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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

Tyler Durden's picture


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.


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.



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Sun, 06/12/2011 - 01:13 | 1362467 slow_roast
slow_roast's picture

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? 

Sun, 06/12/2011 - 01:41 | 1362496 Bay of Pigs
Bay of Pigs's picture

Sounds bullish for gold and silver TD.

Where are the experts like Bob D and Spalding weighing in on this?

Sun, 06/12/2011 - 02:09 | 1362515 Quixotic_Not
Quixotic_Not's picture

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?

Sun, 06/12/2011 - 10:26 | 1362902 boiltherich
boiltherich's picture

Used to work, but the underline command does not work either.

Sun, 06/12/2011 - 11:07 | 1362949 RockyRacoon
RockyRacoon's picture

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?

Sun, 06/12/2011 - 12:10 | 1363042 Bolweevil
Bolweevil's picture

What do we want?
When do we want it?

Sun, 06/12/2011 - 13:10 | 1363145 redguard
redguard's picture


Sun, 06/12/2011 - 13:35 | 1363183 MsCreant
MsCreant's picture

Adorable, as always Rocks!

Sun, 06/12/2011 - 14:19 | 1363251 RockyRacoon
RockyRacoon's picture

See?  I'm a chick magnet.  Cute pays.

Sun, 06/12/2011 - 16:12 | 1363416 Sudden Debt
Sudden Debt's picture



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.



Sun, 06/12/2011 - 17:41 | 1363535 falak pema
falak pema's picture

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.

Sun, 06/12/2011 - 17:44 | 1363536 falak pema
falak pema's picture

" a girls best, diamonds! 

Sun, 06/12/2011 - 19:44 | 1363711 Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

To quote Charles Manson from his prison cell:  "Is it hot in here or am I crazy?!"



Mon, 06/13/2011 - 02:32 | 1364162 Hook Line and S...
Hook Line and Sphincter's picture

They came for my 'colon'. 

Sun, 06/12/2011 - 09:24 | 1362793 Spalding_Smailes
Spalding_Smailes's picture

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 ?


WASHINGTON, D.C. – June 9, 2011 – The Association of American Railroads (AAR) today reported steady results in weekly rail traffic with U.S. railroads originating 273,584 carloads for the week ending June 4, 2011, up 1.1 percent compared with the same week last year.  Intermodal volume for the week totaled 205,565 trailers and containers, up 7.2 percent compared with the same week in 2010.

Fifteen of the 20 carload commodity groups posted increases from the comparable week in 2010. Commodity groups posting solid increases included: iron and steel scrap, up 18.7 percent; coke, up 18.1 percent, and grain, up 17.4 percent. Groups posting a notable decrease included: primary forest products, down 15.2 percent, and nonmetallic minerals, down 10.5 percent.


“U.S. big-truck sales soared in May, up 61.9% vs. a year-ago and far surpassing April’s 31.2% increase, previously 2011’s best monthly performance. Class 8 sales made the biggest leap, up 82.4% thanks to triple-digit percentage increases at Volvo Truck and PACCAR, up 175.4% and 145.4%, respectively. Through May, sales of medium- and heavy-duty trucks in the U.S. were tracking 30.9% ahead of like-2010.



Sun, 06/12/2011 - 10:35 | 1362911 boiltherich
boiltherich's picture

May 20, 2008 Baltic Dry Index=11,790

06/10/2011 Baltic Dry Index = 1,418

Nuff said.

Sun, 06/12/2011 - 10:55 | 1362938 francis_sawyer
francis_sawyer's picture

"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...



Sun, 06/12/2011 - 11:04 | 1362948 Spalding_Smailes
Spalding_Smailes's picture

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 ?


Sun, 06/12/2011 - 11:23 | 1362981 tmosley
tmosley's picture

If it's not predictive, then it is worthless.

But we already knew that about you.

Sun, 06/12/2011 - 13:37 | 1363192 Quixotic_Not
Quixotic_Not's picture

When the light comes on the cock-a-roaches scatter.

Sun, 06/12/2011 - 11:36 | 1363007 francis_sawyer
francis_sawyer's picture


Here... Here are a few 'FACTS' I was looking at... It was YOU who decided to post truck and railroad pieces for May & June...

