FEDS Latest SCAM

[Mega]

http://www.zerohedge.com/article/fed...scheme-exposed
Mike

[icm63]

Re: FEDS Latest SCAM

EJ and FRED could you comments...

Funny how stocks go up... ignoring this news..BUT FOR HOW LONG...

Rates on the LONG side are about to pop up !

[WildspitzE]

Re: FEDS Latest SCAM

This guy discusses this too....
http://www.itulip.com/forums/showthr...14070#poststop

[*T*]

Re: FEDS Latest SCAM

Accross the Curve:

Monetizing the Debt: Disinformation in the Blogosphere

I am not sure where to begin here. A blogger named Chris Martenson wrote a story which alleges that the Federal Reserve System is secretly monetizing the debt. The Zero Hedge Blog links to the story and describes it as a phenomenal piece of investigative reporting. The story also received coverage at the high profile left wing/progressive blog the DailyKos. The author there was nearly apoplectic.

The story is that the Federal Reserve in its Open Market Desk intervention today purchased $4,750,000 of the recently issued 7 year note.

The principal reason for the Open Market Desk’s purchase of so much of just one issue is simple and uncomplicated and it is not part of some Byzantine conspiracy. The Federal Reserve responds to that which the dealer community offers to them. Since the 7 year note was just auctioned the street would own far more of that issue in the narrow sector in which the Open Market Desk was operating today than of surrounding issues.

So to complete the operation quickly and cost effectively, they would opt to buy that issue. Pretty neat and surgical and quick.

[WildspitzE]

Re: FEDS Latest SCAM

I think there are about three or four threads discussing the same thing. One in select, and the rest here.

*T* - per my post in the select thread, Benton (posted below somewhere here in news) does a much better job at explaining what happened than Martenson. In such thread, Cobben points out the conversation that goes on in the "comments" section of Jansens post - bw Benton and Jansen. Benton is spot on IMO.

[derelict54]

Re: FEDS Latest SCAM

I believe Mike Whitney broke this little fed strategy back in June "Bernanke's Next Parlor Trick."

http://www.smirkingchimp.com/thread/22252

by Mike Whitney | June 11, 2009 - 1:32pm


Ben Bernanke is getting ready to pull another rabbit out of his hat and he's hoping no one figures out what he's up to. Here's the scoop; the Fed chief needs to "borrow up to $3.25 trillion in the fiscal year ending Sept. 30" (Bloomberg) without triggering a run on the dollar. But, how? If the stock market keeps surging, investors will turn their backs on low-yielding US Treasuries and move into riskier securities hoping for better returns. The only way to attract more buyers to US debt is by raising interest rates which will kill the "green shoots" of recovery and make it harder for people to buy homes and cars. It's a conundrum.
In the next year, China will buy roughly $200 billion T-Bills while the oil producing states and the rest of the world will add about $300 billion to their stash. That leaves more than $2 trillion for the domestic market where cash-strapped investors are likely to avoid government debt like the plague. So, who's going buy that mountain of low-yield government paper?
The banks.
The Fed has been helping the banks raise reserves for the last year. In fact, excess bank reserves have skyrocketed from $96.5 billion in August 2008 to $949.6 billion by April 2009. Nearly a trillion bucks in less than a year. But, why? Are the banks expecting to expand lending at the fastest rate in history in the middle of a depression?
No way; that's why Master illusionist Bernanke is arranging the props for his next big "Hocus-pocus". The fact is, Bernanke anticipated the current wave of deflation and set up a straw man (the banks) to deal with it so it wouldn't look like he was simply printing more greenbacks to finance the deficits. As soon as rates on 10-year notes hit 4%, the banks (that are borrowing money at 0%) will probably start to purchase Treasuries and keep the housing and retail markets from crashing even faster. It's called "the old switcheroo" and no one does it better than the Fed.
Bernanke pulled a similar stunt after Lehman Bros flopped and he and Paulson decided that it was time to dump 700 billion worth of garbage assets on the public. The Fed chief and Treasury figured out the only way they could hoodwink congress was to stir up a crisis in the credit markets and then moan that if they didn't get $700 billion to buy up toxic assets in the next 48 hours "there wouldn't be an economy by Monday". (I'm not making this up)
Congress swallowed it hook, line and sinker, and weeks later the funds were allocated for the Troubled Asset Relief Program (TARP). Of course, no one in the financial media noticed that the turmoil in the credit markets was NOT caused by "troubled assets" at all (for which TARP funds have NEVER been used) but by skyrocketing LIBOR and TED spreads and other indicators of market stress. Market Ticker's Karl Denninger was the only blogger on the Internet who figured out that Bernanke had deliberately caused the crisis by draining over $100 billion from the banking system just 10 days after Lehman defaulted. Here are Denninger's comments on September 24, 2008 along with the damning chart which proves the Fed was scuttling the ship to extort money from congress:
(http://market-ticker.denninger.net/uploads/drain.png chart)
Market Ticker: "Note that this is an intentional drain of "slosh", or liquidity, from the banking system. $125 billion in the last four days drained? ("Congress must Excise the Bernanke Cancer", Market Ticker)
"It appears to me that he (Bernanke) both orchestrated the crash of the market in the fall of 2008 as a leverage tool to force the passage of the TARP and may have been responsible for Washington Mutual's collapse and forced dismemberment.
Let us remember that on September 20th, four days prior to Bernanke's action, Henry Paulson pitched TARP (along with Bernanke) to Congress." (Market Ticker)
As soon as Paulson and Bernanke had pulled off their multi-billion dollar heist, the Fed chief created lending facilities (completely unrelated to the TARP) which provided government guarantees on money markets and commercial paper. This lowered LIBOR and TED spreads immediately and relieved the stress in the credit markets. The crisis had nothing to do with toxic assets; it was a cheap parlor trick by a professional charlatan. To this day, none of the junk securities have been purchased from the banks under the TARP program. $700 billion has vanished in a puff of smoke.
Poof!