• Sprott Money
    05/06/2016 - 06:03
    The US, in its own decline, is showing this same self-destructive tendency. The worse things get, the greater the inclination of the citizenry to say, “Carry on, everything’s fine.”

Guest Post: The Fed’s European “Rescue”: Another Back-Door US Bank / Goldman bailout?

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Thu, 12/01/2011 - 13:56 | 1935500 jdelano
jdelano's picture

Actually no, you're wrong.  It is one hundred percent right to critisize the fed as "a villain for printing money to help Europe at the expense of the US."  One simply needs to make a minor clarification:

"a villain for printing money to help Europe at the expense of the US. taxpayer."  


And btw, Goldie, go f yourself.  

Thu, 12/01/2011 - 13:59 | 1935522 LeBalance
LeBalance's picture

so when "greece" was bailed out, who got the money, greece?

or the banks?


so the point of the article was to make that distinction.

now that the nationalist trigger is closer to home some seem to miss the similarity in Modus Operandi.

Thu, 12/01/2011 - 14:18 | 1935598 ratso
ratso's picture

Tyler - there seems to be a recurrent theme over the long perod of time here.

The Fed aka Bernanke is a nefarious machine that is devoted to syphoning off tax payer dollars to prop up criminal bankers and their proxies.  Have I got it right?

I don't think so.  There is true liquidity problem in the EU which has siginifcant impact on our financial system. Adding liquidity to the system is an necessity right now.

Thu, 12/01/2011 - 14:22 | 1935609 redpill
redpill's picture

Just like an alcoholic has a true liquidity problem when his glass is empty.

Thu, 12/01/2011 - 14:36 | 1935657 ratso
ratso's picture

Your simplistic answer to a complicated problem may by satisfying but not helpful - much like your alcoholic methaphor.

Thu, 12/01/2011 - 14:38 | 1935662 redpill
redpill's picture

Denial is a symptom of alcoholism as well.

Often times people attempt to make things complicated when they don't like the simple answer.

Thu, 12/01/2011 - 14:42 | 1935682 ratso
ratso's picture

I suspect that you may not a lot more about the usefulness of denial then I do - I applaud you for at least having that.

Thu, 12/01/2011 - 14:45 | 1935699 redpill
redpill's picture

I read that several times and it still makes absolutely no sense at all.

Thu, 12/01/2011 - 14:48 | 1935706 SHEEPFUKKER

My rectum hurts from all these "backdoor bailouts".

Thu, 12/01/2011 - 15:07 | 1935768 CharlieSDT
CharlieSDT's picture

He left out the work "know".

Thu, 12/01/2011 - 15:05 | 1935750 ratso
ratso's picture

It should have read - I suspect that you may know a lot more about denial than I do - I applaud you for at least having that.

It wouldn't have taken much to infer that content.

Thu, 12/01/2011 - 15:11 | 1935794 MsCreant
MsCreant's picture

A bunch of folks are hitting red pill's up counter that they did not understand it either. Instead of admitting you are wrong, or apologizing, you decide to criticize them for their inability to cipher your post. 

You look like the one in denial.

Thu, 12/01/2011 - 15:23 | 1935857 ratso
ratso's picture

I do apologize for my assumption. Thanks for bringing it to my attention

However, I don't think that they are hitting red pill for my bad typing. They probably just agree with his position.  And, that's fine too.

Thu, 12/01/2011 - 15:30 | 1935894 redpill
redpill's picture

More specifically I think they disagree with yours, and I happen to be the one arguing with you.

Thu, 12/01/2011 - 20:33 | 1936821 Al Gorerhythm
Al Gorerhythm's picture

A more apt person (pseudonym wise) to forward the position is yet to be found. Keep at it, redpill. Remember, Ratso's position is the same one we were all hoodwinked into thinking was fair to all players, the "normal" or "sane" path. Ratso, open your eyes. That maze you are following may lead you to to a food reward, but that chunk of cheese that they used to attract you ........ is not resting on a dinner plate.

Fri, 12/02/2011 - 01:11 | 1937396 jeff montanye
jeff montanye's picture

and also remember, unlike ratso's claim, it isn't a matter of lack of liquidity, it is a lack of solvency.  like japan for decades.  for more detail, please see http://www.hussmanfunds.com/wmc/wmc110912.htm and associated articles.

Fri, 12/02/2011 - 13:37 | 1939146 WhiteNight123129
WhiteNight123129's picture

You happen to be both correct in fact. On one hand we can not afford to have the checks stop clearing or the whole economy suffers immediately (ratso point), while on the other hand printing money and/or providing liquidity endlessly ensures of a catastrophe later. So that is a classical short-termist versus long-termism dilemma. Well shall not have a catastrophe now (ratso is right), but on the other we we are sure to have a catastrophe later (redpill is right). What do we do? Fuck it let´s spend, drink and smoke like there is no tomorrow (the consumers´s spending binge on Thanksgiving is a lot wiser than it seems...)


