This page has been archived and commenting is disabled.

Sprott Calls The Fed "A Ponzi Scheme" As Half A Trillion In Treasury Purchasers Are Unaccounted For

Tyler Durden's picture


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Wed, 12/23/2009 - 21:11 | 173287 delacroix
delacroix's picture

not coming up, blank page

Thu, 12/24/2009 - 12:25 | 173667 ATG
ATG's picture

Brilliant piece on rot at the top...

Thu, 12/24/2009 - 12:28 | 173675 Anonymous
Anonymous's picture

Where's the problem? Once the idea of QE is accepted, just the size and scope has possibly changed. After all it is all money that is being birthed out of thin air. Atleast we are not actually borrowing from foreign entities that would need to be repaid. What is a few trillions between two US govt. entities?

Thu, 12/24/2009 - 15:16 | 173843 Anonymous
Anonymous's picture

Sprott's bon mot
shows the rot at the top
without which treasuries flop...
in a trap we are caught.

Gold got?

Thu, 12/24/2009 - 19:15 | 173956 Anonymous
Anonymous's picture

ponzi schemes are a gas!

Wed, 12/23/2009 - 21:18 | 173297 janchup
janchup's picture

I seem to be getting used to the ongoing nausea.

Wed, 12/23/2009 - 21:19 | 173298 Cindy_Dies_In_T...
Cindy_Dies_In_The_End's picture

Clearly, we all need to be drinking much more excessively in 2010.

Why am I not surprised at this?

Wed, 12/23/2009 - 21:38 | 173314 HooFlungPoo
HooFlungPoo's picture

Way ahead of ya.  On my 4th glass already.  I really hope this little house of cards makes lots of noise when it falls and doesn't just quietly die off as most do.  I want dinner AND a show!

Wed, 12/23/2009 - 23:25 | 173410 Scooby Dooby Doo
Scooby Dooby Doo's picture

Don't forget to smoke some scooby doobies.

Thu, 12/24/2009 - 11:24 | 173631 Anonymous
Anonymous's picture

I'm buying vodka by the gallon now.

My god. I'm not even joking.

Thu, 12/24/2009 - 17:38 | 173906 rubberduckie
rubberduckie's picture

Lots of scary stuff posted lately; this is one of the scariest.

Thu, 12/24/2009 - 18:13 | 173923 carbonmutant
carbonmutant's picture

You guys sound like a bunch of Russians.

Fri, 12/25/2009 - 01:52 | 174099 Anonymous
Anonymous's picture

We're on our way to resembling Russia, in more ways than I care to dwell upon.

Wed, 12/23/2009 - 21:32 | 173310 Oracle of Kypseli
Oracle of Kypseli's picture

ixis afixis ou, thnixis en polemo.

Hence, death is certain by a quintillion dollars 

Wed, 12/23/2009 - 21:33 | 173311 deadhead
deadhead's picture

"Household Sector."

Could this become even more infamous than green shoots?

Before the Fed's insanity becomes the death of the Republic, could we please do a comprehensive balance sheet and cash flow audit to see what the hell is happening to our currency and financial status?

Could we all chase down our Senators again on the Bernanke nomination and demand that we get specifics on the "Household Sector"?  That's alot of coin to be laid out by the "Household Sector".


Wed, 12/23/2009 - 21:47 | 173323 delacroix
delacroix's picture

the poison's been swallowed, there is no known antidote.

Wed, 12/23/2009 - 22:15 | 173353 MinnesotaNice
MinnesotaNice's picture

The Fed is already insane and we are living in their asylum.

Wouldn't waste any energy chasing down our Senators... that would result in a blank stare with a pasted on smile at best... with the comment "household sector, ah, yes". 

However, eventually everything will come tumbling down... down... down...


Wed, 12/23/2009 - 22:31 | 173362 El Hosel
El Hosel's picture

 A measley half Trillion?  They sweep 1/2 trillions under the rug all the time, whats the big deal... Nobody is watching.


Thu, 12/24/2009 - 00:48 | 173476 SteveNYC
SteveNYC's picture

Bernanke is a shill in two respects:

1) Congress has the itch to spend, and enable them he has/will. They won't throw him out, plus....

2) Wall St., congress' masters, are also being appeased by Ben.


Basically, he is doing as ordered by those who pull the strings, both levels. No way they throw this guy out, he is the ultimate shill. Only the people could get rid of Ben.

Thu, 12/24/2009 - 12:51 | 173699 Anonymous
Anonymous's picture

why get rid of Ben?
Get rid of those pulling the strings

Thu, 12/24/2009 - 01:10 | 173486 Cursive
Cursive's picture


+1.  I'll be calling Vitter next week.  I realize that many ZH regulars are jaded with the corruption, but the ramifications of this story are huge.  If the FR has been purchasing Treasuries by a factor of 3 times the amount it officially commited to, we have a massive fraud here.  Why is it fraud?  They obviously intended to deceive the American public with the $300B figure.  Why is this any different than the unlawful acts of the FR over the last year?  Because it's easy to understand.  No acronyms, no complicated rules.  They fraudulently purchased more than 3 times what they said they would and they didn't notify anyone.  The UST and FR could have clarified it, but no, both acted like it was the "Household Sector."    

Thu, 12/24/2009 - 10:17 | 173618 Cognitive Dissonance
Cognitive Dissonance's picture

I encourage you and I and others to push this information to the forefront. But if there is anything I've learned over the past few years, it's that the more outrageous and blatant the criminal acts, the more likely a large portion of the public will hide their eyes. This is why the powers-that-be feel so impervious and arrogant.

So while I will help you and others to get the word out, I caution everyone to not let the public reaction (or non reaction) to this and other disclosures be seen as a validation (or non validation) of your efforts.

Remember that you are sane and the vast majority of the public and the powers that be are not sane. Do not place near impossible tasks in front of you and then expect that you will accomplish everything you desire. That would be insane. Maintaining our own sanity inside the insane asylum is of the utmost importance.

Keep/place the oxygen mask on yourself at all times before attempting to help/awaken the others.

Thu, 12/24/2009 - 12:43 | 173691 Anonymous
Anonymous's picture

"Maintaining our own sanity inside the insane asylum is of the utmost importance."

That's a keeper. How do you avoid the "psychological capture" CG? I would have thought that the secret service would have had you on meds by now.

Thu, 12/24/2009 - 12:48 | 173696 B9K9
B9K9's picture

What is the difference between Stalin & Hitler? Both were mass murderers responsible for crimes against humanity, yet one died a natural death (stroke) while still at the height of his power, while the other died from a bullet through his skull as his world came crashing down upon him.

So what can we take away from this lesson? That the key differentiating determinant regarding punishment is power - whether it is extant or extinct. You are wasting your time pursuing traditional representational channels - our republic no longer represents our interests. It is a false choice.

