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Federal Reserve Balance Sheet Update: Week Of December 1: The Ponzi Must Go On

Tyler Durden's picture


Now that the Fed is firmly number one in the world in terms of US Treasury holdings (actual marketable paper, not the mythical paper held by various insolvent trusts) with $926 billion in Treasury paper post today's POMO, providing Fed balance sheet updates seems like a moot point. After all, most people by now realize how this will end. And once Trichet starts monetizing debt too (not if but when, which will be followed by Japan, Switzerland, and China), the global Weimer endgame will come quickly. But for now, for the sake of tradition, here is the weekly update of the Fed's most recent balance sheet.

All numbers as of December 1:

  • Securities
    held outright: $2,088 billion, $1 billion more than the week prior.
    • Total

      Treasury holdings increased
      from $901 billion to $917 billion.

    • MBS
      holdings declined from $1.038 trillion to $1.023 trillion. As we expected, the prepay of mortgage paper at the Fed is accelerating. In other words, just based on the QE Lite mandate, the Fed could have bought $15 billion in USTs this week. It is in fact lagging, meaning that the next POMO schedule will likely be around $150 billion for December through January.
    • Agency holdings were flat at $148 billion.
  • Net
    borrowings: flat at
    $49 billion.
  • Float,
    swaps, Maiden Lane and other assets: $194
    billion, flat W/W. FX liquidity swaps were at $60 million as that one bank continues to borrow the same amount for 3 months now. The value of Maiden
    Lane I was at $27.6
    billion. Maiden Lane II was at $16.3 billion, Maiden Lane III at $23.4 billion while AIA Aurora was $26
  • The monetary base was $1.979 trillion.
  • Reserve
    balances with banks: $1,008 billion, a decline of $17 billion from last week, and an incremental source of money for the Primary Dealers to chase risk.
  • Foreign holdings of USTs and MBS at a new all time high of $3.34 trillion, an increase of $15 billion W/W.
  • There was a plunge in Primary discount window borrowings which last weak peaked at $1 billion, the highest since may, plunging to just $40 million. Then again with the Bernanke put, who needs the discount window.

And this is how the Fed stacks up against the rest of the world in terms of Treasury holdings post today's POMO:

And some brownie points to the first reader to calculate the SOMA's DV01 and how many billions the Fed lost today on the move in rates alone.


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Thu, 12/02/2010 - 21:51 | 773935 Xibalba
Thu, 12/02/2010 - 22:04 | 773965 El Hosel
El Hosel's picture

   "how many billions the Fed lost today"...

           Gee Wally, I thought digital dollars were free? 

Fri, 12/03/2010 - 00:18 | 774245 flacon
flacon's picture

Well yes. Well no. Well they are going to be paid back. Well... some time in the future. You see... the future is brighter than today. /s

Thu, 12/02/2010 - 21:57 | 773950 wisefool
wisefool's picture

What color are we going to pick for the next things that should not be comoditized, but end up on central bankers balance sheets anyway because they have PhDs and are good at this stuff?


1. Medical Entitlement Tally Sticks.

2. Child Future Work Product Weights and Measures.

3. Green stuff made from a yet untapped type of exponentially growing biomass.

PhDs in economics are too smart to worry about picking out the colour pallet for this chart moving forward, so we all need to help them.

Thu, 12/02/2010 - 22:10 | 773986 hamurobby
hamurobby's picture

3. ...and remember, Tuesday is green day!


We were warned that the banks would own everything before it ends.

Thu, 12/02/2010 - 21:58 | 773953 hedgeless_horseman
hedgeless_horseman's picture

And some brownie points to the first reader to calculate the SOMA's DV01 and how many billions the Fed lost today on the move in rates alone.

None.  Hold to maturity. What do I win?

Fri, 12/03/2010 - 03:50 | 774565 hambone
hambone's picture

I'm sorry Hedgeless - You lose (or I don't recognize your sarcasm).

All those held to maturity (on average less than 5yrs) must be rolled over (unless you expect we will actually start taxing ourselves to pay these off...which we haven't done since early 60's) must be rolled over at the higher rate. 

Answer is if we had to roll it all over at 3% = probably about $35B/yr over the past two days.

Thu, 12/02/2010 - 22:05 | 773972 jdrose1985
jdrose1985's picture

Global Weimar endgame huh?

Sounds like you're marching lockstep to Bernank's tune. Basically employed by Bernanke to tell fairy tales...they're going to hand money to you all so you can pay off what you owe free and clear, right?