Fri, 12/02/2011 - 00:22 | 1937308 Al Gorerhythm
Al Gorerhythm's picture

@ Ratso.

RP calls you out as being in denial and you counter that he is in greater denial. Scintillating.

No prizes for coming second in a two horse race, ratso.

Thu, 12/01/2011 - 14:40 | 1935673 Dr. Richard Head
Dr. Richard Head's picture

I think the liquidity problem is that the banks have drained the well of the Globe's savings/pensions/investments/homes/wages.  Well is dry bitchez......

Thu, 12/01/2011 - 14:59 | 1935746 catacl1sm
catacl1sm's picture

C'mon, just ONE more glass and then I'll quite. I SWEAR!

Thu, 12/01/2011 - 14:55 | 1935730 adr
adr's picture

Ratso it's very simple. The banks have a liquidity problem because they have been plowing trillions of dollars into the world markets expecting to unload the stocks to the citizen patsy who will be left holding the bag. Citizen patsy holds a worthless stock certificate, bank gets citizen's money which goes into the bank coffer, voila profit.

The banks don't realize that citizen patsy can't buy stocks this time around because they are all broke and those who aren't just ain't falling for it this time.

Because the banksters only know the ponzi game they think the more they pump up stocks the more the citizen pansy will want to join the game allowing them their exit point. Because the money given to the banks is all tied up in securities, stocks, commodity contracts, derivative swaps, etc that they can't unload there is a liquidity problem even though unprecedented amounts of liquidity have been pumped into the system.

Again its not a liquidity problem its a solvency problem. There is nowhere to unload the garbage on the balance sheet because nobody can actually afford to buy it. Get it now?

Thu, 12/01/2011 - 14:57 | 1935735 whstlblwr
whstlblwr's picture

Why do you guys respond to idiot? He's fake.

Thu, 12/01/2011 - 15:00 | 1935747 MFL8240
MFL8240's picture

Send them your money if you are concerned with their liquidity.

Thu, 12/01/2011 - 15:09 | 1935781 Kickaha
Kickaha's picture

Oh, I agree that the EU has a "liquidity problem".  But I think you and I would disagree as to the definition of "liquidity problem".

Somebody has a "liquidity problem" when they are hopelessly in debt and cannot find anybody so fucking, hopelessly, stupidly retarded enough to loan them more money.

Of course, nowadays, TBTF banks and sovereigns with liquidity problems just go and get some freshly printed dollars from the Bernank.

Thu, 12/01/2011 - 17:39 | 1936405 11b40
11b40's picture

You want to know what is really required right now, and is, in fact, about 3 years past due?  Nationalizing these too big to fail monsters and breaking them up into little pieces, that's what.  Let's see just how those new Dodd-Frank rules work.

And at the same time, dig the fangs of these vampires out of the neck of the US Treasury by bringing back a stricter version of Glass-Stegall and repealing Gramm Leech Bliley - "Financial Services Modernization Act" my ass.

Thu, 12/01/2011 - 18:22 | 1936530 Cadavre
Cadavre's picture

The fear is that the Euro falls against the USD and the finality that will render US Equity Indexes back to the reality of absolute worthlessness.

The FED is engaged in market manipulation - wanna call it "back dooring" - go ahead - but it nothing more than market manipulation - pure and simple. The more the USD print, the higher the US equity print. And less the likelihood a big fat righteous collateral call will force the Gypsies running the 3 card monte kiosks to take the "last flight" from the roofs of them overly compensatory tinsel power towers (hate mushy meat - prefer it firm on the spit with bones intact).

It's a backdoor bailout - for sure - but it's purpose is to inflate US equity indexes - and datz all it intended to do.

Is there [like?] some little magical Arc these neutered queens believe will deliver them to an imagined "Never Never Land" promised by indoctrinated dominion heresies momma used to whisper in their ears at night so they wouldn't wet the bed (again)?

Better to jump and accept being memorialized as a pilgrimage urinal, Avoids a whole bunch of other really nassity metaphors fate has historically dealt victims of acute gangster genetic syndrome (aka: the old "i am divinely ordained" sickness).


Fri, 12/02/2011 - 01:33 | 1937424 riley martini
riley martini's picture

 The liqudity problem is from bad bets made by greedy fascist banksters . Bens solution is to transfer the loss onto backs of the American people and pretend they did something brilliant . Bonuses for banksters bribes for fascist politicians and the bill to the proles .

Thu, 12/01/2011 - 13:56 | 1935503 LeBalance
LeBalance's picture

Europe / US.

Them / US

Divide and Conquer.

old game.

Thu, 12/01/2011 - 13:57 | 1935508 GeneMarchbanks
GeneMarchbanks's picture

Nice stuff by Nomi.

Thu, 12/01/2011 - 14:01 | 1935526 hedgeless_horseman
hedgeless_horseman's picture



Outstanding, Nomi.  Nice to read something that makes sense.  Thank you.