The personal safety of the PTB is literally at risk. If they fail to successfully blow another asset bubble, they will not be able to survive the chaos induced by the resulting debt-deflationary spiral. OTOH, if they do pull off a miracle, nothing will ever come of these activities. They will GET AWAY WITH IT.

The best advice I ever got was this: "He who complains has already lost". The Soviets didn't complain about Hitler - they killed him. But millions upon millions complained about Stalin - and he got away with his crimes.

Think about it. Please can the calls for action and watch the trends - it all comes down to whether or not we can create sufficient output to service the next layer of debt. If not, then we won't even have a republic left in which to petition our "leaders".

Thu, 12/24/2009 - 13:46 | 173759 Cognitive Dissonance
Cognitive Dissonance's picture

In essence, what you're saying is that we should be rooting for the Ponzi. For if they fail in their efforts, all hell will break loose and we will all suffer terribly.

Sadly, I suspect you're correct and this is the fundamental reason why so many people remain "asleep" at the wheel. They aren't really asleep but rather captured and dependant upon the Ponzi to continue. The time to call for a stop to the insanity was decades ago.

However, I don't think they will succeed without great pain and destruction and they know this. Thus the reason for the wholesale theft by everyone and anyone who can.

Thu, 12/24/2009 - 14:37 | 173819 Blindweb
Blindweb's picture

I was actually just saying something similar on a political blog.  The reason liberals only half heartily attack the U.S. empire is because deep down they know without it they could be living close to a 3rd world lifestyle. 

Thu, 12/24/2009 - 15:23 | 173848 tip e. canoe
tip e. canoe's picture

"But there’s another region of the brain that can be activated as we go about editing reality. It’s called the dorsolateral prefrontal cortex, or DLPFC. It’s located just behind the forehead and is one of the last brain areas to develop in young adults. It plays a crucial role in suppressing so-called unwanted representations, getting rid of those thoughts that don’t square with our preconceptions. 

The lesson is that not all data is created equal in our mind’s eye: When it comes to interpreting our experiments, we see what we want to see and disregard the rest. The physics students, for instance, didn’t watch the video and wonder whether Galileo might be wrong. Instead, they put their trust in theory, tuning out whatever it couldn’t explain. Belief, in other words, is a kind of blindness."

Accepting Defeat:  The Neuroscience of Screwing Up

 “This DLPFC is thought to cause the forgetfulness during sleeping due to its “executive ego functions of working memory.” This shutting down of the PFC causes what is known as hypofrontality which is also experienced in altered states of waking consciousness."

reduced DLPFC activity has been measured in subjects suffering from schizophrenia, depression and under the effects of cannabis, ketamine LSD & psilocybin.  and it seems that one of the effects of numerous antidepressants (and ambien) is to artificially activate the DLPFC.

Thu, 12/24/2009 - 14:22 | 173805 Anonymous
Anonymous's picture

So then, do you think when the SHTF that Ben, Tim, Larry and O will be the same as Hitler at the end, throwing wild tantrums because the American people have failed them? Between their fits of rage, they will babble about reserves the republic no longer has, wealth they can confiscate that has already fled, or trillions more fiat dollars they can print and sell to non-existent buyers?

Thu, 12/24/2009 - 17:38 | 173905 Kayman
Kayman's picture

Hey there Big Dog

A "normal" solid growth rate of, say, 3% net is $420 billion on a $14 Trillion economy. Do the math, you cannot "grow" your way out of this one.  

We are starting from a huge debt base, an over inflated asset base- both paper and real estate, and the engine of the (original) economy- the working (middle) class has financial cancer from "outsourcing" American jobs and the Negative Wealth Effect (the Poverty Effect) of retrenching asset prices.

So... tell me how to "grow" our way out of this one.  

Sitting on the sidelines while Nero burns down Rome seems a tad bit acquiescent.

Sorry for getting personal in my last post. My Rottweilers say you're OK.


p.s. The only difference between Stalin and Hitler, is that Stalin had somewhere to retreat to (the Urals) while he regrouped, Russia had once before defeated a megalomaniac (Napoleon) through a scorched earth policy and Russian winter and Stalin was smart enough or lucky enough not to get into a 2 front war.  Russia only declared war on Japan after the Japanese were effectively defeated.

p.p.s. I forgot to mention Hitler was democratically elected.




Fri, 12/25/2009 - 01:41 | 174095 Assetman
Assetman's picture

The best advice I ever got was this: "He who complains has already lost". The Soviets didn't complain about Hitler - they killed him. But millions upon millions complained about Stalin - and he got away with his crimes.


Think about it. Please can the calls for action and watch the trends - it all comes down to whether or not we can create sufficient output to service the next layer of debt. If not, then we won't even have a republic left in which to petition our "leaders".


Powerful commentary, B9K9, but your analogy about Hitler/Stalin is a really crappy one.

The Soviets didn't actually kill Hitler (nice try), but if the Americans, British, etc. didn't get there first, I'm sure the Soviets would have gladly done the job.  And if the Germans had actually not frozen to death out on the Eastern Front, Stalin would have been literal toast.  It's not as if the Germans didn't try, believe me.  

As repressive and cruel as Stalin was, he did have massive internal support due to his own military successes-- and due partially due to a self-constructed cult of personality.  Stalin was a far cry from being universally hated inside Russia.

And as good certral planning would have it, his best friends were the ones that actually still had the rifles after the war.  Most of his so-called enemies were poor an unarmed.   That doesn't sound much like a country I know that has a 2nd amendment. 

Even with so much control, there is STILL some valid debate about the stroke/ cause of death thing.  It very possible that rat poisoning triggered the stroke and permature death.  And it's not as if one drinks rat poison just to see if it tastes real good.  So perhaps people did take action... it just took a little longer.   Wonder why?

Thu, 12/24/2009 - 10:37 | 173624 Mrmojorisin515
Mrmojorisin515's picture

Empty factories to the east and all our waste
The shape of things that came shows on the broken workers face
To the west you'll find our silicon promised lands where
Machines replace our minds for systematic profit plans
The course of human progress staggers like a drunk
Its steps are quick and heavy and its mind is slow and blunt
I look for optimism but I just dont know
Its seeds are planted in a poison place where nothing grows
Its 1989 stand up and take a look around
Weathers bitter tension it seems is sinking down
Drunk with power and fighting one another
Every hour shows the winter getting harder
Theres a freezeup coming
One nation stands the tallest radiating blinding light
Plastic and fluorescent energy robbing us of sight
Set in our way content with our decay
We wave the flag of freedom as we conquer and invade
Ever ask yourself wheres my place in this hell
But no ones there to tell you cuz they dont know that themselves
The well rehearsed lines from our elated politicians
No longer offer solace we can see the self destruction
Just one political song to drop into the list
That is years and years long


Operation Ivy

Thu, 12/24/2009 - 11:49 | 173642 WaterWings
WaterWings's picture

Before the Fed's insanity becomes the death of the Republic, could we please do a comprehensive balance sheet and cash flow audit to see what the hell is happening to our currency and financial status?

