The Circle of Lies

Financial Jenga - source

Circular Money(TM): at least that's the PG-version of what several correspondents are calling it and we'll explain later. But first a little background. Quite a few folks have expressed concern about the Fed "printing" massive amounts of dollars and putting them into the economy, which will trigger inflation. This is certainly a reasonable fear given the numbers being thrown around and the rhetoric coming out of the Treasury and the Fed. However, we do not believe that the fear is well-founded and our evidence come from the Fed itself. Consider the latest report on reserve balances.

The total balance sheet has expanded by an alarming $1 trillion or 110% in 12 months - very disturbing. But the key question would be is any of this actually printed into existence? To determine this, look at the other side of the balance sheet - the liabilities and capital. Liabilities have expanded by $1,032 billion and capital by $3 billion. Liabilities mean the the assets are funded by borrowing. Real printing would go straight to capital since it creates no offsetting liability. The minuscule increase in capital is easily accounted for by interest on the Fed's bond portfolio so we may safely conclude that little or no actual printing is taking place - much less the monstrous quantities that some would suggest. So the money is being borrowed; now let's look at the liability details to see from where the incremental money is being borrowed.

* $78 billion worth of Federal Reserve Notes has been issued - increasing the amount in circulation by 10%. This is a function of demand for cash, not Fed policy. Increasing distrust of banks naturally leads to an increased preference for cash instead of deposits.
* $32 billion of reverse repos - that is the Fed borrowing from other financial institutions using its Treasury holdings as collateral
* $917 billion of "deposits" - now a deposit is a loan so this is the Fed borrowing once again. Let's break this down further:
* $216 billion is borrowed from the US Treasury - through the general and supplemental accounts
* $699 billion is from "depositary institutions" - i.e. banks.

This last one really should get your attention. You might say "I thought the Fed was lending money to the banks!?!" and you'd be right. Then the banks are turning right around and lending that money back to the Fed. It would be as if George "lent" money to Bob and then Bob turned around and "lent" that money right back to George. If the "loans" were for $1, they each now have an asset (the loan) and a liability (obligation to repay) of $1. But that is a sham transaction, whether for $1 or $1 billion. They have both expanded their balance sheet, but how much actual lending took place there? In reality, nothing changed except a meaningless book entry and the same is true with the Fed and the banks. George and Bob could exchange "loans" of $1 billion dollars and it would be just as ineffective as what the Fed has done. This is what we have dubbed Circular Money(TM).

The article continues at the link at top.

So wait a minute here - If I "float" money between 2 different bank accounts - taking the exact same amount of money and deposit from one bank to another to make it *LOOK* like I have more resources, it's illegal, but when the Big Banks and the FED do it, it's all okay???

WTF??

I know my sig line says it all, but really now...

The US taxpayer just got hit for TRILLIONS of dollars (original billions plus debt servicing costs, interest, etc) to "bailout" the banks, and that money quickly turns right back around and goes BACK INTO THE FEDERAL RESERVE'S COFFERS?

WTF???

If Madoff and Stanford are criminals for running ponzi schemes, just what it the "proper" term for what has just been done to the US Taxpayer? And what criminal charges should be brought against ALL THE BANKS WHO GOT TARP MONEY THAT WENT RIGHT BACK TO THE FED AND THE FED ITSELF?

Just when I was convinced I couldn't get any more disgusted, I am again proven wrong!

reply to post by redhatty


The author wants you to believe that those depository institutions are American banks... they aren't they are Chinese banks.

reply to post by HunkaHunka


Do you have a credit card or a mortgage from HSBC? Do you know what HSBC stands for?

The Hongkong and Shanghai Banking Corporation

Just because they have a US office does not make them a US bank, they may appear to be, but it's all an illusion.

Look at the names of some of the Foreign banks and agencies here in the US. JP Morgan and Merrill Lynch are listed in there too.

just because the money is shuffled from one place to another before getting back to the Fed doesn't invalidate the premise

Beautiful. Just freaking beautiful.

The tax payer is getting a tax bill for 700 billion that never existed in the first place, and now we are about to get another one for around a trillion(interest added) that really is going to cause inflation.

No wonder China said they hate us, part of it is that we are devaluing the dollar, but the other part of it is that the world financial system is about be become exposed for the ponzi scheme that it is and everybody's game is up.



