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

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cranky-old-geezer's picture

To paraphase MIB's "K", all their ranting and sabre-rattling will accomplish absolutely ...dick.


everycentometal's picture

and yet that is exactly what you want Greece to do. are you politically schizophrenic?

lawrence1's picture

Well said.  PMs and some cash for the bank holiday.

everycentometal's picture

dont be a u.s. citizen, become a sovereign. the first has rights that are given to them by the gov and therefor can be taken away, the other has inalienable rights that cant be given or taken away. find out the difference on your own, you will appreciate it more.

Crab Cake's picture

Well.... I get what you are saying, but inalienable rights are just that no matter what citizenry a person be of. This is the concept of Natural Law. A sovereign may seek to abolish or infringe upon the law surrounding these rights, but the right remains. A sovereign that does this is what the framers would define as a tyrrany. The founding fathers sought to enumerate natural laws into the constitution.

This may seem all semantics in this day and age, but every person is sovereign to begin with. A government cannot undo this, only infringe upon it. A just government will not challenge the sovereignty of its peoples, only allow for a common framework for a society's necessary functions; as was done with the Constitution. As time has gone on the powers that be have gone further and further away from the Constitution and the recognition of Natural Law. The Federal Government, along with most state governments, are tyrranies. It is time to rebel, it is the only just recourse to a government that tramples inherent and inalienable rights.

Do you see what I am saying? There is no need to declare sovereignty, you already are... It's just that now there is someone, government, that is telling you that you are not; they must be corrected.

everycentometal's picture

well said. our law now is contract and maritime. because of that in some ways you need to take back your sovereignty, such as filing a UCC. you are right, I have simply reasserted something that was already there. it just needed some dusting off.

cranky-old-geezer's picture

It is time to rebel ...

No, it's time to END that government.  It's long past time to end it.

But we've let it get too big and too powerful.  Ending it is no longer possible.

It'll have to collapse on its own. Unfortunately we'll go down with it. The nation won't survive.

That govt we didn't end when we should have ended it has caused too many problems and created too many enemies around the world.  When it collapses from its own weight, those enemies will pounce in a coordinated strike and take out the entire nation.  

Al Gorerhythm's picture

I haven't been a US citizen for quite some time.

I'm a "consumer" now.

We are all "consumers"

Consumer ID located on your bank card.

minsky4ever's picture

Is it OK if I send a Tweet of my junk to my local congresswoman? Her name's Nan Hayworth and she hasn't got a fucking clue. If it isn't a GOP talking point depicted in pictures she won't understand it. And she's a MD to boot. Another Republican medical doctor in congress. The system's so fucked up even the doctors are looking for other work.

SpiritBlade's picture

Or at the very least claim 9 dependents, dont pay a penny before April 14th. This alone will keep you out of hot water and accmplish the same end.

And, if you must pay the beast...think of what you will earn in silver during those 15 1/2 months! (Jan11-Apr12)





tired1's picture

Chuwa who? what? ZH, what's that? No sir, I've never heard of Fight Club.

can I go now? Thank you, sir. I'll keep my eye out.

See something, say something? sorry I confuse it with Don't ask don't tell. I'll do better.

Thank You Sir! Sorry, Mam!

Sven Sikztu's picture

sure would love to- but Schmuckie Schumer is my 'rep'- even if I got the sniveling little shit got on the phone, what could me or anybody convince him to do? He's never worked a second in the private sector! America v2.0 will feature Term Limits I assure you. Or maybe not-- the dis-Union is underway, maybe we'll just have competing groups of cities and states next... maybe the 'blue states' will become ethno-gulags... moreso than they already are. Anyway, no system worth defending allows sick creatures like Schmuckie to burrow into the body politic and rot it like a cancer.

Sean7k's picture

Not sure why this is shocking. The US has been Europe's, but especially Britain's, dog and pony show for a long time. The Creature from Jekyll Island is not just a central bank, but a bank run by European bankers.

We enter wars at their direction (WWI, WWII, Vietnam, Bosnia, Etc.), we have bailed them out financially since 1920, when we supported Britain and helped them maintain their social safety net and the pound sterling.

America was effectively reconquered in 1913. The income tax was a transfer mechanism. Any surprise Bernanke testified he couldn't remember where 500 billion went in 2008? The FED papers told us- foreign banks. 

We pay for their defense and maintain it at huge costs. The Marshall plan money was spent rebuilding banks and governments, not industry.

Americans need to start at the beginning and throw out EVERY single piece of history they were taught, then re-educate yourselves. The information is available, from excellent historians, both economic and political. You have been lied to. 

Keep that in mind, because your citizenship is a contract and contracts are not viable when they were initiated through fraud.

boiltherich's picture

Really, I concur, after all that you have seen in the last few years and you find THIS shocking? 

thefedisscam's picture

Plus, without those big foreign banks support. US$ would have already stopped being the world reserve currency.

