May 20

- White House Explains: Obama Didn’t Know What He Knew When Everyone Else Knew What He Should Have Known (ZeroHedge, May 20, 2013):

Yesterday, when we reported that as a result of new disclosures regarding the timing of who learned what, but most importantly when, in the White House regarding the IRS persecution (if not prosecution) of conservative groups, we made it quite clear that the narrative enacted by the White House, which could simply be summarized as “we’ll make it up as we go along“, was nothing more than damage control in total disarray. Because once caught lying, the best solution usually is to stop lying and tell the truth, tying up all those loose ends that eventually lead to Watergate-type outcomes unless addressed early on. No such luck here.Instead, the White House has doubled down on its crash and burn storyline and in doing so is merely guaranteeing that the very same conservatives, and all others who would rather not have a very political IRS on their back, who have smelled blood are not going to let go until someone at the very top takes responsibility for what, together with the AP-fiasco, is rapidly becoming Obama’s Nixonian scandal.

Sure enough, here is The Hill with the White House’s official explanation for what happened: White House officials were notified of a Treasury Department inspector general report on the IRS but elected not to tell President Obama about it.In other words, neither the IRS chief was aware of what is going on at the IRS (recall the countless “I don’t knows” and “I don’t recalls”) and apparently, neither was the president briefed on what everyone beneath him at the White House knew weeks in advance of the premeditated IRS leak. And in fact, it turns out it was someone else’s executive duty to make the decision what the chief executive of the nation is and isn’t allowed to know in the first pace. So, maybe we are confused, but just how is Obama the “president” again?

For more on how when the White House finds itself in a hole, it merely keeps on digging and digging, we go to The Hill:

Continue reading »

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Feb 08

- “In Feb 2013, Fed Will Buy 75% Of New 30y Treasury Supply” (ZeroHedge, Feb 7, 2013):

We urge readers to read the bolded section below, which comes straight from this quariter’s Treasury Borrowing Advisory Committee (i.e., Primary Dealers) presentation to the Treasury Department, and explain, with a straight face, just how the Fed will ever be able to not only stop monetizing debt and injecting $85 billion of flow into the stock market, but actually sell any holdings.Federal Reserve Holdings (1 of 2)

As of Dec 26, 2012 the Federal Reserve System Open Market Account (SOMA) held approximately $300 billion in 21+ year US Treasury debt

  • SOMA holds 41% of the 30y Treasury bonds issued since 2009
  • In Feb 2013, Fed will buy 75% of new 30y Treasury supply

Twist and QE operations have significantly lengthened the WAM of the Fed’s SOMA portfolio

The Fed currently owns 29% of all marketable 10yr Equivalents outstanding Continue reading »

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Nov 28


Rothschild frontman, J. P. Morgan

- Is JPMorgan About To Take Over America, Again? (ZeroHedge, Nov 27, 2012):

Great and wondrous things seem to be afoot among the righteous bankers of the world. A few months ago Matt Zames was named to get JPMorgan’s CIO office out of trouble – and also happens to be the Chairman of the all-powerful Treasury Borrowing Advisory Committee. Just yesterday, Mark Carney completed Europe’s full-house of ex-Goldman Sachs alum running the region’s monetary policy. Today we hear Lloyd Blankfein will be sidling up to Obama tomorrow. And now this; from the never-crony-capitalist himself, billionaire Warren Buffett has publicly blessed Jamie “apart from the failure of control” Dimon as the best man for the top job at the Treasury. “If we did run into problems in markets, I think he would actually be the best person you could have in the job,” Buffett added (sounding more like the ‘we’ meant he) and dismissed the London-Whale “failure of control” with sometimes “people go off the reservation.” With Zames running the Shadow Treasury and Dimon running the Real Treasury, is it any wonder that inquiring minds are asking who really runs America (and for whom)? Of course, in the pre-Fed era – over 100 years ago, JPMorgan Sr. ‘bailed-out’ America before…

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Aug 09

- Treasury’s Secretive $2.4 Trillion Fund Guarantee (CNBC, Aug 9, 2012):

Details about a secretive government program to bail out money-market mutual funds are finally coming to light.

Acting without any explicit Congressional authority, the U.S. Treasury guaranteed in excess of $2.4 trillion of money market funds after the giant Reserve Primary Fund “broke the buck” following the bankruptcy of Lehman Brothers. The program, which ended on Sept. 18, 2009, seems to have successfully prevented a panicked run by money-market fund investors.

But until now the Treasury has kept the identities of the funds that received government backing and the amounts guaranteed secret. It was not clear how many funds obtained backing or for how much taxpayers were on the hook during the program’s duration.

Continue reading »

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Aug 03

- The Fed’s Gold Is Being Audited… By The US Treasury (ZeroHedge, Aug 2, 2012):

When we started reading the LA Times article reporting that “the federal government has quietly been completing an audit of U.S. gold stored at the New York Fed” we couldn’t help but wonder when the gotcha moment would appear. It was about 15 paragraphs in that we stumbled upon what we were waiting for: “The process involved about half a dozen employees of the Mint, the Treasury inspector general’s office and the New York Fed. It was monitored by employees of the Government Accountability Office, Congress’ investigative arm.” In other words the Fed’s gold is being audited… by the Treasury. Now our history may be a little rusty, but as far as we can remember, the last time the Fed was actually independent of the Treasury then-president Harry Truman fired not one but two Fed Chairmen including both Thomas McCabe as well as the man after whom the Fed’s current residence is named: Marriner Eccles, culminating with the Fed-Treasury “Accord” of March 3, 1951 which effectively fused the two entities into one – a quasi independent branch of the US government, which would do the bidding of its “political”, who in turn has always been merely a proxy for wherever the money came from (historically, and primarily, from Wall Street), which can pretend it is a “private bank” yet which is entirely subjugated to the crony interests funding US politicians (more on that below). But in a nutshell, the irony of the Treasury auditing the fed is like asking Libor Trade A to confirm that Libor Trader B was not only “fixing” the Libor rate correctly and accurately, but that there is no champagne involved for anyone who could misrepresent it the best within the cabal of manipulation in which the Nash Equilibrium was for everyone to commit fraud.