Somebody needs to remake that Downfall scene with Hitler discussing Allied positions closing in on Berlin as Benny, Timmy, Larry, and Rahmmy discussing the above.

But Führer, vee don't haff eenuff shredders to do zee jop!

Thu, 12/24/2009 - 12:50 | 173698 Ripped Chunk
Ripped Chunk's picture

That is the item that really caught my attention.  Creative accounting at its finest.

They better audit this house of cards.

Thu, 12/24/2009 - 15:23 | 173849 Anonymous
Anonymous's picture

Green shoots are the monetary diarrhea we've become accustomed to in our state yellow fever.

Yellow because they are afraid to allow the natural consequence of decades of misfeasance.

Mellon said, "liquidate", he meant, this is Chapter 11.
We will reorganize and emerge to a greater future of growth.

Paulson/Geithner have said. Chapter 7, but imposed not willingly undertaken. We will be dissolved for good.

Geithner saying, "We will not ALLOW the markets to naturally correct" is a signal.

Only wall street traders will profit as the PPT attempts to hold a line on Treasuries and equities. Traders will pressure movements requiring response by gov't via printed dollars. Traders will cut out strays from the herd. Common people will have currency debauched and their productivity drained.

Paper traders only will profit. Suspension of market rules and efficiency.

Ever attempted, ever failed. Red flag to prepare for currency collapse. There is no longer any other way.

You are a fool to hold the currency for anything other than momentary exchanges. It is a false staff.

Wed, 12/23/2009 - 21:42 | 173319 Miyagi_san
Miyagi_san's picture

imagine the company that makes the printing press gloating how successful their machine saved the Fed but destroyed the free world

Wed, 12/23/2009 - 22:13 | 173351 Anonymous
Anonymous's picture


Still trying to figure out where the P&I payments from the mortgages purchased are going? Could the Fed be using the performing P&I payments to purchase more treasuries? On the portfolio which is almost a trillion at this stage it would net off something like 50-60 billion per anum crudely which is good for one 2yr funding schedule. Leveraged is another story. Has the Fed said what they are doing with the return of capital on the mortgages still performing? If not, why hasn't someone asked Bernanke?

Any thoughts on how the Fed will try and manuever a new program. I suspect they will use the wind-down of the exisiting facilities to introduce a new facility or allocate more of TARP to a CRE bridge.

As for the $500 billion, the flows coming out of Carribean ought to be checked carefully. FARC to the rescue. Ever wonder why there was so much posturing during the late Bush era about the "Free Trade" deal with Columbia? Clearly a payoff, but for what?

Thu, 12/24/2009 - 12:12 | 173657 JR
JR's picture

Jumping Jehosaphat.  Shot in the act.

Thu, 12/24/2009 - 12:30 | 173676 ATG
ATG's picture

Smell Soros selling...

Wed, 12/23/2009 - 21:40 | 173317 HooFlungPoo
HooFlungPoo's picture

Nice one ghost. 

Wed, 12/23/2009 - 21:41 | 173318 Kayman
Kayman's picture

Hey little people   "Household Sector" is none of your g-damned business. And you wouldn't understand it anyway. Like, if we don't understand it, then how the hell could you understand it ????

Merry Christmas,

Little Timmy and Big Beard Ben

Thu, 12/24/2009 - 04:52 | 173547 Anonymous
Anonymous's picture

Isn't the worldwide heroin market about $500B?

Wed, 12/23/2009 - 21:44 | 173321 bugs_
bugs_'s picture

Yes.  Quite a thought experiment.  Great post.

Wed, 12/23/2009 - 21:44 | 173322 donatoloscalzo
donatoloscalzo's picture

Gentlemen, we are inches away from the precipice........may God have mercy on us innocents, but let the guilty be brought to justice.  What worries me is not only the criminal activities of the FED and Bernanke in particular, but the amazing indifference (or collusion?) by the mainstream media: nobody cares, nobody asks the right question and whenever Ron Paul at least tries he is ridiculed.  I am scaredof what awaits us ahead ........

Wed, 12/23/2009 - 22:10 | 173345 Anonymous
Anonymous's picture

donato, be serious. the mediatards have not a clue.

Wed, 12/23/2009 - 22:37 | 173371 Anonymous
Anonymous's picture

the mediatards may not have a clue but their
bosses in the cia do....

Thu, 12/24/2009 - 10:01 | 173613 geopol
geopol's picture

DING!!!!!!    Step right over here to get your prise.

Thu, 12/24/2009 - 12:38 | 173682 ATG
Wed, 12/23/2009 - 21:49 | 173325 msorense
msorense's picture

This whole "recovery" is one massive fraud.  We knew it all along:

Wed, 12/23/2009 - 22:17 | 173355 Anonymous
Anonymous's picture

Must Read.

Thu, 12/24/2009 - 10:15 | 173617 Scooby Dooby Doo
Scooby Dooby Doo's picture

Known in the financial intelligence community as The Reston 6.

A secret committee

Don't you hate it when juicy news is making its rounds but you are kept out of the loop? Welcome to the club. Already back in 1988, Ronald Reagan signed an executive order to establish a specific committee designed to prevent major market collapses.

As per this order, the Secretary of the Treasury, the chairman of the Federal Reserve, the chairman of the SEC and the chairman of the commodity futures trading commission make up the core of this team. By extension, major financial institutions like JP Morgan Chase and Goldman Sachs are used to execute their orders.

The existence of this team is said to have been confirmed by former Clinton advisor George Stephanopoulos on Good Morning America. Last year, former Treasury Secretary Hank Paulson called for this 'financial fraternity' to meet with greater frequency and set up a command center at the U.S. Treasury designed to track global markets and serve as headquarter for the next crisis.

There is much more to this unique arrangement designed to keep a lid an potential market meltdowns and use major Wall Street firms as marionettes to accomplish this goal. A detailed report about this secret team is available in the most recent issue of the ETF Profit Strategy Newsletter.

Thu, 12/24/2009 - 13:09 | 173710 JR
JR's picture

"We are in a hyperdrive casino with distracting sideshows to cloak what is imminent. Sovereign default. The USA will renege on its debts. The LEHs, DSLs, MERs are just the minor royal chess pieces insulating the King. But the King is dead. Long live the King."--  Guest on 2008-09-05 18:41:30


Working Group on Financial Markets |Wikipedia, the free encyclopedia

The Working Group on Financial Markets (also, President's Working Group on Financial Markets or the Working Group) was created by Executive Order 12631, signed on March 18, 1988 by United States President Ronald Reagan.

