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Market Now Pricing In $770 Billion Increase In Fed Balance Sheet

Tyler Durden's picture


As we have pointed out previously, the primary if not only driver of relative risk returns (because in a world of relative fiat value destruction, it is all relative, except for gold which is revalued relative to all on a pro rata basis), will be who of the big two - the Fed and the ECB - can print more. And up until now, at least since the end of December when the market "suddenly" realized that the ECB's balance sheet has soared to unseen records, the consensus was that it was the ECB that would be the primary source of easing. Especially when considering that there is another ~€500 billion LTRO due on February 29. Yet today's rapid reversal in the EURUSD, driven by Bernanke's uber-dovish comments suggest that something has changed and that the Fed is now expected to ease substantially. How much? For that we look to the latest balance sheet cross-correlation, where if we go by simple correlation, the market is now pricing in (based on the EURUSD cross ratio) that the relationship of the two balance sheets will rise from a multi year low of 1.08 as of a few days ago to 1.15, at least based on the rapid move in the EURUSD higher as can be seen in the chart below. Indicatively, the actual value of the two balance sheets is €2.706 trillion for the ECB and $2.92 trillion for the Fed (or a 1.08 ratio). So now that the EURUSD has risen as high as it has, it implies that the pro forma "priced in" ratio is about 1.15. But wait: one should also factor in the fact that the ECB's balance sheet will rise by at least another €500 billion in just over a month, which will bring the ECB's balance sheet to €3.2 trillion. Which means that to retain the 1.15 cross balance sheet relationship, the Fed's own balance sheet will have to rise to $3,687 billion, or a whopping $767 billion increase!

Naturally, that's a simple heuristic based on only what the EURUSD pair is implying. Of course, this is not a scientific way of predicting where Bernanke will go, but that is at least what the market seems to be telling us. If the LTRO is much bigger, such as the €1 trillion suggested by CLSA, then the ratio changes, but €500 billion is probably far more realistic at this point.

So at the end of the day, the balance sheets of the world's two biggest central banks will increase by about €500 billion for the ECB and ~$770 for the Fed and $655 billion for the ECB.

Incidentally, this analysis assumes all else equal which, with Greece on the verge of default and Portugal potentially in its footsteps, isn't... 

Thus our question is: gold is not on its way to $2000 yet why again?


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Wed, 01/25/2012 - 17:23 | 2097665 John Law Lives
John Law Lives's picture

"Which means that to retain the 1.15 cross balance sheet relationship, the Fed's own balance sheet will have to rise to $3,687 billion, or a whopping $767 billion increase!"

Are there any actual legal restraints re. how much the Fed's balance sheet can rise?  Seriously, who says the Fed's balance sheet will not continue to steadily rise forever until some doomsday scenario unfolds and the big R-E-S-E-T button gets pressed.

Wed, 01/25/2012 - 18:10 | 2097912 CapitalistRock
CapitalistRock's picture

No restraints. The fed is limited by their duel mandate. That's it.

And yes. It really is that scary.

Thu, 01/26/2012 - 08:01 | 2099081 tired1
tired1's picture

"duel" that's cute.

Wed, 01/25/2012 - 17:17 | 2097668 bob_dabolina
bob_dabolina's picture

$700 billion was sooooo 2008. 

On another note, whatever happened to Wall Street Pro? 

Wed, 01/25/2012 - 17:50 | 2097686 SheepDog-One
SheepDog-One's picture

Anything under $1T is just chump change in todays fact Im a bit surprised this number wasnt considered a big bummer by the stock pricing supercomputers.

.last I heard WSP was back in state custody, not sure though.

Wed, 01/25/2012 - 19:04 | 2098050 TruthInSunshine
TruthInSunshine's picture


We're all going to be billionaires soon!

I can feel it!

Wed, 01/25/2012 - 17:19 | 2097679 AC_Doctor
AC_Doctor's picture

Not bad considering the FED is presently leveraged 60:1.  What this going to bump them up to leveragewise?

