BLATANT Monetization Uncovered

BLATANT Monetization Uncovered

market-ticker.denninger.net

Remember the Dallas Fed's Fisher saying that "The Fed will not become the handmaiden of Treasury"?

He was lying (The Fed already has), and now there is proof.

Mad props to both Zerohedge and Chris Martenson for noticing this; I missed the facts buried in the CUSIP list.

The upshot: The Fed bought nearly half of LAST WEEK'S 7 year Treasury Issuance TODAY.

Huh? Remember, after the 5 year auction that went badly (and which I wrote about) the 7yr auction went "well." Rick Santelli (and a lot of other people) agreed - demand was strong. That made no sense to me at the time, com

(visit the link for the full news article)

continued:

That made no sense to me at the time, coming one day after a near-failure in the 5 year.

Well now we know what happened: The Fed pretty clearly pre-arranged, either explicitly or by "suggestion", that the Primary Dealers take up the auction with the promise that The Fed would immediately monetize half the issue!

Folks, this is beyond bad - it is pernicious and outrageous conduct by The Federal Reserve in conspiracy with the Primary Dealers, both of which are now desperately trying to prop up the US Government Bond Market through subterfuge rather than just buying up the bond issue from Treasury when originally put to the market!

If you think the economy and credit markets are "on the mend" why would The Fed do something like this? It would not be necessary unless The Fed was told (by those very same Primary Dealers) that they were going to be unable or unwilling to take down any more Treasury Debt.

Folks, let me be clear: The United States HAS OFFICIALLY HIT THE TREASURY DEBT WALL and The Fed and Treasury are engaged in subterfuge and conspiracy in an attempt to hide this from the market.

There is no other explanation for what just happened.

None.

This is likely what the market figured out:

When it sinks in to the market's consciousness - we had two failed Treasury Auctions last week, both 5 and 7 year, yet we intend to try to borrow ANOTHER $400 billion next quarter and nearly $100 billion this coming week - the consequences could be extremely severe.

So much for green shoots. We are in trouble. This is another example of the government attempting to make their dog pile look like a trophy. The sneaky (because they are desperate) bastards must realize this jig won't last too long.

The lies and trickery don't help their transparency claims much.

Is there any wonder why the Fed needs auditing? Crooks controlling the economy = us getting shafted.




[edit on 8/6/2009 by sad_eyed_lady]

You mean it was a mistake to take ex-Enron management and have the Federal Reserve hire them?

We should get those guys from AIG now those are some straight shooters?

While this is interesting, you'd have to look at the Fed's balance sheet to know if they actually "monetized" anything...just buying treasuries is not necessarily monetization. While the Fed buys treasuries they also sell them on the open market, according to Bernanke's testimony the Fed's balance sheet is now at 2007 levels...which would mean they have not monetized anything on the open market...everything is in Fed accounts.

Anyhow, the dollar is about to rally hard, mark my words...and get out of the way.

[edit on 6-8-2009 by yellowcard]

I've said it all along, that entities were proping up the markets...
Family said I was nuts, but I listened, learned, and have been stocking/dehydrating/freezing foods for a year now. I'm hoping the best to all, but its not looking good is it...

But wait a minute Yellow, how could our central bank buying up it's own debt be a GOOD thing?

This clearly smacks of subterfuge as the article so eloquently stated.

S&F Sadeyed!

Originally posted by mpriebe81
But wait a minute Yellow, how could our central bank buying up it's own debt be a GOOD thing?

This clearly smacks of subterfuge as the article so eloquently stated.

S&F Sadeyed!

The Fed always buys/sells debt in their open market operations, that's how they control the short end of the curve. They usually don't reach further than the 2 year though.

They may have monetized debt, but I'm pointing out that the conclusion this blog hits is not necessarily true.

[edit on 6-8-2009 by yellowcard]

reply to post by yellowcard


Sweetheart we have two more dips and a bottom out to get through. History is repeating its self word for word and action for action. There is not one thing about this fiasco that doesn't smack of what has been pulled over on the American people in the past!
When we the normal average joe on the street make a mistake lets say 60%+ of us learn from it. Now when it comes to the markets movers and shakers; they are so busy running business as usual they don't even take time to learn from their past mistakes. You know those mistakes of getting caught at it! They are so confident they have us in a dream world they control that they use the same damn schemes! WORD FOR WORD ACTION FOR ACTION!
We have two dips and a bottom out before they are done with us buddy! Make some money if you want before they take it all back. BUT get used to it they aren't done yet.

reply to post by sad_eyed_lady


To me, this is why Geithner and other officials are saying tax increases are on the table.

Not to break us in, but as a message to China. Saying: We will raise taxes to pay or debts to you.

Not to reassure them but, because they are requiring Geithner to say it in public or they will no longer buy more of our debt.


I think we are coming to an extremely dangerous time in our history.

The growing revolt against the Health Care Bill indicates to me that a broad-based tax increase (which our exploding debt requires) will be nearly impossible to pass.

If it does pass, I think there will literally be a tax revolt by Americans.

The real danger? I wonder what China will do when we can't pay our debts.

reply to post by yellowcard


No, what they are doing is monetizing the debt in a round about way. They have to create the money in order to buy the treasuries. This is a move Third World Banana republics use to keep funding their governments.

America is in it way deeper. If they were to open up the books at the fed the world would melt down, everybody would break into a panic.

This is not good at all. The world has lost faith in our currency and now the details are just starting to come out.

reply to post by ActivePatriot


China was absent from the last bond auction. It doesn't matter what Obama and Co. do. China is starting to pull out and invest the dollars they hold in hard assets. China knows that Obama isn't going to stop spending, he wants all these big money programs passed and they can tax us 100% of everything everybody owns and it isn't going to solve a thing.

