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How High Can the Fed Pile Manure?

RickAckerman's picture





 

 

A U.S. banking system that is being held aloft solely by hot air and brazen lies took an ebullient leap toward November 6 yesterday with the release of an Administration-friendly Fed report declaring most banks sufficiently capitalized to weather severe adversity.  How severe? It’s hard to tell, since there were only passing references in the New York Times to a still-deflating housing market that has helped make The Great Recession and a plummeting standard of living an entrenched fact of life for most Americans. And nowhere in the front-page article was there even a word about the Fed’s warehousing of trillions of dollars’ worth of mortgage paper once held by the banks – debt paper that might never recover in value.  Under the circumstances, far from being healthy as the Fed and its shadowy masters would have us believe, the banks are afflicted with the financial equivalent of stage four cancer. Not that anyone on the Street would care to notice. In fact, with this week’s big stock market gains, Wall Street seems to be literally banking on the ability of the spinmeisters to hide the financial system’s deathly pallor with the skill of Sonny Corleone’s mortician.

 

 

In the meantime, many on the Street, and even a contributor or two in the Rick’s Picks forum, were seeing cloudless skies at least till the election. “Money is going to be pouring into the stock market at the expense of other investments,” noted one forum regular, Gary L. “I now see the possibility of a 20 percent rise in the stock market year over year,” he continued. “If external factors don’t derail this trend, we are in a perfect sunny day lasting perhaps another nine months. This will make Obama’s chances of winning re-election an odds on favorite.”  We’re not so sure ourselves, especially since the real economy that most Americans encounter in their day-to-day lives is wholly different from the sunny illusion being spun with increasing brazenness by The Powers That Be.

 

Strong Dollar vs. Gold

 

And while it’s true that gold and silver futures got sacked yesterday, we see the weakness as merely corrective rather than impulsive. Even conceding that bullion could remain under pressure if our own, extremely bullish forecast for the dollar pans out (click here to access all of our forecasts free for a week), we very strongly doubt that precious metals have seen their bull market highs. And keep in mind that the dollar is not “strong” in the sense of being sound; rather, it is in demand because global managers of Other People’s Money believe it will be the “last man standing” when Europe’s inevitable financial collapse occurs.  We agree but only up to a point, since it’s quite possible the smart money may only have an hour or two to react  to Europe’s implosion before it takes the dollar and all of our banks down with it.

Continuing with the sunny observations of Gary L:  “Inflation tame, import and export costs low, a recession in EU and China, wages tame, domestic spending up along with debt. Looks like the old patterns are coming back.”  Although Gary has proven himself to be an astute and flexible observer of the markets in the past, we think his optimism is misplaced — like looking at Europe in the early summer of 1914 and remarking on the robust health of Germany’s manufacturing sector.  If inflation seems tame, as he notes, it is only because the counterforce, a nearly quadrillion dollar derivatives bubble, is poised to deflate catastrophically if the central banks ease off the monetary throttle even slightly. As for Europe’s deepening recession, it adds force to the already deflationary impact of austerity measures taking root in a growing number of zombie nations. As for the sharp selloff yesterday in precious metals, if it eventually takes gold down to $1500, we would view that as the last great buying opportunity before the metal leaps to $2000 and beyond. (Please note that, from a technical standpoint, we’ll be looking on Thursday for at least a tentatively bullish turn from well above that level – specifically, from 1623.00, basis the Comex April contract.)

 

Perfectly Scripted

 

As bearish as we are on the big picture, we can only marvel at the scripted perfection of recent, ostensibly bullish, economic “news.” For starters, a couple of banks were reported to have failed the stress test — including, most notably, Citi.  Clearly, this was meant to mollify skeptics who might have dismissed the report if no banks of size had gotten an “F”.  Also, the Times, using talking points presumably planted by the Fed itself, inserted this red herring into the article: “Another potential shortcoming in the tests is that they don’t focus on one of the main problems the industry faced during the financial crisis, the difficulty banks had borrowing money in the markets.”  In fact, and as everyone knows perfectly well, there is no limit to the amount of “money” that problem banks will be able to borrow from the Fed the next time TSHTF.

Not that unlimited borrowing power is going to do the banks any more good than it will Europe’s when their hour of reckoning arrives. At that point, it is credibility with the public that will matter, not borrowing power. Unfortunately, what little credibility remains — evidenced by the stock market’s maniacal response to the latest Fed dog-and-pony show — is destined to be squashed as the central banks and politicians continue to pile up bald-faced lies one on top of another.

