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The Beginning Of The Ponzi End: As Of Today, The Biggest Holder Of US Debt Is Ben Bernanke

Tyler Durden's picture


Well, folks, it's official - mark November 22, 2010 in your calendars - today is the day the Ponzi starts in earnest. With today's $8.3 billion POMO monetization, the Fed's official holdings of US Treasury securities now amount to $891.3 billion, which is higher than the second largest holder of US debt: China, which as of September 30 held $884 billion, and Japan, with $864 billion. The purists will claim that the TIC data is as of September 30, and that as the weekly custodial account shows UST buying continues the data is likely not correct. They will be wrong: with the Fed now buying about $30 billion per week, or about $120 billion per month, for the foreseeable future and beyond, it would mean that China would need to buy a comparable amount to be in the standing. It won't. In other words, the Ponzi operation is now complete, and the Fed's monetization of US debt has made it not only the largest holder of such debt, but made external funding checks and balances in the guise of indirect auction bidding, irrelevant. For what tends to happen next in comparable case studies, please read the Dying of Money. And congratulations to China for finally not being the one having the most to lose on a DV01 basis on that day when the inevitable surge in interest rates finally happens. That honor is now strictly reserved for America's taxpayers.


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Tue, 11/23/2010 - 00:32 | 748528 digitalhermit
digitalhermit's picture

A dubious distinction to say the least...

Tue, 11/23/2010 - 01:15 | 748602 Ludwig Van
Ludwig Van's picture


It is appropriate the achievement should occur on the anniversary (57th) of the assassination of President Kennedy.


Tue, 11/23/2010 - 01:53 | 748642 Cursive
Cursive's picture

Mentioned it to the wife earlier.  First reference I've read or heard of today.

Tue, 11/23/2010 - 05:35 | 748850 MarketTruth
MarketTruth's picture

Exactly, now why would MSMedia not report on the assassination of a US President, perhaps one of the most important events in it's era. Maybe killing Presidents like Lincoln and JFK are the norm if you go against the Federal Reserve?

On June 4, 1963, a little known attempt was made to strip the Federal Reserve Bank of its power to loan money to the government at interest. On that day President John F. Kennedy signed Executive Order No. 11110 that returned to the U.S. government the power to issue currency, without going through the Federal Reserve. Mr. Kennedy's order gave the Treasury the power "to issue silver certificates against any silver bullion, silver, or standard silver dollars in the Treasury." This meant that for every ounce of silver in the U.S. Treasury's vault, the government could introduce new money into circulation. In all, Kennedy brought nearly $4.3 billion in U.S. notes into circulation. The ramifications of this bill are enormous.

Tue, 11/23/2010 - 06:36 | 748896 EvlTheCat
EvlTheCat's picture

Well I don't think we have to worry about Obama going against the Federal Reserve anytime soon.

Tue, 11/23/2010 - 02:00 | 748657 delacroix
delacroix's picture


Tue, 11/23/2010 - 09:50 | 749077 Ludwig Van
Ludwig Van's picture


47th anniversary, yes, thank you.


Tue, 11/23/2010 - 02:18 | 748682 chopper read
chopper read's picture



"On June 4, 1963, a little known attempt was made to strip the Federal Reserve Bank of its power to loan money to the government at interest.

On that day President John F. Kennedy signed Executive Order No. 11110 that returned to the U.S. government the power to issue currency, without going through the Federal Reserve.

Mr. Kennedy's order gave the Treasury the power "to issue silver certificates against any silver bullion, silver, or standard silver dollars in the Treasury." This meant that for every ounce of silver in the U.S. Treasury's vault, the government could introduce new money into circulation. In all, Kennedy brought nearly $4.3 billion in U.S. notes into circulation. The ramifications of this bill are enormous. 

With the stroke of a pen, Mr. Kennedy was on his way to putting the Federal Reserve Bank of New York out of business. If enough of these silver certificates were to come into circulation they would have eliminated the demand for Federal Reserve notes.  This is because the silver certificates are backed by silver and the Federal Reserve notes are not backed by anything.

Executive Order 11110 could have prevented the national debt from reaching its current level, because it would have given the government the ability to repay its debt without going to the Federal Reserve and being charged interest in order to create the new money. Executive Order 11110 gave the U.S. the ability to create its own money backed by silver. 


After Mr. Kennedy was assassinated just five months later, no more silver certificates were issued. The Final Call has learned that the Executive Order was never repealed by any U.S. President through an Executive Order and is still valid. Why then has no president utilized it?

Virtually all of the nearly $6 trillion in debt has been created since 1963, and if a U.S. president had utilized Executive Order 11110 the debt would be nowhere near the current level.

Perhaps the assassination of JFK was a warning to future presidents who would think to eliminate the U.S. debt by eliminating the Federal Reserve's control over the creation of money.

Mr. Kennedy challenged the government of money by challenging the two most successful vehicles that have ever been used to drive up debt -- war and the creation of money by a privately owned central bank.

His efforts to have all troops out of Vietnam by 1965 and Executive Order 11110 would have severely cut into the profits and control of the New York banking establishment."

Tue, 11/23/2010 - 05:57 | 748874 Unlawful Justice
Unlawful Justice's picture

I see my 1964 Kennedy silver .50 cent in an entirely different light.   

Tue, 11/23/2010 - 08:42 | 748959 RichyRoo
RichyRoo's picture
Who the Fuck was Secretary of the Treasury C. Douglas Dillon? from


E.O. 11110 was never reversed by President Lyndon B. Johnson and remained on the books until President Ronald Reagan issued Executive Order 12608 on September 9, 1987 as part of a general clean-up of executive orders. E.O. 12608 specifically revoked the sections added by E.O. 11110 which effectively revoked the entire Order. By this time, however, the remaining legislative authority behind E.O. 11110 had been repealed by Congress when Pub.L. 97-258 was passed in 1982.

In March 1964, Secretary of the Treasury C. Douglas Dillon halted redemption of silver certificates for silver dollars. In the 1970s, large numbers of the remaining silver dollars in the mint vaults were sold to the collecting public for collector value. All redemption in silver ceased on June 24, 1968.

Tue, 11/23/2010 - 13:04 | 749693 Ripped Chunk
Ripped Chunk's picture

He was an un-American tool who's grave should be vandalized.


Tue, 11/23/2010 - 23:19 | 751308 chopper read
chopper read's picture


too funny!

Tue, 11/23/2010 - 08:40 | 748973 Ace Ventura
Ace Ventura's picture

Hey guys, I'm not sure if I'm remembering this right, but it seems to me I've read a piece by G. Edward Griffin (or someone of his ilk), wherein he essentially states that EO 11110 did not in fact do anything in terms of competing with the fed's power over the nation's money supply. In other words, whatever the reason(s) JFK was terminated for, apparently EO 1110 was not the one.

