Well folks, what was strongly suspected has now been confirmed by no less an authority than a former V. P. of the Dallas Federal Reserve, Gerald O'Driscoll, Senior Fellow of the Cato Institute, on the editorial page of the Wall Street Journal on December 28, 2011.
Namely, Mr. O’Driscoll states that the central bank of the United States of America, the Federal Reserve, is engaged in a several hundred billion dollar stealth bailout of European banks. And this is AFTER the Chairman of the Federal Reserve stated before the US Senate several weeks ago that the Fed “did not have the intention nor the authority” to lend our (not Benanke’s) US money to the Europeans.
The legal issue at question revolves around whether or not a ‘swap’ is a ‘loan’ and should be considered to be a ‘bailout.’ On CNBC Mr. O’Driscoll said, “A swap is a defacto bailout” and by implication is a loan. I do believe that he would know ‘what is what’ in the area of the “FED’s Magic Money Machine” (FMMM). Unfortunately, this revelation confirms our most horrendous fears that we wrote of on Polestar’s Home page way back in early October.
So, another of our predictions comes true, BUT much, much quicker than we ever thought possible, which only proves that Bernanke and his ‘Buds’ at the Fed are scared out of their minds, as are we!
The facts are; that, the Fed's authority to issue Dollars in Currency swaps with the ECB is unlimited. Consider that it was nearly three years before we learned that the FED effectively 'swapped' roughly $669,000,000,000 of our money with our Banksters in 2008-09 without anyone knowing. Now that money was largely lent here. And they really did 'Swap' over $1,250,000,000,000 of US Dollars for the Bankster's Toxic Waste Loans, which our FED still owns to this day!
Therefore, the unlimited Swap line with the ECB can easily approach and surpass those amounts and here is the reason. The ECB just lent $640,000,000,000 to 523 European Banks. Do you think they now are in need of a few extra Dollars?
The answer is, YES!
And that's where the FED's largess with our money should become important to all of us. These backroom machinations have the appearance (and we believe really are) of the FED's funding of the ECB's back door funding of the BbBDBBs. It's really that simple. The unlimited FED's Dollar Swaps with the ECB will go directly to the effectively bankrupt European Banks to fund their purchases of Toxic Sovereign Country debts and European common stocks!
And, there is the absolutely ordained beginning of the "Great Deception of 2012" and the great stock rallies of 2012, which will be utilized to herd the Sheeple - yet again - into the wrong investments at EXACTLY the wrong time.
In other words, could the ECB just have lent hundreds Billions of Dollars of Euros to their effectively bankrupt European Banks, if they had not known that this avenue to unlimited US Dollars would soon be available to them and very, very shortly indeed and unlimited at that? This is likely to go into the hundreds and hundreds of Billions of US Dollar Swaps over the next three years.
In the final analysis, it is now becoming quite obvious to one and to all that probably hundreds of Billions of our US Dollars are going to Europe to be repaid in massively depreciated US Dollars in three years or so! So everyone should get ready for the inevitability of massive inflation before then. Otherwise the Europeans will have no chance in Hell of ever returning these Dollars.
Therefore, the unlimited Swap line with the ECB can easily approach and surpass those amounts and here is the reason. The ECB just lent $640,000,000,000 to 523 European Banks. Do you think they now are in need of a few extra Dollars?
The answer is, YES!
And that's where the FED's largess with our money should become important to all of us. These backroom machinations have the appearance (and we believe really are) of the FED's funding of the ECB's back door funding of the BbBDBBs. It's really that simple. The unlimited FED's Dollar Swaps with the ECB will go directly to the effectively bankrupt European Banks to fund their purchases of Toxic Sovereign Country debts and European common stocks!
And, there is the absolutely ordained beginning of the "Great Deception of 2012" and the great stock rallies of 2012, which will be utilized to herd the Sheeple - yet again - into the wrong investments at EXACTLY the wrong time.
In other words, could the ECB just have lent hundreds Billions of Dollars of Euros to their effectively bankrupt European Banks, if they had not known that this avenue to unlimited US Dollars would soon be available to them and very, very shortly indeed and unlimited at that? This is likely to go into the hundreds and hundreds of Billions of US Dollar Swaps over the next three years.