Far more importantly, for all those financial novices who fail to grasp the simplest relationship between assets and liabilities, the allegation expounded by the “conspiracy theorists”, as the LA Times calls them, has never been that the gold at the NY Fed is not there. It is by all means there: after all what safer place to keep it than 80 feet below the Federal Reserve itself, the same Fed which has exclusive access to the 1000+ strong Federeal Reserve Police whose “primary duty is to provide force protection to Federal Reserve facilities. Secondary responsibilities, depending on the particular location, may include liaison work with other law enforcement agencies and/or investigative work related to administrative matters.”

And not only the gold belonging to the US: it is well known that the bulk of Europe’s sovereign gold is also contained deep under downtown Manhattan: we wish them all the best when they attempt to repatriate the physical when they need it, such as the day after the EUR finally collapses.

No – what the “conspiracy theorists” allege is that claims existing in paper format on the physical gold held under Liberty 33 are orders of magnitude greater than the actual physical gold these claims supposedly have recourse to. Indeed, this too was a conspiracy theory until the failure of MF Global proved it to be a conspiracy “fact” and the entire asset-liability rehypothecation daisy-chain threatened to begin unwinding in November of 2011, at which point forced delivery of hard assets would expose the entire facade of the modern financial system to be a hollow sham.

So unless the Treasury will also conduct a full “audit” of every single paper trail and every physical bar is mapped to all of its existing obligors, then the entire operation is absolutely meaningless and simply a waste of taxpayer money. Because the physical gold may well be there (and furthermore it is the gold at Ft. Knox that was questionable; never the gold held by the Fed, but who cares about details). The problem is if the paper claims on this gold are far greater than the actual deliverable physical gold for that moment when the latest attempt to kick the can down the rehypothecated road finally fails.

Continue reading »

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Jul 18

- FOIA docs reveal Treasury officials cited for soliciting prostitutes, accepting gifts (The Hill, July 15, 2012):

Treasury Department officials have been cited for soliciting prostitutes, breaking conflict-of-interest rules and accepting gifts from corporate executives, according to the findings of official government investigations.

The revelations of unethical behavior at Treasury are detailed in little-noticed documents posted this month on governmentattic.org, which publishes agency responses to Freedom of Information Act (FOIA) requests.

Continue reading »

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Apr 11

ZeroHedge:

“In a few weeks the Treasury will most likely launch Floating Rate Notes. Will that be the signal to get out of Dodge? If history is any precedent, and especially the 1951 Accord… you bet.”

- Is The Treasury’s Imminent Launch Of Floaters The Signal To Get Out Of Dodge? (ZeroHedge, April 10, 2012):

Today, our favorite IMF economist, and arguably one of the few people who sees the big picture, Manmohan Singh issued a paper titled “Money and Collateral“, which, not surprisingly, deals with the issues of money and collateral. And while it provides an interesting read, we can jump to the conclusion which is, not surprisingly, that there is simply not enough collateral within the global financial system, which in turn inhibits the proper intermediation of banks in traditional monetary conduits (due to the need for central banks to intervene in the place of traditional banks and shadow banking entities), which keeps the money multiplier low. We have extensively covered the issue of collateral scarcity and encumbrance previously (read: “Encumbrance 101, Or Why Europe Is Running Out Of Assets“, “No Record Profits For Old Assets: Jim Montier On Unsustainable Parabolic Margin Expansion For Dummies“, “A Few Quick Reminders Why NOTHING Has Been Fixed In Europe (And Why LTRO 3 Is Not Coming)“, “How The Fed’s Visible Hand Is Forcing Corporate Cash Mismanagement“) so the paper’s conclusion should not come as a surprise: until cash is used to replenish a diminishing, cash-poor asset base, nothing can change. Unfortunately, in the ultimate Catch 22, under central planning companies are disincentivized from investing cash into CapEx and organic growth, and instead are spending it on M&A and dividends, the two worst decisions management can take over the long run. It was one of the tangential “boxes” in the Singh paper titled “Floating Rate Note “puts”—are they forthcoming?” that caught our attention because it reminded us that in all the distraction over the past 3 months, we had forgotten that probably the most important event of 2012 is about to take place, and it has nothing to do with Europe, or with a central bank’s balance sheet. Namely: the imminent arrival of Floating Rate Note Treasurys, or Floaters. In reality, while we noted this very curious development before (here and here), we did not think too much into what the Treasury may be signalling. Which was a mistake, because if Singh is correct, the US Treasury may be telegraphing to the world that it, or far more importantly, the TBAC, is quietly preparing for a surge in interest rates. Which as everyone and the kitchen sink knows, is THE black swan event (or gray for you taleb purists).

Continue reading »

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Jan 25

- U.S. treasury raids federal employee pension funds to cover debts (Natural News, Jan. 25, 2012):

There is a saying, “Desperate times call for desperate measures.” Roughly, it’s an expression that’s meant to be reassuring, conjuring up an image of a true statesman-like leader who is preparing to do whatever is necessary to lead the masses out of danger.

Of course, the expression doesn’t have the same connotation when applied to the Obama administration in its futile struggle to balance the nation’s books. Left to fend for itself by a hapless Congress that couldn’t agree on the color of red bricks, let alone pass a budget that actually curbed spending and lowered the national debt, the administration has taken to theft as a way to pay the country’s bills. Specifically, the Treasury Department is stealing cash from federal employees pension funds so the government can obtain more credit to pay its debts.

Continue reading »

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Aug 10

What can you say?


