When you see such coordinated action by all the major Central Banks in the world, you know the situation is much worse than you are being told by the ruling oligarchy. The confidence and trust is gone. Every major bank in the world is insolvent, whether it be in the U.S., Europe or China. These Central Banks are owned and controlled by the very banks they are bailing out. They are telling you they have it under control. They do not. They have lost control. The debt is too great and will destroy the economic system of the world.
This is a last ditch effort by those in power to grab the last vestiges of middle class wealth. The stock market will soar today, benefitting bankers, politicians, and the 1%. They have solved nothing. The debt remains. The debt will not be paid.
Oil, food and commodity prices immediately soared on this announcement. Again, the wealthy will get richer and the average American will be destroyed by inflation on the things they need to live. The game goes on.
Gold jumped $20 in seconds. It is your only defense against the looting by the evil banking syndicate.
Here Comes The Global, US-Funded Liquidity Bail Out
Submitted by Tyler Durden on 11/30/2011 08:02 -0500
As expected, the Fed has just bailed out the world once again:
- FED, ECB, BOJ, BOE, SNB, BANK OF CANADA LOWER SWAP RATES – BBG
- ECB, FED other major central bank to lower the pricing of existing USD liquidity swaps by 50BPS
And as we have been writing every single day, the worldwide dollar crunch is now confirmed:
- At present, there is no need to offer liquidity in non-domestic currencies other than the U.S. dollar
And finally, a promise to bailout Bank of America when it hits $4.00 again:
- U.S. financial institutions currently do not face difficulty obtaining liquidity in short-term funding markets. However, were conditions to deteriorate, the Federal Reserve has a range of tools available to provide an effective liquidity backstop for such institutions and is prepared to use these tools as needed to support financial stability and to promote the extension of credit to U.S. households and businesses.
This means that the global situation is far, far more dire than the talking heads have said. Luckily, when this step fails, which it will, Mars can always come and bail us out.
For release at 8:00 a.m. EDT
The Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve, and the Swiss National Bank are today announcing coordinated actions to enhance their capacity to provide liquidity support to the global financial system. The purpose of these actions is to ease strains in financial markets and thereby mitigate the effects of such strains on the supply of credit to households and businesses and so help foster economic activity.
These central banks have agreed to lower the pricing on the existing temporary U.S. dollar liquidity swap arrangements by 50 basis points so that the new rate will be the U.S. dollar overnight index swap (OIS) rate plus 50 basis points. This pricing will be applied to all operations conducted from December 5, 2011. The authorization of these swap arrangements has been extended to February 1, 2013. In addition, the Bank of England, the Bank of Japan, the European Central Bank, and the Swiss National Bank will continue to offer three-month tenders until further notice.
As a contingency measure, these central banks have also agreed to establish temporary bilateral liquidity swap arrangements so that liquidity can be provided in each jurisdiction in any of their currencies should market conditions so warrant. At present, there is no need to offer liquidity in non-domestic currencies other than the U.S. dollar, but the central banks judge it prudent to make the necessary arrangements so that liquidity support operations could be put into place quickly should the need arise. These swap lines are authorized through February 1, 2013.
Federal Reserve Actions
The Federal Open Market Committee has authorized an extension of the existing temporary U.S. dollar liquidity swap arrangements with the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, and the Swiss National Bank through February 1, 2013. The rate on these swap arrangements has been reduced from the U.S. dollar OIS rate plus 100 basis points to the OIS rate plus 50 basis points. In addition, as a contingency measure, the Federal Open Market Committee has agreed to establish similar temporary swap arrangements with these five central banks to provide liquidity in any of their currencies if necessary. Further details on the revised arrangements will be available shortly.
U.S. financial institutions currently do not face difficulty obtaining liquidity in short-term funding markets. However, were conditions to deteriorate, the Federal Reserve has a range of tools available to provide an effective liquidity backstop for such institutions and is prepared to use these tools as needed to support financial stability and to promote the extension of credit to U.S. households and businesses.
Market Reaction To Global Bailout
Submitted by Tyler Durden on 11/30/2011 08:35 -0500
Risk markets are tearing higher globally with equities, commodities, and credit all considerably higher. Equities and CONTEXT are back in line as this is a very systemic shift up as the dollar tanks and TSY yield surge. US equities are back to 11/18 levels but are stalling out a little here as the initial spike wears off – whether this liquidity surge fixes the insolvency crisis is the question it seems markets are considering now that they have had some time to think (and squeeze).
