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The Fed's Bailout Of Europe Continues With Record $237 Billion Injected Into Foreign Banks In Past Month

Tyler Durden's picture


Last weekend Zero Hedge once again broke the news that just like back in June 2011, when as part of the launch of QE2 we demonstrated that all the incremental cash resulting form the $600 billion surge in the Fed's excess reserves, had gone not to domestically-chartered US banks, but to subsidiaries of foreign banks operating on US soil. To be sure, various other secondary outlets picked up on the story without proper attribution, most notably the WSJ, which cited a Stone McCarthy report adding the caveat that "interpreting the data released by the Federal Reserve is a bit challenging" and also adding the usual incorrect attempts at interpretation for why this is happening. To the contrary: interpreting the data is quite simple, which is why we made an explicit prediction: 'We urge readers to check the weekly status of the H.8 when it comes out every Friday night, and specifically line item 25 on page 18, as we have a sinking feeling that as the Fed creates $85 billion in reserves every month... it will do just one thing: hand the cash right over straight to still hopelessly insolvent European banks." So with Friday having come and gone, we did just the check we suggested. As the chart below shows, we were right.

Another way of showing what has happened: in the past 4 weeks, the Fed has injected a record $237 billion of cash into foreign banks with access to the Fed's excess reserves: a number greater than both the cash influx surge seen after the Lehman collapse, and faster and more acute than the massive build up of cash during the spring and summer of 2011 when all the Fed's brand new QE2 cash was once again, solely used to overfund European bank cash.

Another way of showing precisely what we said would happen, and what is happening: in the past month, as $237 billion in cash was being handed over by Ben Bernanke to foreign banks, cash to both small and large domestically-chartered banks declined.

The result is that of the record $1.8 trillion in cash sloshing within the US financial system (consisting of US and foreign banks), a record $955 billion, or 52.6% of total is now allocated to foreign banks.

Do we know that the cash in the US financial system is purely a result of the latest open-ended QE? Yes we do, because as the chart below shows, every dollar change in excess reserves created by the Fed is tracked tick by tick by the total amount of cash held by US and foreign banks. And as the yellow area - foreign bank cash - in chart further shows, all the cash generated by QEternity has gone straight to foreign banks.

Another way of showing this correlation: the change in excess reserves vs just the change in cash assets held by foreign banks. There is no doubt on which banks' balance sheets the Fed's "excess reserves" are appearing as cash.

Finally, as a reminder there was a second part in our forecast as to what these European banks will do with this fresh prop-trade funding cash courtesy of Bernanke - they will "push the EURUSD higher, until, as in the summer of 2011 it goes far too high, crushes German, and any other net European exports, and precipitates yet another wholesale bailout of Europe by the global central bankers. Just as the Fed did in 2011."

Sure enough, it required the intervention of none other than Mario Draghi last Thursday to stop the massive, sharp ascent in the EUR in the past two months, which as we showed in the morning before the ECB's announcement on Thursday, had resulted the EUR surge by over 10% on trade-weighted terms. The reason for this intervention: to prevent the collapse of what little is left of Europe's export economy. However, unlike previously, now that Japan is also actively crushing its own currency to promote its exports over those from Germany and France, things will be just a little bit more acute as everyone scramble to be the exporter of only resort to what little import demand remains in a world where everyone is desperate to grow their trade balance through currency manipulation.

So whether European banks will continue buying the EURUSD, or redirect their Fed-cash into purchasing the ES outright, or invest in other even riskier assets, remains unknown.

What is, however, known beyond a reasonable doubt is that at least through this point, the sole beneficiary of the Fed's open-ended quantitative easing which launched in September of 2012, and which was supposed to help lower US unemployment and raise inflation (it will certainly succeed in that eventually, and what a smashing success it will be), are once again solely foreign - read almost exclusively European - banks.


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Sat, 02/09/2013 - 16:24 | 3229148 q99x2
q99x2's picture

Bernanke needs to be arrested--NOW.

Sat, 02/09/2013 - 16:30 | 3229173 negative rates
negative rates's picture

Yea, like this moment kind of now!

Sat, 02/09/2013 - 16:34 | 3229182 I think I need ...
I think I need to buy a gun's picture

What happened to the KWN website? apparently your computer gets destroyed if you go to the site?

Sat, 02/09/2013 - 17:47 | 3229309 ziggy59
ziggy59's picture

Nothing happens except what is supposed to happen... Link opens up normally

Sat, 02/09/2013 - 18:00 | 3229330 gwar5
gwar5's picture

Just use DuckDuckGo and all is well.  I am only blocked by Google with those malware warnings. Censorship and desperation?


Sat, 02/09/2013 - 18:36 | 3229401 medium giraffe
medium giraffe's picture

DuckDuckGo for the win.  Not recording your search against your IP? Hurrah!

I know online privacy is important, but since most of us aren't trying to find secret blueprints or instructions on how to build things that go bang, it does make me chuckle when I think of all of those DHS data warehouses that have had billions spent on them storing petabytes and petabytes of mostly cats and porn.  Good luck MIBs :)

Sat, 02/09/2013 - 19:45 | 3229522 This just in
This just in's picture

Are you accusing us of viewing cats online?!  THem's fightin' words, giraffehole!

Sat, 02/09/2013 - 22:51 | 3229637 medium giraffe
medium giraffe's picture

hahahaha! strictly one-handed surfing kind of fella eh? :)

well, someone out there must be looking at a shitload of cats:

Sun, 02/10/2013 - 00:00 | 3229841 CH1
CH1's picture

Sure, just use a different search engine and it will fix everything!

Everything on the Internet can be done for free!

Free lunches forever!!

Sun, 02/10/2013 - 08:56 | 3230278 CheapBastard
CheapBastard's picture

Can also use Startpage by Ixquick and no worries, Mon:



It's like DuckDuckGo.

Sun, 02/10/2013 - 00:48 | 3229936 WillyGroper
WillyGroper's picture

no problem here.

Mon, 02/11/2013 - 18:20 | 3234885 Pegasus Muse
Pegasus Muse's picture

Strange.  My post from Sat, 02/09/2013 - 18:13 (Post 3229438) disappeared.  So did the post of another ZH-er who commented on it.  Wonder how that could have happened? I'm reposting my orginal post.  Curious to see what happens.