Thu, 12/02/2010 - 23:15 | 774140 akak
akak's picture

I'm still waiting for your first intelligent and meaningful post in this forum.

Something tells me that it is going to be a LONG wait.

Fri, 12/03/2010 - 00:02 | 774219 jdrose1985
jdrose1985's picture

If intelligent means that I think I'm going to become rich by investing in metals or that I believe Bernanke when he said he would be dropping cash from a helicopter, you shouldn't be holding your breath.


Fri, 12/03/2010 - 00:19 | 774246 flacon
flacon's picture

OMG! We have a genius. Ok, I have $300,000. What should I do with it? 

Fri, 12/03/2010 - 00:43 | 774280 jdrose1985
jdrose1985's picture

Invest in making yourself useful and needed, stay out of debt.

Fri, 12/03/2010 - 01:39 | 774383 WaterWings
WaterWings's picture

Yes. Conventionally wise.

Good luck beating CPI year after year after year after year after year...

Savers lose in this stage; unless you are saving in metals that are only valued in currencies that change quickly in the long view of human history. Gold and Silver are money. Not mere investments.

How many paper tickets does it cost to buy precious metals these days? Does it take more paper tickets yesterday than it did tomorrow?



Fri, 12/03/2010 - 02:32 | 774476 jdrose1985
jdrose1985's picture

I understand that metals are going up and I understand why. Basically a currency trap. You're speculating that you'll be smart enough to sell when the smart money sells. Otherwise you own a dollar graveyard.

Fri, 12/03/2010 - 03:00 | 774516 WaterWings
WaterWings's picture

The Doelarr. Yes. Like the one Hendrix has been recommending?



Fri, 12/03/2010 - 06:04 | 774647 WaterWings
WaterWings's picture

(wait, what Hendrix was not recommending :-))

(I love his posts)

Fri, 12/03/2010 - 00:23 | 774250 akak
akak's picture

How impressive a joust! 

And with TWO strawmen at the same time!

Truly, you are a man af great sagacity and intellectual prowess.

Thu, 12/02/2010 - 23:27 | 774159 Burnbright
Burnbright's picture

jdrose your comment doesn't make much sense. You think we like the idea of hyperinflation? You must be kidding. If you really think that central banks, the organizations that create money, can't create enough money to cause hyperinflation you are one dumb motherfucker. 

Thu, 12/02/2010 - 23:58 | 774205 jdrose1985
jdrose1985's picture

What's taking them so long to create all this money?

Actually your statement is incorrect. It is the US consumer who manufactures money. Go read the Bretton Woods agreement.

If you think the central bankers are stupid or inept or that the central banks are going to be sending you wheelbarrows of cash to go buy bread and pay off your debts, you may want to rethink that one.

Fri, 12/03/2010 - 00:01 | 774217 akak
akak's picture

If you think the central bankers are stupid or inept or that the central banks are going to be sending you wheelbarrows of cash to go buy bread and pay off your debts, you may want to rethink that one.

Yes, how stupid of us to worry about such an impossible scenario, because of course it has NEVER happened many, many times throughout the glorious history of government-controlled fiat currency!

Your grasp of monetary history leaves MUCH to be desired --- if you have any grasp of it at all.

Fri, 12/03/2010 - 00:04 | 774228 jdrose1985
jdrose1985's picture

It's not government controlled fiat, obviously you were taught how to be stupid and passed with flying colors.

The gov't borrows from the existing money supply, doesn't add to it.

Fri, 12/03/2010 - 00:28 | 774252 akak
akak's picture


The depth of your ignorance, and stupidity, is positively breathtaking.

Fri, 12/03/2010 - 00:34 | 774263 jdrose1985
jdrose1985's picture

you said money is gov't controlled. it's not. the gov't borrows money from the existing money supply. if gov't controlled the money it wouldnt need to borrow money from itself.

Now, please tell me how money is gov't controlled so I can rip to shreds whatever delusions you hold to be truth?

Fri, 12/03/2010 - 01:58 | 774417 jdrose1985
jdrose1985's picture

Give me a break.

That was just a rehash of this book:

Neither address the problem, just the effects.


Fri, 12/03/2010 - 00:06 | 774231 jdrose1985
jdrose1985's picture

I never said it has never happened, you can easily scroll through any of my posts here and see that.

Fri, 12/03/2010 - 00:45 | 774281 RockyRacoon
RockyRacoon's picture

...scroll through any of my posts here...