Broad risk assets and ES (e-mini S&P futures) are back in sync after CONTEXT pulled back to equity’s slow drip weaker overnight. Now the central banks have dumped liquidity, risk-on was evident but the move is perhaps notably small if this really is a solution – albeit extremely painful for shorts. The initial jump earlier on China’s RRR shift was then taken on as the rest of the central banks joined in the party.
The dollar immediately dropped like a stone -1.5% on the week with AUD (carry and China driven) smashing over 5% higher against the USD. The EUR is (as usual) tracking with DXY as its main driver and we note that JPY did strengthen against the USD but is only marginally better on the week now.
Of course, the dollar shift and risk-on sentiment has surged commodities with Copper the major outperformer. Silver and Gold also jumped notably (with the former much more than the latter as is its higher beta case) and Oil now over $101 which has to help spending and demand in the real economy right?
Gold now up $30.
Oil almost to $102
Copper jumped 4%
Does this mean the end of the world has been postponed and I can start using up my survival food?
Is it time close our retirement accounts and put it ALL in physical gold?
“If you don’t trust gold, do you trust the logic of taking a beautiful pine tree, worth about $4,000 – $5,000, cutting it up, turning it into pulp and then paper, putting some ink on it and then calling it one billion dollars?”
–Ken Gerbino
After last globally coordinated intervention in September
Charles Hugh Smith:
As I write, “risk trade” assets are skyrocketing around the globe as central banks unleash a tsunami of liquidity. Giving bankrupt entities the ability to borrow more money does not make them solvent, and so if we look past the manic rally in speculative assets, we see that debt will still have to be renunciated, written down, forgiven, wiped off the books–whatever terminology you prefer.
JESSE’S WISDOM ON TODAY’S LATEST FRAUD:
30 November 2011
Currency Wars: Fed Acts To “Increase the Availability of Dollars Outside the United States”
Several people have asked what I think about this.
I wrote about this just yesterday.
“I think the major monetization is already occurring in the Eurodollar markets, and an ongoing stealth bailout of European debt, in order to save the big money center banks at home and broaden the reach of the Dollar.
And this is why the Fed stopped reporting on Eurodollars some years ago, as a component of M3. It was to pave the way for the monetary equivalent of a financial neo-con, to addict European governance to the US dollar and pave the way for a stronger position for the dollar as a one world currency.”
Currency Wars: The Anglo-American Century and Why the Financial Engineers Hate Gold and Silver
Here is a primer on the Fed Swaps. Keep in mind that it is written by the Fed.
I had also suggested after the bell that there would be an effort to blow off the downgrade of the big money center banks. I suspected there would be a more singular effort to pump up the SP futures from the Fed’s house banks, but it appears the Central Banks, led by the Fed, decided to hit the markets with a major sugar rush of cheap dollars. That is US dollars.
“I will be surprised if they do not try and rally stocks in the face of this to put the brave face on and whistle past the graveyard once again. This is what traders like to do when they have been caught offsides by the news. But they may not be able to sustain it without official help from the strong trading desks of the financial sector.”
The Chinese cut reserve requirement ratio on their banks by .5 percentage points. This will help them release more of their huge hoard of US dollars back into the global financial system.
This action, led by the US Fed, has had a marked effect on commodity prices in dollars.
This is just a big serving of a quick energy drink to ease the short term liquidity problem, and dull the news impact of the bank downgrades. When the rush wears off, and it will because this is doing little to help the average person in the real economy, we will see how the markets react to the growing piles of paper covering the landscape of a mismanaged and ruined economy.
But it was extraordinarily kind of the Fed to announce this just in time for the banks and the hedge funds to repair some of the damage from the stock market decline before they close their trading books on November.
The Eurozone problems have not been solved by this. The US domestic economy has not been improved by this, except to weaken the dollar and increase commodity prices.
It has only bought all of the western banks some time, and further addicted the Western world to US dollars. This is government of the one percent, by the one percent, and for the one percent.
Did A Large European Bank Almost Fail Last Night?
Submitted by Tyler Durden on 11/30/2011 10:40 -0500
Need a reason to explain the massive central bank intervention from China, to Japan, Switzerland, the ECB, England and all the way to the US? Forbes may have one explanation: “It appears that a big European bank got close to failure last night. European banks, especially French banks, rely heavily on funding in the wholesale money markets. It appears that a major bank was having difficulty funding its immediate liquidity needs. The cavalry was called in and has come to the successful rescue.” Granted the post is rather weak on factual backing and is mostly speculative, but it would certainly make sense. That said, it harkens back to our original question: just how bad was the situation if the global central banking cabal had to intervene all over again, and just what was not being told to the general public? Lastly, and most important, slapping liquidity bandaids on solvency gangrenes does nothing but buy a few days at most. Furthermore, we now expect the stigmata associated with borrowing from the Fed to haunt each and every European bank as vigilantes will now use the weekly ECB update on borrowings from the Fed as a signal to hone in on this and that weak Italian and French, pardon, European bank.
