Somebody Else Discovers Fed Monetary Tricks
Jim Willie of Golden Jackass fame has discovered, according to his latest Gold: Musings and Peptalk, the not-so-secret but totally-ignored-by-analysts tool that the Federal Reserve used to prop up the dollar and U.S. Treasuries late last year. In Fed Reveals Meaning of “Other”, I had discussed how around 40% of the increase in the Fed’s balance sheet had not gone to U.S. banks as generally believed but rather to foreign banks under the Fed’s Central Bank Liquidity Swap lines. Although I don’t always agree with Jim Willie, in particular with his more outlandish calls, he does offer a highly valuable perspective that attempts to simplify and connect the convoluted and complex global financial and monetary system. He often even succeeds and for that reason I recommend that his writing be heeded (although as is the case with mine, it should be taken with a variably-sized, usually big, grain of salt). In any case, check out the “Treasuries and CB Swaps” charts in his latest piece and mine from the beginning of February — all I can say is imitation is the sincerest form of flattery.
Tom,
Searching through the BIS QUARTERLY REPORT which was released this morning confirms the TRICKERY above and then some.
02 Mar
Publication and press release:
BIS Quarterly Review March 2009 - International banking and financial market developments
In this issue:
* Assessing the risk of banking crises - revisited
* The US dollar shortage in global banking
* US dollar money market funds and non-US banks
* Execution methods in foreign exchange markets
http://www.bis.org/publ/qtrpdf/r_qt0903.pdf?noframes=1
I haven’t looked at this yet, will try to get back to discussing it once I do.
Doesn’t Jim Willie regularly post comments to this site? I thought I had him nailed as SRSroccco. Maybe just similar style. I enjoy Willie’s commentary too, although it is a bit one sided. If he uses your charts/data compilations, credit should be noted. Data is data. As long as it’s valid, I care more about the interpretations and what chances are of those interpretations have in being valid. One example is a geophysicist can generate plenty of “anomalies” from raw a Induced Polarization (IP) survey, but without a valid geological interpretation to accompany it, the data doesn’t mean much. I think you catch my drift Tom.
The style is similar but not the same person — in any case, what did happen to SRS? Yes, catch your drift.
Will IMF SDR’s be used to bail out further countries, particularly in Eastern Europe? Is this Gordon Brown’s ‘Grand Deal’ - an international currency that can be exchanged for Dollar forex reserves without selling the Dollar down. It will of course be inflationary like the fiat currencies it is being traded for - we could maybe call it the ‘Assignat’ or something catchy?
I think this is entirely possible, the IMF creating some new international fiat arrangement in the name of stability, but it wouldn’t get done in the short term due to the huge bureaucracy.
TOM,
SRS is still alive and KICKING. Been a bit busy out in the GREENHOUSE, working the LAND. Nothing like FRESH AIR and physical work to get SLUDGE out of ones BLOODSTREAM and COLON for that matter.
Tom….I have been wanting to reply to a few of your past posts. I remember you had made a remark about FEKETE basically wasting his time in BUMF#CK NOWHERE teaching people about the BASIS when he could be helping the NIMWITS in GOVT solve CRISIS of a lifetime.
True….he could do that….but I have to say….a good TAOIST never tries to change those who are too STOOPID to know any different. The TAOIST finds solace in doing those things that make sense, even in a world gone mad. Many of the TAOIST moved to the mountains in CHINA when the different SECTS of WARLORDS fought with each other in the LOWLANDS to prove they had BALLS larger than the OTHER. This sort of pastime is not something the TAOIST seeks to EMULATE. That is why they left the LOWLANDS for the EGOS to fight over and lived high in the mountains were no one cared to. They lived there for centuries in large Temples with wonderful gardens and put out some of the best Martial Artists ever. Unfortunately MAO….had to destroy these temples and the TAOIST way in the mid 1900’s as his EGO was even grander than his ancestors.
All….I am saying is this…..All I can do is control my SURROUNDINGS and live my life that I can CONTROL. GOVT is a waste of time even though it can do some good for a while. In the end….its a CANCER. Today…the CANCER has spread and there is no CURE.
Those who try to change the SYSTEM…..only lose themselves in the process. Those who leave the system and work on growing oneself….could care less about the system.
With all that RUBBISH now said and DONE……the United States DISINTEGRATION is underway in FULL COLOR. Most analysts are CLUELESS to how to FORECAST a DISINTEGRATION as all they have in the past playbook are RECESSIONS and DEPRESSIONS. There are no TECHNICALS for a DISINTEGRATION. So they are FORECASTING it on the FLY…from the HIP. This is sure FOLLY.
FREDRICO KRUG said that this could not be a DISINTEGRATION as MORGAN STANLEY’S stock was still quite HIGH. YEAH….well the ROYAL BANK OF SCOTLAND was REAL HIGH on JAN 19, then REAL LOW on JAN 20 when it lost almost 80% in one FRICKEN DAY. So that ANALOGY will go out the WINDOW the day MORGAN STANLEY gets the ENEMA of its life.