This video expands on the history presented by G. Edward Griffin in his book/video The Creature from Jekyll Island

 All Wars are Banker’s Warsfocuses on how privately-owned Central Banks and their mega-wealthy private owners (the Rothschilds, Warburgs, Rockefellers, Lazards, Brown/Harriman [the GW Bush family], Schiffs, etc.) use war to force countries to adopt their dishonest monetary system so these families can thieve those countries’ natural resources and honest labor, “paying” for it with worthless pieces of paper called fiat money.  Recent Bankster Wars include the Iraq War (Saddam wanted to sell Iraqi oil for gold, cutting out the US Dollar) and the Libyan Invasion (Gaddafi wanted to establish the gold dinar as the foundation for all currency on the African continent and he wanted payment in gold  for Libyan oil).  This video discusses how the bankers were behind the War of 1812, the American Civil War, and both World Wars.  Interesting stuff. 


All Wars Are Bankers' Wars

Written and spoken by Michael Rivero. The written version is here:

video: (44 min)

Sat, 02/09/2013 - 19:35 | 3229506 kill switch
kill switch's picture

This is it,,,Saterday Night JA DOUBLE Z

Sat, 02/09/2013 - 16:57 | 3229229 Silver Bug
Silver Bug's picture

It's QE to infinity. They aren't going to stop until it all blows apart.

Sat, 02/09/2013 - 17:37 | 3229297 SheepleLOVEched...
SheepleLOVEcheddarbaybiscuits's picture

Central banks have paved the way for a complete global financial collapse. What will set it off? Rising interest rates. This collapse is less than 2 yrs away.

Sat, 02/09/2013 - 18:57 | 3229437 Debeachesand Je...
Debeachesand Jerseyshores's picture

No the collapse is less than 200 base points away.

Sat, 02/09/2013 - 17:35 | 3229293 Deacon Frost
Deacon Frost's picture

The Federal Reserve Cartel is more secretive than the CIA and more powerful than the President or Congress and for that matter the world.

This is product of hundreds of years of refinement and the pinnacle of scientific oligarchic tyranny.




Sat, 02/09/2013 - 18:22 | 3229373 ISEEIT
ISEEIT's picture

That's like arresting just the street dealer. The BIS is his boss so............

Sat, 02/09/2013 - 18:25 | 3229377 ISEEIT
ISEEIT's picture

I guess my point is that Bernanke is just an actor...Just like bushy, both clintons, obammy, and so many of the other stooges who have sold out humanity on behalf of the bankster/communist elite.

They all need to go.

Sat, 02/09/2013 - 18:44 | 3229417 Jacque Itch
Jacque Itch's picture

Arrested?  By whom?

Sat, 02/09/2013 - 19:00 | 3229442 LongSoupLine
LongSoupLine's picture

Holy Fucking Shit!



This is nothing other than pure fucking High Financial Treason against the fucking United States and it's fucking taxpayers.  This motherfucking treasonous asshole must be fucking stopped.


You fucking full fucking plate of hot shit eating subhuman ass.  You fucking deserve everything that's fucking coming to you dickhead, and it's going to make fucking hell look like one of your fucking bank bitch sucking vacations to Davos, you Ivy league fucking puke.

Fucking eat hot european banker shit and die Bernanke.

Sat, 02/09/2013 - 20:17 | 3229578 CrimsonAvenger
CrimsonAvenger's picture


Sun, 02/10/2013 - 00:51 | 3229941 WillyGroper
WillyGroper's picture

LSL, dude you really need a powder or take up smoking. You're wound like an 8 day clock.

Sun, 02/10/2013 - 01:00 | 3229960 H E D G E H O G
H E D G E H O G's picture

WTF! Keep it up 'soup, I like it, and besides, it saves ME alot of typing :) Say what the fuck you want to say, I happen to agree with each and every word........

Sun, 02/10/2013 - 02:07 | 3230064 Colonel Klink
Colonel Klink's picture

Posted somewhere else before on ZH too.  It's not treason as defined.  It's "high crimes and misdemeanors" against the citizens of the US.  Same as for our elite politicans.

When will someone stand up and finally charge many of those in Washington with those very crimes?

Sat, 02/09/2013 - 23:04 | 3229776 bobthehorse
bobthehorse's picture

Europe is like Humpty Dumpty.

It can't be fixed.

Scrambled eggs, baby.

Sun, 02/10/2013 - 02:05 | 3230061 Colonel Klink
Colonel Klink's picture

But, but, but, Bennocio said he wasn't lending to foreign banks!  He said it!  And before CONgress no less!  I read it on the internets, it MUST be true!

Sat, 02/09/2013 - 16:25 | 3229151 Stoploss
Stoploss's picture

==========================FUCK THE FED=============================

Sat, 02/09/2013 - 16:45 | 3229201 ArkansasAngie
ArkansasAngie's picture


This is getting ridiculous.  I do not concent to giving money to europe.  I don't

I normally don't say this but ... WTF!

Sat, 02/09/2013 - 17:07 | 3229252 dick cheneys ghost
dick cheneys ghost's picture

suck having the worlds reserve currency, dont it

Sat, 02/09/2013 - 17:27 | 3229275 HoaX
HoaX's picture

I could link you some Rick Astley to cheer ya up?

Sat, 02/09/2013 - 17:37 | 3229294 Oldballplayer
Oldballplayer's picture

You do not have to consent.  The Fed is an independent bank that is only quasi government.   

They sit around in their mahoganey panelled rooms, smoking Havanas...reading Zero Hedge, laughing and screaming, "Fuck YOU, asshole.  Here hold my congac and watch THIS!"

Sat, 02/09/2013 - 21:26 | 3229682 sessinpo
sessinpo's picture

Government or not, you don't have to consent. But you will face the consequences, regardless.


And that my friends is why the 2nd Amendment is so important. At some point, enough people will be willing to give up their lives to fight the corruption and defend the other Amendments.

Sun, 02/10/2013 - 02:30 | 3230096 Colonel Klink
Colonel Klink's picture

The burning (powder) question is when?

Tue, 02/12/2013 - 20:09 | 3238460 Seeking Beta
Seeking Beta's picture

Hahaha...Wonder if they have strip pole inside the Fed?