Wed, 01/25/2012 - 17:27 | 2097702 bob_dabolina
bob_dabolina's picture

The leverage doesn't matter as all the FED has to do is add a "0(s)" integer and we'll just pay through inflation. The FED can buy Ts as well but with real inflation rising there is no point in holding something yielding 1 or 2 percent so the money coming out of the T market will find it's way into commodities which is great for lower to middle classes. Such is the consequence of an overzealous government being the chief purveyor of the welfare state and bailout nation. 

Wed, 01/25/2012 - 17:26 | 2097708 Scalaris
Scalaris's picture


$767 bil?

Why won't they just round it up to $1 tril and be done with it; it's not real money anyway.


Make it rain Ben.

Wed, 01/25/2012 - 17:26 | 2097709 LiquidityandLunacy
LiquidityandLunacy's picture

Please stop with the gold stuff, you already know and have posted about the manipulation and the cavern between paper and physical prices.


The real question is, when will OIL increase in price. Then we can figure out what that shiny treasure chest is really worth and whether or not we can use it for stuff in the future.

Wed, 01/25/2012 - 17:36 | 2097777 trav7777
trav7777's picture

oil is caught between monetary inflation, increasing scarcity, and contraction-led aggregate demand collapse.

Look at the gasoline usage figures for the USA or other major western economies.  THAT is GDP that is going bye bye forever.

Buy producers today.  They will 10-bag for you assuming that the .govs don't expropriate them.  Eventually, even if they have shitty reserves compared to someone else, the market will work its way around to extracting them.

Wed, 01/25/2012 - 23:31 | 2098685 disabledvet
disabledvet's picture

what about production figures in your world of "increasing scarcity." (when isn't "scarcity" increasing? ever and always trav. of course the willingness to work to get said valuable stuff out of the ground...

Wed, 01/25/2012 - 17:28 | 2097718 bankonzhongguo
bankonzhongguo's picture

You can no longer consider "money" as money.

It's merely grease to make "things happen."

What is unfolding is another Afghanistan Paradigm.

When the US went to war in AfPak, we had few friends and could not locate the enemy.

The C-17 lands in the night and off comes pallets of hundred dollar bills, shrink wrapped into $100,000 bundles.  It gets loaded up and sent to anyone that would "do something" to help the good ol' USA. Its token grease to get things moving.

The Fed was involved in that op, thanks to the ESF and all its spooks.  Now, after the Davos' hors devours settle in we can all wait for another Trillion Credit Bondage Plan.

PS:  You're the Taliban and al-qaeda.

Wed, 01/25/2012 - 17:30 | 2097725 Yen Cross
Yen Cross's picture

 "To the MOon Alice", Said Ralph to Fred...  Now that everything is priced in, it only has one way to go.   ?

Wed, 01/25/2012 - 17:28 | 2097727 punxsutawney phil
punxsutawney phil's picture

Don't you get it ....IPAD's are the new currency....that is why the fed has been buying them and stockpiling them.  IT is the new crack the new gold that people have to have....

Wed, 01/25/2012 - 17:28 | 2097730 chindit13
chindit13's picture

Fed is going to set inflation target of 2%?  FINALLY!  Tightening has arrived. 

Oh wait!  Who measures that 2% rate?

(Word has it that the basket of goods against which the Fed will measure inflation includes Betamax players, last week's losing Powerball tickets, Kodak common stock and autographed copies of "Zamfir Does Gershwin on the Magical Pan Flute".)


Wed, 01/25/2012 - 19:07 | 2097955 Flakmeister
Flakmeister's picture

"And Billy Ben Bernake jumped off the Tallahatchie Bridge..."

Wed, 01/25/2012 - 21:31 | 2098404 Stax Edwards
Stax Edwards's picture

Love your stuff C13.  You are a gem!

Wed, 01/25/2012 - 17:36 | 2097774 SheepDog-One
SheepDog-One's picture

So really todays 'news' was 'We see no growth until 2020 or so, we'll set inflation 'target levels' to 2% although anyone with eyes can see its more like 15% at least, and just keep flooding in free money and buying our own debt like crazy'....and its deemed 'good news'? 

Wow are we ever screwed.