Sun, 06/12/2011 - 12:21 | 1363066 Bay of Pigs
Bay of Pigs's picture

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.


Sun, 06/12/2011 - 14:00 | 1363222 RockyRacoon
RockyRacoon's picture

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.



Sun, 06/12/2011 - 23:55 | 1364031 CompassionateFascist
CompassionateFascist's picture

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...

Sun, 06/12/2011 - 15:21 | 1363344 knowless
knowless's picture

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?

Sun, 06/12/2011 - 04:40 | 1362600 bigwavedave
bigwavedave's picture

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.

Sun, 06/12/2011 - 04:46 | 1362602 longorshort
longorshort's picture

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.

Sun, 06/12/2011 - 15:45 | 1363377 minsky4ever
minsky4ever's picture

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.

Sun, 06/12/2011 - 21:42 | 1363852 boooyaaaah
boooyaaaah's picture

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

Sun, 06/12/2011 - 01:02 | 1362449 Caviar Emptor
Caviar Emptor's picture

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

Sun, 06/12/2011 - 04:34 | 1362598 Bringin It
Bringin It's picture

Re. Turmoil?  In the valium nation? 

Sun, 06/12/2011 - 10:09 | 1362870 johnnynaps
johnnynaps's picture

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!

Sun, 06/12/2011 - 10:32 | 1362906 Dollar Bill Hiccup
Dollar Bill Hiccup's picture

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 ...

Sun, 06/12/2011 - 00:49 | 1362423 JW n FL
JW n FL's picture

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!!

Sun, 06/12/2011 - 00:50 | 1362424 Tyler Durden
Tyler Durden's picture

This story will be headlined until well into next week.

Sun, 06/12/2011 - 00:54 | 1362429 JW n FL
JW n FL's picture

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!

Sun, 06/12/2011 - 01:31 | 1362483 Hulk
Hulk's picture

Kiss ass.

Sun, 06/12/2011 - 08:48 | 1362774 JW n FL
JW n FL's picture

ya! but!! have you seen his ab's? they are to die for! you sexxy Beast!

Sun, 06/12/2011 - 00:57 | 1362438 Hansel
Hansel's picture

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

Sun, 06/12/2011 - 01:11 | 1362459 Conrad Murray
Conrad Murray's picture

or about the majority of bailout cash going to foreign firms

While he was a douche, Alan Grayson dug in on The Bernank -

And there's always Ron Paul - and


Sun, 06/12/2011 - 01:56 | 1362512 Hansel
Hansel's picture

Theater is for entertainment.  Where is the action?

Sun, 06/12/2011 - 02:12 | 1362521 Conrad Murray
Conrad Murray's picture

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.

Sun, 06/12/2011 - 04:58 | 1362607 Bringin It
Bringin It's picture

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] 


Sun, 06/12/2011 - 15:53 | 1363391 hedgeless_horseman
hedgeless_horseman's picture

I'd fight Thomas Paine.

Sun, 06/12/2011 - 16:36 | 1363451 WaterWings
WaterWings's picture

"Good answer."

Sun, 06/12/2011 - 06:28 | 1362679 Neoisolationist
Neoisolationist's picture

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.


Sun, 06/12/2011 - 20:51 | 1363805 Bringin It
Bringin It's picture

I predict elections won't fix this.

Mon, 06/13/2011 - 00:05 | 1364046 CompassionateFascist
CompassionateFascist's picture

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 the meantime, by all means, gather 'round and attempt to levitate the Fed.

Mon, 06/13/2011 - 10:34 | 1364718 forexskin
forexskin's picture

kinda going out on a limb there, huh?

Sun, 06/12/2011 - 10:22 | 1362888 mick_richfield
mick_richfield's picture

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?

Sun, 06/12/2011 - 11:02 | 1362946 BobPaulson
BobPaulson's picture

I'd say 99% of those people not paying are NOT doing it as a political statement.

Sun, 06/12/2011 - 11:05 | 1362950 francis_sawyer
francis_sawyer's picture

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..." 



Sun, 06/12/2011 - 01:49 | 1362499 RockyRacoon
RockyRacoon's picture

While I hope this might move pols to act against Ben Bernanke, I have yet to see anyone challenge him so far.

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.