The Group was established explicitly in response to events in the financial markets surrounding October 19, 1987 ("Black Monday") to give recommendations for legislative and private sector solutions for "enhancing the integrity, efficiency, orderliness, and competitiveness of [United States] financial markets and maintaining investor confidence".

As established by Executive Order 12631, the Working Group consists of:

"Plunge Protection Team" …The term "Plunge Protection Team" was originally the headline for an article in The Washington Post by staff writer Brett D. Fromson, published on Sunday, February 23, 1997. He did not invent the term. It was added later by a copy desk editor as a sensational nickname for the Working Group.



To view or print the PDF content on this page, download the free Adobe® Acrobat® Reader®.

March 13, 2008

President’s Working Group Issues Policy Statement
To Improve Future State of Financial Markets

Washington -The President's Working Group on Financial Markets issued a policy statement today with recommendations to improve the future state of U.S. and global financial markets. The statement offers the group's insight on causes of recent market issues and next steps for mitigating systemic risk, restoring investor confidence, and facilitating stable economic growth.

"The President's Working Group on Financial Markets has been reviewing policy issues to help reduce the likelihood that mistakes of the past are repeated. We have completed the assessment phase of our review, and are moving forward to focus on implementation," said Secretary Henry M. Paulson, Jr., chairman of the PWG, which includes the Treasury Department, the Federal Reserve, the Securities and Exchange Commission and the Commodity Futures Trading Commission. "I believe today's recommendations, when implemented, will strengthen market discipline, enhance risk management and improve the efficiency and stability of our capital markets."

"The recommendations set out in the Working Group's statement constitute an appropriate and effective response to the deficiencies in our financial framework that contributed to the current turmoil in financial markets. I strongly support them," said Federal Reserve Board Chairman Ben S. Bernanke...

"These recommendations are a critical step in strengthening the US financial markets.  The CFTC will continue to work with the other PWG members to implement the recommendations," said CFTC Acting Chairman Walt Lukken...

President Bush called on the PWG in August 2007 to review the underlying causes of the recent market issues. Members of the group have frequently discussed the causes of the recent turmoil, including: lax underwriting standards for mortgages, particularly for subprime mortgages; an erosion of market discipline in the securitization process; flaws in credit rating agencies' assessments of some complex structured credit products; risk management weaknesses at global financial institutions; and regulatory policies that failed to mitigate risk management weaknesses.

The PWG will work with foreign regulators, finance ministries, and central banks through the international Financial Stability Forum and other venues to address these challenges globally...



As is well known by now, the PPT, the Working Group,  "is an orchestrated mechanism that attempts to manipulate U.S. stock markets in the event of a market crash by using government funds to buy stocks, or other instruments such as stock index futures."   It seems we are now in a chronic state of "market crash," as diagnosed by the TBTFs, as the PPT daily transfers the nation's wealth into the ailing financiers' pockets.

Wed, 12/23/2009 - 21:51 | 173327 FLETCH
FLETCH's picture

Banks:  "Holy Sh%T! I need money"

Beard: "ok. i have that.  but one condition"

Banks: "Yes, my fearless benefactor?"

Beard: "you must buy the sh%t debt."

Banks: "Sh%T debt?"

Beard: " Yes, my boney little buddy timmy needs some help"

Banks: "ok, but will you still pay for our deposits?"

Beard: "no problemo."

Banks: "can we also invest retail deposits?  they'll never know and by the way, their f'd anyway by Timmy"

Beard: " i can't hear you..."

Banks: "hello... hello... hello"

Obama: "yes?"

Banks: " who's this?"

Obama: "Barry O.  now listen up: start lending.  i don't care about the fact that people have no earning power and can't pay you back.  lend the money..."


To be continued.....


Wed, 12/23/2009 - 21:54 | 173329 Shameful
Shameful's picture

Good post, another voice telling us the obvious the Fed Reserve is buying the Treasuries.  They have to after all who else has the supply of dollars i that quantity and willing to toss them into a furnace?  Wish they would just man up and admit it "Yeah we are buying all the bonds, so what?"

Wed, 12/23/2009 - 22:04 | 173341 Mad Max
Mad Max's picture

It doesn't HAVE to be the Fed.... it could be purchases with central American drug money... or Russian, Chinese and middle eastern oligarchs... perhaps some undead sea creatures are buying the debt with the intent of getting 100% equity stake after the pending sovereign bankruptcy... I mean, c'mon, there's lots of other nightmare scenarios to consider.

It does make you wonder if the Fed hired all of Enron's financial engineers, though.

Thu, 12/24/2009 - 00:34 | 173469 Anonymous
Anonymous's picture

Central American drug cartels and others are diversifying their portofolios away from U.S. dollar :-)

"Why drug dealers prefer euros?"

Thu, 12/24/2009 - 02:30 | 173510 Shameful
Shameful's picture

Okay if Cthulhu is buying up those treasuries I will personally travel to R'lyeh to deliver the thanks of the American people.  Ph'nglui mglw'nafh Cthulhu R'lyeh wgah'nagl fhtagn

Seems about as plausible as the oligarchs.  I mean I could see them doing it if the debt was backed by land or something, but it's backed by the full faith and credit of the US.  I figure the full faith and credit of the US and a buck will still let you dine at the value menu at most fast food places.  You could be right about the drug money though...after all that saved the banks before.  But if it is shouldn't we let all their customers out of jail?

Thu, 12/24/2009 - 09:07 | 173597 Mad Max
Mad Max's picture

I was actually talking about the vampire squid, but Cthulhu is a good option too.

Thu, 12/24/2009 - 13:51 | 173765 Anonymous
Anonymous's picture

Don't be ridiculous. Putting their customers in jail is what makes their business profitable - if you take away the implicit subsidy given to dealers and growers of having their product be black-market only, there's no reason for us to pay a bunch of Columbians for something we could all grow here at home.

Thu, 12/24/2009 - 14:11 | 173792 Zé Cacetudo
Zé Cacetudo's picture

"It does make you wonder if the Fed hired all of Enron's financial engineers, though."

Not sure about the financial engineers, but they definitely hired Enron's lobbying crew (headed by Linda Robertson) in 2009-06:


Wed, 12/23/2009 - 21:56 | 173332 Stuart
Stuart's picture

The Fed:  Ya, so what?  Whatcha gonna do 'bout, eh punk!

Public:  ssssssssooorrryyy  sssssssiirrrrr..  

Wed, 12/23/2009 - 21:56 | 173333 digalert
digalert's picture

Suppose we just say the Bernanke household has a taste for treasuries.

