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Treasury To Stop Funding Its Market Manipulation Fund To Delay US Bankruptcy
After pillaging the G Fund and Civil Service Retirement and Disability Fund (CSRDF), aka the Government retirement funds, Tim Geithner was just forced to resort to the final debt ceiling extension measure: suspending reinvestment in the Exchange Stabilization Fund, better known as the mechanism by which the Treasury manipulates the stock, bond and FX markets, often times indirectly (thank you Brian Sack and Citadel fat pipe) and on occasion with CIA assistance. What this means is that FX vol will likely hit unseen levels in the next several weeks as the Treasury's manipulative ways are strongly curtailed.
From the Treasury:
Update: As Previously Announced, Treasury to Employ Final Extraordinary Measure to Extend U.S. Borrowing Authority Until August 2
WASHINGTON – Today, the U.S. Department of the Treasury released the following statement from Jeffrey Goldstein, Under Secretary for Domestic Finance, regarding the use of the last of the four previously announced measures available to keep our nation under the statutory debt limit, suspension of reinvestment of the Exchange Stabilization Fund.
“Today, as previously announced, the Treasury Department will suspend reinvestment of the Exchange Stabilization Fund, the last of the measures available to keep the nation under the statutory debt limit. In order to prevent a default on the nation’s obligations, Congress must enact a timely increase of the debt ceiling.”
The U.S. reached the debt limit on May 16, 2011, but the Treasury Department has employed three previous measures to temporarily extend our ability to meet the nation’s obligations. Those measures, in order taken, are (1) suspending issuance of State and Local Government Series (SLGS) Treasury securities; (2) declaring a “debt issuance suspension period” of the Civil Service Retirement and Disability Fund (CSRDF); and (3) suspending reinvestment of the Government Securities Investment Fund (G Fund).
As previously stated in the May, June, and July monthly updates, taken altogether, these four extraordinary measures allow the Treasury to extend borrowing authority until August 2, 2011.
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Fairly certain that tyler never said the "econ collapse" would be painless. In fact just the opposite.
However, he has stated that it is necessary for a true recovery. We should have got is after Lehman. It would have been hell. But the bad debt would have been written down, and the market allowed to clear. And low and behold on the 3rd anniversary of the demise of Lehman we would be recovering, not preparing for a second collapse.
Robo got an "automatic rally" sign from his goat entrails.... and ya know what? Since this POS "market" always does the exact opposite of what it should do, we probably get a moon-shot in equities on the back of this news, so the pricks can bank another $_____ billion before they BAIL. what a deal
PPT getting layed off
I was managing an American subsidiary of a successful large US Company in Mexico. It had been a financial turnaround for our team. Cash flow had accumulated in our bank in Mexico and corporate didn’t want the money repatriated to the US. Although we had already paid a 35% income tax to the Mexican government, we would have to pay an additional 30% exit tax to repatriate the money. In addition, we would have to pay high fees for the peso/dollar exchange, in order to make the transfer. The company wanted to expand our successful business and so we decided to keep the money in Mexican pesos to be used for further expansion. One morning, as my wife and I were on a trip driving on the highway, we heard a national message from the President of Mexico, Luis Echevarria, one of the most corrupt presidents in Mexican history. “It is a lie that we are going to devalue the peso,” he said.
Read more
https://lonerangersilver.wordpress.com/2011/06/20/living-through-a-curre...
Great piece, thanks.
Two peas in a pod.
http://www.washingtontimes.com/news/2010/feb/25/bernanke-delivers-warning-on-us-debt/
I think I'll just take a nap. Wake me when it's over.
The ESF is and has been used to manipulate the price of gold down. Gold is going to 2K.
There's also another reason for them doing it also, to allow the market to become unstable and have multiple 3 figure down days with no PPT to help. To scare the people and some in congress that the markets are going bad unless you give us a debt ceiling increase.
no more
free peas
PPT
pea protection team
Don't Fucking Watch This Video: http://www.youtube.com/watch?v=Jwpy8GMzf4I
Oh boy does JPM love this!!! They are the masters of completely trashing markets when volume is light. With their endless stream of utterly free money from the fed, plus unlimited bailout backup in case of errors, plus the ability to create money out of thin air themselves AKA massive internal leverage, JPM will definitely take this opportunity to RAPE everyone else in the markets. Beware, mere mortals.
Any "mere mortals" still in this market in any degree of an elective manner almost deserve to have their cheeks forcibly spread, at this point.
Serious question.
Is this why the stock market ramped at the close? Was it as a result of the perceived potential negative effect on the dollar?
DavidC