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Is The Treasury's Imminent Launch Of Floaters The Signal To Get Out Of Dodge?

Tyler Durden's picture


Today, our favorite IMF economist, and arguably one of the few people who sees the big picture, Manmohan Singh issued a paper titled "Money and Collateral", which, not surprisingly, deals with the issues of money and collateral. And while it provides an interesting read, we can jump to the conclusion which is, not surprisingly, that there is simply not enough collateral within the global financial system, which in turn inhibits the proper intermediation of banks in traditional monetary conduits (due to the need for central banks to intervene in the place of traditional banks and shadow banking entities), which keeps the money multiplier low. We have extensively covered the issue of collateral scarcity and encumbrance previously (read: "Encumbrance 101, Or Why Europe Is Running Out Of Assets", "No Record Profits For Old Assets: Jim Montier On Unsustainable Parabolic Margin Expansion For Dummies", "A Few Quick Reminders Why NOTHING Has Been Fixed In Europe (And Why LTRO 3 Is Not Coming)", "How The Fed's Visible Hand Is Forcing Corporate Cash Mismanagement") so the paper's conclusion should not come as a surprise: until cash is used to replenish a diminishing, cash-poor asset base, nothing can change. Unfortunately, in the ultimate Catch 22, under central planning companies are disincentivized from investing cash into CapEx and organic growth, and instead are spending it on M&A and dividends, the two worst decisions management can take over the long run. It was one of the tangential "boxes" in the Singh paper titled "Floating Rate Note “puts”—are they forthcoming?" that caught our attention because it reminded us that in all the distraction over the past 3 months, we had forgotten that probably the most important event of 2012 is about to take place, and it has nothing to do with Europe, or with a central bank's balance sheet. Namely: the imminent arrival of Floating Rate Note Treasurys, or Floaters. In reality, while we noted this very curious development before (here and here), we did not think too much into what the Treasury may be signalling. Which was a mistake, because if Singh is correct, the US Treasury may be telegraphing to the world that it, or far more importantly, the TBAC, is quietly preparing for a surge in interest rates. Which as everyone and the kitchen sink knows, is THE black swan event (or gray for you taleb purists).

But before we go there, let's take a tangent of our own to a point in history 61 years prior, known simply as The Accord of 1951. Here is how Wikipedia summarizes this footnote in history, which the Fed, the Treasury and any US administration would be delighted to have never been made public.

The 1951 Accord, also known simply as the Accord, was an agreement between the U.S. Department of the Treasury and the Federal Reserve that restored independence to the Fed.


During World War II, the Fed pledged to keep the interest rate on Treasury bills fixed at 0.375 percent. It continued to support government borrowing after the war ended, despite the fact that the Consumer Price Index rose 14% in 1947 and 8% in 1948, and the economy was in recession. President Harry S. Truman in 1948 replaced then Chairman of the Federal Reserve Marriner Eccles with Thomas B. McCabe for opposing this policy, although Eccles's term on the board would continue for three more years. The reluctance of the Fed to continue monetizing the deficit became so great that in 1951, President Truman invited the entire Federal Open Market Committee to the White House to resolve their differences. William McChesney Martin, then Assistant Secretary of the Treasury, was the principal mediator. Three weeks later, he was named Chairman of the Fed, replacing McCabe.

Few things to note here:

  1. The Fed keeping rates artificially low is nothing new - the Fed did it during and after World War 2, when the short end was anchored at ZIRP, even as inflation was soaring. So much for bonds indicating inflation.
  2. There was a time when the Fed was "reluctant" to monetize the debt. The result was a termination of the Fed head.
  3. There was also a time when the Fed was truly independent. That led to the Administration and the Treasury to force a coup at the Fed, and to put in a puppet regime which would monetize debt no questions asked. This in turn led to official media to proclaim that a thoroughly subservient Fed is now "independent"
  4. Nothing like naming the Fed's Washington D.C. HQ for the one man who dared to stand up to the president's demands for infinite monetization... and get sacked for it.

He hope this little incident that nobody talks about puts everything we live through nowadays with the Fed, and its endless appetite for US paper, in a far more comprehensible light.

Yet while entertaining, this historical incident also teaches us about the future, and what may be imminent. Here is Manmohan Singh:

Floating Rate Note “puts”—are they forthcoming?


At the time of the discussions leading up to the Fed-Treasury Accord of 1951 which ended an extended period of artificially suppressed interest rates on Treasury bonds, there was much internal debate about the potential deleterious impact on bondholders from a “surprise” rise in rates. There was also concern about a potential buyers strike and/or fear that a new market equilibrium would entail a sharp spike in rates. This discussion was conditioned by the similar situation faced by the U.S. Treasury in 1919 after it promised to stabilize bond prices during and after WWI. This policy caused conflict with certain Fed policymakers and the eventual losses on Liberty bonds were still remembered by Congress and the Treasury in 1951, 30 years later. As a consequence, at the time of the announcement of the Accord, buyback options were offered by the Treasury, that is the U.S. Treasury offered to swap the outstanding stock of long-term debt with new long term debt with higher coupons (coupled with restrictions on sales before maturity). The idea was to cushion the market from capital losses.

Bingo: "prevent capital losses" by way of the modern version of 1951's Treasury puts. In a day and age, i.e., now, when investors generate the bulk of their wealth from capital appreciation (thank you ZIRP), and in which capital losses would be the deathknell for a US market in which the bulk of consumer and non-financial cash is already invested in the capital markets (recall "This Is Where The Developed World's Households Have Invested Their Money"), capital losses within the one asset that has been a cash magnet ever since the Second Great Depression, would be devastating. How devastating? Simple bond math: since a bond's yield is determined by its fixed cash coupon and its price, in an environment of rising interest rates (especially on the short-end which are duration magnified exponentially by the time they reach the long end) when the coupon can not be changed (or is 'fixed' as stated), the price of the bond has to drop to keep the yield rising. A good example are the new Greek 10 Year bonds, which because of their ~4% cash coupon, and 20% yield demanded by the market, are trading at just about 20 cents on the dollar.

Needless to say an 80% capital loss on the 10 Year Treasury would be cataclysmic for all those who believe their money is "safe." Also for America, and for modern capitalism.

So what is a Treasury to do? Well, unfix the fixed portion, or the cash coupon, so that rapid moves in interest rates are absorbed not by the capital loss to keep the yield higher, but by a spike in the variable interest margin over Libor. That way even if the Fed were to lose control of both the long and the short end, capital losses would be minimized, something of absolutely critical value in a society transfixed with capital preservation.

In other words, the market under the guise of the TBAC will provide the instrument, or product, that will be best suited to buffer a surge in interest rates. Ironically, the very act of rolling out this product is thus the alarm bell that higher rates are a-comin'.

This is how Singh sees the current comparable event, the imminent launch of FRNs, as comparable to the bond swap of the 1951 Accord:

Might the U.S. Treasury go down a similar path again in conjunction with an eventual Fed exit strategy? In the current environment, markets have witnessed a 30 year secular decline in bond market yields. Serious market turbulence might result, significantly greater than that associated with the February 1994 “surprise” rise in rates initiating a tightening cycle, were the market to believe it were embarking on a steady (or rocky) rise in rates from near zero to a “neutral” fed funds rate of 400 bps and a "normal' 5 percent yield on 2-year U.S. Treasuries. The recent TBAC’s proposal for floating rate notes (FRNs) seems an obvious option to cushion the transition for the market. As an indication that the eventual unwinding and normalization of the yield curve will take time and inflict pain on holders of fixed income debt, the market appears already to be requesting such "puts". In this context, it is useful to quote from recent TBAC report (Jan 31, 2012)


“… ways to explore the viability of Treasury issuing floating rate notes (FRNs). In particular, the presentation [attached] assessed potential client demand, optimal maturity, reference index, and reset frequency. The structural decline in the stock of global high-quality government bonds, coupled with an increase in demand for non-volatile liquid assets, should make U.S. government issued FRNs extremely attractive. Pricing for a hypothetical two year FRN was estimated to be in the arena of 3 month Treasury bills plus 8 basis points.”

What is also obvious is that if the TBAC is quietly shifting the market into preparation mode for "a steady (or rocky) rise in rates from near zero to a "neutral" fed funds rate of 400 bps and a "normal" 5 percent yield on 2 year U.S. Treasuries" as the IMF warns, then all hell is about to break loose in stocks, as by now everyone is aware that without the Fed liquidity, and not just liquidity, but "flow" or constant injection of liquidity, as opposed to merely "stock", VIX will explode, equities will implode, and all hell would break loose.