Don't get me wrong, I would not be surprised in the least if it was the fed/cia who collaborated to end JFK, but I'm just curious if it was this particular EO which cemented his fate, rather than the unexpected refusal to 'play ball' with the MIC.

Anyone else heard of Griffin's 'debunking' of the EO1110 theory?


Tue, 11/23/2010 - 11:54 | 749414 chopper read
chopper read's picture

of course, i am but one man who cannot be certain.  however, this does seem to play into an overall theme.

For example, Is Ireland the new Turkey?: 

Turkey's 'bailing out' by the IMF in 2001 allowed the IMF to gain more control.   I view this as probably the last step in a process. 

Before all of this, it was essential to create a fiat debt-based monetary system and perpetuate a major bond market in order to support a ponzi scheme welfare state and subsequent culture of dependency. When the inevitable collapse ensued, more power was consolidated and now indigenous Turkish people are further relieved of their wealth and property over time. The IMF, which is indirectly 'owned' by the ruling elite, enslaves Turkey under the guise of 'saving' Turkey.

Member countries of the IMF are able to direct activities via their Central Banks. For example, the biggest Central Bank, the private Federal Reserve Bank, is owned by its member banks who are owned by its shareholders who consist of large private multi-national banks whose shares are largely owned by limited liability companies whose shares are owned by an elite group of individuals including the Morgan's, Rothschild's, and Lazard's.


"The IMF sometimes advocates 'austerity programmes', increasing taxes even when the economy is weak, in order to generate government revenue and bring budgets closer to a balance, thus reducing budget deficits. Countries are often advised to lower their corporate tax rate. These policies were criticized by Joseph E. Stiglitz, former chief economist and Senior Vice President at the World Bank, in his book Globalization and Its Discontents. He argued that by converting to a more Monetarist approach, the fund no longer had a valid purpose, as it was designed to provide funds for countries to carry out Keynesian reflations, and that the IMF 'was not participating in a conspiracy, but it was reflecting the interests and ideology of the Western financial community'.

The IMF is for the most part controlled by the major Western Powers, with voting rights on the Executive board based on a quota derived from the relative size of a country in the global economy. Critics claim that the board rarely votes and passes issues contradicting the will of the US or Europeans, which combined represent the largest bloc of shareholders in the Fund."


"How Multinational Banks Supported Dictators in DR Congo, South Africa, the Philippines and Argentina.

The film asks whether it is fair that poor and innocent people in the world today have to repay the debts of former dictators.

The focus of this TV-documentary is the illegitimate debt in Argentina, South Africa, the Philippines, and DR Congo. The documentary looks behind local tourist attractions, and visits the poor neighborhoods of Buenos Aires and the depressing township of Johannesburg, where, where poor youngsters desperately seek jobs. The Journey ends in the slums of Manila.

The story highlights the sad fact that even when corrupt dictators and generals were committing the most horrifying human rights violations, the large banks of the world such as the International Monetary Fund and the World Bank were lining up to offer billion-dollar loans."


"These loans were conditional on structural adjustment policies, which required Jamaica to enact harsh economic reforms, including trade liberalization, privatization, and deregulation. However, the reforms were unsuccessful and left the country with $4.6 billion dollars in debt."


...any idea who is next?


keep in mind, this also fits in well with the apparent "Protocol of the Learned Elders of Zion":

"Today I may tell you that our goal is now only a few steps off. There remains a small space to cross and the whole long path we have trodden is ready now to close its cycle of the Symbolic Snake. When this ring closes, all the States of Europe will be locked in its coil as in a powerful vice. What form of administrative rule can be given to communities in which corruption has penetrated everywhere, communities where riches are attained only by the clever surprise tactics of semi-swindling tricks; where looseness reigns: where morality is maintained by penal measures and harsh laws but not by voluntarily accepted principles: where the feelings towards faith and country are obligated by cosmopolitan convictions? What form of rule is to be given to these communities if not that despotism which I shall describe to you later? We shall create an intensified centralization of government in order to grip in our hands all the forces of the community. We shall be told that such a despotism as I speak of is not consistent with the progress of these days, but I will prove to you that it is. Capital, if it is to co-operate untrammeled, must be free to establish a monopoly of industry and trade: this is already being put in execution by an unseen hand in all quarters of the world. This freedom will give political force to those engaged in industry, and that will help to oppress the people. We shall soon begin to establish huge monopolies, reservoirs of colossal riches, upon which even large fortunes will depend to such an extent that they will go to the bottom together with the credit of the States on the day after the political smash. In every possible way we must develop the significance of our Super-Government by representing it as the Protector and Benefactor of all those who voluntarily submit to us. It is essential therefore for us at whatever cost to deprive them of their land. This object will be best attained by increasing the burdens upon landed property - in loading lands with debts. At the same time we must intensively patronize trade and industry, but, first and foremost, speculation, the part played by which is to provide a counterpoise to industry: the absence of speculative industry will multiply capital in private hands and will serve to restore agriculture by freeing the land from indebtedness to the land banks. What we want is that industry should drain off from the land both labor and capital and by means of speculation transfer into our hands all the money of the world, and thereby throw all the GOYIM into the ranks of the proletariat. Then the(y) will bow down before us, if for no other reason but to get the right to exist. They will be compelled to offer us international power of a nature that by its position will enable us without any violence gradually to absorb all the state forces of the the world and to form a Super-Government. The intensification of armaments, the increase of police forces - are all essential for the completion of the aforementioned plans. What we have to get at is that there should be in all the States of the world, besides ourselves, only the masses of the proletariat, a few millionaires devoted to our interests, police and soldiers. We count upon attracting all nations to the task of erecting the new fundamental structure, the project for which has been drawn up by us. This is why, before everything, it is indispensable for us to arm ourselves and to store up in ourselves that absolutely reckless audacity and irresistible might of the spirit which in the person of our active workers will break down all hindrances on our way. When we have accomplished our coup d'etat we shall say then to the various peoples: 'Everything has gone terribly badly, all have been worn out with suffering. We are destroying the causes of your torment - nationalities, frontiers, differences of coinages. You are at liberty, of course, to pronounce sentence upon us, but can it possibly be a just one if it is confirmed by you before your make any trial of what we are offering you?' Then the mob will exalt us and bear us up in their hands in a unanimous triumph of hopes and expectations. Voting, which we have made the instrument which will set us on the throne of the world by teaching even the very smallest units of members of the human race to vote by means of meetings and agreements of groups, will then have served its purposes and will play its part then for the last time by a unanimity of desire to make close acquaintance with us before condemning us. To secure this we must have everybody vote without distinction of classesand qualifications, in order to establish an absolute majority, which cannot be got from the educated propertied classes. In this way, by inculcating in all a sense of self-importance, we shall destroy the importance of the family and its educational value and remove the possibility of individual minds splitting off, for the mob, handled by us, will not let them come to the front nor even give them a hearing; it is accustomed to listen to us only who pay it for obedience and attention. In this way we shall create a blind, mighty force which will never be in a position to move in any direction without the guidance of our agents set at its head by us as leaders of the mob. The people will submit to this regime because it will know that upon these leaders will depend its earnings, gratifications and the receipt of all kinds of benefits. These schemes will not turn existing institutions upside down just yet. They will only effect changes in their economy and consequently in the whole combined movement of their progress, which will thus be directed along the paths laid down in our schemes. The reforms projected by us in the financial institutions and principles will be clothed by us in such forms as will alarm nobody. We shall point out the necessity of reforms in consequence of the disorderly darkness into which the(y) by their irregularities have plunged the finances. The first irregularity, as we shall point out, consists in their beginning with drawing up a single budget which year after year grows owing to the following cause: this budget is dragged out to half the year, then they demand a budget to put things right, and this they expend in three months, after which they ask for a supplementary budget, and all this ends with a liquidation budget. But, as the budget of the following year is drawn up in accordance with the sum of the total addition, the annual departure from the normal reaches as much as 50 per cent in a year, and so the annual budget is trebled in ten years. Thanks to such methods, allowed by the carelessness of the States, their treasuries are empty. The period of loans supervenes, and that has swallowed up remainders and brought all the States to bankruptcy."