Oh regional Indian's picture

Could not agree more. Well said all around. And for anyone that wonders why a regional Indian cares about America...well, it is the epicenter of our current, collective reality.

And it's looking more and more like the cone of a whirlpool.



Ahmeexnal's picture

ORI, the cone of a cesspool would be a better description, given the current state of affairs.

America (and the rest of the world) has to put a stop to european sociopaths and break free from the chains of oppression. Let THEM eat mud pie!

falak pema's picture

well not to belabor the point but who is pot and who is kettle... what is cause and what is effect...I know we can go back to the crusades or even the roman empire...but if we started in 1945...we could understand better where the power really lies since the days USA became top dog. With its very own game plan laid out at Bretton Woods...

Oh regional Indian's picture

indeed Ahm. And the root is in cold/grey europe.


SoNH80's picture

The European nazis won World War II.  Our snobs and effete intellectuals (see, e.g., David Rockefeller & Larry Summers, et. al.) can't bend over far enough for the motley scum of European royalty and pseudo-royalty (see, e.g., that fat cow Queen of the Netherlands and the Rothchilds taking the air at Bildeberg).  The U.S. should have allowed the Dutch scum and all the rest of the rabble to starve under the nazi boot in WWII, the Europeans are looting as much as they can in this country (see e.g. the bankster bailout).  India had the right idea, Non-Aligned Movement all the way baby.

i-dog's picture

"Americans need to start at the beginning and throw out EVERY single piece of history they were taught, then re-educate yourselves. The information is available, from excellent historians, both economic and political. You have been lied to. "

Excellent advice ... but too late now.

The beatings (draining of all private wealth) will continue until morale improves (in the re-education camps)!

There will not be a QE3 (enough was drained to overseas banks through TARP and QE2, thank you very much). There will not be an election in 2012 (who needs an election during martial law?). You will have every opportunity to pay off your housing, education, vehicle and iCrap loans in the work camps. And you'd better brush up on Spanish and a few Slavic dialects if you expect to be chatting with the guards!

The only way to avoid this outcome is to now do what everyone has been telling Greece to do for months: default, secede and start again - by rebuilding all institutions from the county level on up. There is nothing to save in the present corrupt structure.

lawrence1's picture

Unfortunately, you are right.  Way too late.  As Gregg Palast wrote, the war against the middle class has been won without firing a shot.  But better to go down firing than on you knees.

minsky4ever's picture

Thank god I learned Romanian and Russian!

eureka's picture

You've got it wrong: All US Fed action is for self-preservation.

YHC-FTSE's picture

Come on. 18 of these POMO banks have been listed on ZH for over a year! I don't know why anyone would be surprised.

Sudden Debt's picture

Like THE pope would say:

Thank you for the flowers AND THE MONEY BITCHEZ!!!!

Tom_333's picture

All those CDS´make a big difference...

doesmybuttlookfatinthis's picture

Now I know why my butt seems so fat. Its from getting bent over by the FED. I feel so violated.

He_Who Carried The Sun's picture

"...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!"


It was Bill Clinton who said that every American is 'entiteled' to her/his own house. It was Alan Greenspan who invited foreign lenders to buy all these 'structured investment vehicles' and if the US does not want to end up like Greece with the EU dictating terms of bailout, it better pays back.

Chill, baby, chill !!

eureka's picture

Not shocking at all! Check your facts y'all.

A) when you have a $-world-reserve-currency printing press AND more guns AND spires AND spy-and-kill-drones than the whole rest of the world, it doesn't matter how much $ you print or who you give it to.

B) any and all $ "given" to "foreign" banks, are actually given for self-preservation; if the globalist leveraged financial system's flaws are revealed and "foreign" fiats collapse - the US financial system's de facto bankruptcy is revealed and US finance collapses. It is called "Mutual Dependency" or "Inter-Dependence".

C) ALL of the in above article listed "foreign" Fed bail-out recepient banks, were instrumental i orchestrating and financing the US housing bubble.

D) The US corporatist/facist bankster military empire needs bubbles - because - the US over-consumes and under-produces - AND - consequently the US eoconomy is built predominantly on leverage of paper assets and wealth extraction from the rest of the world.

E) All empires follow this model - the US is merely monky'ing previous empires.

F) Empires lifespans historically/, chronologically, sequentially halftime: Rome lasted 600 years, Spain 300, Britain 150 - and US will last 75 (1945-2020)

G) If you do not see the completely inter-relatedness of globalist banking - you are in denial. The issue at hand is NOT "domestic" versus "foreign". The issue at hand is gloabalist leveraged finance, which is the New Colonialism, which cannabalizes all national consciousness and national institutions.