It is not yet certain if the TBAC will proceed with implementing FRNs. Although, since the proposal came from the TBAC, read Goldman and JPM, and what Goldman and JPM want, they get, it is almost certain that in about a month, concurrent with the next quarterly refunding, America will slowly but surely proceed with adopting Floaters.


The second charge was to explore the viability of Treasury issuing floating rate notes (FRNs). In particular, the presentation [attached] assessed potential client demand, optimal maturity, reference index, and reset frequency. The structural decline in the stock of global high-quality government bonds, coupled with an increase in demand for non-volatile liquid assets, should make U.S. government issued FRNs extremely attractive. Pricing for a hypothetical two year FRN was estimated to be in the arena of 3 month Treasury bills plus 8 basis points.

A discussion then ensued over whether 3 month Treasury bills or Fed Funds Effective was the more appropriate floating rate index. In conjunction with fixed-rate issuance, FRNs give Treasury an attractive alternative to increase the average maturity of its debt. While more analysis on the specifics of the program must be done, the Committee was unanimously in favor of Treasury issuing FRNs.

As a reminder, this is what Treasury's Mary Miller said earlier:

Treasury continues to study the possibility of issuing Floating Rate Notes (FRNs).  The Treasury Borrowing Advisory Committee suggested in its February 2012 charge that FRNs could complement Treasury’s current suite of products.

Treasury recognizes that FRNs may provide a number of benefits to government finance, and plans to announce a decision regarding whether or not to introduce an FRN product at the May 2012 Quarterly Refunding.

What happens once we get Floating Treasurys nobody knows. But if 1951 is a precedent, when the unstoppable force of central planning finally rammed right into the immovable wall that is reality, it may be time to start heading for the cliffs.

Finally, here is the TBAC's FRN presentation:



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Tue, 04/10/2012 - 22:51 | 2333462 Almost Solvent
Almost Solvent's picture



That shit that circles and circles the drain when you flush but just won't go down?


Tue, 04/10/2012 - 22:54 | 2333465 ACP
ACP's picture

Be: Uhhhh, huh-huh, huh-huh, huhuhuh...he said floater.

Bu: Shut up Beavis before I have to kick your ass again!

Tue, 04/10/2012 - 23:10 | 2333497 SilverTree
SilverTree's picture

A POS that just wont flush.

Wed, 04/11/2012 - 00:30 | 2333646 strannick
strannick's picture

With FRNs, Treasury buyers still buy into a raising rate enviroment, but then the stock market crashes... Maybe to offset this, it will be QE3 and FRNs. Something for everyone. That might account for gold's solo spike without stocks today.

Wed, 04/11/2012 - 00:33 | 2333650 The Big Ching-aso
The Big Ching-aso's picture



Speaking of floaters, is it warm in here or are my frog legs just feeling hot flashes?

Wed, 04/11/2012 - 07:07 | 2333939 bernorange
bernorange's picture

Lipstick on a PIIGS?

Wed, 04/11/2012 - 08:07 | 2334018 monkeyboy
monkeyboy's picture

So it's just one big game of IOU.

Tue, 04/10/2012 - 23:11 | 2333501 slewie the pi-rat
slewie the pi-rat's picture

what was it they usta say?

...people with floating avatars shoudn't...  ...?

Tue, 04/10/2012 - 23:22 | 2333517 TruthInSunshine
TruthInSunshine's picture

I will agree, with an intent to not overstate anything or engage in hyperbole, that this very well may be a watershed event in the annals of full fractional reserve banking Ponzi-nomics & chicanery.

It ranks right up there with the:

Bretton Woods Agreement

Plaza Accord


The Federal Reserve Act of 1913

and the de jure closing of the gold standard in 1971 (helping to perpetuate Deep Capture of America's legislative, executive and judiciary branches of government).


*On August 15, 1971, the United States unilaterally terminated convertibility of the dollar to gold. As a result, “[t]he Bretton Woods system officially ended and the dollar became fully fiat currency, backed by nothing but the promise of the federal government.” This action, referred to as the Nixon shock, created the situation in which the United States dollar became the sole backing of currencies and a reserve currency for the member states. At the same time, many fixed currencies also became free floating.

Tue, 04/10/2012 - 23:27 | 2333534 nope-1004
nope-1004's picture

Ironic that preservation of capital is front and center in light of the fact that capital has been so badly debauched over the last few years by the Treasury and Fed.  If Singh is correct, rates will rise very soon.... perhaps the easiest way out now.

IMO, rates have to rise at some point though, either by error or by design, as the current financial obligations are clearly unsupportable.  The easiest way out is to inflate.  Default is an admission of failure, and inflation will be chosen over default anyday at the obvious expense of the masses (sheeple) asleep at the wheel.


Tue, 04/10/2012 - 23:44 | 2333582 derek_vineyard
derek_vineyard's picture

The floaters will have negative real yields....look at negative 5 and 10 year TIPS----preservation of capital is why companies are hoarding cash and not hiring or investing---these corporate leaders know what we on zero hedge know-----risk is greater than reward in most asset classes

put on a happy face for as long as you can

Wed, 04/11/2012 - 00:10 | 2333625 FinkPloyd
FinkPloyd's picture

"The floaters will have negative real yields"

 This seems to make a lot of sense considering the amount of info on ZH that rising interest rates will be a death knell.

Wed, 04/11/2012 - 00:33 | 2333636 derek_vineyard
derek_vineyard's picture

fink    you will NEVER see positive real rates again under USA currency--the next step is collapse or 'reset'

         which will probably occur over a 2-5 day panic period when bond holders get routed or legislated  out of their principal


in 2008 money markets froze.....the government could have let ALL banks go belly up and backstopped the majority of the principal and embarked on a new banking system let only lehman fail and bear was sold and the collapse was POSTPONED and the realization of balanced budget, job creation and fiscal prudence was NOT re-established within our society

Wed, 04/11/2012 - 00:41 | 2333661 The Big Ching-aso
The Big Ching-aso's picture



"Hey, Bernanke.   Do you know what the PHUCK you're doing?"

"No.   But I did stay at a Holiday Inn Express last night."

Wed, 04/11/2012 - 00:41 | 2333659 Oh regional Indian
Oh regional Indian's picture

From what I'm reading, the PTB playbook for Extend and Pretend seems to be thus:

Long bouts of controlled deflation interspersed with short bursts of wealth destroying hyper-inflation. 

When the world is your chessboard, the playing field is huge, the levers are SO many and time..... they look to have all the time in the world. Literally.



Wed, 04/11/2012 - 00:38 | 2333655 Nukular Freedum
Nukular Freedum's picture

Tips are a con job since they always adjust to the FEDs la-la land definition of inflation. What may be happening is a return to. Volckeresque approach to dealing with incipient inflation, which would not be a bad thing (if this is the case one presumes that the FED now believes that the financial sector is now strong enough to weather the storm of long overdue normalization.
I have written a post about what the FED interest rate policy should classicaly have been since day one of the ZIRP crisis.

Wed, 04/11/2012 - 02:12 | 2333761 derek_vineyard
derek_vineyard's picture

5 years TIPS   -1.30 plus the UNDERstated rate of inflation 

10 year            -0.27


all maturites of TIPS exceeded 3.00% right after 2008 meltdown (due to deflation expectation)

negative yields on an understated infaltion rate???????????   crazy compressed market

Wed, 04/11/2012 - 02:17 | 2333766 derek_vineyard
derek_vineyard's picture

here comes a possible law :     50% of private pensions and IRA's MUST be invested in USA debt at government pegged rates (to keep rates down, budget managed and save the country)     this is highly probable or some hybrid thereof


rates cannot go up much without imploding the debt, so japan-esque measures will be taken

Wed, 04/11/2012 - 08:51 | 2334093 GeezerGeek
GeezerGeek's picture

I wonder if requiring that a large part of retirement assets be put in government debt is politically possible.The outflow of money from the stock market would probably make the DJIA crash, and that is probably the most prominent number that the average clueless person follows. I doubt many of the Joe Six-pack types know or care about Treasury rates directly, but the DJIA falling rapidly will cause a serious lack of confidence in whoever happens to be president at the time. Why do you think Ben pumps up the market? Because Barack would be tossed out in a heartbeat if the DJIA was around $8000 come November.

I can see the possibility that future retirement savings must be invested as you suggest. It doesn't matter, in my opinion. It's all just rearranging the deck chairs on a sinking ship.