(The United States was declared "bankrupt" at the Geneva Convention of 1929. [see 31 USC 5112, 5118, and 5119)

...again, I am just connecting dots and in deep wonder.  Sincerely, no offence to anyone here, but is there a chance that we are racially targeted by a select group of ruling elite?  I keep an open mind and am reminded of this quote:


"if you wish to know by whom you are ruled, ask who cannot be criticized."


Tue, 11/23/2010 - 06:39 | 748898 Scoutster
Scoutster's picture

This was my first thought, as well.

Tue, 11/23/2010 - 08:29 | 748953 RichyRoo
RichyRoo's picture

What happens if the Gubmint defaults on the Bernanke?

Tue, 11/23/2010 - 00:32 | 748529 DoChenRollingBearing
DoChenRollingBearing's picture

Say hey!  No one beats the good ol' USA!  Step aside China, we are No. 1 now!

But what's so great about that, oh dear.

On the other hand, we owe it to ourselves!

Tue, 11/23/2010 - 00:37 | 748538 westboundnup
westboundnup's picture

Heard someone today use the expression, "we owe it to ourselves."  The Fed is neither "we" nor "ourselves"

Tue, 11/23/2010 - 01:53 | 748643 Milton Waddams
Milton Waddams's picture

Splitting hairs, I think.

While it is a private entity - the Fed, AFAIK, and for whatever reason (appearances, perhaps?), remits all profits back to the Treasury.

Of course all profits born to the Primary Dependents (Fed's owners), via the Fed, originate from the Treasury as well.

From a April 1938 LIFE magazine, anything rhyme?:

[Herbert] Hoover had found new forces at work in Europe: 1) the Rise of Planned Economies; 2) a continent that is "a rumbling war machine without the men yet in the trenches"; 3) unbalanced budgets; 4) Fear -- "fear by nations of one another, fear by governments of their citizens, fear by citizens of their governments and the fear of people everywhere that general war is upon them again"; and 5) "an underlying failure of morals terrible to contemplate."

Tue, 11/23/2010 - 05:43 | 748859 Djirk
Djirk's picture

My BS (balance sheet that is) is bigger than yours

Tue, 11/23/2010 - 00:35 | 748532 Dehrow
Dehrow's picture

I don't know, way things are going, the Chinese might just consider this a challenge and look to take back the crown.

Tue, 11/23/2010 - 00:37 | 748539 tmosley
tmosley's picture

Or they might consider it a good time to get out, since they aren't the biggest boy on the block any more.

Tue, 11/23/2010 - 00:35 | 748534 tmosley
tmosley's picture

Well, we all knew it was coming.

A day that should live in infamy, but probably won't.

Tue, 11/23/2010 - 00:38 | 748537 Herknoid Weaver
Herknoid Weaver's picture

Is it too early to call the Fed the United States of America?

Tue, 11/23/2010 - 00:45 | 748551 Herknoid Weaver
Herknoid Weaver's picture

the title of this thread changed but im not sure it should have

Tue, 11/23/2010 - 01:13 | 748599 RockyRacoon
RockyRacoon's picture



I fixed it.

Tue, 11/23/2010 - 03:44 | 748778 i.knoknot
i.knoknot's picture

i thought i just left the TSA thread


Tue, 11/23/2010 - 00:42 | 748550 Turd Ferguson
Turd Ferguson's picture

We, the people now owe they, the bankers, $892B. Very nice. Very f-ing nice.

Man, are we screwed.

Tue, 11/23/2010 - 00:50 | 748556 Herknoid Weaver
Herknoid Weaver's picture

Are you Nialls brother?

Tue, 11/23/2010 - 00:50 | 748557 Herknoid Weaver
Herknoid Weaver's picture

Are you Nialls brother?

Tue, 11/23/2010 - 01:18 | 748606 lynnybee
lynnybee's picture

WE don't owe anybody anything !!!   I NEVER SIGNED MY NAME ON ANY CREDIT TO ANY BANK !   WE are not screwed !!   STOP IT!    REVOLT !  where the hell is the revolution !!   i lived my life debt-free, so how come all of a sudden 'I' owe a bank money ??!!   .......... where the hell is my pitchfork !

Tue, 11/23/2010 - 01:51 | 748637 merehuman
merehuman's picture

All of a sudden we are ireland! Wait till my neighbor hears this!


He says hes too busy watching "Dancing with the Stars".

Sorry Lynnybee, we are on our own. Find a safe spot, hunker down cause likely worse is coming.

BTW you all. On Harveys column tonite...yea i saw it below  after posting.

Tue, 11/23/2010 - 02:07 | 748668 DoChenRollingBearing
DoChenRollingBearing's picture

lynnybee, merehuman,

I hear you two loud and clear!


Sort of rhetorically I asked merehuman the other day:

Should I stay or should I go?  

That is, stay and fight for America with my pitiful stash of arms, PMs and food,


Just take whatever capital we have/will have and just go to Peru where I have friendly in-laws and our business.

YES, we are Ireland.  And I have to decide fairly soon, I guess.  I am a believer in what America WAS, now, not so sure...

:(   :(   :(

Tue, 11/23/2010 - 02:28 | 748691 Oh regional Indian
Oh regional Indian's picture

DoChen, you have friendly in-laws and it's even a question?

You seem like a really nice guy. Why do you even want to be in a position to use your Pb and carry that karma forward?

As someone quite famous sang once...

"Go ooooon, take your money and RUN!"


Tue, 11/23/2010 - 02:46 | 748714 DoChenRollingBearing
DoChenRollingBearing's picture


Thanks for your input!  Using Pb would be a big minus re karma, thx for reminding me.


