This page has been archived and commenting is disabled.
Exclusive: The Fed's $600 Billion Stealth Bailout Of Foreign Banks Continues At The Expense Of The Domestic Economy, Or Explaining Where All The QE2 Money Went
- Agency Paper
- Barclays
- Ben Bernanke
- Ben Bernanke
- Bill Gross
- Capital Markets
- Citigroup
- Credit Crisis
- Credit Suisse
- default
- Deutsche Bank
- Discount Window
- Equity Markets
- European Central Bank
- Excess Reserves
- Federal Reserve
- Germany
- goldman sachs
- Goldman Sachs
- Greece
- Ireland
- Italy
- Mark To Market
- Merrill
- Merrill Lynch
- MF Global
- Monetary Policy
- Morgan Stanley
- Muni Bonds
- New York Fed
- Nomura
- None
- Portugal
- Primary Dealer Credit Facility
- RBC Capital Markets
- RBS
- Real estate
- REITs
- Trichet
Courtesy of the recently declassified Fed discount window documents, we now know that the biggest beneficiaries of the Fed's generosity during the peak of the credit crisis were foreign banks, among which Belgium's Dexia was the most troubled, and thus most lent to, bank. Having been thus exposed, many speculated that going forward the US central bank would primarily focus its "rescue" efforts on US banks, not US-based (or local branches) of foreign (read European) banks: after all that's what the ECB is for, while the Fed's role is to stimulate US employment and to keep US inflation modest. And furthermore, should the ECB need to bail out its banks, it could simply do what the Fed does, and monetize debt, thus boosting its assets, while concurrently expanding its excess reserves thus generating fungible capital which would go to European banks. Wrong. Below we present that not only has the Fed's bailout of foreign banks not terminated with the drop in discount window borrowings or the unwind of the Primary Dealer Credit Facility, but that the only beneficiary of the reserves generated were US-based branches of foreign banks (which in turn turned around and funnelled the cash back to their domestic branches), a shocking finding which explains not only why US banks have been unwilling and, far more importantly, unable to lend out these reserves, but that anyone retaining hopes that with the end of QE2 the reserves that hypothetically had been accumulated at US banks would be flipped to purchase Treasurys, has been dead wrong, therefore making the case for QE3 a done deal. In summary, instead of doing everything in its power to stimulate reserve, and thus cash, accumulation at domestic (US) banks which would in turn encourage lending to US borrowers, the Fed has been conducting yet another stealthy foreign bank rescue operation, which rerouted $600 billion in capital from potential borrowers to insolvent foreign financial institutions in the past 7 months. QE2 was nothing more (or less) than another European bank rescue operation!
For those who can't wait for the punchline, here it is. Below we chart the total cash holdings of Foreign-related banks in the US using weekly H.8 data.
Note the $630 billion increase in foreign bank cash balances since November 3, which just so happens is the date when the Fed commenced QE2 operations in the form of adding excess reserves to the liability side of its balance sheet. Here is the change in Fed reserves during QE2 (from the Fed's H.4.1 statement, ending with the week of June 1).
Above, note that Fed reserves increased by $610 billion for the duration of QE2 through the week ending June 1 (and by another $70 billion in the week ending June 8, although since we only have bank cash data through June 1, we use the former number, although we are certain that the bulk of this incremental cash once again went to foreign financial institutions).
So how did cash held by US banks fare during QE2? Well, not good. The chart below demonstrates cash balances at small and large US domestic banks, as well as the cash at foreign banks, all of which is compared to total Fed reserves plotted on the same axis. It pretty much explains it all.
The chart above has tremendous implications for everything from US and European monetary policy, to exhange rate and trade policy, to the current account on both sides of the Atlantic, to US fiscal policy, to borrowing and lending activity in the US, and, lastly, to QE 3.
What is the first notable thing about the above chart is that while cash levels in US and US-based foreign-banks correlate almost perfectly with the Fed's reserve balances, as they should, there is a notable divergence beginning around May of 2010, or the first Greek bailout, when Europe was in a state of turmoil, and when cash assets of foreign banks jumped by $200 billion, independent of the Fed and of cash holdings by US banks. About 6 months later, this jump in foreign bank cash balances had plunged to the lowest in years, due to repatriated fungible cash being used to plug undercapitalized local operations, with total cash just $265 billion as of November 17, just as QE2 was commencing. Incidentally, the last time foreign banks had this little cash was April 2009... Just as QE1 was beginning. As to what happens next, the first chart above says it all: cash held by foreign banks jumps from $308 billion on November 3, or the official start of QE2, to $940 billion as of June 1: an almost dollar for dollar increase with the increase in Fed reserve balances. In other words, while the Fed did nothing to rescue foreign banks in the aftermath of the first Greek crisis, aside from opening up FX swap lines, one can argue that the whole point of QE2 was not so much to spike equity markets, or the proverbial "third mandate" of Ben Bernanke, but solely to rescue European banks!
What this observation also means, is that the bulk of risk asset purchasing by dealer desks (if any), has not been performed by US-based primary dealers, as has been widely speculated, but by foreign dealers, which have the designatin of "Primary" with the Federal Reserve. Below is the list of 20 Primary Dealers currently recognized by the New York Fed. The foreign ones, with US-based operations, are bolded:
- BNP Paribas Securities Corp.
- Barclays Capital Inc.
- Cantor Fitzgerald & Co.
- Citigroup Global Markets Inc.
Credit Suisse Securities (USA) LLC
Daiwa Capital Markets America Inc.
Deutsche Bank Securities Inc.- Goldman, Sachs & Co.
