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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 - 18:34 | 3229395 HoaX
HoaX's picture

The main difference is the ECB balance sheet has been tightening since July 2012, and a lot of this money will prolly go towards paying back LTRO as stated by someone else in the comments. The Fed balance sheet on the other hand?

Sat, 02/09/2013 - 17:34 | 3229291 f16hoser
f16hoser's picture

Bernanke sure is generous with "OUR" money. Someone should take him out back to the wood shed.

Sat, 02/09/2013 - 17:52 | 3229320 gwar5
gwar5's picture

O/T Google blocking KWN site with malware warnings?  Use DuckDuckGo instead and all is well. 


I can't believe billions of people have to be at each others throats to keep up the status quo illusion of 1000 banksters.



Sat, 02/09/2013 - 18:13 | 3229339 HoaX
HoaX's picture

All joking aside, I do wonder how many of these "foreign" banks are actually US affiliates operating from for instance the UK to get out of Dodd-Frank and to take advantage of the CFTC waiver there?

I take it you´re unable to obtain any specific names/numbers for now Tyler? Would be damn interesting to see where exactly the money went.

Hrm..Nevermind, it would probably consist of a lot of the PD´s (thanks ekm)

Sat, 02/09/2013 - 18:29 | 3229348 Ham-bone
Ham-bone's picture

Fed did it before and they're doing it again.  But difference is previously they were defined amounts / time.  This period is not a period at all but an epoch.  $85 billion monthly until what?  We are only in the first inning of QE4EVER and already the stock markets are going, going...but bonds are quivering and wondering.  Massive excess reserves in China, US, and now loading up EU banks.  All to what end?

Do you want to play thermonuclear hyperinflation war?

Sat, 02/09/2013 - 18:19 | 3229369 Sudden Debt
Sudden Debt's picture

those graphs with the blue and red bars and the white background are funny... :)

Sat, 02/09/2013 - 18:27 | 3229383 lasvegaspersona
lasvegaspersona's picture

FOA said 'the Fed will buy all debt for cash and dump it on your front lawn. 'This is the way hyper I happens. Debt becomes cash ( M0) and then we need grocery bags and after that wheel barrows.
Got gold?

Sat, 02/09/2013 - 18:40 | 3229412 rhinoblitzing
rhinoblitzing's picture

Several times I have mentioned "The Swap Lines" between the Fed and other Central Banks are wide open, I did not need to check the Friday report Line 29 - Bernanke said so and stated it loud and clear - during his press conferences (plural) - in front ofthe press - live in person - open to questions...

HeyTyler - get out to the Fed at the next announcement - introduce yourself to the world - and ask for clarification and future guidance. I bet you would get in the front door with your press credentials and be the star of the show.


Sat, 02/09/2013 - 18:51 | 3229427 Son of Loki
Son of Loki's picture

The Middle Class better buy more Vaseline/grease/KY 'cause it's gonna hurt otherwise.

Sat, 02/09/2013 - 18:55 | 3229434 notadouche
notadouche's picture

Sounds to me like we are engaged in the ultimate act of "Social Justice"  Fucking over and taking from the "rich" US taxpayer to enrich the lesser more unfotunate rest of the world.  Wouldn't this be keeping in step with the agenda of the progressive movement?

Sat, 02/09/2013 - 19:01 | 3229445 notadouche
notadouche's picture

No douche because the only beneficiary's are banks and bankers.

Sat, 02/09/2013 - 19:17 | 3229470 IridiumRebel
IridiumRebel's picture

I love a good "douche on douche" convo.

Sat, 02/09/2013 - 19:23 | 3229484 notadouche
notadouche's picture

There's a blizzard.  If it were 150 years ago I'd be in my own version of the "Donner Party" about now.  "Rimshot"

Sat, 02/09/2013 - 19:11 | 3229436 WhiteNight123129
WhiteNight123129's picture

Fucking hypocrits on that blog, we have an inflationary recovery and you guys own Gold what is wrong with you?

the most fucked-up are the Europeans thanks to Germany.