Problem with Peru for me is I lose many USA family & friend connections (at least in part), good bookstores and food for which I have become accustomed...  And Lima's winters are not user-friendly!

Maybe my larger family would be weirded-out should I decamp to Peru...  At least I could live VERY WELL there (OK in a Peruvian context, which IS meaningful).

Open question: Take the money and run?!


At this point, I would ask ZH-ers to examine their situations and THINK what may happen soon.  AND, please send us your opinions!  Which to me have been better than my bank's suggestions.

Tue, 11/23/2010 - 03:31 | 748763 Mariposa de Oro
Mariposa de Oro's picture

I say you take the money and run.  I would.  I'm in the RMI but working for a US contractor.  If I had family that would take me in, I'd probably go.  I understand how you feel about giving up your present life.  I'm very happy where I'm at.  I also know that it won't last and that at some part its all going to fall to pieces.   At the very least you should get some of your assets safely tucked away in Peru.  I'm sure our masters will enact currency controls when things get really bad.  You will likely be allowed to leave with nothing anytime, so get your stash out while you can......

Tue, 11/23/2010 - 03:57 | 748785 DoChenRollingBearing
DoChenRollingBearing's picture


at least we have some assets already in Peru, including a decent stash as downpayment on a condo there.  We are going to Peru in early December, so can consider exfiltrating some assets then.  Wire transfers still open as well.  I think there is a little bit more time left.

Mariposa (and Oracle of Kypseli), can send me an email at my above name with ideas, although I do not check that email real often.  I DO check it from time to time, and I really do like ideas re PERU!  Our escape hatch...

Seems like things are coming to an ugly head now...  I feel more paranoid than is even normal for me...

:(   or should that be   :)  ?  Setting up a secure soft landing in Peru looks smarter each minute...

Tue, 11/23/2010 - 11:38 | 749395 Mariposa de Oro
Mariposa de Oro's picture

Check your email...


Tue, 11/23/2010 - 03:47 | 748781 i.knoknot
i.knoknot's picture

should you go, take a laptop and keep an eye on us here at ZH... you'd be missed.




Tue, 11/23/2010 - 04:11 | 748790 DoChenRollingBearing
DoChenRollingBearing's picture

dupe post, sorry!

Tue, 11/23/2010 - 04:09 | 748793 DoChenRollingBearing
DoChenRollingBearing's picture

Gracias for the nice reply!  Cheers to you as well!

Each time we go there, we ask ourselves, hey when do we decide to stay?

During each trip to Peru in the last year and a half or so, the Bearing has been firing off his thoughts (for better or worse) to my beloved third family: ZH!  Broadband is at our place down there, so at least I am connected...

Tue, 11/23/2010 - 04:09 | 748792 Oh regional Indian
Oh regional Indian's picture


How about the other side of this view-point.

Once you explain to your larger family/friends network, why you are doing it, and the possibility that if the S does hit the F, you can provide some/many of them a place/way out? 

But I also speak as a life-long gypsy. Never had a problem upping and awaying, like I did from the US. It's not easy but then again, these are not easy times.

Plus, wouldn't your lovely wife love it?



Tue, 11/23/2010 - 04:18 | 748798 DoChenRollingBearing
DoChenRollingBearing's picture

My very lovely wife would probably indeed love it!

My family is completely entrenched in the USA, no way interested in leaving.  Just me (and my lovely C) prepared to go.  Although our daughter, now aware of money & finance, is sympathetic...

My family (perhaps rightly?) does not have the paranoia/anxiety that I do, even though I think I am right!

Tue, 11/23/2010 - 08:52 | 748987 RichyRoo
RichyRoo's picture

This isnt a helpful comment...


All that is required for tyranny to triumph is for good men to do nothing,


Only a fool stands in the way of a freight train.

Tue, 11/23/2010 - 02:36 | 748699 Things that go bump
Things that go bump's picture

If I had anywhere else to go, I'd be there now.  

Tue, 11/23/2010 - 02:36 | 748700 Things that go bump
Things that go bump's picture


Tue, 11/23/2010 - 06:03 | 748878 Al Gorerhythm
Al Gorerhythm's picture

You were warned. You know the action to take as well. Spontaneous revolt, revolution. The tree of liberty needs to be fertilized.

Tue, 11/23/2010 - 00:47 | 748552 Sour Grapes
Sour Grapes's picture

If you don't intend to pay it back, is it still debt?

Since the Fed will roll over the debt in perpetuity, I would say it is no longer debt.

In fact, we should stop calling it "debt monetization," and start calling it debt elimination.



Tue, 11/23/2010 - 02:25 | 748688 Oracle of Kypseli
Oracle of Kypseli's picture

It is not debt elimination when the extra dollars go to the favored sons and get funnelled in the economy to artificially prop the markets.

If the government wants to create money, then why do they need our taxes?

And let's not talk about inflation, 'cause I am afraid, you don't really think it exists. 

Tue, 11/23/2010 - 07:45 | 748925 Chris Jusset
Chris Jusset's picture

If you don't intend to pay it back, is it still debt?  Since the Fed will roll over the debt in perpetuity, I would say it is no longer debt.

Nevertheless, the USA must still pay interest on the debt; with ZIRP interest rates, $14T might seem manageable ... but once interest rates normalize and factor in appropriate risks, the interest expense alone will kill the real economy.


Tue, 11/23/2010 - 00:48 | 748553 tony bonn
tony bonn's picture

it's quite appropriate that when the first coup d'etat occurred in 1963 that another should occur today as well.

Tue, 11/23/2010 - 01:14 | 748600 RockyRacoon
RockyRacoon's picture

A bloodless coup -- until it's not.

Tue, 11/23/2010 - 00:48 | 748554 dot_bust
dot_bust's picture

Speaking of the Fed, Harvey Organ mentioned something interesting in his article today.

Here's what he said: "This first story is very big. This story has become public. It seems that the Federal Reserve has kept funds sent to it from the central bank of Taiwan. When large sums of money are involved, money is cleared through central banks by way of ACATs. In this case, the sum of money involved is 700 billion usa dollars. The BIS was asked to make the US Federal Reserve carry out the transfer. The BIS refused to do so, even though its purpose is to make sure that international settlements are completed. When the gold and silver markets explode who would now expect the BIS to deal with that crisis any more effectively?"

He supplies the following letters as documentation:

Allegedly, a company called Tropos Capital Corporation of America, Inc. sent the $700 billion to the Fed on behalf of the Central Bank of Taiwan. It was part of some kind of financial transaction, but the Fed is alleged to have simply made off with Taiwan's money.

I had trouble verifying the accuracy of this story. I also had trouble finding anything solid about Tropos. Maybe someone here can add some insight.