- HSBC Securities (USA) Inc.
- Jefferies & Company, Inc.
- J.P. Morgan Securities LLC
- MF Global Inc.
- Merrill Lynch, Pierce, Fenner & Smith Incorporated
Mizuho Securities USA Inc.- Morgan Stanley & Co. LLC
Nomura Securities International, Inc.
RBC Capital Markets, LLC
RBS Securities Inc.
SG Americas Securities, LLC
UBS Securities LLC.
That's right, out of 20 Primary Dealers, 12 are.... foreign. And incidentally, the reason why we added the (if any) above, is that since this cash is fungible between on and off-shore operations, what happened is that the $600 billion in cash was promptly repatriated and used by domestic branches of foreign banks to fill undercapitalization voids left by exposure to insolvent European PIIGS and for all other bankruptcy-related capital needs. And one wonders why suddenly German banks are so willing to take haircuts on Greek bonds: it is simply because courtesy of their US based branches which have been getting the bulk of the Fed's dollars in 1 and 0 format, they suddenly find themselves willing and ready to face the mark to market on Greek debt from par to 50 cents on the dollar. And not only Greek, but all other PIIGS, which will inevitably happen once Greece goes bankrupt, either volutnarily or otherwise. In fact, the $600 billion in cash that was repatriated to Europe will mean that European banks likely are fully covered to face the capitalization shortfall that will occur once Portugal, Ireland, Greece, Spain and possibly Italy are forced to face the inevitable Event of Default that will see their bonds marked down anywhere between 20% and 60%. Of course, this will also expose the ECB as an insolvent central bank, but that largely explains why Germany has been so willing to allow Mario Draghi to take the helm at an institution that will soon be left insolvent, and also explains the recent shocking animosity between Angela Merkel and Jean Claude Trichet: the German are preparing for the end of the ECB, and thanks to Ben Bernanke they are certainly capitalized well enough to handle the end of Europe's lender of first and last resort. But don't take our word for this: here is Stone McCarthy's explanation of what massive reserve sequestering by foreign banks means: "Foreign banks operating in the US often lend reserves to home offices or other banks operating outside the US. These loans do not change the volume of excess reserves in the system, but do support the funding of dollar denominated assets outside the US....Foreign banks operating in the US do not present a large source of C&I, Consumer, or Real Estate Loans. These banks represent about 16% of commercial bank assets, but only about 9% of bank credit. Thus, the concern that excess reserves will quickly fuel lending activities and money growth is probably diminished by the skewing of excess reserve balances towards foreign banks."
Which brings us to point #2: prepare for the Bernanke hearings and possible impeachment. For if it becomes popular knowledge that the Chairman of the Fed, despite explicit instructions to enforce the trickle down of "printed" dollars to US banks, was only concerned about rescuing foreign banks with the $600 billion in excess cash created out of QE2, then all political hell is about to break loose, and not even Democrats will be able to defend Bernanke's actions to a public furious with the complete inability to procure a loan. Any loan. Furthermore the data above proves beyond a reasonable doubt why there has been no excess lending by US banks to US borrowers: none of the cash ever even made it to US banks! This also resolves the mystery of the broken money multiplier and why the velocity of money has imploded.
Implication #3 explains why the US dollar has been as week as it has since the start of QE 2. Instead of repricing the EUR to a fair value, somewhere around parity with the USD, this stealthy fund flow from the US to Europe to the tune of $600 billion has likely resulted in an artificial boost in the european currency to the tune of 2000-3000 pips, keeping it far from its fair value of about 1.1 EURUSD. If this data does not send European (read German) exporters into a blind rage, after the realization that the Fed (most certainly with the complicity of the G7) was willing to sacrifice European economic output in order to plug European bank undercapitalization, then nothing will.
But implication #4 is by far the most important. Recall that Bill Gross has long been asking where the cash to purchase bonds come the end of QE 2 would come from. Well, the punditry, in its parroting groupthink stupidity (validated by precisely zero actual research), immediately set forth the thesis that there is no problem: after all banks would simply reverse the process of reserve expansion and use the $750 billion in Cash that will be accumulated by the end of QE 2 on June 30 to purchase US Treasurys.
Wrong.
The above data destroys this thesis completely: since the bulk of the reserve induced bank cash has long since departed US shores and is now being used to ratably fill European bank balance sheet voids, and since US banks have benefited precisely not at all from any of the reserves generated by QE 2, there is exactly zero dry powder for the US Primary Dealers to purchase Treasurys starting July 1.
This observation may well be the missing link that justifies the Gross argument, as it puts to rest any speculation that there is any buyer remaining for Treasurys. Alas: the digital cash generated by the Fed's computers has long since been spent... a few thousand miles east of the US.
Which leads us to implication #5. QE 3 is a certainty. The one thing people focus on during every episode of monetary easing is the change in Fed assets, which courtesy of LSAP means a jump in Treasurys, MBS, Agency paper, or (for the tin foil brigade) ES: the truth is all these are a distraction. The one thing people always forget is the change in Fed liabilities, all of them: currency in circulation, which has barely budged in the past 3 years, and far more importantly- excess reserves, which as this article demonstrates, is the electronic "cash" that goes to needy banks the world over in order to fund this need or that. In fact, it is the need to expand the Fed's liabilities that is and has always been a driver of monetary stimulus, not the need to boost Fed assets. The latter is, counterintuitively, merely a mathematical aftereffect of matching an asset-for-liability expansion. This means that as banks are about to face yet another risk flaring episode in the next several months, the Fed will need to release another $500-$1000 billion in excess reserves. As to what asset will be used to match this balance sheet expansion, why take your picK; the Fed could buy MBS, Muni bonds, Treasurys, or go Japanese, and purchase ETFs, REITs, or just go ahead and outright buy up every underwater mortgage in the US. This side of the ledger is largely irrelevant, and will serve only two functions: to send the S&P surging, and to send the precious metal complex surging2 as it becomes clear that the dollar is now entirely worthless.
