aware of
any imminent terrorist attacks and concerned about
possible asset seizures such as those that arose after
the 1979 Iranian hostage crisis and the 1998 embassy
bombings could have been trying to liquidate their bank
accounts in July and August 2001. The money trail could
provide important clues about people aware of, if not
responsible for, the attacks. I looked at some internal
data bearing on this issue that was available to anyone
within the Federal Reserves internal computer
network; after going back to look at this important data
again a week or two later, it was no longer freely
available, but password protected.
Approximately one month after his money laundering work
was terminated for what was described at the time as an
egregious breach of protocol attributed to his contacting
the staff of the Board of Governors, Bergmans
department was absorbed into another department, and his
14-year employment with the Federal Reserve ended.
Bergman was told that the elimination of his position at
the Federal Reserve had nothing to do with him personally
- that it was an organizational matter. He was offered
and accepted a severance package, and left the Chicago
Federal Reserve Bank in March 2004.
Whether inquiring about the unusually high put options
placed prior to 9/11 on airline companies such as
American and United, or the World Trade Center Complex
insurance companies such as Axa, Allianz, along with
other insurance companies of interests, put options that
then most likely made the insiders billions of dollars as
a result of these companies stock values plummeting
after 9/11, or about an unusual spike in the currency
component of the M1 in July / August 2001 that appears to
be $5 billion denoted in $100 bills - and what the reader
is left with is more evidence that prior knowledge of
9/11 was rampant in the United States and that the event
could have been prevented but was instead, enabled and
And what about the August 2, 2001 supervisory letter?
What prompted it? Sadly, Americans are once again left
with trying to determine for themselves - because nobody
entrusted to uphold the rule of law free from passion or
prejudice is willing to launch a thorough and purposeful
criminal investigation - who knew what, and when.
Prior knowledge of 9/11 without action and / or effort to
prevent the events from unfolding is at minimum -
criminally negligent homicide - a felony. For many within
the U.S. government and foreign intelligence community,
as well as the banking cartel, for the entire
wide-ranging set of un-indicted co-conspirators, justice
waits, but must prevail.
<> Board of Governors of the Federal Reserve
System, SR 01-18 (SUP), Suspicious Activity Report
Database, August 2, 2001, <>http://www.federalreserve.gov/boarddocs/srletters/2001/sr0118.htm, [Accessed March 21, 2007]
European traditional leadership of IMF under attack
09.07.2007 - 09:29 CET
The International Monetary Fund's executive board is
meeting today (9 July) to discuss the selection process
for the international organisation's new leader with
current IMF chief Rodrigo Rato stepping down in autumn.
However, it has come under renewed fire for always
choosing a European for its top post.
"There will be an informal meeting of the executive
board on the selection process of the managing director,'
the spokeswoman, Conny Lotze, said last week without
providing further details, according to press reports.
An unwritten rule says that the IMF's managing director
must be European while the president of its sister
organisation - the World Bank - must be from the US.
Washington has just replaced Paul Wolfowitz after his
forced exit from the World Bank with another US citizen,
Robert Zoellick, and Europe looks set on insisting the
IMF job should remain in its hands.
Developing countries have for years protested in vain
against the current practice, but the pressure is
mounting for a more open competition in the 185-member
organisation with emerging market economies playing a
rapidly increasing role in the global economy alongside
long-term industrialised powers.
"A meeting of the board has been called for Monday
and we hope a process for selection can be agreed that
will be open to anybody," said one senior board
official from a developing country, according to Reuters.
"This is not the time to be talking about
candidates. We want to agree on a process of selection
and we want that process to include candidates from other
parts of the world, not only Europe," the official
said, adding there was at least one G-11 member which
indicated it planned to put forward a candidate.
The G-11 represents more than 110 emerging and developing
countries from Africa, Asia, Latin America and the Middle
The move comes after Mr Rato from Spain last week said he
was stepping down for personal reasons in late October
ending his five-year term two years early.
A French man in job?
French president Nicolas Sarkozy is seeking to place a
Frenchman in the top job in a move seen as a bid to
strengthen France's influence overseas and the new
leader's own political power at home.
Former socialist finance minister Dominique Strauss-Kahn
is France's candidate for the top job. He has received
Germany's approval but could meet resistance from Italy,
which had hoped to see an Italian in the post for the
first time, writes the Wall Street Journal.
Three out of the nine IMF leaders since its creation in
1946 have been French. Two were from Sweden, one each
from Belgium, the Netherlands, Germany and Spain.
The Washington DC-based IMF is an international
organisation that oversees the global financial system by
observing exchange rates and balance of payments systems,
as well as offering financial and technical assistance to