- Treasury Adds Another $20 Billion In Debt Overnight, Just $160 Billion Below Revised Ceiling (ZeroHedge, Aug 8, 2011):

Ok, someone please explain this one to us because we must be a little slow. Wasn’t the whole thing with the debt ceiling hike such that no more Congressional melodramas would have to be inflicted upon the population until after Obama [won|lost] the 2012 elections? Because according to the one again exponentially increasing debt balance of the US Treasury (there is another $51 billion in debt/cash coming in next week), the total US treasury balance (subject to the ceiling) is $14.54 trillion (and $14.58 trillion for total), an increase of $20 billion overnight, the Treasury will hit its latest ceiling no later than the end of September. As the latest DTS statement indicates, the debt ceiling now is $14.694 trillion: a number which Tim Geithner will hit in about a month. So if this is due to a planned expansion as part of the two step plan, we would like to understand how it works, because the $400 billion additional ceiling is barely sufficient to cover the catch up in funding for the SSN and the various governmental trust funds. And the far bigger concern is that tax receipts are about to plunge courtesy of the imminent double dip. So we wonder just based on what assumptions does the Treasury believe that its issuance needs will be met by this paltry debt ceiling.

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Jul 29

FOX News:

- Obama Privately Told The Banksters: We’re Not Defaulting:

While officials from the Obama Administration raised their rhetoric over the weekend about the possibility of a debt default if the debt ceiling isn’t raised, they privately have been telling top executives at major U.S. banks that such an event won’t happen, FOX Business has learned.

In a series of phone calls, administration officials have told bankers that the administration will not allow a default to happen even if the debt cap isn’t raised by the August 2 date Treasury Secretary Tim Geithner says the government will run out of money to pay all its bills, including obligations to bond holders. Geithner made the rounds on the Sunday talk shows saying a default is imminent if the debt ceiling isn’t raised, and President Obama issued a similar warning during a Friday press conference after budget negotiations with House Republicans broke down.


- Primary Dealers Met With Treasury on Debt Ceiling, Auctions (Bloomberg, July 29, 2011):

The U.S. Treasury Department met with bond dealers in New York to discuss next month’s quarterly auctions of notes and bonds and the debt ceiling.

The Treasury canceled its regularly scheduled individual meetings with bond dealers in favor of the group meeting, the department said in a statement today. All 20 primary dealers were invited.

The government is inching closer to running out of cash before an Aug. 2 deadline to raise the $14.3 trillion debt ceiling. House Republican leaders scrapped a vote on the debt ceiling bill late yesterday, fueling concern a compromise by the two parties won’t be reached before the deadline and casting doubt on whether the Treasury can sell more debt.

Continue reading »

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May 04

“Protecting America’s creditworthiness and our economic leadership position in the world is a duty to our country that is shared by policymakers in both parties, in the Legislative Branch as well as the Executive Branch. Therefore any attempt by either party to use the full faith and credit of the United States as a bargaining chip to advance partisan policy agendas would be irresponsible.”
- Timothy Geithner

Those criminals (Republicans and Democrats alike) are intentionally bankrupting America. They are spending America into oblivion.

And yes, they know exactly what they are doing:

‘Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren,” Obama said in a 2006 floor speech that preceded a Senate vote to extend the debt limit. “America has a debt problem and a failure of leadership.’
- Barack Obama

And even Bush’s record budget deficit of $482 billion pales if you compare it to Obama’s projected deficit:

- President Obama Sends Congress $3.73 Trillion Budget:

The administration is projecting that the deficit will hit an all-time high of $1.65 trillion this year.

Elite puppet President Obama is 3,42 times worse than even elite puppet President Bush and Obama correctly stated that under Bush “America had a debt problem and a failure of leadership.’

What does this say about Obama?


Secretary Geithner Sends Debt Limit Letter to Congress

- Secretary Geithner Sends Debt Limit Letter to Congress:

By: Erika Gudmundson
5/2/2011

Today, as Members return from recess, Secretary Geithner sent the following letter to Congress regarding the debt limit, which we estimate will be reached on May 16. He also details the extraordinary measures that Treasury will begin implementing this week in advance of that deadline (download the signed letter here). For more information on the State & Local Government Series (SLGS)  referenced in the letter, read these FAQs. And get the facts about the debt limit, including previous letters from the Secretary and other information here.
May 2, 2011

The Honorable John A. Boehner

Speaker of the House
U.S. House of Representatives
Washington, DC  20515

Dear Mr. Speaker:

Further to my letters of January 6 and April 4, 2011, I am writing again to Members of Congress regarding the importance of protecting America’s creditworthiness by enacting an increase in the statutory debt limit.  This letter is to inform you of the extraordinary measures the Treasury Department will begin taking this week in anticipation of the date the debt limit will be reached, and to provide an updated estimate of the Department’s ability to use these measures to preserve lawful borrowing authority without exceeding the debt limit.  In my last letter, I described in detail the set of extraordinary measures Treasury is prepared to take in order to extend temporarily our ability to meet the Nation’s obligations if an increase is not enacted by May 16, when we estimate the limit will be reached.  Because it appears that Congress will not act by May 16, it will be necessary for the Treasury to begin implementing these extraordinary measures this week.

On Friday, May 6, Treasury will suspend until further notice the issuance of State and Local Government Series (SLGS) Treasury securities.  SLGS are special-purpose Treasury securities issued to states and municipalities to help them conform to tax rules that restrict the investment of proceeds from the issuance of tax-exempt bonds.  These bonds are used to fund a variety of expenditures, including infrastructure improvements across the country.  When Treasury issues SLGS, they count against the debt limit.  Because the United States is very close to reaching the debt limit, Treasury must take this action now.  However, it is not without costs; it will deprive state and local governments of an important tool to manage their outstanding debt expenses.

If Congress does not increase the debt limit by May 16, the Treasury Department will be forced to employ further extraordinary measures on that date to provide headroom under the limit.  Therefore, on May 16, I will (1) declare a “debt issuance suspension period” under the statute governing the Civil Service Retirement and Disability Fund, permitting us to redeem existing Treasury securities held by that fund as investments, and to suspend issuance of new Treasury securities to that fund as investments and (2) suspend the daily reinvestment of Treasury securities held as investments by the Government Securities Investment Fund of the Federal Employees’ Retirement System Thrift Savings Plan.  (Under the law, Federal employees are protected by a requirement that both funds be made whole after a debt limit increase is enacted.)