That said, of all of the above, the one we are most looking forward to is the impeachment of Ben Bernanke: because if there is one definitive proof of the Fed abdicating any and all of its mandates, and merely playing the role of globofunder explicitly at the expense of US consumers and borrowers, not to mention lackey for the banking syndicate, this is it.
»
- 110894 reads
- Printer-friendly version
- Send to friend
- advertisements -
What would QE3 have to entail to have the "right" impact? The Fed will have to sell it so they can't simply continue monetizing the debt via flipped bonds. Surely mortgages, Weiners, and muni-bonds might be on the plate right? Not only that, but size-wise it would have to be in excess of $1T and last longer than 12 months to carry through to elections; so are we looking at a 15 months, $1.5T program due to start once silver hits $20, the S&P hits 1,000, oil touches $85, and the entire commodity complex is nearly dead from dysentary?
Sounds bullish for gold and silver TD.
Where are the experts like Bob D and Spalding weighing in on this?
The trend is in place, the continued devaluation of fiat usury will move forward unabated...
Until big .gov kills the host, <s>money</s> fiat usury will be <s>printed</s> digitized & spent, and the (D) & (R) Free Shit Empire™ will continue to export inflation to lower IQ developing countries.
¿Tienes plata gringo?
Note to admin: Why the hell doesn't the strikethrough command work?
Used to work, but the underline command does not work either.
I'm surprised that bold works. Our liberties are slowly being taken away from us!
Bold and italics next!
Stand up for your HTML rights! Burn your computer.
First they came for the strike-through...
Is it getting warm in here? What are these little bubbles in the water?
What do we want?
Bold!
When do we want it?
Now!
LOL!
Adorable, as always Rocks!
See? I'm a chick magnet. Cute pays.
yeah...
Whenever a chich says to me "you're so rude", I just know I can score in the next 2 hours.
I actually met my wife in a discotec and insulted her like for a hour and when she started yelling to me, I empied a champagne bucket over her head with the water and the ice.
I had her in my bed the same night and couldn't get rid of her after that so I married her.
The only time she calles me "cute" is if I fall from the stairs and if I need ambulance to get me to the hospital. Which actually happened.
I'm just debating if its your rocks she finds adorable or if its your words she finds magnetic...anyways don't fall down the stairs...cos being cut up is not being cute.
"Diamonds...diamonds...are a girls best friend...wow, diamonds!
To quote Charles Manson from his prison cell: "Is it hot in here or am I crazy?!"
Tuco
They came for my 'colon'.
Dollar denominated debt ......
Big deal, I have been talking about this for 7-8 months. They made loans denominated in dollars and now need more dollars so they can do a rollover ( A can " kick " per se' )
So what was driving stocks then .... ? Could it be .... improvement in the economy ?
May 20, 2008 Baltic Dry Index=11,790
06/10/2011 Baltic Dry Index = 1,418
Nuff said.
"They made loans denominated in dollars and now need more dollars so they can do a rollover"
Ha! Railroads & Trucks... Must be why the $TRAN is so "on fire" since May 1st... Right? I guess they need those huge containers to move around all the FRN's (It's the NEW 'multiplier' on money velocity)...
So... smarty pants... Since the economy is so obviously improving, and you're such a wizard at 7-8 month forecasting windows, enlighten us all as to your calls for the SPX & DXY, for, say, the Jan '12 opex...
---
Footnote: $50 bucks says the 'Smailes' kid eats it...
No forecast ... Just the facts.
Study dollar denominated debt in the securitization market, forex,global finance,letters of credit, central banks, sovereign wealth funds, commodities ect ....
Then get back with us
Tell us about the money velocity QE2 created via treasuries .... or was it the bric's driving commodities ?
If it's not predictive, then it is worthless.
But we already knew that about you.
When the light comes on the cock-a-roaches scatter.
Facts?
Here... Here are a few 'FACTS' I was looking at... It was YOU who decided to post truck and railroad pieces for May & June...
http://stockcharts.com/h-sc/ui?s=%24TRAN
Just the facts? Yeah, right. 7-8 months ago you were bad mouthing gold and silver when gold was around $1330-1340 and silver was $23-25.
All you bring to the table is disinformation and propaganda when it comes to PM's.
I call bullshit on your railroad diversionary tactic:
Baseline Rail Traffic in Contraction: Oil Consumption vs. Production Revisited...baseline traffic is now in contraction with intermodal and cyclical traffic soon to follow if the current trend holds.
Intermodal traffic, containers and piggyback service, actually has stronger cyclical tendencies than so-called cyclical traffic. Compared to the same month a year ago, intermodal is right where it was in 2006, 2007, and 2008.
Baseline traffic is below and cyclical traffic is well below levels in the same month in 2006, 2007, and 2008. Thus total traffic is below levels in the same month in 2006, 2007, and 2008.
Never mind corporate/gov't "statistics". A half-dozen loaded freight trains used to go thru the local station every day. Now there are none, for weeks at a time. Did see a few empties being shuttled back and forth today, tho...
yeah dude, iron and steel scrap shipments up 18%! what a recovery.
could the vehicle sales increases have to do with a certain asain nations demise? isn't a 60% drop quite near a 150% gain?