Uh, I think I'll get that root canal I've been putting off.

Fri, 12/03/2010 - 00:57 | 774305 jdrose1985
jdrose1985's picture

well you didn't have to be a smartass, old man.

I bet if you dipped your toothbrush handle in gold it would likely get more use.

Fri, 12/03/2010 - 01:42 | 774391 WaterWings
WaterWings's picture

There is no way you have been this deluded this long. I remember savoring some of your posts. Somehow one of us is incredibly misguided.


Fri, 12/03/2010 - 02:15 | 774445 jdrose1985
jdrose1985's picture

money supply contracting first time since 30's, hyperinflation steadily exported to China since '79, that's why they were opened up.

Fri, 12/03/2010 - 06:01 | 774646 WaterWings
WaterWings's picture

What gives? Sudden askewed profundity?

Poor girl...

Fri, 12/03/2010 - 03:10 | 774527 Burnbright
Burnbright's picture

What's taking them so long to create all this money?

You mean like the 3.3 trillion that the FED disclosed about funding, or how about the 100 billion a month on POMO? That isn't money being created?

Actually your statement is incorrect. It is the US consumer who manufactures money. Go read the Bretton Woods agreement.

The consumer creates DEBT, not money. The banks create CREDIT, central banks create NOTES. So you are wrong. 

If you think the central bankers are stupid or inept or that the central banks are going to be sending you wheelbarrows of cash to go buy bread and pay off your debts, you may want to rethink that one.

I think that Central Bankers are GREEDY, their is a difference. They are inept because they want Power over money and they will continue to print money to try and paper over any problem that would dethrone them from their reigns over the economy. Central bankers will not be sending me wheelbarrows of cash, they will be sending them to their buddies while the average person has to work for every dollar only one day people say "fuck this" and stop accepting dollars because it doesn't hold value and the FED has an open trough to banks. Honestly why does anyone still use dollars after it has been painfully obvious that essentially it is a form of repression. The Fed gets to decide who lives or dies financially, and Bernake is not a benevolent God, the more apparent that becomes to people the more inflation you will see. 

Fri, 12/03/2010 - 11:43 | 775420 Raynja
Raynja's picture

+ 14

Thu, 12/02/2010 - 22:06 | 773974 Oh regional Indian
Oh regional Indian's picture

Wow! Talk about bloat. The FED mirrors Sheeple waistlines, which is somehow fitting.

Seeing graphs like this, all resembling some twisted version of the ones shown in Inconvenient truth, ought to be enough to spill some ketchup on the streets one would think.


Thu, 12/02/2010 - 22:10 | 773980 jdrose1985
jdrose1985's picture


Fri, 12/03/2010 - 00:51 | 774291 RockyRacoon
RockyRacoon's picture


You've garnered some junks.  In spite of your proclamation, a few folks must not think you are, a Dupe in fact.

Fri, 12/03/2010 - 02:00 | 774422 jdrose1985
jdrose1985's picture

as in duplicate

Thu, 12/02/2010 - 22:10 | 773987 BW
BW's picture
Since the MBS is fraud, then AIG (Taxpayers) need to get their insurance money back from the banks that were paid out.
Thu, 12/02/2010 - 22:19 | 774000 RobotTrader
RobotTrader's picture

CRB still going up...

Stocks, gold, oil, euro, commodities.

It's all the same "risk trade".   No need to buy anything other than the SPY, because it leads everything.

Thu, 12/02/2010 - 23:42 | 774142 akak
akak's picture

That's exactly right RT ---- it's called "Inflation", a.k.a. currency depreciation, a.k.a. wholesale society-wide theft via official counterfeiting.  And you ain't seen nothin' yet!

Fri, 12/03/2010 - 01:50 | 774403 WaterWings
WaterWings's picture

Like B9K9 pointed out, we have "Winner Syndrome" at hand.

Look at the glory of Robo. Imagine that you had that much confidence to be a longtime contributor of so much brilliance...only to turn to amazingly contrary in sudden fashion. What a waste. We so muched loved his allusions of markets and ladies.

Robo, how do I miss thee.

Thu, 12/02/2010 - 22:29 | 774021 TheGreatPonzi
TheGreatPonzi's picture

Tyler -> Lies are necessary to the survival of the Ponzi. So can we really be sure the statistics released by the FED are trustworthy?

In normal conditions, I would not put them into question.

