by Jim Rickards, Daily Reckoning:
After 9/11, I was tasked by the CIA with creating a system with one essential purpose: to predict the future.
That’s why it was called Project Prophesy.
Project Prophesy was launched as a strategic study under the direction of CIA veteran Randy Tauss, who was also a seasoned options trader.
I was tapped to join the group based in part on my experience with Islamic banking in Pakistan.
That was considered useful in understanding the mindset of potential terrorist traders. I later became one of two project managers reporting to Tauss.
In 2004, I helped build a working prototype of a Project Prophesy machine using artificial intelligence, applied mathematics, news feeds, price feeds, computing and human oversight. We were looking for terrorist insider trading.
We developed Project Prophesy in total secrecy. And much of my work is classified. But I can tell you that on Aug. 7, 2006, Prophesy’s system uncovered warning signs of an impending terrorist attack.
Three days later in London, a plot to blow up 10 U.S. passenger jets was thwarted. Twenty four Pakistani extremists were arrested.
Then in 2007, my system spotted an impending crash in the real estate and stock markets.
I presented my findings to Treasury officials. But they ignored my warnings. We all know what happened next.
We were ready at that point to build a more robust version of this for the CIA and sought additional funding.
But the CIA decided not to move forward with the project mainly for political reasons.
They were worried about possible adverse headlines if it were made to appear that the intelligence community was trolling through citizens’ personal trading records.
That was never true; we used open source price feeds to get initial leads and then operated through the judicial system after that. But the publicity risk was there and the CIA did not want to take a chance.
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