Tue, 11/23/2010 - 01:15 | 748601 RockyRacoon
RockyRacoon's picture

I'm curious about how this will play out as well.  I hope Harvey stays on it.

Tue, 11/23/2010 - 08:33 | 748956 NumberNone
NumberNone's picture

Speaking of how things play out...WTF ever happened to this story?  Japanese citizens arrested with $134 Billion in US bonds but absolutely no follow-up after the initial story.  

Tue, 11/23/2010 - 14:57 | 750016 chopper read
chopper read's picture

attention all livestock: do not forget to let Big Bruvva know what you are doing with your own wealth. 

Tue, 11/23/2010 - 01:22 | 748610 CD
CD's picture

Google, despite its possible nefarious global domination ambitions, is a useful tool. Use it to your advantage. The alleged "president" of "Tropos" seems to share a name with a Canadian fellow who recently lost a civil bank fraud case in Canada:

Also, you claim to be the rightful recipient of $700B from the Bank of Taiwan via the Fed, but fail to register your own domain name and must be reached via While I would not necessarily rule out the FRB pocketing such a sum of someone else's money, I am pretty sure our friend Robert should NOT be receiving such a sum either. Interesting mind game, to be sure -- but almost certainly a mind game rather than "real" news. 

Tue, 11/23/2010 - 01:41 | 748630 revenue_anticip...
revenue_anticipation_believer's picture

come on ! ..... just some deluded incompetently fraudulent minded old fools

Nigerian scam letters do better, and actually work

Tue, 11/23/2010 - 02:38 | 748704 traderjoe
traderjoe's picture

Speaking of conspiracy theories, I found this on CNBS:

"”I think we see a specific attack on the NYSE,” he says. “The aftermath will have a profound impact and cause a week-long hiatus in trading as well as a slowdown in travel.” Yup, you read that right – a week long hiatus in trading." - Doug Kass

I'm obviously not a fan of CNBC, but Kass has made a couple of big (bullish) calls lately, which makes me think he might be in the good graces of the PTB at the moment. Personally, I've thought a bank holiday is likely over the next 12 months, in an attempt to forestall a panic run on the banks. When someone like this says something out loud like this, makes more sort of wonder if this is the foreshadowing, laying the groundwork, etc. 

Just talking out loud...

Tue, 11/23/2010 - 04:12 | 748794 EscapeKey
EscapeKey's picture

I found this line slightly amusing:

"We have never seen anything like this in years."

Tue, 11/23/2010 - 00:51 | 748559 Roscoe
Roscoe's picture

Benjamin Bernanke has now replaced Robert Oppenheimer as father of the most destructive force on earth. I can see him gazing at the screen today as the numbers flashed by, thinking, "Now I am become Death, the destroyer of worlds." 

Tue, 11/23/2010 - 01:04 | 748579 plocequ1
plocequ1's picture

Its death from a thousand suns

Tue, 11/23/2010 - 01:11 | 748594 LowProfile
LowProfile's picture

"Now I am become Debt, the destroyer of Wealth."

  -B.S. Bernanke

Tue, 11/23/2010 - 02:34 | 748698 Oh regional Indian
Oh regional Indian's picture




Tue, 11/23/2010 - 08:59 | 748996 plocequ1
plocequ1's picture

+ 8 Billion

Tue, 11/23/2010 - 00:53 | 748561 Apostate
Apostate's picture

This trend will continue and accelerate.

What, me worry?

Tue, 11/23/2010 - 01:30 | 748621 DoChenRollingBearing
DoChenRollingBearing's picture

Unfortunately right.  Worse and worse ever faster.

What, me work?

What, me start a business?


I will just hunker down and do zip (except buy PMs).  If it gets REALLY, REALLY bad, OK, we are off to Peru with whatever we can wire down first and take with us.  And we'll deal with the TSA goon/gropers then...

FED and TSA.  Anyone not scared to death does not have a functioning brain.

Tue, 11/23/2010 - 01:37 | 748626 DoChenRollingBearing
DoChenRollingBearing's picture

New neural-synapse connection...

TSA = the new 21st Century Internal Border Guards, except if you try to bribe them with your 1 oz Gold Eagle, they'll just take it all instead of letting you go along your way...

And the throw you in jail.


Tue, 11/23/2010 - 01:41 | 748629 Shameful
Shameful's picture

Don't think it will escalate to that yet.  Remember the US has a very porous borders.  If I can't fly out then I can most certainly get into my car and head for a border.  Closer to Mexico, but no Spanish language skill is a problem :)

Tue, 11/23/2010 - 01:55 | 748645 DoChenRollingBearing
DoChenRollingBearing's picture

Borders are tightening up.  Not like I was in my 20s living in TX and just strolling across the bridge from Laredo...

I read in a ZH reply yesterday that the Border Patrol stopped the poster and searched his car meticulously for cash (from drug dealers, duh) leaving the US for CANADA.

Porous borders, well OK, but only for the knowledgeable or criminals.  And I am neither.


Tue, 11/23/2010 - 01:38 | 748627 Shameful
Shameful's picture

Might as well be carved in stone.  As things destabilize things will move ever faster and more and more desperate options will be put on the table.  Now is a great time to work, need to get the last value possible out of the system to prepare for the long dark winter.  Start a business, not in this county.  Risking capital on a business venture with this kind of regulatory risk is madness.

On the TSA, does anyone know much about booking passage on commercial ships?  I glanced at it and didn't see the same rape down policy.  Sure it's a few weeks at sea and more expensive, but on a one way trip might be an option.

Tue, 11/23/2010 - 12:12 | 749540 RKDS
RKDS's picture

I would rather be a madman than a coward.

Tue, 11/23/2010 - 02:41 | 748706 Things that go bump
Things that go bump's picture

Why not drive to Mexico and fly from there?  Save yourself a grope.

Tue, 11/23/2010 - 01:02 | 748563 plocequ1
plocequ1's picture

We are in this together. Remember, We are all part of the same hypocrisy . In other words, Its a huge shit sandwich and were all gonna have to take a bite. Dig in boys!!!

Tue, 11/23/2010 - 01:01 | 748571 RobotTrader
RobotTrader's picture

Funny thing is, that the more debt the Fed purchases, the U.S. Dollar is actually going up...

Just like Japan.  Print more, and your currency rises.  Hey, this could continue another 10 years..


Tue, 11/23/2010 - 01:10 | 748593 Herknoid Weaver
Herknoid Weaver's picture

so the dow should be 3000 sometime in the next 10-15 years

Tue, 11/23/2010 - 02:10 | 748670 TwoShortPlanks
TwoShortPlanks's picture

Perhaps long enough to have another housing bubble.

Tue, 11/23/2010 - 16:30 | 750382 akak
akak's picture

Funny thing is, that the more debt the Fed purchases, the U.S. Dollar is actually going up...

Just like Japan.  Print more, and your currency rises.  Hey, this could continue another 10 years..


