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Friday Episode Of Criminal Reserve's "Flip That Bond" Accompanies Dollar Plunge

Tyler Durden's picture


Meanwhile, not letting any parabolic blow off in silver crisis go to waste, the Criminal Reserve and the Criminal Dealers engaged in another gang rape of whatever is left of the US middle class. Today's POMO, which closed with $6.688 billion of 3 year bonds getting monetized (at a whopping 5.6x Submitted/Accepted ratio), basically consisted of just two cusips: the 912828PQ7 and the 912828QH6. Of these two, QH6 represented $5.285 billion or 80% of the entire POMO. Why is this interesting? Because this CUSIP was auctioned off ten days ago, with an actual issuance date of February 15. That's Tuesday. The Fed just monetized bonds that were eligible for trading for a whopping 3 days! The daylight robbery, and the PD fringe benefits, continue as nobody apparently has the guts or half the brain to understand just how criminal this set up is. Luckily, everyone will magically, and very retroactively "know" just how ominous this now daily occurrence was after the next and last crash.

And for those US taxpayers who are somehow not zombified yet with their iPad apps and praying to find enough credit money for that 3rd liposuction, here is what now glaringly direct monetization does to the US currency.


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Fri, 02/18/2011 - 13:18 | 974732 SwingForce
SwingForce's picture

"Too Late Smart", my Grandpa always said.

Fri, 02/18/2011 - 13:33 | 974813 Herd Redirectio...
Herd Redirection Committee's picture

Zimbabwe Ben, up to it again!  It is increasingly looking like nothing will get the Oligarchy out of this mess short of an internet shutdown and another World War!    I would say these people 'must be stopped'. but it looks like their system will collapse under its own weight, within the next 36 months.

Check out the latest from the Capital Research Institute

What makes Gold money?

The last few weeks the Capital Research Institute has looked at a wide range of issues, from food inflation to unreliable government statistics to different forms of wealth.  Today we look at one of the crucial issues of our time, is gold money?  What is it about gold that makes it arguably THE best choice to serve as money?

Well, before answering that, it would perhaps be wise to do a  quick refresher course on the system currently in place.   The US dollar currently acts as world reserve currency.  This means that the ‘strength’ of the US dollar underpins the entire world economy.  If you want to buy oil, sorry, you have to buy US dollars in order to buy the oil!  And the value of the US dollar is merely a function of how many dollars are in circulation, how much demand is there, and how much faith people still have in the US Government.

Hold on, faith in the US government?  That is one of the components that determines the value of the US dollar?  follow above link to continue reading

Fri, 02/18/2011 - 14:46 | 975101 eddiebe
eddiebe's picture

The $ is underpinned by fraud and protection racket and more and more by by military might and threat.

 With all the Q.E.'s past, present and future, amongst other slight of hands the rest of the world will increasingly resist somehow. Ultimately this will more than likely result in a major world war.

Fri, 02/18/2011 - 13:35 | 974822 Cash_is_Trash
Cash_is_Trash's picture

"They may take our fiat, but never our SILVER!!!"

Fri, 02/18/2011 - 17:50 | 975677 lynnybee
lynnybee's picture

 listen to your grandparents !  /  & my GRANDMA JO (born 1915, god rest her soul) always said, " NEVER TRUST THE GOVERNMENT & DO NOT GO INTO THE STOCK MARKET . "  

Fri, 02/18/2011 - 17:54 | 975680 lynnybee
lynnybee's picture

!double post / happens to the best of us !


Sat, 02/19/2011 - 00:28 | 976749 StychoKiller
StychoKiller's picture

I gotta wonder how many Wisconsin Public Employees will demonstrate when they find pocket lint in their next pay envelope.  Idjuts, stop complaining about the biscuit wheels coming off the gravy train and start protesting the destruction of your entire way of life!

Fri, 02/18/2011 - 13:21 | 974748 Oh regional Indian
Oh regional Indian's picture

Actually the criminality you point out is a sub set to this:

And if the game is really that rigged and the lie that huge, who is going to call out the elephant mating in the room?



Fri, 02/18/2011 - 13:24 | 974759 jus_lite_reading
jus_lite_reading's picture

WHAT THE #$%^&*?!




Fri, 02/18/2011 - 13:24 | 974761 becky quick and...
becky quick and her beautiful mouth's picture

i just got back from buying preps at walmart, the electronics section was packed. poor souls. wait until the $5 dvd bin goes aay.

Fri, 02/18/2011 - 13:24 | 974767 NOTW777
NOTW777's picture

maybe they can cap the day with a holder presser announcing a lawsuit against wisconsin

Fri, 02/18/2011 - 13:34 | 974819 Joe Davola
Joe Davola's picture

Don't give him any ideas.

