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How The Fed Is Handing Over Billions In "Profits" To Foreign Banks Each Year

Tyler Durden's picture


Over the past two weeks we have reported that just like during the spring and summer of 2011, all the cash generated by Fed excess reserves, has gone to foreign banks operating in the US, which according to the Fed, are vastly composed of European financial institutions. In other words, the cash that the Fed is creating out of thin air by monetizing the US deficit, is going solely and exclusively to European banks and a handful of other foreign banks. This can be seen both in the chart below, and is confirmed by the Fed itself, which in a paper from November 2012, admitted just this when it said that "the recent unprecedented build-up of cash balances by [foreign banks] was almost entirely composed of excess reserves."

What is notable about the chart above is that while cash parked at US-domiciled banks, both small and large, has been relatively flat in the past 3 years at just about $800 billion, it was been foreign banks that absorbed the bulk of the Fed's newly created reserves.

All of this was explained in extensive detail previously here and here.

Just as importantly, and as also shown previously, the excess reserve cash parked at foreign banks just hit a record $954 billion as of the week ended January 31.

What is still a mystery, however, is just what do foreign banks use this cash for: does the cash undergo collateral transformation whereby the cash collateral is transformed into various "safe" intermediary securities via the shadow banking system (as Monte Paschi was discovered to have done recently), and if so what is the ultimate use of free Federal Reserve funds.

We hope that before the Fed loses all control of the economy and markets we will get the answer to this budding question.

But even assuming foreign banks do nothing with this cash and it merely sits on the Fed's books, this does pose another question, one which we hope someone from Congress will ask Chairman Ben at the upcoming Humphrey Hawkins presentation at the end of February. Namely: why has the Fed paid some $6 billion in interest to foreign banks, in the process subsidizing and keeping insolvent European and other foreign banks, in business and explicitly to the detriment of countless US-based banks who have to compete with Fed-funded foreign banks and who have to fire countless workers courtesy of this Fed subsidy to foreign workers?

As readers will recall, on December 18, 2008, the Fed dramatically changed its policy to control the suddenly all critical fungible liquidity bailout reserve level, by implementing a cash interest paid on reserve balances held at Reserve banks, amounting to 25 basis points on the excess reserve balance. The Reserve banks included all foreign banks operating in the US. It is these banks that now have a record $954 billion in cash as of the week ended January 30, and it is this $954 billion that now accrues an interest of 0.25% per year.

We show the surge in the foreign bank cash level, as well as the cumulative cash interest paid to these banks assuming a weekly cash interest payment. What the chart shows is that from December 2008 through the last week of January, the Fed has paid out some $6 billion in cash (red line) to European banks simply as interest on excess reserves.

But that's just the beginning. If we are correct in assuming that QE3 will be a replica of QE2 when all the new reserves created ended up as cash on foreign bank balance sheets, it means that we can quite accurately forecast what the total foreign bank cash position will be on December 31, 2013 (as the Fed will certainly not end its open ended monetization of the US deficit before then, or likely, ever). The result: just under $2 trillion in cash held be foreign banks operating in the US, which also means that in calendar 2013, the Fed will fund and subsidize foreign banks a blended interest payment of $3.5 billion! This is entirely separate from the $2 trillion liquidity subsidy that Bernanke will also have handed out to keep these banks afloat, and is $3.5 billion that will flow right through the P&L and end up in the pockets of offshore shareholders who otherwise would very likely be wiped out had it not been for the Fed's relentless efforts to bailout foreign banks.

And since it is improbable that excess reserves held by any banks will decline at all in the coming years, one can also assume that the annualized interest paid to foreign banks, which would amount to at least $5 billion pear year, every year, will continue indefinitely as a direct Fed subsidy to the bottom line of Foreign banks.

All of this, of course, ignores what happens should the Fed hike interest rates across the board, which will also mean rising the rates on IOER, once inflation finally strikes: simple math means a 1% IOER means some $20 billion in interest paid to foreign banks, 2% - $40 billion, 5% - $100 billion paid to foreign banks, and so on. Putting these numbers in perspective, let's recall that Italy's third largest bank just got a €3.9 billion bailout (its third), and has a market cap of some €2.9 billion.

We can only hope someone in Congress asks Ben Bernanke in two weeks just under which Fed charter it is that the Fed is more focused on generating profits (not just trillions in excess liquidity) for European banks, than on opening up consumer lending which has been stuck in "petrified" mode for the past 4 years, with the total amount of loans outstanding currently at all US banks - foreign and domestic - at levels last seen the week Lehman filed for bankruptcy.


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Mon, 02/11/2013 - 16:54 | 3234634 ZippyBananaPants
ZippyBananaPants's picture

more like Why?


Mon, 02/11/2013 - 17:08 | 3234674 redpill
redpill's picture

More like treason.  Hang 'em.

Mon, 02/11/2013 - 17:13 | 3234695 Everybodys All ...
Everybodys All American's picture

Nothing is going to change until shots are fired imo. For all you NSA people watching. I'm not advocating. I'm just stating an opinion.