Wed, 01/25/2012 - 18:08 | 2097902 SAT 800
SAT 800's picture

Well, you could say that you're screwed, or you could say that modern scientific propaganda, or consensus forming, based on mass media is very, very succesful. Whichever you prefer. It's good news because Dick and Jane have been "properly" edumacated to believe that it's good news.

Wed, 01/25/2012 - 23:33 | 2098686 disabledvet
disabledvet's picture

you mean "brain washed." like i said...."scared the shit out of everybody when he said it."

Wed, 01/25/2012 - 17:41 | 2097796 fonzannoon
fonzannoon's picture

I don't get it. They did not announce QE today. They said they would keep rates low forever. Why was this market positive?

Wed, 01/25/2012 - 17:53 | 2097839 SheepDog-One
SheepDog-One's picture

Apparently its so full retard now and everyone is so full of normalcy bias that ES would shoot up 20 if there was a rumor on CNBC that Bernanke stepped in some dog shit.

Wed, 01/25/2012 - 18:24 | 2097967 Bear
Bear's picture

Wow ... did he?  BBindodo ... OMG

Wed, 01/25/2012 - 18:04 | 2097885 SAT 800
SAT 800's picture

Low rates is QE; they just made a beginner's error once and anounced something that you could actually track thru data releases; but they got too much of a public reaction to that; just realize that zero rates is QE and let it go at that; it's too complicated to explain; it has several main branches, including the Euro exchange fund; and they're all humming along. This is the "secret" behind the NYSE; enjoy.

Wed, 01/25/2012 - 18:12 | 2097916 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

POMO continues, albeit minimal (compared).  OT2 continues, albeit minimally.  Monetization continues, but on par (nominally).  But the problem is this is not giving the apperance of growth.  For that, the rate of return/GDP needs to increase (nominally).  For that to happen, more programs, or an increase in the scope of the programs, are needed.

Wed, 01/25/2012 - 23:36 | 2098694 disabledvet
disabledvet's picture

well...the NYSE is publicly you got me on that one. Start buying i guess. Of course the folks on the FLOOR might look at things differently: "an upward sloping yield curve" is i imagine what they want. still...that a powerful "node of information." rumors abound....

Wed, 01/25/2012 - 17:48 | 2097799 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

[G]old is not on its way to $2000 yet why again?

The gold loaned out by the CBs has mitigated demand until now, thus the reason why gold gave finance the middle finger today- the market wanted more, and the loans were held back; this because the Fed needs gold to appreciate so to give them more collateral when they make the loans. 

The loans will continue, as to achieve a balanced ledger for Bernanke and his cohort.  Look for gold to trade in the range of $1700-$1900 for the next month while Bernanke accomidates the "asset" side of the ledger.  From there on out demand will again move higher, with tighter supply.  Then in a month the real question will be, do they openly monetize and increase POMO ops....considering the problems with Europe, and how interconnected the CBs are, the Fed will need to, which will see a leap of gold into the $2000s and beyond.

There will be a slow burn in the coming month, while everything is "priced in", and then once Bernanke's dry powder is unleashed (the dollars he will get from his gold loans he uses to fractionally reserve 10X over) the market will have to digest further dollar devaluation.

Wed, 01/25/2012 - 17:49 | 2097827 LawsofPhysics
LawsofPhysics's picture

...and further repricing in PMs.

Wed, 01/25/2012 - 23:38 | 2098700 disabledvet
disabledvet's picture

"European gold"..."on deposit with the Fed"..."being leased." Sound about right? Now what's all that money being used for again?

Wed, 01/25/2012 - 17:43 | 2097808 chinaboy
chinaboy's picture

Guess what they are doing.

Wed, 01/25/2012 - 23:39 | 2098702 disabledvet
disabledvet's picture

"fighting wars." sound about right as well?

Wed, 01/25/2012 - 17:58 | 2097860 sexcellent
sexcellent's picture

the reason why it was 767 Bil instead of 1T is that it "looks" like it was done to meet an objective. 1T would too obviously be a printer pump.

Wed, 01/25/2012 - 18:09 | 2097896 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

The objective is priced in euros.  What is $767 priced in euros?

