"Recent information has surfaced that both the U.S. and Soviet governments fancied an interest in faking an alien invasion as a means to induce mass-hysteria in the enemy à la Orson Welles' chaotic War of the Worlds broadcast from 1938.
At least one inter-agency communication from the early 1950s acknowledges the potential disruptive power of a faked alien invasion in both "offensive and defensive" contexts (keeping in mind, the Roswell UFO incident occurred only a few years prior and was followed by a flurry of "flying saucer" sightings around the world).
The following memo was sent from then-director of the CIA, Walter Bedell Smith to the unnamed director of the "Psychological Strategy Board."
I am today transmitting to the National Security Council a proposal… in which it is concluded that the problems connected with unidentified flying objects appear to have implications for psychological warfare as well as for intelligence and operations…
I suggest that we discuss at an early board meeting the possible offensive or defensive utilization of these phenomena for psychological warfare purposes."