Tyler. think about it. All that is needed to keep the printer going is the 'full faith and credit of the people of the united states" which means the housing stock. enter Fanny and Freddie. Friday the 13th - The Porn Version.
Is data available of how much each bank has gotten? Think this turd floats back to Jim Rogers short on a bank that has not went down as much as the others? My guess on that was JPM or Wells Fargo or GS, although Wells Fargo and GS would be more shock factor beings Buffet has been so smoochie smoochie with Them. I am not sure how you eliminated those two in your article.
As Minsky pointed out, large bailouts are followed by larger bailouts until, in the end, the institutions become too big to fail and moral hazard is out the window.
Nothing was done to change the system after the treasury was looted, not a fucking thing. Dodd-Frank was like drawing a picture on a Winkie Dink screen, it made no sense and does nothing to curtail the abuses that brought about the most recent collapse.
Glen Beck's carrying you link to this article
Are you really Glen Beck
Or If not are you going to appear on his new web tv
I think you guys are on the same wave length
And political risks. Euro governments are on shaky ground because of the unfolding debt crisis. And MENA instability is a direct offshoot. Here in the US there's rising disaffection with both parties and rising chance for turmoil
Re. Turmoil? In the valium nation?
ahhhh valium! I haven't seen you in years! Me thinks it's time to head to the good Doctor and schedule a reunion with you, on my wife's government bennies of course!
Grantham called it as he saw it in 2007, a slow motion train wreck. And now? The Dinner Roll or the last jump of the Federal Reserve ...
http://blogs.minyanville.com/dollar-bill/2011/06/12/the-bernank-does-the-dinner-roll/
This is not a 1am Saturday Night Story.. unless you are trying to bury it! LOL!! take it out with the trash on the weekend!!
This story will be headlined until well into next week.
I was kidding! I would have pushed in on Face Book and twitter any way! You can NOT Stop me or the truth Tyler!!!
Happy Saturday evening to You Bro and I would hope Yours as well given the hour!
Keep up the GRANDE' Work Product! You are Wonderful! Human Being!
Kiss ass.
ya! but!! have you seen his ab's? they are to die for! you sexxy Beast!
Nice work TD. While I hope this might move pols to act against Ben Bernanke, I have yet to see anyone challenge him so far. I have been disappointed that Bernanke has not been confronted about loaning money to Libya, or about the majority of bailout cash going to foreign firms, or the complete ineffectiveness of QE on employment, or for loaning to banks at 0% so they can loan back to the gov't at 3+%. Still the congressmen fellate Bernanke because they know who butters their bread. The proles won't push for action against Bernanke because they largely don't understand, and even with action against Bernanke, the damage has been done. /dejected
While he was a douche, Alan Grayson dug in on The Bernank - http://www.youtube.com/watch?v=n0NYBTkE1yQ
And there's always Ron Paul - http://www.youtube.com/watch?v=cxBNR0qBKVU and http://www.youtube.com/watch?v=fc4DDBvsYPg
Theater is for entertainment. Where is the action?
Just pointing out that he has been confronted. The action will come when 1,000,000 people surround the Federal Reserve Corporation, Capitol, and White House. As long as the people remain at home, placated by SNAP, Medicare, american Idle, the internet, and everything else that makes life acceptable, we will be slaves.
http://ampedstatus.org/network/members/admin/activity/35028
I used to be amazed at how complacent/docile people have been, but ... you learn something new all the time.
Now, it's too late to do anything about the train wreck except make plans for the after effects.
I hope people find community to defend common interests, but I'm amazed it hasn't happened so far. People are so deep into the Kool-Aide.
-------------------------------------------
TD - Thanks. The Thomas Paine of our times.
[PbagWan - is how the local equivalent of kiss-ass BTW]
I'd fight Thomas Paine.
"Good answer."
could be that the us is just waiting for the next election. I know lots and lots of people who are disgusted, who all say the same thing: Nov 2012 can't get here quickly enough. There's also an understanding that the PTB woudl benefit from imposing martial law, so the idea of acting in such a way as to risk martial law is out of the question.
And meanwhile of course, the sheeple quietly arm themselves, buy PM's, and food storage and other survival-based items.
I predict elections won't fix this.
Rick Perry will fix "this". He'll either liquidate Zero and his bankster regime in 2012, or his state Texas will secede before/after and take 20 others with it. Then we will get the Civil War we so desperately need. It's the only way...in the meantime, by all means, gather 'round and attempt to levitate the Fed.
kinda going out on a limb there, huh?
I think that Americans are more active than they appear to be, and Greeks less. What is more effective: thirty thousand people shouting at riot cops in Syntagma Square, or 4 million Americans not paying their mortgages?
I'd say 99% of those people not paying are NOT doing it as a political statement.
While I admire the 'spirit' of your observation, I'd be inclined to color your conclusions a shade differently...
4 million Americans not paying their mortgages ISN'T as much an act of rebellion (though there may be isolated instances where that is the case)... In aggregate, it's probably just an issue of...
"I'm so stupid, I just don't what to do... Let's try NOT PAYING and see what happens... If it lasts, whoopee for me... If it doesn't, I'll figure it out then... Maybe in the process, some political candidate will promise me a cookie..."
Say, what? Oh, you mean other than the ususal group of crackpots like Ron Paul, etc. And the hearings that were attended by a couple of snoozing street bums -- and no media.
Maybe they could use our encouragement instead of our contempt.
Ron Paul talks a good game. I become less impressed with his actions by the day.
well, he's still done a 1000 times more than just about anyone else i can think of and does a great job getting common sense out there when it comes to foreign policy
I admire the effort Ron Paul has put out as well... Kudos for that...