More from Forbes:
These are the type of actions that were being taken during the financial crisis in 2008. Now most knowledgeable experts agree that not rescuing Lehman Brothers was a mistake. The authorities are not about to make the same mistake again. The only explanation for the massive action is that central banks were concerned about a pending failure that is not publically known. The readers may want to make their own judgment from the following excerpts from a statement by the Federal Reserve.
These central banks have agreed to lower the pricing on the existing temporary U.S. dollar liquidity swap arrangements by 50 basis points so that the new rate will be the U.S. dollar overnight index swap (OIS) rate plus 50 basis points. This pricing will be applied to all operations conducted from December 5, 2011. The authorization of these swap arrangements has been extended to February 1, 2013. In addition, the Bank of England, the Bank of Japan, the European Central Bank, and the Swiss National Bank will continue to offer three-month tenders until further notice.
US Economic Data Reporting Now Officially A Farce: Every Economic Data Point Prints 4+ Std Devs Above Consensus
Submitted by Tyler Durden on 11/30/2011 10:15 -0500
It appears that central bank intervention was not the only thing in full force today: The US version of the Chinese Ministry of Truth in economic reporting has now officially joined the fray. Anyone wondering just how much of a joke the US high frequency economic data updates have become should look no further than these three charts showing Wall Street forecasts (consensus and distribution) and actual prints for the ADP Payroll, the Chicago PMI and Pending Home Sales. Not one indicator has come below 4 standard deviations above the average forecast, and every single one has printed above the highest forecast. It is now safe to say without any doubt that US data is equal if not more equal in credibility terms with that of China.
Good morning!
“We can’t solve problems by using the same kind of thinking we used when we created them.”
—Albert Einstein
talk about throwing out the baby with the bath water!
Dow 36,000, here we come!!!
We’re saved!!!
Colma says: “One large coffee and that croissant, please”
Coffee wench answers: “That’ll be 43 dollars and 35 cents”
Colma answers: “I said a coffee and croissant, not a hand job”
“You want breakfast, or not, asshole?” (Register slams shut) “If you do, bend the fuck over, buddy.”
Fed Cancels POMO Due To “System Difficulties”
Submitted by Tyler Durden on 11/30/2011 11:33 -0500
Ok, what the hell is going on? This is the first POMO ever cancelled in QE/Lite/Twist history. As a reminder, today the Fed was supposed to sell $8 billion in 2013 bonds: a liquidity withdrawing operation. Just how little liquidity is there in the “system”?
It’s deja vu all over again; 2008 2.0, only global now. As near as I can tell, providing “liquidity” is a loan, or other vehicle, which means more debt. It has to be considered debt, money created out of thin air. The Fed is trying to enslave the rest of the world with debt like they have enslaved everyone here in the U.S. As one of the posts mentions, it’s only providing time for the insiders and 1% to have a quiet run on banks, to get their money out before the banks are insolvent. It sounds like they are having bank runs already, but nobody is reporting it as such. Considering the debt amounts outstanding, and the CDS amounts that will be due, the Fed and other central bankers don’t have enough printing presses and ink to stick any more fingers in the dike. Hyperinflation here we come.
Colma answers: “I said a coffee and croissant, not a hand job”
Colma at the “coffee shop”
Why would a POMO ever be “cancelled”? Has that ever happened before?
Either the bonds are expected to be bought as there is enough liquidity to do it. Or not, because there isn’t any liquidity, right?
Is this in any way tied to the failed German bond auction last week?
HZK
It is all tied together. The system is seizing up. The bank runs are happening electronically. Behind the scenes bankers and politicians are desperately trying to keep this ship afloat. The damage is too great. This ship is going down. But it will be a spectacular display as it explodes before plunging to the bottom of the sea.
More news, Mary Malone may be interested.
Foreclosure fraud whistleblower found dead
A notary public who signed tens of thousands of false documents in a massive foreclosure scam before blowing the whistle on the scandal has been found dead in her Las Vegas home.
NBC station KSNV of Las Vegas reported that the woman, Tracy Lawrence, 43, was scheduled to be sentenced Monday morning after she pleaded guilty this month to notarizing the signature of an individual not in her presence. She failed to show up for her hearing, and police found her body at her home later in the day.