Continue reading »

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Mar 30

First, the irrelevant news:

Today’s $29 billion 7 Year auction just closed at a yield of 2.895%, the highest since April 2010, just the time when QE1 was ending and everyone was certain there would be no follow through monetization. The Bid To Cover was 2.79, weaker compared to recent auctions, and 2 bps wider of the When Issued, implying the auction was not all that hot. Directs took down 8.76%, in line with the last year average, Indirects accounts for 49.41%, or the lowest foreign take down since November 2010, while PDs bought 41.83% of the auction. Altogether a weak auction but it’s not like the PDs would let it fail especially not with QB9 becoming the next “flip back to the Fed” bond for the PD community.

(Click on image to enlarge.)

Next, the relevant news:

Now bear with us for a second: the most recently disclosed total debt was 14,211,567,662,931.23 as of March 28. This excludes the settlement of all of this week’s auctions which amount to $35 + $35 + $29 billion (including today) or $99 billion. Adding the two amounts to $14,310,567,662,931.23. As a reminder the debt ceiling is $14,294,000,000,000.00. In other words, the total US debt just passed the debt limit – break out the Champagne! Granted there is a buffer of $52.2 billion between the total debt and the debt actually subject to the ceiling, meaning that America is not in default, yet.

Continue reading »

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Jan 23

Silver will skyrocket:

- Silver: Shortage This Decade, Will Be Worth More Than Gold (MUST-SEE!)



Added: 10. December 2010

Related information:

- The Ultimate Cost of 0% Money

- These Central Banks Are Printing Money – Prepare Yourself

- Quantitative Easing Explained

Gold:

- ‘GoldNomics’: Cash or Gold Bullion?

- George Soros’ and John Paulson’s Biggest Holding Is GOLD

- China, Russia, Iran are Dumping the Dollar, Buy Gold And Silver

- Gold and Gold Mining Shares As a Percentage of Global Assets or ‘The Once In a Lifetime Ride’

Silver:

- US Mint Reports Unprecedented Buying Spree Of Physical Silver

- BullionVault.com Runs Out Of Silver In Germany

- Silver: Shortage This Decade, Will Be Worth More Than Gold

- Silver Derivatives – China and JP Morgan

- Max Keiser: Want JP Morgan to Crash? Buy Silver!

- Max Keiser: Crash JP Morgan – Buy Silver!

- JPMorgan Silver Manipulation Explained (Must-See!)

And don’t forget to do this (!!!):

- James G. Rickards of Omnis Inc.: Get Your Gold Out Of The Banking System

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Oct 25


A statue of Albert Gallatin, a long-serving U.S. secretary of the Treasury, stands in front of he U.S. Treasury Building in Washington, D.C. Photographer: David Rogowski/Bloomberg

The Treasury sold $10 billion of five-year Treasury Inflation Protected Securities at a negative yield for the first time at a U.S. debt auction as investors bet the Federal Reserve will be successful in halting deflation.

The securities drew a yield of negative 0.55 percent, the same as the average forecast in a Bloomberg News survey of 7 of the Federal Reserve’s 18 primary dealers. The sale was a reopening of an $11 billion offering in April. Conventional Treasuries rallied amid speculation about the amount of debt the Fed may purchase to spur the economy in a strategy called quantitative easing.

“It signals people’s expectation of the Fed being able to create some inflation with the QE program,” said Alex Li, an interest-rate strategist in New York at Deutsche Bank AG, one of 18 primary dealers required to bid at Treasury auctions. “With nominal rates so low, in order have high TIPS breakevens you’ve got to have negative real yields on the five-year.”

Holders of TIPS receive an adjustment to the principal value of their securities equal to the change in the consumer price index, in addition to a fixed rate of interest that is smaller than the interest paid to a holder of conventional debt. The difference between is known as the breakeven rate.

Continue reading »

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Jul 26

See also:

- Obama Bankster Bill Lets Banks Have US Over A Barrel Again (Telegraph)


us-treasury-in-washington
U.S. Treasury in Washington

July 20 (Bloomberg) — U.S. taxpayers may be on the hook for as much as $23.7 trillion to bolster the economy and bail out financial companies, said Neil Barofsky, special inspector general for the Treasury’s Troubled Asset Relief Program.

The Treasury’s $700 billion bank-investment program represents a fraction of all federal support to resuscitate the U.S. financial system, including $6.8 trillion in aid offered by the Federal Reserve, Barofsky said in a report released today.

“TARP has evolved into a program of unprecedented scope, scale and complexity,” Barofsky said in testimony prepared for a hearing tomorrow before the House Committee on Oversight and Government Reform.

Treasury spokesman Andrew Williams said the U.S. has spent less than $2 trillion so far and that Barofsky’s estimates are flawed because they don’t take into account assets that back those programs or fees charged to recoup some costs shouldered by taxpayers.

“These estimates of potential exposures do not provide a useful framework for evaluating the potential cost of these programs,” Williams said. “This estimate includes programs at their hypothetical maximum size, and it was never likely that the programs would be maxed out at the same time.”

Barofsky’s estimates include $2.3 trillion in programs offered by the Federal Deposit Insurance Corp., $7.4 trillion in TARP and other aid from the Treasury and $7.2 trillion in federal money for Fannie Mae, Freddie Mac, credit unions, Veterans Affairs and other federal programs. Continue reading »

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Jun 10

Totally unsustainable. Prepare for collapse.

- US: $13 Trillion Debt Poised to Overtake GDP (Chart of Day)

Doomed!


debt_star

WASHINGTON June 8 (Reuters) – The U.S. debt will top $13.6 trillion this year and climb to an estimated $19.6 trillion by 2015, according to a Treasury Department report to Congress.