Sun, 06/12/2011 - 01:53 | 1362508 Hansel
Hansel's picture

Ron Paul talks a good game.  I become less impressed with his actions by the day.

Sun, 06/12/2011 - 10:13 | 1362880 I am a Man I am...
I am a Man I am Forty's picture

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

Sun, 06/12/2011 - 11:06 | 1362959 francis_sawyer
francis_sawyer's picture

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...

Sun, 06/12/2011 - 11:21 | 1362974 RockyRacoon
RockyRacoon's picture

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.

Sun, 06/12/2011 - 06:21 | 1362671 Moe Howard
Moe Howard's picture

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.

Sun, 06/12/2011 - 08:35 | 1362762 Sean7k
Sean7k's picture

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!

Sun, 06/12/2011 - 13:45 | 1363198 JW n FL
JW n FL's picture

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

Sun, 06/12/2011 - 14:41 | 1363283 cossack55
cossack55's picture

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.

Mon, 06/13/2011 - 00:06 | 1364052 CompassionateFascist
CompassionateFascist's picture

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....

Sun, 06/12/2011 - 01:05 | 1362453 MrPalladium
MrPalladium's picture

You're a hero!!

It's been a while since I sent in $100. Do you still need donations, or does advertising revenue suffice?

Sun, 06/12/2011 - 01:23 | 1362474 slow_roast
slow_roast's picture

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.

Sun, 06/12/2011 - 03:28 | 1362572 francis_sawyer
francis_sawyer's picture


Sun, 06/12/2011 - 01:26 | 1362479 Bolweevil
Bolweevil's picture

$99.86 (hurry)

Sun, 06/12/2011 - 06:22 | 1362675 Moe Howard
Moe Howard's picture


Sun, 06/12/2011 - 16:07 | 1363414 topcallingtroll
topcallingtroll's picture

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.

Sun, 06/12/2011 - 02:12 | 1362519 Milestones
Milestones's picture

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.

Sun, 06/12/2011 - 02:44 | 1362534 Quixotic_Not
Quixotic_Not's picture

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....

Sun, 06/12/2011 - 04:57 | 1362609 Bringin It
Bringin It's picture

Funny.  You could be right.

Sun, 06/12/2011 - 19:37 | 1363699 Concentrated po...
Concentrated power has always been the enemy of liberty.'s picture

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.

Mon, 06/13/2011 - 13:34 | 1365234 JW n FL
JW n FL's picture
by Tyler Durden
on Sun, 06/12/2011 - 00:50


This story will be headlined until well into next week.



Sun, 06/12/2011 - 00:48 | 1362428 holdbuysell
holdbuysell's picture

So, if we already know that the US government is controlled by corporations (e.g. financials, oil, etc.), where does this road go?

Sun, 06/12/2011 - 00:55 | 1362431 JW n FL
JW n FL's picture

how do you feel about live fire situations?

Sun, 06/12/2011 - 01:06 | 1362454 holdbuysell
holdbuysell's picture

Yea, it seems it will come to that.

Sun, 06/12/2011 - 01:07 | 1362456 Threeggg
Threeggg's picture

When the can is "kicked" the road follows !

Sun, 06/12/2011 - 02:29 | 1362532 Quixotic_Not
Quixotic_Not's picture

And the tail wagged the dog....

Sun, 06/12/2011 - 01:27 | 1362476 SilverDosed
SilverDosed's picture

The same circles, different paths, just keep that shit moving and everything will be alright.

Sun, 06/12/2011 - 01:52 | 1362503 Idiocracy
Idiocracy's picture

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.

Sun, 06/12/2011 - 05:46 | 1362646 silvertrain
silvertrain's picture

I would tend to side with the people that own the guns I guess..

Sun, 06/12/2011 - 08:54 | 1362779 JW n FL
JW n FL's picture

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!

Sun, 06/12/2011 - 09:37 | 1362825 darkpool2
darkpool2's picture

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?

Sun, 06/12/2011 - 11:57 | 1363031 equity_momo
equity_momo's picture

Well said.

Sun, 06/12/2011 - 10:25 | 1362903 I am a Man I am...
I am a Man I am Forty's picture

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

Sun, 06/12/2011 - 11:31 | 1363001 dbTX
dbTX's picture

Gunslingers always out do volvo drivers

Sun, 06/12/2011 - 15:19 | 1363340 Optimusprime
Optimusprime's picture

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.