Fri, 02/18/2011 - 13:25 | 974768 Robslob
Robslob's picture

This was the intent to absolutely get everybody all in on everything and then crash it all to the ground including paper gold and silver...meanwhile at Fraudstreet Central the Banks now have enough reserves to buy everything at deflationary prices.

Ben is doing what he was instructed to...assuming anything else is comical.

Fri, 02/18/2011 - 13:29 | 974772 koot
koot's picture

I am still laughing, a sad laugh it is.  We are so freaking doomed.  And the most unbelievable part of it is, there are still masses of humans out there who listen, follow and believe what the Fed says. 

Fri, 02/18/2011 - 13:27 | 974775 thetruth
thetruth's picture

this is normal, right

Fri, 02/18/2011 - 13:43 | 974868 Cash_is_Trash
Cash_is_Trash's picture


My friend, this has happened to every single fiat currency in the world.

  • Our medium of exchange will cease to be soon.
  • Governments always destroy their money.
  • Fed Reserve notes will one day litter the streets like Weimar Germany.

Q - "Welcome to Zimbabwe, are you here for business or pleasure?"

A - "I'm here for the fascism"


Fri, 02/18/2011 - 13:27 | 974776 Innocent Bystander
Innocent Bystander's picture

The tipping point was few week back. plan accordingly. goodluck - IB

Fri, 02/18/2011 - 13:32 | 974810 taint
taint's picture



please expand on this statement.  On what do you base that statement?

Fri, 02/18/2011 - 14:30 | 975044 Oh regional Indian
Oh regional Indian's picture

Taint, in case he misses it, let me try. 

Terrance McKenna's surprisingly prescient Timewave zero put the peak of this round of human civilization at on or about December 14 2010.

A cursory look at teh world between that day and today will tell you quite a story.

You can track it in any real metric you want.

Try human a good collective indicator. See the weather. Australia, America, Japan, England...... just seems like a huge leap downward.

that is the trend for this time and it is undeniable. Much better to down a slide with yoru arms in the air and whooping, rhater than trying to hang on. 

Prepare accordingly is mostly mental conditioning. Are you ready for a paradigm flip? War? Shortages?

Because the tipping point is surely behind us.


Fri, 02/18/2011 - 13:29 | 974785 Unmisinformed
Fri, 02/18/2011 - 13:29 | 974787 dan10400
dan10400's picture

Can someone help out one of the bond-challenged here?  ZH is clear in showing the 3-day monetization cycle, and that about 17% of the issued QH6 securities were bought back 3 days after being issued.    However, what would be of interest is what premium was paid to the sellers of those bonds after holding 3 days (if any).  Only the dollar amounts are reported on the POMO operation - nothing about the yields. 

Fri, 02/18/2011 - 13:34 | 974817 koot
koot's picture

A short time ago when the US was a republic such questions would never be asked, but if they were answers would be readilty available.  It is best to just think of all this as worthless dollars because in a short time that is exactly what they will be.

Fri, 02/18/2011 - 13:36 | 974832 Common_Cents22
Common_Cents22's picture

Yes, what kind of return are these dealer holders of bonds for 3 days making off the taxpayer?


Can we find out who are the sellers?   And how do they make the decision on which cusip to buy back?

Fri, 02/18/2011 - 13:45 | 974879 Caviar Emptor
Caviar Emptor's picture

what would be of interest is what premium was paid to the sellers


It's an under the table subsidy to the PDs. They still need that juice to keep operations afloat and they're committed to pumping some of the $6-7 billion per day in to equities, the Fed's third mandate. With volumes so anemic on NSYE and others,  this juice is vital to the markets. Even so NYSE had to sell itself to the Germans. Happy new Borse

Fri, 02/18/2011 - 13:57 | 974925 dan10400
dan10400's picture

I am sure it is nothing but an under-the-table subsidy to the PDs.   However, without being able to quantitize it, it is near impossible to extract the american public from playing Angry Birds on their Iphones to actually understand the size of the toy being shoved up their collective asses.

We really need to get these issues into digestable, "Ross Perot slide presentation" style understable (to at least somewhat literate) public can understand.   That is why I decided to try, unsuccessfully.

Fri, 02/18/2011 - 14:35 | 975067 RichardENixon
RichardENixon's picture

You're wasting your time. No attention will be paid until the final meltdown.

Fri, 02/18/2011 - 16:32 | 975433 thedrickster
thedrickster's picture

Then think a kindergarten class hyped up on PCP, being told recess is canceled today.