Germany refuses to let bankruptcies and let the ratio of debt to base money shrink through bankruptcies (Austrian remedy) and she refuses to print, since LTRO is colletarized lending, so she refuses to let credit shrinks in relation to base money in relative terms by pushing base money up through printing (inflate away, the Keynesian remedy). Result in Europe is permanent debt slaves for the periphery, Soros is right this is going to lead EU to become USSR.

At least in hte US the debt will be inflated away. The productivity is declining and wages pressures are mounting. People will have higher nominal salaries, making it easier to repay their credit card and mortgage debts.

Well done Benny B.  Everyone hates you while you make the Gold bug rich, what an ingratitude. At least a thank you Ben postcard from Goldbug would be welcome. Scrooge McDuck million dollar long duration trade is getting fuck, but so be it, Rant all you want Santelli and PIMCO. Fuck you guys.




Sat, 02/09/2013 - 19:16 | 3229465 IridiumRebel
IridiumRebel's picture

Two words: Debt Monetization

Sat, 02/09/2013 - 19:21 | 3229480 notadouche
notadouche's picture

I'm not so sure about the notion of the higher salary you speak of.  

Are you being sarcastic when you place Europes blame on Germany and no assigning of blame to Greece, Spain, France, Portugal etc...?   The weak Europe beg to be saved by the Germans yet it's the Germans fault the EU is at risk?  Really?  My poor wothless brother who pissed his money away blames me for his woes because I won't unconditionally lend him money.  Really?  Then when I let him I find he's exponentially more poor than what he claimed and takes off to Vegas on the borrowings.  Really?  

Sat, 02/09/2013 - 19:15 | 3229462 IridiumRebel
IridiumRebel's picture

Inject some over here, tough guy! 

BTW: O/T I think I may finally have a suitor for my house to be sold. Send a quick fuckin prayer to the God/Fuckhead of your choosing that The IridiumRebel family may exit the housing(read financial rape) market before the fucker implodes. Help us baby Jesus. I want out! Liquid, Bitchez....liquid. Keep stacking!

Sat, 02/09/2013 - 20:04 | 3229552 HoaX
HoaX's picture

So, what you gonna do? Move into a rental? Tent?

Sat, 02/09/2013 - 20:16 | 3229576 IridiumRebel
IridiumRebel's picture


Did you know you are perpetually "rick-rolling" the world?

Sun, 02/10/2013 - 01:42 | 3230031 HoaX
HoaX's picture

Yah, kinda

Sat, 02/09/2013 - 19:17 | 3229469 trendybull459
trendybull459's picture

pitty,no one paid attention how such experiment of Central banking puppet finished in Holly Land Israel:


Sat, 02/09/2013 - 19:17 | 3229471 Clesthenes
Clesthenes's picture

Tyler, you wrote, “when as part of the launch of QE2 we demonstrated that all the incremental cash resulting form [sic] 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.

Actually, there’s more.

Back in Sep of 2008, when Paulsen demanded $700 billion from the Treasury (or else he and Goldman would impose martial law), a fact that escaped notice was that the Treasury didn’t have the cash.

So, where did it come from?

I’m really not sure.  But I do know that the Federal Reserve lent some $600 billion to almost thirty foreign central banks which passed the money on to its customers, who sent the cash (computer impulses) to the US Treasury in exchange for Treasury securities… all this according to FR statistical releases H4.1.

This is how the Treasury raised the booty demanded by Paulsen.

Once Congress authorized the booty, it was doled out and those thirty central banks paid their loans from the FR.  The repayment is evidenced by above H4.1 releases.

I have to surmise the booty was paid to customers of those thirty foreign central banks.  How else could they have paid their Fed loans?

The net result?  Customers of those thirty foreign central banks merely exchanged some $600 billion of bad paper (MBS, student loans, SBA loans, car lot loans, credit card et cetera) for another batch of bad paper (US Treasury securities).