But there, you have a thousand trillions ponzi scheme ready to fall down each day. When people are desperate, they do desperate things. Including stat manipulations, just like in USSR.

Thu, 12/02/2010 - 22:34 | 774031 cswake
cswake's picture

Speaking of keeping the ponzi going...

Five GOP leadership aides, speaking anonymously because a decision isn't final, say incoming House Speaker John Boehner has discussed ways to prevent [Ron] Paul from becoming chairman or to keep him on a tight leash if he does.


Thu, 12/02/2010 - 22:57 | 774087 pomogranate
pomogranate's picture

I want to see the market continue to scream higher, if for no other reason than to laugh at how much it pisses off all the space monkeys.

Thu, 12/02/2010 - 23:03 | 774109 LongSoupLine
LongSoupLine's picture

seems buying silver and OTM SPY calls is a win-win.

Thu, 12/02/2010 - 23:11 | 774128 Fish Gone Bad
Fish Gone Bad's picture

Who says the party ever has to end?  Extend unemployment to EVERYBODY for the rest of time.  Give all state/federal employees a raise.  Fund everyone's retirement.  Everybody is now considered to be above average and deserving of more than twice what they are getting now.  So what if the deficit grows to a brazillion dollars (1 followed by (the population of Brazil) in zeroes), everyone is special and deserves what they are owed.  The debt will never be repaid, so what does it matter how large the deficit grows?

Thu, 12/02/2010 - 23:28 | 774153 akak
akak's picture

The sad thing is, the majority of Amerikans probably think that such a plan would be eminently practical and just.  And why shouldn't they, when most of their politicians and credentialled academics believe the same?

And here I used to be naive enough to think that people actually stopped believing in Santa Claus as they grew up.

Fri, 12/03/2010 - 00:12 | 774238 jdrose1985
jdrose1985's picture

Yet you bought Benny's lie, sucked it up hook line and sinker. You're still waiting for him to show up in his sleigh, er, helicopter.

Thu, 12/02/2010 - 23:37 | 774165 AUD
AUD's picture

I think the Reserve Bank of Zimbabwe ended up with mostly Zimbabwean government bonds. Don't think it was very marketable paper though.

Doug Noland says the market will eventually discipline Washington, I agree, the question is when does the UST lose its marketability? Foreign holdings of USTs and MBS at a new all time high of $3.34 trillion, will the chinese just keep on buying?

Thu, 12/02/2010 - 23:52 | 774197 TheGreatPonzi
TheGreatPonzi's picture
Classified By: Ambassador Christopher W. Dell under Section 1.4b/d

1. (C) Having said my piece repeatedly over the last three years,
I won't offer a lengthy prescription for our Zimbabwe
policy. My views can be stated very simply as stay the
course and prepare for change. Our policy is working and it's
helping to drive change here. What is required is simply the grit,
determination and focus to see this through. Then, when the changes
finally come we must be ready to move quickly to help consolidate
the new dispensation.


2. (C) Robert Mugabe has survived for so long because he is more
clever and more ruthless than any other politician in
To give the devil his due, he is a brilliant
tactitian and has long thrived on his ability to abruptly
change the rules of the game, radicalize the political
dynamic and force everyone else to react to his agenda.
However, he is fundamentally hampered by several factors:
his ego and belief in his own infallibility; his obsessive
focus on the past as a justification for everything in the
present and future; his deep ignorance on economic issues
(coupled with the belief that his 18 doctorates give him
the authority to suspend the laws of economics, including
supply and demand);
and his essentially short-term,
tactical style.

3. (C) While his tactical skills have kept him in power for 27
years, over the last seven this has only been achieved by a
series of populist, but destructive and ultimately
self-defeating moves. In reaction to losing the 2000
referendum on the constitution, a vengeful Mugabe unleashed
his QGreen BombersQ to commit land reform and in the
process he destroyed ZimbabweQs agricultural sector, once the
bedrock of the economy. While thousands of white farmers
saw their properties seized, hundreds of thousands of black
Zimbabweans lost their livelihoods and were reduced to utter
poverty. In 2005, having been forced to steal victory by
manipulating the results of an election he lost, Mugabe
lashed out again, punishing the urban populace by launching
Operation Murambatsvina. The result was wholesale
destruction of the informal sector, on which as much as
70-80 percent of urban dwellers had depended, and the
uprooting of 700,000 Zimbabweans. The current inflationary
cycle really began with Murambatsvina, as rents and prices
grew in response to a decrease in supply.