Mon, 02/11/2013 - 17:30 | 3234744 SamAdams
SamAdams's picture

Cointelpro is the typical lone post that calls for violence, but then secretly records dissent.  However, for those who are resistance and are compiling your own list, please do not forget these traitorous senators who lied to prevent further investigation into the 911 false flag / sacrifice.  You will find one of the names quite familiar, a name infamous for clandestine crime and graft:

Mon, 02/11/2013 - 17:36 | 3234763 earleflorida
earleflorida's picture

54 Min. of the best time you'll ever spend!!!

"The New World Order" __ Eustace Mullins ~ 1993

enjoy it,  if you care at your convenience, with some popcorn

Mon, 02/11/2013 - 17:47 | 3234799 SamAdams
SamAdams's picture

Other suggestions:

  • Web of Debt, Ellen Brown
  • War is a Racket, Smedley Butler
  • Dialogue Between Machiavelli and Montesqeuies
  • The International Jew - Henry Ford
  • Tragedy and Hope - Carrol Quigley
  • Federal Reserve Act of Dec 23, 1913
  • Secrets of The Federal Reserve - Eustace Mullins
  • Federal Reserve Directors - Committee on Banking, 1976
  • None Dare Call It a Conspiracy - Gary Allen
  • Billions for Bankers - Sheldon Emry

Read the above and you will be able to identify the black to your white...

Mon, 02/11/2013 - 18:06 | 3234850 Yes We Can. But...
Yes We Can. But Lets Not.'s picture

If the proposed line of questioning, which is sensible, reasonable, pertinent and serious, is actually pursued two weeks out, I will eat my shirt, my T shirt, and my jacket.

Mon, 02/11/2013 - 23:38 | 3235608 Enslavethechild...
EnslavethechildrenforBen's picture

The Fed is handing over $Trillions to al-Queda terrorists.

Send in the Drones immediately

Mon, 02/11/2013 - 23:45 | 3235622 Enslavethechild...
EnslavethechildrenforBen's picture

Seriously, the Central Bankers all print each others currencies anyways. Who the fuck is going to stop them? The fucking Military?

Yeah right!

Mon, 02/11/2013 - 19:30 | 3235044 Pegasus Muse
Pegasus Muse's picture

All Wars Are Bankers' Wars

Published on Feb 4, 2013

Written and spoken by Michael Rivero.

The written version is here:

video: (44 min)

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 Wars focuses 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 inked 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.

Mon, 02/11/2013 - 18:29 | 3234914 Wile-E-Coyote
Wile-E-Coyote's picture

The NSA knows exactly what you meant, there is a drone over your house right now; hell fire missile waiting for an infrared thermal lock.

Mon, 02/11/2013 - 17:26 | 3234731 Shell Game
Shell Game's picture

There's about a 1:1 ratio of trees to statists in D.C.  This bullshit will never stop until rotting corpses decorate every one of them..

Mon, 02/11/2013 - 17:37 | 3234764 NidStyles
NidStyles's picture

I didn't think there were that many trees in D.C..

Mon, 02/11/2013 - 18:02 | 3234843 Papasmurf
Papasmurf's picture

DC has plenty of trees.  There are also plenty of lamposts.

Mon, 02/11/2013 - 18:12 | 3234861 Yes We Can. But...
Yes We Can. But Lets Not.'s picture

DC features a very large urban park known as Rock Creek Park (where body of Chandra Levy, who was boinking greaseball ex-Congressman Condit, was found), that has many thousands of trees.  And just across the river is Virginia, with thousands more trees, including those in Fort Marcy Park (where body of Vince Foster, counsel for the charming Hillary Clinton) was found.

Mon, 02/11/2013 - 18:27 | 3234908 cynicalskeptic
cynicalskeptic's picture

They'll be cut down to heat houses before there's any accounting.  Look at past and present collapses - people can't afford to heat their homes so trees start getting cut down.

Mon, 02/11/2013 - 17:43 | 3234783 eatthebanksters
eatthebanksters's picture

Everyone ought to just take a deep breath and settle down.....then grab your ankles

Mon, 02/11/2013 - 17:59 | 3234832 rahbii
rahbii's picture

And expect a drone overhead shortly



Mon, 02/11/2013 - 17:50 | 3234815 Dear Infinity
Dear Infinity's picture

Capital punishment should be reinstated... this country has gone SOFT.

Mon, 02/11/2013 - 18:15 | 3234877 Al Gorerhythm
Al Gorerhythm's picture

The masses still believe that their savings are used as collateral for 100% of all loans. They believe that everyone's money is held in safe keeping, that their bank is safe with 100% deposits held in the vault. Foolish sheeple. They haven't even heard of Fractional Reserve Banking, nor have they heard who legislated this nonsense into existence and who gave them legal cover.

Mon, 02/11/2013 - 18:44 | 3234952 Never One Roach
Never One Roach's picture

The Fed hates Americans.