Sat, 02/09/2013 - 19:42 | 3229519 tip e. canoe
tip e. canoe's picture

+700B.   nice way to break it down so clearly.

Sat, 02/09/2013 - 19:34 | 3229504 widget
widget's picture

First rule of Wall Street: You do not talk about Zero Hedge.

Sat, 02/09/2013 - 19:42 | 3229517 rhinoblitzing
rhinoblitzing's picture

So we should introduce ourselves.... Pleased to meet you...

Sat, 02/09/2013 - 21:15 | 3229663 ebworthen
ebworthen's picture

Bacteria forbid talk of Listerine.

Sat, 02/09/2013 - 19:44 | 3229521 Curt W
Curt W's picture

Off topic, Tyler I don't care if ads are along both sides, capitalism is great, but the floating one really sucks on my phone.   Love your site though, thanks.



Sat, 02/09/2013 - 19:49 | 3229527 rahbii
rahbii's picture

Money for nuthin' and debt for free!

Sat, 02/09/2013 - 19:53 | 3229534 topspinslicer
topspinslicer's picture

It is part of their mandate -- to do whatever in hell they want to do

Sat, 02/09/2013 - 19:53 | 3229535 LetsGetPhysical
LetsGetPhysical's picture

The American taxpayer says.... you're welcome Europeans. It's our pleasure funding your socialist utopia. 

Sat, 02/09/2013 - 20:08 | 3229553 HoaX
HoaX's picture

Your banks screwed us over to begin with, but thanks anyway!

Hey, if you ever wanna drop by for some R&R, got a nice villa with a pool near the beach for ya to rent in Southern Europe. I promise I´ll make you a good deal.


Sat, 02/09/2013 - 20:29 | 3229567 rhinoblitzing
rhinoblitzing's picture

I heard the EU passed a budget the other day -

Q: What was the expected outlay for Defense?

Sat, 02/09/2013 - 19:55 | 3229538 golden raccoon
golden raccoon's picture

Is it not possible that the Fed buys treasuries and MBS from domestic banks, and the domestic banks turn around and replace the securities by using their new Fed reserves to acquire replacements from U.S. subsidiaries of foreign banks?  Or that foreign banks with access to Fed open market operations, through their U.S. subsidiaries, consistently post the lowest asking price for treasuries and MBS (i.e. they want out)?  Or both?

Sat, 02/09/2013 - 20:21 | 3229540 One World Mafia
One World Mafia's picture

It’s a fallacy that a rising currency will mean you can’t export bc two things happen when you have a strengthening currency that reduce your overall costs. #1 is your raw material costs. Your components that you import from around the world will become less expensive for you. Also your capital costs will be lower. When you have a strong currency businesses can borrow money at more favorable terms bc the lender knows they will be paid back in a currency that’s not losing its value. So historically if you have a strong currency you have a lower cost of capital and you have lower raw material costs that help you be competitive.

The only reason you are exporting is to import. You are exporting to finance your imports, and if you can export less to import more you are better off bc you don’t have to work as hard to consume the things that you need. If you look historically, the US had a very strong currency when we had trade surpluses. We now have a weakening currency and we have trade deficits. The Japanese yen was much stronger during the 70s and 80s than it is now. It was rising sharply yet they had trade surpluses the whole time. Same thing with Germany. Germany still has a trade surplus, but Germany, when it still had the Deutsche Mark, the Deutsche Mark was strengthening thru 70s, 80, 90s against the dollar and its trade surpluses were growing. America with its weakening currency had growing trade deficits.

So it’s just not true that you can increase the real value of your exports by debasing your currency. You might be able to increase the nominal price that you receive for your exports, but that doesn’t mean anything if you can’t buy anything with that. What’s the value of Zimbabwe’s exports?

If it's caused by prop trading financed by cheap money from the Fed it will blow up.

