The Ongoing Plight of the U.S. "Nightcrawler" - Part 2

RobotTrader's picture

Currency markets to Fed/Uncle Sugar: Put up, or shut up.
Rasputin - Sat, Oct 10, 2009 - 08:29 AM

Clearly the relentless, empty, jawboning and pie-holing by various Fed
Heads and Treasury officials has convinced NO ONE (who matters, anyway)
that the U.S. is serious about reining in our monetary madness.

For pictorial proof of how insane that the Fed alone has been
acting, I ask that you simply click on this link to an

...and scroll down to the graphs of the various Fed programs to fling-fiatscos at the collapsed financial sector.

One glance at the monumental amount of risk shown in those charts
that the Fed is absorbing would send even the most fervent U.S.
nightcrawler lover into a fit of rage at the sheer stupidity that the
Fed has shown in accepting any and all toxic trash in exchange for
freshly-flung fiat.

Furthermore, as also discussed in that lengthy-but-informative
post is the fact that the Fed has NO INTENTION WHATSOEVER of unwinding
this enormous monetization--at least not with the failed financial
gamblers from whom the Fed accepted the toxic trash.

Instead, the Fed is seeking ways to soak down the money market
suckers and steal their hard-earned fiatscos via "reverse repos",
facilitated by the very failed gamblers that the Fed bailed out in the
first place.

In addition, please allow me to address another issue that
ABSOLUTELY PRECLUDES any dousing of the fiatsco firestorm the Fed and
Uncle Sugar have unleashed:


As I have discussed many times on this and other boards, the U.S. is very dependent on creating approximately:

over-and-above-the-TEN-TRILLION-already-in-existence, mortgages each
year, every year, year-after-year, just to keep the McHousing bubble
from continuing to collapse in on itself.

Which is ONE-HALF of the approximately:


...of total debt that must be created every year, year-after-year,
and in fact GROW more every year, just to keep the entire U.S. "Ponzi
Pyramid of Debt and Derivatives Death" from imploding.

Also, as I have covered ad nauseum, at this point the Fed and
Uncle Sugar are the SOLE SOURCE and BACKSTOP OF LAST RESORT for the
entire mortgage sector--both existing and new loans.


1. Fannie

2. Freddie

3. FHLBs

4. FHA/Ginnie

5. Fed purchases of MBS/GSE debt

...Uncle and the Fed are truly "all in" on the housing bubble and
they will do everything in their power to keep pumping this pig
up--even going so far as to implement some of the more Draconian
measures I have previously discussed such as:

1. Zero down payment (already doing that via 8000-fiatsco credit, soon to be expanded and extended)

2. Low interest rates (already doing that too, but can cut them in half if necessary)

3. Forty, fifty, or one-hundred loan terms (see Japan as example)

4. High debt-to-income ratios (already doing that too, but can crank it even higher).

...because there is NO WAY that Uncle and the Fed ever want to
admit that they are taking a beating in their ownership of the mortgage
creation/backstop/McMansion value space.

Finally, there is the issue of the:


...of dead, rotting debt STILL sitting on the books of failed banks and Wall Street goons, as well as:

TENS OF TRILLIONS OF FIATSCOS MORE destroyed derivatives positions dragging down the gamblers
who partook in this particular gambling parlor. Uncle Sugar, FASB, and
the ISDA have all colluded to allow the decimated players totally
ignore these festering wounds--with one little issue as a consequence:

The banks won't lend to any sheeple as long as the institutions remain in this crippled condition!

(Ras conclusion): We're just as scroomed as we were a year
ago--skying stock markets and gold-hating trolls posting "Gold isn't
money" notwithstanding.

There is absolutey ZERO chance that the Fed raises their Fed Funds
Politburo rates, and a ONE HUNDRED PERCENT CERTAINTY that both the Fed
and Uncle Sugar MUST continue their monetizations, back stops and being
the "lenders, insurers, and market of last resort" for all things
credit, but especially the McHousing market where they have
multi-trillion fiatsco exposure.

So, it is little wonder that the U.S. fiatsco is getting pounded
in the currency casino and that people are piling into PMs in
droves--even going so far as to DEMAND physical delivery from the
corrupt exchanges, even as the jawboning and pie-holing by the Fed
Heads and Treasury twerps continues unabated.

Because we are still very much in the midst of the "convulsions"
of collapse AND the massive monetary and fiscal insanity the Fed and
Uncle are undertaking to fight them.