Wed, 12/23/2009 - 21:57 | 173334 Rusty_Shackleford
Rusty_Shackleford's picture


Wed, 12/23/2009 - 22:59 | 173386 MarketTruth
MarketTruth's picture

Time for a BANK RUN!!!

And buy gold and silver.

Thu, 12/24/2009 - 12:40 | 173684 ATG
ATG's picture

Or not.

Deflation is a beach.

Dollars to donuts... 

Wed, 12/23/2009 - 22:01 | 173337 Anonymous
Anonymous's picture

I'm wondering if the whole report is even true, that the category, "Household", is a sham and that it is being employed simply to give substance to the totals that are being reported. Could it be that this miscellaneous category is really an empty vessel? I mean we pre-emptively invade foreign countries, torture people in countries that the NKVD and the Gestapo had had earlier experience, and we sell our democracy for campaign contributions, why not fabricate bogus categories in our accounting in order to make the totals come out the way we'd like?

Wed, 12/23/2009 - 22:02 | 173339 Anonymous
Anonymous's picture

Where does the buck stop?

Wed, 12/23/2009 - 22:02 | 173340 Andrei Vyshinsky
Andrei Vyshinsky's picture

I'm wondering if the whole report is even true, that the category, "Household", is a sham and that it is being employed simply to give substance to the totals that are being reported. Could it be that this miscellaneous category is really an empty vessel? I mean we pre-emptively invade foreign countries, torture people in countries that the NKVD and the Gestapo had had earlier experience, and we sell our democracy for campaign contributions, why not fabricate bogus categories in our accounting in order to make the totals come out the way we'd like?

Wed, 12/23/2009 - 22:04 | 173342 Cistercian
Cistercian's picture

 Is it a ponzi scheme?Absolutely.

Wed, 12/23/2009 - 23:19 | 173402 Hansel
Hansel's picture

Agreed.  All signs point to yes.

Thu, 12/24/2009 - 00:31 | 173467 Benthamite
Benthamite's picture

Ergo, We. Are. Fucked.

Thu, 12/24/2009 - 01:28 | 173493 milbank
milbank's picture

Come on Hansel, fess up.  You only say that because your Magic 8 Ball told you so. 

Thu, 12/24/2009 - 01:35 | 173500 Anonymouse
Anonymouse's picture

Have you ever known the Magic 8 Ball to be wrong?

Thu, 12/24/2009 - 11:57 | 173647 Anonymous
Anonymous's picture

Reply hazy, try again.

Wed, 12/23/2009 - 22:08 | 173344 mrmortgage
mrmortgage's picture

And we have 37 MILLION americans living on food stamps. MSNBC article here


Why not create and entity that lends to small business to create jobs? Oh wait.. its called the SBA. Maybe we have Timmy print $100b and give it to SBA?


I say people in the streets within 6 months unless they get people working. Hey it worked in the great work programs of the depression era.

Thu, 12/24/2009 - 01:32 | 173495 milbank
milbank's picture

No.  It didn't work.  What worked was world war. I'm not endorsing that solution, just correcting your rewrite of the facts.

Thu, 12/24/2009 - 12:16 | 173658 Crime of the Century
Crime of the Century's picture

It didn't "work" as in solve the underlying issue, but it was one of the few tactics that they tried that wasn't counter-productive.

Thu, 12/24/2009 - 14:42 | 173822 faustian bargain
faustian bargain's picture

The thing it did do was destroy the manufacturing base of competing economies, allowing the US to get ahead.

Thu, 12/24/2009 - 18:32 | 173934 batgirl791
batgirl791's picture

That's exactly what I heard Karl Denninger say! It totally explains why the US did so well

Wed, 12/23/2009 - 22:11 | 173347 Anonymous
Anonymous's picture

it is not only a USA ponzi is a global central bank ponzi scheme.
The fractional thinkers over-leveraged the game.
The system is toast really.....the slack in the rope is decreasing and when the slack vanishes, the music stops.
It is not IF the system collapses on itself, but, a matter of when and how it unravels.
Essentially, the bankers of the world are printing currencies much faster than the slaves can "produce" to support the currencies.
The Chinese are no angels. The Chinese government just forces their people to under-consume and therefore generate a higher savings rates than most other regions of the world.
Lets see how this all unfolds by Dec 23rd, 2011.
I think people will be absolutely shocked to see the price of gold rise.
The US will force the rest of the world to pay for the losses/bailouts and the rest of the world can't afford to do that, as it bankrupts their own the rest of the world will have to cut lose the US, economically speaking and make do without the US.

Wed, 12/23/2009 - 22:23 | 173356 Cistercian
Cistercian's picture

 I think you are correct.The over leveraging via CDS and derivatives is the unstoppable deathstar.They keep extend/pretending(and manipulating equities)...but there is zero hope they can fix the blackhole the greedpigs created.System Fail.

Wed, 12/23/2009 - 22:30 | 173361 Anonymous
Anonymous's picture

Excellent to-the-point analysis!!

We are so phuckked, we cant even catch a bus back to Phuccked!!


Fri, 12/25/2009 - 21:49 | 174603 Tahoe
Tahoe's picture

+100 .... too priceless.  Excellente, Muy Muy Excellente!

Wed, 12/23/2009 - 22:32 | 173366 perchprism
perchprism's picture


When things get really, really bad, people still need to eat, and they'll be eating wheat and corn from the US.  And burning US coal that we're not allowed to burn ourselves.  So they can't completely cut themselves loose economically from the US. 

It'd be interesting if our gubmint tries to settle sovereign defaults with ag goods.



Wed, 12/23/2009 - 22:37 | 173370 Anonymous
Anonymous's picture

USA's agriculture output will decline severely when our economy has a real disruption.. there will be as much or more starvation in our 50 states as in the countries we export to... everybody in the world is trapped by this insane system

Thu, 12/24/2009 - 13:30 | 173737 ATG
ATG's picture


Wed, 12/23/2009 - 22:50 | 173379 Gilgamesh
Gilgamesh's picture

All corn is now set aside for Ethanol 90%.  Find another source for your silly "food" desires.

Thu, 12/24/2009 - 00:18 | 173457 Anonymous
Anonymous's picture

Wonder what a central banker tastes like

Thu, 12/24/2009 - 13:52 | 173767 Anonymous
Anonymous's picture

Chicken, or so I'm told by reliable sources in Zimbabwe.

Thu, 12/24/2009 - 18:04 | 173916 Kayman
Kayman's picture

Like Swine.

Thu, 12/24/2009 - 13:31 | 173739 ATG
ATG's picture


Wed, 12/23/2009 - 23:21 | 173404 Eric W
Eric W's picture


The new jobs program: indentured servitude in the New Agrarian Order. Who'd a thunk we'd see a return to slavery in the good ol' US of A?