$767x.763=Priced for inflation........=LTRO

Wed, 01/25/2012 - 17:58 | 2097862 poor fella
poor fella's picture

Who's going to raise their debt ceiling? Oh wait!

Wed, 01/25/2012 - 17:59 | 2097872 Captain Kink
Captain Kink's picture

This is a pretty serious leap of correlation at best.  Or I am mssing something.  What's to say the relationship betwixt the two can be extrapolated into the future? 

Wed, 01/25/2012 - 18:09 | 2097909 SheepDog-One
SheepDog-One's picture

Any seller of size steps up and hits the sell button hard, and I really doubt they can prevent it all from collapsing. 1 'world event' out of the blue and the house of cards collapses. 3 years straight of total suspension of disbelief, its insane to think all the balls can just stay up in the air forever. 

Wed, 01/25/2012 - 18:19 | 2097948 Bear
Bear's picture

Race to the Bottom, it's a new Olympic event to debut in London this year ... stay tuned

Wed, 01/25/2012 - 18:38 | 2097999 Wakanda
Wakanda's picture

There are some nights that I have won that competition.

I can't remember any of them though...

Wed, 01/25/2012 - 18:17 | 2097940 Bear
Bear's picture

It's not too late ... 2014 is a far piece off

Wed, 01/25/2012 - 19:02 | 2098043 SheepDog-One
SheepDog-One's picture

If theyre saying 2014, they really mean by spring 2012 at the latest.

Wed, 01/25/2012 - 18:36 | 2097995 Spacemoose
Spacemoose's picture

think on a five year timeline. 

Q. will gold have more or less purchasing power in 5 years?  A. who the hell knows.

Q. will the dollar have more or less purchasing power in 5 years?  A. are you f'in kidding me?  


Wed, 01/25/2012 - 21:45 | 2097921 DaveyJones
DaveyJones's picture

CNBC / Onion Headline: Fed Outlook Good for Stocks but What about Economy 

Wed, 01/25/2012 - 18:20 | 2097953 VelvetHog
VelvetHog's picture

Thank GOD!  Here, I was afraid the FED had run out of bullets.  Oh, me of little faith.  Go Bend-Over-Bernank Go!

Wed, 01/25/2012 - 18:29 | 2097982 Milton William ...
Milton William Cooper's picture

In this case, bullets are electronic 0's = infinite

Wed, 01/25/2012 - 18:23 | 2097966 JR
JR's picture

We have zero chance on America unless the central bank is broken. That’s the truth and includes everybody, including the millionaires who in the end will be fighting the state.

How can it break? It can break when the debt sinks it; when the Fed can no longer manufacture the value.

Gold is my refuge? I said everybody. I saw again today Greenspan’s famous 1998 statement: “Central banks stand ready to lease gold in increasing quantities should the price rise.”

Thu, 01/26/2012 - 08:13 | 2099089 tired1
tired1's picture

OT kinda: Anyone care to speculate how Israel is going to attempt to survive once $ and Euro find their real value?

Wed, 01/25/2012 - 18:25 | 2097971 Poetic injustice
Poetic injustice's picture

Can't wait for CNN/other mainstream media headlines.
"Markets cheer and rise under the wise decisions of Bernanke"

Wed, 01/25/2012 - 18:29 | 2097980 LiquidityandLunacy
LiquidityandLunacy's picture

Apparently netflix is the winner...



































Thu, 01/26/2012 - 00:56 | 2098856 jomama
jomama's picture

funny thing is, i finally got around to cancelling my crapflix account the other day.

in the exit questionarre, they wanted to know how many bootleg movies i watched and where i got them from.

saddest part is, lots of idiots actually fill that shit out!

Wed, 01/25/2012 - 18:37 | 2097996 Dermasolarapate...
Dermasolarapaterraphatrima's picture

Does the $770 Billion yoyu mention include the Trillion or so the ECB will print?

How about the $770 Billion China CB will print to buy up the flood of dollars and hold down their currency?

Just wondering.

Wed, 01/25/2012 - 18:48 | 2098016 yogibear
yogibear's picture

This is not it. There will be plenty more. Bernanke and the Federal Reserve printing doves will keep printing until commodities and the price of food crushes 99% of the people. Think that's called hyperinflation. Marc Faber called it correctly. Bernanke and the rest of the Fed will print until they can't.