Thu, 04/12/2012 - 23:36 | 2340117 MeelionDollerBogus
MeelionDollerBogus's picture

"I wonder if requiring that a large part of retirement assets be put in government debt is politically possible."

Good sir,

might I remind you it's now legal for police to bust in your door without a warrant and you NOT being permitted to block entry, that it's legal to strip-search you for even a minor alleged offense, and to remind you that the TSA regularly gropes childrens' genitals and scans your naked picture to allow you to pass a gate.

Politically possible?

Welcome to fucking Wonderland, Alice, enjoy your stay.

Wed, 04/11/2012 - 07:25 | 2333958 BandGap
BandGap's picture

I was thinking the same thing. what point do interest rates start to rise?

Wed, 04/11/2012 - 00:12 | 2333629 Sam Clemons
Sam Clemons's picture

Rates didn't rise for about 20 years during the Great Depression days.  The Fed, if they do control the stock market which many people allude to here, will definitely let stocks tank in order to prevent yields rising dramatically.

What is more important to them?  Corporate stocks and their investors or the ability to fund the US Military and every other part of Government?  I'd bet on the latter.

Wed, 04/11/2012 - 04:05 | 2333840 LarryDavis
LarryDavis's picture

Very insightful. 

Wed, 04/11/2012 - 05:49 | 2333890 Mentaliusanything
Mentaliusanything's picture


well said you must save the farm
























Wed, 04/11/2012 - 06:19 | 2333909 jeff montanye
jeff montanye's picture

see sydney homer's history of interest rates.  long term gov't yields (average of all over twelve years) rose from a low in 1930 of 3.19% to a high in 1932 of 4.29% (fourth edition, page 351) and this was in an environment of money supply decline and spreading world depression.  after 1932 rates began falling and bottomed in 1941 at an average of 1.95%.  from there they rose, accelerating after 1950 and 1968 to a high average annual yield of 12.87% in 1981 (pages 375 and 376).  here's a graph but it's a little hard to read:

Wed, 04/11/2012 - 02:25 | 2333776 derek_vineyard
derek_vineyard's picture

asset prices will be routed before bond prices are for sure...maybe both

government can't afford high rates....when its down to survival...fuck the asset prices; legislate pensions and IRA's to buy pegged rate bond at japan-like rates to keep budget from imploding

Wed, 04/11/2012 - 05:09 | 2333865 mrdenis
mrdenis's picture

If forced purchesed of T bonds how could state actuaries still state a return on pension of 7 to 9% be attained ,which enables states to underfund pensions ? 

Thu, 04/12/2012 - 20:55 | 2340105 MeelionDollerBogus
MeelionDollerBogus's picture

You don't need to state a rate of return. You mandate it into law then no one can leave. Yield-chasing will be over. Pensions will be jailed.

Wed, 04/11/2012 - 00:09 | 2333612 Teamtc321
Teamtc321's picture

Spot on as usual Truth.


Fiat Currency: Using the Past to See into the Future

Fiat Money -Toilet Paper Money

The history of fiat money, to put it kindly, has been one of failure. In fact, EVERY fiat currency since the Romans first began the practice in the first century has ended in devaluation and eventual collapse, of not only the currency, but of the economy that housed the fiat currency as well.

"Why would it be different here in the U.S.? Well, in actuality, it hasn’t been. In fact, in our short history, we’ve already had several failed attempts at using paper currency, and it is my opinion that today’s dollars are no different than the continentals issued during the Revolutionary War. But I will get into that in a moment. In the meantime, I will show you that fiat currencies have not been successful, and the only aspect of fiat currencies that have stood the test of time is the inability of political systems to prevent the devaluation and debasement of this toilet paper money by letting the printing presses run wild."


Wed, 04/11/2012 - 06:06 | 2333899 CSA
CSA's picture


Questions:  On a gold standard (paper backed by gold), wouldn't counterfeiting eventually collapse the system?  How does a country account for people who want their "physical gold" when the holder of paper comes calling, but the vault is empty due to counterfeiters draining it?  Do you expect fallible man to create the perfect "counterfeit proof" paper currency or is electronic currency better?  Because everyone knows hacking is non-existent.  If the gold standard was the panacea, there would easily be one country who currently ruled them all and has withstood the test of time.  This isn't really directed at you, more for other people to respond.  I don't have answers, only questions. 


Wed, 04/11/2012 - 07:45 | 2333987 HurricaneSeason
HurricaneSeason's picture

There isn't anything in the vault, now. You wouldn't have to worry about the counterfeiters if the banks are storing the gold with no audits. Who could you trust to audit? Less than a gram of gold or silver would need to be put into the coin or note and be verifiable.

Wed, 04/11/2012 - 08:30 | 2334053 CSA
CSA's picture

Interesting additional points, thanks.

Wed, 04/11/2012 - 10:57 | 2334471 Overflow-admin
Overflow-admin's picture

"Because everyone knows hacking is non-existent"


I bet my physical gold you don't ever know the historical definition of hacking. Hackito Ergo Sum

Thu, 04/12/2012 - 20:53 | 2340101 MeelionDollerBogus
MeelionDollerBogus's picture

Stick to coins & bars not paper promises.

Problem solved.

Wed, 04/11/2012 - 07:27 | 2333962 Seize Mars
Seize Mars's picture

Good post, but I'll point out that, like a lot of other things, fiat was actually invented in ancient China. It didn't start in Rome.

Wed, 04/11/2012 - 00:11 | 2333628 MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

Heh, heh -- he said "Annals."

Wed, 04/11/2012 - 01:21 | 2333702 cranky-old-geezer
cranky-old-geezer's picture



Preservation of capital?  When the Fed has debased the US dollar 40% in 4 years?

Wall Street seems totally blind to currency debasement, looking only at numbers, ignoring the shrinking value of those numbers.  (Today's 13,000 Dow is equivalent to 7,800 in 2007 dollars.  Today's 1,300 S&P is 780 in 2007 dollars.)

If treasuries went back to 5%, people holding them would still be losing money because the dollar is losing way more than 5% value each year, more like 10%.

People holding treasuries would have to get 10% yield just to break even with inflation, just to maintain their real purchasing power. That's not making a profit.  It's just breaking even, not gaining, not losing.

Federal borrowing is draining wealth out of the economy at the rate $150 billion a month.  That's why the economy isn't recovering.

Fed is keeping interest rates near zero so the federal government can keep draining $150 billion a month out of the economy.  No, QE hasn't stopped, it's going right on. 

If the Fed stopped printing and the federal government was forced to pay markert rates for borrowed money, their interest expense would jump to $800 billion a year, maybe even $1 trillion a year, half of all federal taxes collected.

But nobody would loan them $150 billion a month in  normal credit markets, so the Fed must keep printing and buying treasuries, if not directly, then thru proxies.

And the Fed must keep rates near zero so interest expense doesn't balloon up and destroy the federal budget. 

Oh wait, there is no budget.

Anyway, you get the point.   The federal government simply cannot handle higher interest rates with $16 trillion of debt, so rates WILL stay near zero from now on.  They'll NEVER go back up.  EVER.

This is the end game for the federal government.   Their last few years of existence.  When federal debt reaches $20 trillion, that's probably it, the dollar will collapse, the Fed will collapse, the federal government will collapse, ...and America will collapse.

Wed, 04/11/2012 - 02:16 | 2333710 TruthInSunshine
TruthInSunshine's picture

Don't worry. The Bernank would tell us that he hasn't massively distorted asset prices, thus creating yet another bubble (but this time, a wide basket of extremely over-inflated asset prices, rather than just a defined, concentrated or housing one), which will create a far more devastating series of crises when it inevitably implodes.

It's all normal and healthy, from a micro and macro economic perspective, efficiency of markets, and efficiency of price discovery, when a company that developed an 'app' that lets you alter your photo to a black & white one and then share it with those in your social media circle, to be purchased for a billion USD, nor for Facebook, which is an abysmal failure in actually creating revenue let alone profits, gets tagged with a 50 to 100 billion USD market valuation, nor for [insert whatever example of thousands you'd like to here]....




By the way, look for bank failures and municipal defaults (as Meredith Whitney predicted, being only off on the timing, and certainly not the magnitude; it's going to be epic - check out your local papers to see the cities, townships, villages near you that are running on $$$ vapors) to re-surge with a vengeance soon.

Wed, 04/11/2012 - 07:29 | 2333965 Seize Mars
Seize Mars's picture

Well I think I will be just fine, thanks.