 


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Thu, 03/15/2012 - 21:01 | Link to Comment Sathington Willougby
Sathington Willougby's picture

 

Don't blame me you muppets, I voted for GonzO.  Or was it the Swedish Chef?  Can't tell, they all have the same hand up their ass.  

Question: If an "elected" muppet fellatiates a Central Banker is it

1. a hand job,

2.  a blow job

or

3. masturbation?

Bork bork bork bork bork.

OH fuck yeah almost forgot look at these fucking correlations:

https://docs.google.com/file/d/0ByJAC-sfXwumZzI2bVlON2VTMnFyYVZZSnpDYnNy...

Fuck you GOP cheater mother fuckers.  DNC==GOP 

Thu, 03/15/2012 - 20:15 | Link to Comment palmereldritch
palmereldritch's picture

How tall is the Bernanke?

Thu, 03/15/2012 - 21:02 | Link to Comment akak
akak's picture

Clearly tall enough to easily insert his member into virtually every American's much-abused sphincter.

Thu, 03/15/2012 - 20:06 | Link to Comment Pejorative Requiem
Pejorative Requiem's picture

I agree that it's gonna continue to look good for a long time.

There’s a saying in the construction industry “Termites will never commit suicide.”
Termites will never eat a house up to the point it collapses, they leave just enough structural integrity to be able to come back for another meal. It’s the same with The Powers That Be. Those who control and benefit from the present FIAT/ currency Ponzi/ con game are not going to roll over without a long drawn out death drama.
Those who make announcements of the coming death of the fiat system would do well to remember that guy who predicted the Rapture last summer; they’ll have to continue living with the dying US dollar/debt/ economic system a lot longer than they think.
Everyone who does invest, invests in a way of living that connects them to their perceived reality. Since most people perceive wellbeing in their reality, the Ponzi will go on for quite some time – and only termites will know exactly when to get out.

Thu, 03/15/2012 - 18:13 | Link to Comment NotApplicable
NotApplicable's picture

Does that question include shit derivatives?

Thu, 03/15/2012 - 18:09 | Link to Comment non_anon
non_anon's picture

shit can be piled mighty high

Thu, 03/15/2012 - 18:45 | Link to Comment hangman
hangman's picture

At least the way they see it (fed, gov. uk, etc.), it is a fight for survival of our own western civilization and world order (shift).   Therefore, they will exclude nothing in this fight (they will find a way to pile it infinitely higher until either war is won or lost).  In the process, we are changing the rules of the game as it is being played, suppressing and ignoring all discontent, even from its own citizens (people die in a war-no exception in this war).   And we will continue to take this path (blindly ignoring protests), as long as we (western civilization) possess the military might.  Stupid, it is not the ‘whoever has the most manure (gold) makes the rules,’ at least for now, it is whoever has the military might makes the rules.

 

Thu, 03/15/2012 - 22:14 | Link to Comment i-dog
i-dog's picture

 

"survival of our own western civilization and world order"

Don't kid yourself ... those two things are quite unrelated. The Luciferians are destroying western "civilization" in order to further their "new" world order. They deliberately have you believing such tripe so that you'll help them in their own quite separate quest!

Ask yourself: Why would they dismantle American and European manufacturing, dismantle the US Constitution and European sovereign states, build up massive police-state aparati, and run up huge debts to the eastern bloc and middle east, if they were trying to maintain survival of the post-Magna Carta and Enlightenment western world?

The progress previously made by developing countries to lift themselves from poverty and starvation is being turned back even more quickly than the developed world is being brought down into poverty and starvation.

Something akin to worldwide mediaeval feudalism is the objective ... though its roots and mechanisms go back to the days of Pharaohs and other potentates ruling in concert with priests and money-changers ... when the Pharisees (forerunners of the Illuminati) began attempting to usurp control from the hereditary elites (kings and priests) and transfer it to a cabal (or Politburo, in modern speak) of self-appointed "wise men". That is what communism and the NWO is about.

Free market capitalism is anathema to kings, priests AND pharisees!

Thu, 03/15/2012 - 17:46 | Link to Comment Ripped Chunk
Ripped Chunk's picture

Much higher than now.