We're not laughing with you, RobotTraitor ---- we're laughing AT you.

Tue, 11/23/2010 - 01:02 | 748578 AUD
AUD's picture

The dying of money? This must be why gold is currently down in USD's.



Tue, 11/23/2010 - 01:53 | 748641 Burnbright
Burnbright's picture

only if your time horizon is a week. 

Tue, 11/23/2010 - 01:05 | 748582 mynhair
Tue, 11/23/2010 - 01:07 | 748584 Herknoid Weaver
Herknoid Weaver's picture

I just hope i get more bread than shit. Could i get that on Texas toast.

Tue, 11/23/2010 - 01:09 | 748589 UP4Liberty
UP4Liberty's picture

Nothing to see here...keep moving along...cheerio!

Tue, 11/23/2010 - 01:09 | 748590 dashingdwl
dashingdwl's picture

What was the name of the big investment fund that TheBernank ran before he was Fed Chairman?

Tue, 11/23/2010 - 01:11 | 748595 Beatscape
Beatscape's picture

Yet M3 continues to shrink. When you think about it, this is more deflationary than inflationary.  By keeping these treasuries on their own books, the Fed is not allowing this money to go into the great financial grid. I think Sour Grapes nails it labeling this as debt elimination rather than monetizing. The Fed is sucking this money out of the system--all because no one else can afford or wants to buy this much. This works great--until it doesn't anymore.

Talk about moral hazard... my goodness, the Fed is operating as a financial all powerful Greek God here.  This is unprecedented, completely distorts the markets and goes beyond the realm of what is legal. It's so completely brazen on such a grand scale that no one has the guts or the authority to challenge them on it.


Tue, 11/23/2010 - 01:26 | 748614 AndrewJackson
AndrewJackson's picture

This would only be true if the Fed didn't roll over its treasury purchases and continuously purchase more and more. The days of Open Market Selling are long gone. How you think this is sucking money out of the system is beyond me?


And remember Debt Elimination = Inflation/Monetization

Tue, 11/23/2010 - 01:34 | 748624 Beatscape
Beatscape's picture

How do you know that the Fed is going to perpetually roll over this debt?  I think they are secretly (in some complex transaction) are going to simply extinguish the debt and save the treasury from having to make payments on it.

Tue, 11/23/2010 - 15:15 | 750088 chopper read
chopper read's picture

these monsters are not patriots, but rather quite the opposite.  a debt crisis allows for the IMF to 'rescue' the US with 'special drawing rights' (one world currency).

Tue, 11/23/2010 - 02:39 | 748702 Oracle of Kypseli
Oracle of Kypseli's picture

The Fed is not operating like a Greek God. It is operating more like a God damn Greek.

It will take 10 years or more for the fed to replanish the banks and eliminate the losses. But guess who will be suffering al these years? The tax payers. 

No growth, no jobs, no salary increases, just pain. Revolution is inevitable.

Meanwhile, any black swan event, can change things in a NY minute. 

Tue, 11/23/2010 - 04:17 | 748797 EscapeKey
EscapeKey's picture

Uh, which M3? M1 and M2 are both expanding, and the derivative of SGS-M3 is strongly positive. If, indeed, M3 is shrinking, it won't be for much longer.

Furthermore, the FRB has no control over the flow of funds. The cash so readily handed out to the banks won't just sit on a balance sheet somewhere.

Tue, 11/23/2010 - 01:17 | 748605 trav7777
trav7777's picture


Tue, 11/23/2010 - 01:19 | 748609 deepsouthdoug
deepsouthdoug's picture

Hmmmm I could have sworn the Social Security Trust Fund is the largest holder of US debt!

Tue, 11/23/2010 - 01:25 | 748615 Shameful
Shameful's picture


Now we can show our foreign creditors we don't need them! Sell our debt to the world?  Bah! We have advanced technology that makes such vulgar transactions a thing of the past.  We shall find our glory and salvation at the end of the printing press.  We shall succeed where all other nations and people have failed.  We will have money for nothing and our chicks for free!

Rally on!

Tue, 11/23/2010 - 04:19 | 748799 EscapeKey
EscapeKey's picture

This time is different!

Tue, 11/23/2010 - 04:33 | 748808 i.knoknot
i.knoknot's picture

heh - yer on a roll today!


Tue, 11/23/2010 - 01:28 | 748617 UP4Liberty
UP4Liberty's picture

The Fed reminds me of what my mum and dad would say when I was a little tyke... "Because I say so!"



Tue, 11/23/2010 - 01:48 | 748634 dashingdwl
dashingdwl's picture

What was the name of the big investment fund that TheBernank ran before he was Fed Chairman?

Tue, 11/23/2010 - 01:48 | 748635 geminiRX
geminiRX's picture

I don't think one lasts too long drinking their own urine as a measure of last resort.

Tue, 11/23/2010 - 01:56 | 748648 Cursive
Cursive's picture


Damn.  Financial education in one sentence.  Is this in "Currency Trading for Dummies?"  Cause, if not, they need to revise that bitch.

Tue, 11/23/2010 - 02:15 | 748676 DoChenRollingBearing
DoChenRollingBearing's picture

+++  geminiRX and Cursive

Ugh, ugh and ugh.  Makes me want to bail even sooner than I had planned.  At least I have acted on SOME of my plans...

Tue, 11/23/2010 - 09:08 | 749004 RichyRoo
RichyRoo's picture

+1 Gatorade

Tue, 11/23/2010 - 01:51 | 748639 lunaticfringe
Tue, 11/23/2010 - 15:38 | 750177 chopper read
chopper read's picture

i'm with Coach. 

Tue, 11/23/2010 - 01:57 | 748650 Hillbillyfreak
Hillbillyfreak's picture

It used to be that the banks were content to take our "deposits" and lend them back to us.  With the help of compound interest and fractional reserve banking they  made gobs of money.  That not being good enough, now the banksters have latched themselves to the wallet of the US taxpayer (me and you, assuming you have a job) via federal government debt.

May I suggest the world would be a better place without banks.  You can do your part, take your "money" out of the bank and close your credit accounts.      

Tue, 11/23/2010 - 15:40 | 750182 chopper read
chopper read's picture

...all by design in a debt-based monetary system.  keep in mind, a domestic debt crisis allows for the IMF to 'rescue' the US with 'special drawing rights' (one world currency).

Tue, 11/23/2010 - 01:58 | 748651 merehuman
merehuman's picture

freedom dollars! 

Tue, 11/23/2010 - 01:58 | 748652 bankonzhongguo
bankonzhongguo's picture

Greece. Ireland. Portugal?

This is going one of two ways. 

Either the US goes down the road of the PIIGS, needing some IMF type intervention.  Call it crazy, but please remember how TARP was sold. Thereafter, the trashed EUR and the trashed USD make a baby backed by XDR.  White People of the World Rejoice! 