Thu, 12/01/2011 - 14:08 | 1935561 GeneMarchbanks
GeneMarchbanks's picture

'But we do know from the US bailouts in phase one of the global meltdown, that providing ‘liquidity' or ‘greasing the wheels of ‘ banks in times of ‘emergency’ does absolute nothing for the Main Street Economy. Not in the US. And not in Europe. It also doesn’t fix anything, it just funds bad trades with impunity.'

Great closing paragraph. This is all about 'psychology'. The half-life of these actions is debatable but I see no reason why this should change anything in Europe at least.

Thu, 12/01/2011 - 14:41 | 1935675 Smiddywesson
Smiddywesson's picture

All of their actions are to stall while they ready the lifeboats (gold)

Thu, 12/01/2011 - 15:01 | 1935749 whstlblwr
whstlblwr's picture

"does noting for Main Street Economy."

This is problem with Fed, it rewards bad behavior and then it hurts public. It does do something to Main Street, it makes them out to thinking everything okay. Does it reward prudent savers who avoid bubbles? No, these fuckers need to go to jail.

Thu, 12/01/2011 - 15:07 | 1935758 DaveyJones
DaveyJones's picture

this is all about forensic psychology.

It doesn't fix main street because it doesn't serve main street.  

We should get on the FOIA

Thu, 12/01/2011 - 15:14 | 1935819 MolotovCockhead
MolotovCockhead's picture

What the point of bailing out the Banksters when all they do are to raise there stakes at the gambling table! No way you can help solve the problem of a compulsive gambler who do not admit that has a gambling problem.

Thu, 12/01/2011 - 14:09 | 1935565 Don Birnam
Don Birnam's picture

"[F]und[ing] bad trades with impunity."

...Yet another mandate which ought be incorporated into the Fed's charter, "By Act of Congress."

A thoughtful piece, Nomi.


Thu, 12/01/2011 - 14:30 | 1935637 Ted K
Ted K's picture

Nomi Prins rocks.  ZH would be fortunate to have her as a regular post if that's what she wants.  Very few females have a mind that sharp on financial matters. Plus she has a rockin' body.

Thu, 12/01/2011 - 14:38 | 1935663 Smiddywesson
Smiddywesson's picture

Indeed, Nomi just made the A list.

Thu, 12/01/2011 - 14:43 | 1935683 Smiddywesson
Smiddywesson's picture

Doubly so because of the picture.  :-)

Thu, 12/01/2011 - 14:44 | 1935685 Dr. Richard Head
Dr. Richard Head's picture

I have such a crush on Nomi.  Intelligence, beautiful, and using her knowledge from the inside to help break us all out of this debt peonage, fiat enslavement circle jerk.

I'd give up a good pile of my gold and silver to spend a night with her....talking of course.

Thu, 12/01/2011 - 20:36 | 1936834 Al Gorerhythm
Al Gorerhythm's picture

You must be a young bull.

Thu, 12/01/2011 - 14:53 | 1935724 Deadpool
Deadpool's picture

this is just an update and recap of what Reggie has been saying for years. Goldman over leveraged and gonna die taking us (system) with it.

Thu, 12/01/2011 - 15:02 | 1935754 CharlieSDT
CharlieSDT's picture

And she's quite hot as well as brilliant.

Thu, 12/01/2011 - 13:57 | 1935513 redpill
redpill's picture

The only reason "Europe matters" is because of US bank exposure to European debt.

Thu, 12/01/2011 - 14:00 | 1935523 Ralph Spoilsport
Ralph Spoilsport's picture

The big question is why do they keep increasing the exposure to European debt? We're missing something here.

Thu, 12/01/2011 - 15:07 | 1935567 redpill
redpill's picture

The international banking interests/globalists/madmen would love nothing more than to further combine and intermingle the debt liabilities of all countries.  This ensures the debt service continues indefinitely for all areas as it becomes an all-or-nothing proposition and they figure the majority of the sheeple will elect to continue the status quo (which they will).  If exposure remained compartmentalized, then there is the temptation to think that default of some compartments is an answer (which it is) because its impacts would be limited, unpayable debt could be discharged, and a new beginning would be possible.  But that's the last thing they want.  Iceland is the nightmare situation for them and they don't want to see it again.  They want to ensure the entire western world is successfully transformed into a tightly fenced milking cow that does nothing but eat, shit, and pay interest.  Complete control.


Thu, 12/01/2011 - 15:23 | 1935791 DaveyJones
DaveyJones's picture

Iceland is giving them nightmares because the people aren't asleep. We must wake up and realize that we can't remove the bankers without removing their elected servants. Both parties must be destoyed.

Thu, 12/01/2011 - 15:12 | 1935804 CharlieSDT
Thu, 12/01/2011 - 15:22 | 1935854 I am a Man I am...
I am a Man I am Forty's picture

outstanding summary

Thu, 12/01/2011 - 14:11 | 1935571 GeneMarchbanks
GeneMarchbanks's picture

Empires usually collapse first at the periphery. What else are they going to do? Invest in Brazil? This is a confidence game. Double down to keep the dream alive. Only now we've got a nightmare.

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