Ticks me off our entire world is being run by the freaking MAFIA.

reply to post by redhatty


Got any good news?

I saw two rabbits humping in the park today. I guess that's good news for rabbits.

Jokes aside...

HELP!!!!!!!!!!!!!!!!

BTW S & F...thanks for making my day brighter red!

[edit on 21-2-2009 by David9176]

reply to post by redhatty


Red, i've accepted the fact that it is over. The evidence is overwhelming at this point. The fraud and theft is so enormous now that it can no longer be denied.

We're done for man.

What else could there be that could be exposed? How deep does the rabbit hole go? (pun NOT intended)

Time to take another tylenol. I think I'll take a tylenol pm this time.

Maybe when I wake up it will all have been a dream.

reply to post by David9176


I wonder what our next incarnation will be like

And how long it will take for it to happen.

I just pray it doesn't get TOO fugly during the transitional phase

The TARP money has functioned to maintain select investment banks, which are in fact insolvent, by improving the appearance of their balance sheets. As so much of US treasury money is actually loaned from foreign nations, such as China and the UAE, America is at risk of bankruptcy should these nations demand return of their funds. The deposits made by the US banks of TARP money helps to prevent other nations from withdrawing their funds using a smoke and mirrors approach to make the debtor nations think that their money is safe.

Also as hedge funds implode they must sell stocks and other such investments, placing the proceeds into US Treasury Bonds, which is also acting to bolster the value of the US dollar. The money will not remain in bonds for long, and when it moves out, the US dollar will crash and the Debtor Nations will panic and remove their money so fast no one will be able to stop the collapse of the US as we have known it. Concurrent with this will be a collapse of other nations as all trade between countries will cease due to the US currency's Reserve status. This will be followed by a short squeeze in gold when people everywhere wake up to the fact that gold is the only currency which is always free from the machinations of inflation and deflation produced by manipulation of currencies by governments and central banks. Of course the government may try to repeat what they did in the last Depression and force people to give up their gold for worthless government cash - although somehow I doubt the people will allow this after the 30's swindle.

Unfortunately this will also be the moment when the globalist agenda has its' greatest chance of being accepted by the leaders of most nations, and thus the world dictatorship will be ushered in as has been planned for a very long time. They will of course act the archetypal knight to the rescue, when in fact they have caused all this to happen knowing what would result. An economic disaster of this magnitude has been wrought upon the masses through the deliberate flooding of the world with liquidity. Housing prices skyrocketed as a result and the people who owned real estate became rich beyond their dreams (or so they thought) and those who then merely wished to own the roof over their heads, rather than pay exorbitant rents, were forced to in-debt themselves to the banks beyond any real capacity to pay through thick and thin times. Now people are caught with mortgages worth less than what they owe and with very insecure futures as regards their capacity to earn a living to pay their debts.

To put our slave status into perspective one only needs to recall the cyclone which destroyed all the habitation belonging to the indigenous population of an isolated island in the Solomons a few years ago. By the time the rescue choppers arrived 48 hours after the event, they initially thought that no damage had occurred on the island, when in fact what had happened was that the people had simply rebuilt. No banks required there and no monetary debts. A truly sustainable lifestyle without debt or taxation - now that is freedom.

There is no guarantee that what I have envisaged will come to pass of course, but I might just be right.

Say NO to a Global World it is too dangerous to behold.

[edit on 21-2-2009 by Nineteen]

They may try to come up with world dictatorship, but it is never going to work.

They don't have the force to impose it. The resistance from inside will decapitate them. If Obama does that, for instance, individual states of America will rebel. It is too obvious. They will not tolerate such a loss of sovereignty. Nobody will.

Originally posted by redhatty
reply to post by HunkaHunka

 

Do you have a credit card or a mortgage from HSBC? Do you know what HSBC stands for?

The Hongkong and Shanghai Banking Corporation

Just because they have a US office does not make them a US bank, they may appear to be, but it's all an illusion.

Look at the names of some of the Foreign banks and agencies here in the US. JP Morgan and Merrill Lynch are listed in there too.

just because the money is shuffled from one place to another before getting back to the Fed doesn't invalidate the premise

Perhaps I'm misunderstanding what you're saying. I looked up JP Morgan and Merrill Lynch and they were listed as U.S. companies NOT foreign companies. Also, what does HSBC have to do with the bailouts? I'm not aware that any of the money went to HSBC. Am I missing something? Don't get me wrong here, I am NOT an advocate of the bailouts, I think it was absolutely the wrong way to go and the point your OP is trying to make is an interesting one. My questions are of your response.