Sat, 02/09/2013 - 23:12 | 3229785 FreeMktFisherMN
FreeMktFisherMN's picture

well explained, sir. The U.S. exported more than anybody when we still had sound money. Sound money means people reap the benefits of their productivity increases with lower prices. Ultimately what is wanted is stuff;purchasing power; capital. Everybody in Soviet Russia had a 'job' but they had nothing to show for it. 

Sat, 02/09/2013 - 23:29 | 3229806 Tyler Durden
Tyler Durden's picture

Well then please explain to the German exporters that they should be delighted by the plunge in the Yen, not furious about it.

Japan needs structural reforms if it wants to be competitive in global markets in the long term, Anton Boerner, president of Germany’s BGA exporters’ association, told Euro am Sonntag.


“We see the risk that Japanese companies will be a able to take away market share from German exporters because of changed exchange rates:” Boerner


“The German trade industry disapproves of the Japanese government’s policy that essentially skirts the independence of the central bank and floods markets with yen:” Boerner


Europe mustn’t give in and enter currency war: Boerner


European Central Bank must continue its current policy course: Boerner

Or, perhaps, exporters actually know better what happens to their exports and their economies when their currency surges.

It may even have something to do with that whole central bank-facilitated race to debase each and every developed currency in the "developed" world. 

Then again, they probably have the whole thing backward too.

Sun, 02/10/2013 - 15:03 | 3230956 supermaxedout
supermaxedout's picture

Japan got the job from the US.  Wonder what happenend to the currency agreement between China and Japan. Do they continue to exclude the US Dollar when doing business among each other. Most probably the agressive stance of Japan against China has something to do with this agreements. Now trade between the two nations got much lesser, so that the currency swap agreement between China and Japan is not that imprtant any longer. So Japan has now to attack German export business with the EU and the rest of the world. But this is doing a lot of harm also to Korea, Taiwan, and other important exporting countries.  Do the Japanese still buy oil from Iran? Most probably yes.  How do they pay for this oil?  In chinese Yuan ? Iran is not accepting US Dollars as payment for oil since a few years.  They sell only for Indian Rupees, Russian Roubles, Euros, Yuan and gold. How does this end ?

Fri, 02/15/2013 - 01:49 | 3245537 One World Mafia
One World Mafia's picture

They have a way of finding the wrong explanation for just about everything.

It's the same misconception as China needing a weak currency to aid exports when they have a citizenry that will benefit from a strong currency so that they can afford to purchase more of the products produced in China instead of subsidizing other countries cheap imports exported from China.

Sat, 02/09/2013 - 19:56 | 3229541 topspinslicer
topspinslicer's picture

The Marshall Plan was open ended -- Marshall Plan To Infinty

Sat, 02/09/2013 - 20:14 | 3229571 They Tried to S...
They Tried to Steal My Gold's picture

The most dispicable result of all this - is that the US TAXPAYER will be on the hook for all this, So now we find out 

"Bailout Nation is Not it's Bailout Planet - the Entire BANKING PLANET IS TOO BIG TO FAIL"

Forget Obama Forget Bush Forget Wall Street - IT SHOULD BE OCCUPY THE FEDERAL RESERVE 

With all this Bailiing out - Gold at $3000 - is flat out conservative - the Fair Value Number "Starts" at $5000



Sat, 02/09/2013 - 22:36 | 3229747 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

No only those in debt and who have valuable assets on the books when the shit house blows sky high.

Sat, 02/09/2013 - 20:14 | 3229572 ThisTimeIsDifferent
ThisTimeIsDifferent's picture

"Foreign banks"?

The "European" financial community is a wholly owned subsidiary of the US.

Yes go ahead and shut down Fed funding - that will be a painless victory - sparing us lots of "low intensity conflict" aka left wing/al qaida/martian terrorism.



Sat, 02/09/2013 - 20:15 | 3229573 Downtoolong
Downtoolong's picture

Organized crime. It makes the Mafia look sooooo lame by comparison.