Sadly, in reality... He'll never get within a square kilometer of the Oval Office... Or if DOES, he'd better be either riding in a "popemobile", and/or steer clear of book depositories...
Stay out of helicopters & don't cross the street RP... Francis_Sawyer's sound words of wisdom...
Have you ever listened to his ass-reaming of Bernanke at EVERY opportunity, especially during any Congressional hearings where he has been a member? Come on, man. Listen up. Have you heard his stinging criticism of the Federal Reserve in any televised interview? The man has never been given the tools to do anything, and the piddly hearings he was holding were a sop to try to placate him. He is serious. Therefore, he has no chance at power. I fear for his life should he gain any political foothold.
Although I don't follow it closely, I saw a FEDREP in Congressional testimony recently state it is their mission to hand out the cash to foreign banks, in fact, the dude quoted chapter and verse. The Congressperson [sorry don't remember which one] did not have a follow up question. The key point is that I am sure they have it written in some regulation that they can do it. He was not afraid of the question, in fact, he was ready for the question.
When dealing with lawyers [and banksters], the best bet is to burn all the law books except the Constitution and start there. Everything that has accumulated is to their benefit. The US Code is one giant 'fuck you' to the American People.
Ask the Native Americans how well the Constitution protected them. The Constitution has been a doo rag since 1789. The law was clear, George Washington was clear, Marshall was clear, but their land was stolen anyway.
Anyone depending on Constitutional law to protect them is laughably naive. Heck, we just lost the 4th Amendment completely. Wake up people!
It is time for "We the People" to Arm ourselves and defend our Rights! The Constitution is under attack (again, some more, as usual) thusly we should prepare to defend the Constitution thru any and all means!
Who is with me? LOL!! dont everyone break a leg lining up to fight Washington DC now.. LOL
The constitution is a tool to be used against the populace. Burn the damn thing and revert to Articles of Confederation, and pay very close attention to state elections. The first state to secede will be gaining a new resident 1 day later.
Native "Americans"? You stupid dweeb...there was no "America" until White Anglo-Saxons created it by defeating 400 tribes of stone-age savages. Who now run casinos....
You're a hero!!
It's been a while since I sent in $100. Do you still need donations, or does advertising revenue suffice?
I'm glad you said something...I immediately went and donated $100 to the site after reading your post. How could I not?
Best site on the internet hands down.
+$100
$99.86 (hurry)
+$17.76
This is not a moneymaker and tyler durden has too much pride to ask for donations in the posts.
Yes more donations are helpful. It is not a moneymaker yet, and zero hedge doesnt line up at the government trough like NPR and PBS. They need more money to survive and get the word out.
Any size donation is appreciated. Tyler of all people knows the hard times many of you face.
Agreed Tyler; unless 10-15 % of Mercans grasp what happened during Q2, then this country could go off the tracks. These elites keep bring up things that eventually the people will understand and take to heart. Milestones.
Surely you jest?
'MerKans will continue to vote for duopoly; and the banksters will continue to issue marching orders to politeers; and the politeers will continue issue marching orders to generals; and the .gov thugopoly will violently continue crowd control, ad infinitum...
Welcome to the new boss, same as the old boss - Same shit, different century.
The huddled mongrels have spoken, and they love tyranny....
Funny. You could be right.
Thank you Tyler. I have sent this to my address book, various news outlets, my senator, etc. I think the ship has sailed and rome will burn, but I'm glad the word is getting out.
Truly, thank you.
on Sun, 06/12/2011 - 00:50
#1362424
This story will be headlined until well into next week.
***********************************************************
hahahahahahahhahahaahahahahahahaahahhahaha!
So, if we already know that the US government is controlled by corporations (e.g. financials, oil, etc.), where does this road go?
how do you feel about live fire situations?
Yea, it seems it will come to that.
When the can is "kicked" the road follows !
And the tail wagged the dog....
The same circles, different paths, just keep that shit moving and everything will be alright.
Ok then, the ulimate question is, how many separate countries does the 50 state union become? 2? 3? 4?
Once the Monopoly money disapears completely, there is no way the Volvo drivers from MA and CT can remain part of the same country as the slack jawed, gun worshipers from TX and AR. You can't paper over these profound differences forever.
I would love to get more thoughts on this from the ZH group (smartest group on the net that I've found). I have been wondering about this for some time now.
I would tend to side with the people that own the guns I guess..
you should own a bunch of large caliber weapons and side with yourself, your nieghbor or your loved ones! fuck them that do the bidding of the Banker Terrorists!
Family.... First and last. Fuck any and all notion of "country", that's a "contract" that needs to be buried in the garbage can of history( to steal an expression) Until we all wake up and understand that it's artificial tribal and geographic boundaries that enslave us, we will continue to be repressed, lied to and exploited. Are you a "sovereign individual" or not?
Well said.
i would hope that there would be closer to 40 separate countries, let the socialist states combine together in the northeast, but most states will probably fly solo, those with big debt burdens won't want to like ca and il, waiting for tx to be the first to give the us the finger
Gunslingers always out do volvo drivers
Well... here's how one dude sees it...
http://strangemaps.files.wordpress.com/2009/05/panarin-us-break.jpg
Here's another hypothesis...
http://graphics8.nytimes.com/images/2008/05/18/books/stossel-650.jpg
Thanks for the graphics--the first was not very plausible (I had seen it before), and the second did not even try to be plausible--but cracked me up! LOL
A couple decades ago someone wrote a book "The Nine Nations of America" that made a reasoned argument for the devolution of the US into smaller blocs. Can't recall the author now, but it made a few reasonable points.