Wed, 04/11/2012 - 09:01 | 2334111 chubbar
chubbar's picture

Here is an excerpt from a GATA article written in 2009 that exposes a Confidential Federal Reserve Document in the possession of William McChesney Martin. This is followed by some interesting comments, particularly by Catherine Austin Fitts. 

"The document, which is marked "Confidential," is from the papers of William McChesney Martin, Jr., and this collection is held by the Missouri Historical Society. A scanned image of the original document is posted by the Federal Reserve Bank of St. Louis at the following link: ical/martin/23_06_19610405.pdf

Most importantly, GATA consultant James Turk has brilliantly dissected this document in an essay titled, "The Federal Reserve’s Blueprint for Market Intervention," which has been served at The Matisse Table and at title of this confidential report is:

Confidential - - (F.R.)

U.S. Foreign Exchange Operations: Needs and Methods

James Turk notes:

In short, it lays out what the Treasury and Federal Reserve needed to do in order to begin intervening in the foreign exchange markets, but there is even more. This document plainly shows what happens when government operates behind closed doors. It also makes clear the motivations of the operators of dollar policy long described by the Gold Anti-Trust Action Committee and its supporters -- namely, that the government would pursue intervention rather than a policy of free markets unfettered by government activity. The run to redeem dollars for gold had put the government at a crossroads, forcing it to make a decision about the future course of dollar policy. This paper describes what the government would need to do by choosing the interventionist alternative.

This document provides primary, original source supporting evidence that GATA has been right all along.

I have long hoped that a "confidential" document like this one would eventually emerge. There are no doubt countless more like it, as evidenced by the Federal Reserve's and the Treasury's refusal to provide all the documents requested by GATA under its recent Freedom of Information Act request. Maybe those documents will eventually see the light of day too.


James makes a key point regarding one of the assertions of this report…

"The basic purpose of such operations would be to maintain confidence in the dollar."

James T notes…

"This statement confirms one of the basic planks of much of the work by me and others that has been published by GATA over the years. The efforts to cap the gold price have one aim. It is to make the dollar look worthy of being the world's reserve currency when in fact it is not."


This significant report was written some 48 years ago, yet could have been written at any time in the past 10 years during which GATA has discovered blatant manipulation of the prices of gold and silver … as well as noted ludicrous counterintuitive dollar market action, which has been most noticeable in recent days, as our hysterical financial crisis in the US intensifies.

James Turk’s title says it all: it is a blueprint for the gold price and financial market manipulation so prevalent now. Ironically, there is a common misconception out there that the US is in the financial market mess it is in today because of too much deregulation. To some extent that is very true, as the likes of Secretary Paulson and Gary Gensler urged Congress to allow the US investment banks to increase the allowable debt/credit on their books from 12:1 to 40:1.

Yet, just as big a problem was the secretive interference in the US financial markets which allowed credit and risk issues to go completely out of control in America … meaning too much secretive market manipulation … and in a hidden way, too much regulation. Had the gold market not been artificially suppressed and allowed to trade freely, the price would have soared these past years, interest rates would have risen dramatically, and there would have not been the reckless investment bank shenanigans that have put our financial system in such peril. Simplistically, it is generally acknowledged that if gold had been allowed to keep up with inflation for the past 28 years, the price would be over $2,000+ per ounce. The GATA camp knows why it is not there RIGHT NOW!

Had the Plunge Protection Team (Working Group on Financial Markets) not stepped up their constant Hail Mary play activity after 9/11 to drive the DOW mysteriously higher in the last hour of trading on the New York Stock Exchange, the market probably would have broken down much earlier than it did and given the investing public more of a clue that something was wrong, instead of the misleading Stepford Wives drill that "Everything is fine."

What is profoundly disturbing about the discovery of this confidential document is it fits in with much grander conspiracy theories than where GATA is coming from. Since this document, based on what has happened, really is a blueprint for market manipulation since 1961, it feeds into the worst fears of those who are constantly on the case about the Bilderbergers, Council on Foreign Relations, Trilateral Commission, and so on. This document to William McChesney Martin, Jr. is EXACTLY what I have been seeing and reporting over the past decade … not that much different than those who pointed out the Madoff Ponzi scheme during the same period of time. To learn that this market deception and manipulation was conceived when I was a freshman in high school is almost beyond comprehension, especially since the Wall Street crowd hasn’t permitted a serious discussion about it ALL THIS TIME! Nor has our government allowed a true independent audit of US gold reserves since the Eisenhower Administration in 1955.

It also feeds right into the scary notion revealed in a famed President Clinton comment that goes something like … "I didn’t realize I wouldn’t be in control here when I became President." … meaning there were far more powerful background forces pulling the strings and on how he must operate.

GATA doesn’t want to go there, but based on this new discovery, it certainly opens up further comments for fair game, even for some of GATA’s Board of Directors. Adrian Douglas (an oil industry consultant who is presently off to Angola) sent the following email to James Turk:

Congratulations. This was an excellent analysis. What a stunning document! Real dynamite.

It got me thinking as to whether the heist they have pulled is bigger than we think. The BIS as we know, and as mentioned in this memo, is the organization that allows for cooperation behind the scenes of the Central banks. We know they went private to prevent any need for public disclosure seeding the opportunity for Reg Howe’s lawsuit. We have plenty of evidence that Central Bank gold holdings have been depleted. We keep saying that the gold is "gone". But what do we mean by "the gold is gone"? Gold is not like crude oil, expensive wine, even silver… it does not get consumed. It has not "gone"; it has changed ownership. The Central Banks leased out gold to the bullion banks. Now who did the the bullion banks sell the gold to? We know that the bullion banks can’t get the gold back. If the central banks ask for the gold back the bullion banks can declare bankruptcy or settle in cash. How convenient! The Central bank gold has gone into someone else’s hands that are unknown and the loss will eventually be written off. We know that Central Banks are owned or controlled by some of the richest families and/or entities in the world. Is it possible that these "bankers" can benefit from a fiat Ponzi scheme while it can be maintained AND still end up with the gold in which case they can benefit from a return to a gold standard and when the gold standard eventually gets abused and abandoned in the future they will play the whole fiat game over again? It would certainly require cooperation between central banks to pull off such a heist.

It would be great to have the whole world sitting in a room and ask those who own more than 10 million ozs of gold to raise their hands!

The crime may be more than manipulating the price of gold to "defend the US dollar" and concealing the evidence from the public. The Cartel may well have aided and abetted embezzlement of the citizens’ gold of the Western world. And who ever has it, they bought it perfectly legally from the bullion banks with fiat currency.

This seems to make sense because Central bankers and the "elitists" (Rockefellers, Rothchilds, Morgans, Mellons, Carnegies, Vanderbilts etc etc) are not stupid. They must know gold is real money. They can study monetary history too. The fiat money game in this context is a decoy for the theft of sovereign gold.

It is not without precedent, the great inflationist, John Law, was arrested escaping with a coach loaded with gold and silver!

Is this a bridge too far in conspiracy theory?

Which provoked this reply from another GATA Board member, Catherine Austin Fitts (Assistant Secretary of Housing/Federal Housing Commissioner at the United States Department of Housing and Urban Development in the first Bush Administration)…

My hypothesis since 2001 is that the NWO is shifting assets out of sovereign governments and shifting liabilities back in. The goal is to reengineer global governance into the hands of private banks and corporations in a manner that dramatically centralizes control. This is why the creation of a genetically controlled seed and food supply, etc.

To achieve such centralization requires the centralization of the gold and silver stores. Whoever has the gold has the most powerful financial asset. So if you want a new centralized currency, you need a monopoly on gold and silver. I think part of the end game is to shift back to something involving some kind of gold standard.

If you use fiat currency to acquire ownership and control of all the real assets on the planet, then you need a gold standard to make sure you keep them.

So, it would not surprise me to see G8 and GATA start to move into alignment, strange as it may sound.

Tue, 04/10/2012 - 23:41 | 2333523 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

It is about time to end this BS charade. Purify the system by forcing everyone to bankruptcy! We can build a better society afterwards.

Wed, 04/11/2012 - 02:57 | 2333796 aleph0
aleph0's picture

Don't forget the most important part .. purge all those top banksters , politicians and other crooks ... for life.

Sat, 08/04/2012 - 12:51 | 2678117 LooseLee
LooseLee's picture

Purge 'em? Execute 'em!

Sat, 08/04/2012 - 12:51 | 2678118 LooseLee
LooseLee's picture

Purge 'em? Execute 'em!

Wed, 04/11/2012 - 06:16 | 2333907 neidermeyer
neidermeyer's picture

OMG! He said FLOATER ... It's no big deal..