Sat, 02/09/2013 - 21:08 | 3229651 medium giraffe
medium giraffe's picture

Know where you are coming from, but I don't think it's about America's banks / Europe's banks staying afloat as entities anymore, it's likely a lot more to do with systemic risk. 

I think at this stage they might just be trying to stop this beast from imploding:


Sat, 02/09/2013 - 17:19 | 3229267 Mongo
Mongo's picture

You have to decide... End the Fed or Fuck the Fed ... you can't have both

Sat, 02/09/2013 - 17:55 | 3229325 cossack55
cossack55's picture

Au contraire, you can end it by fucking it to death. 

Sat, 02/09/2013 - 18:49 | 3229423 neidermeyer
neidermeyer's picture

Three guys got stranded on an island. Two of the three were wimps and the other was a tough, strong guy.
One day, they met a tribe. The tribe chief told them that they could either have Death or Bunga-bung. He asked the first wimp: Death or Bunga-bunga? The wimp replied: Well, I want to live so I guess Bunga-bunga. He got ass raped.
The Chief asked the second wimp: Death or Bunga-bunga? He replied: I don't want to die, so Bunga-bunga. He got ass raped.
Then the Chief asked the tough guy: Death or Bunga-bunga? He replied: I don't want to get ass raped so I'll take Death! Everyone in the tribe then chants: Oooooooo! He choose Death! Death! Death by Bunga-bunga!!!

Sat, 02/09/2013 - 18:55 | 3229433 neidermeyer
neidermeyer's picture

F'em to death with regulations , make them bleed cash until every last person involved in their management is on food stamps and reduced to an efficiency apartment in the wrong neighborhood.. make the regulations retroactive by simply enforcing any of the thousands of regs that are currently ignored and going after all management in place since the 1990's no matter where they moved on to. 

Sat, 02/09/2013 - 19:25 | 3229490 LongSoupLine
LongSoupLine's picture

End the Fed or Fuck the Fed ... you can't have both



Oh yes you can...End the Fucking Fed.

Coinage Act of 1792 -

Sat, 02/09/2013 - 21:30 | 3229686 sessinpo
sessinpo's picture

In the current environment with a vast majority of ignorant, propagandized citiizens. The most likely outcome is that the FED, or FRB will fuck itself while fucking the citizens, and in turn end itself.


This charade could have been ended a long time ago by the populace.

Sat, 02/09/2013 - 16:25 | 3229152 Silverhog
Silverhog's picture

Creating a World Utopia has it's costs.

Sat, 02/09/2013 - 16:27 | 3229160 fourchan
fourchan's picture

As fiat money replaced hard or honest money the controls or constraints on population size, welfare state size, and land use exploded.

In this explosion the quantity of everything went up, and the quality went down.

This can be seen in the development of humans fed the slurry of welfare, resulting in a backwardization or de-evolving of those

consuming this socialist slop, the poor of the nation with bred in ever lower low iq's.

Blacks Mexican and white trash are now the republic turned democracy's majority and norm.

 You can thank the Federal Reserve and its real owners for what this country has become.

Sat, 02/09/2013 - 16:30 | 3229169 I think I need ...
I think I need to buy a gun's picture

thats an awesome viewpoint fourchan,,,,never looked at it from that view

Sat, 02/09/2013 - 16:42 | 3229197 Manthong
Manthong's picture

C’mon now, don’t be such a Debbie Downer.

Look at the bright side of the brave, new world.. kids can now have three parents.

Sat, 02/09/2013 - 20:07 | 3229558 Whiner
Whiner's picture

Give me control of your nations currency and I'll make anything I want out of it. I can most quickly destroy it. Thank you Greenspan and Bernanke. You sold us like your Tribe's Joseph into slavery. You will be judged with wrath and the second death.

Sat, 02/09/2013 - 21:35 | 3229692 sessinpo
sessinpo's picture

' You can thank the Federal Reserve and its real owners for what this country has become."


And you can thank modern day liberalism/progressives for that. The idea that Government knows better and should control its people.  Large institutions like the FED are tools used against people. They wouldn't exist if the population had a mindset that big government was bad and self responsibility was good.

Sun, 02/10/2013 - 21:02 | 3231765 YouAreBliss
YouAreBliss's picture

The GOP is in pocket of the Banksters...remember it was Dubbya and Uncle Hank who delivered the audit/oversight free TARP!!!!

Sat, 02/09/2013 - 16:26 | 3229158 ATM
ATM's picture

Must crash the entire Western World together!

Sat, 02/09/2013 - 16:46 | 3229205 Shell Game
Shell Game's picture

The Status mother-fucking Quo must go on..

Sat, 02/09/2013 - 16:30 | 3229171 JPM Hater001
JPM Hater001's picture

How do I qualify? I can speak like a frenchy if need be. The maid outfit may be needed

Sat, 02/09/2013 - 17:32 | 3229286 HoaX
HoaX's picture

Soz, we got eight countries lined up already. Get in the back of the queue behind Albania.

Cheers, the EU.

Sat, 02/09/2013 - 16:30 | 3229172 Joebloinvestor
Joebloinvestor's picture

Zero Hedge, showing others what they chose to ignore then realize they shouldn't.

They should at least give ZH credit.

Sat, 02/09/2013 - 16:31 | 3229174 Cdad
Cdad's picture

Ben Bernanke and the Federal Reserve Bank have become nothing short of a massive national security risk.

Sat, 02/09/2013 - 21:36 | 3229696 sessinpo
sessinpo's picture

To who?


For you and I, yes. For them, no.

Sat, 02/09/2013 - 16:34 | 3229181 l.kimbot
l.kimbot's picture

off topic, Tyler's, can we lose the supremely annoying  popup ads!

Sat, 02/09/2013 - 16:38 | 3229190 Silverhog
Silverhog's picture

Whats the matter with single asian girls trolling for a blog dork like me..................

Sat, 02/09/2013 - 18:47 | 3229418 Jacque Itch
Jacque Itch's picture

Yeah man.  That's the only action I'm getting this weekend.

Sat, 02/09/2013 - 16:54 | 3229218 From Germany Wi...
From Germany With Love's picture

You don't use an ad blocker??