Tue, 02/12/2013 - 09:46 | 3236023 Al Gorerhythm
Al Gorerhythm's picture

The Fed hates Americans when they use a gold based currency as a national money base, which backs the currency on a 100% reserve ratio.

Mon, 02/11/2013 - 17:08 | 3234676 Say What Again
Say What Again's picture

Examination of this fleecing of America should be one of the TOP 3 priorities of the congress.  But I know I ask for too much

Mon, 02/11/2013 - 17:11 | 3234688 redpill
redpill's picture

It is, it's number 2.  The problem is number 1 is to keep the fleecing going.

Mon, 02/11/2013 - 17:22 | 3234716 Say What Again
Say What Again's picture

I know that most of the morons in congress don't do their homework. They're just too lazy.

But when ZH does it for them, all they need to to do to look smart is to read the message/questions given above -- but they don't do so.

The Banktstas must have some good shit on those morons to keep them that compliant.

Mon, 02/11/2013 - 17:37 | 3234749 SamAdams
SamAdams's picture

My senator told me he was well aware of the problem, but he would lose his influence (seat) if he pushed too hard.  He said that some influence is better than none at all.  How is that for reassuring?  Whichever poster said that force will be the only solution was correct.  Those in power will never rescind and they know as well as anyone, force is power.  Time to quit fooling yourselves.  Be it known, the right should not be anxious to fire the first shot.  Our current agenda is to educate and spread awareness.

Mon, 02/11/2013 - 16:55 | 3234636 financial apoca...
financial apocalyptic contagion's picture

this is fucked up

Mon, 02/11/2013 - 17:26 | 3234730 cynicalskeptic
cynicalskeptic's picture

Makes perfect sense when you realize that the Federal Reserve is OWNED BY PRIVATE BANKS - INCULDING FOREIGN BANKS.

The Fed is serving its owners quite well.

Mon, 02/11/2013 - 17:36 | 3234758 Say What Again
Say What Again's picture

Correction: The Federal Reserve is owned by the "House of Rothschild."

Mon, 02/11/2013 - 17:47 | 3234801 earleflorida
earleflorida's picture

draw your own conclusions?

Mon, 02/11/2013 - 18:20 | 3234889 Al Gorerhythm
Al Gorerhythm's picture


NWO, same as the OWO.

Mon, 02/11/2013 - 18:57 | 3234973 earleflorida
earleflorida's picture

just watch it... for christ sake!

even if your brain can't absorb a five-minute drill?  let the learned, and inculcate Cassandra imbibe upon your headstrong dogma's... before showing ones ignorance, in the burrows of cranium darkness!

Mon, 02/11/2013 - 23:27 | 3235562 Al Gorerhythm
Al Gorerhythm's picture

Cosmicly, wildly,  flowery, dude.

I did watch it, and my comment remains the same. New World Order same as the Old World Order. It has been threatened only once, recently, in the history of money. Jesus had a swipe at them but even his mightiness couldn't stop it. Get your ego in check and you might see that I was supporting your post.

Mon, 02/11/2013 - 23:30 | 3235587 Enslavethechild...
EnslavethechildrenforBen's picture

They could easily be stopped. This thing can turn on a dime.

Tue, 02/12/2013 - 09:47 | 3235636 Al Gorerhythm
Al Gorerhythm's picture

Well now, please share. I've been scratching my melon over this for years and banging the drum. Who you gonna call to mount the attack, if that's the plan?

Mon, 02/11/2013 - 17:01 | 3234654 Banksters
Banksters's picture

Obama is going to enact an executive order on cyber security.

Anonymous= CIA

The truth is that govts can't stand freedom of speech.  Especially now that there are so many people piecing together their CORRUPTION!



Mon, 02/11/2013 - 17:01 | 3234657 trendybull459
trendybull459's picture

From all of those points its still people who are interesting to keep and run system of crooks on your behalf,there no strikes or revolutions,it looks every american quit down this option via given to him portion of cheeseburger from catched on the street dog or cat,looks no one care of their wealth devalue and only monkeys who are care is a foreighners who feeling their dollars becoming very very liquid so some of it we do not find in account to buy enough as in the past,on this not I asking you visit and tell us in FED pool what do you think on it and visit our new page:

Mon, 02/11/2013 - 17:04 | 3234662 Theta_Burn
Theta_Burn's picture

Dude, you took the words right out of my mouth..

Mon, 02/11/2013 - 17:09 | 3234681 redpill
redpill's picture

Then you must have a cheek full of punctuation, cuz he sure didn't take that!

Mon, 02/11/2013 - 17:24 | 3234723 Say What Again
Say What Again's picture

Click here to learn how to write good.

Mon, 02/11/2013 - 17:46 | 3234798 Karl von Bahnhof
Karl von Bahnhof's picture

Its because people are not hungry (yet).

Mon, 02/11/2013 - 18:27 | 3234901 Al Gorerhythm
Al Gorerhythm's picture

"Click here to learn how to write good."