Tue, 04/10/2012 - 23:02 | 2333484 Stuck on Zero
Stuck on Zero's picture

Is this about the bullshit to energy scheme funded by Obama?

Tue, 04/10/2012 - 23:24 | 2333539 km4
km4's picture

Here's your floater

CaddyShack Pool Scene - YouTube

Tue, 04/10/2012 - 23:34 | 2333561 Bookdoc
Bookdoc's picture

It's those new government mandated toilets...

Wed, 04/11/2012 - 00:11 | 2333627 zorba THE GREEK
zorba THE GREEK's picture

Floaters are what you get in your eyeballs when you're old.

Wed, 04/11/2012 - 02:38 | 2333666's picture

Floaters are light dumplings which float on top your stew or sauerkraut. Heavy dumplings are called sinkers.

Wed, 04/11/2012 - 02:03 | 2333746 UP Forester
UP Forester's picture

My floaters started in High School.  Either football or hockey, probably hockey.

Wed, 04/11/2012 - 03:43 | 2333824 Intoxicologist
Intoxicologist's picture

Everybody's got floaters.  I saw mine when I was  5 and my dad explained "floaters" to me.  Try on a pair of pinhole glasses sometime, and you will see every floater that exists in your eyes.  I bought a pair awhile back to exercise my eyes; and also still be able to read if my regular glasses get squished.  I'm hoping in time I'll no longer need to be bespectacled.

Wed, 04/11/2012 - 00:55 | 2333649 Waffen
Waffen's picture

So it goes?


1.) interest rates go up

3.) equities take a big dump

4.) the debt will become unsustainable

5.) politicians will declare an age of austerity

5.) the people will scream and there will be gnashing of teeth.

6.) the FED will come to the rescue with a devaluation, or massive influx of QE. 

7.) This will be the full on hyperinflationary event.


Deflation typically precedes hyperinflation(per fofoa and recent hyperinflationary events).. So is this the actual deflationary event being telegraphed?


>>rant moved to bottom<<


Ok, all I have heard the last year in a half is, "the fed has run out of bullets","no more bullets in the gun","QE to infinity","no QE, the stock market will tank","QE is the only thing holding up the market."

Since then we have had QEII end, Operation Twist, CBs around the world propping up the market, now its FRNs? Whats next?


Wed, 04/11/2012 - 04:06 | 2333841 Urban Roman
Urban Roman's picture

Number 5) will NEVER happen. Politicians will declare that they have fixed global warming, ended corruption, and placed the economy on a sound foundation. They may run around declaring war on some new undefined enemy. They will declare many things.

But they will not declare a new age of austerity, EVER.


Wed, 04/11/2012 - 05:21 | 2333872 cossack55
Wed, 04/11/2012 - 03:41 | 2333823 Donnie Duvanie
Donnie Duvanie's picture

Whew! For a minute, there, I thought floaters were something that might be bad for Amerika in the long run.

Wed, 04/11/2012 - 03:47 | 2333826 Jafo
Jafo's picture

The corollory of this is that all the current debt can be classified as "sinkers" that just go to the bottom of the sewer.

Eeeeew!  I wouldn't want to be holding any of that.

Wed, 04/11/2012 - 14:32 | 2335301 PayneNita
PayneNita's picture

my classmate's sister makes $62 hourly on the laptop. She has been unemployed for 5 months but last month her pay check was $13843 just working on the laptop for a few hours. Read more on this web site ....

Tue, 04/10/2012 - 22:51 | 2333464 phungus_mungus
phungus_mungus's picture

Between this and the fact Florida is about to burn, when the DA tells the world int he next 72 hours she's not charging Zimmermann... were all screwed!

Send lawyers, guns and money!!!



Tue, 04/10/2012 - 23:00 | 2333479 LetThemEatRand
LetThemEatRand's picture

Start a 1:44.

One of the best live acts ever.


Tue, 04/10/2012 - 23:24 | 2333537 Pool Shark
Pool Shark's picture



"And if California falls into the ocean

like the mystics and statistics say it will,

I predict this hotel will be standing

until I pay my bill."

RIP Warren...

Tue, 04/10/2012 - 23:41 | 2333577 Pool Shark
Pool Shark's picture



"Patty Hearst

heard the burst

of Roland's Thompson gun

and bought it."


Tue, 04/10/2012 - 23:07 | 2333493 centerline
centerline's picture

Media has been stoking this Trayvon thing like I have never seen.  And the funny thing is that Zimmerman is hispanic.  In Florida, hispanics are a huge proportion of the population.  In most areas, whites are the minority.  Congrats to the black communnity for uniting stupid whites and hispanics against the stupidity of the black cause.

Anyone who buys into what the media is selling is playing part to the great distraction... and the great divide.  Stupid fucking people never learn they are being baited.  Worse is that stupid fucking people cant deal with real statisitics and face social problems head on.

Wed, 04/11/2012 - 00:04 | 2333580 palmereldritch
palmereldritch's picture

Nice interview here of Webster Tarpley where he properly contextualizes systemic racism and the castle law against the tragedy of the Trayvon Martin shooting and how Obama seems to exploiting it along racial and religious lines not unlike when he counselled his cousin Odinga in Kenya to flame the fires of intolerance to achieve political electoral success in his home country of Kenya (Odinga's home country!...].  It's an election year!!

Tue, 04/10/2012 - 23:50 | 2333593 derek_vineyard
derek_vineyard's picture

any smart ass punk in hoody come into my community better answer my fucking questions

dont be polite = ass kicking

threaten me =  shit hits the fan

Wed, 04/11/2012 - 02:02 | 2333672's picture

It was Zimmerman who refused to identify himself or state his purpose when Martin asked why he was being followed according to Zimmerman's own account. Does racism cause illiteracy or is the commonly repeated misstatement of fact you repeated simply a matter of "stupid is as stupid does?"


Trayvon asked Zimmerman if he had a problem. Zimmerman said no and reached for his cellphone, he told police. Trayvon then said, "Well, you do now," or something similar and punched Zimmerman in the nose, according to the account he gave police.


Wed, 04/11/2012 - 02:15 | 2333764 BooMushroom
BooMushroom's picture

So, to clarify: if you ask someone if they have a problem, and they say no, and reach for their cell phone, you can punch them in the face and do your best to crush their skull on the sidewalk?

Just want to make sure I understand the protocol.

Wed, 04/11/2012 - 02:47 | 2333777's picture

Here's the protocol.

If a black man in a vehicle follows a seventeen year old white kid there's no need to be alarmed. But if the white kid gets nervous and starts walking faster and the black man speeds up his pursuit, that's OK. If the white kid steps into the shadows to hide from his pursuer and the black man gets out of his car and corners the white kid in a dark spot that's OK. If the white kid is unreasonable enough to be concerned and asks why he's being followed the black man should not feel the need to answer. If the black man reaches for something in his jacket the white kid should just stand there and smile and take whatever is coming.

That is the protocol which the pro-Zimmerman crowd advocates if we are to understand that one is guaranteed equal protection under the law and that race is not a factor in such incidents. Does that sound kosher to you?

Wed, 04/11/2012 - 10:29 | 2334388 DeadFinks
DeadFinks's picture

Nice story.  How does this relate to the incident in Sanford?

Wed, 04/11/2012 - 11:10 | 2334520's picture

If you don't believe Zimmerman's own account they why do you seem to be supporting him?

Wed, 04/11/2012 - 11:33 | 2334596 DeadFinks
DeadFinks's picture

Do I support Zimmerman?  That's news to me.  I support the truth and your fantasies aren't part of it.

Wed, 04/11/2012 - 12:13 | 2334708's picture

My synopsis is based on Zimmerman's own account. Zimmerman admits that he followed Martin and that when Martin tried to get away Zimmerman continued the pursuit. Zimmerman admits that Martin asked why he was being followed and that Zimmerman refused to answer and then reached for something.

It is a fact that these statements constitute Zimmerman's own account of the incident. If you don't support Zimmerman then why do you seem to be so heavily invested in calling the truth a fantasy?

Wed, 04/11/2012 - 12:19 | 2334771 DeadFinks
DeadFinks's picture

So Zimmerman's account is THE truth.  Case closed then.  I personally have a hard time believing that the fat old beaner managed to "corner" a 6'3" 17 year old athlete and left him no choice but to fight.

Wed, 04/11/2012 - 12:37 | 2334826's picture

So you believe that Zimmerman is lying and that proves he's innocent? You should get some kind of prize for working that one out.