Sat, 02/09/2013 - 20:19 | 3229582 Atomizer
Atomizer's picture



Nov 28, 2010: The debt ridden Greek government has been accused of wasting taxpayers' money in the persecution of rebel monks from the country's Holy Mountain, Mount Athos.

Patriarch Bartholomew, the head of the Orthodox church wants to evict the monks from their monastery because of their opposition to his leadership and his attempt to secure closer ties with the Catholic church.

The monks have set up a smuggling operation to overcome a police and coastguard blockade aimed at forcing them out of Esphigmenou (ESS FIG MEN OO ) monastery.


Terrorism reside in those monk houses. /sarc


Sat, 02/09/2013 - 21:03 | 3229644 ekm
ekm's picture

As a practising christian orthodox, I can tell you that one was hilarious.

Sun, 02/10/2013 - 00:39 | 3229907 tip e. canoe
tip e. canoe's picture

ever read this?

how do you say cui bono? in greek?

Sun, 02/10/2013 - 12:54 | 3230642 WillyGroper
WillyGroper's picture

Excellent article. Read it when it came out. 

Sat, 02/09/2013 - 20:25 | 3229587 Atomizer
Atomizer's picture

Everyone of these stories circles back to the same group. They will end up on TV under a global manhunt. Mark my words..

Sat, 02/09/2013 - 20:37 | 3229603 goldenbuddha454
goldenbuddha454's picture

No wonder Draghi punted when he could have overtly stepped into the currency wars, he's already been fully involved via a great big syringe full of FIAT courtesy of BEN!

Sat, 02/09/2013 - 20:37 | 3229605 Everybodys All ...
Everybodys All American's picture

Five years later and the Fed is still bailing out banks to the tune of nearly a quarter trillion in one month. That's unreal.

Sat, 02/09/2013 - 20:42 | 3229609 Hubbs
Hubbs's picture

Thanks Tyler,


It doesn't get any simpler than that.


BTW, for all you statisticians out there, what are the p factors and the correlation of these two graphs?  About the same as the length of each day measured at the equator?

Sat, 02/09/2013 - 20:47 | 3229612 toros
toros's picture

If the newly printed Bennys are being used to plug the holes in the euro-banking dike, what does this mean for the domestic shadow banking hemorrhaging?

Sat, 02/09/2013 - 21:04 | 3229646 strangewalk
strangewalk's picture

The Chinese get away with doing something similar all the time, and since they don't tell anybody, there's no problem. So, what's the big deal?

Sat, 02/09/2013 - 21:09 | 3229654 YouAreBliss
YouAreBliss's picture

They lauder money for terriots and drug dealer sna now we bail them out!

Sat, 02/09/2013 - 21:14 | 3229660 ebworthen
ebworthen's picture

And why isn't the FED being charged with a civil suit like S&P for the MBS's fiasco?

What about the LIBOR scandal?

The banks selling MBS's?

And it's our fault?

And we pay?


Sat, 02/09/2013 - 21:20 | 3229672 Seasmoke
Seasmoke's picture

OT,   Just heard today that Makers Mark is dropping the alcohol to 84 proof !!!


The end is near folks...........Seriously !

Sat, 02/09/2013 - 21:23 | 3229674 world_debt_slave
world_debt_slave's picture

Ah, I remember well the S&L Bailout by HW Bush to the tune of 60B, nowadays that is chump change.

Sun, 02/10/2013 - 12:58 | 3230656 WillyGroper
WillyGroper's picture

At least Boesky went to jail & the bastard is bankrupt.

Sat, 02/09/2013 - 22:03 | 3229720 Michelle
Michelle's picture

And Germans balk at bailing out the PIIGS and we say nothing.

And why are the European banks paying back the ECB when they should be sending money across the pond to fund their own?

When is this ever going to end???