Beautifully done! You triggered my incontinence.

Straight from Zoolander's "School for kids who wanna read good."?

Mon, 02/11/2013 - 17:48 | 3234806 Pairadimes
Pairadimes's picture

I think I just sprained my prefrontal cortex.

Mon, 02/11/2013 - 21:15 | 3235315 Say What Again
Say What Again's picture

No worries...

Obama's health plan has got you covered.

While we're working on you, just leave your smart phone, tablets, computers, and credit cards in this little basket -- OK?

Mon, 02/11/2013 - 23:49 | 3235638 ZeroAvatar
ZeroAvatar's picture

trendybull, nice try.  Your attempt to appear like some 'foriegner' is poor at best.  '"Hey, everybody!  Look!  This guy must be Chinese or something!  I'm SURE he's MUCH smarter than most people and I'm going to click on his spam link just as fast as I can get my curser over it!"

Mon, 02/11/2013 - 17:06 | 3234661 q99x2
q99x2's picture

The US Gold reserves also went that way. They did not audit the Gold even though I signed the petition. They probably don't care about me.

Maybe they are paying me off. College starts this week.

Gold crushed on the news Russia has joined China as both are buying like crazy. Guess we know where the US Citizen's gold is going.

Mon, 02/11/2013 - 17:51 | 3234818 NidStyles
NidStyles's picture

Citizen's can not own anything, for they themselves are owned by the state. Try loooking up where the word Citizen comes from. You'll refrain from using that word in the future.

Mon, 02/11/2013 - 19:05 | 3234993 falak pema
falak pema's picture

you pretend to understand historical context when you say that?

Citizens make nations and states via elections. Thats how the US began.

Don't act like the dog's tail. 

These Oligarchs have TakEN over the state; they are not representing people's interest. They ARE a minority!

Learn to count, economist. The state belongs to the responsible citizen. 

Mon, 02/11/2013 - 17:04 | 3234664 Super Broccoli
Super Broccoli's picture

who cares if that funny money ends up in an Yankee or in a european bank ? Not like it did get thru my pocket !

Mon, 02/11/2013 - 18:43 | 3234933 CaptainSpaulding
CaptainSpaulding's picture

I wish some of that money would make its way to a couple of snow plows and plow my street. 

Mon, 02/11/2013 - 17:07 | 3234667 yogibear
yogibear's picture

Obama and the Fed's Zimbabwe economic plan.

Bernake, Dudley, Evans and Yellen all giving the middle finger to China and the middle east.

Yellen is Yelling, "SUCKERS!!!!" in the background for buying US debt and accepting toilet paper for assets.


Mon, 02/11/2013 - 17:07 | 3234672 gwar5
gwar5's picture

Merger of all Western banks and their co-option of Western governments/militaries is already a fait accompli. 


Central Banks can pass $$ between themselves because they are all the House, not crooked dealers at different tables.




Mon, 02/11/2013 - 18:31 | 3234921 SeattleBruce
SeattleBruce's picture

"Central Banks can pass $$ between themselves because they are all the House, not crooked dealers at different tables."

That may be the case for the ECB and the FED, but I don't think you can include all CBs in the same House.  There's a lot of infighting that's happening and will happen (currency war.)  So the result will be more chaotic - but all fiat is headed to the same place.  We know how this ends, we just don't know exactly the path we'll take.  Prepare.

Mon, 02/11/2013 - 17:08 | 3234677 falak pema
falak pema's picture

fighting fire with fire; its all electronic shit money anyway; let it grow and then burn...The first world loses, thats the down side. 

But then the first world was the one that wanted 40 more years of wealth based on "borrowed" oil.

Now I guess the FED says in the name of the Oligarchs :  we all pay for it; except the 1% who will pay much less!

Some guys get the long end of the stick! 

Mon, 02/11/2013 - 17:27 | 3234735 cynicalskeptic
cynicalskeptic's picture

More like a very splintery telephone pole.....

Mon, 02/11/2013 - 17:09 | 3234682 Shizzmoney
Shizzmoney's picture
How The Fed Is Handing Over Billions In "Profits" To Foreign Banks Each Year

They are going through their own austerity: Instead of buying Dom for this year's Fiscal Year End Party, they'll buy Cristal instead.

Tough times, tough times, indeed.

Mon, 02/11/2013 - 17:12 | 3234689 tornado_watch
tornado_watch's picture

Fed Deposit Rate = 0.25%
ECB Deposit Rate = 0.00%

Mon, 02/11/2013 - 17:13 | 3234691 nobusiness
nobusiness's picture

Is this why the Euro is so strong?

Mon, 02/11/2013 - 17:14 | 3234697 Flakmeister
Flakmeister's picture

Here's your precious Tea Party, aka, a front for the Kochs:

Study Confirms Tea Party Was Created by Big Tobacco and Pollutocrat Kochs 


....that in 2002, the Kochs and tobacco-backed CSE designed and made public the first Tea Party Movement website under the web address Here’s a screenshot of the archived U.S. Tea Party site, as it appeared online on Sept. 13, 2002:

Mon, 02/11/2013 - 17:36 | 3234760 Bay of Pigs
Bay of Pigs's picture

Save your bullshit for the Yahoo boards.