'One Currency to rule them all, One Currency to find them,
One Currency to bring them all and in the darkness bind them.'

All your debt are belong to Us.

Or, the Fed just wakes up one morning and says.  "Golly, Mr. Treasury.  'Member all those t-bills we had you print the last couple of years.  We don't need'em anymore.  So you can have'em back to just cancel out.  Have a nice day.'

Both are absurd, yet strangely both seem the only "exit" to this fiasco.


Tue, 11/23/2010 - 02:00 | 748658 Kaiser Sousa
Kaiser Sousa's picture


keep buyng Silver....shhhh!

Tue, 11/23/2010 - 06:18 | 748885 Al Gorerhythm
Al Gorerhythm's picture



Tue, 11/23/2010 - 02:04 | 748659 ebworthen
ebworthen's picture

"the Fed's official holdings of US Treasury securities now amount to $891.3 billion, which is higher than the second largest holder of US debt: China, which as of September 30 held $884 billion"

What?!?!  And they see no problem with this? 

It's like Parents taking out a home equity loan that is greater than the college fund, life insurance, and any inheritance to go on a two-week Vegas bender and saying "Don't worry kids, this will all work out to your benefit."


Tue, 11/23/2010 - 02:03 | 748664 Ignatius
Ignatius's picture

"The road will seem so straight and fair to travel, that you will kick yourself for stumbling through the brambles for so long, and wonder at your neighbors who still can't see the path, though it is truly a freeway." (Aristotle, courtesy of FOFOA)


Tue, 11/23/2010 - 02:20 | 748684 DoChenRollingBearing
DoChenRollingBearing's picture

FOFOA has been so right...  Were it not for him, I would have stocked up on LESS gold...!

Well done Ignatius, posting one of the best posts from

Tue, 11/23/2010 - 03:01 | 748731 Ignatius
Ignatius's picture

FOFOA has certainly helped me nail down the corners.

Those who understand -- and act -- will do well.  :)

Tue, 11/23/2010 - 02:15 | 748677 revenue_anticip...
revenue_anticipation_believer's picture


RE: Your attachment

Jens Parsson - Dying Of Money.pdf 


dated 3/20/2009 auspicious! 

but obsolete 20 MONTHS AGO


This is from the Mises Institute? really? perhaps a rejected 'thesis paper'?  

why is THIS even in the Mises Institute Archives? "Advancing the scholarship 

of liberty in the tradition of the Austrian School" MISES author of "Human action", 

believer that the individual freely willing, does make a difference




THIS PAPER is hardly canonical, indeed a heretical, 

Something Party Line from Lenin/Stalin? 

Hegel better, GroupMind, the Spirit, 

inevitable fate that is history..??


example paragraph HERE 

summation page 125: 


"The weaving of history is a spectator sport. It is a play without a director. No man, not even kings or

presidents or prime ministers, is much more than a spectator to the events and sometime bit player. It is

reminiscent of Tolstoy's observations on how grand an illusion it was that even the commanding general was

in command of the battle. You and I are audience. These final words are not an epilogue, as they would be if

the play were over, but a sort of parting word at intermission and a reminder that we may see one another

again in the audience to the remaining scenes. There is not much that we can do about the play except to

know how we would reply if we were called upon to speak or vote from the audience. After you have thought

that out, come and join me in the galleries and we will watch."


"Notes Sources which are recurrently cited in these notes are the following:"

[pages 126-158 ! on and on, a generic bibliography [Piled Higher and Deeper] 


Tue, 11/23/2010 - 04:21 | 748801 ebworthen
ebworthen's picture

Lenin/Stalin Groupmind?

Von Mises?

Tyler poking a stick into FED purchases bought with "the people's" unearned future tax revenues?

Don't you feel as though you are watching a movies sometimes?

This is beyond the polarity of politics, and even of socialism/communism versus capitalism - it is a new form of government, in a new age - the Kleptoligarchy, the CronyCraptocracy, or what name you can invent.

A beast nonetheless.

Tue, 11/23/2010 - 02:20 | 748685 mkkby
mkkby's picture

Keep piling on the debt. It's never going to be paid back. So let those clueless bankers get deeper and deeper. What's more stupid than a banker that lends money to a creditor that's already way under. It's an act of desperation.

Now the fed is printing as a way of pretending to repay debt. Protect yourself from the inevitable inflation with hard assets or FX trades. Just enjoy the artificially low taxes or extra services.

Tue, 11/23/2010 - 02:32 | 748696 john milton
john milton's picture

South Korea says North Korea has fired artillery onto an island and into the sea near the western border with South Korea.

A South Korean official says dozens of rounds of artillery landed on Yeonpyeong island. The official says South Korea fired back. The official had no other details.

Read more:

Tue, 11/23/2010 - 03:09 | 748739 Mongo
Mongo's picture

Robert Mugabe sends his regards... stating: "Impressive!"

Tue, 11/23/2010 - 03:16 | 748749 saulysw
saulysw's picture

And so we see the flight of the "oo-ah" bird. This creature flies in ever smaller circles, until it flies up it's own ass, at which point, it exclaims "oh-ah!".

Tue, 11/23/2010 - 13:02 | 749685 Husk-Erzulie
Husk-Erzulie's picture


Tue, 11/23/2010 - 03:27 | 748759 Temporalist
Temporalist's picture
China Allows Yuan to Start Trading Against Ruble

"China is allowing greater use of its currency for cross- border transactions to reduce reliance on the U.S. dollar, after Premier Wen Jiabao said in March he is “worried” about holdings of assets denominated in the greenback. Purchases of U.S. currency to contain yuan gains contributed to a $194 billion increase in the nation’s foreign-exchange reserves in the third quarter, boosting the total to a record $2.65 trillion."


Tue, 11/23/2010 - 03:40 | 748769 alexwest
alexwest's picture

#with the Fed now buying about $30 billion per week, or about $120 billion per month,

to all assholes who still talk about  purpose of QE2...

monthly new debt issaunce of  federal gov is ~140 bln ...

case closed


Tue, 11/23/2010 - 06:14 | 748881 EscapeKey
EscapeKey's picture

Don't forget about all the muni bonds, looking for "smart money". If there's one thing Ben shines at, it's spotting a great deal.


Tue, 11/23/2010 - 03:41 | 748771 Oh regional Indian
Oh regional Indian's picture

In a strange and ironical twist of fate, the industrial revolution, which was presaged by the "explosion" of knowledge made possible by the invention of the printing press, will meet it's demise through it's own spawn.

The great designer in the sky sure has an interesting sense of humor.


Tue, 11/23/2010 - 04:51 | 748824 StychoKiller
StychoKiller's picture

Looks like I picked a bad year to stop snorting Hopium!