[edit on 21/2/2009 by Iamonlyhuman]

From what I'm hearing, after the banks get these bailouts, they park most of it back at the Fed and pass around what's left among their selfs, to pad the books, looking like loans are being made...


[edit on 2/21/2009 by Hx3_1963]

Originally posted by Iamonlyhuman
Perhaps I'm misunderstanding what you're saying. I looked up JP Morgan and Merrill Lynch and they were listed as U.S. companies NOT foreign companies. Also, what does HSBC have to do with the bailouts? I'm not aware that any of the money went to HSBC. Am I missing something? Don't get me wrong here, I am NOT an advocate of the bailouts, I think it was absolutely the wrong way to go and the point your OP is trying to make is an interesting one. My questions are of your response.

[edit on 21/2/2009 by Iamonlyhuman]

Any bank, whether foreign or "US" that does business in the US has to get approved for a charter from the FED & Treasury.

Hunka was trying to argue that the "depository institutions" that have cash deposits with the FED are Chinese banks.

We have MANY foreign banks here in the US that don't appear to the average person to be a foreign bank, HSBC is an example. While it has a charter to operate here and even has US offices, it is not and never has been an American bank.

Even iconic banks that did begin in America have branches in foreign countries.

I was simply providing an example to Hunka to show that the illusion that our "US" banks are not the depository institutions many people think they are.

reply to post by redhatty


Printed or not, the money supply can increase even if it's just a number, and the effects of inflation would be just the same.

For instance..

I never handle cash. I find it an inconvenience, I use my Debit card for most transactions..

The money is there.. it says so in my account, it exist, even if I never touch the "real thing".

No bank holds enough cash for every dollar in deposit.. in fact, the bigger banks are so far leveraged to what they loan out etc to how much in deposits they have, that a run on the banks would leave many people with nothing.

So the money supply, even through credit and digital numbers, can increase.

ALSO, the recent passage of the stimulus is putting money directly into the economy.. granted compared to the amount lost, it will not have an inflationary effect, but regardless, every penny you give back to the tax payers that we didnt have before is inflation of the money supply.

Anyways.. given the amount of wealth that has evaporated this year, the fed would have to pump trillions into the economy to see any severe inflation.

I've said it before, look at ex IMF executive Johnathan Mays, 1989 prison testimony at: www.google.com...
He's not in jail because he's a bad man, he's in jail because he tried to eliminate dependance on the Fed Bank. Just like JFK and Lincoln, weeks before they were shot, and many more died and were discredited as well. I'll believe them before the Fed any day. At least JFK issued EO 11110 authorizing silver backed currency in the US to be printed, the Hunt family-- the traitor's who helped the Bush's and other families, after their failed Snedley Butler Vet backed overthrow attempt of FDR, forced him to push the New Deal and create the Fed and IRS monopolies, making him a traitor, also.
Here's part of what May's says, that explains what the author is talking about, it makes it all the more clear. I emailed the Fed in Washington about it, I eagerly await their response (or their silence). Mays says;

"There are thirteen families which effectively control the central
banks of the hard currency countries of the world. The hard currency
countries are those whose currency is not allowed to fluctuate as much
as the other countries' currency fluctuates. These thirteen families
have the control of the policy-making and decision-making of the
central banks of
those countries. They all practice fractional reserve banking.


Fractional reserve banking has allowed the central banks to permit the
prime banks to lend up to twenty-six units of currency for every one
unit of currency they have on deposit. The owners andcontrollers of
the prime banks are the same people who own and control the central
banks.The initial final stage of System 2000 was put into effect in
the mid-seventies. System 2000 is the global creditors unilateral
totalitarian plan for the control of the world.

The deal cut with the Saudis, the Kuwaitis, and the middle eastern
peoples was that they were to put their money in the prime banks in
America. They did not know that the prime banks were able to lend
twenty to one. All they were to receive was the interest on the money
they deposited for between ten to thirty years. They were to receive
the principal at the end of the term.


Because they had locked-in deposits from the Middle Eastern nations,
the banks were able to make loans to the Third World nations. The
banks relied on the greed of those ministers of those Third World
nations to mis-handle the money. Over the years, that manipulated
greed has caused those countries to be in the bankrupt position they
are in today.