Sat, 02/09/2013 - 22:24 | 3229729 Manipuflation
Manipuflation's picture

Holy fuck, what a surprise.

Sun, 02/10/2013 - 00:25 | 3229868 Bear
Bear's picture

My wife didn't think this was so funcking funny ..... I did

Sat, 02/09/2013 - 22:30 | 3229734 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

Seems pretty straight foward to me, we need to set up the debt/free parallel system and ween off the fiat. Looks like it is time to start pushing the local scrip currencies which are legal still to break the stranglehold. When it all collapses they won't be able to impose austerity on US. Not unless they try to do so by force and that will happen over our dead bodies in that scenario.

They can't take the cookies not in their jar. Not without force anyways and that will wake up everyone that isn't an ebt zombie in the matrix and start turning the whole populace on these thieving cocksuckers.

Sat, 02/09/2013 - 22:55 | 3229768 JohnGaltsChild
JohnGaltsChild's picture


Sat, 02/09/2013 - 23:11 | 3229784 JR
JR's picture

The Fed is not bailing out foreign banks; it is bailing out itself. Its owners are sans national – without a country - even the ones thought of as US banks, aren’t US banks.  They are non-American and non-European - like Microsoft and Google and GE. They are banks with allegiance to no country, only to themselves.

Here was Congress’s folly: to charge private bankers with the management of the United States economy…  It’s coming into focus now with these revelations by Zero Hedge; we now know that the owners of the Federal Reserve are, in the fullest sense of the word, global . The Federal Reserve building may be on American soil, but its owners are not. 

IOW, the Fed is transferring America’s wealth to its global owners.

The blame for the demise of America’s great economy lies at the door of Congress. It was the Congress that designated that the owners of the Fed should be kept secret while giving them full power to own and issue the currency, i.e., to control all facets of American life; either their names now should be made public and their books audited and kept open to government scrutiny or they should be barred from transacting business in the markets and in the United States.

Frederick Mann in The Economic Rape of America (1992) gives one of the best and latest reports of who these owners are thought to be:


"There has been much speculation about who owns the Federal Reserve Corporation. It has been one of the best kept secrets of the century, because the Federal Reserve Act of 1913 provided that the names of the owner banks be kept secret. However, R. E. McMaster publisher of the newsletter The Reaper, asked his Swiss banking contacts which banks hold the controlling stock in the Federal Reserve Corporation. The answer [of where America’s wealth is going]:

  1. Rothschild Banks of London and Berlin
  2. Lazard Brothers Bank of Paris
  3. Israel Moses Sieff Banks of Italy
  4. Warburg Bank of Hamburg and Amsterdam
  5. Lehman Brothers Bank of New York (allegedly bankrupt)
  6. Kuhn Loeb Bank of New York
  7. Chase Manhattan Bank of New York (JP Morgan Chase)
  8. Goldman Sachs Bank of New York."

In The Secrets of The Federal Reserve, Eustace Mullins indicates that, because the Federal Reserve Bank of New York sets interest rates and controls the daily supply and price of currency throughout the U.S., the owners of that bank are the real directors of the entire system. Mullins states:

"The shareholders of these banks which own the stock of the Federal Reserve Bank of New York are the people who have controlled our political and economic destinies since 1914. They are [the same] Rothschilds, Lazard Freres (Eugene Mayer), Israel Sieff, Kuhn Loeb Company, Warburg Company, Lehman Brothers, Goldman Sachs, the Rockefeller family, and the J.P. Morgan interests."

As for Lehman, Adam Davison wrote September 11, 2012 in a NY Times Magazine, Lehman Brother, We Heard You Were Dead:

“Lehman Brothers is having a great year. The bank, which almost destroyed the global economy four years ago this week, recently emerged from bankruptcy, resolved a third of its debts and executed the largest U.S. real estate deal of the year. Today, the company appears an awful lot like a normal investment bank. Its trading floor — on one of the two floors Lehman occupies in the Time & Life Building in Midtown Manhattan — is filled with dozens of young people who stare at financial graphs on Bloomberg terminals and talk in the hallways about the deals they’re working on.