The report that was sent to lawmakers Friday night with no fanfare said the ratio of debt to the gross domestic product would rise to 102 percent by 2015 from 93 percent this year. Continue reading »

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May 19


Added: 13. Mai 2010

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May 16

“I cannot come up with any explanation for market activity for last 15 months other than treasury intervention. Probability of other explanation is nonexistent.”

wallstreet

I am Ex CEO of mid sized Wall Street Firm. Known for equity research; reasonably good trading; acceptable Investment Banking. Now retired
Equity Block Trader early in career. May have traded more 1,000,000 share blocks than anyone over 10 year period.

Executed 1st program trade that I am aware of. Manually handled blocks of stock vs options on the XMI for expiration October of 1983.
Oversaw global equity trading, for top 5 firm. Was senior trader and oversaw hedge book during 87 crash. Still have time and sales from that day for all trades on NYSE.

Can read the tape as well as most.

I cannot come up with any explanation for market activity for last 15 months other than treasury intervention. Probability of other explanation is nonexistent.
Continue reading »

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May 13

Bankrupting America!


us-capitol
A tourist gazes up towards the dome of the U.S. Capitol (Reuters)

WASHINGTON (Reuters) – The United States posted an $82.69 billion deficit in April, nearly four times the $20.91 billion shortfall registered in April 2009 and the largest on record for that month, the Treasury Department said on Wednesday.

It was more than twice the $40-billion deficit that Wall Street economists surveyed by Reuters had forecast and was striking since April marks the filing deadline for individual income taxes that are the main source of government revenue.

Department officials said that in prior years, there was a surplus during April in 43 out of the past 56 years.

The government has now posted 19 consecutive monthly budget deficits, the longest string of shortfalls on record. Continue reading »

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Mar 26

An honest answer would probably sound like: “The elite told me to do so.”


Gordon Brown has been ordered to release information before the general election about his controversial decision to sell Britain’s gold reserves.

gordon-brown-gold
Gordon Brown pushed ahead with the of Britain’s gold despite serious misgivings at the Bank of England, it is believed Photo: REX/ALAMY

The decision to sell the gold – taken by Mr Brown when he was Chancellor – is regarded as one of the Treasury’s worst financial mistakes and has cost taxpayers almost £7 billion.

Mr Brown and the Treasury have repeatedly refused to disclose information about the gold sale amid allegations that warnings were ignored.

Following a series of freedom of information requests from The Daily Telegraph over the past four years, the Information Commissioner has ordered the Treasury to release some details. The Treasury must publish the information demanded within 35 calendar days – by the end of April.

The sale is expected to be become a major election issue, casting light on Mr Brown’s decisions while at the Treasury.

Last night, George Osborne, the shadow chancellor, demanded that the information was published immediately. “Gordon Brown‘s decision to sell off our gold reserves at the bottom of the market cost the British taxpayer billions of pounds,” he said. “It was one of the worst economic judgements ever made by a chancellor. Continue reading »

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Mar 21

Keynesianism (Deficit Spending, Obamanomics) in general is outdated and wrong.

Interesting article nevertheless.


The latest U.S. Treasury Z1 Flow of Funds report was released on March 11, 2010, bringing the data current through the end of 2009. What follows is the most important chart of your lifetime. It relegates almost all modern economists and economic theory to the dustbin of history. Any economic theory, formula, or relationship that does not consider this non-linear relationship of DEBT and phase transition is destined to fail.

It explains the “jobless” recoveries of the past and how each recent economic cycle produces higher money figures, yet lower employment. It explains why we are seeing debt driven events that circle the globe. It explains the psychological uneasiness that underpins this point in history, the elephant in the room that nobody sees or can describe.

(Click on images to enlarge.)

diminishing-productivity-of-debt-in-the-us-economy

This is a very simple chart. It takes the change in GDP and divides it by the change in Debt. What it shows is how much productivity is gained by infusing $1 of debt into our debt backed money system.

Back in the early 1960s a dollar of new debt added almost a dollar to the nation’s output of goods and services. As more debt enters the system the productivity gained by new debt diminishes. This produced a path that was following a diminishing line targeting ZERO in the year 2015. This meant that we could expect that each new dollar of debt added in the year 2015 would add NOTHING to our productivity.

Then a funny thing happened along the way. Macroeconomic DEBT SATURATION occurred causing a phase transition with our debt relationship. This is because total income can no longer support total debt. In the third quarter of 2009 each dollar of debt added produced NEGATIVE 15 cents of productivity, and at the end of 2009, each dollar of new debt now SUBTRACTS 45 cents from GDP!

This is mathematical PROOF that debt saturation has occurred. Continuing to add debt into a saturated system, where all money is debt, leads only to future defaults and to higher unemployment. Continue reading »

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Mar 12

Sarbanes-Oxley was supposed to prevent crap like this:

lehman-105serendipity

From the paper:

Lehman employed off-balance sheet devices, known within Lehman as “Repo 105″ and “Repo 108″ transactions, to temporarily remove securities inventory from its balance sheet, usually for a period of seven to ten days, and to create a materially misleading picture of the firm’s financial condition in late 2007 and 2008.2847

Oh yeah, that’s legal?  It’s not supposed to be!

Lehman regularly increased its use of Repo 105 transactions in the days prior to reporting periods to reduce its publicly reported net leverage and balance sheet.2850  Lehman’s periodic reports did not disclose the cash borrowing from the Repo 105 transaction – i.e., although Lehman had in effect borrowed tens of billions of dollars in these transactions, Lehman did not disclose the known obligation to repay the debt.2851  Lehman used the cash from the Repo 105 transaction to pay down other liabilities, thereby reducing both the total liabilities and the total assets reported on its balance sheet and lowering its leverage ratios.

Isn’t that special?

It gets better, as you might expect.

The Examiner concludes that colorable claims of breach of fiduciary duty exist against Richard Fuld, Chris O’Meara, Erin Callan, and Ian Lowitt, and that a colorable claim of professional malpractice exists against Arthur Anderson Ernst & Young.2915  (strikethrough mine, not in the original)

It is stated that Government Regulators (FRBNY and The SEC) had “no knowledge” of these practices.  Perhaps true.  But this calls into question why we’re hearing of this just now, and whether other firms have or are at present doing the same sort of thing.