The new green buildings for the US masses: sod houses with dirt floors, and we can all walk to work, in the fields owned by the bank massas.

Thu, 12/24/2009 - 12:04 | 173653 Anonymous
Anonymous's picture

I'm actually seeing signs of this seeping into the liberal media (NPR, social engineering for the upper middle class). They are starting to portray farmers and farming as romantic, noble. Ag is the new thing for college kids to major in. Returning military are also encouraged to get into farming.

It's actually a clever reaction to bad circumstances. We all need to eat, and we all have to pay back our debts. Food is one of the few things America knows how to produce anymore.

Neo-feudalism: We knew it was all coming to this, why act surprised. Interesting thing though: There was a kind of golden era in Russian feudalism - before it started getting creepy with the "soul taxes," etc. - where agricultural output fed the peasants pretty well. They were only required to work 3 days per week - except for planting and harvesting, when things are intense - and had the rest of the week off to chew hayseeds or chase women or build things for the hut. The noblemen were responsible for keeping the peasants housed and fed. Compared to the way many Americans live now, a 3 day workweek with guaranteed shelter and a full belly doesn't sound like such a bad deal. Sad that it's come to this, but it's possible our Overlords really HAVE decided that Russian feudalism is THE model for keeping the sheep fed. Scary thought: What if they are right?

Thu, 12/24/2009 - 12:26 | 173670 Crime of the Century
Crime of the Century's picture

Read "One Day in the Life of Ivan Denisovich" to see how the Soviets handled it circa 1951. The women borderline starved on the collective farms, while the men borderline starved in the work camps. American leftists still idealized it over the hated Ozzie & Harriet paradigm.

Thu, 12/24/2009 - 13:31 | 173740 ATG
ATG's picture


Thu, 12/24/2009 - 13:29 | 173736 ATG
ATG's picture


Thu, 12/24/2009 - 13:01 | 173703 ATG
ATG's picture

Go to the head of the class but rethink the gold calf...

Wed, 12/23/2009 - 22:13 | 173349 Anonymous
Anonymous's picture

Thank you, thank you, THANK YOU Tyler Durden, whoever you are, for doing the muck-raking work that the mainstream media should be doing right now, BUT IS NOT!!!!

This is so, so alarming. Our government is so clearly OWNED by Wall Street and the Financial Oligarchy, and no one, but NO ONE that we elected to protect us is standing up to this tyrany!!

Please keep bringing us the truth---we will distribute far and wide.

Wed, 12/23/2009 - 22:13 | 173350 Anonymous
Anonymous's picture

The Illuminati has been working diligently, for close to a decade now, to try and stave off the conclusion of the business cycle. We've levered every asset on the balance sheet now. The real issue is that the consumer is finally tapped out even with 0% interest rates. The only option left is to blow up bubbles inside of bubbles and that's what they're doing at the Treasury Department.

While the Illuminati will certainly blame the imminent terrorist attack on "terrorists who are jealous of our freedoms," one has to consider the geopolitical consequences of the Treasury's actions. There is no way out of this, it's not going to end well, it's going to change the way we live life. They put Japanese Americans in concentration camps in the 40s and the more people that say that "can't" or "won't" happen again the more likely it will.

Thu, 12/24/2009 - 13:03 | 173704 ATG
ATG's picture

So you're saying Arabs will be running the camps

or in them?

Wed, 12/23/2009 - 22:16 | 173354 Anonymous
Anonymous's picture

our whole economy is a ponzi scheme going on 30 years

Thu, 12/24/2009 - 10:12 | 173615 geopol
geopol's picture


MIke Ruppert, the whole system is a ponzi scheme/pyramid... Trailer for the movie CoLLapse..

Thu, 12/24/2009 - 12:45 | 173687 Crime of the Century
Crime of the Century's picture

A good movie for critical thinkers. I don't buy all of Ruppert's scenarios, just like I don't buy all of Jim Willie's, but many people (mostly non-ZH types) would be served by at least exposing themselves to some of the cold water. It helps to separate the message from the messenger as well (see Ruppert vs Alex Jones affair). Go down the rabbit hole, but bring a sturdy set of pitons and carabiners.

Thu, 12/24/2009 - 18:08 | 173919 Kayman
Kayman's picture

Truth, plainly spoken.  Inflating assets is not productivity.

Wed, 12/23/2009 - 22:24 | 173357 Stuart
Stuart's picture

Gangster economics.  We're no better than any bush league banana republic that we like to ridicule.   We only follow rules when it serves our purpose but when the rules hurt us, fuck that, bend them and if people see it, so what, too fuckin' bad.  Whatcha gonna do about it.

Wed, 12/23/2009 - 22:31 | 173363 Anonymous
Anonymous's picture

How do we get a copy to every congressman for review? We also need to add a diagram with stick people (easier for our elected officials to understand). One stick person could represent the taxpayer ( he needs to be bent over something) and the other stick person could represent the Fed. Then just add arrows to indicate motion. We're done- in some many ways.

Thu, 12/24/2009 - 15:04 | 173834 Anonymous
Anonymous's picture

Why do people keep thinking Congress cares? I got kicked off of Denninger's site because I kept emphasizing that Congress is bought out and won't lift a finger. When will you people come to realize that we are on our own here and the sooner we get to voting with our feet, the better the outcome will be for us? We have to starve the beast, it's the only way.

Wed, 12/23/2009 - 22:31 | 173364 jwthomps
jwthomps's picture

The bailouts here create jobs in China.

Wed, 12/23/2009 - 22:34 | 173367 Anonymous
Anonymous's picture

It would not be a real "Ponzi Scheme", since the government can always create more money. (Ponzi schemes require an ever-increasing flow of money to keep the scheme going, but the flow of money from the Fed is infinite.)

Suppose the worst is true. Who wants the world to end? No one. If this "scheme" ends, it won't be because people want it to end.

So what makes it end? Why does it have to end if we all agree to keep it going? Just asking.

Thu, 12/24/2009 - 10:37 | 173625 Sancho Panza
Sancho Panza's picture

Even when all parties act in agreement and the government keeps printing more and more and more money, the ponzi cannot go on forever.  Hyperinflation is a bitch. 

It's a matter of nature, as sure as gravity.  Printing money reduces the money rate of interest below the natural rate of interest.  If the banks attmept to hold money rate of interest below the natural rate of interest forever, hyperinflation is the only possible outcome.  Take a look at a graph showing the money rate of interest over the last 60 years.  Guess how this ends? 

Thu, 12/24/2009 - 13:12 | 173711 ATG
ATG's picture

We had 86% devaluation of the dollar

in terms of gold since 2001, the economy

is saturated with debt, and rolling defaults are

ramping up. The real rate of interest is -10.3%

YOY GDP plus zero to 64% APR nominal credit card

rate. Volcker never had real rates so high.