Thu, 03/15/2012 - 17:24 | Link to Comment HAhyperion
HAhyperion's picture

Please sing along: From "Ten Indians"

One trillion, two trillion, three trillion Benny bills

Four trillion, five trillion, six trillion Benny bills 

Seven trillion, eight trillion, nine trillion Benny bills

Ten trillion Benny bills, now 

 

Kaboom! Firey mushroom cloud (default) fall out rings (hyperinflation)
Ten trillion,  nine trillion,  eight hundred billion Benny bills,
seven hundred billion, six bllion,  five hundred million Benny bills

four hundred million, three million, two thousand Benny bills 
 

ONE little Benny bill, now
  • And off little Benny went with his one little Benny bill to buy a loaf of bread, for his printing press had long ago jammed and caught fire.  And just like the Weimar Republic where the price had astronomically soared from 1 mark to 100,000 million mark, in a few short years,  poor misguided Benny found he was priced right out of the market.
  •  
  • and that is the end of our tale (I used the public domain format so as to not get those SOPA/PIPA thought police chasing after anyone - but the Septimus Winner 1868 long version, origi nally used for minstrel shows is on wiki and the loss of the boys is too comical and appropriate, check it out) 

  • UPDATE TO CURRENT:   H4's no longer have the stuff - Orwellian doublespeak, pure obfiscation or redaction; "editing, modification, clarification for the public" 

  • But, no need to worry, I heard yesterday the FED is tweeting: all you need to know in 140 characters or less.
  •  
  • I hear Cabaret Music softly rising "Willkommen"  suddenly the surreal picture merges with the ghost of Mr. Roarke "Willkommen (German accent changing to Spanish, interchangeable really substitute your favorite PIIG) to Fantasy Island! We've been waiting for you."

  • Heard a few months back the Pope was tweeting:  Think they are following each other .  

  • Cut to the Wizard of OZ, "Pay no attention to the small, little fleckless man behind the curtain.." 
  • And scene.

 

 

Thu, 03/15/2012 - 17:14 | Link to Comment Bansters-in-my-...
Bansters-in-my- feces's picture

I don't know how high the fed can pile shit,but I know it comes shooting out of their mouth every time it gets that high and thier lips move.

The Fed is a Criminal Terrorist Organization,and operates with the blessing of the US Whitehouse.

End the corruption.

Thu, 03/15/2012 - 17:03 | Link to Comment El Oregonian
El Oregonian's picture

J.P. Morgan whistle-blower busts company with open letter on comment section of CFTC website.

Copy and paste and save because it will be scrubbed shortly.

comments.cftc.gov/PublicComments/ViewComment.aspx?id=57019&SearchText

Thu, 03/15/2012 - 16:09 | Link to Comment monopoly
monopoly's picture

I do remember that saying from "Confucius" William, words of wisdom on shit. It was one of his first "enlightenments".

And this is a good post, but we have said it many times, Until it matters, it just doesn't! Carry on.

Thu, 03/15/2012 - 15:57 | Link to Comment BeetleBailey
BeetleBailey's picture

How high? As high as they want, what with the sheeple out there. It seems they'll believe anything they read or see on TV.

Thu, 03/15/2012 - 18:40 | Link to Comment lotsoffun
lotsoffun's picture

they have to believe, otherwise they would not participate and then they will be lonely and undesirable.  fear is the motivator, and when they look for an instant behind the curtain, they see bad things, so they go back to fear and participation.

 

 

 

Thu, 03/15/2012 - 21:35 | Link to Comment i-dog
i-dog's picture

+1. Very perceptive.

Thu, 03/15/2012 - 14:32 | Link to Comment rsnoble
rsnoble's picture

3-ring circus.  This crash is going to result in deaths.  There's already millions that can't afford food and shelter.

Thu, 03/15/2012 - 14:06 | Link to Comment hairball48
hairball48's picture

So what happens to Bernanke's rosey scenario for the banksters when interest rates rise in spite of the Fed's manipulations?

Thu, 03/15/2012 - 15:24 | Link to Comment John Wilmot
John Wilmot's picture

If the Fed wants rates to stay low badly enough, rates will stay low. The Fed never runs out of cash to buy bonds. They could buy 100% of all treasury issuance at 0% yeild if they wanted to.

Thu, 03/15/2012 - 15:20 | Link to Comment ilovefreedom
ilovefreedom's picture

400-600 billion in federal debt interest payments so far, get ready for interest to encompass 100-200% of the Federal budget. = catastrophic reset

Thu, 03/15/2012 - 14:42 | Link to Comment johnQpublic
johnQpublic's picture

get that question under 140 characters and tweet it to the fed....

Thu, 03/15/2012 - 13:40 | Link to Comment Winston Churchill
Winston Churchill's picture

I keep on ruminating about making some money in this balistic "market".