Sat, 02/09/2013 - 17:17 | 3229263 Motorhead
Motorhead's picture

I don't get any pop ups (well, sometimes Paul Krugman pops up)...might be your settings.

Sat, 02/09/2013 - 19:03 | 3229448 medium giraffe
medium giraffe's picture

If you are using ie9, just go here (this list is specifically for ads):

Click on 'Add TPL'. It's legit and has MS blessing. Just adds a list of site exclusions to your browser, no software - tada! no more ads :)

Can be removed under 'settings' > 'manage addons' in ie9

Info on MS site re. TPLs:

Simples! :)

Sat, 02/09/2013 - 22:33 | 3229743 Meatballs
Meatballs's picture

ie9. Really?

Sat, 02/09/2013 - 16:37 | 3229186 chubbyjjfong
chubbyjjfong's picture

Anger doesn't cut it any more.. its just plain sad.

Sat, 02/09/2013 - 16:37 | 3229188 falak pema
falak pema's picture

the current Achilles heel to this Euro construct : the Feb elections in Italy.

Read this : Update: Italian Election Chart - Business Insider

What Pax Americana NWO  wants is soft, corpo, global corporism under CB coordinated control. But what could upset the apple cart NOW is Europe going viral  : into National socialist type narrow corpo fascism, à la Berlu/Farage/LepeN.

That is the NWO globalist nightmare in Eurozone. 

As far as the people of Europe are concerned its a choice between the Plague and the Cholera! 

Sat, 02/09/2013 - 16:40 | 3229195 Tyler Durden
Tyler Durden's picture

Or, one can stay away from tabloids, and find a far more in-depth analysis of the Italian elections on Zero Hedge:

An Italian "Hung Parliament" - Europe's Biggest Political Risk

Sat, 02/09/2013 - 17:28 | 3229278 Atomizer
Atomizer's picture

Another wall of mirrors the lemmings will walk down to support a bloated EU government expense.


Finding a new revenue source stream has turn out to be a US TV commercial.

Spray paint the debt problems away

Sat, 02/09/2013 - 17:56 | 3229321 Ham-bone
Ham-bone's picture

IS this also a pass through for LTRO repayments???

Sat, 02/09/2013 - 21:09 | 3229655 FL_Conservative
FL_Conservative's picture

Congratulations, Hambone.  I was scrolling through here to see if anybody brought that up.  That's exactly what this is about.  The Fed funding LTRO repayments, making the world think that the Euro banking system is healing because they were able to repay more than what was anticipated.  I wonder how the average "Merkan" would feel if they knew that they were going deeper in debt to bail out Europe because the fucking Fed decided that was a good idea.  And some folks want to know why we want to audit the Fed.

Sun, 02/10/2013 - 17:59 | 3231308 medium giraffe
medium giraffe's picture

Hey, good call Ham & FL, I was wondering where all the cash was coming from.  Dunno why I didn't put two and two together. Thanks.

Sun, 02/10/2013 - 18:00 | 3231309 medium giraffe
medium giraffe's picture

duplicate. apologies.

Sat, 02/09/2013 - 16:55 | 3229225 Totentänzerlied
Totentänzerlied's picture

"That is the NWO globalist nightmare in Eurozone."

Yes, having a few left-wing authoritarian client-states states become right-wing authoritarian client-states would be so awful!

Sat, 02/09/2013 - 17:12 | 3229244 falak pema
falak pema's picture

there are no left wing authoritarian states currently in europe! Even France or similar "socialist" countries have their hands tied in bankrutpcy and are slaves of the oligarchy construct where all the money is ; until it isn't...

They are all on the Global page today, more or less! And the knee jerk is coming from national socialism, which is NOT social democracy. 

Thank you Tyler, I missed that post! 

And, about tabloids : Its never wise to not have a skeptical but open look on all sources of info, however good or bad...just saying. Nobody is perfect. 

Sat, 02/09/2013 - 17:53 | 3229322 disabledvet
disabledvet's picture

"slavery in the modern age." hmmmm. there is much to be argued for (as correct EMPIRICALLY...not morally) in this regard. the headline sounds outrageous...but when you realize the bulk of those excess reserves are then turned around and used to buy treasuries you really see how "this Scam of the Century" is happening...well, it's not as "un-American as it sounds" i guess i would say. A true "bitches brew" of debt debauchery. Doesn't change the reality of the USA having to "pay its bills"...or as Bruce has so rightly pointed out here vis a vis Social Security "our obligations." i still think the fly in this ointment is a COLLAPSE in prices however...and Venezuela is definitely a move in that direction. (not for Venezuelans of course.) Clearly someone in the USA has their (pure evil) thinking caps on though. "Sure smells like someone from New York City." Again i reiterate my position..."if i were advising the President i would be telling him to build the biggest Army and Navy imaginable." Since i am NOT advising the President however (at least not that i am aware of) i guess we'll just have to go "full on Bill and Hillary" here.

Sat, 02/09/2013 - 18:06 | 3229345 falak pema
falak pema's picture

Kings and Emperors when they went bankrupt made war...just saying. Again and again in history. So you don't HAVE to pay your debts...

New Rome always has that choice; but its not a winning choice, based on self destruction of democracy and home middle class. If the US oligarchy feels thats an option then it will use it, if it can get away with it.

Sat, 02/09/2013 - 18:20 | 3229372 disabledvet
disabledvet's picture

"if it isn't being reported does it even happen." hmmmm. the whole thing sounded impractical...ludicrous...when they first started it. (QE 1). Point being "everyone has to be on board the US Treasury debt train." Certainly Japan and China would be all for it. When you go down the "list of thieves" its actually quite long. ANYONE who having made a product now wishes to sell THEORY...could be on that list as well. Clearly "they got lucky with equities." Once you get a boom in that space "that sucks up all the available product and moves prices higher at large." I still don't think they have an answer to falling prices though. "Outta bullets." Capitalism wins no matter how you cut it. "The State is nothing more than a vessel for debt containment." Sure..."cut the Social Security check." But everything else is a "for profit enterprise" with Barak Obama and the Clintons as "your patsy." Go long the Kennedy Center for Performing Arts i guess...