You still think this is hyperinflation?

Get thee back to the Dirty Untouchable Thirties...


Thu, 12/24/2009 - 13:35 | 173743 ATG
ATG's picture

The flow of Fed funny money is not infinite.

It stops when the economy is debt-logged

and can no longer service 64% real rates

of interest (-10.3% GDP + nominal

credit card APRs including penalty fees)...

Thu, 12/24/2009 - 18:19 | 173925 Kayman
Kayman's picture

Printing money is not infinite. Like Zimbabwe and Weimar, it means hyper-inflation and no jobs.

Wed, 12/23/2009 - 22:40 | 173372 Spitzer
Spitzer's picture

If enough of this gets around then the game is up.

The million ounce question is if there will be another general market selloff or if gold and gold stocks will take off.

Thu, 12/24/2009 - 13:15 | 173720 ATG
ATG's picture

Could be on the edge of an ultra thin EFT

holiday market precipice where stops

trigger into air pockets. Re gold, the trend

is our friend, and it is not up as of late.

Hope springs eternal and people are most

bullish after the top...


Wed, 12/23/2009 - 23:12 | 173373 phaesed
phaesed's picture

*sigh* Banks are purchasing Treasuries.

Banks are purchasing Treasuries because those are what's used to bolster their deposit base.

- Why would they be bolstering their deposit base?

Because they need to pay back all the cash that they borrowed to loan out.

- Why would Treasuries be used to pay back cash?

Because Treasuries are essentially cash in a deferred state, when they mature, the US Government credits cash to the banking institution.

- So wait, Banks borrow Treasuries and don't buy them?

Correct, Banks borrow Treasuries from the Fed, then they sell the Treasuries to individuals so they hold them on the book as an asset and make a loan against that asset.

- So if banks made a loan against the asset wouldn't they still have the Treasury security?

Not really, the treasury was still held in electronic form but they loaned out the cash that would be received from the Treasury, so these loans were supposed to be returned in cash form so they can pay back the Federal Reserve, who purchased them from the United States.

- You're not making any sense.... Why would the bank borrow from the Fed instead of purchasing the security outright? And if they purchased the security and made a loan against the security, why would it matter? The cash would come on their books anyways!

Kind of.... A bank has a reversed structure. An asset for the bank is a liability for anybody else and vice versa. The way it works is that I give a bank $10000, this becomes a $10000 liability for the bank, but like everyone knows, they only need $1000 on deposit, but they don't really have it on deposit because my account is less than $200,000 (read FDIC insured here), so what they do is they purchase a $1000 bill/note/bond and loan out the rest to a corporation.

Well the corporation can't pay off the loan and goes bankrupt... thus while the bank has a $1000 US security, they don't have the other fractional amounts needed to cover what they loaned out, so they borrow this from the Federal Reserve, but they borrow this in the form of Treasuries and while they pay interest on these Treasuries (which we really pay), eventually they need to pay the cash back when the Treasury matures.

Well as we all know, the banks loaned out all their cash holdings, so now they need cash delivered to them. So what do they buy? Well, cash of course... but not cash today, that's too expensive and could collapse equities... so they buy cash due 1, 3, or 6 months from now. Sometimes they buy it to be delivered a year from now.

- So okay.... the banks need to pay someone back.... who????

Good question, who did the banks borrow from on a massive scale? Us of course.... you assume that they held that $1000 when in fact nobody checked and they loaned out that $1000, unfortunately now they aren't going to get that $1000 back and they can't pay us back. When you add that to the fact that the reserve requirements will be going back up next year, they are going to need more cash deposits, meaning more T-bills, meaning a low rate of interest in anything due under a year.

- So what happens if they don't have enough cash deposits when they are going to be due?

They collapse the market and take the cash we put into it right back out. Oh, and the T-Bills will become worth more as well, increasing the deposit base for the banks.


Confused you yet? :)

Wed, 12/23/2009 - 23:20 | 173403 Anonymous
Anonymous's picture

Perhaps on the short end, but on the long end forget about it. Not even the banks or foreign sovereigns are that crazy. Only Bernanke and CO can be.

Thu, 12/24/2009 - 14:31 | 173816 phaesed
phaesed's picture

No, but essentially the ends are correlated, however weakly. This is the worst negative correlation ever right now from what I can gather, but I'm about to do an actual study. I'm willing to beat this was the case in the 30's also.

Thu, 12/24/2009 - 15:25 | 173851 Anonymous
Anonymous's picture

Except the US was still a creditor nation in the 30s. Now the US is the largest debtor in the history of the world dependent upon foreigners to prop up their treasury market. The problem is that as that as the proportion of treasury sales increases relative to trade deficits foreigners will no longer be able to purchase treasuries at such a rate. Hence higher long-term interests in the near-medium term. In the long-term there might as well by a default if the fed decides to not print away.

Thu, 12/24/2009 - 01:49 | 173504 jedwards
jedwards's picture

Thanks for this phaesed.  I was beginning to get a bit freaked out at this.  But what you're saying makes total sense.  Well not really.... I need to draw this out on a piece of paper, but it certainly sounds like it makes sense.



Thu, 12/24/2009 - 14:32 | 173817 phaesed
phaesed's picture

"I need to draw this out on a piece of paper"


Hell, I understand it and it confuses the hell out of me :)

Thu, 12/24/2009 - 08:17 | 173581 FLETCH
FLETCH's picture

Yup.  See my post above.  alot will show up as "household/other"

Thu, 12/24/2009 - 08:25 | 173584 Zippyin Annapolis
Zippyin Annapolis's picture

Excellent analysis

Thu, 12/24/2009 - 13:18 | 173723 ATG
ATG's picture

So in other words, a hyperdeflationary implosive

spiral into disappearing dollars...

Wed, 12/23/2009 - 22:41 | 173375 Anonymous
Anonymous's picture

What are you people talking about? Turbo Timmy says they can prevent another wave in the crisis, and THEY WILL. Interview with NPR. Book it.

Seriously, FRL is by it's very nature a pyramid scheme and must go bust eventually. You think Madoff is in the medical center at his prison? Hah! The dude is in Manhattan consulting with Bubbles and Timmay.

Thu, 12/24/2009 - 13:25 | 173733 ATG
ATG's picture

Marx's point to Rothschild re fractional reserve

banking. NR cut him off after a couple of thousand

pounds and the Communist Manifesto paved the

way for them to finance both sides of the

revolutionary and counter-revolutionary

insurgent and counter-insurgent Hegelian

political dialectic for a few centuries.

Stalin exiled Kondratyev to a Siberian Gulag

Death Camp for pointing out economic cycles

are self-correcting and don't need totalitarian

central planning. Maybe there's a pony in here

somewhere for Christina, Franz, Hank, Larry,

Shalom and Big 0...