H) If you want to do ANYTHING productive against it, you must withdraw all your capital from all major banks AND involve yourself in rebuilding the strength and vibrancy and productive INDEPENDENCE of your own local community. Anything short of these two basic actions is infantile, blowviating, passing the buck finger-pointing ignorance and impotense.

falak pema's picture

Jese the USA is short dikked or shorted ...or whatever, according to your analysis...Finally those who had the longest Empire carried the shortest swords...I wonder if there is a message there ...for the pygmies...of Congo...not that I be anthropologist...who understands whats what...

Optimusprime's picture

+1 and well said.  We shall see if your expectation of 75 years for the US pans out.  It worked for the USSR.

WonderDawg's picture

Truth. Thank you, that was very perspicuous. You saved me a lot of keystrokes, because the truth needs to be laid out.

adeptish's picture

Note that RBC (Royal Bank of Canada) is a primary dealer.

Year to date earnings...3.3 billion dollars.

My guess is that they will own one of the big U.S. banks within a year for pennies on the dollar.

instinctiveDrift's picture

Great article Tyler. It does explain many of the questions I've been asking myself about QE2.

disabledvet's picture

"okay, you're on the record," 777:  Jimmy Buffet Live.  The only "implication" of this is of course that a rally in treasuries would surely proceed.  we all know from the 70's that "the petro-dollars were repatriated right back into the US" and so it would be via so called "bailouts of foreign banks."  indeed this has only been enhanced via Fukushima and what is in fact an "Arab AWAKENING" and not a so called "Arab Spring" at all.  As such of course The Berank will not be impeached as in fact he now should be celebrated (and it does shock me that i of all people who so perfectly ridiculed him should say this--appropos though?) as "pretty much spot on" although i think it is now apparent he--amazingly--could have let market forces determine interest rates to positive effect much earlier.  obviously insofar as economic growth is concerned QE II is a total failure--and so what makes this..."squishiness" suddenly appear "squemish" is the memories of 2008.  "How is one to know" to invert Greenspan's famous locution "when an irrational pessimism will suddenly take hold..." taking out all of Wall Street, a big chunk of the US Senate and "basically every State and Local budget in the nation"?  Clearly the real story we're all staring at is "was the real estate collapse of 2008 just a precursor to something even more dramatic?"  Simply put at this point in the ballgame i know longer take issue with the Federal Government's ability to sustain multi-trillion dollar deficits.  I do take issue with the solveny of various States in the Union however should there be a dramatic decline of similar magnitude in real estate values per 2008.  "We've never seen this before" should have been what the financial networks should have been saying all along.  Instead "we're always being surprised" when in fact the math has never added up "and it's all been political since day one."   THE MARKETS ARE COMING REAL ESTATE LOBBY! 

Oh regional Indian's picture

Well said all around disabledvet.

What pray do you have against 'Carriage return"??? 


instinctiveDrift's picture

As a non banking, non financial industry guy I gotta say I don't get all the linkages here. Can someone put together a few pieces for me?

So, PD get treasuries bonds from Treasury. They auction them off. We've seen evidence that up to half of all the auctions were purchased by the fed as part of QE2. Sure, some of those PD's are foreign banks but doesn't the money created to cover the bond purchase go to the Treasury ultimately with the PDs taking a fee off the top?

How did the foreign PDs get 600B from the fed then?


Alcoholic Native American's picture

Support the mercs! Fighting Unemployment.

max2205's picture

Our MBS scam did to ECU what Iceland did to UK X 1 Billion

bigwavedave's picture

"or just go ahead and outright buy up every underwater mortgage in the US."

this is why you have not yet heard of the 'plan' for the GIC's. expect to hear about the restructuring of Fanny and Freddie along with the other agencies in the next week or two. implicit in any 'grand plan' for these monsters will be the monetization of almost all US mortgages.

101 years and counting's picture

Just out of curiousity, how can Bernanke or ANYONE else launch QE3 once this BULLSHIT is revealed, Bernanke IS impeached (and IMPRISONED TO A FEDERAL POUND ME IN ASS PRISON) and Americans are finally awake to the complete destruction of our country courtesy of the Fed, Congress and the FUCKING PRESIDENT!

tired1's picture

Make one last deal with China: build a 'special' prison over there and let the Chinese house them.

cossack55's picture

Just out of curiosity, who exactly are you counting on to prosecute ol' Benny von Bernankenstein?  "They" all work FOR him. Not going to happen my friend.

WonderDawg's picture

Wrong. "They" all work for the banks, same as Bernanke. Bernanke is NOT the Fed, he's just the public face, following orders. He'd make a good sacrifice if one is needed.


three chord sloth's picture

Monetize and internationalize all those mortgages.

Then, and only then, let housing prices drop to their real value -- triggering a tidal wave of defaults. Et viola! The land beneath your feet owned by foreign interests! All those pesky Americans with their rights and freedom and independence (at least some of us still want it)...? Suddenly landless and powerless peasants.

Then the rightful rulers of the world, the financial/political/business elites, can run things unopposed, Euro-style. Now take your government-provided bag of beans, shut up, and sit down.