It could not immediately be determined whether Lawrence, who faced up to one year in jail and a fine of up to $2,000, died of susicide or of natural causes, KSNV reported. Detectives said they had ruled out homicide.
Lawrence came forward earlier this month and blew the whistle on the operation, in which title officers Gary Trafford, 49, of Irvine, Calif., and Geraldine Sheppard, 62, of Santa Ana, Calif. — who worked for a Florida processing company used by most major banks to process repossessions — allegedly forged signatures on tens of thousands of default notices from 2005 to 2008.
Trafford and Sheppard were charged two weeks ago with 606 counts of offering false instruments for recording, false certification on certain instruments and notarization of the signature of a person not in the presence of a notary public.
Police said at the time that the alleged scam had thrown into question the legality of most Las Vegas home foreclosures in the past few years, leaving many people living in foreclosed-upon homes that they unknowingly don’t actually own.
“I would suggest you review your documents and bring them to an expert and an attorney,” said John Kelleher, chief deputy attorney general for Nevada’s fraud unit
I’m no economic genius, but it’s pretty apparent what’s happening. The Fed here and other countries just threw out 5 ton bricks of money to the 1%ers, who, having seen hundreds of billions laying on the ground, are happy to pick it up to pay their debts and stash it away someplace. Once the feeding frenzy is done, and all the people that matter have money stashed, then everything blows up. This is a last-ditch effort by central banks. After this, they have nothing left. This is the last gasp, not something that is going to have any meaningful benefit. If it’s come to this already, this quickly, it won’t be long now.
Yeah, the “earthquake kit” looks a lot smaller today…
THERE GOES THAT CRAZY RON AGAIN WITH TRUTH & COMMON SENSE
Ron Paul Statement On The Fed’s Bailout Of Europe
Submitted by Tyler Durden on 11/30/2011 13:04 -0500
From Ron Paul
Statement on the Fed’s Continued Euro Bailout
The Fed’s latest actions in cooperating with foreign central banks to undertake liquidity swaps of dollars for foreign currencies is another reason why Congress needs enhanced power to oversee and audit the Fed. Under current law Congress cannot examine these types of agreements. Those who would argue that auditing the Fed or these agreements with central banks harms the Fed’s independence should reevaluate the Fed’s supposed independence when the Fed bails out Europe so soon after President Obama promised US assistance in resolving the Euro crisis.
Rather than calming markets, these arrangements should indicate just how frightened governments around the world are about the European financial crisis. Central banks are grasping at straws, hoping that flooding the world with money created out of thin air will somehow resolve a crisis caused by uncontrolled government spending and irresponsible debt issuance. Congress should not permit this type of open-ended commitment on the part of the Fed, a commitment which could easily run into the trillions of dollars. These dollar swaps are purely inflationary and will harm American consumers as much as any form of quantitative easing.
The Fed is behaving much as it did during the 2008 financial crisis, only this time instead of bailing out politically well-connected too-big-to-fail firms it is bailing out profligate government spending. Citizens the world over deserve better than this. They deserve sound money that cannot be manipulated and created out of thin air by central planners who promise printed prosperity. Fiat money caused this European crisis and the financial crisis before it. More fiat money is not the cure. The global fiat currency system has proven itself a failure, we need real monetary reform. We need sound money.
Good for RP, at least somebody is speaking out against this travesty.
My question is this, Admin or anybody:
When all the private banks fail, including the TBTF banks here in the U.S., who will take them over, the government or the Fed?
The banks own the Fed.
The banks will need to be nationalized like the did to the Swedish banks in 1990. The stockholders and bondholders get wiped out, the management gets fired, the bad debts get written off and eventually you bring them back public after they have recovered.
Thanks, okay, next question:
How can our government, which is already $15.1 trillion in debt, nationalize banks? Just take them over and wipe ’em clean? What happens to depositors? How much money will it cost taxpayers?
The taxpayer wouldn’t be screwed. The stockholders and bondholders would take the losses. The depositors are fine. The normal day to day operations of banks is not the problem. It’s the bad loans from the past. You essentially have a controlled bankruptcy like GM.
It is costing taxpayers more to keep these banks alive on life support.
My concern is what will then happen to all the little privately owned banks throughout the US?
You know, the ones that aren’t “Too Big To Fail” and that actually provide services to customers and make loans to the small businesses that keep their communities afloat. I fear these banks will get the shaft and the small businesspeople associated with them will go down in flames also.