Then I pinch myself to make sure I am awake.

Maybe they're putting the Hopium in the water now.

Then I think back to 2007 when I cashed out for good.

A little luck,lots of research.

Thank God I am not on this train to nowhere..

Thu, 03/15/2012 - 15:28 | Link to Comment akak
akak's picture

We all know the inevitable final outcome here --- default and/or inflation/hyperinflation --- as well as the inevitable consequences of that outcome.  Everything else is just short-term noise.

(Sorry deflationary flat-earthers --- your appreciating-fiat-currency-and-unicorn fantasies have no place in either history or reality.)

Thu, 03/15/2012 - 13:35 | Link to Comment Nobody For President
Nobody For President's picture

"How high's the bullshit Momma?

Six feet high and rising..."

http://www.youtube.com/watch?v=pyZD7eoHZT8

 

Just make sure your PM stack is high enough to stand on and stay above the tide.

Thu, 03/15/2012 - 13:21 | Link to Comment ebworthen
ebworthen's picture

When the FED feeds the cows with ground up taxpayer they can pile the manure to the moon.

Thu, 03/15/2012 - 12:53 | Link to Comment Zero Govt
Zero Govt's picture


"How High Can the Fed Pile Manure?"

Much higher than the ECB as they don't have any German discipline limitations

Thu, 03/15/2012 - 14:07 | Link to Comment rickack
rickack's picture

The ECB seem to have gotten around this by accepting the Fed's gracious offer to effect euro/dollar swaps in unlimited quantity and at a nominal charge of 50 basis points. It's not clear whether the Germans tacitly agreed to this subterfuge; but deep-down, probably, they don't like it and know it cannot work.  Incidentally, Japan -- not usually mentioned in the same breath as the PIIGS -- has been taking down 40-50% of these swaps, which were running at around $10 billion per month (and growing) in January.

Thu, 03/15/2012 - 13:11 | Link to Comment SilverTree
Thu, 03/15/2012 - 12:49 | Link to Comment wearef_ckedwith...
wearef_ckedwithnohope's picture

Would these "banks" have also passed these stringent standards prior to the crisis resulting in bailouts, TARP, ZIRP, etc?

Thu, 03/15/2012 - 12:35 | Link to Comment gaoptimize
gaoptimize's picture

Manure has always been a way of promoting growth
In the beginning was the Plan.
And then came the Assumptions.
And the Assumptions were without form.
And the Plan was without substance.
And darkness was upon the face of the Workers.
And they spoke among themselves, saying,
"It is a crock of sh*t, and it stinks."
And the Workers went unto their Supervisors and said,
"It is a pail of dung, and we can't live with the smell.
And the Supervisors went unto their Managers, saying,
"It is the container of the manure, and it is very strong,
such that none may abide by it."
And the Mangers went unto their Directors, saying,
"It is a vessel of fertilizer, and none may abide its strength."
And the Directors spoke among themselves, saying to one another,
"It promotes growth, and it is very powerful."
And the Vice Presidents went to the President, saying unto him,
"This new plan will actively promote the growth and vigor of the company
with very powerful effects."
And the President looked upon the Plan and saw that it was good.
And the Plan became Policy.
And that is how shit happens.

Thu, 03/15/2012 - 14:52 | Link to Comment bankruptcylawyer
bankruptcylawyer's picture

This is the most insightful and biblically poetic expression of how hierarchecal levels of group think interact to create sytemic shitstreams of behavior.

Well done
Thank you

Thu, 03/15/2012 - 14:02 | Link to Comment dontgoforit
dontgoforit's picture

++++5 for u today!  Thanks; we're LOL!

Thu, 03/15/2012 - 12:29 | Link to Comment Bloodstock
Bloodstock's picture

March 14th, 5,000 people at the University of Illinois, Champaign, to hear RON PAUL speak. End The Fed!

(No exageration folks as I was there and took my own estimated count which was a minimum OF 4900!) 

RON PAUL - 2012 - RESTORE AMERICA NOW

Thu, 03/15/2012 - 18:14 | Link to Comment NotApplicable
Thu, 03/15/2012 - 22:47 | Link to Comment mt paul
mt paul's picture

Republican preference pole Alaska

a couple weeks ago 

Out of about 1,700 votes cast in Fairbanks, Paul won about 31 percent of the vote, followed by Romney with 24 percent, Santorum with 21 percent and Gingrich with 15.5 percent

Read more: Fairbanks Daily News-Miner - 

 

bull walrus indepedent ...