In the final analysis, it is now becoming quite obvious to one and to all that probably hundreds of Billions of our US Dollars are going to Europe to be repaid in massively depreciated US Dollars in three years or so! So everyone should get ready for the inevitability of massive inflation before then. Otherwise the Europeans will have no chance in Hell of ever returning these Dollars.
To put this into perspective, the entire cost of World War II (fighting BOTH Japan in the Pacific and Germany and giving a TON of money to the British and to the Russians) cost the United States of America roughly $306,000,000,000.
Yep and yep! That's right folks, panicked Bernanke is probably going to lend the Europeans over TWICE AS MUCH AS THIS COUNTRY SPENT IN FOUR YEARS OF WORLD WAR II!
For anyone who would like to claim that in this comparison I am not calculating the cost of inflation; I would politely ask, "Who gave us the inflation?"
And just a couple of years ago, after nearly 100 years of operation, the Fed’s Balance Sheet held roughly $800,000,000,000, which was identified as the Fed’s monetary base. It has subsequently ballooned to a monetary base of roughly $2,400,000,000,000 and now is obviously heading much higher yet!
Yep and yep! That's right folks, panicked Bernanke is probably going to lend the Europeans over TWICE AS MUCH AS THIS COUNTRY SPENT IN FOUR YEARS OF WORLD WAR II!
For anyone who would like to claim that in this comparison I am not calculating the cost of inflation; I would politely ask, "Who gave us the inflation?"
And just a couple of years ago, after nearly 100 years of operation, the Fed’s Balance Sheet held roughly $800,000,000,000, which was identified as the Fed’s monetary base. It has subsequently ballooned to a monetary base of roughly $2,400,000,000,000 and now is obviously heading much higher yet!
Do you NOW understand why Wendy’s burgers are going to roughly $27 and to $49 with fries and a shake before 2018 and that gasoline is going to $12 a gallon in 2015 and will ratchet MUCH higher each year after that - until the final of the three waves of the Super "Kondratieff" Long-Wave sweeps the US & World's economies clean of their massive accumulation of Bad-Debts and near worthless Fiat currencies?
Five things quite naturally follow from these machinations of the FED:
#1 this clears the way for the great charade of 2012 when the fiscal side of the European Union will be implemented in a ‘gradualist fashion,’ see our many Blogs on this issue,
#2 following the great charade of a fiscal bond being implemented in the European States, will be the “Great Deception of 2012,”
#3 concurrent with the explosion of all equity markets in mid 2012 to early 2013, will be the VERY last insane buying-binge of the DCBF's (for meaning of DCBF, see our acronym lexicon at bottom of our Home page on www.polestarcomm.com),
#4 with the ebbing of the DCBF's insanity in early 2013 will begin the surge of truly brutal inflation,
#5 contiguous with surging inflation will be the second Tsunami Super “Kondratieff” Long - Wave.
#4 with the ebbing of the DCBF's insanity in early 2013 will begin the surge of truly brutal inflation,
#5 contiguous with surging inflation will be the second Tsunami Super “Kondratieff” Long - Wave.
The rest of the horrors awaiting the entire world are covered in our inaugural issue of our Market Review and quarterly updates.
Are you and your company ready for the “Show?”
Wall Street Journal; Editorial; December 28, 2011; BY GERALD P. O'DRISCOLL JR.
“America's central bank, the Federal Reserve, is engaged in a bailout of European banks. Surprisingly, its operation is largely unnoticed here.
The Fed is using what is termed a "temporary U.S. dollar liquidity swap arrangement" with the European Central Bank (ECB). There are similar arrangements with the central banks of Canada, England, Switzerland and Japan. Simply put, the Fed trades or "swaps" dollars for euros. The Fed is compensated by payment of an interest rate (currently 50 basis points, or one-half of 1%) above the overnight index swap rate. The ECB, which guarantees to return the dollars at an exchange ...”
Apparently, Bernanke’s Black Helicopters have only failed to drop OUR US Dollars over Russia and China and India and Africa. But, the readers of our Market Review do know the reason for that oversight.
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