- here, have a drink on me.
http://www.examiner.com/conservative-in-boise/idaho-to-be-first-chinese-state#ixzz1O1Z5BucB
here's a half assed visual attempt: http://i.imgur.com/Mo01X.jpg
incredibly simplistic drawing/thinking, I would estimate maybe near 20-30 countries, many quite small.
the central plains east of the rockies i think would be a pretty contested region..
nebraska kansas iowa missouri maybe meriting their own state, i think there will be less countries than there currently are states, but more than just 3 or 4.
geography is generally the boundary of states because of defensible positions in war. so all the square states would fragment and have their borders drastically redrawn.
the boundaries will look nothing like what people conventionally think the state lines are, and patriotism towards the concept of the USA will quickly fade once the gun is in their face.
Hard to imagine any states throwing it in with Mexico (or Russia) but I could see two or three maybe tying the knot with Canada (Maine?, MN?). China in a lot of ways seems just as brittle as we are. So I have a hard time seeing them as a hegemony over the long term.
I also doubt all the current political state boundaries would remain unbroken. Border lines like the 4 corners out West would seem pointless in a reshuffle under duress. I suspect that geography would become the driving factor
Dear ideocracy, - VERY interesting question, indeed:
"how many separate countries does the 50 state union become?"
How about 5?
NW, SW, Middle, SE and NE - each region/new-country led by their largest state.
"how many separate countries does the 50 state union become?"
How about 3141?
i only disagree with you because your assessment is based on current arbitrarilly defined regions. in a true collapse and restructuring, tensions that were kept in place by the federal governement will become acceptable political issues, for example race, religeoun, and class.
I dont think it's so clean cut, and a much more likely scenario is based on strategically definsible geography with a coherant national identity, any currently "diverse" region will fall to the more cohesive monocultures as the diversity will be a cause for extreme tension and violence. my above post is overly simplistic, but tell me the truth, do you think that a homogonously mormon SLC with their current predominant values would not have the disipline to maintain itself as switzerland has in the past? think of the geography and mindset, utah has already passed PM's as legal tender.
The American stock markets won't surge if American consumers keep getting squeezed by inflation in gasoline and food prices. Some equities will do well, but P/Es are too high and the outlook is abysmal.
Gold should uncouple from the US indices before long. Clearly global inflation should drive gold, while depression spanks US equities.
I dont know how else to say this..
there is not enough energy to go around.. we are burning thru all the go go juice!
there can not be any kind of real recovery becuase there is not enough energy in the supply chain!
once you figure that out, everything will make perfect sense.. it is fire control, putting out fires.. trying to maintain control over the crowds while the world goes no where..
Yes, Fancy Bear. I agree.
AND - all zerohedgers should, as part of their patriotic duty the original, Libertarian US ideals, dump all US/globalist stocks - AND - withdraw all funds from all TBTF US/globalist banks - AND - buy PMs - AND build self-sufficient local communities - AND - educate their fellow citizens on the facts represented here on zerohedge and on Max Keiser etc etc
If we don't do ALL of these things, we are no better than the sheeple or the elite.
we better leave the U.S. becuase the F.D.A. will want to come shut down our farm for not buying corporate foods!
The only mistake that Bernanke made was that he didn't print enough. The reasoning behind the "limited" easing is that the proles would get too scared of inflation which is absolute nonsense. As everyone knows, inflation is a good thing. I'm confident that Bernanke will soon do the right thing and monetize up to $5 trillion in government bonds, corporate debt and student loans. As everyone surely understands, more money in the hands of the government, Fortune 500 and the people makes us all wealthier.
Saturday night bombshell. Zero Hedge, FTW.
Bernanke is very patriot.
Most bald fucktards are...
Lloyd Blankdick, Hank Paulson, Limp Dick Cheney,
Neel "Down you bitch" Kaskari...
Dare I say "Rothschild" ?
You hit the nail on the head!
on Friday, the German Ratings Agency Feri downgraded the US to AA from AAA, due to "high public debt, inadequate fiscal measures".
Is this blackmail? To make sure QE3 does come to pass soon and the Greek 'soft default' is allowed to go through without harming debt-holder bank credit ratings? The plot thickens...
Another way of exporting inflation perhaps?
I wonder what leverage zee germs have? on thier dollar?
1. U.S. Dollar has 120(ish) times leverage
2. China Yaun has 1,200(ish) times leverage
3. Zee Germ's have ????? (ish) times leverage
if you are not signed in with your old timer name or you are new source and site your answer.. all the rest of you that I trust I dont need to see it.. although we sould always sourse and site for the new people so that they can see for themselves?? I dont do it always.. I try to most of the time.. so I am not being Judgy of my fellow Bro's on a Sunday Morn!
sure wish i wuz an old timer insider connected mofo like you...
damn.
although we sould always sourse and site for the new people so that they can see for themselves??
My take? The euro would have crashed too quickly relative to the USD, so they need to hold it up a bit. They're synchronizing the collapse of the western currencies so that the gold-backed SDR can be more easily accepted.
They had to do it this way. Quite ingenious really, it's all about perception management. Goldbugs will be vidicated, or confiscated.
When you say 'western currencies' How do you see Australia and New Zealand fitting into this scheme? Or are their futures in Asia under Apec? www.rbnz.govt.nz/news/2011/4372182.html ...?
"fair value, somewhere around parity with the USD,"
I have heard the assumption many times that the Euro and dollar should be at a so-called parity, but have never seen any evidence of this. Is it any more difficult to manage 26 states than 50? Politics, economics, societal standards, culture, infrastructure, intelligence, etc.--------on what basis do ye judge???
