Photo Credit: http://www.flickr.com/photos/hikingartist/5726740357/

The current turmoil in capital markets worldwide is by all accounts the result of injudicious lending to borrowers lacking the ability to repay their loans, and the creation of financial instruments for manipulating a certain class of investors: those seeking short term, high gain results, yet lacking the ability or just too lazy to assess the real risks involved.

So we are being told by all those brilliant financial analysts and advisers who got it all totally wrong, and yet expect us to believe them now.

I have no idea what really happened, but the situation is tailor-made for fantasizing and I have no doubt that as I write these words, others are working flat-out to produce novels, screen plays, or pseudo-documentaries against the background of this real-life drama that has caught the attention of all.

I too am going to indulge my imagination. The date is January 2008. The scene is a private room in the head offices of the National Bank of Saudi Arabia or the Iranian Ministry of Finance or the 250^th floor of the newest Dubai tower – take your pick. I haven't yet decided if the speaker looks as if he was attired by London's finest tailoring establishment or if he donned the clerical garb he deemed appropriate for the occasion. He speaks:

"My dear friends and colleagues. As we all know, the ultimate victory of our jihad against the reactionary and corrupt world of the unbelievers is assured. They have been tested in Beirut, in New York, in Baghdad, in Kabul, and the weakness of their response has been noted. Our fellow believers in their millions are now firmly established in the heartlands of our enemies. Our operational ability to strike when and where we choose in order to weaken them further and advance our aims is stronger than ever. While our enemies are running round in circles trying to figure out how to prevent another 9/11, we are many steps ahead of them, at an advanced stage of planning destruction in a manner and on a scale that they cannot even imagine.

My friends, I can now report to you that we are ready to deliver the ultimate blow, one that will destroy the very foundation of their way of life and render them impotent to defend themselves against the imposition of our strategic plan. Through our carefully assembled shareholdings in the world's largest banks and other leading financial institutions, we are now in a position to engineer the destruction of those institutions from within. Their stability rests on nothing more than trust, that is to say the belief of their depositors that their funds are secure and will be repaid on demand. I am happy to report that we can now execute a coordinated move to undermine that trust, simultaneously, at a number of major institutions, including Merrill Lynch, Lehman Brothers, Royal Bank of Scotland and several others. This, we predict, will lead to a crisis of confidence at major commercial banks, among them Barclays in the UK, Union Bank of Switzerland and Deutsche Bank in Germany. A dramatic shortage of credit will drive several national economies into recession. Governments will be forced to intervene at the expense of their taxpayers, but the scale of the problem will be beyond their ability to control.

This will be our opportunity to step in and pick up the pieces at bargain prices, using untraceable nominees. It is ironic that those who have been warning against our threat to their way of life will now welcome our intervention as the saviors of their economies. We estimate that by the end of 2009, we will be in effective control of key sectors of the national economies of the United States, Britain, France, Germany and Japan. This will enable us to direct economic policies and establish political agendas which will advance our cause in one huge leap. We will be unstoppable.

We have already taken the first step. Our principle investments have all been hedged against the predicted collapse in the prices of equities. We have factored in the inevitable decline in oil prices as industrial activity slows down.

The whole operation has been highly compartmentalized. Nobody outside of this room is aware of the concept or the strategy. We will maintain strict secrecy and the world will wake up to what has happened only when it is too late…."

What nonsense, the experts will say, and they will strut out all the reasons why manipulation on such a scale is unthinkable and impossible. They will explain to us, again and again, the reasons and the logic behind the reasons, and the effects and the results of the effects, all according to their concepts of how things happened in the past and their models and charts from which they deduce what will happen in the future. Much as Dan Brown's fictional Da Vinci Code was considered blasphemous by some traditionalists who rushed into print with their explanations and reasoning, so would any serious attempt to present my fantasy as fact be attacked as Islamophobic or worse.

So I will restate my complete ignorance of the facts and merely claim my right to be imaginative. I certainly hope that the cult of the “politically correct” hasn't yet reached the point of denying that right. And what is undeniable is that all those so called investment advisers at all those banks and brokerage houses were wrong about everything in the past and don't know diddley-squat about what will happen next. There's nothing you or I can do about it, so I might as well dream on.