Tue, 11/23/2010 - 05:26 | 748844 Moonrajah
Moonrajah's picture

I guess now is a good time for China to start slowly divesting from USTs. Say, 3-5 bln a week sounds about right. If not for the current phony 'China-is-the-bogeyman' spindoctorisms seeping out from the orifices of the TPTB, this could even go unnoticed.

Tue, 11/23/2010 - 06:15 | 748883 toathis
toathis's picture

Remebering Kennedy, America's last real President

"I'm Sorry..."

Tue, 11/23/2010 - 06:44 | 748900 papaswamp
papaswamp's picture

Spanish 3 month bill auction fails....whoops.

Spanish 3-month bill auction fail - debt agency sells €3.26bn vs €4-5bn indicated, at avg yield of 1.743% vs 0.951% prior. via alphaville tweet.

Tue, 11/23/2010 - 06:51 | 748908 spinone
spinone's picture

The FED is the bad bank

Tue, 11/23/2010 - 08:13 | 748941 RichyRoo
RichyRoo's picture

What happens if the US govt defaults on the FED?

Tue, 11/23/2010 - 08:19 | 748944 AssFire
AssFire's picture

I'll give them a pat-down, touch their junk, then say "Now, you do me".

Tue, 11/23/2010 - 08:35 | 748961 Bartanist
Bartanist's picture

Some "contra" thoughts:

a) the Fed is not the American taxpayer.

b) the Fed creates money and loans out of thin air and can destroy them as well... and no one needs to know, except the annoying scorekeepers.

c) haven't we all been saying how much better it would be if our government created interest free money instead of a privately owned central bank creating money and lending it to the government at interest? From what I can see, this is the closest thing to that the Fed can do... ZIRP and POMO... without giving up control.

The only problem that I see is that none of this fundamentally helps the US people or the US economy. All it seemingly does is transfer real wealth (as defined by ???? ... what is real wealth now ... come on ... not money certainly)

I cannot help but think that the Chinese believed they could control the US through the ownership of US debt. After all, the hand that gives is above the hand that receives .... I wonder how they think that is going, now.

Tue, 11/23/2010 - 23:15 | 751303 FreedomGuy
FreedomGuy's picture

"The only problem that I see is that none of this fundamentally helps the US people or the US economy. All it seemingly does is transfer real wealth (as defined by ???? ... what is real wealth now ... come on ... not money certainly)"


Is anyone besides me scared of that much funny money being created by the Fed? When Arabs or Chinese buy our bonds we know it's money derived from real products like oil and lead painted toys. What is it again the Fed uses to buy those bonds???!!! A printing press maybe? How much Monopoly money would take for anything you own...your car, your garden tools, even one little golf ball? The answer is none. The Fed is threatening to make our dollars into Monopoly money.

My thought is that there is only one play here in the medium to long term and that is to turn your dollars into real stuff (gold, silver, bags of rice) or even things based on real stuff like commodity stocks. These things will hold value and appreciate in the event of the dollar becoming play money. Unfortunately, we still need cash to conduct 99% of our daily transactions.

To reiterate, the sheer magnitude of this currency/financial game is breathtaking and has completely detached from the real economy which consists of the products and services generated by people. This will not end well.

Here's a website from a personal friend of mine that posits the idea that there are two economies, one a "real" economy of products and services and the other a "financial" economy of (bogus) paper. Stretch your brain on it.

Tue, 11/23/2010 - 08:49 | 748983 max2205
max2205's picture

Now we can default and no one gets hurt. Also Ben saves interest when he doesn't pay himself

Tue, 11/23/2010 - 23:18 | 751306 FreedomGuy
FreedomGuy's picture

That would be nice, but economics is like physics and there will be an accounting. However, I think your one liner might reflect Fed thinking.

Tue, 11/23/2010 - 10:18 | 749127 PalladiumTrading
PalladiumTrading's picture

Our silver desk in Chicago is off the chain right now...  We still have around 40,000 oz left right now, half Eagles and half Maples. $15,500 (right now) per monster box.  205-202-1442

Tue, 11/23/2010 - 11:14 | 749286 Catallaxative
Catallaxative's picture

Read Dying of Money! Great to have posted the PDF.

Tue, 11/23/2010 - 11:20 | 749310 TruthInSunshine
TruthInSunshine's picture

The Bernank: "Tim G., this whole Korean thing will help distract everyone from QE x.0"

TurboTimmy: "Right, Boss."

The Bernank: "I hope North Korea keeps this shit up. I haven't caught a break from the ass pounding over my 14% YoY inflation targets in three weeks. As you know, when people buy less shit, the only way to prop up GDP and general economic numbers if by offsetting volume loss with price increases."

TurboTimmy: "Yes, Boss."

The Bernank: "Do you really understand what I'm hoping to achieve, Tim, or are you just agreeing with me again?"

TurboTimmy: "I can't believe Bristol Palin lost. Sorry for not being more focused this morning, Sir."


The Bernank: "Good God, you're an idiot."

TurboTimmy: "But I'm YOUR idiot, Boss."

Tue, 11/23/2010 - 11:32 | 749363 Eastwood
Eastwood's picture

Cats and dogs, living together. Mass hysteria!

Tue, 11/23/2010 - 12:52 | 749652 Don Levit
Don Levit's picture

The Treasury rolls over debt, until we have a surplus.  Then, the surplus pays down the debt held buy the public.

The second category of debt, Intragovernmental Holdings, is the largest harder of Treasury debt, over $2 trillion.

This is a little bit different than debt held by the public, for in intragovernmental holdings debt, the left hand owes the right hand. It's like borrowing from yourself.  For example, Treasury borrowed from the Social Security trust fund.  When the Treasury pays interest on the loan, it does so by isssuing additional Treasuries.  Isn't that lovely? Interest paid with debt?

And, it need  not pay back loan interest until the trust outgo exceeds the income (not including interest).

It need not pay back the principal until trust outgo exceeds the income  (including interest).

Wouldn't you like to have a loan like that?

I can provide excerpts and links from reputable governmental web sites for those who are interested.

Don Levit

Tue, 11/23/2010 - 23:21 | 751312 FreedomGuy
FreedomGuy's picture

The question is "How long can it go till it collapses?" I think its like a run on the bank, on Social Security and ultimately our currency. My guess is it will happen quickly and unexpectedly.

Tue, 11/23/2010 - 20:32 | 750985 Buck Johnson
Buck Johnson's picture

Yes, it seems that the game is about over and it won't be pretty.  Bernanke has to know what he is doing to the economy, but I think he fell into the trap that all civilizations who print fiat money fall into.  He thought he could control the market enough where he wouldn't have to worry about the consequences of rapid monetary deflation and in turn massive inflation.  And that is the trap, by thinking you can control it by not having to take your fiscal medicine from your abuse of the system.  The trap is insidious, because it is based on your free will alone going in there and printing more and more money.  But in reality what you are doing is taking one step forware and 4 steps back.

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