Fri, 02/18/2011 - 14:34 | 975061 Hero Protagonist
Hero Protagonist's picture

I'm in complete agreement with you.  I asked similar questions with other POMO posts by ZH and never received anything other than smoke and no fire (granted my gut tells me there's fire).  I've done the heavy lifting by doing a ton of research and yet when it comes to showing how a PD is somehow receiving a giant benefit that can then be turned into buying equities, commodities, etc. there's nada.

The MBS pruchases I get...when the FED purchased those at 100 cents on the dollar from banks and they are worth potentially far less, it's easy to see the shafting.  BUT when that same bank (PD) buys Treasuries and then resells them to the FED a few days later, so what?  Are there Fees for doing the transaction substantial enough to be the money on POMO days that gets put into the market? Probably not.  Does the PD pay a lower price from the Treasury and then sell them at a higher price to the FED?  Maybe but where is the data to show that?

In the end, you're right that if those that have the knowledge don't start explaining this stuff so that non professionals can add it up, than this is just one big echo chamber.


Fri, 02/18/2011 - 14:46 | 975107 dan10400
dan10400's picture

We can go on and on about the economic illiteracy of the bulk of the population, but without making an effort to cross that divide, this is all a waste of time.   If you can show, even in an xtranormal video (which tend to go video), how the banks or their ilk are once again sucking at the teat of the govenment (both of which seem to be locked in a 69 position), then something might get noticed and done.    It may be futile, but not doing anything is a guaranteed strategy for no results. 

Fri, 02/18/2011 - 13:29 | 974789 John Law Lives
John Law Lives's picture

This is really scary stuff.  A maniac at the Fed apparently thinks pumping the M2 money supply is a solution.  When has printing fiat currency every solved any economic crisis.

Fri, 02/18/2011 - 14:26 | 975023 dootyfree
dootyfree's picture

There is no "money printing" in QE.  This is myth.  It is just an asset swap.

Fri, 02/18/2011 - 14:57 | 975144 RichardENixon
RichardENixon's picture

It allows Treasury to issue more debt. That is its primary purpose.

Fri, 02/18/2011 - 13:31 | 974795 Stu
Fri, 02/18/2011 - 13:32 | 974799 plocequ1
plocequ1's picture

Its about time you put up that POMO chart. My apple shares were looking a little sick today. Rally on.

Fri, 02/18/2011 - 13:35 | 974820 Bansters-in-my-...
Bansters-in-my- feces's picture

..."FUCK the FED" FUCKING SCUM. When are people really going to stop calling the CARTEL, the FED. It aint Federal,and it's got No reserves.

Why do I never see the words GOVERMENT attached to its address,or title..????

Fucking scum.

Fri, 02/18/2011 - 13:45 | 974881 Cash_is_Trash
Cash_is_Trash's picture

Confucious say: "Nation have politicians it deserve"

Fri, 02/18/2011 - 14:55 | 975138 eddiebe
eddiebe's picture

Confucius is a confused asshole. This 'government of the people for the people is affecting all people of the world the virtuous and the greedy swine. Think for yourself!

Fri, 02/18/2011 - 14:18 | 974987 Oh regional Indian
Oh regional Indian's picture


Who can call it what it is?

Apparently no one that matters or cares to make a difference...


Fri, 02/18/2011 - 15:56 | 975333 Clockwork Orange
Clockwork Orange's picture

Agree on all counts.  But, sadly:

Fri, 02/18/2011 - 13:37 | 974828 CrashisOptimistic
CrashisOptimistic's picture

Useful to remember that the Fed has always bought and sold Treasury securities.

Fri, 02/18/2011 - 21:16 | 974834 Ferg .
Ferg .'s picture

Poor bucky . There was a time when the current environment would have constituted a "Goldilocks" situation for the dollar . A neutral-decent ( or at least not disastrous ) string of economic data , rate hike after rate hike from China ,  more ominous rumblings from Europe and revolution throughout the Middle East .

Instead equities are soaring ,  taking the commodity dollars with them , and the EUR/USD is breaking higher despite widening peripheral spreads and higher demand for emergency loans . But hey , that's rational , efficient markets right ?

You know regarding equities it's funny . They dropped sharply during the initial protests in Egypt and then , when things turned violent and revolution spread to Jordan , Yemen and Bahrain etc ... they didn't blink an eye , just kept on climbing .

Fri, 02/18/2011 - 13:40 | 974855 Caviar Emptor
Caviar Emptor's picture

The bets on QE3 took a sharp turn positive today. It's related to the odds of an impending oil shock, the odds of which have risen dramatically. Euro and Asia slowdowns are only reinforcing the bets. Silver goes higher on this and the stock rally will keep going until it don't. But if there's an oil shock the turn for stocks will be sharp and brutal. But for silver and gold the run will continue. 