There also appears to be a colorable claim that Lehman Management was fully-aware of what was going on: Continue reading »

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Mar 02

For Immediate Release
March 1, 2010

Congressman Paul Returns Over $100,000 to Treasury

ron-paul

Washington, D.C. – Congressman Ron Paul has continued to run his Congressional office in a frugal manner, and was able to return more than $100,000 from his allotted office budget to the Treasury this year, an increase over the $90,000 returned last year.

“Since my first year in Congress representing the 14th district I have managed my office in a frugal manner, instructing staff to provide the greatest possible service to the people of the 14th district at the least possible cost to taxpayers,”
said Paul.

Source: http://www.house.gov/apps/list/press/tx14_paul/MRESurplus.shtml

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Feb 19

Goldman Sachs and other big banks aren’t just pocketing the trillions we gave them to rescue the economy – they’re re-creating the conditions for another crash

matt-taibbi-wall-street-bailout-hustle

On January 21st, Lloyd Blankfein left a peculiar voicemail message on the work phones of his employees at Goldman Sachs. Fast becoming America’s pre-eminent Marvel Comics supervillain, the CEO used the call to deploy his secret weapon: a pair of giant, nuclear-powered testicles. In his message, Blankfein addressed his plan to pay out gigantic year-end bonuses amid widespread controversy over Goldman’s role in precipitating the global financial crisis.

The bank had already set aside a tidy $16.2 billion for salaries and bonuses – meaning that Goldman employees were each set to take home an average of $498,246, a number roughly commensurate with what they received during the bubble years. Still, the troops were worried: There were rumors that Dr. Ballsachs, bowing to political pressure, might be forced to scale the number back. After all, the country was broke, 14.8 million Americans were stranded on the unemployment line, and Barack Obama and the Democrats were trying to recover the populist high ground after their bitch-whipping in Massachusetts by calling for a “bailout tax” on banks. Maybe this wasn’t the right time for Goldman to be throwing its annual Roman bonus orgy.

Not to worry, Blankfein reassured employees. “In a year that proved to have no shortage of story lines,” he said, “I believe very strongly that performance is the ultimate narrative.”

Translation: We made a shitload of money last year because we’re so amazing at our jobs, so fuck all those people who want us to reduce our bonuses.

Goldman wasn’t alone. The nation’s six largest banks – all committed to this balls-out, I drink your milkshake! strategy of flagrantly gorging themselves as America goes hungry – set aside a whopping $140 billion for executive compensation last year, a sum only slightly less than the $164 billion they paid themselves in the pre-crash year of 2007. In a gesture of self-sacrifice, Blankfein himself took a humiliatingly low bonus of $9 million, less than the 2009 pay of elephantine New York Knicks washout Eddy Curry. But in reality, not much had changed. “What is the state of our moral being when Lloyd Blankfein taking a $9 million bonus is viewed as this great act of contrition, when every penny of it was a direct transfer from the taxpayer?” asks Eliot Spitzer, who tried to hold Wall Street accountable during his own ill-fated stint as governor of New York.

Beyond a few such bleats of outrage, however, the huge payout was met, by and large, with a collective sigh of resignation. Because beneath America’s populist veneer, on a more subtle strata of the national psyche, there remains a strong temptation to not really give a shit. The rich, after all, have always made way too much money; what’s the difference if some fat cat in New York pockets $20 million instead of $10 million?

The only reason such apathy exists, however, is because there’s still a widespread misunderstanding of how exactly Wall Street “earns” its money, with emphasis on the quotation marks around “earns.” The question everyone should be asking, as one bailout recipient after another posts massive profits – Goldman reported $13.4 billion in profits last year, after paying out that $16.2 billion in bonuses and compensation – is this: In an economy as horrible as ours, with every factory town between New York and Los Angeles looking like those hollowed-out ghost ships we see on History Channel documentaries like Shipwrecks of the Great Lakes, where in the hell did Wall Street’s eye-popping profits come from, exactly? Did Goldman go from bailout city to $13.4 billion in the black because, as Blankfein suggests, its “performance” was just that awesome? A year and a half after they were minutes away from bankruptcy, how are these assholes not only back on their feet again, but hauling in bonuses at the same rate they were during the bubble?

The answer to that question is basically twofold: They raped the taxpayer, and they raped their clients. Continue reading »

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Feb 09

goldman-sachs
Goldman Sachs

David Fiderer’s below piece, originally published on the Huffington Post, continues probing the topic of Goldman and AIG. For all intents and purposes the debate has been pretty much exhausted and if there was a functioning legal system, Goldman would have been forced long ago to pay back the cash it received from ML-3 (which in itself should have been long unwound now that plans to liquidate AIG have been scrapped) and to have the original arrangement reestablished (including the profitless unwind of AIG CDS the firm made improper billions on, by trading on non-public, pre-March 2009, information), and now that AIG is solvent courtesy of the government, so too its counterparties can continue experiencing some, albeit marginal, risk, instead of enjoying the possession of cold hard cash. Oh, and Tim Geithner would be facing civil and criminal charges.

Yet as we look forward, we ask, who now determines the variation margin on Greek CDS (and Portugal, and Dubai, and Spain, and, pretty soon, Japan and the US), the associated recovery rate, and how much collateral should be posted by sellers of Greek protection? If Greek banks, as the rumors goes, indeed sold Greek protection, and, as the rumor also goes, Goldman was the bulk buyer, either in prop or flow capacity, it is precisely Goldman, just like in the AIG case, that can now dictate what the collateral margin that Greek counterparties, and by extension the very nation of Greece, have to post on billions of dollars of Greek insurance. Let’s say Goldman thinks Greece’s debt recovery is 75 cents and the CDS should be trading at 700 bps, instead of the “prevailing” consensus of a 90 recovery and 450 spread, then it will very likely get its way when demanding extra capital to cover potential shortfalls, since Goldman itself has been instrumental in covering up Greece’s catastrophic financial state and continues to be a critical factor in any future refinancing efforts on behalf of Greece. Obviously this incremental margin, which only Goldman will ever see, even if the CDS was purchased on a flow basis, will never be downstreamed on behalf of its clients, and instead will be used to [buy futures|buy steepeners|prepay 2011 bonuses|buy more treasuries for the BONY $60 billion Treasury rainy day fund].