4. (C) And now, faced with the hyperinflationary consequences
of his ruinous fiscal policies and growing reliance on the
printing press to keep his government running
, Mugabe has
launched Operation Slash Prices. This has once again given
him a very temporary boost in popularity (especially among
the police, who have led the looting of retail outlets and
now seem well positioned to take a leading role in the
black market economy) at the cost of terrible damage to the
country and people. Many small grocery and shop owners,
traders, etc., will be wiped out; the shelves are
increasingly bare; hunger, fear, and tension are growing;
fuel has disappeared. When the shelves are still empty
this time next week, the popular appeal of the price roll
back will evaporate and the government simply doesnQt have
the resources to replace the entire private commercial
sector and keep Zimbabweans fed. It may attempt to do so
by printing more money, adding even more inflationary
pressure on a system already reeling from the GOZQs
quasi-fiscal lunacy combined with the price impact of
pervasive shortages. The increasingly worthless Zim dollar
is likely to collapse as a unit of trade in the near
future, depriving the GOZ of its last economic tool other
than sheer thuggery and theft of othersQ assets.

With all this in view, I'm convinced the end is not far off for the Mugabe regime.
Fri, 12/03/2010 - 00:03 | 774226 AUD
AUD's picture

Interesting. What was this informal sector?

Thu, 12/02/2010 - 23:50 | 774192 moofph
moofph's picture

...fedinkie-leaks...sorry, but it sounds ssssooooo cute.

on a more serious note, that federal reserve balance sheet sure does remind me of a tsunami moving from east to west...may the laws of bouyancy help us all.

Fri, 12/03/2010 - 00:00 | 774211 DonutBoy
DonutBoy's picture

So how does it come apart?  I assume USD and EUR implode together because the Fed will not allow the EUR to die alone. 

Does JPY implode first?  This seems likely to me, as 2011 looks to be fiscally impossible for Japan.  If I were a Japanese central banker I'd be printing yen and buying gold as quietly as I could.

Can the AUD, CAD, NOK, and ZAR hold-up once USD and EUR begin to collapse?

It seems to me a policy question.  Will these governments choose to inflate to parity?  If they have foreign debt denominated in their own currency they may be forced to.  If they are net lenders in their own currency, they'd rather not.

Fri, 12/03/2010 - 00:20 | 774248 AUD
AUD's picture

It seems nothing is impossible in international monetary affairs.

The US government defaulted on its gold obligations way back in 1971, yet the USD, being the more marketable form of the UST, has remained 'money good' for nearly 40 years! Not only that, gold fell in price from 1980 for 20 years, despite there being no let up in the exponential growth of global credit since 1971!

Someone, sometime, is gonna get caught holding the bag.

Fri, 12/03/2010 - 08:10 | 774698 youngman
youngman's picture

I think countries will start to demand gold or silver as more paper....

Fri, 12/03/2010 - 00:17 | 774242 boooyaaaah
boooyaaaah's picture

Rev 6:5-6

5 When the Lamb opened the third seal, I heard the third living creature say, "Come!" I looked, and there before me was a black horse! Its rider was holding a pair of scales in his hand. 6 Then I heard what sounded like a voice among the four living creatures, saying, "A quart of wheat for a day's wages, and three quarts of barley for a day's wages, and do not damage the oil and the wine!"

Fri, 12/03/2010 - 00:20 | 774243 hejss
hejss's picture


They can cause hyperinflation anyway. Since we might be at the crossroad where they just "can´t" let the stock market go down the market should after a while expect runaway inflation in food, oil etc. Why should it not?

But they chose deflation over collapse i guess..

Fri, 12/03/2010 - 03:01 | 774519 jdrose1985
jdrose1985's picture

"They" can cause hyperinflation, but it would be followed by a hyperdeflation.

Either way, it's all bad from here

Fri, 12/03/2010 - 01:43 | 774392 steve from virginia
steve from virginia's picture

I have to hand it to Bernanke. He's a pretty smart dude.

Look who he's up against. Mother Nature. She never puts up a fight, she just merrily goes along with whatever dumb program smart guys like 'Uncle Bennie' come up with.

Cut down all the trees. No problem. Dam all the rivers. Piece of cake. Dig holes in the ground and fill them up with pig shit. Excellent. Dump trillions of tons of CO2 into the atmosphere and water, great! She loves it!

Drill for and extract all the cheap crude and waste it driving giant metal boxes in circles for no discernible return; brilliant! Why didn't someone think of that earlier!