I don’t know what the future holds, but it sure sounds like another winding of the 4th turning spring to me.
Thanks again. All’s well then. Except for one thing, the fucking banksters aren’t going to give up that easily. And the U.S. government is bankrupt already, a zombie, just like the banks. It can never pay back $15.1 trillion, even if the criminals in Washington had the desire, which they will never.
“When all is said and done, the debt will still be there. Larger than ever. Every major government is running a deficit. The US, for example, only collects a bit more than $2 trillion in taxes. But it spends about $3.5 trillion. You can do the math later, dear reader. We’ll tell you what it means now — the US is headed for bankruptcy. The paltry and pathetic efforts of the super-committee and Congress notwithstanding.
In Europe, the situation is more fun to watch. They speak in different tongues but they all say the same things:
“Give me a bailout.”
Read more: The Staying Power of Debt http://dailyreckoning.com/the-staying-power-of-debt/#ixzz1fDWVOora
Sweden and Iceland are examples of exactly how to deal with the fucking banks. They took the short term pain and started over again. Lessons were learned and the people who caused the problem were not rewarded. They were fired and took the losses.
What could go wrong by easing monetary policy when interest rates are already 0%?
AWD said,
“And the U.S. government is bankrupt already, a zombie, just like the banks. It can never pay back $15.1 trillion, even if the criminals in Washington had the desire, which they will never.”
Liquidation….Fire Sale! Everything must go! To the highest bidders, who just so happen to likely be the same fuckers who created this clusterfuck global debt contagion….is this a way to wipe out national governments to institute a global governing system? Youbetcha!
Plato, Plato, Plato… that would be too EASY.
Firesale, sell it all and SERVICE THE INTEREST the second it gets ratcheted up by the same folk who caused it….
Get ready to watch shiips full of food, timbe, ore and workers leave port while the debt stays about the same and your stomach begins digesting itself.
AWD, from what I can tell, the local banks will continue to operate just fine. I’m dealing with a few right now, as I finance the purchase of a little farm. I was shocked the first time one quoted a 7% interest rate, but it makes sense when you realize that these banks operate differently. They don’t package mortgage securities and debt to sell. Their shareholders are members of their local community; everybody who holds an account at the bank gets shares. They only loan money to people who have proven their ability to pay it back.
They’ll continue operating when the TBTF banks fall, because they have sound operating procedures. They’re sustainable. Too bad the people who were supposed to regulate the whole industry that way didn’t do their job.
But hey, those dam kids ought to get off the lawn and protest at DC instead…
Thinker,
I agree with most of your thoughts, but the system is rigged. A local bank is only as “sound” as its regulators say it is in many cases. The TBTF banks get by with fraud and murder, and some of the little ones get the crap stomped out of them for missing a form on a Real Estate note.
There are two sets of rules to abide by. If the powers that be want the small banks shut down, they will be. There is no way with all the regulations and ridiculous rules in place that a bank can comply with all of them 100% of the time. If examiners want to find something wrong, they will. I know of several cases where they have not bothered some banks on certain issues for over 20 years, but now they are looking for those issues and hammering them on it. The banks ask why the examiners never said anything about it for all these years and the response was that the bank should have been paying closer attention. The examiners are never wrong. They never outright approve anything; they just don’t disapprove of certain things. I’m not kidding. That’s how the letters are worded.
If they want them gone, they will be. That is a fact. All it takes is for several bank runs to be engineered and then people telling the TV news reporters over and over how they couldn’t get their money out and when the next one is rumored to be insolvent, watch out! If there isn’t enough money left or they can’t get enough money in to service their customers, it’s over. Their reputation is ruined.
We should have ducked.
Just had to weigh in a strand that features comments from Vinnie the Shark.
I’m such a Jersey girl, ya know?
Quick question – when European banks collapse, will money flow to US treasuries for awhile? Will this prop up our anemic and corrupt economy temporarily? Or, will US be screwed shortly after the European banks and their monetary system go kaput?
Also – has anyone considered that US interest rate is tied to compliance with Sharia law? Just say’in…
Lastly, NewsJunckie – I read about the robo-signer’s untimely death. Hoping it was natural causes, but looks fishy, no?
Now back to the regular programming…
Thanks for the insight, MA.
Scary times.
mary, that is hilarious, the sharia law bit.
admin, i ain’t screaming deflation (bitches) today. called my gold dealer. took some cash out of the bank. don’t know how much to stash in the mattress (getting kind of lumpy) and how much to convert to shiny coins. but i’ll be damned if i am convinced ben is really gonna print to buy euro bonds and italian debt (for more than overnight).
truly insane times.
