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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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.