The Fed Has Another $3.9 Trillion In QE To Go (At Least)

Tyler Durden's picture

Some wonder why we have been so convinced that no matter what happens, that the Fed will have no choice but to continue pushing the monetary easing pedal to the metal. It is actually no secret: we explained the logic for the first time back in March of this year with "Here Is Why The Fed Will Have To Do At Least Another $3.6 Trillion In Quantitative Easing." The logic, in a nutshell, is simple: everyone who looks at modern monetary practice (as opposed to theory) through the prism of a 1980s textbook is woefully unprepared for the modern capital markets reality for one simple reason: shadow banking; and when accounting for the ongoing melt of shadow banking credit intermediates, which continues to accelerate, the Fed has a Herculean task ahead of it in restoring consolidated credit growth.

Shadow banking, as we have explained many times most recently here, is merely an unregulated, inflationary-buffer (as it has no matched deposits) which provides the conventional banking credit transformations such as maturity, credit and liquidity, in the process generating term liabilities. In yet other words, shadow banking creates credit money which can then flow into monetary conduits such as economic "growth" or capital markets, however without creating the threat of inflation - if anything shadow banks are the biggest systemic deflationary threat, as due to the relatively short-term nature of their duration exposure, they tend to lock up at the first sing of trouble (see Money Markets breaking the buck within hours of the Lehman failure) and lead to utter economic mayhem unless preempted. Well, preempting the collapse in the shadow banking system is precisely what the Fed's primary role has so far been, even more so than pushing the S&P to new all time highs. The problem, however, as we will show today, is that even with the Fed's balance sheet at $2.8 trillion and set to rise to $5 trillion in 2 years, it will not be enough.

Before we begin, we urge readers new to this topic to read some of the more pertinent posts we have written on the issue of shadow banking, as it is not a simple subject. Some of the more relevant ones:

For those who are somewhat familiar with the topic, but not quite, we believe a useful visualization of how traditional bank liabilities (defined simplistically and easily recreated using the Flow of Funds report using total liabilities at U.S.-Chartered Depository Institutions, L.110, plus total liabilities of Foreign Banking Offices in the US, L.111, plus Total Liabilities of Banks in US Affiliates Areas, L.112) which serve as the backbone of the entire US fractional reserve banking system, compare to US GDP is in order.

More than anything the chart above, which shows the amounts of traditional bank liabilities and GDP on the same Y axis, confirms one simple thing: economic "growth" is only and nothing more than an increase in systemic credit, aka money creation (just as Ray Dalio observed a few days ago). The problem with traditional bank liabilities is that for the most part they have corresponding money aggregates in the form of M2, which in turn is primarily fungible deposits, as an opportunity cost. And, as Germans living in the 1920s recall all too well, putting meaningless theory aside, deposits, when escaping the fractional reserve system and used to pursue hard assets, are the primary driver of such unpleasant monetary events as hyperinflation.

The nuisance that are "deposits" is also why the banking system is desperate to prevent bank runs, which are not so much a threat to systemic liquidity: any central bank can and will step in and guarantee all the banks' viability overnight if it has to, as it did at the peak of the financial crisis, but an asset allocation decision to shift out of an asset equivalency system built upon faith, and into a mode of hard asset ownership, based on lack of faith in the system (it also explains why the Fed hates when you use your cash to buy "worthless" and cash-flow free hard assets as gold, silver, copper, crude, etc). Of course, what happens with asset prices should $9 trillion in deposits suddenly exit bank vaults and seek to purchase "stuff" would make even the Hungarian hyperinflationary episode, in which prices doubled every several hours, seem like a walk in the park.

So how to fix this? How to ensure economic growth without the threat of inflation at any corner should a central planner make a false move leading to an uncontrollable bank run and deposit outflow? Simple: create a representation of money without the actual money, i.e., M2 equivalents, whether currency in circulation, or even electronic deposits.

Enter the shadow banking system, which is simply the traditional banking system however without the deposits and without the threat of monetary redemptions from the banking system (and the threat of a collapse of fractional reserve banking): it is quite simply, the essence of bank transformation funded by "faith", or a system in which credit money is created, but without an offsetting money equivalent unit. It is a system in which assets and liabilities are essentially the same concept, interwoven in a daisy chain of rehypothecated ownership claims, and in which every incremental layer of credit money creation serves to ultimately boost the nominal quantity of credit money in circulation.