Mon, 02/11/2013 - 17:43 | 3234786 Flakmeister
Flakmeister's picture

What's the matter, afraid to face the facts that you have been astroturfed by the corporate sons-of-bitches???

Amazing what you can find when you scratch the surface eh?

Mon, 02/11/2013 - 17:55 | 3234824 redpill
redpill's picture

The idea of reincarnating the Boston tea party is nothing new.  There are numerous instances of groups using the event as a rallying cry against government action in the 80s and 90s.  Even if CSE/Kochs put up that website in 2002 as you claim, the fact that it didn't go anywhere doesn't prove your point, it invalidates it.  Amazing what you can find when you scratch the surface, eh?


Mon, 02/11/2013 - 18:14 | 3234873 Flakmeister
Flakmeister's picture

There is a lot more to it than just the website...

Or did you forget about Dick Armey?

Meet the new boss, same as the old boss....

Mon, 02/11/2013 - 18:39 | 3234942 SeattleBruce
SeattleBruce's picture

"Or did you forget about Dick Armey?"

Dick Armey doesn't represent the length and breadth of the Tea Party.  He represents it as much as Jon Boehner or Karl Rove do - which is not at all.  It's still very decentralized, which is why it's having a tough time taking on the republican establishment, although there have been some successes.  As hopeless as the republicans are, the democrats are even more hopeless.  There's a reason Ron Paul chose the R vessel to try to move the liberty marker forward.  But truly, none of it matters until we move away from Fed fiat, debt based money.

Mon, 02/11/2013 - 19:05 | 3234991 Flakmeister
Flakmeister's picture

Do you actually believe the shit you just wrote?

Are you blind to the puppet strings that are there? (just like every other political movement...)

Mon, 02/11/2013 - 19:17 | 3235023 nmewn
nmewn's picture

Well this is odd.

I have never recieved anything from Dick Armey or the Kochs or asked to give anything to them. The uncontrolled mass of the TP is what frightens you most isn't it?

Just like Rove, he's shitting his pants too ;-)

Mon, 02/11/2013 - 19:57 | 3235100 SeattleBruce
SeattleBruce's picture

I'm not harboring illusions about political movements, nor the true nature of man.  That said, the tea partiers as represented in 2009, raw and unabridged, represent potential.  They were and to some real degree still are a potential force for good in what we tend to discuss here - sound money, forcing accountability - a return to a Constitutionally based rule of law, the masses fighting back against the banksta/politico oligarchs, etc.

Since you believe in none of it, and think it's so much bullshit, co-opted hopelessly and captured completely, then I'd recommend this course of action for you, which you may already be taking.  Make sure you have lots of ammo, when the hordes come to overrun (clearly there's no movement of any kind that is pure enough to stop it), and make sure your bunker is stocked up and is super sweet inside.  Enjoy the bunker life Flak.  I plan to fight.

Mon, 02/11/2013 - 17:58 | 3234827 camaro68ss
camaro68ss's picture

cool bro, no one forces you to smoke or buy cigs, so go fuck yourself.

Obama forces me to buy obamacare, If i dont, i pay a fine or get thrown in jail, so go fuck yourself.

(not you redpill, that was for flak)

Mon, 02/11/2013 - 18:16 | 3234881 Flakmeister
Flakmeister's picture

You are a fucking idiot if you think that pointing out that the Tea Party was a front for the Kochs makes me a supporter of that abortion called Obamacare...

You have been fucking had, just like everybody else...

Mon, 02/11/2013 - 23:14 | 3235544 RockyRacoon
RockyRacoon's picture

You are up against some hard competition here.  No quarter is given for variance from the conventional thinking.

It's like asking for white wine in a biker bar.

I'll get junked just for being neutral.


Tue, 02/12/2013 - 00:01 | 3235671 ZeroAvatar
ZeroAvatar's picture

I order Pina Colladas in biker bars all the time.  Usually, I get laughed at, but I still order them!

Mon, 02/11/2013 - 18:02 | 3234836 Shell Game
Shell Game's picture

Who's precious Tea Party? Is they yours, precious?   Not mine, dude..

Seriously, that was one of the worst 'peer-reviewed' research articles I have ever read. A political science article, authored by a professor of medicine at UCSF.  Word association was the only meager thread upon which it hung.  That shit is responsible for tarnishing the rep of good science. And for that, Dr. Glantz should be ashamed.


Mon, 02/11/2013 - 18:19 | 3234887 Flakmeister
Flakmeister's picture

Do have anything of substance to add? Or are you going to limit yourself to flinging your faeces?

Mon, 02/11/2013 - 18:30 | 3234918 Shell Game
Shell Game's picture

In defeat you are a cowardly mess..