The charges are set..the clocks are ticking closer and closer to zero hour. Marla should be getting very close to being dragged into the room now..she arrives just in time to see the new America rise as the MegaSkyScrapers one after the other collapse under Tylers masterful plan. Agast as the first megalith crumbles under it's own weight, she cannot comprehend she is witnessing the complete distruction of the shackles of indebtedness for the first time in her life, and the re-establishment of the Republic. The same Republic we were promised when we held our hands over our hearts and spoke The Pledge.. of The People, By the People, and for the People!!! For over four decades I have been waiting to hear this news, the truth. No doubt this will be a very interesting next week indeed!
+10
As she talks facing the cameras, the first of the freedom-fighters breaks in to the studio. And there on live TV they discover the shocking truth: Maria was a remotely operated cyborg all along...
"What we need is an Andrew Jackson to stand as Jackson stood, against the encroachments of aggregated wealth.
We say in our platform that we believe that the right to coin money and issue money is a function of government. We believe it. We believe it is a part of sovereignty...
Those who are opposed to this proposition tell us that the issue of paper money is a function of the bank and that the government ought to go out of the banking business.
I stand with Jefferson rather than with them, and tell them, as he did, that the issue of money is a function of the government and that the banks should go out of the governing business."
Thank you Tyler. Thank you ZH.
A light in the darkness, truth amongst the lies.
Why not stand with Kennedy?
http://en.wikipedia.org/wiki/Executive_Order_11110
'(j) The authority vested in the President by paragraph (b) of section 43 of the Act of May 12, 1933, as amended (31 U.S.C. 821(b)), to issue silver certificates against any silver bullion, silver, or standard silver dollars in the Treasury not then held for redemption of an outstanding silver certificates, to prescribe the denominations of such silver certificates, and to coin standard silver dollars and subsidiary silver currency for their redemption,' and (b) By revoking subparagraphs (b) and (c) of paragraph 2 thereof.
President Kennedy Killed the FED! and then they Killed him.
http://www.youtube.com/watch?v=XY02Qkuc_f8
JFK assassination: Secret Service Standdown
the video is accurate, no tin foil hat people need to sully these facts.
and for 40 years the Corporate Media Slandered his Good Name! after they Murdered him! This alone is reason enough to "by the Holy God Rout them OUT!".
Andrew Jackson was a land speculator, first and foremost. The actions of the second FED, during the panic of 1819, resulted in tremendous pressure on land speculators as loans were called in. Many, lost much of their wealth as a result.
Jackson hated the bank because it was opposed to own wealth development. We have a tendency to paint him a hero for his actions against the bank, but he was really a despicable human being. His actions against the "5 civilized tribes" of the south for the benefit of himself and his partners were nothing less than genocide.
George Washington Owned how much land?
How many people are getting their homes taken away?
How many are being pressured buy property tax certificate sales by Large Brand Name TBTF Banks? that have DBA's?
59% of the American People are on the Government Tit and I am sure that at least some of those people dont want to be and are pissed.
Not sure how much land GW owned but by his death he was the largest producer of whiskey in the country.
your name makes me happy inside!
Jackson was elected because of the 1819 panic.
And, yes, his policies towards the tribes was nothing less than genocidal. And ya know which states started it all? Take a guess? Georgia followed by the rest of the idiots south of the Mason-Dixon line.
After the next Civil War we have to make sure to execute the ones who start it and then bankrupt and destroy the others. We've been paying for 150 years because the government wasn't determined to get this country back into shape after the treason of the southern states. They're still pulling their massive resistance bullshit while the country goes down the toilet.
As always, many thanks Tyler!!!
So the US/Chinese/BRICS/rest-of-the-world taxpayer is being squeezed dead so the europeans can have their 6 week/yr vacation, "free" healthcare, "free" education, wine&beer, and sane banks that pass all the "stress tests"?
Speaking of stress tests...
The first thing that popped into my head when I read the article was, "Repo 105/108." Doesn't anyone else get the feeling that the Euros have simply "borrowed" US taxpayer funds, perhaps at interest, in order to be able to pass muster with their stress tests in the same way that all the Wall Street banks used to borrow from each other at end of quarter filings?
If it worked before, why won't it work again, only on a much grander scale? What is scale when you have obfuscation by the very people who are supposed to be protecting us?
Circus (jerk) maximus.
Doesn't anyone else get the feeling that the Euros have simply "borrowed" US taxpayer funds ( i.e.-dollar denominated debt ), perhaps at "interest" ( I'm agast ...... Lol )
http://www.youtube.com/watch?v=UMRo5XCKddQ
Very nice work. Lots of Whats and Wows. But no Whys.
Is it as simple as failing European banks would cause US banks to fail? Or is it more complicated?
It's not any more complicated, but that's not quite the right focus.
The real problem is that the entire scheme is already broken. International finance/banking/economics/whatever has failed utterly.
EVERY major bank has already failed: they've just convinced everyone not to call them on it. The emperor is naked, but the kid hasn't spoken yet. A large chunk of the population hasn't bothered to look.
The governments know they can't afford to bail the banks out, and don't want to take responsibility for maintaining the current level of wealth inequality, but are currently are on the hook because they work for the tiny number of people who run the financial show.
The families that own the banks.
http://www.youtube.com/watch?v=ZPWH5TlbloU
http://www.youtube.com/watch?v=4w-A54h_GQ8
Why?