Thu, 03/15/2012 - 14:34 | Link to Comment Binko
Binko's picture

The sad truth is that it doesn't matter how right Ron Paul is on these issues. He's been successfully marginalized. Running against tools and fools like Romney, Santorum and Gingrich he's only getting 5% of the vote in many recent primaries. This alone make me realize how absolutely mired in willful delusion and ignorance the general public remain. 

Thu, 03/15/2012 - 18:01 | Link to Comment Bloodstock
Bloodstock's picture

Please allow me to correct you on your statement that he is only gettng 5% of the vote. Man, I said there were 5,000 people there! That's FIVE Thousand! This crowd was on the Wednesday night before spring break which is when most of the kids that are going on spring break have already left. If this is a successful representation of marginalization then I must disagree. The issue of the 5% is of who counts/reports the count of the votes.

Even though the lame stream media continues to ignore/marginalize Dr. Paul, this is how STRONG THE MESSAGE. Keep the faith if you truly believe in the United States of America! The lame stream media is fast becoming a joke and they know it. They're desperate,,,stay on them and don't give up.

Thu, 03/15/2012 - 22:00 | Link to Comment lakecity55
lakecity55's picture

TPTB have consistently dicked around with Paul's votes. I've watched in each primary. He has, say, 25-35%, but when the votes are "counted," he comes in around 10-12%.

The real people of this country have had it with the  donkey/elephant con game.

It's gonna take a fire to birth a new party.

Thu, 03/15/2012 - 17:04 | Link to Comment Piranhanoia
Piranhanoia's picture

Wait and see what happens when he goes independent.  I can see why he has to use the R's to get airtime, but he isn't going anywhere until he goes I,  and probably lands Kucinich and others in a cabinet the people might trust.  Before the election, so we know what we are voting for.  No more hope.  No more dopes.

Thu, 03/15/2012 - 18:25 | Link to Comment blunderdog
blunderdog's picture

OK, but consider how many times he has said he would never run as an independent.

He doesn't seem like the flip-flopper type.

Thu, 03/15/2012 - 21:23 | Link to Comment harlanaladd
harlanaladd's picture

I recall his answers as phrased more ambiguously. Along the lines of "I have no plans to run as an independent at this time." 

I agree he's not a flip-flopper, but he needs to avoid complete marginalization by staying in the primary fight till the convention.  Just my opinion. 

Thu, 03/15/2012 - 22:23 | Link to Comment blunderdog
blunderdog's picture

I'd pretty much say you're misremembering.  He's not known for ambiguity, but I guess a defense attorney could find a way to say he could've meant something like that.  He recently said he's not an absolutist.

Who can really divine what goes on in the man's mind?

Fri, 03/16/2012 - 23:56 | Link to Comment woolly mammoth
woolly mammoth's picture

Well, I'd pretty much say you're not remembering what Ron Paul says but remembering what others say Ron Paul is saying.

Thu, 03/15/2012 - 12:46 | Link to Comment nathan1234
nathan1234's picture

Maybe too late by next week.

 

Thu, 03/15/2012 - 12:27 | Link to Comment hangemhigh77
hangemhigh77's picture

Soon The Fed will rename themselves, "The Federal Reserve Church" and all will be required to tithe at leat ten percent.  Of course you can go to your nearest TBTF thieving bank to submit your tithe.

Thu, 03/15/2012 - 12:18 | Link to Comment JailBank
JailBank's picture

The economy is doing so well we just need to do ZIRP, POMO, Operation Twist for the foreseeable future. You know jsut like a healthy economy.

Thu, 03/15/2012 - 11:44 | Link to Comment espirit
espirit's picture

Fed selling out to the Chinese?

This "I got mine" meme is getting old.

Thu, 03/15/2012 - 11:26 | Link to Comment williambanzai7
williambanzai7's picture

WISDOM OF HU FLUNG DUNG

Thu, 03/15/2012 - 18:29 | Link to Comment Spirit Of Truth
Spirit Of Truth's picture

Great pic!

How about a Rothschild quote?:

"The man that controls Britain's (America's) money supply controls the British (American) Empire. And I control the money supply."

http://quotes.liberty-tree.ca/quote_blog/Nathan.Mayer.Rothschild.Quote.4F94

Thu, 03/15/2012 - 15:27 | Link to Comment John Wilmot
John Wilmot's picture

Feed that prick his fish heads...

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