In essence, through its conflict of interest, its unshakable negotiating position, and its facility to determine collateral requirements and variation margin, Goldman can expand its previous position of strength from dictating merely AIG and Federal Reserve decision making, to one which determines sovereign policy! This is unmitigated lunacy and a recipe for financial collapse at the global level.

This is yet another AIG in the making, with Goldman this time likely threatening to accelerate the collapse not merely of the US financial system, but of the global one, in order to attain virtually infinite negotiating leverage. Of course, the world will not allow a Greece-initiated domino, allowing Goldman to call everyone’s bluff once again. Continue reading »

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Feb 02

Related information:

- MSNBC Exposes President Obama’s lies: FED GAVE Banks Access to 23.7 TRILLION DOLLARS NOT $700 Billion!


the-fed-as-giant-counterfeiter

San Jose State economics professor Jeffrey Rogers Hummel tells all his students that the easiest way to understand the Federal Reserve is to think of it as a giant, legalized counterfeiter. I had always known that the Fed and other central banks were like counterfeiters, but I still thought that the actual mechanics of open-market operations and so forth actually provided some important distinctions.

In large part because of my frequent email exchanges with Hummel, I now realize that I was being naïve. Once you understand the details of modern central banking, you are able to step back and see that it truly is a way for the government to use the printing press to pay its bills. All of the complicated process of targeting interest rates through buying Treasuries simply hides this essential point – and perhaps deliberately so. Continue reading »

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Jan 23

“The collapse of the financial system is still in its early stage.”

“The social unrest will illicit cries for the government to exert unusual force to head off a complete breakdown of law and order. The ultimate trap will be set for a system of government claiming to protect a free society.”

“If more power and police authority are not given to the Federal government, it will be argued that only anarchy will result. If more government policing power is given, it will mean a lethal threat to civil liberties.”

“We are rapidly moving toward a dangerous time in our history. Society as we know it is vulnerable to political and social unrest. This impending crisis comes as a consequence of our flawed foreign and domestic economic policies, a silly notion about money, ignorance about central banking, ignoring the onerous power and mischief of out of control intelligence agencies, our unsustainable welfare state and a willingness to sacrifice privacy and civil liberties in an attempt to achieve safety and security from an inept government.”

“Dangerous times indeed.”

“The only way that we can prevent blood from running in the streets is to offer a better idea of the proper role of government in a society that desires, first and foremost, liberty.”

1 of 3:

Added: 21. Januar 2010

2 of 3:

Added: 21. Januar 2010

3 of 3:

Added: 21. Januar 2010

The Fed and the US government are destroying America:

- America’s Impending Master Class Dictatorship! (MUST-READ!)

- The CFR Controls American News/Media

- Senate Proposes Increasing US Debt Limit to $14.3 Trillion: “If Congress does not enact this legislation, and soon, then the Treasury would default on its debt for the first time in history,” said Senate Finance Committee Chairman Max Baucus

- US: Unfunded Benefits Dig States’ $3 Trillion Hole

- Illinois enters a state of insolvency: ‘We’re close to de facto bankruptcy, if not de jure bankruptcy.’

- The No.1 Trend Forecaster Gerald Celente: Financial Mafia Controlling US and Wall Street

- Peter Schiff: The Lunacy of US Government Programs

- Former Dean of Harvard College Harry R. Lewis: Larry Summers, Robert Rubin: Will The Harvard Shadow Elite Bankrupt The University And The Country?
Continue reading »

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Jan 23

This article is a MUST-READ!

This is not a conspiracy. This is politics and economics.

Wake up America! You will lose everything, if you do not act NOW.

Prepare yourself for a complete controlled meltdown. The greatest financial collapse in world history.

A hyperinflationary depression. THE Greatest Depression.

The Fed and the US government are destroying America!

(More information at the end of the following article.)


“The people no longer have elected representatives; they have elected traitors.”

stewart-dougherty

By Stewart Dougherty

Stewart Dougherty is a specialist in inferential analysis, the practice of identifying historic and contemporary patterns and then extrapolating their likely effects upon the future. Dougherty was educated at Tufts University (B.A., magna cum laude), and Harvard Business School (M.B.A. and an academic Fellow).

FOREWORD: At certain times, focusing on the big picture is important not just for investment success, but for personal welfare, and even survival. We believe such times are here. It is estimated that 98% of Americans have never held a gold coin in their hands. Yet 100% of Americans regularly handle Federal Reserve Notes. From a contrarian standpoint, the financial message from those two statistics is clear. Even so, gold is much more than money or an investment medium; it stands for liberty and throughout history has facilitated escape and ensured freedom. Never having touched a gold coin is the monetary equivalent to never having breathed fresh air, felt the warmth of sunshine, looked up at the stars or risen from the gutter. Fiat Federal Reserve Notes are becoming nothing more than sewage decomposing in the vast, toxic septic tank of predatory Washington politics, epic Federal Reserve arrogance and error, blatant Wall Street fraud and outright Master Class plunder. Below, we outline America’s troubling and compounding predicament, and urge you to think about how to protect yourself from its consequences, both financially and personally.

Thanks to the endless barrage of feel-good propaganda that daily assaults the American mind, best epitomized a few months ago by the “green shoots,” everything’s-coming-up-roses propaganda touted by Federal Reserve Chairman Bernanke, the citizens have no idea how disastrous the country’s fiscal, monetary and economic problems truly are. Nor do they perceive the rapidly increasing risk of a totalitarian nightmare descending upon the American Republic.

One stark and sobering way to frame the crisis is this: if the United States government were to nationalize (in other words, steal) every penny of private wealth accumulated by America’s citizens since the nation’s founding 235 years ago, the government would remain totally bankrupt.