What this does is it allows for near infinite credit-money expansion within a financial system, without a threat of inflation. It does, however, not prevent the threat of a deflationary collapse should faith in this same system be shaken, and counterparties demand to be made whole on their exposure, which incidentally peaked at  $21 trillion in 2008.

But by far the biggest threat with shadow banking, which perceptive readers have already grasped is nothing but the greatest ponzi scheme ever conceived, is that it works brilliantly in an environment of increasing leverage, but should deleveraging commence, is an asset price black hole, as the entire Schrodinger Asset/Liability Function collapses in on itself upon the realization that there are no real asset at the end of a rehypothecation chain. In other words, the moment a liability is accelerated, due to maturity, request for deliverable or any other inverse "faith" transformations, the jig is up.

As the second chart below shows, one of the primary reasons for the surge in US capital markets beginning in 1980 is not so much the "great moderation", which was certainly a necessary but not sufficient condition for Dow 36,000, as much as that starting in roughly June of 1982, when shadow liabilities crossed the $1 trillion line for the first time and never looked back, the US shadow banking system became a more and more prevalent form of credit money creation, until it overtook traditional liabilities in 1995 in terms of total notional. While traditional liabilities have historically matched GDP dollar for dollar, when one throws shadow liabilities into the mix, one can see a distinctively different picture: the one below.

But where did all those extra trillions in credit money created via Shadow intermediation end up if not in the economic growth of the US? Why in its capital markets of course! This, ironically, makes sense from a symmetrical point of view. Recall that shadow liabilities, by their nature, are not inflationary as they do not have matched monetary aggregates: the US Stock market is also, at least according to the US government and the economic canon, is ot viewed as being part of any inflationary measurement, even though all it really is deferred purchasing power: for example, if everyone is long AAPL and if everyone manages to cash out at the very top, when the market cap of AAPL is $1 quadrillion (for illustrative purposes), all that cash would then exit the capital market and compete with other former AAPL shareholders for physical goods and services. It is in this sense that the S&P merely is a conduit to the latent inflationary build up that infinite credit money creation can lead to. Implicitly, and as a rational benchmark, this boils down to creating infinite purchasing power based on "faith" in a world of very finite goods and services. Not to get cute about it, but when an infinite purchasing power meets an immovable and very finite universe of goods and services, what one gets is hyperinflation. But that is irrelevant in the topic at hand: we will write more on that in a different post.

As noted above, it all worked great for nearly 30 years... and then Lehman brothers hit. What happened next can only be classified as an epic collapse in shadow banking as all the faith in the system had been extinguished and counterparties, unsure if anyone would be standing tomorrow, demanded an acceleration on their credit, liquidity and maturity transformed liabilities, irrespective of what state or what penalty such acceleration would entail. And this is where the Fed comes in.

The chart below shows the total amount of shadow liabilities broken up by constituent parts since the 1960s. What is obvious is the exponential surge in notional, hitting a peak of just shy of $21 trillion in Q1 of 2008, and then going straight down.

More important, however, is the sequential change in liabilities within this "shadow" system: having grown every quarter for decades until June 2008, things changed rapidly with the end of Lehman brothers, and much to the chagrin of the Fed, have not improved 4 years later. In fact, as the chart shows, the peak draw down in one quarter was a stunning $1.5 trillion in credit money deleveraging in one quarter! This is an amount that all else equal, would have caused an epic collapse in either US GDP or the stock market, as trillions in credit money were taken out of the system. Remember: credit money is fungible, and 'fractionally reserved.' All said, there has been over $6 trillion in deleveraging within shadow banking since the Lehman collapse.

Which brings us to the point of this post.

In Q2, as per the just released Flow of Funds report, the deleveraging continued. In fact, between money market funds, GSEs, Agency Mortgage Pools, Asset Backed Security Issuers, Funding Corporations, Repos, and Open Market Paper, also collectively known as "shadow banking liabilities", in the second quarter the US saw another $141 billion in deleveraging take place, following the $164 billion in Q1, or a total of over $300 billion year to date.

This took the total amount in shadow liabilities to $14.9 trillion for the first time since 2005. It also means that as of right now, the shadow banking system, which continues to deleverage, and the traditional banking system's liabilities, which continue to grow primarily due to reserve creation by the Fed during periods of unsterilized QE (such as right now courtesy of QEternity), and which amounted to a record $14.9 trillion as well, have reached parity.