You start with glaringly obvious fallacies, thought you were better than that..


Fact: Grassroots participated in the TP.
Fact: The TP was co-opted.
Ergo1:  The grassroots was co-opted. [FALLACY]
Ergo2:  The grassroots will never learn from their mistakes. [FALLACY]
Ergo3:  The grassroots was duped and is more distrustful and open-sourced (read: leaderless) than ever before.  


What do you want to believe?  Facts and truth are inconvenient, eh nut job?



Mon, 02/11/2013 - 18:43 | 3234947 Flakmeister
Flakmeister's picture


The modest grassroots movement that did exist got astroturfed according to a plan that had been in place a *long* time...

Dick and the boys moved in like  frat boys who spiked the sororiety punch with Rohypnol...

Why don't you check out the super-pacs that fronted the Tea Party candidates in the primaries? As always, follow the money....

And I thought that you were not so naive...


Mon, 02/11/2013 - 18:57 | 3234972 Shell Game
Shell Game's picture

Astro-turfed?!? as in sporting surfac...  Oohh, you mean words can have more than one association...  ;)

Mon, 02/11/2013 - 20:00 | 3235107 SeattleBruce
SeattleBruce's picture


Straight out of Nancy Pelosi's talking points.  Brilliant.

Tue, 02/12/2013 - 01:02 | 3235832 redpill
redpill's picture

Just because assholes spend a lot of time and money trying to co-opt something doesn't mean they started it, and it doesn't mean they were successful.  I'm not a big tea party person because they lack focus as much as the occupy people do, but please get off the fucking MSNBC Koch talking points.  Yeah another couple rich fuckers trying to influence things.  Ever heard of George Soros?  Warren Buffet?  Nothing new.  Kochs are small fries compared to them.

Mon, 02/11/2013 - 17:47 | 3234800 eatthebanksters
eatthebanksters's picture

Wasn't that study pulled out of some libtards ass?

Mon, 02/11/2013 - 18:01 | 3234813 krispkritter
krispkritter's picture

Just don't mention (whispered) AGW...

Mon, 02/11/2013 - 19:23 | 3235033 nmewn
nmewn's picture

Oh God, don't get him started on the whole hot/cold/wet/dry an asteroid is passing too close to Earth blizzard thingy.

Mon, 02/11/2013 - 18:54 | 3234969 Meat Hammer
Meat Hammer's picture

How much does trolling pay?  Just curious.  I might need some supplemental income. 

Mon, 02/11/2013 - 21:09 | 3235299 Blankenstein
Blankenstein's picture

And the current administration has done what to stop the flow of money from the 99% to the big banks?  Oh that's right, the current leader has filled his team with Goldman Sachs and other bank alums.


 Please stop with the purposely distracting team blue partisan rhetoric, the election is over.  

Mon, 02/11/2013 - 17:14 | 3234698 waterwitch
waterwitch's picture

One thing the foreign banks don't appear to be doing is using it to buy 'safe' assets like gold.  If I got that kind of money, you can bet that's where I'd put it.

Mon, 02/11/2013 - 17:17 | 3234701 Jason T
Jason T's picture

makes me think about something I read .. about when in 1896, we were "bailed out" by the banks in Europe when our gold stocks plummeted.  

JP Morgan schemed to issue $65 million bond to a European syndicate that Morgan and "Rothschild" would organize.  The Euro banks put up at least 50 tons of gold or half the total bond issuance AND would charge 1% higher in interest than the NY banks were charging.  

Bernstein writes in his book "the power of gold" pg. 275 .. "when news of this unorthodox transaction broke, the publc clamour was deafening agasint what appeared to be a sellout for the foreign bankers.  the New York World described the syndicate as "blood sucking jews and aliens."  .. in congress, William Jennings Bryan asked the clerk to read Shylocks Bond from The Merchant of Venice"

we have to appreciate, this was 1896 .. I cannont imagine we ever paid back those Eurobanks nor defaulted without some kind of reprocussion.

guess we're still paying back them blood suckers.  : /

Mon, 02/11/2013 - 17:36 | 3234755 LawsofPhysics
LawsofPhysics's picture

It is not in the best interest of any bank or banker to have any loans paid off.  They live quite well on the interest they get for "creating" that credit out of thin air.  You and I must actually work and toil, producing a product of real value.

Roll the motherfucking guillotines already.

Mon, 02/11/2013 - 17:21 | 3234711 debtor of last ...
debtor of last resort's picture

Funding is not going through eurozone peripherals this way. That means things are much, much worse in euro peripheral banks than we think? The ecb cannot print that much because of Germany, and target2 is over the top. Let's call this target3.

Mon, 02/11/2013 - 17:26 | 3234732 Clowns on Acid
Clowns on Acid's picture

The USD is in reality is FedCoin. Just a digital value owned by the Fed (really owned by those who onw the Fed).

Same as BitCoin except the owners of the Fed have not yet decided when to stop "printing" (digital credits to whomever they choose).