Sat, 02/09/2013 - 19:59 | 3229544 smacker
smacker's picture

There are only Left-wing authoritarian states in the European Union. Even those who label themselves as political 'conservatives' (eg Cameron's coalition in the UK, Rajoy's lot in Spain and Merkel's grupenzoids in Germany) are all in reality, Left-leaning at the very least. We have no political party anywhere in Europe that believes strongly in the principles of the Right, if we ever did. Economic collapse has forced them all to display their true colours.

Sat, 02/09/2013 - 21:34 | 3229690 nmewn
nmewn's picture

Here's a "little" diddy...

"This is not to say that the Nordics are shredding their old model. They continue to pride themselves on the generosity of their welfare states.

About 30% of their labour force works in the public sector, twice the average in the Organisation for Economic Development and Co-operation, a rich-country think-tank. They continue to believe in combining open economies with public investment in human capital.

But the new Nordic model begins with the individual rather than the state.

It begins with fiscal responsibility rather than pump-priming: all four Nordic countries have AAA ratings and debt loads significantly below the euro-zone average. It begins with choice and competition rather than paternalism and planning. The economic-freedom index of the Fraser Institute, a Canadian think-tank, shows Sweden and Finland catching up with the United States (see chart). The leftward lurch has been reversed: rather than extending the state into the market, the Nordics are extending the market into the state."

"Why are the Nordic countries doing this? The obvious answer is that they have reached the limits of big government. “The welfare state we have is excellent in most ways,” says Gunnar Viby Mogensen, a Danish historian. “We only have this little problem. We can’t afford it.”

Well, yeah, there is always that one little

Sun, 02/10/2013 - 05:46 | 3230207 smacker
smacker's picture

The Nordics (not really part of Europe) are seeing sense, but they have some way to go after years of the top-down socialist model.

A documentary recently revealed that Finland (and I guess other Nordics too) suffers from a quasi-fascist mindset. On the say-so of a neighbour (perhaps with a grudge), there are stories of kids being forcibly taken away from parents by Social Services on spurious grounds of bad parenting and into State care. The State wants kids to be brought up strictly in accordance with its requirements (aka brainwashing) and are reducing parenthood to little more than a State means of producing future workers. The Secret Family Courts in Britain are doing similar things since the last Labour Govt.

Sat, 02/09/2013 - 16:39 | 3229193 Jason T
Jason T's picture

The disintigration will continue.. and there is no power great enough to stop it.  

bankers will panic our of their asses soon enough. 

Sat, 02/09/2013 - 16:40 | 3229194 blindman
blindman's picture

job production!
price stability!
[KR404] Keiser Report: Wicked Debt Web

Sat, 02/09/2013 - 16:47 | 3229202 ekm
ekm's picture

When are you people going to believe what I've been saying.


QEs have only one and one goal only:

To monetize the bets, not the debts of the primary dealers.




These banks have done trillions in interest rate swap and credit default swap bets that the Fed is monetizing by order of the White House and Congress. Hence current hyperinflation in crude oil and food and commodities.


QEs never had a goal to fix the economy. The only thing QEs were and are good for, is to monetize the bets, not the debts.



Wake up. It's all about derivative bets, it has been, it is and it will be. And everything is in the hands of the White House and Congress, not the banks. The banks are screwed.

Sat, 02/09/2013 - 17:22 | 3229221 ekm
ekm's picture

Let me repeat this again:



Sat, 02/09/2013 - 16:59 | 3229233 Totentänzerlied
Totentänzerlied's picture

Why can't it be both?

Sat, 02/09/2013 - 17:01 | 3229238 ekm
ekm's picture

Debt can be easily handled. There are bankruptsy laws for that.


Bets with chinese and russian state owned banks are a geostrategic issue, not a legal issue, hence White House and Congress involvement.

Sat, 02/09/2013 - 17:20 | 3229268 Joe moneybags
Joe moneybags's picture

Too much shouting, and condescension, ekm.  You have a good point about the derivative nightmare, but don't talk down to the ZH audience.

Sat, 02/09/2013 - 17:27 | 3229272 ekm
ekm's picture

Point taken.

Bottom line, $85b/month is what western major banks need to pay for losses of derivative bets.

It is this simple.


Sat, 02/09/2013 - 17:43 | 3229306 Atomizer
Atomizer's picture

If a derivative falls in a forest and no one is around to hear it, does it make a sound?

Sat, 02/09/2013 - 17:48 | 3229310 ekm
ekm's picture

I love metaphors but this time I don't understand.

Please clarify.

Sat, 02/09/2013 - 18:00 | 3229331 Atomizer
Atomizer's picture

You don't understand your very own post?


$85b/month is what western major banks need to pay for losses of derivative bets


Simple mathematical equations have now become a job creation outlet for the Special Olympics.  Shakes my head!

Sat, 02/09/2013 - 18:14 | 3229357 ekm
ekm's picture

Ah I see.

Well, Atomizer, my formal education is engineering. Didn't pay much attention to learning about rhetorics. On of my biggest mistakes.

Sat, 02/09/2013 - 18:26 | 3229379 ekm
ekm's picture

And of course, all the other europian shit, like LTRO or ESM of anything else, has one goal only, pay for eurobanks derivative losses of bets.

Sat, 02/09/2013 - 18:50 | 3229424 Atomizer
Atomizer's picture


Not criticizing you, just poking you into the right direction. Just open your eyes, you can see it clearly.  many are scared shitless, hence the disarmament motive goals.

Sat, 02/09/2013 - 18:06 | 3229344 disabledvet
disabledvet's picture

"if it isn't reported on by ZH and ZH'ers did it ever actually happen?" In other words "if it isn't perceived as happening" don't we all just go on our merry way none the wiser? There is MUCH to be said...both in what you say ekm...and what has been said in response. "Par for the course" is acceptable in finance as well as golf? Hmmm. Boy. VERY interesting. Is the transportation space "the asset" used to back this whole debt boondoogle? sure...SOME banks get screwed (through the loss of the "borrow short to lend long" spread trade.) on the other hand if you're the Bank of North Dakota "it's like you died and went to heaven" They're sitting at a "crossroads" or "trading station" as it were...a place where goods are exchanged...and hence where capital is extended "freely." and CHEAPLY. They could build a space port out of their old ICBM launch silo's or something. anywho "i still thing Islam will order the attack." whatever the details "that has been the plan all along."