This is a historic inversion point for three main reasons:

  1. As the shadow banking system delevers, the Fed has no choice but to relever traditional bank liabilities, via reserve injection to keep the system at least at equilibrium, if not leveraging at the consolidated level. In both Q1 and Q2 the Fed failed to generate the all critical credit releveraging, as first $110 billion in Q1, and then $58 billion in Q2 credit money exited the closed system via maturities without being rolled over, redemptions, conversion into hard assets, etc.
  2. Paradoxically, it is precisely due to its action, with which the Fed continues to remove faith in the US financial system as a standalone entity and one that can function effectively without a central bank backstop at every corner, that the ongoing deleveraging within the all critical shadow banking system - the one monetary conduit which as noted above is the closest thing to a inflation-free lunch due to the lack of immediate inflationary threats - continues. As noted above, so far in 2012 there has been $300 billion in deleveraging here alone.
  3. Completing the Catch 22 loop, the Fed, which is cornered, will continue to do what it does, reflating traditional liabilities, creating reserves, deposits, and currency, all of which have an exponentially greater inflationary propensity that the circular liabilities continued within shadow banking, and which eventually will breach the dam door of inflationary expectations leading to an epic surge in priced in and/or concurrent inflation.

Visually, this can be presented as follows:

The chart above shows what the consolidated deleveraging - combining shadow and traditional banks - since the Lehman collapse. All told there is still a $3.9 trillion hole that need to be plugged for the 'market' to simply return back to its 2008 peak credit levels. But what is truly a slap in the face of the Fed, and what confirms that the more the Fed "acts" the more it shoots itself in the foot, is that the last time we did this analysis, the hole was "only" $3.6 trillion. In 6 short months, the Fed's relentless intervention in markets, managed to force the deleveraging of over quarter of a trillion in additional credit money!

It also explains why the Fed knew long ago, that it would have to engage in a relereving program that offset at least the continuing deleveraring in shadow aggregates: first $40 and then $85 billion a month sounds about right, and is an amount that will at best keep the system at its current state as opposed to actually growing it.

And while one does not have to be a rocket scientist to have grasped by now that all the Fed does is self-defeating, what the above analysis does do is provide a primer to all those Economy PhD's who still fail to grasp how the modern economy works, specifically why so far the inflationary surge has been deferred.

In short: the more the Fed actively relevers using conventional conduits that spur the threat of inflation, and the more that shadow conduits delever, the greater the risk that inflation will finally come to roost. Because that $3.9 trillion in incremental reserves (and recall that already both BofA and Goldman, following our example, determined that the Fed will need to do at least another $2 trillion in QE, which means much more in reality) that will be created to offset the ongoing shadow deleveraging will simply pump up various asset classes, until the hard asset spillover finally hits, and no matter how much SPR jawboning, no matter how many CME margin hikes, no matter how many Saudi rumors of increase crude production, prices of hard assets will finally explode.

We can at this point say that an inflationary surge is an absolute certainty if not for one thing: if somehow the deleveraging in the shadow banking system is finally offset (and with the GSEs now in runoff mode this is a virtual impossibility), and Bernanke can take his foot off the gas, then there may still be a chance. However, as noted, 4 years in, this has not happened, and it will not happen for one simple reason: at its core, the market, which despite all of Bernanke's attempt to the contrary, realizes that a centrally planned system is ultimately unsustainable, and quietly, behind the scenes, those who have shadow credit relationships are promptly unwinding them while they still can, and using the proceeds to invest into hard asset for the inevitable T+1 moment.

The bottom line paradox here is that the more forcefully the Fed intervenes, the greater the implicit loss of confidence in the system, the greater the shadow deleveraging, and the more definitive is the ultimate destruction of the capital markets as we know them. Of course, there is still a chance that Bernanke will step back and realize what he is doing. However, since all Bernanke is, is a pawn of those whose wealth is conserved in the US equity tranche, it means that it is now, and has been for the past 4 years, impossible for him to stop.

And in not stopping, Bernanke has sowed the seeds of not only his, but everyone else's destruction.

* * *

Finally, and confirming the above observations have some basis in actual reality, is the following chart from Citi's Matt King, who implicitly summarizes everything said above as follows: "Much credit growth was based on collateralized lending." Well, the collateral has now run out.