Fri, 02/18/2011 - 13:45 | 974887 Bansters-in-my-...
Bansters-in-my- feces's picture

Hey...How do I buy shares in this "FED"

is a  "PRIVATE" for "PROFIT" corp.

Are their shares openly traded on the "markets".?

When do people get to vote on the their represenatives if they are federal like so many dolts think.?

So many questions,so many idiots sheeple.

Fri, 02/18/2011 - 15:00 | 975149 eddiebe
eddiebe's picture

the real Question should be: When do people get to vote for someone that doesnt just blow smoke up their ass! And if they dare blowing when do they get the guillotine?

Fri, 02/18/2011 - 15:58 | 975339 Clockwork Orange
Clockwork Orange's picture

Try a diversified basket of:


Its the same thing.

Fri, 02/18/2011 - 13:47 | 974895 Temporalist
Temporalist's picture
Bernanke defends QE2 on global stage

"Experts said the U.S. was caught flat-footed when emerging-market economies sided with China and blamed the Fed for causing destabilizing capital flows, which put the global financial system on edge. Critics charged that the Fed’s added liquidity was finding its way into emerging markets, creating inflation and possibly leading to asset bubbles. Some officials went so far as to talk openly about currency wars."

Fri, 02/18/2011 - 13:55 | 974918 John Law Lives
John Law Lives's picture

Pathological liar and psychopath?

Fri, 02/18/2011 - 15:02 | 975158 eddiebe
eddiebe's picture

'It's our currency, it's their problem.'

Fri, 02/18/2011 - 13:55 | 974917 ThirdCoastSurfer
ThirdCoastSurfer's picture

What a dilemma, $20 billion a month to spend and nothing left worth buying. 

Is this the law of diminishing returns, the law of unintended consequences or the "law of gravitas"? 

Fri, 02/18/2011 - 14:05 | 974946 NotApplicable
NotApplicable's picture

Well, it's not like I would loan the US Treasury money for any longer than 3 days either...

Fri, 02/18/2011 - 14:08 | 974961 Instant Karma
Instant Karma's picture

With such an enormous fiscal deficit (100 billion plus per month), what would happen to interest rates if the Fed stopped buying Treasurys? Soar of course.

In the old days didn't the Fed let interest rates go up to deaden the economy and get the sheeple angry at the body politic to reign in said fiscal deficits?

There was a back and forth between the Fed and the politicians. Now they're both spending money like madmen.

One reason the US Dollar is hanging in there, sort of, is that the balance sheet for the Euro or the Yen is very good either, and they are doing QE of their own directly or indirectly.

I am surprised the Aussie and the Loonie aren't higher than they are. Anyone know why?

Fri, 02/18/2011 - 15:03 | 975171 eddiebe
eddiebe's picture

My guess is their central banks are under the same command as ours.

Fri, 02/18/2011 - 16:02 | 975350 Innocent Bystander
Innocent Bystander's picture

Dr. Ben & co. lost control of over a seemingly controllable little experiment in monetary policy a few weeks back.  Dr. Ben’s little guinea pig has morphed into Frankenstein that now unfortunately controls Dr. Ben and it demands to be fed.   


Dr. Ben will have to flip bonds at an ever faster rate, and there is no turning back. 


Hence plan / prepare accordingly.  Also note CBs around the world fully understand the scope and magnitude of the coming deluge and they have their own problems having subscribed to the same school of thought as Dr. Ben.


Plan – fewer intangibles like fiat more tangibles like?  Well you are on ZH, I assume you now your options.  Goodluck! - IB

Sat, 02/19/2011 - 00:37 | 976765 StychoKiller
StychoKiller's picture

"FEED ME!"  -- Little Shop of Horrors.

Fri, 02/18/2011 - 17:12 | 975426 Occams Aftershave
Occams Aftershave's picture

Yes, this is only secondarily about giving free profits to banksters.   It is primarily about the usual buyers of US treasuries have stopped buying.   The Fed is the buyer of last resort to keep bond prices from crashing.   The US is loaning itself fantasy money.  It's Benbabwe's economic onanism, because no one wants to date anymore.

Fri, 02/18/2011 - 17:23 | 975587 defn8Dog
defn8Dog's picture

the US middle class doesn't even know it has a place on the balance sheet, let alone that it's getting robbed

Fri, 02/18/2011 - 20:15 | 976128 Buck Johnson
Buck Johnson's picture

No the middle class doesn't want to know.  They are hiding their heads in the sand and hopeing those bad things happen to those people and not them.  When in reality everybody eventually becomes those people.

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