Wed, 12/23/2009 - 22:47 | 173376 Daedal
Daedal's picture

Audit the Fed!

Thu, 12/24/2009 - 00:35 | 173470 Benthamite
Benthamite's picture

"I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated governments in the civilized world. No longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and duress of a small group of dominant men."

-W. Wilson on the Federal Reserve

Thu, 12/24/2009 - 01:05 | 173484 whacked
whacked's picture

Thanks for that ... pity this idiot only realsied after he allowed the bill to be introduced and put through the senate...


Read the full story on WW's involvement with the Fed and you realise that the idot only came to his senses when he was within his final months as Prez..


The US are littered with fools and none bigger that those that elected them!

Thu, 12/24/2009 - 17:18 | 173897 Benthamite
Benthamite's picture

Frankly I was surprised he came out and said something like this.  Can't speak for any contemporaries close to Wilson's stature.  

Thu, 12/24/2009 - 13:44 | 173754 ATG
ATG's picture

WWI, who, like 0, was bought and sold

by the money trust he campaigned against,

and negotiated the Versaille Treaty which

led to A Hitler financed by Fritz Thyssen,

Union Banking Corp with Prescott Sheldon Bush

and George Herbert Walker directors...


Mon, 01/25/2010 - 17:37 | 205692 mouser98
mouser98's picture

plus it is very likely that AH's maternal grandfather was a Rothschild...

Wed, 12/23/2009 - 22:50 | 173378 Anonymous
Anonymous's picture

the fed is has been insolvent since august 2008....the suspension of mark to market was only partially to benefit the vampire squids of wall street....the real beneficiary was the fed who knew it was about to embark on a course to buy worthless mbs crap from the squids....the timing of fasb's roll over and the commencement of financial terrorist bernanke's qe was precise - it all happened in march 2009.....

when you apply appropriate mark to market to the crap sitting on the fed's balance sheet which now composes 52% of its assets and compare it to its 52b usd in equity you have an insolvent federal reserve system....

it's over folks - it's been over since august 2008....the fucktards in the oval office, the media czar at the cia, and a host of other nincompoops may never acknowledge it but it is all over....there is no way to resuscitate the fed including a hairbrained scheme i read about using federal lands to reliquify the fed and treasury...

stop whining and bitching about the has already happened and it doesn't make a crap's worth of difference who recognizes happened when the balance sheet went negative and that was 8/08.....most people don't know about the 100s of billions usd transferred from fed to the treasury in 8/08 and why terrorist criminal paulson and bernanke staged a putsch to get congress to roll over on tarp....they had already started it without congressional approval with bush crime syndicate henchman baby bush authorizing it...

Thu, 12/24/2009 - 09:17 | 173601 Anonymous
Anonymous's picture

yes. yes. all true. and well said.

Thu, 12/24/2009 - 13:47 | 173760 ATG
ATG's picture

Really, the Fed insolvent since 1933 and

1971, not to count Federal Land foreclosure

out. We may not see the final bottom until

District of Criminals cries Uncle...


Mon, 01/25/2010 - 18:01 | 205717 mouser98
mouser98's picture


Wed, 12/23/2009 - 22:54 | 173381 Segestan
Segestan's picture

Oh thats what .. Change means... alot of new change is circulation. Seriously this is going to end badly.

Wed, 12/23/2009 - 23:01 | 173388 Anonymous
Anonymous's picture

regarding the authors' wonderment about the source of the household sector they can wonder no more - it is ben's cayman island account running 24x7 buying treasuries...

get serious people....who in god's name believes this horse crap published by the fed and the treasury??

Wed, 12/23/2009 - 23:06 | 173393 Anonymous
Anonymous's picture

or on second thought to my previous cayman island statement, the banks may be buying the bonds with their huge deposits in the fed (or the fed may be using those fund via the cayman operation)'s hard to know if those deposits are literally cash or treasuries...

Wed, 12/23/2009 - 23:09 | 173395 Anonymous
Anonymous's picture

Eric should know.

Wed, 12/23/2009 - 23:15 | 173399 TheInterest
TheInterest's picture

So what's the big deal? We're not buying foreign crap so foreigners don't have US dollars to buy our debt. Local investors aren't buying our debt. That leaves only the Fed to either buy some debt, or make some debt up with the "household sector". Big deal. The debt is just numbers in a computer. We can pay the debt off tomorrow by moving numbers from "savings" to "checking".

How many years of "the sky is falling, the sky is falling" will we have to go through before people realize the debt doesn't matter?

Perhaps one should stop worrying about the debt and start asking why we have debt in the first place? Who is making money off our debt? A debt that doesn't exists?

Thu, 12/24/2009 - 00:07 | 173445 Anonymous
Anonymous's picture


spoken like a true member of Team Turbo Tax Cheat Benzimbwe

the farce is with thee

Thu, 12/24/2009 - 00:25 | 173462 Spitzer
Spitzer's picture

There has never been a time in history when debt didnt matter.


If debt didnt matter then why has all fiat currencies failed ?


If debt didnt matter then why is gold just a commodity for the jewlery market ?


Thu, 12/24/2009 - 13:49 | 173764 ATG
ATG's picture

Borrower slave to the lender

Proverbs 22:7...

Thu, 12/24/2009 - 00:53 | 173477 Kayman
Kayman's picture

Hey man, its debt, what's the big deal. Lets move to Zimbabwe, debt and printing are a growth business.  Argh..........

Wed, 12/23/2009 - 23:15 | 173400 Anonymous
Anonymous's picture

Global governments will print and prop up all markets hoping for the return of the great pumpkin (consumer). Not one bit of bad news has turned our market in the last 9 months, and there has been plenty.

What news will change the direction and which msm outlet is going to print it ?.

If the system crashes the oligarchs will be rich but they will lose power.... And that they will not let happen. Wealth without power is no good to these sociopaths..

Thu, 12/24/2009 - 08:51 | 173594 Anonymous
Anonymous's picture

Another 9/11.

As someone else pointed out in another thread, they make big money off of bidding up garbage assets and distributing them to leveraged consumers and they make money shorting the products as their valuations crumble. It is possible to buy the low tick and sell the top tick when you make markets.

Remember, masses are MORE PREDICTABLE/CONTROLLABLE when in fear.

Thu, 12/24/2009 - 13:09 | 173709 Ripped Chunk
Ripped Chunk's picture

Two very good observations here. 

Even if we folks were organized enough to start a run on the TBTF's and move our money to local banks, the Fed would rescue the TBTF's and impose stricter capital limits and asset quality reviews on the local banks to limit their growth.

They are running the game. Out legislators are at their feet to do their bidding.




Do NOT follow this link or you will be banned from the site!