And the "wrong horse" is precisely what all those who come up with convenient, three letter goal-seeking theories to justify an ideological bent, are focusing on. If instead of reading 1980s textbooks, all those "modern market" thinkers were to grasp just what it is that drives the market, we might still have a chance. 

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transaccountin's picture

Or about 4 more years of QE - enough for O's 2nd term.

Jendrzejczyk's picture

No amount of Qe will ever be enough.

Assume the crash position and kiss your ass goodbye.



Precious's picture

... Only limited by how many trees are stlll standing.

nope-1004's picture

Shadow banking deleveraging is hugely deflationary.  But ironically it is this deflationary squeeze that the Fed finds itself in that will cause a complete hyperinflationary outcome.

And that is why anyone with an ear to the ground can 'feel' something is not working right in the economy.


Ying-Yang's picture

Thank you Tyler, a hell of a lot of work to put this information out. I can't believe I read it on a Sunday night but you make it very clear how this is going down.

Kudos for your work and patience in explaining this.

Shocker's picture


Problem now is, we keep pumping money into the system but the results are not there.

The economic siutation is still not great, to say the least



derek_vineyard's picture

just one more drink....funny how the last round repeats itself over and over

economics9698's picture

I like your work Tyler but there are different ways to see the same thing.  Good research and this will be a epic fail.  Still laughing about how you explain this crap.  Let's see, 3 years, 10 months, say 2013 or 2014?  In there somewhere.

I like looking at the $2.8 trillion and the almost 100% correlation to the drop in the M2 velocity.   Scares the shit out of my students. 

Maybe I will rip off your work and do a thesis on it.

All Risk No Reward's picture

9698, we need a thesis on Debt Money Tyranny and how it is engineered to bankrupt its host society to those few people who control debt based money.

Debt Money Tyranny money flow chart (PDF)

Please share th elink so others can undersant the con-game being played on all Debt Money Tyrant victims and we have to identify the Debt Money Tyrants and put an end to their crimes.

Sun Tzu, Art of War

"War is all about deception."

"The best warriors NEVER have to fight."

"If you have to fight a war, end it quickly or you will bankrupt the nation."

-- Corollary: "Anyone selling a nation a never ending war has, as one of its prime objectives, a the goal to bankrupt the nation."

derek_vineyard's picture

3 trillion, eight hundred ninety nine thousand, nine hundred ninety nine bottles of beer on the wall 3 trillion, eight hundred ninety thousand thousand, nine hundred ninety nine bottles of beer; take one down,  pass it around...............

Bobbyrib's picture

In the future it will be 3 trillion, eight hundred ninety nine thousand, nine hundred ninety nine peices of fiat currency on the outhouse wall.

markmotive's picture

Clearly the Fed hasn't learned the lessons from the past decade.

Perhaps a refresher is needed?

Peter Schiff's raw interview footage from "The Bubble":

All Risk No Reward's picture

I think it is you who have not learned the lessons of thousands of years of history!

The Trojan Horse Fed is doing what it was engineered to do - saturate a nation with unpayable debts.

They lead you to believe they will destroy the currency so you don't get too mad at this militarized debt campaign because you don't see the end result of destitution that awaitys your community.

The debt is a rope that is being placed around you neck.  You think the Fed will cut that rope, that's not the plan.  Th eplan is to hang your *ss.

No way the Money Power, that controls the Fed, wipes out the dollar while they own trillions of them and trillions more in debt holdings.  JP Morgan isn't giving out 3.5% 30 year loans because Jamie Dimon is promoting hyperinflation as a BOD on the Fed.

QE is about transferring the cash from society to the banksters while transferring the bankster debt back to society.

That's tying the knot on that rope around your neck.

The Fed controllers want to impoverish you, not themselves.

That should be self evidenct.  The Fed IS NOT run by government lackies that are stupid.  It is run by the most wicked, diabolical international banking cartel the world has ever known.

As we speak, they are offloading their worthless 2nd mortgages onto the Fed's balance sheet.  When the losses are recognized, the tax payer will be on the hook.  The banksters are getting paid in full for worthless chit...  and they are stupid?

No, society is stupid.  Everything they do is about ripping off society's faces... not bailing out debtors with hyperinflation.

They will hyperinflate, but only after they've stolen almost everyone's chit first.