Wed, 04/11/2012 - 13:24 | 2334990 DeadFinks
DeadFinks's picture

Go ahead and try to put more words into my mouth.  I made no such statement and drew no such silly conclusion.  It seems that you're saying he's telling the truth as it is the basis for your fantasies.  So if he's telling all there is to tell, then his actions were justified.  I'm saying I don't know all the facts and neither do you.

Wed, 04/11/2012 - 14:11 | 2335159's picture

So if he's telling all there is to tell, then his actions were justified.


If an armed adult male of another race pursued your child by vehicle and on foot and then refused to identify himself or state his purpose while simultaneously reaching for something in his jacket would you recommend to your child that he just stand there? That's Zimmerman's account and you said that such behavior is justified. You put those words into your own mouth, I had nothing to do with it.


I'm saying I don't know all the facts and neither do you.

It is through discussing the topic that we can share facts of which many people are either not aware or which they have gotten ass backwards. An example would be the fact that Zimmerman never identified himself as a member of the neighborhood watch nor did he attempt to question Martin. It was Martin rather who asked the questions and Zimmerman who refused to answer.

If everybody knew all the answers already what would be the point of discussing this or any other topic?

Wed, 04/11/2012 - 11:33 | 2334589 MachoMan
MachoMan's picture

2 problematic premises (at least):

1.  The primary and only possible witness account of the incident to explain whether Treyvon appeared scared (Zimmerman) is not going to state that Treyvon thought Zimmerman had a weapon or was otherwise in fear of his health or well being.  So, having to "take what is coming" only applies to some guy pulling out a cell phone and trying to contact the proper authorities.

2.  You're going to need to present an incredible amount of additional evidence to justify Treyvon's actions in the context of "later police involvement would be racist against Treyvon and, therefore, Treyvon was justified in attempting to evade having to speak with authorities, by any means necessary."

Further, practically speaking, it appears Treyvon will likely have a credibility issue if the school incidents, allegations of theft, internet handles, pictures, etc. are all legitimate.  It might be ex post facto, but it's certainly information a likely jury would use to let Zimmerman off the hook...  presuming charges are even filed. 

Wed, 04/11/2012 - 12:47 | 2334858's picture

1. Martin was talking to a girl on the phone. She is a witness who can testify that Martin was fearful of his pursuer.

2. Martin never had an opportunity to speak to authorities. He was dead when they arrived.

3. Martin had been suspended for an empty marijuana baggie, spray painting graffiti and having what might have been stolen jewelry. But no burglary was reported that night, Zimmerman did not see Martin attempt to burglarize any home and no drugs, spray paint or stolen goods were found on Martin's body. So I fail to see how Martin's school suspensions have any bearing on the incident.

It is Zimmerman and not Martin who has a record of committing assault and then blaming the victims. As that is exactly the scenario that played out that night it would appear that Zimmerman's past is far more relevant than Martin's in regard to this incident.


Wed, 04/11/2012 - 14:18 | 2335152 MachoMan
MachoMan's picture

deleted.  can't feed the trolls.

Wed, 04/11/2012 - 14:53 | 2335239's picture

Update: One would hope that you would consider the reply I began writing before you deleted your post. However, I do sympathize with the fact that small minds have little room for sweepingly broad concepts such as truth and justice and so I will not burden you with any expectation of a reply to these thoughts. Nevertheless, they follow forthwith...



What makes you believe that Trayvon was trying to avoid meeting the authorities? There is no way Martin could have known that Zimmerman was reaching for only a cellphone. Zimmerman could have told Martin that he was a member of the neighborhood watch and that he was in contact with police when Martin asked, "Do you have a problem," but Zimmerman chose to remain reticent.

Martin had every reason to believe that Zimmerman was attempting to cause Martin harm when Zimmerman followed Martin by vehicle and on foot and then refused to identify himself when asked by Martin while simultaneously reaching into his jacket for some object.

It was not fear of the authorities that caused Martin to defend himself, it was fear of Zimmerman. One of the authors of the "Stand Your Ground" law, Representative Baxley, has said that Zimmerman can claim no protection under the law but that Martin did have such a right to defend himself according to the law:


Op-Ed: Why I Wrote 'Stand Your Ground' Law

BAXLEY: Well, simply because if you carefully read the statute, which most of the critics have not, and read the legislative analysis, there's nothing in this statute that authorizes you to pursue or confront other people. If anything, this law would have protected the victim in this case; it could have.

CONAN: It could have.


The bill's co-author, former Senator Peaden and former Governor Bush who signed the bill into law have publicly agreed that Zimmerman has no protection under the law.


Thu, 04/12/2012 - 11:31 | 2338037 MachoMan
MachoMan's picture

First, it took you 35+ minutes to reply?  You need more shit to do...

Second, the legal concept of self defense is broader than the stand your ground law...  There will be a hearing prior to trial to determine whether or not the shooting was justified...  if the Defense can prove its case by a preponderance, then the case will be taken out of the jury's hands... 

Third, look at what source you're citing (notice the word, "victim" in it...  does that note objectivity?)  The other issue is that, practically speaking, public figures are going to say whatever is popular... 

Fourth, how is it that you're so certain Martin could not have known it was a cell phone (or something other than a weapon)?  The only testimony on the subject is going to be Zimmerman's...  even at the expense of credibility (inconsistent prior statements, if any), I can't fathom that he will concede the issue...  so, where do you get your evidence for this premise or, practically speaking, what do you think is going to happen at trial?

Fifth, practically speaking, do you not think that it looks the least bit suspicious when the neighborhood watch guy calls the cops, tells them that someone is behaving suspicously (appearing to be on drugs and/or being abnormally interested in investigating houses in the neighborhood), and when martin figures out zimmerman is watching, he runs?  Zimmerman is clearly vested with the authority to determine martin's intentions...  so, the interaction itself is inherently permitted.  The exact details of what happened after initial contact are not within your privvy...  given the prosecutors' decision to not reveal additional facts of the case (and the defense's determination to remain silent).  For all you know, martin could have previously seen and known who zimmerman was...

I think you're oversimplifying the issues at play here as well as interjecting unknown information in an effort to justify your paradigm...  hopefully the jury isn't made up of people as understanding.


Wed, 04/11/2012 - 02:08 | 2333757 putaipan
putaipan's picture

and if any smart ass cop knocks at your door to provide protect and serve you better open the door and answer his questions-

what a perfect distraction 'prevocative'... distract and rile and the same time- right when the far worse racial crime of national attention,  the  fatal shooting of an African-American male that has received far less scrutiny:Kenneth Chamberlain, Sr., a 68-year-old African-American Marine veteran

Killed at Home: White Plains, NY Police Called Out on Medical Alert Shoot Dead Black Veteran, 68

almost reminds me of louis gates and his jetlagged harrasement case- if he hadn't been so self involved and called race on the event we could have begun an honest dialoge on what assholes most authority figures have become

Wed, 04/11/2012 - 02:37 | 2333783's picture

Will Grigg wrote an insightful piece that discusses both the Chamberlain and Martin killings:

Tue, 04/10/2012 - 23:52 | 2333597 Vint Slugs
Vint Slugs's picture

But he's white Hispanic

Wed, 04/11/2012 - 02:56 | 2333794 wee-weed up
wee-weed up's picture

white Hispanic = A nice term the media made up to try to rile up whites against blacks and vise versa. Race tension sells news.

Tue, 04/10/2012 - 23:58 | 2333608 CH1
CH1's picture

It's a distration.

Jew-hating works best on blog forums and race fights work best on TV.

Wed, 04/11/2012 - 00:17 | 2333631 zorba THE GREEK
zorba THE GREEK's picture

I saw 3 black youths walking through my development on Easter. I didn't want to seem like a biggot

and ask them what they were doing here. They stole my grand-daughter's bike. God is my witness.

Next time, I will ask.

Wed, 04/11/2012 - 01:14 | 2333680's picture

I was once robbed at gunpoint on an Easter Sunday at a Uni-mart by a Caucasian male, five foot eight, 140 pounds with red hair and a very large revolver. But for some reason I don't inquire as to the intent of every white man I see in a convenience store. Do you think I should start?

Wed, 04/11/2012 - 01:58 | 2333741 lemonobrien
lemonobrien's picture

fuck yeah, and start carrying a revolver;

Wed, 04/11/2012 - 06:25 | 2333912 Calmyourself
Calmyourself's picture

CA, your lack of understanding of probabilities and certainly statistics may get you dead one day.. Redhead with a revolver vs black guy in a hoodie your a funny guy.  I think you should start reading CRIME STATISTICS  and see what they tell you..