Same principle applies to those who shouldn't recieve loans as does lending to Third World countries and Arabs who went from Nomads to Internantional Investors overnight and did not know about international banking.

It inly takes 5% of the total debtor nations to equal all of the
deposits of the Saudis that are in the banks. The reason for this is
the twenty-to-one ratio of fractional reserve banking. In works in
contrary reverse. It doesn't take many nations to agree to the
International Mon-etary Fund's proposal for the total volume of money
owed to equal the total volume of money on deposit from the Saudis.
Twenty debtor nations have already agreed to the International
Monetary Fund's proposal.The resultant collapse of the second group of
holding companies will
precipitate the Saudis' and Kuwaitis' liquidation of assets.


When the second group of holding companies are unable to pay the
private group of bank holding companies the money they owe them from
the credit extended to them to buy the assets and liabilities, it will
precip-itate those bank holding companies inability to pay the loans
extended to them by the prime banks to buy the foreclosed land which
was used as collateral to secure those loans. Ultimately, the prime
banks will end up with all the properties.

You will see the foreclosures on real property in America stepped up
drastically by the FDIC and FSLIC. They are using gangsteristic
tactics to achieve their objective for their masters.


Since the advent of the manipulation of the oil producing countries to
sell all their oil in U.S. dollars, the entire world trade is now
denom-inated in U.S. dollars because of the volitility of all the
other currencies. The entire trading volume of the world will be
totally and absolutely beholden to the super banks. When System 2000
is put into effect, the super banks will be the only source of "U.S.
Dollars" credit. There will be no cash."

So, NO there was never any intention to print money. The idea is to use CREDIT to collapse CURRENCY and take it's place, with the Foreign Fed Bank owning all the CREDIT and Assets and Capital.

[edit on 21-2-2009 by PhyberDragon]

reply to post by PhyberDragon


After this mess they are going to have a hard time convincing everyday people that credit is the way to go.

Just about everybody is getting burned and I just don't see it happening.

Finally the end of the dollar and the introduction to credits and the Empire. It's true science fiction paves the way for everything in this world. Jesus Christ walks on water and the rest of you put your heads to the ground before a great 'pillar. I cannot wait for this global monetary system to go into effect. This is the best news to come of light in sometime. So I'm really happy right now as the rest of you worry about how horrible it is that you lost your jackpot. Get over yourselves. It's not like you rightfully deserved that kind of reward. That is why there are people from great institutions working to balance your problems - - - out. Out of the system you go. Not everyone is a scam artist. Not everything is a conspiracy. But boy oh boy when people's gambling addiction hits the market look out. You take too much pride in the United States consitution but you'll never put your life online to defend it. Oh wait. I'm sorry you are online defending it. Your starting to sound like these corporate news anchors. Chatterbox vs. Twitter. Republican time slots hidden by independent comptrollers. Just wait in about 20 years you'll be a splitting image of John McCain.

All hail Darth Vader!!!

Grrrr. I have 2 loans with HSBC and I really had no idea that is what it was. The only good thing about all this is that banks now need customers so bad they even let me have an account.

reply to post by Nineteen


I agree with your post and think it's something that's coming. One thing I would add to your post, however, is that Silver and Platinum also fall into the category of "real money". Gold is a fantastic form of real money, but I'll be honest, it's rather soft. When you can literally sink your teeth into the stuff, it's just not the best for day to day transactions. Silver is far better because it's far more durable than gold.

Originally posted by DangerDeath
They may try to come up with world dictatorship, but it is never going to work.

They don't have the force to impose it. The resistance from inside will decapitate them. If Obama does that, for instance, individual states of America will rebel. It is too obvious. They will not tolerate such a loss of sovereignty. Nobody will.

You're right, the States and the people within them would rebel. There won't be any stopping the people when it happens nation wide simultaneously. The States will grab hold of their State Constitutions and raise a finger to the Federal Government. The Federal Government is quick to say, well you won't get any money from us, but the States in this case would simply reply, "It's no good anyway! We'll handle things ourselves." And it wouldn't just be one State. The federal government is an agent of the many States, and nothing besides.

Originally posted by HunkaHunka
reply to post by redhatty

 

they are Chinese banks.

are the banks belonging to the countries or is it the opposite ?

(2nd line: i guess my opinion sweat from the question)