Sat, 02/09/2013 - 18:18 | 3229365 jbvtme
jbvtme's picture

fuck again

Sat, 02/09/2013 - 19:28 | 3229496 tip e. canoe
tip e. canoe's picture

if a Bearnank pays full price for a piece of shit security, does it still stink up the joint?

Sat, 02/09/2013 - 17:56 | 3229328 davidsmith
davidsmith's picture

You are absolutely right, and my God, how much in bets are we talking about now, $14 quadrillion? $21 quadrillion?  Let's see the research on THAT.  It's the only thing that matters.


There's revolution or starvation: no third way.

Sat, 02/09/2013 - 18:14 | 3229360 Things that go bump
Things that go bump's picture

I think we will get both.

Sat, 02/09/2013 - 18:23 | 3229374 ekm
ekm's picture

It is gradually looking that way.


Increase of food stamps accompanied by executive order aiming to ban guns. It smells.

Sat, 02/09/2013 - 18:17 | 3229367 ekm
ekm's picture

700 trillions as per BIS as reported over and over and over by ZH.


I get enraged when some people say that the Fed has contained inflation. Whaaaat?

Crude oil is in hyperinflation, commodities are in hyperinflation. Food is in hyperinflation. And all because of lost bets.

If it weren't for the food stamps, you'd have had revolution by now.

Sat, 02/09/2013 - 19:31 | 3229498 tip e. canoe
tip e. canoe's picture

you'd also have a serious price deflation in all of those items.

that is, unless the supply lines weren't cut off.

Sat, 02/09/2013 - 19:37 | 3229509 ekm
ekm's picture


Price deflation after those items are thrown into the consumption market from storage, like oil in 2008.

Sat, 02/09/2013 - 19:55 | 3229539 tip e. canoe
tip e. canoe's picture

lest we forget those all those oil tankers parked in international waters for the better part of 2009.  

oh yes, a blast from the past:

With on-land tank farms getting full, the discretionary stocks turn to oil tankers for floating storage. According to research by Gibson Shipbrokers, one in twelve of the world’s largest crude oil tankers are being used to store oil rather than transporting it.

Bloomberg gave a good visualization of this massive convoy:

“Those storage tankers, if lined up end to end, would stretch for about 26 miles, enough to blockade the English Channel.”

In the same report, Platts also noted broker reports showed 16 Very Large Crude Carries (VLCCs) have been taken by charterers such as Royal Dutch Shell (RDS.A), Barclays Capital (BCS), Vitol, and JPMorgan Chase (JPM) to store diesel/gasoil off European and Asian coasts.

Sat, 02/09/2013 - 20:06 | 3229555 ekm
ekm's picture

God bless you.

I had been looking for that specific post but couldn't remember.

Thx a lot. Just bookmarked it.

Sat, 02/09/2013 - 23:59 | 3229840 Babushka
Sun, 02/10/2013 - 00:24 | 3229869 ekm
ekm's picture

excellent link
thx a lot

Sat, 02/09/2013 - 16:46 | 3229203 Mark123
Mark123's picture

I am not sure I understand the ramifications of these excess reserves, and how foreign banks obtain/use them.


All I do know is that the Fed is buying up financial "assets" from its children (primary dealers) that equates to the same amount as the federal deficit (how coincidental).


At the end of the day the fed sucks up all the garbage loans from its children using new funny money, and the primary dealer "banks" own the USA.  Not sure what the Fed intends on doing with the garbage it has bought, but likely it does not matter since they can just keep it (not like they used real money to buy it).

Sat, 02/09/2013 - 17:07 | 3229209 ekm
ekm's picture

The answer is 'nothing'. As long as the order from WH and Congress continues, the Fed will buy shit from primary dealers, US and non US based in order to provide them with money to PAY FOR THE LOST BETS IN INTEREST RATE SWAPS AND CREDIT DEFAULT SWAPSS.


Question: Who are the counterparties? My mind tells me they are chinese and russian state owned banks.


Question 2: Do these primary dealers have anything left over to sell to the Fed? My mind tells me, nothing left to sell, hence 'EXCESS RESERVES'.

Sat, 02/09/2013 - 18:43 | 3229414 chubbyjjfong
chubbyjjfong's picture

Valid point ekm.  I would really like to know who, or what, is on the other side of Sovereign CDS.  Who is issuing them?  Also, are the same entities that issue them, the same entities responsible for bailing them out?  In other words, are those parties that bailout the PIIGS directly profiting from also issuing their SCDS and harvesting the regular premiums?  

So have I got this straight?  (Please forgive my lack of understanding, I'm starting to get my head around it.)

Big banks bailout the PIIGS.  

Big banks issue SCDS on those same countries contributing to massive derivative speculation totals.

FED, IMF, ECB, has to prop up the banks as a sovereign default would send this whole house of cards tumbling through the forced honouring of the SCDS and associated derivatives which the big banks created in the first instance.

The people of the PIIGS nations get totally screwed through forced austerity and lies to justify the bailout.

So in this way, bailout in reality means profit for the Heirarchy, Central Planners and big banks who started this whole mess. Just print money and distribute among the ponzi elite.

Am I on the right track here?


Sat, 02/09/2013 - 19:05 | 3229432 ekm
ekm's picture

Yes. It's just a matter of identifying the counterparties. By via negativa logic, it can be only chinese and russian STATE OWNED banks. Hence, there is dealings with Chinese and Russian Governments. This is not simple issue. They don't really care about JPM or GS. They talk to Washington or London or Berlin or Tokyo only.


Putin or Xi Jinping do not really doesn't care for small fish like Jamie Dimon or Lloyd Blankfein.

Sat, 02/09/2013 - 19:15 | 3229459 chubbyjjfong
chubbyjjfong's picture

On that logic you would have to assume that the FED then, via foreign banks and bailout shenanigans (wittingly or un-wittingly??), is ultimately funneling money into Chinese and Russian hands.  Why?  If that were true, The Chinese and Russians would be laughing their asses off.  Easy money from the western world chumps who have to run this ponzi in order to keep themselves and western society afloat.  Your thoughts?