Muck, everything I’m tracking agrees with you. This is literally the last-gasp of the global financial industry before everything heads south. I’m hoping to close my land deal before that happens.
Vinnie, good points. Yes, they can force the smaller, sound banks to close, too. And they can take away land, guns and gold from those of us who have it. It would be like the Bolsheviks all over again.
God help us all if it goes that far.
If anybody finds Big Banks distasteful and would like to assist Admin’s efforts, go to “The Store Of Doom” where you will find wonderful shirts with the abbreviation:
BBES
“Big Banks Eat Shit”
Normally I’d hate to be an ad shill, however, I have found this addition to the TBP clothing line to be both stylish and amusing…. and not in overt profanity. Show your thoughts to those who would ask.
Thank you for your time.
Muck About – “Which I did not expect to happen for years yet.”
I predicted 2-3 months AFTER the 2012 Presidential elections as the end of the line. It looks like the can has slammed up against the wall early… f**k, I really was hoping for more time…
Europe and ALL it’s banks are INSOLVENT. So are the US banks, CDS are worthless if your counterparties cannot pay you. (Betting on the sun going supernova trade).
As insane as it sounds, the entire world is broke.
Dave of “Trade with Dave” fame has just called the “reset switch” for Dec 21 – 3 Jan 2012. If he’s correct we are ~ 3 weeks left before the US dollar and the US debt gets nuked out of existence and “Fedbux?” become the new legal tender.
The “reset” switch may also call for JPMorgan and HBSC to nuke the GLD and maybe SLV instruments out of existence, in a “divorced currency” gold ownership by the “people” will be outlawed.
It would be easy to do – Announce on the lame stream media that there is NO physical to back these EFT’s and watch the knife plunge to 0. With HFT driving the waterfall it would take under a minute.
The million dollar question now becomes – What will be the value of physical gold AFTER the “reset switch” has been played out?
As a fellow gold stacker I am frantically looking for answers on that one. If anyone has insights they wish to share feel free.
“I used to know nothing, now I’m not so sure”
Is this the Anglo/Western way of kicking China as it pauses for a breath?
Been a long time since I Logged In, but since the IP addys are working again and we seem to be at the Endgame here for the Fiat, I figured I’d drop on a REAL “RE” Post, instead of the one liners I have dropped on here lately. Nostalgia for the Old Days, I guess. LOL. Have fun with this one, my old Napalm Pitching adversaries 🙂
RE
———-
This Time IS Different
November 30th, 2011
Repost from Reverse Engineering
http://tech.groups.yahoo.com/group/reverseengineering/
Today was a watershed in the collapse dynamic. The Central Banks, in UNISON have openned up the Currency Swap Spigot to Full ON in order to maintain liquidity in the system. This is not a lot different than what they did in 2008, with the notable exception that at the time the insolvency in the system had not yet worked its way up to the Nation States, which themselves back the issue of any currency through the power of taxation.
You will notice here that besides Da Fed, the ECB, the BoJ et all agreeing to swap unlimited currency which can then be distributed to their own troubled Banks, the Chinese REDUCED the Reserve Requirement for their own banks, freeing up an enormous amount of Forex to be moved around the market here. No coincidence there of course.
Have you ever driven a really OLD car which all of a sudden starts making really BAD noises, but you are miles from the next Gas Station and you KNOW if you let it stop, you’ll never get it going again? So you don’t stop, you put the Pedal to the Metal and drive it as fast as you can to cover as many miles as you can before the engine seizes on you.
This move is a desperation attempt at maintaining liquidity in the system long enough to get enough political agreement in Eurotrashland to set up a common Treasury and cotrol both the new Treasury and the ECB through the Euro Parliament in Brussels. It had to be done to try to make it through to the Dec 9th Summit. The Engine was ont he verge of Seizing Up over the weekend, and essentially the CBs are now pouring Oil through the engine while they are driving it, while with each turn of the crankshaft it leaks out as fast as they pour it in.
Bennie and the Inkjets went ALL IN. This is the Biggest Possible Intervention that the CBs can do. They signaled to the Markets and the “Investors” that they will provide all the liquidity they need to keep the car rolling here, and as a result you got the expected reaction of a rapid upsurge in the markets. There is one small problem with this.
If this was JUST a liquidity problem for a few banks, inundating them with cheap credit could keep them going until they sorted out their problems and deleveraged some. Its not a liquidity problem though, its a SOLVENCY problem, and its not a solvency problem for just a few of the banks but ALL of them, and not just them but the Nation States backing the currency being used to define the values.