LMAOLORI's picture



Shocker "Problem now is, we keep pumping money into the system but the results are not there.The economic siutation is still not great, to say the least"

That's only a problem for the segment of society who obviously do not count.

When your neighbor loses his job it's a Recession when you lose yours it's a Depression (sarc)

Federal Reserve policies favor the rich

On a more serious note I get this the Fed said they would be sQEasing us until pretty much they can't get away with it anymore.

In about-face, Fed official eyes low rates for years


I know Lehman an investment bank was over leveraged, I understand it was Reserve Primary (a money market mutual fund also part of the shadowing banking system) that originally broke the buck and I know we are still at risk of that very same thing happening again at anytime. I also understand the ramifications. Since many pundits are now saying the Fed did not need to do this what I would like to know is WHO caused the actual meltdown (the run) to begin with and why our government never answered that question? 

Wall Street’s Collapse to Be Mystery Forever: Jonathan Weil


Excellent Article btw Tyler thanks for the explanations through out the comments you helped simplify it a great deal.


Harbanger's picture

"Assume the crash position and kiss your ass goodbye."

Not necessarily, some welcome it.  It all depends on who you are, and how you prepared.   You are either part of the solution or part of the bitch club¿  I live in the US and we WILL restore our Constitution. 

CompassionateFascist's picture

Charts & Grafs, lotsa chartz and grafs. Not in this wee small hour. Put it this way: US economy has been ravaged by 20 years of cheap labor-insourcing and good job-outsourcing. Only way to keep up any semblance of demand is to issue debt then monetize same. It'll work until it doesn't. And that'll be: when the first oil tanker goes down in the Straits of Hormuz.        



vast-dom's picture

no amount of Fed accounting will be accountable. no value in Fed's numbers. no correlation between Fed and reality. just throw any number out and it will be twisted and made to make sense in this nonsensical ponzi amongst ponzis.

Rogue Trooper's picture

Brother(s), you got some change?

lloyd blankfein

Colonel Klink's picture

"Assume the crash position and kiss your ass goodbye"


No thanks, I'll take the gold or silver parachute and get the fuck out of the plane!


See ya sheeple!

jekyll island's picture

The fall of Lehman Bros. caused the daisy chain to break.  Counterparty risk was balanced in that if nothing else both sides of the CDS could be zero'd out with no winner, no loser, just one very relieved and one very pissed off participant.  Now there are big winners and big losers and there is no solution.  The time is now to make your move to protect yourself from the collapse in both the banking system and the stock market.  Bullish for gold.  

derek_vineyard's picture

was watchin ice road truckers on tv and one guy wuz haulin' 1 mil in tungsten

Rogue Trooper's picture

Someone was ahead of the curve.  Should have been long tungsten earlier... all about timin'

This is getting more bizarre by the hour.

See you all in hell ZH BitChez

neidermeyer's picture

When the music's over
When the music's over, yeah
When the music's over
Turn out the lights
Turn out the lights
Turn out the lights, yeah

When the music's over
When the music's over
When the music's over
Turn out the lights
Turn out the lights
Turn out the lights

For the music is your special friend
Dance on fire as it intends
Music is your only friend
Until the end
Until the end
Until the end

lasvegaspersona's picture

45.88 months using 3.9 T and 85 B/ month fed activity

vmromk's picture

End the Fed NOW, Bernanke belongs in PRISON.


Agreed, but I'm quite sure prisons are also owned by bankers. 

tickhound's picture

Crime does pay when you pack cells for profit.  Corrections Corp of America (CXW) at NEW HIGHS BITCHEZ! 

Is that your gum???  WELL PICK IT UP!!!

OpenThePodBayDoorHAL's picture

I love the story where states are trying to sell off prisons to private companies...but the companies have asked for a gov't guarantee of 90% occupancy

Nice. The government now has a financial incentive to put people in prison. Growth baby!

Rogue Trooper's picture

HAL I'd go further and try to see this from Krugman's angle.

Why not let the 'occupants' out say, three months in and three months out, that way they can go out and 'break some windows', etc.  This will all be GDP positive.  You could put those ankle bracelets on them and track them back to ensure they go back to Prison and keep the 90% occupancy metric intact. Everyone wins!

I'm a fuckin' Keynesian geninus, where's my Noble Prize BiTChez!