Now the the cheap crude is gone up the asspipe, if you will, what remains is the Ponzi scheme to cover it all up and put the blame on someone else. Nature is indeed going along with the program because that is what she does. She just goes along and allows the humanoids to do what they please. At some point the humans get to experience the consequences of their actions. This is because, Momma Nature really doesn't give a rat's ass about us humans: whether they live or die or whether we die horribly.

Humans don't care, Momma Nature doesn't care. What goes around, comes around.

She knows that after the humans have wiped themselves out with their self- delusions and hubris, a hundred thousand years or so will have Planet Earth much like it was before the first human ever took breath. Plenty o' trees, lots of wild rivers, clean air and water and lots of fish, birds, etc. Just like the 'good old days'.

So ... the lyin' Bernanke is smart trying to 'Kill the Dollar' or whatever it is he is doing so that the humanoid experiment of smashing nature for a buck can keep on keepin' on. And guess what? It's going to work ... until it stops.

Being privileged, you and I get to sit back and watch the endgame unfold. It's going to be really interesting. Lotsa powerful dudes are going to get the pie all over their faces. Economic systems will crash, more and more humanoids will fall into extreme poverty, there will be more conflicts, more dumb schemes and more fools like Bennie Boy trying variations on the theme of 'Stupid' to keep the houses of cards intact.

And, nobody is going to do anything to change. Peeps are going to say 'Gold' when all that is is a strategy to keep the current Nature- bashing regime intact with some trivial adjustments. Sorry, it's not going to work. Only big changes not small change will solve this set of Mama Nature's 'Self- Solving Problems'.

Time is running out for us. Serious.


Fri, 12/03/2010 - 02:04 | 774429 jdrose1985
jdrose1985's picture


Thanks, this is a lonely place.

Fri, 12/03/2010 - 06:11 | 774649 WaterWings
WaterWings's picture


Conflation alert!

MSM misses you.

Fri, 12/03/2010 - 08:40 | 774716 EvlTheCat
EvlTheCat's picture


Fri, 12/03/2010 - 02:52 | 774508 AUD
AUD's picture

But gold will still be there too.

Unlike the credit.

Fri, 12/03/2010 - 08:48 | 774713 EvlTheCat
EvlTheCat's picture

Time is running out for us.

Yea, hey douche bag, instead of going tin foil why don't you expound some wisdom upon us. Like the right way to solve the problem, or STFU!

Most of us know what you are saying is partly true, without the loony bits. The problem is there is no foreseeable way to solve the problem, but I guess you already know that and just feel the need to express yourself.

America needs solutions not more armchair philosophers stating the obvious!

Fri, 12/03/2010 - 10:12 | 775033 bobboberson
bobboberson's picture

What is meant by "agencies"?

Fri, 12/03/2010 - 10:55 | 775192 dizzyfingers
dizzyfingers's picture

"...the budget deficit almost doubled to around 41.5 billion. To finance this shortfall required the printing of ever-increasing amounts of ever more worthless paper marks. In 1922, around 1 trillion marks of additional currenty was issued; in the first six months of 1923 it was 17 trillion marks."

"Over the next few months, Germany experienced the single greatest destruction of monetary value in human history. By August 1923, a dollar was woth 620,000 marks and by early November 1923, 630 billion.*"

"It was not simply the extraordinary numbers involved; it was the dizzying speed at which prices were now soaring. In the last three weeks of October, they rose more than ten thousandfold, doubling every couple of days."

"Those who made up the backbone of Germany--the civil servants, doctors, teachers, and professors,--were hit the worst. Their investments in government bonds and bank deposits, carefully accumulated after a lifetime or prudence and discipline, were suddenly worthless. Forced to  scrape by on meager pensions and salaries, which were decimated by inflation, they had to abandon their last vestiges of dignity. Imperial officers took jobs as bank clerks, middle-class families took in lodgers, professors begged on the streets, and young ladies from respectable families became prostitutes."

...from LORDS OF FINANCE, The Bankers Who Broke The World, L. Ahmed, 2009, Penguin Books.

Paraphrasing from EVITA: "We are all (about to be) prostitutes now!"


Fri, 12/03/2010 - 14:58 | 776083 Don Levit
Don Levit's picture

Why do you draw a distinction between the $926 billion of marketable paper versus over $4 trillion of non marketable paper?

Do you think debt owed to our citizens is less worthy than debt owed to foreign countries, etc.?

Don Levit

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