Wed, 04/11/2012 - 11:11 | 2334527's picture

I responded to an anecdote with an anecdote. But apparently only racists are allowed to use anecdotal evidence and anyone else who does is a bad, bad person.

Thu, 04/12/2012 - 08:36 | 2337247 Calmyourself
Calmyourself's picture

For a liberal I sort of like you and never said you were a bad person..  Just that your lack of understanding of probabilities could get you killed, consider it friendly advice..

Wed, 04/11/2012 - 08:23 | 2334047 Chuck Walla
Chuck Walla's picture

@Centerline  Haven't you heard? The NYT has declared Zimmerman an Honorary Caucasian.

Wed, 04/11/2012 - 12:18 | 2334757 blunderdog
blunderdog's picture

"Hispanic" means descended of Spanish-speakers.  There are "white" ones and "black" ones, as well as the yellow and brown ones.

'Course, a proper bigot never once stops to consider what any of these words might mean, or why they'd even exist.

If you're not exactly like them, you're just another nigger, and you've got it coming.

Good to see you here, centerline.

Tue, 04/10/2012 - 23:25 | 2333543 Banksters
Banksters's picture


Wed, 04/11/2012 - 00:06 | 2333596 derek_vineyard
derek_vineyard's picture

wear a hoody into a casino or bank and see how long it takes security to get there

or was it snowing in florida so he needed it pulled over his head?

Wed, 04/11/2012 - 01:11 | 2333689's picture

Or you could pull a Zimmerman. Start following people who you claim are suspicious because you don't recognize them even though it's dark and you don't know what street you're on at the time. Follow them in your car. If they start to walk faster drive faster in pursuit. If you lose sight of them get out of your car and corner them in a dark and lonely spot. When they ask you what's going on refuse to answer and reach into your jacket.

Don't worry, it's perfectly safe and legal. Only a criminal would mistake your friendly actions for threatening behavior. No regular white guy would ever take advantage of you by punching you in the nose (or worse) in such a situation.


Wed, 04/11/2012 - 01:17 | 2333704 HarryM
HarryM's picture

dress like a gang banger, get treated like one

Wed, 04/11/2012 - 01:47 | 2333716's picture

My grandfather wore a hoodie. But nobody ever shot him for it because that would just be stupid.

Wed, 04/11/2012 - 01:59 | 2333743 lemonobrien
lemonobrien's picture

hoodie = hoodlum = hoods (as in: theys a bunch of hoods)

Wed, 04/11/2012 - 02:19 | 2333772's picture

Would Zimmerman take out Frank and Dino or just Sammy?

Wed, 04/11/2012 - 08:52 | 2334094 CH1
CH1's picture

dress like a gang banger, get treated like one

This time I'll respond to an ignorant comment:

There are a lot of nice kids in those neighborhoods that dress like that because they have to. If you think of an actual human being growing up in that environment - as opposed to a cartoon figure tagged THEM - you'll see how that works: Play along or be beaten... or worse. We're talking about emotionally battered 13 year old kids here; don't pretend that it's easy for them to do better.

It's a uniform they have to wear. Some of those kids will turn into real gang-bangers, but others are just wearing the uniform until they figure out how to escape.

Broaden your perspective.

Tue, 04/10/2012 - 23:54 | 2333602 Vint Slugs
Vint Slugs's picture

What do your remarks have to do with the thread: Treasury's Imminent Lauch of Floaters?

Wed, 04/11/2012 - 00:28 | 2333644 Banksters
Banksters's picture

Vint slugs


Eat my asshole, punk.   This is zerohedge not some lame ass PC joint.  But, to answer your question, I was responding to another poster.  

Wed, 04/11/2012 - 09:38 | 2334210 blunderdog
blunderdog's picture

On an unmoderated forum, it's ALWAYS time to hate on the niggers and jews.

It's the Internet, where the subconscious can run free!

Tue, 04/10/2012 - 22:55 | 2333471 Tijuana Donkey Show
Tijuana Donkey Show's picture

Sounds like a universal default fee to me.. can anyone spell g-o-l-d?

Tue, 04/10/2012 - 22:56 | 2333473 Piranhanoia
Piranhanoia's picture

SHTF is probably better than a floater hitting the fan.  Why do you think it floats!

Tue, 04/10/2012 - 23:10 | 2333474 DormRoom
DormRoom's picture

high-hyper inflation angers the 1% for their wealth vanishes over a breadth of months, if not days..  deflation/depression hurts the 99% since they lose their job, and their standard of living drops.


Prices, and trade imbalances, can correct either from hyper-inflation, or a depression, after a period of excess.


In a crony capitalist system, do you really believe the 1% would allow hyper-inflation to take root?  never.  Which is why we're more likely to see a depression in the US.

If you don't believe me, read the monetary history & economic outcomes of the Inter-gold years.


The NDAA is a preemptive move by TPTB to prevent the organization of labour when the economic depression hits,  thereby posing an imminent threat to the very small rentier class.

Tue, 04/10/2012 - 23:14 | 2333512 centerline
centerline's picture

Bullshit.  The 1% dont matter.  It is those who are in the know.  Their assets are inflation hedged.  They are the top.  They are not of nation - only of power.  Most "wealthy people" as you imagine them will be wiped out.  But, if diversified properly, many can still do better than most - but time is running out.  You are talking about fiat, which is relative.  That is not wealth.  You ought to know this by now.

Believing that governments will not print (not devalue money) to avoid collapse is foolish.  This is what history has taught us more often than not. The second option is war.



Tue, 04/10/2012 - 23:19 | 2333531 centerline
centerline's picture

NDAA is because no matter what a collapse cannot be avoided on some level at least.  Those at the margins are pushed over the edge by inflation or deflation.  Doesn't matter.  Society is about to experience a paradigm shift as we experience a perfect storm of baby-boomer retirement, cheap energy, bloated pensions, runaway populatin growth, false promises,  leveraged, social complexity, fiat/reserve currency, etc. issues all hit like a perfect fucking storm.

Wed, 04/11/2012 - 00:02 | 2333618 EverythingEviL
EverythingEviL's picture

Kind of sounds like the Great Tribulation of Mark 13:19,20. "19 for those days will be [days of] a tribulation such as has not occurred from [the] beginning of the creation which God created until that time, and will not occur again. 20 In fact, unless Jehovah had cut short the days, no flesh would be saved. But on account of the chosen ones whom he has chosen he has cut short the days."

Wed, 04/11/2012 - 07:27 | 2333961 francis_sawyer
francis_sawyer's picture

Oh, fucking great... More "chosen" people... Yipee

Wed, 04/11/2012 - 05:27 | 2333873 goldfish1
goldfish1's picture

On December 31, 2011, President Obama signed the National Defense Authorization Act (NDAA), codifying indefinite military detention without charge or trial into law for the first time in American history. The NDAA’s dangerous detention provisions would authorize the president — and all future presidents — to order the military to pick up and indefinitely imprison people captured anywhere in the world, far from any battlefield.

Tue, 04/10/2012 - 23:19 | 2333528 lasvegaspersona
lasvegaspersona's picture


great theory but in fact it NEVER happens, not once in the history of fiat...the 'powers' have been through this many times and know exactly what to do, please do not be overly concerned that they do not know how to survive a mere hyperinflation, global or not. They have had a LOT of practice and probably have a play book...literally!

Tue, 04/10/2012 - 23:25 | 2333541 centerline
centerline's picture



I would only add that inflation will most likely be experienced in monetary terms.  Right on.  Deflation is the physical result either way.  Just a matter of perspective.  Sort of like the difference between falling off a cliff or seeing the cliff shoot up into the air.  The relative difference is the same.  Only the mechanics of what happened was different.

Wed, 04/11/2012 - 01:13 | 2333699 SeattleBruce
SeattleBruce's picture

TPTB can benefit from combinations/manipulations of deflation and inflation (as has been currently happening) to capture real assets (gold/commodities/property), and then inflate away at some point...they'll be protected in the reset - will we be ready?

Tue, 04/10/2012 - 23:50 | 2333592 Vint Slugs
Vint Slugs's picture

"the organization of labour when the economic depression hits" ??? As if the depression hasn't hit in the USA with official total unemployment at 19%.

The orgainzation of labour to what purpose?

Wed, 04/11/2012 - 08:28 | 2334050 Chuck Walla
Chuck Walla's picture

If the 1% can get foreign exchange,(and they can) they can buy assets like crazy from the hyper-inflated owners. You should read up on Weimar, foreign money was worth a fortune. Many would not sell to anyone who didn't have it. Little shit like food.

