Truth will out….

According to press rpeorts, the possibility that the US government has signficant intervention plans to prop up equity markets in a crisis first emerged during a simulation.

The so-called plunge protection team was first disclosed during a financial war game held by the Council on Foreign Relations in 2000. Journalists reported that simulation participants displayed a willingness to consider government intervention in the stock market in the event of a financial crisis. despite the free trade agenda of the administration.

See a report for Sprott Asset Management by John Embry and Andrew Hepburn called “Move Over, Adam Smith: The Visible Hand of Uncle Sam,” Toronto: August 2005.

I dont personally find this surprising. Theyd be mad not to.

But it is a good example of how things said or assumed in a simulation can come to public notice and possibly influence the real world. (As in the publicity given to the Iran simulation recently.) Sometimes, you cant do a realistic simulation without revealing your hand.

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