FOLKS…..sure…I still like to look at BLOODY CHARTS and TECHNICALS like the next SLOB….but hey…..the FAN is getting ready to HIT THE SHEET and hardly ANYONE has a RAINCOAT ON.
LASTLY…..TOM you mentioned its not PRODUCTIVE to call names at the FED CHAIRMAN, US TREASURY or GOVT. At first glance…..this seems to make sense…..but on the other hand…..STUPID IS…STUPID DOES.
SRSrocco,
Firstly good to see ya back in usual form.
Yep,being down on the farm no doubt reinvigorates the mind and body.
Let me be clear on one matter regarding the DISINTEGRATION thesis which i do agree on many of your points past and present the only difference is the rate/pace of change towards this inevitable outcome.
Morgan Stanley and Goldman aside using sporting events and venues as an indicator to determine the arrival of the DISINTEGRATION may not be that bad an economic gauge.As i stated before when NASCAR,INDYCAR,FORMULA 1,MOTO GP.NFL,NHL,NBA,PGA,etc.etc. are left standing without sponsor’s/sponserships we can say the SHEET HAS NOW ENGULFED THE FAN.
Glad to have you back SRSrocco! I can’t argue with the substance of your points because nobody knows for certain exactly what lies ahead — it is always a good idea to be prepared for the worst while we go on living our lives. Even though things look terrible today, the odds of a total collapse are not any worse than they were 6 months ago. Last October the survivalists were pulling money out of the banks and packing for the woods, but we are still here in March 2009. Your outlook is uncompromising but there are still a lot of “what ifs” in play. That said, in terms of gold and silver, anyone who holds less than 5-10% of their assets in physical metal is simply being irresponsible.
My point about the professor is that he should be more open to spreading his message to a larger group outside of the gold bug community but he can’t do that with the present approach. Recall that it was basically one man, Paul Volcker, who in 1979 was instrumental in a deeply unpopular policy that brought the U.S. back from the brink of monetary and fiscal collapse. It could have easily gone the other way then, and I would argue that it could easily go the other way now (not disintegration) if credible people with conviction step up to the plate insisting on realistic policies that might work today (such as mobilizing central bank gold reserves). Of course the Professor is a retired mathematician and Canadian emigre now living back in Hungary so he probably couldn’t be a direct adviser to the U.S. government, but his words and thinking can still influence others who are in such a position.
FREDERICO,
How about BANK OF AMERICA BAILING OUT THE NBA in the tune of $175 MILLION. Bank of America to Bailout the NBA??? HAHAHAHAHAHAHAAA…..BAC is BANKRUPT for PETE SAKES. Is this a START in the RIGHT DIRECTION…my friend:
Bank of America to Bail Out NBA with $175 Million
http://onlinesportshandicapping.com/news/nba-basketball-news/bank-of-america-to-bail-out-nba-with-$175-million-022709.html
Looks like another BLOODBATH on WALL STREET. Seems as if the EUPHORIA about the addtional Chinese Bailout failed to be true. So much for CHINESE FORTUNE COOKIES.
GM may take the FINAL ENEMA if BIG DADDY WARBUCKS (GOVT) doesn’t step in and ADMINISTER much needed KAOPECTATE. Unfortunately….the BIG THREE and the PUBLIC still don’t realize their DAYS are OVER. All I can say is….pass the around the WHISKEY and LAXATIVES…this is gonna be a WILD and MESSY RIDE.
Oh, by the way FREDERICO…..I meant to Say GOLDMAN SACHS and not MORGAN STANLEY. I am buying LONG $150 CALLS on MORGAN STANLEY with my EX-WIFES retirement funds. THINK SHE MAY BE A WINNER??
Anytime I get BORED…..I always can find GOOD ENTERTAINMENT on CNBC. Lately…there has been a great deal of INNER BICKERING and FIGHTING….as they realize those RED NUMBERS on the SCREEN represent their PORTFOLIOS as well. You have to give ol LARRY KUDLOW credit for getting up everyday…..putting on that HOT PINK tie…and talking about MUSTARD SEEDS and POSITIVES in the MARKETS. It’s a DIRTY JOB….but some SLOB has to do it.
Folks…..let’s get real…..the USA will no longer FUNCTION after 2010-11. Time to BE LONG COUNTRY LIVING and SHORT the SUBURBS….those who remain in the large cities…..do it…at your own PERIL.
Rocco,
Oh my..Oh my.my.my.I have just recovered after almost falling off my chair with laughter having read the link to the BAC Bailout of the NBA.
Thats it…..THE FAN IS COVERED…..THE FAN CAN TAKE NO MORE.
Listen up people these DISINTEGRATION PROPHECIES are now becoming reality.
When will they get it that you cannot pay off debts with debts, that every new note conjured into existance devalues every other note and misdirects capital, putting off proper reforms and spreading the pain further. Let the corupt institutions fail, compensate savers, admit that Keynesian economics and fiat currencies are a complete disaster and start again with Austrian economics and sound money.