This is a BIG warning sign to get out of US dollara and treasuries.

Wed, 01/25/2012 - 18:53 | 2098017 falak pema
falak pema's picture


Here is a projection that sees world OIL/LIQUID production to go to 110 MMB/D in 2035, AN INCREASE OF 25%. This refutes the peak liquid oil scenario. One contribution is NGL from gas and Shale, but going from 85 MM today to 110 MM in 2035 is a big increase. All comments the peak oil seems an elastic frontier...

I notice bio fuels contributes 12% which is big increase...all from corn, or ...? 

Here's The US Energy Outlook From Now Through 2035  

In the US, imports are expected to fall

Read more:


Wed, 01/25/2012 - 23:49 | 2098716 disabledvet
Thu, 01/26/2012 - 08:35 | 2099125 falak pema
falak pema's picture

Am I still on the hit list? That would be like earning a purple heart from the MIC!

Wed, 01/25/2012 - 18:52 | 2098022 chindit13
chindit13's picture

Frankly, until today I would not have given Ron Paul much of a chance to either take the Republican nod or going 3rd Party for the win, but having a bumbling and incompetent Fed Chief (limited to subprime ring a bell?) set a target rate of inflation, at a time when incomes are falling and even reported UE remains within earshot of double digits, just makes Paul's domestic message resonate all the more loudly.

Spring is coming, to be followed by the proverbial long hot summer.  Even George Soros is predicting possible riots in the US.  The odds for Paul, while still long, just shortened considerably.

Wed, 01/25/2012 - 18:53 | 2098025 yogibear
yogibear's picture

The Fed is hiding Biflation. It will just keeep printing and printing and printing.

Wed, 01/25/2012 - 18:57 | 2098034 the grateful un...
the grateful unemployed's picture

and the Fed balance sheet was already supersensitive to any rise in interest rates. this seems like an incredible gamble. or they could let the dollar rise against the Euro, who says they have to target the 1.15 ratio? bernanke has said the dollar isn't his problem? i am going to guess EURUSD parity is in the cards. that's whats happening under the table already.  

Wed, 01/25/2012 - 19:14 | 2098074 JR
JR's picture

As Nadeen Walayat says: “Bank of England quarterly inflation forecast reports are nothing more than ECONOMIC PROPAGANDA… over the past 24 years nearly 60% of the purchasing power of sterling has been stolen and funneled to those that control the printing of money, namely the banking elite”

The same can be said of the U.S. central bank.

Here’s an excerpt from UK Inflation Mega-trend Second Anniversary Despite Continuing Delusional Deflation Propaganda, January 19 on Market Oracle:

UK CPI inflation ended 2011 at 4.2% (December) coming down sharply from a peak of 5.2% (September) that despite the mainstream presses continuing academic backed falling inflation / deflation risk warnings remains at more than DOUBLE the Bank of England's 2% target that continues to make a mockery of the central bank whose primary remit is supposedly price stability. CPI 3% was supposed to have been the maximum level a break above which was supposed to trigger a series of panic measures to bring inflation under control, instead of which the Bank of England has instead opted to print money that to date officially totals £275 billion of electronic money printing that the fractional reserve banking system will eventually leverage to over £1 trillion for the primary objective for the monetization of government debt as warned of now 2 years ago in the Inflation Mega-Trend Ebook (Free Download).

UK debt continues to be monetized at the approx rate of 15% per annum, with only the deflation fools and vested interest academic economists unable to realise the highly inflationary consequences of governments monetizing their own debt. For the risk is not just what we witnessed during 2011, but the risks are of loss of confidence in fiat currency amidst a panic that would fast accelerate towards hyperinflation…

However, actual inflation as experienced by most people in Britain currently stands at a far higher rate of 6%, which explains why your weekly groceries bill is inflating at near twice the rate of official inflation indices that have been manipulated by successive governments to under-report the true rate of inflation.

lst the inflation rate looks set to continue correcting lower into early 2012 as the UK economy starts to sputter in response to the Euro-zone in meltdown, with most of its member countries being consumed by debt deflationary black holes as they are unable to print money and devalue against Germany that further lacks any real means for internal transfer payments. However the UK still remains in an ongoing Inflationary Depression.

