posted on May, 8 2012 @ 03:12 PM
when the fed dropped rates to 0.1% for the large TBTF banks, and inserted large sums of "liquidity" into the finacial markets, they have broken the
"balence" of large capital flows in and out of other nations.
when the TBTF banks got bailed out they decided to use this "extra" liquidity to buy hard assets.
we in new zealand will not increase the money supply in our country, and canot borrow money at anywhere near the same LOW interest rate, and this has
caused an imbalence in world wide capital flows.
when the TBTF banks were given the bail out money we were told it was to stop systemic risk in the banking sector. this means that any assets for sale
in my country can be bought up by the TBTF banks at a much reduced borrowing cost, if we as new zealanders want to buy shares in these new zealand
companies we must borrow at the market rate WITH interest.
this means that the total money supply has been increased, but only the TBTF banks have the liquidity (in USD) to out compete our citizens and borrow
to buy our assets at a much cheeper price in terms of interest than we can.
the second point to make is that when you inflate the money supply, asset prices should incresase proportionally to the increase of total liquidity in
we see no increase in the prices of our assets when compaired to the increase of the total money supply.
this means our assets are being priced at rates that are PRE money printing, and the prices for our assets are under valued compaired to the total
why have the TBTF banks made record profits?
while austerity is touted for the stability of world money markets and to keep bond rates high,
the excess liquidity is being used to buy HARD assets world wide but at the prices and rates of the pre BAILOUT valuations, using the BAILOUT money
and 0.1% interest rates.
this has the effect of selling our assets to the TBTF banks at reduced prices, while the banks can borrow at rates that make competition for these
assets imposable on a level playing field.
the federal reserves bail out and super low interest rates allow the TBTF banks to game the international money markets and buy HARD assets world wide
without inflation adjusted prices of those assets,
and at interest rates that are not on offer in my country.
this has the effect of depriving new zealanders of the ability to buy our assets or compete with the TBTF because their borrowing costs are non
i suspect that this extra liquidty in absence of the inflationary aspect of the extra liquidity is being used to deprive countries of assets and
leading to the MASSIVE profits of the TBTF.
i suspect the 0.1%rate money from the fed "lent" to the TBTF banks, will allow the TBTF to out compete and buy up our assets for prices that dont
reflect the increase in money supply.
if its happening here it will be happing else where.
this has the effect of making the TBTF banks even larger and more dangerous to systemic failure, which is the exact reason we were told a bailout was
HOW COME THE TBTF BANKS ARE MORE PROFITABLE WHEN AUSTERITY IS PRESENT/
because it drives down the asset value, and drives down the currency allowing for an advantage for those that can get this cheep money.
this is a massive transfer of wealth from my country men and women to the TBTF banks.
can someone tell me, if i can articulate this why are economists so silent on this subject?
we are not so stupid to beleive that this wasnt the plan from word go.
first by inflation then by deflation of the money supply the people of this nation will end up renters in the nation our forefathers fought world wars