According to the Federal Reserve’s most recent report on wealth, America’s private net worth was $53.4 trillion as of September, 2009. But at the same time, America’s debt and unfunded liabilities totaled at least $120,000,000,000,000.00 ($120 trillion), or 225% of the citizens’ net worth. Even if the government expropriated every dollar of private wealth in the nation, it would still have a deficit of $66,600,000,000,000.00 ($66.6 trillion), equal to $214,286.00 for every man, woman and child in America and roughly 500% of GDP. If the government does not directly seize the nation’s private wealth, then it will require $389,610 from each and every citizen to balance the country’s books. State, county and municipal debts and deficits are additional, already elephantine in many states (e.g., California, Illinois, New Jersey and New York) and growing at an alarming rate nationwide. In addition to the federal government, dozens of states are already bankrupt and sinking deeper into the morass every day.

The government continues to dig a deeper and deeper fiscal grave in which to bury its citizens. This year, the federal deficit will total at least $1,600,000,000,000.00 ($1.6 trillion), which represents overspending of $4,383,561,600.00 ($4.38 billion) per day. (The deficit during October and November, 2009, the first two months of Fiscal Year 2010, totaled $296,700,000,000.00 ($297 billion), or $4,863,934,000.00 ($4.9 billion) per day, a record.) Using the GAAP accounting method (which is what corporations are required to use because it presents a far more accurate and honest picture of a company’s finances than the cash accounting method primarily and misleadingly used by the U.S. government), the nation’s fiscal year 2009 deficit was roughly $9,000,000,000,000.00 ($9 trillion), or $24,700,000,000.00 ($24.7 billion) per day, as calculated by brilliant and well-respected economist John Williams. (www.shadowstats.com) Fiscal Year 2010’s cash- and GAAP-accounting deficits will likely be worse than 2009’s, given government bailout and new program spending that is on steroids and psychotic.

Putting Fiscal Year 2009’s $9,000,000,000,000.00 ($9 trillion) deficit another way, 17% of America’s private wealth, accumulated over a period of 235 years, was wiped out by just one year’s worth of government deficit spending insanity.

Given this, is it any surprise that Treasury Secretary Geithner has announced that the release of the nation’s FY 2009 supplemental GAAP financial statements has been delayed? Remember, this is the same Secretary Geithner who bullied people to cover up the sordid details of the AIG, or more accurately, the taxpayer-funded, multi-billion dollar, Santa Claus bailout and bonus bonanza for Goldman Sachs. Do you really think this government, characterized as it is by fiscal and monetary secrecy, lies, chicanery, cronyism and stonewalling, wants the people to know what is actually happening? Obviously, it does not, so it hides from the public the inexcusable facts.

Continue reading »

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Jan 21

On government debt:

“There are two ways to conquer and enslave a nation. One is by the sword. The other is by debt.”
- John Adams

“I wish it were possible to obtain a single amendment to our Constitution — taking from the federal government their power of borrowing.”
- Thomas Jefferson

“‘Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren,” Obama said in a 2006 floor speech that preceded a Senate vote to extend the debt limit. “America has a debt problem and a failure of leadership.”
- Barack Obama (Exactly right!)

“When a country embarks on deficit financing and inflationism you wipe out the middle class and wealth is transferred from the middle class and the poor to the rich.”
- Ron Paul

“Deficits mean future tax increases, pure and simple. Deficit spending should be viewed as a tax on future generations, and politicians who create deficits should be exposed as tax hikers.”
- Ron Paul

“The dollar represents a one dollar debt to the Federal Reserve System. The Federal Reserve Banks create money out of thin air to buy Government Bonds from the U.S. Treasury…and has created out of nothing a … debt which the American people are obliged to pay with interest.”
- Wright Patman

“The one aim of these financiers is world control by the creation of inextinguishable debts.”
- Henry Ford

“I place the economy among the first and most important virtues, and public debt as the greatest of dangers.”
- Thomas Jefferson


Those criminals in the US government and the Fed banksters are bankrupting America!

- George Carlin: The American Dream

(Much more info at the end of this article.)


us_senate
U.S. Senate

Jan. 21 (Bloomberg) — The U.S. debt limit would be raised by $1.9 trillion to $14.29 trillion under an amendment proposed in the Senate.

The chamber began debate yesterday on raising the debt ceiling for the fifth time in two years after lower tax revenue from the recession and higher stimulus spending boosted the calendar-year budget deficit to an all-time high last year.

“If Congress does not enact this legislation, and soon, then the Treasury would default on its debt for the first time in history,” said Senate Finance Committee Chairman Max Baucus, a Montana Democrat.

The White House in a statement urged lawmakers to pass the measure. “Such an increase is critically important to make sure that financing of federal government operations can continue without interruption,” it said.

The proposed ceiling would probably allow the Treasury to continue its borrowing until next year, said Michael Feroli, an economist at JPMorgan Chase & Co. in New York.

Congress passed a short-term increase in the debt limit to $12.39 trillion last month after a group of senators, led by Budget Committee Chairman Kent Conrad of North Dakota, refused to vote on a longer-term extension unless Congress created a commission to study deficit reduction. Continue reading »

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Jan 06

us-debt-ceiling-december

On December 24, the Senate passed a vote by a razor thin margin (with not a vote to spare) to raise the Federal debt ceiling from $12,104 billion to $12,394 billion.

The actual debt ceiling increase took effect on December 28. And as the chart below shows, the Treasury’s cash flow projections were spot on: 3 days later, and the debt subject to limit surged to $12,254, a jump of over $200 billion in 2 days, and a whopping $150 billion over the old debt ceiling.

Three days is all the buffer the administration’s reckless spending spree has afforded this country to avoid bankruptcy. Had one more Democratic vote dissented from the stopgap measure, the US would now be in technical default.

There is just $140 billion left before the revised debt ceiling is breached. We hope for the country’s sake that Bill refunding in January is massive, because as we already pointed out, on January 7th we expect another ~$130 of new Treasuries to be announced for auction by January 15th. Continue reading »

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