Contrary to the Bank of England's economic propaganda of high inflation always being just temporary (for over 2 years now), there is nothing surprising about persistently high inflation as I warned of 2 years ago in the Inflation Mega-trend ebook (FREE DOWNLOAD), high inflation is a deliberate and inevitable policy of the stealth default on UK public and private debt. The trend of high inflation is likely to persist for the whole decade because the government continues to accumulate new debt at the rate of at least £120 billion per year which remains on the SAME debt accumulation trajectory as the last Labour government despite the cuts and austerity propaganda…

Concludes Walayat:

Therefore the workers of Britain are in the exact same boat as the workers of Greece, it's just that for the Greeks the theft is obvious as they actually see their pay being cut, whereas in Britain the theft is executed stealthily, slyly by the masters of economic propaganda with chief propagandists such as Mervyn King uttering soothing phrases every now and then of temporarily high inflation that the mainstream press and academic economists (vested interests) lap up and regurgitate at length so as to manage the populations inflation expectations.

Savers experience the stealth theft of wealth where even the best savings accounts paying 3% are still resulting in a loss of life time accumulated wealth to tune of at least 3% per year (RPI and after basic income tax). For savers to just break even they would need to be in receipt of a savings rate of at least 6.

Wed, 01/25/2012 - 23:52 | 2098725 disabledvet
disabledvet's picture

does England have a problem with shortages of goods...and if so can you name specifically what goods you are..."shorted" on? (And i'm not talking i-phones. more like gasoline, basic foodstuffs, etc...things you used to get but now can't be had at any price.)

Thu, 01/26/2012 - 01:35 | 2098901 JR
JR's picture

I would say that the main item the Brits are short of is money, considering Walayat’s statement that the Bank of England’s forecast "for inflation to remain well below 2% into the end of 2012” supports "the Bank of England's persistent view that everyone should focus on the Deflation threat and ignore high inflation during early 2011 so as the Bank of England can continue to keep interest rates well below the real rate of inflation for the purpose of funneling savers wealth and tax payers cash onto the balance sheet of the bailed out bankrupt banks.”

You might also want to read: Southern Europe Permanently Crippled, The Only Tool Left is Hyper Inflation - 20th Jan 12 - Jim_Willie_CB

Wed, 01/25/2012 - 19:29 | 2098111 Chupacabra-322
Chupacabra-322's picture

Cheat sheet for the Criminal locations.  They can run, but they can't hide.  Tick toc, tick toc......


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Stop by their offices, or give them a call. I am sure that they would be glad to hear from you.

Wed, 01/25/2012 - 19:40 | 2098138 Chupacabra-322
Chupacabra-322's picture

A little Reseach?  Try this on for size:

1. The IRS is not a U.S. Government Agency. It is an Agency of the IMF. (Diversified Metal Products v. IRS et al. CV-93-405E-EJE U.S.D.C.D.I., Public Law 94-564, Senate

Report 94-1148 pg. 5967, Reorganization Plan No. 26, Public Law 102-391.)

2. The IMF is an Agency of the UN. (Blacks Law Dictionary 6th Ed. Pg. 816)

3. The U.S. Has not had a Treasury since 1921. (41 Stat. Ch.214 pg. 654)

4. The U.S. Treasury is now the IMF. (Presidential Documents Volume 29-No.4 pg. 113, 22 U.S.C. 285-288)

5. The United States does not have any employees because there is no longer a United States. No more reorganizations. After over 200 years of operating under bankruptcy its finally over. (Executive Order 12803) Do not personate one of the creditors or share holders or you will go to Prison, 18 U.S.C. 914

6. The FCC, CIA, FBI, NASA and all of the other alphabet gangs were never part of the United States government. Even though the “US Government” held shares of stock in the various Agencies. (U.S. V. Strang , 254 US 491, Lewis v. US, 680 F.2d, 1239)

