China's Jolly Rogers

Anyone who knows what the Federal Reserve will do next can make billions. A senior Fed advisor allegedly sold China an insider track.

“It is ten thousand times cheaper to pay the best spies lavishly than even a tiny army poorly.” – Sun Tzu

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Wanted: Fudan University seeks a part-time economics professor. Pays $450,000, plus all-expenses-paid trips to Shanghai, Beijing, and Ji’Nan. Luxury accommodations and fine meals included. Traitors welcome.

This is the job that economist John Harold Rogers, 63, of Vienna, Va., took as he also served as a senior adviser for the Federal Reserve Bank.

Let’s take a moment to ponder these two prestigious gigs: One at a Chinese university, the other at the U.S. central bank. Hmm. Can anybody spot a conflict of interest? What could go wrong?

Last week, Rogers was indicted for pirating the Fed’s economic secrets and sharing them with the People’s Republic of China. It’s yet another embarrassing example of the communists out-capitalizing the capitalists.

Rogers denies the allegations in a grand jury indictment, according to his attorney. But let’s consider the obvious implications of this situation that were somehow overlooked at the Fed.

John Harold Rogers looks like a reasonably jolly guy for an economist. (Photo Illustration Credit: Personal website and Wikimedia Commons.)

China holds more than $800 billion in U.S. debt, making it the second-largest debt holder after Japan. Imagine what just a tiny edge could do for its trading accounts.

According to the indictment:

“Having unauthorized access to … confidential information could allow China to manipulate the U.S. market, in a manner similar to insider trading. …

Gaining advance knowledge of U.S. economic policy, including advance knowledge of changes to the federal funds rate, could provide China with an advantage when selling or buying U.S. bonds or securities.”

If these allegations are true, China has made it look so easy to hack our central bank that we can only wonder who else is doing it. This is a market intelligence operation that any hedge fund could afford, let alone our sovereign enemies.

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