Sat, 02/09/2013 - 19:31 | 3229489 ekm
ekm's picture


By orders of the White House and Congress the Fed is doing that. That money is being used to buy and store crude oil and commodities, hence commodity and crude oil hyperinflation.


The reason: Russians and Chinese may have strongly used WAR WORDING. US Navy is moving around China.

Based on what I read, I think Putin attacked the country of Georgia because US wanted Russia to take a loss on fannie and freddie bonds that both China and Russia owned.

Lo and behold, after Russian attack on Georgia in 2008, those bonds are payed 100% and QEs starts and russian pull away from Georgia.


Russians and Chinese have opposing interests though. Russians want high oil prices, chinese want low oil prices.


Sat, 02/09/2013 - 18:53 | 3229428 notadouche
notadouche's picture

Is it wrong to think the ultimate counterparty is the US taxpayer?

Sat, 02/09/2013 - 19:00 | 3229443 ekm
ekm's picture

I think it's incorrect, because nobody really cares about US taxpayer.

Also, by voting for a totallitarian like Obama, US taxpayers have accepted to be taxed to death in exchange for food stamps.


Freedom is a choice, so is slavery. By electing Obama, americans chose slavery, for the next 4 years at least.

Sat, 02/09/2013 - 19:15 | 3229461 notadouche
notadouche's picture

Oh man your killing me because you are so right.  Those stupid ignorant voters in the meaningless fly over states gave a clear mandate in repudiation of Obama but as you say for the taxpayer, nobody, especially the elites and media not only do not give a shit, but also look down their noses at these folks.

I don't suppose Bernanke has ever considered "not killing the golden goose", that goose being the US taxpayer or what's left of them?



Sat, 02/09/2013 - 19:21 | 3229479 ekm
ekm's picture

If you pay attention to Bernanke's interviews, he always trembles and shivers. He's into prozac or something like that. Pay attention to his lips.

What I'm saying is that the Fed has zero power. They just take orders.


Legally the Fed can take orders from WH and Congress. WH is trying to undercut the republican congress. I strongly think that Obama is the only game in town LEGALLY, Boehner is too weak, unless he mans up.

Sat, 02/09/2013 - 19:32 | 3229499 notadouche
notadouche's picture

Aldous Huxley predicition 1949:

"Within the next generation I believe that the world leaders will discover that infant conditioning and narco hypnosis are more efficient, as instruments of government, than clubs or prisons, and that the lust for power can be completely satisfied by suggesting people into loving their servitude as flogging them or kicking them in to obedience".

Prozac anyone because I'm not loving it yet?

Sat, 02/09/2013 - 19:39 | 3229513 tip e. canoe
tip e. canoe's picture

interesting hypothesis, mainly cuz i've also noticed the constant quivvering.   there's something shaking behind the mask.

Sat, 02/09/2013 - 19:43 | 3229516 ekm
ekm's picture

I do not think he will be selected again in 2014, simply because he's run out of mental power.

He's finished.

The chairman of the Fed is an academic position, not a CIA position. They do not get formal mental training like CIA operatives.

Sat, 02/09/2013 - 19:59 | 3229543 JimS
JimS's picture

And Rummy would have been better? ........ really? You are fucking kidding me, right? Both fucking parties are owned by the bankers, you can't see that? Get the fuck out of this Red/Blue frame of mind.

Sat, 02/09/2013 - 20:08 | 3229549 ekm
ekm's picture

There's absolutely no difference between repubs and dems in a practical way.


Tea Party tries to make a difference, but so far, nothing practical.What I'm saying is that Obama openly stated that he would enslave the people by giving them free stuff.

Romny did not say that, but he'd do it immediately after coming to power.

Sat, 02/09/2013 - 16:46 | 3229204 Miss Expectations
Miss Expectations's picture

Sometimes you have to destroy the entire world to save the banks.


Sat, 02/09/2013 - 16:52 | 3229213 WhiteNight123129
WhiteNight123129's picture

You can have credit fuel collapse when the boom is fueled by credit, but not when it is fueled by base money.

Your dollar bills in your pocket do not go bankrupt, please use them because inflation is coming. Keynes is right and so are Austrians. You need to get rid of excess debt, Austrians want a fixed level of base money and you shrink credit by bankruptices, and Keynesians want a fixed amount of credit so you shrink credit in relative terms by expanding money (printing).

The Fed has done the deleveraging by expanding base money to credit. No that inflation is coming, no need to print anymore.

HOwever this recovery is inflationary, PE are going to contract pronto. SHORT THE TREASURIES BITCHEZ.

The mainstream media has not figured out Gold, when you see ~nasty inflation~ on the newspaper sell your Gold.


Sat, 02/09/2013 - 17:19 | 3229266 Seasmoke
Seasmoke's picture

use them for what ???......i have enough silver and gold

Sat, 02/09/2013 - 18:05 | 3229337 WhiteNight123129
WhiteNight123129's picture

Negative duration assets.

Sat, 02/09/2013 - 16:55 | 3229223 Water Is Wet
Water Is Wet's picture

FREE MARKET FTW!!!!!!!!!!!!!!!!!!!!!!111

Sat, 02/09/2013 - 17:22 | 3229256 debtor of last ...
debtor of last resort's picture

Mario cannot pump because of Germany, someone has to do it? It's an unbelievable pile of shit. Ordered a ceramic waterfilter today.

Edit, it's not about the US, Europe, Japan. The system goes under, Israel buying FB, Ben buying EU banks. It's what i am reading for a few years now. The frogs are jumping out of the pot.

Sat, 02/09/2013 - 17:30 | 3229279 Savyindallas
Savyindallas's picture

Who in Israel is buying Facebook? I knew Zuckerman was just a figurehead pawn of the banksters, but selling to an Israeli entity? My account (little used though it iss) will soon be closed. 

Sat, 02/09/2013 - 19:20 | 3229475 WhiteNight123129
WhiteNight123129's picture

LTRO is collateralized lending, best proof is that they are trying to unwind it, shrinking the balance sheet, strengtehning the EURO.

Those guys are retarded, they will get a strengthening EUR while Japan is debasing. The workers in Germany are going to beg Merkel to print when no heavy machinery and cars are sold and while Japan is beating Germany on exports hand over first.