Sun, 06/12/2011 - 16:09 | 1363394 knowless
knowless's picture

here's a half assed visual attempt:

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.

Mon, 06/13/2011 - 09:30 | 1364553 Idiocracy
Idiocracy's picture

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

Sun, 06/12/2011 - 16:43 | 1363457 eureka
eureka's picture

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.

Sun, 06/12/2011 - 21:33 | 1363843 Rusty Shorts
Rusty Shorts's picture

"how many separate countries does the 50 state union become?" 


How about 3141?

Mon, 06/13/2011 - 02:06 | 1364151 knowless
knowless's picture

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.

Sun, 06/12/2011 - 01:33 | 1362432 Fancy Bear
Fancy Bear's picture

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.

Sun, 06/12/2011 - 08:57 | 1362783 JW n FL
JW n FL's picture

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..

Sun, 06/12/2011 - 16:45 | 1363465 eureka
eureka's picture

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.


Sun, 06/12/2011 - 19:06 | 1363641 JW n FL
JW n FL's picture

we better leave the U.S. becuase the F.D.A. will want to come shut down our farm for not buying corporate foods!

Sun, 06/12/2011 - 18:17 | 1363577 double 007
double 007's picture

Sun, 06/12/2011 - 00:53 | 1362433 Subprime JD
Subprime JD's picture

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.

Sun, 06/12/2011 - 00:56 | 1362437 Conrad Murray
Conrad Murray's picture

Saturday night bombshell. Zero Hedge, FTW.

Sun, 06/12/2011 - 00:57 | 1362439 YesWeKahn
YesWeKahn's picture

Bernanke is very patriot.

Sun, 06/12/2011 - 02:40 | 1362539 Problem Is
Problem Is's picture

Most bald fucktards are...

Lloyd Blankdick, Hank Paulson, Limp Dick Cheney,
Neel "Down you bitch" Kaskari...

Sun, 06/12/2011 - 00:58 | 1362440 ILikeBoats
ILikeBoats's picture

Dare I say "Rothschild" ?

Sun, 06/12/2011 - 05:06 | 1362616 maneco
maneco's picture

You hit the nail on the head!

Sun, 06/12/2011 - 01:00 | 1362442 Caviar Emptor
Caviar Emptor's picture

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...

Sun, 06/12/2011 - 05:27 | 1362629 BigDuke6
BigDuke6's picture

Another way of exporting inflation perhaps?

Sun, 06/12/2011 - 09:08 | 1362790 JW n FL
JW n FL's picture

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!

Mon, 06/13/2011 - 11:10 | 1364812 forexskin
forexskin's picture

sure wish i wuz an old timer insider connected mofo like you...


Wed, 06/29/2011 - 13:08 | 1412469 JW n FL
JW n FL's picture

 although we sould always sourse and site for the new people so that they can see for themselves??

Sun, 06/12/2011 - 01:08 | 1362451 holdbuysell
holdbuysell's picture

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.

Sun, 06/12/2011 - 07:30 | 1362715 Arnolds Love Child
Arnolds Love Child's picture

They had to do it this way. Quite ingenious really, it's all about perception management. Goldbugs will be vidicated, or confiscated.

Mon, 06/13/2011 - 04:37 | 1364213 Cultural Capital
Cultural Capital's picture

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? ...?

Sun, 06/12/2011 - 01:08 | 1362452 oldman
oldman's picture

         "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???



Sun, 06/12/2011 - 01:10 | 1362455 Goldenhands57
Goldenhands57's picture

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!   

Sun, 06/12/2011 - 01:14 | 1362464 Caviar Emptor
Caviar Emptor's picture


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...

Sun, 06/12/2011 - 02:27 | 1362527 I_ate_the_crow
I_ate_the_crow's picture

"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.

Sun, 06/12/2011 - 09:11 | 1362797 JW n FL
JW n FL's picture

Why not stand with Kennedy?

'(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.

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!".

Sun, 06/12/2011 - 09:21 | 1362806 Sean7k
Sean7k's picture

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.


Sun, 06/12/2011 - 09:37 | 1362826 JW n FL
JW n FL's picture

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.