We are so screwed.

reply to post by sad_eyed_lady


and...all the pieces of the puzzle fall into place

good post

reply to post by ActivePatriot


A couple years ago, the budgets of the local, state, county, and federal govts = 70% of the GNP. So how much was the tax? Let me think... And now Maitreya is going to raise it, so combined with the coming inflation, it equals MORE than the GNP? I can't afford to work anymore. Can you?
There is another cloud on the horizon that you should be aware of; there is $591 TRILLION in the derivatives scam world-wide, that is beginning to explode. You ain't seen nothin yet! The govt/masters can't print money fast enough to cover that. So inflation is a LONG way off. My question; why aren't they paying off the national debt by printing? Deliberate malfeasance? So the Fed is a private British bank, and it 'loans' all the money it prints, and then 'loans' it to the stinking govt who was supposed to issue it in the first place. And presidents that try and do what the law says, end up on a slab in Texas. Jesus, come quickly.



[edit on 6-8-2009 by Gregarious]

Congratulations, together you have all discovered something that will be appearing in at least one MSM publication tomorrow (unless I miss my guess)!

I agree that this seems to be quite similar to past market control by the banking cartel which owns the two-headed political party and the Madison Venue-Hollywood brothel of infotainment whores.

I have to wonder how some of the people in the halls of government manage to persuade themselves that this isn't alarming, or that this blind faith in a supranational cartel will 'work.' Especially considering the data embargo that they have imposed upon the nation.

Of course, there must be those who understand exactly what effect their policies are having, and I'm cynical enough to think they know in real-time or better.

The economy has been corrupted beyond the point of concealment. How does this figure in to all the regulatory events and social engineering practices, one might ask?

Can we be that gullible?

Originally posted by Hastobemoretolife
reply to post by yellowcard

 

No, what they are doing is monetizing the debt in a round about way. They have to create the money in order to buy the treasuries. This is a move Third World Banana republics use to keep funding their governments.

America is in it way deeper. If they were to open up the books at the fed the world would melt down, everybody would break into a panic.

This is not good at all. The world has lost faith in our currency and now the details are just starting to come out.

Me thinks not many people here know about monetary policy's inner workings. The Great Depression was caused by a monetary contraction of 1/3 at the hands of the Fed; this current situation isn't "out of the playbook," and this data is not enough proof to say that debt has been monetized or that the Fed's balance sheet has grown.

[edit on 6-8-2009 by yellowcard]

reply to post by sad_eyed_lady


Uhm... where is the proof of monetization?


Maybe I missed it... could someone point that out?

reply to post by yellowcard


I'm pretty sure the Fed Buying Treasuries is illegal, or was or who knows anymore.

The Fed did the same thing this time they have always done they made credit cheap to get to where people had to borrow more and more money to stay competitive in the market. Eventually the bottom falls out of the market because of the bubble created and people can no longer afford the debt.

Now how the fed controls treasury prices is by regulating the cost of the treasuries, by either making them cheaper to buy, or more expensive to buy. That is the way the Fed is supposed to regulate the money supply.

What is going on now is when we went off the gold standard in the 70's our economy turned into a huge ponzi scheme and just like Madoff you run out of investors to buy the debt.

So now what is happening is the fed is buying the debt with the money they create to keep things afloat, and they hope people don't find out about it well looks like they just did.

The situation we are in is nothing like the Great Depression we didn't have anywhere between a quarter of a Quadrillion dollars and a Quadrillion dollars in out standing debt floating around, and there is no mechanism to continually print money and keep the system afloat they did they already played that card.

reply to post by yellowcard


Yellow, just remember that is an unaudited balance sheet you are referring to, .....TPTB want inflation, it hurts average joe but will ultimately be the only way we can manage servicing our debt. They are fighting the deflation tooth and nail. I just liquidated my short dollar position and bought triple short S&P. Short term dollar rally likely and then kurplunk in a few months. Stay frosty, rest of the summer will be a doozy. JMHO.

reply to post by yellowcard


THAT is absolute, lying liberal/communist bs! That depression, and all the others are directly cause by the money scam that bankers have been pulling off for decades; loaning out money that does not exist. When they loan it, it becomes money, but they do not print it, therefore it is not technically counterfeiting. But I say it IS. A rose by any other name... They usually counterfeit trillions now. When the borrower defaults, that money evaporates. This is also how that private British bank, the Fed, controls inflation. Thru controlling how much the banks are able to counterfeit, using interest rates. Take care, knowing what the elite are doing is dangerous to your health.

Originally posted by Hastobemoretolife
reply to post by yellowcard

 

...The Fed did the same thing this time they have always done they made credit cheap to get to where people had to borrow more and more money to stay competitive in the market. Eventually the bottom falls out of the market because of the bubble created and people can no longer afford the debt.

Just a thought, this reminds me of a prediction made in an opinion piece in 2002.

...The basic point is that the recession of 2001 wasn't a typical postwar slump, brought on when an inflation-fighting Fed raises interest rates and easily ended by a snapback in housing and consumer spending when the Fed brings rates back down again. This was a prewar-style recession, a morning after brought on by irrational exuberance. To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.

New York Times - 2002

And where does the husband of Andrea Mitchell now work?

Pimco - > Pacific Investment Management

On May 16, 2007, former Federal Reserve Chairman Alan Greenspan was hired as a special consultant by PIMCO and he will participate in PIMCO’s quarterly economic forums and speak privately with the bond manager about Fed interest rate policy.

Wikipedia article