7. Social Security Numbers are issued by the UN through the IMF. The Application for a Social Security Number is the SS5 form. The Department of the Treasury (IMF) issues the SS5 not the Social Security Administration. The new SS5 forms do not state who or what publishes them, the earlier SS5 forms state that they are Department of the Treasury forms. You can get a copy of the SS5 you filled out by sending form SSA-L996 to the SS Administration. (20 CFR chapter 111, subpart B 422.103 (b) (2) (2) Read the cites above)

8. There are no Judicial courts in America and there has not been since 1789. Judges do not enforce Statutes and Codes. Executive Administrators enforce Statutes and Codes. (FRC v. GE 281 US 464, Keller v. PE 261 US 428, 1 Stat. 138-178)

9. It is not the duty of the police to protect you. Their job is to protect the Corporation and arrest code breakers. Sapp v. Tallahasee, 348 So. 2nd. 363, Reiff v. City of Philadelphia, 477 F.Supp. 1262, Lynch v. N.C. Dept of Justice 376 S.E. 2nd. 247.

10. We're Fucked.

Wed, 01/25/2012 - 20:12 | 2098216 Everybodys All ...
Everybodys All American's picture

Bernanke chooses inflation as a monetary policy. Imagine the shear stupidity of this man no more. In my lifetime I never imagined an American policy maker at the Federal Reserve going this route. This is policy of a bannana republic.

Thu, 01/26/2012 - 00:04 | 2098749 JR
JR's picture

London Banker wrote four years ago why we must fight the Fed.

He said: “(a) The current mission of the Fed is to privatize profits and socialize losses to the maximum benefit of the entitled elites, hypothecating the maximum wealth from all other classes of Americans. 
“(b) If the Fed were to have a mission of serving the interests of a maximum of US citizens, its top three objectives would be: (1) Preserve the credibility and purchasing power of the dollar to attract and retain foreign credit and investment flows and provide a predictable basis for domestic investment decisions; (2) Apply prudential supervision and regulation to reinforce traditional banking constructs such as tying finance to the productive use of that finance to promote repayment of the debt and the general economic welfare; enforcing lending parameters which reward prudence, caution and productive use of credit; and limiting the scope for conflicts of interest and contagion arising from intermingling of commercial banking with investment banking and other speculative enterprise; and (3) Promote fiscal discipline by using the levers of monetary policy to offset imprudence and poor judgement of the Executive and Legislative branches by hiking interest rates when deficit spending exceeds small, temporary imbalances to restore fiscal discipline.”

Wed, 01/25/2012 - 22:18 | 2098499 Backspin
Backspin's picture

Off Topic:  Can some knowledgeable people here give me some insight into Russia Today as a news source?

Reliable or not on certain topics?  Caviats or warnings?

I've just seen a few clips but they have been more substantive than most of the main stream news sources I've seen lately.

Opinions and thoughts appreciated.  Thanks in advance, and sorry for the off topic post but hopefully it will be helpful to all.


Wed, 01/25/2012 - 23:55 | 2098729 disabledvet
disabledvet's picture


Wed, 01/25/2012 - 23:55 | 2098731 disabledvet
disabledvet's picture

but i hear Al Jazeera's pretty good. Try them first...

Wed, 01/25/2012 - 22:35 | 2098547 graymnzrc
graymnzrc's picture

Silver is a is a bit of a conundrum (sp?). It has the industrial worldwide trade collapse downside risk with the anti-fiat money printing hedge. Quite frankly I don't know (near term) which outweighs the other.

Definitely would buy it on a big collapse but still not sure which way the tug of war will take it.

Wed, 01/25/2012 - 22:50 | 2098594 electricgorilla
electricgorilla's picture

Call me Mansa Musa Bitchezzzzzz. My safe is flooded with gold coins. I guess my grandpa understood the value of bullion a long time ago.

Wed, 01/25/2012 - 23:11 | 2098650 IndicaTive
IndicaTive's picture

But do you understand?