Sun, 06/12/2011 - 10:46 | 1362921 boiltherich
boiltherich's picture

Not sure how much land GW owned but by his death he was the largest producer of whiskey in the country. 

Sun, 06/12/2011 - 11:21 | 1362977 JW n FL
JW n FL's picture

your name makes me happy inside!

Tue, 06/14/2011 - 08:04 | 1367256 minsky4ever
minsky4ever's picture

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.

Sun, 06/12/2011 - 01:07 | 1362457 agrotera
agrotera's picture

As always, many thanks Tyler!!!

Sun, 06/12/2011 - 01:11 | 1362458 Ahmeexnal
Ahmeexnal's picture

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"?


Sun, 06/12/2011 - 09:50 | 1362845 Orly
Orly's picture

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.

Sun, 06/12/2011 - 10:35 | 1362908 Spalding_Smailes
Spalding_Smailes's picture

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 )

Sun, 06/12/2011 - 01:12 | 1362461 Peak Everything
Peak Everything's picture

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?

Sun, 06/12/2011 - 01:53 | 1362504 blunderdog
blunderdog's picture

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.

Sun, 06/12/2011 - 02:18 | 1362524 Conrad Murray
Conrad Murray's picture

Is it as simple as failing European banks would cause US banks to fail? Or is it more complicated?

The families that own the banks.

Sun, 06/12/2011 - 05:36 | 1362637 bk1037
bk1037's picture


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.


Sun, 06/12/2011 - 06:41 | 1362684 docj
docj's picture

"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."


Once you understand that everything else becomes absolutely chrystal clear.

Sun, 06/12/2011 - 11:34 | 1363003 JW n FL
JW n FL's picture

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?

Al Bartlett on energy consumption versus population

David Rockefeller speaks about population control.


Obama's Science Czar..,or.r_gc.r_pw.&fp=71c6c4af87148765&biw=1266&bih=575 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?


Sun, 06/12/2011 - 01:12 | 1362462 Elliott Eldrich
Elliott Eldrich's picture

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? 

Sun, 06/12/2011 - 06:41 | 1362687 Noah Vail
Noah Vail's picture

So were those foreign banks the primary buyers of commodities and US equities during QE2? "

My question also.

Sun, 06/12/2011 - 07:22 | 1362711 scatterbrains
scatterbrains's picture

Well looking back on it, it does seem like most of the moves did occur on the globex in the middle of the night.

Sun, 06/12/2011 - 11:46 | 1363025 oldmanagain
oldmanagain's picture

Very good observation. US markets looked like just a readjustment of stockprices not listed internationally.

Sun, 06/12/2011 - 01:09 | 1362463 anonnn
anonnn's picture

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.

Sun, 06/12/2011 - 01:18 | 1362469 GtownSLV
GtownSLV's picture

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?

Sun, 06/12/2011 - 02:40 | 1362541 ebworthen
ebworthen's picture

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.

Sun, 06/12/2011 - 07:03 | 1362705 Catullus
Catullus's picture

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.

Sun, 06/12/2011 - 14:18 | 1363256 BrosMacManus
BrosMacManus's picture

purchased from foreign PDs, with the 1s/0s repatriated for capital shoring, risk on or carry trade? no idea...

Mon, 06/13/2011 - 02:21 | 1364156 ebworthen
ebworthen's picture

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.

Sun, 06/12/2011 - 01:20 | 1362471 holdbuysell
holdbuysell's picture

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?

Sun, 06/12/2011 - 01:25 | 1362475 Caviar Emptor
Caviar Emptor's picture

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. 

Sun, 06/12/2011 - 01:52 | 1362507 holdbuysell
holdbuysell's picture

Can you expand (provide links, thoughts, etc.) on how the NWO creators might be ensnared? Seems this is going according to 'plan.'

Sun, 06/12/2011 - 01:29 | 1362480 irregular
irregular's picture

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.....

Sun, 06/12/2011 - 01:32 | 1362488 wannabe traitor
wannabe traitor's picture

gotta keep the ponzi going. go short

Sun, 06/12/2011 - 01:33 | 1362490 davepowers
davepowers's picture

 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

Sun, 06/12/2011 - 01:37 | 1362495 Bonesetter Brown
Bonesetter Brown's picture

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...

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