What could possibly go wrong..?

Mon, 02/11/2013 - 17:27 | 3234733 drbill
drbill's picture

The FED is a bank(st)er controlled banking cartel. Probably a majority of these "owners" of the FED also own these foreign banks. So the fact that the FED is helping foreign banks should probably only surprise members of congress who conveniently ignore who created the FED and why they did so.

Mon, 02/11/2013 - 17:26 | 3234734 ekm
ekm's picture

As I've said over and over and over, that money goes to pay for swap losses of major european banks and primary dealers.


The winning counterparties are piling up on Brent crude with part of that money.

Mon, 02/11/2013 - 17:29 | 3234740 Bansters-in-my-...
Bansters-in-my- feces's picture



noun-==== one who has commited a crime====FED


Mon, 02/11/2013 - 17:41 | 3234778 Oldwood
Oldwood's picture

How do we know that the Fed isn't owned by foreign banks?

Mon, 02/11/2013 - 17:49 | 3234792 treasurefish
treasurefish's picture

I'm sure Colonel Edward M. House knew exactly what's going on and where the money is going.

Mon, 02/11/2013 - 17:49 | 3234804 Miles Kendig
Miles Kendig's picture

Like all these foreign banks would be falling on the sword in public without sufficient quantities of fragrant grease to churn back on the "fine" transaction gravy train

Mon, 02/11/2013 - 17:48 | 3234807 Bastiat
Mon, 02/11/2013 - 18:22 | 3234897 NidStyles
NidStyles's picture

Interesting, I think I know who that person was. How weird I had always suspected that some of the people I have often debated with were shills for some reason. Primarily due to how they would suddenly respond in a particular fashion about related topics.

Tue, 02/12/2013 - 05:23 | 3236059 smacker
smacker's picture

This is not surprising. I believe there's at least one EU shill who regularly posts on ZH using the Euro currency symbol as an avatar. His lines of argument are rarely coherent and often diversionary, and his sole purpose appears to be simply to challenge the views of anybody who criticises the EU's hidden agenda.

And according to Nigel Farage (UKIP) a few days ago, the EU-crats in Brussels intend to post on Twitter to "correct" untruths about the EU, given the growing widespread disillusionment with the whole show. Will they make themselves clearly identifiable? I doubt it.

Mon, 02/11/2013 - 17:52 | 3234820 Binko
Binko's picture

In the world of the 1% of the 1% the only true nationality is wealth and power. We currently are in thrall to one world government, the Davos 500. Money flows to where it is needed to keep the web of control functioning.

Tue, 02/12/2013 - 00:08 | 3235690 ZeroAvatar
ZeroAvatar's picture

The 1% of the 1%.  The moneyed halls of which few people ever participate. 

Mon, 02/11/2013 - 17:56 | 3234826 jmcadg
jmcadg's picture

I think if you ignore the current European bank names and substitute Rothchild, it all makes sense. All you're doing is passing from one of your pots to another.

Mon, 02/11/2013 - 17:59 | 3234834 gatorengineer
gatorengineer's picture

Ok, How is the fed printing money going to the foreign banks, I have read all of the articles, and no transmission mechanism is discussed.


What I think you are seeing is that the foreign banks are needing to raise capital as such they are selling their paper back to the fed....  Much simpler less conspiratorial.... Love ZH, but not sure they are on this one.

Mon, 02/11/2013 - 18:10 | 3234862 Tyler Durden
Tyler Durden's picture

Did you completely skip the article and proceeds right to comments?

Mon, 02/11/2013 - 18:51 | 3234960 gatorengineer
gatorengineer's picture

Utmost respect for you Tyler, but I do not see the transmission mechanism mentioned, I read it at third time, twice before posting.  I doubt these banks have accounts under the name US Federal Reserve........  You have Fed Printing and Foreign Bank reserves rising to me those are not cause and affect.

Mon, 02/11/2013 - 19:03 | 3234987 Tyler Durden
Tyler Durden's picture

Let's try once more: is the topic of this article the billions in interest on excess reserves handed over to foreign banks?

Mon, 02/11/2013 - 19:14 | 3235008 Say What Again
Say What Again's picture

Is this a trick question?

Mon, 02/11/2013 - 23:34 | 3235599 RockyRacoon
RockyRacoon's picture

When does Bernanke get to sit across the table from Congress again... and since Dr. Paul is gone, who will have the balls to ask the right questions?

Tue, 02/12/2013 - 02:46 | 3235967 Blankenstein
Blankenstein's picture

Or better yet, who will have the brains to ask the right questions.

Wed, 02/13/2013 - 00:58 | 3239563 RockyRacoon
RockyRacoon's picture

It's Congress.  Brains is not an option.

Mon, 02/11/2013 - 19:16 | 3235018 Say What Again
Say What Again's picture

Do they speak English in Gator-Land?

Never mind...  Rhetorical question.