Clashfan's picture

And increasingly, more and more people get shot before even making it to prison, like this double amputee in a wheelchair:

walküre's picture

Buying billions in toxic waste from banks at face value is NOT improving the economy. It improves the banks so they may jerk the people around a bit harder because they're now liquid again, compliments of the Fed.

Destroy the debt, burn it up, cut it down to zero and let people RESTART. Everything else is bullshit lipstick on a pig.

TonyCoitus's picture

The Fed says they are buying $4o billion a month in agency MBS. I assume this means new origination mortgages from Fannie and Freddie.

Why are you assuming the Fed is buying toxic mortgages from banks?

What am I missing?

Bay of Pigs's picture

Nothing. Bennie Mac has the situation handled nicely. LOL.

delacroix's picture

are $40 a month in new mortgages being originated, in the current economy? or do the banks sell their crap to fanny/freddie first, and then it's purchasable by the fed?

delacroix's picture

my suspicion, is that the fed will purchase the worst fraud laced crap, with the potential to expose criminal activity on the part of member banks

Winston Churchill's picture

Damned right.The bondholder law groups are slinging lawsuits around with

trillions of potential costs for TBTF.That before the LI(E)BOR ones.

Don't think the Fed can print a big enough 'rug" to hide it.

AGuy's picture

"this means new origination mortgages from Fannie and Freddie. hy are you assuming the Fed is buying toxic mortgages...."

The GSE are hold Toxic mortgages. Although, Perhaps there is a little more to this story. For instance, China owns a lot of GSE Debt. Perhaps China has decided to dump their GSE debt, cash out and use the money more constructively.

FWIW: QE3 is 85 Billion a Money, 40 Billion in GSE and 45 Billion in Gov't debt.

walküre's picture

When twist is done at the end of 2012, the Fed only buys MBS. Unless of course they announce more gov't debt purchases. But Tylers put here in chartology that there's a limit as to how much the Fed can twist before they run out of twistable paper.

Crap shoot. Whatever they're doing.

andrewp111's picture

The unlimited Congressional guarantee of Fannie and Freddie expires at the end of 2012, and it may not be extended. By buying GSE MBS, the Fed is creating a bid under these assets and providing a way for China (and others) to sell their holdings. Without a Congressional guarantee or a Bernanke bid, Fannie and Freddie would go poof almost immediately. I mean, what investor in his right mind would buy crap mortgages without a Government guarantee??

AGuy's picture

"When twist is done at the end of 2012, the Fed only buys MBS. Unless of course they announce more gov't debt purchases."

Since when did the Fed Gov't not announce or even hinted they will stop? In fact the language for QE3 is now open ended with no date nor cap on future purchases.

"But Tylers put here in chartology that there's a limit as to how much the Fed can twist before they run out of twistable paper."

The Fed will simply switch to buying short term debt again.  Rinse - Repeat, You know the drill by now. Also consider that the bulk of new debt (to cover the +1 Trillion deficit) is purchase by the Primary Dealers, who borrow from the Fed to by Govt' Debt. This is why Bernanke dictates that Interest rates will remain low into 2015 so the Dealers go on buying Gov't debt and borrow from the Fed.





walküre's picture

Please! Do yourself the favor and DO NOT ASSUME anything when it comes to any actions by the incredibly untalented Mr. Bernanke. He is doing whatever it takes to save his banking buddies asses. Nothing more and certainly nothing less!

The details surrounding the MBS purchases are murky at best. Ben pulled the number of 40 billion straight out of his ass. One could almost suspect that the Fed isn't doing SQUAT but their announcement sure lifted the markets and got a few more suckers excited. Without a Fed audit, nobody knows what the Fed is holding, purchasing, selling, twisting, exchanging etc.

In the end this whole campaign could turn out to be fluff.

GOSPLAN HERO's picture

Mr. Bernanke, we have reached the far country.

neidermeyer's picture

‘Never get out of the boat. Absolutely goddamn right. Unless you were goin’ all the way. Kurtz got off the boat. He split from the whole f***in’ program.’

aint no fortunate son's picture

There are no assets at the end of a rehypotecation chain... but, but, what about tungsten?

Jack Burton's picture

Tungsten? Where is it mined? Whatever country has the most must need liberation and democracy. Whoever controls the tungsten controls the world.

Are not tungsten producing nations threatening their own people? A humanitarian NATO bombing is in order.