Wed, 01/25/2012 - 23:31 | 2098681 JuicedGamma
JuicedGamma's picture

Do not fight the Fed.
Do not fight the Fed.
Do not fight the Fed.
Do not fight the Fed.
Do not fight the Fed.
Do not fight the Fed.
Do not fight the Fed.
Do not fight the Fed.
Do not fight the Fed.
Do not fight the Fed.
Do not fight the Fed.
Do not fight the Fed.
Do not fight the Fed.
Do not fight the Fed.

Wed, 01/25/2012 - 23:37 | 2098698 JR
JR's picture


Thu, 01/26/2012 - 00:25 | 2098785 swabeyjw
swabeyjw's picture

Tyler, take a look at the follow as a build on your approach to comments,

Thu, 01/26/2012 - 00:36 | 2098796 JR
JR's picture

V.C. Vickers resigned his appointment after 10 years as a governor of the Bank of England in 1919 to fight the monetary system that was destroying England, declaring in 1926 that he “felt it my duty to explain to the Governor of the Bank of England, Mr. Montagu Norman, that ‘henceforth I was going to fight him…and the Bank of England policy until I died.”

He wrote in 1939 in Economic Tribulation, just before his death: “It is perfectly idle to talk about a Democracy or a Republic, when the sovereign power is really being exercised by an individual super-group.” He then pointed out the consequences:

“Through our own base carelessness and ignorance we have permitted the money industry, by the very virtue of its business, gradually to attain a political and economic influence so wide and powerful that it has actually undermined the authority of the State and usurped the power of democratic government…

“This national and mainly international dictatorship of money, which plays off one country against another, and which, through the ownership of a large portion of the Press, converts the advertisement of its own private opinion into the semblance of general public opinion, cannot for much longer be permitted to render Democratic Government a mere nickname…

“The finance industry, the exchange bankers and the Stock Exchange grow rich upon the ups and downs of Trade, and are largely dependent on variations and changes of the price-level of commodities. But productive industry grows rich upon stable markets, a constant price-level, and the absence of violent economic fluctuations…”

Entrusting private individuals engaged in finance to safeguard the national sovereignty, he said, leads to “the deadly and detestable international Imperialism of money” and comes at “an increasing poverty and loss of influence among those who have so recently been the mainstay and backbone of their country.”

Concluded Vickers, “As nations have to struggle to maintain their national sovereignty against the international manipulators of money, the sovereign authority in the nation must take over the creation of the entire medium of exchange, consisting of the lawful physical or tangible money of the country.”

Vickers failed at his lonely task. Is the fate of the United States of America and freedom to be that of England?

Thu, 01/26/2012 - 00:36 | 2098802 ebworthen
ebworthen's picture

Silver = pretty, and hefty

Gold = pretty, and hefty


Thu, 01/26/2012 - 00:52 | 2098844 jomama
jomama's picture

i had to move my stash last weekend.  god damn i forgot how heavy silver is..

Thu, 01/26/2012 - 00:55 | 2098851 non_anon
non_anon's picture

Bernark beat Gingrich to the moon

Thu, 01/26/2012 - 01:14 | 2098887 Seasmoke
Seasmoke's picture

We are not living........

We are just killing time....

Thu, 01/26/2012 - 01:37 | 2098902 evolutionx
evolutionx's picture

But how can anyone possibly believe that totally incompetent and clueless politicians and central bankers could solve anything. They created the problem in the first place and are therefore totally unsuitable to play the role of Deus. The main objective of governments is to stay in power and thus to buy votes. Therefore they are incapable of taking the right decisions. And the opposition, aspiring to power is even less suitable since they will lie through their teeth and promise the earth in order to be elected. (We know that there are exceptions like Ron Paul, but the voters will most probably find his medicine too strong to swallow.)

More analysis:

Thu, 01/26/2012 - 03:44 | 2098975 Triple A
Triple A's picture

Soros buying italian bonds and also saying how bad of shape Europe is in.... interesting. Me think US fails first

Thu, 01/26/2012 - 07:10 | 2099051 Sathington Willougby
Sathington Willougby's picture

Attack someone's right to low interest rates, expect rage-revulsion.



Thu, 01/26/2012 - 07:22 | 2099060 mushioov
mushioov's picture

Does anyone of you think of gold price as a "crystal ball to the future" as to where the price of all goods and services are going?

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