More scrutiny of the federal reserve system.

[gsvol]

The federal reserve act was passed in 1913, after 1914 in became impossible to buy more stock in this private bank, at that time about 60% of the stock was foreign owned.

From whence cometh all this 'stimulus' money??

The recent TIC reports have been quite alarming, because they not only reveal the most sudden deceleration in flows in history, but also that they have been negative for some time now.............

If we dig into deeper into the detail of the report, we find something even more interesting. While the overall flows have been negative, there is an enormous difference between the behaviors of foreign central banks and private investors. Fortunately the TIC report distinguishes between these two broad classes of buyers.

Since the start of 2009 and continuing through the month of May, private investors sold $364 billion dollars worth of US assets, while central banks purchased $50 billion dollars worth (source is a .csv file available here from the Treasury). Added up, some $314 billion dollars of foreign money has left the country since the start of the year.

What this demonstrates is the utter reliance of the entire house of cards upon the continued purchase of US financial assets by foreign central banks. Without the continued cooperation of the foreign central banks in accumulating US assets, suffice it to say that the dollar will fall a lot lower than it already has.

..........................

With the exception of the 5-year auction, which mysteriously stank up the joint with a worrisome bid-to-cover ratio well below 2.0 (the bond market behaved poorly upon the release of that news item), the story here is that foreign central banks are buying up vast quantities of Treasury offerings.

Wait a minute, hold on there…I thought we just talked about how the TIC report said that foreign central banks have only bought $50 billion in total US paper assets through May - and now they are said to be buying $95 billion during a single week in July alone?

Something is not adding up here.

To understand what, and to get to the essence of the shell game, we need to visit one more source of information - something called the Federal Reserve Custody Account.

Read and weep.

For various reasons, the Federal Reserve cannot just up and start buying all the Treasury paper that becomes available in record amounts, week after week, month after month.

Instead, it uses this three-step shell game to hide what it is doing under a layer of complexity:

Shell #1: Foreign central banks sell agency debt out of the custody account.

Shell #2: The Federal Reserve buys those agency bonds with money created out of thin air.

Shell #3: Foreign central banks use that very same money to buy Treasuries at the next government auction."

So now you see how communist China owns so much of America's debt and they are selling it off because in the end we have no way to pay and they even now don't want to go to war with America.

Hope this isns't long enough to tweak any attention deficits.

:hi:

Speaking of deficits:

Obama and his sleazy cronies predict our projected deficit for the next ten years will be $9,000,000,000,000.

Reuters and Forbes say it will be more in the range of $10,000,000,000,000 to $12,000,000,000,000.

Using real numbers instead of mumbo jumbo lingo, if we do what the socialists want, the number will be closer to $20,000,000,000,000 or #30,000,000,000,000 or in other words your grandchildren's granchildren will still be indebted to someone who we don't even know, unless we can at least get a comprehensive audit of the fed.

Support HR 1207 now.