Please be aware that the global elite control all central banking institutions so in their eyes it doesn't matter how this is perpetrated. They do not honor national boundaries, its part of the one currency system they have been promoting for a long time, where they reside as the power brokers. Please consult available references on the Rothschild family for further information. Since they also own Reuters allegedly, they have some influence as to how this information gets out to the public. Americans have never owned the major share of the Federal Reserve, nor earlier vestiges of the Banks of the United States dating back centuries. Any supposed ownership ultimately relgates back to the European Rotschilds, Rockefeller, JP Morgan and countless others have connections to the cartel to perpetuate the power and strength this financial elits exercise over western society, including the US government. Allegations of profiteering in wars goes back at least 300 years, once more there is ample internet reference material out there for those that are interested in the inner workings of the financial global elite.
"the global elite control all central banking institutions so in their eyes it doesn't matter how this is perpetrated. They do not honor national boundaries, its part of the one currency system they have been promoting for a long time, where they reside as the power brokers."
This.
Once you understand that everything else becomes absolutely chrystal clear.
what everyone needs to understand is that the system is broken..
it is NOT! Peak OIL! it is peak affordable oil, peak lite sweet crude oil.. peak oil that is easy to drill for and get out of the ground! CHEAP! Sub-$100 a Barrel Oil!
once you understand that every wage arbitrage position is BLOWN UP!
Trade keeps Countries from going to War! without trade and with a natural resource crunch..
one better, if there is NOT! enough cheap oil to go around... how do you fix that problem.. in a way that is efficiant and near term?
http://www.youtube.com/watch?v=O5Xe_ATNWQQ
Al Bartlett on energy consumption versus population
http://www.youtube.com/watch?v=ClqUcScwnn8
David Rockefeller speaks about population control.
Obama's Science Czar..
http://www.google.com/#sclient=psy&hl=en&source=hp&q=obama+science+czar+population+control&aq=1&aqi=g2g-v2g-sv1&aql=&oq=obama+science+czar&pbx=1&bav=on.2,or.r_gc.r_pw.&fp=71c6c4af87148765&biw=1266&bih=575
http://vimeo.com/6475921 Control in Modern Times! Easier to Kill a Million People than Control a Million People in these modern politically awaken times. Revolution will come, will you be a spectator or will you help change your own future.. your children’s future, for the better?
The markets have gone up quite a bit during QE2, and it seems likely to me that all of the POMO money has been a major factor in making that happen. So were those foreign banks the primary buyers of commodities and US equities during QE2?
So were those foreign banks the primary buyers of commodities and US equities during QE2? "
My question also.
Well looking back on it, it does seem like most of the moves did occur on the globex in the middle of the night.
Very good observation. US markets looked like just a readjustment of stockprices not listed internationally.
re: Bailout of foreign banks...
Why not state the obvious?
It's a bribe! It's the quid for the pro; something for something [latin quid pro quo].
State the something, then imagine what the other something is. Inductively tease-out the possibilities in "Don't waste a good crisis" viewpoint.
UN/vote arm-twisting
ME/Africa grabs
Oil and pipeline deals
Af/Pak/Iraq/Iran policy support
Just imagine the possibilities.
I get the premise of the article but how do these US branches of foreign banks connect to the purchase of 85% of bond\t-bill auctions over the last 5 months?
FED back door lending facility, 0.25% interest on indefinite amounts of U.S. taxpayer obligations lent to Eruobanks to lend out there for 5%-20% just like J.P. Morgue and "Ally" (GMAC) "banks" here.
Sent via unmarked binary data, 0's and 1's, keystroked across the Atlantic in milliseconds; but it is none of the business of us peasants toiling in the fields and smithies and bleeding in the battlefields.
This is a question that demands answering. There's a missing step between QE2 POMO and the increase in foreign bank holdings. You can see the CUISP numbers of the bonds the fed has been purchasing, those have a feel of domestic assets to me.
purchased from foreign PDs, with the 1s/0s repatriated for capital shoring, risk on or carry trade? no idea...
Listen, you can move binary data with no one knowing.
No one will know how they funnel the 1's and 0's between computers, if they even need to.
It could be a simple phone call on a secure line; an agreement to do opposite trades or exchange trades or currencies or bond auctions using shadow accounts or via the "investment banker" trading desks with fake names.
You have to assume they are lying and shuffling money around the world; it is about the central banks, the satellite TBTF banks, propping up the puppet governments.
There doesn't need to be a conspiracy, just a cabal of greedy S.O.B.'s and self-important politicians going to bed each night telling themselves they are saving the world.
Tyler, I wonder, if your forensics are correct, is this the first concrete proof that the developed countries are already operating as one, and the NWO conspiracy concept is real and imminent?
No need to be imminent: there's enough proof it was here already for a long time. The crisis is as much about economics as it is about the NWO nearing collapse as the tangled web snares its own creators.
Can you expand (provide links, thoughts, etc.) on how the NWO creators might be ensnared? Seems this is going according to 'plan.'
So - Jean Claude Junky wasn't on the build a booger guest list. Junky "throws US and Japan under a bus" about debt compared to EU debt which has been eased by the FED with digital dollars.
BogusPOTUS wants US to help Greece. Dexia is still stinking up the joint. Libya is in the mix and the US has no national security interest being there.
Got It!
Suck it up Europe.....
gotta keep the ponzi going. go short
The one thing people always forget is the change in Fed liabilities,
---
not me
thanks for finally looking on the liability side, where the bodies are buried
Fantastic post. Thank you.
A year ago when the FX swap lines were re-opened, I expected those to be the source of plugging holes in European balance sheets. But there was never any material draw on those lines.
Thanks for solving that mystery. Now I gotta ponder the end game for the insolvent ECB...