The market will now “rebalance” with the “new normal” of increased CB swaps and cheap money, with the TBTF using worthless assets as Collateral for the deluge of money being made available here. The assets themselves are STILL not performing though, and everyone who trades them knows this, so they are illiquid. Nobody will trade them because then they would be marked to market. So despite the ocean of money being made available, it won’t MOVE very much, if at all.
The new money won’t be invested into new Eurotrash Bonds to keep those economies moving unless and until it can be made believable to “investors” that these Nation States will be able to pay off on the new Bonds. This cannot be made believable, because said Nation States are themselves insolvent, not illiquid.
The TBTF Banks are stuck with an increasing amount of Cash, with increasingly fewer performing assets to actually trade for that cash. In this case the market doesn’t lock up because of insufficient cash, it locks up because of insufficient worthwhile assets anybody will bid on for that cash.
In order to generate returns on the new cash, it will flow into the few commodities people think will hold value, namely likely Oil, Food and Gold. This will generate new Bubbles in those asset classes, which will subsequently CRASH big time when they can’t be sold for anywhere near what the bubble price becomes.
If they keep this up for any great length of time, Oil prices are likely to skyrocket to $200/bbl, perhaps higher, but its also unlikely they can keep it up that long before the solvency problem hits one or more Nation States and one or more TBTF Banks.
When, not IF one of them collapses here you’ll still get the same cascade failure through the system, just it will be bigger and more glorious in its numbers. Its just not possible to stop the collapse of an exponential function inside real world parameters.
This play by the CBs may extend out the crash date by a few months, but based on what occurred with Lehman, I don’t think it can work more than about 3 months. Its also the last biggest BAZOOKA the CBs have to play here. They are all working in concert, and there is no Bigger Deep Pocket left anywhere to stick a gun to their head and say you will crash the system if they don’t Pony Up. The Ferengi are NOT going to show up here, and even if they did I scarcely think they would be worried about the Pop Gun the Illuminati have at their disposal.
Its the End of the Line for this Monetary System, no matter how you cut it here. You can’t fix a solvency problem by increasing liquidity. The Debt remains, and it is still IRREDEEMABLE Debt. Not to say our Illuminati Masters will not TRY to reboot a new system once this one collapses, they most certainly will try that. They also will most certainly FAIL, because they are not fighting against J6P here, they are fighting against the Laws Of Mathematics. You cannot build a debt based monetary system in a world awash in population overshoot and in serious resource depletion at the same time. Debt based systems of Money are all these folks KNOW, its what they have been using since the Dawn of Agriculture. They do not HAVE another Playbook, for if they did they most certainly would be running it now. They are running the SAME Playbook, but this time with parameters not seen EVER, in all of Recorded History. In this sense, this time IS different.
I have no idea how it will play itself out after the Monetary System in existence since the time of the Medici finally makes its way to the Great Beyond, other than to say it will be a Clusterfuck beyond all comprehension at the moment. The CBs are doing all they can to push the Day of Reckoning off here for a bit longer, but they just SHOT THE BIG WAD, and there is nothing left to play after this one.
The Titanic is GOING DOWN.
RE
I have no idea how it will play itself out after the Monetary System in existence since the time of the Medici finally makes its way to the Great Beyond, other than to say it will be a Clusterfuck beyond all comprehension at the moment. The CBs are doing all they can to push the Day of Reckoning off here for a bit longer, but they just SHOT THE BIG WAD, and there is nothing left to play after this one.
The Titanic is GOING DOWN.
RE
Nobody knows how that turns out, RE, but the historians who are mostly correct.
@Colma
Historians are the winners, and we got no real clue as to who the winners will be here. All you can do really is make a choice as to which side of the line you will stand on, or do your very best to GTFO of Dodge and avoid being at Ground Zero when it all goes to Hell in a Handbasket.
RE
Iodized salt and drinking water, RE….
Iodized salt and drinking water.
@thinker and Vinnie,
I have to disagree with you both.Local banksters are in just as deep in ripping off the taxpayers as the big crime bosses.FDIC-you and I- has bailed out hundreds of these worthless money grubbing fucks who lost it all gambling in the land development\construction business.
And these so called pillars of the community banksters own local governments and use their influence to push one unnecessary greater good flop of a project after another. I could name several locally that have not produced any returns as promised by the bondholders i.e banksters, but that would be outing my location and neighbors do read this blog.