“Except that Lehman’s sole objective is to sell everything it owns so it can repay its lenders and disappear…”

IOW, just more bailout redistribution for you-know-who.

Sun, 02/10/2013 - 00:41 | 3229912 tip e. canoe
tip e. canoe's picture

interesting date to file that story

Sun, 02/10/2013 - 12:00 | 3230462 Village Smithy
Village Smithy's picture

Your point about the Fed owners not being American is great one. Being a citizen is so middleclass. Actually giving a f*** about where you live and work and where your kids will live and work and what their future will be like, is really really middleclass. The elite have no citizenship because they have no stake in anything except their ever increasing wealth. To them a country is just a vacation destination, a daliance. Stay, enjoy what it has to offer and then flit on to the next indulgence. How do we put control back in the hands of the people who have real citizenship?

Sun, 02/10/2013 - 15:32 | 3231006 Real Estate Geek
Real Estate Geek's picture

Hint: ask yourself WWPPD?

(What would Pol Pot do?).

Sat, 02/09/2013 - 23:16 | 3229794 AssFire
AssFire's picture
Lew’s Cayman Islands Fund a Likely Issue at Confirmation Hearings...seeing as Romney was crucified for having one.
Sat, 02/09/2013 - 23:24 | 3229803 jack stephan
jack stephan's picture

Derek: Hand over the milk money, Weaver.
Mitch: I'm afraid I can't do that, Derek.........I'm just not sure you'll spend it on milk.

Sun, 02/10/2013 - 00:47 | 3229913 Bear
Bear's picture

And some how we're worried about a 'Fiscal Cliff', or that SP told the truth, or sequestration, or some cop-on-the-run or who might win the Oscar for best 2012 animated film ... the LEECHES ARE SUCKING US DRY

Hits on Google:

Christopher Dorner = 196,000,000 ... he's been around for a week

Federal Reserve Bank =  73,900,000 ... the've been around for 100 years

We have our collective heads so far up our ass that our tongue's touch

Sun, 02/10/2013 - 03:57 | 3230146 resurger
resurger's picture


Sun, 02/10/2013 - 10:07 | 3230355 Tom Green Swedish
Tom Green Swedish's picture

Ok this is starting to get pathetic.  First of all we spend the most money on defense in the world and pretty much protect it from SHTF.  Europe doesn't do jack for military. Second, we have problems here.  What is bailing out Europe going to do for us?  Strengthen trade, stop the stock market from crashing?  We are essentially bailing out the PIIGS because Germany doesn't want to, they have a trade surplus yet they can't manage to unify their of own continent nor do they care.  Not only this they are taking their gold back.  Why who the hell cares, but essentially we are bailing out rich nations so they can further destroy the South.  Would seem like the USA is once again trying to prevent a war, This time against Germany, which makes no sense because we would decimate them again if war started just like WW1 and 2. 


  So what do they do?  Further trash the USA for Europe.  Nice to know the USA cares about its people.

Sun, 02/10/2013 - 14:26 | 3230886 Absinthe Minded
Absinthe Minded's picture

It's not about saving Europe, it's all about saving the banks. The money goes there to save the banks, they are all one big cabal and the Fed is the great printer that will save them at our expense. When in doubt blame the banks, they're the only ones that can make bad financial judgements and prosper.

Sun, 02/10/2013 - 20:33 | 3231714 DCon
DCon's picture

So the borrow from FED to pay off LTRO rumours were true



Thu, 02/14/2013 - 03:14 | 3242389 rbblum
rbblum's picture

So much for military might and warfare or the trojan horse.

And so, with each passing day, the standard of living will slip away within the countries subject to the fiscal and monetary suicidal tendencies engaged in by the powers that be of the western financial system . . . while countries such as Russia and China will continue to reap real wealth via the garnering of gold.



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