Mon, 02/11/2013 - 20:54 | 3235250 Go Tribe
Mon, 02/11/2013 - 18:05 | 3234840 cuxxy
cuxxy's picture

Don't be so greedy and pay your fair share, Americans. You only print the money, anyway.

We either stand together in a house of cards or we fall together. FED is the creditor of last instance for all other central banks. It was designed that way. Why the pretense of surprise and anger now?

Mon, 02/11/2013 - 18:09 | 3234858 max2205
max2205's picture

wheres my interest ben?

Mon, 02/11/2013 - 18:09 | 3234859 Peter Pan
Peter Pan's picture

It is we who make the distinction between foreign and US banks and therefore become upset with what the FED is doing. However, when ALL banks are considered to be part of just ONE big happy and evil family, it all makes sense and does not surprise in the least.

Mon, 02/11/2013 - 18:14 | 3234869 BattlegroundEur...
BattlegroundEurope2011's picture

You owe foreign banks because they are participating in your Ponzi scheme.


Mon, 02/11/2013 - 18:20 | 3234888 riphowardkatz
riphowardkatz's picture

and to top it off the bankers will have to drink more now to drown their sorrows as the liquor and money keep getting watered down.

Mon, 02/11/2013 - 18:52 | 3234964 Hubbs
Hubbs's picture

John Beloushi would have gone apeshit. The f---ing whiskey!! They diluted the f---ing whiskey!

Mon, 02/11/2013 - 18:53 | 3234967 Meat Hammer
Meat Hammer's picture

If Boehner had any balls he would propose to eliminate the 16th Amendment, citing The Fed's ability to print all the money we would ever need.   

Mon, 02/11/2013 - 19:10 | 3235001 Joe moneybags
Joe moneybags's picture

"If Boehner had any balls"....

and "if pigs had wings...."

Mon, 02/11/2013 - 19:04 | 3234990 Hubbs
Hubbs's picture

Seems like 5 years ago when I was following Nouriel Robini's blog, he correctly called for US domestic real estate induced bank insolvency, but that the foreign markets/banks would decouple--and not go down. Granted, no one could have predicted how much lipstick the FED could have piled on to rescue this pig, but it seems to me that it is almost sophomoric how anyone with any financial acumen could not have figured out that it had to be an across the board world wide rescue, and especially when it didn't take much to see that US banks had injected their toxic venom into foreign banks as well.

How people can be so right on some things....and so wrong on the flip (corollary)side.

Mon, 02/11/2013 - 19:07 | 3234997 Herdee
Herdee's picture

Maybe it's more like this:We caught you at all your dirty little games and we'll do you a big favor now.You European Banks are stoned cold broke,just like it was after WW2(your assets aren't worth shit),we hold almost all of your gold(which we won't give back), because eventually you are all going to jail,so you will take the devalued crappy paper - you have no choice.Just remember who's still the boss.(and don't forget to pay the interest)

Mon, 02/11/2013 - 21:14 | 3235320 dolph9
dolph9's picture

Because the international banksters own your goyim asses, suckers.

All your money are belong to us.

Tue, 02/12/2013 - 01:36 | 3235889 resurger
resurger's picture

I dont think there is any maturity for the largese to foreign banks! does this money behaves like non maturing customer deposit? From your projection it will keep rising, so it behaves like a customer deposit.

Either way, with a balance sheet of 3Trillion and a DV01 of approx 3bn the IOER will not exceed 0.25% anytime soon, on the opposite, when inflation rises the intrerest goes down in bizarro broken markets.

Tue, 02/12/2013 - 01:56 | 3235899 Lord Of Finance
Lord Of Finance's picture

That must be a Boeing military grade helicopter for the Bernank to pilot across the Atlantic for his repeated missions of freshly printed dollar drops.


Krugman is right though about the amount of money missels being not effective enough. Soon the Bernank will follow his generals advice and start going Nixon on 'em and just start carpet bombing the shit out of Europe. Then he will do just as Nixon did in Vietnam after that massive bombing raid and pull out quick, allowing the people he claimed to be helping to get slaughtered Cambodia style.

Tue, 02/12/2013 - 02:55 | 3235972 Tom Green Swedish
Tom Green Swedish's picture

Strange.  Although the USA does have a history of helping other countries in time of need, although the Central Bank idea is a fully Europe Rothschild idea.  Maybe the Eu has some dirt on USA

Tue, 02/12/2013 - 03:17 | 3235992 Lord Of Finance
Lord Of Finance's picture

Yeah. Maybe it was sarcasm when EU officials claimed America was the "least dirty shirt". 


  This is a manner in which is typical of politicians to speak. They say one thing but mean the opposite. They send subliminal messages all the time.


The US is the "dirtier" shirt, and europe's got the "dirt" on us. They might very well have us by the balls. Or it could be a bluff. Which is what I lean towards because these assholes are really not so smart. Pretty soon all nations will be bluffed out and we will all be standing with arms/weapons pointed at each other in some high tech Mexican stand-off.

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