Tue, 04/10/2012 - 23:10 | 2333478 Slewburger
Slewburger's picture

I tried to see Dr. Paul tonight in south Texas. The event was filled up and I was not allowed in.

Dr Paul and his continued campaigning are once again marginalized here:

If the "media" was honest, there would be no FED.

Home state crowd vs Home state crowd:

Judge for yourself.

Tue, 04/10/2012 - 23:41 | 2333578 I Got Worms
I Got Worms's picture

As an Aggie, I'm so proud of the crowd tonight in College Station. Really wanted to drive over from Austin. Packed the auditorium to the rafters and had an overflow crowd of 500 watching on TVs.

Wed, 04/11/2012 - 00:26 | 2333643 Teamtc321
Teamtc321's picture

Witness the Power of an Idea: Ron Paul Massive Rallies 2012. You will not see this on television.

Wed, 04/11/2012 - 00:36 | 2333652 strannick
strannick's picture

The Ron Paul Revolution will not be televised. No surprize.

Wed, 04/11/2012 - 01:20 | 2333707's picture

There once was a doctor named Paul,

Who filled all the seats in the hall.

We were not surprised

It was not televised,

For he preached peace and freedom for all.

Wed, 04/11/2012 - 01:56 | 2333740 Tsunami Wave
Tsunami Wave's picture

This revolution, period, will not be televised.

Wed, 04/11/2012 - 01:21 | 2333709 HarryM
HarryM's picture

Ron wil never be pres,but Rand might

Wed, 04/11/2012 - 07:38 | 2333978 Seize Mars
Seize Mars's picture


Incredible that the dinosaur media is trying trying to toe the line, that "Romney is the frontrunner" bullshit.

Clearly he is not.

In fact if the Rep. party would just grow a pair, and stop being such wankers, the would get themselves a landslide victory in November.

Tue, 04/10/2012 - 23:01 | 2333480 miro1a
miro1a's picture

What would the presumed ramifications be for housing and gold?

Tue, 04/10/2012 - 23:13 | 2333509 fadgadget
fadgadget's picture

paying off your housenote with a coin?

Tue, 04/10/2012 - 23:36 | 2333570 fourchan
fourchan's picture

that has always been my end game.

Tue, 04/10/2012 - 23:47 | 2333588 Ropingdown
Ropingdown's picture

But wait and see what you have to pay if you want to move up to a better neighborhood from the dump the note on which you paid off with a coin....

Wed, 04/11/2012 - 02:57 | 2333795 BooMushroom
BooMushroom's picture

The note on my house could currently be paid with a single, 100oz gold bar.

Wed, 04/11/2012 - 01:03 | 2333681 narnia
narnia's picture

The $600T Interest rate swap market, the source of virtially all the Fed intetest holders' improperly characterized profits, implodes at 4%. We'll have the SDR crammed up our asses before we see high interest rates.

Tue, 04/10/2012 - 23:01 | 2333482 Dr. Engali
Dr. Engali's picture

I know every time I issue a floater you don't want to be the next one in the barroom.

Tue, 04/10/2012 - 23:13 | 2333506 UP Forester
UP Forester's picture

Pickled eggs and chili cheese fries do it every time.

Tue, 04/10/2012 - 23:07 | 2333488 vast-dom
vast-dom's picture

Today is actually severely different from 1951. Also, if these floaters function as buy-backs on pre-existing 10/20y bonds, which by the way are ripe for plunge, then this will speed up stock market unwind for obvious reasons. Very tricky gambit here could end up lose-lose for TPTB.


PS Shanghai Composite is the most miraculous physics and laws of economics and good taste defying index ever!

Tue, 04/10/2012 - 23:13 | 2333510 infiniti
infiniti's picture

I'll gladly take those 'ripe' 10-year maturities off your hands.

2013: year of the 1% 10-year.

Tue, 04/10/2012 - 23:07 | 2333490 lolmao500
lolmao500's picture

So the FED will implode the whole thing by design? Wouldn't surprise me.

Tue, 04/10/2012 - 23:11 | 2333502 ekm
ekm's picture

...or go to jail.

Independent Fed never existed.

Tue, 04/10/2012 - 23:22 | 2333536 Yen Cross
Yen Cross's picture


Tue, 04/10/2012 - 23:07 | 2333491 holdbuysell
holdbuysell's picture

Would it be correct to say that the buying of hard assets with fiat (land, commodities, fine art, etc.) instead of paper stocks and bonds with said fiat removes said collateral from the system?

Wed, 04/11/2012 - 00:25 | 2333640 Stuck on Zero
Stuck on Zero's picture

Nope.  Just increases the velocity of the money.  The only way to retire it is to take bills out of circulation.  Like stuffing a mattress.

Tue, 04/10/2012 - 23:07 | 2333492 Shock and Aweful
Shock and Aweful's picture

can someone explain, in goddamn "engrish" what this means to a person, such as myself who's only investments are cash, staple food stuffs and the shiny metals? 

I mean honestly...I don't own any fucking stocks....sure as shit wouldn't buy a bond in a government or a corrupt ass corporation...and don't think I will ever be in the market for any either.

Say for instance these FRN's come to pass...and the rates go to 5%...what does that do to the dollar?  What does that do to Gold ( I assume Gold and silver would be utterly massacred...ala 1980? 

Can someone...who is smarter (I use that word loosely) than me create a plausible scenario of what the short and mediucm term looks like after this policy is enacted....and what that means for the average person out here (although since I owe phys gold and silver, I am not "average"...that puts me in a small crowd of about 5%)




Tue, 04/10/2012 - 23:18 | 2333521 UP Forester
UP Forester's picture

I'm in the same boat.  If I were to guess, I think it means that they know inflation due to printing, with shitty "collateral," is going to shoot up, maybe past the 70s and early 80s mark.

Correct me if I'm wrong, but I think this'll be the mother of stagflations, wiping out everyone without PMs.  Retirement- gone.  Savings- gone.  Cash- burn it for heat.  Job- good luck.

I'm thinking this means T-3 months.

Wed, 04/11/2012 - 00:04 | 2333616 CH1
CH1's picture

I'm thinking this means T-3 months.

Perhaps, but if people start catching on (I know, they have to turn off the idiot box first), it could be fast.

Wed, 04/11/2012 - 00:51 | 2333657 slewie the pi-rat
slewie the pi-rat's picture

i dunno;  mary at the Treasury?  was she the one who told us they were considering negative interest rates last year? 

how is this diff from this?: Individual - Treasury Securities & Programs

Treasury Inflation-Protected Securities (TIPS) TIPS are marketable securities whose principal is adjusted by changes in the ...

instead of adjusting the principle, the rate gets adjusted;  these might complement today's "suite of products"

this seems a far cry from replacing outstanding w/ new bonds, wholesale and across the board as in 1951 [paste]:    "that is the U.S. Treasury offered to swap the outstanding stock of long-term debt with new long term debt with higher coupons (coupled with restrictions on sales before maturity)."

maybe it will end up there, but it doesn't sound quite like '51 right now;  perhaps that this might be added to a paper-marketing product line is a harbinger of increased interest rates;  perhaps not, too

if it is, we better sell PMs, huh?  L0L!!! 

this is risk0n bullish, especially for "financials" isn't it?  L0L!!!

tyler seems to think this IMF guy is ok, but talk is cheap;  and bullshit walks, too!

Wed, 04/11/2012 - 01:34 | 2333724 slewie the pi-rat
slewie the pi-rat's picture

anyone remember when the FED issued the puts on the Ts?  and the price went up about 25% since then?  L0L!!!

Floating Rate Note “puts”—are they forthcoming?

again, is it this really a big deal?   here is a bond w/ an add-on or some "insurance" and they are gonna charge more for it, too;  this is simply marketing, imo

yes some day the FED may raise interest rates;  and they may try to market these bonds, too;  all they hafta do is print them, right?

risk0n!  dump yer PMs!  buy FRNs2!  with FRNs1!  Hahaha!  and don't forget the fuking taxes!!!  Hahaha!

Tue, 04/10/2012 - 23:20 | 2333525 Bad Lieutenant
Bad Lieutenant's picture

for what it's worth, this peice contains some pretty decent multidimentional bond pricing/wealth relationships that you're not alone in getting your head around.  i usually read these 2-3 times to take it all in, but if you're just getting into this stuff keep your head up and learn what you can.  as long as you keep pointed in the 'learning' and 'humble' direction, you'll become quite the finantial warrior.  

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