When ECB actually buys the periphery sovereign instead of threatening (PUT) that will mean printing for Good.

That will be good for deleveraging and good for your PM.

System not going under.

THe system will go under ONLY WHEN THE FED IS FORCED TO PAY RATES ON EXCESS RESERVES HIHER THAN WHAT THEY GET ON TREASURIES. At that point you have hyperinflation, small probability, but not the case anywhere near now.


Sat, 02/09/2013 - 17:14 | 3229258 Seasmoke
Seasmoke's picture

they are stealing American wealth

Sat, 02/09/2013 - 18:50 | 3229425 rhinoblitzing
rhinoblitzing's picture

Not Stealing - Your giving it up freely, everytime you pump gasoline, and buy imported/prison/slave labor produced goods - starting with the iphone most of you are using.

Sat, 02/09/2013 - 17:28 | 3229277 Herdee
Herdee's picture

Funny that the CIA doesn't consider this FED action to be a National Security Threat.

Sat, 02/09/2013 - 17:29 | 3229280 Joe moneybags
Joe moneybags's picture

This back-door European bank bailout is, no doubt, one of the chief reasons why the European stock markets have been rallying right along the the U.S., despite Europe's return to negative growth.  It's pretty easy for money managers to go and stay long with a Bernanke put stretching across the Atlantic.  Thanks for the facts and analysis, Tyler.

Sat, 02/09/2013 - 17:34 | 3229281 earleflorida
earleflorida's picture

#13)    "Who Owns and Controls the 'Federal Reserve Bank"   http//

#23)    "The Federal Reserve Cartel: The Eight Families"

Note: when Bush #41 was summoned to London by none other than thatcher... she told georgy boy not to waffle at what his, and her's  master's orders were, to be carried out! *Harriman & Prescott 

#33)     "The New World Order" __ by Eustace Mullins

 Bonus: The TwoburningBushes... and then their were Three Bush`ee's???__ remember everythring comes in [H]trees???

Extra Bonor!!! **The Entirety of the U.S. FRB is own'd by Foreign Banking interest totally private or off the radar tracking screen, period!


thankyou Tyler

Sat, 02/09/2013 - 17:32 | 3229285 ebworthen
ebworthen's picture



Sat, 02/09/2013 - 18:25 | 3229378 earleflorida
earleflorida's picture

as the founding fathers were all to aware of... they had the empirical hindsight, and the realistic innate foresight, to fully appreciate an unpredictable future as a pragmatic thesis...thus, they created and gave us-- 'a-rock-solid constitution'-- that some today, dare call archaic!?

Hang em All... the mother fuckers!!!

Sat, 02/09/2013 - 18:48 | 3229419 rhinoblitzing
rhinoblitzing's picture

Many of the Founding Fathers DID PREDICT THE FUTURE. Look at some of Jefferson's and Franklin's quotes - Prophetic.

Not so much because they were prophets - but they knew the history of empires, and that it rhymes/repeats. Study what influences and books they read. They gave us the tools to counter balance tyranny, but they knew that "The People" needed to be educated, moral, and G-d Fearing. Where are we now?

Sat, 02/09/2013 - 19:46 | 3229523 Uber Vandal
Uber Vandal's picture

Lord Byron's take on the future:


Here is the moral of all human tales –

‘Tis but the same rehearsal of the past,

First freedom and then glory – when that fails,

Wealth, vice, corruption, barbarism at last;

And history with all her volumes vast

Hath but one page.




The warnings of our founding fathers grow mute, their speeches and writings have been sequestered to musty mausoleums of forgotten and neglected libraries, and if they could speak to us today, their wisdom would most likely fall upon deaf ears.

Sun, 02/10/2013 - 09:22 | 3230306 CheapBastard
CheapBastard's picture

The Course of Empire


The fifth painting, Desolation, shows the results, years later. We view the remains of the city in the livid light of a dying day. The landscape has begun to return to wilderness, and no human beings are to be seen; but the remnants of their architecture emerge from beneath a mantle of trees, ivy, and other overgrowth. The broken stumps of the pharoses loom in the background. The arches of the shattered bridge, and the columns of the temple are still visible; a single column looms in the foreground, now a nesting place for birds. The sunrise of the first painting is mirrored here by a moonrise, a pale light reflecting in the ruin-choked river while the standing pillar reflects the last rays of sunset.

Sun, 02/10/2013 - 12:18 | 3230490 earleflorida
earleflorida's picture


excellent quote, uber... and follow through CB :-))


Sat, 02/09/2013 - 21:18 | 3229669 ebworthen
ebworthen's picture

So my thumbs down on calling the FED using U.S. taxpayer money to bail out European banks being theft and treason must be:

  1. Ben Bernanke
  2. Timmy Geithner
  3. Steve Liesman

Especially since there are no rational responses, just knee-jerk down votes.

Sat, 02/09/2013 - 17:33 | 3229288 holdbuysell
holdbuysell's picture

Well, Draghi did say he would do whatever it takes...which, apparently, includes having the US Fed print money on its behalf.

Sat, 02/09/2013 - 17:33 | 3229289 Joe A
Joe A's picture

Are these the same European banks that bought toxic US MBS?

Sat, 02/09/2013 - 17:49 | 3229313 HoaX
HoaX's picture

Seems like it´s payback time.

Sat, 02/09/2013 - 18:11 | 3229351 Joe A
Joe A's picture

I feel like I've been Rick Rolled. I guess that is how European banks felt when they realized that these MBS that they bought were pretty worthless. Perhaps the FED realized that the Rick Roll could come back if the European banks foreclosed all these homes. Or even worse, fill them with Eurotrash.

Sat, 02/09/2013 - 18:24 | 3229361 HoaX
HoaX's picture

Here´s some music tho! (And it´s not "Never gonna give you up" don´t worry ;)


Sat, 02/09/2013 - 19:26 | 3229492 Joe A
Joe A's picture

I expected to be Rick Rolled again but instead I got Queened!

Sat, 02/09/2013 - 18:26 | 3229380 ebworthen
ebworthen's picture

The whole point of central banks bailing out banks is to benefit bankers on the backs of the citizenry - of the U.S. and of Europe.

There is only paybck for the bankers, they are bailing each other out with our children and granchildren's future.

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