Banksters great and small should be banned from any participation in politics whatsoever.They shoudl serve on no local economic, zoning or planning committees, no school boards, no utility authorities and hell no to any city or county office.They will and do use these position to line their damn pockets while the taxpayer gets the shaft..
I know bankers that have crashed two local banks due to development speculation and they are still living pretty high on the hog …even buying boats and stretched Mercedes Benz cars while the taxpayers get the rusty shaft in the ass.
And, fact of the matter is that the small banks were/are selling local mortgages into MERS as well.
Just by financing locally , does not mean that bank will not sell your mortgage, as one naive family member found out , just one week after closing with a local bank.
http://money.cnn.com/news/specials/storysupplement/bankbailout/
http://www.calculatedriskblog.com/2011/11/unofficial-problem-bank-list-increases.html
Bankers are greedy ,stupid, non productive class of lazy dumb asses who should never be trusted with a nickel of anyones’ money.They are the very reason the COLOSSUS is now crumbling.The entire banking system needs to be reworked and banksters should be made to feel the heat whenever they stray from the straight and narrow.
“When 5,000 banks failed during the early years of the Great Depression, the temptation of the government to “do something” was too great to resist, and the FDIC was born. Allegedly installed to protect the customer, in fact the FDIC protects the bank itself against its own bad judgments through the use of taxpayer money. As Rothbard noted, “Now bank runs are over, and we have been paying and will continue to pay the horrendous price of saving the banks: chronic and unlimited inflation” as the Federal Reserve and the FDIC continue to bail out banks from their own bad judgments.
With the apparent slowing down of the rate of failure of banks (84 so far this year compared to 154 for all of last year), a fair question may be asked: How many more banks will the FDIC close before this unhappy chapter is written? Because the FDIC doesn’t publish a “troubled banks” watch list, private sources, such as Weiss Ratings, have developed such a list covering the 7,500 remaining banks in the country. To each of the four banks closed over the weekend Weiss had assigned a rating of E- (Very Weak). In fact more than 95 percent of the banks the FDIC has closed so far this year held either an E or an E- rating.
At the present time, Weiss rates another 420 banks and thrifts as “Very Weak” with a rating of E+, E, or E-. If predictions that another recession has just started are correct, then many of those 420 banks will likely find themselves belonging to another stronger bank in the next year or so, courtesy of the enabler, the FDIC and, of course, the American taxpayer.”
There is the possibility of world war, even nuclear. This serves two purposes, depopulation and return to status quo. After all, that’s what we’re talking about with all the debt, it’s debt owed by socialist nations, including the US.
The Devil and his minion would clearly see this as the most opportune action, get rid of as many souls as possible, and reset the system.
With a lot fewer people in the world, things would pretty much return to where they were, and governments would resume their role of nanny states, with the Devil continuing his role of killing God’s Word in people’s lives.
The Devil’s time is short, we are told in Revelation 12:12, where it also states there is a battle raging in heaven between the Michael and his Angels and the dragon and his angels. This would be right before the appearance of the anti christ, and the beginning of the tribulation and events leading up to Armegeddon and Judgement Day. Revelation talks of Satan being cast in a pit for a thousand years before Armegeddon, so it’s hard to tell where we are in the order of events.
In this context, the saints are admonished more than once,
Here is a call for the endurance of the saints, those who keep the commandments of God and their faith in Jesus.
Nothing to do for the moment except remain vigilante, assuming of course you’ve got basic prepping done. If not, I highly encourage you to store several weeks or months worth of food you use every day. There’s powdered or dehydrated versions of perishable goods. You also need guns and ammunition, water filtration, sanitation, all of the things yo take for granted. If there’s no food to had anyone, it’s going to get ugly real fast. Katrina in 2005 and LA in 1992 are your best examples of what to expect.
One may say these are extreme measures, or even paranoid, but these are extreme times. It’s not paranoia if there really is an enemy who is trying to kill you. The conspiracy exists, and the chief conspirator is Satan and the Devil.
I have no idea how it will play itself out after the Monetary System in existence since the time of the Medici finally makes its way to the Great Beyond, other than to say it will be a Clusterfuck beyond all comprehension at the moment. The CBs are doing all they can to push the Day of Reckoning off here for a bit longer, but they just SHOT THE BIG WAD, and there is nothing left to play after this one.
The Titanic is GOING DOWN.
RE
Thanks RE, that was refreshing….but you left out one thing.
@Flash
The “TOAST”pic was reserved for threads about China. This is more Global.
RE
RE Welcome back.
Advent Calendar for the Euro