The Feds New Plan For Bankrupting America -- The Great Dollar Auction
DriftingByTheStorm
Posts: 8,684
SELL SELL SELL.
and sell it cheap!
CNBC, 9am 12\12\07
The Fed threw another monkeywrench at the market this morning. After making everyone jump off the cliff yesterday at 2:15, giving them a lemon of a christmas gift, they pull the second present out of their back pocket and make it jump up and bump its head! Blatant and abject market manipulation but even worse is what it all means.
HERE IT IS:
Ok. So yesterday the Fed drags the market through the mud, telling us that INFLATION was of primary concern, and therefore it (the fed) would remain cautious with it's inflationary policies (cutting rates, adding liquidity).
HOWEVER, TODAY, the Fed says it is going to set up a "Temporary Auction Facility", and allow banks to "bid for additional funds".
WHAT DOES IT MEAN, and where does this money come from? Well my friend, THERE in lies the rub. This is actualy a Federal Reserve tactic for fooling the market as much as it can.
"Hey, we don't want to lower the actual stated rate, because we don't want to inflate the currency and lower the dollars value. How about this instead? We'll print up that same amount of money, but instead of lowering the price tag on our shelf, we'll just walk out to the parking lot and have an auction. That way you get it at the same price or CHEAPER, but it looks like we aren't lowering prices. Hey it's just an auction, right?"
Not only that, they are saying, "Man, we really don't want to order more goods here at Walmart (print more money at the Fed) because then we would have too much stock on our shelves (too much money in our system), but instead of doing that, we will set up an agreement with Kmart and Target so that if our inventory gets low, we will just BORROW from them and give it straight to you. That way, the other shoppers don't really see it on the shelves, but you get what you want."
Genius guys, fucking brilliant.
Thanks. My ass burns already.
This is bascialy the Fed printing up ANOTHER 35 billion to put in the system.
In case no one is paying attention, in the past six months, the Fed has put (by my lazy count) OVER 100 BILLION DOLLARS in to the system.
They did 14 billion, and 39 billion, and another 18 billion, and on and on ... every couple of weeks, CNBC quietly announces "the fed added liquidity this morning" and then the story dissapears.
100BILLION is a TEN PERCENT increase in TOTAL paper dollar supply, FYI. Although at 9 to 1 lending, it is a ONE percent increase.
Hmm.
And headline inflation is under 5%, huh?
Bullshit. Garbage. Rubbish.
and sell it cheap!
CNBC, 9am 12\12\07
From CNBC wrote:The Fed said that it was creating a temporary auction facility to make funds available to banks and was also setting up lines of credit with the European Central Bank and the Swiss Central Bank that could be used for additional resources.
The Fed said that commercial banks would be able to bid at auction for funds that would be drawn from the Temporary Auction Facility. The money would be intended to help cash-strapped banks raise money needed to keep making loans to businesses and consumers.
The Fed threw another monkeywrench at the market this morning. After making everyone jump off the cliff yesterday at 2:15, giving them a lemon of a christmas gift, they pull the second present out of their back pocket and make it jump up and bump its head! Blatant and abject market manipulation but even worse is what it all means.
HERE IT IS:
Ok. So yesterday the Fed drags the market through the mud, telling us that INFLATION was of primary concern, and therefore it (the fed) would remain cautious with it's inflationary policies (cutting rates, adding liquidity).
HOWEVER, TODAY, the Fed says it is going to set up a "Temporary Auction Facility", and allow banks to "bid for additional funds".
WHAT DOES IT MEAN, and where does this money come from? Well my friend, THERE in lies the rub. This is actualy a Federal Reserve tactic for fooling the market as much as it can.
"Hey, we don't want to lower the actual stated rate, because we don't want to inflate the currency and lower the dollars value. How about this instead? We'll print up that same amount of money, but instead of lowering the price tag on our shelf, we'll just walk out to the parking lot and have an auction. That way you get it at the same price or CHEAPER, but it looks like we aren't lowering prices. Hey it's just an auction, right?"
Not only that, they are saying, "Man, we really don't want to order more goods here at Walmart (print more money at the Fed) because then we would have too much stock on our shelves (too much money in our system), but instead of doing that, we will set up an agreement with Kmart and Target so that if our inventory gets low, we will just BORROW from them and give it straight to you. That way, the other shoppers don't really see it on the shelves, but you get what you want."
Genius guys, fucking brilliant.
Thanks. My ass burns already.
This is bascialy the Fed printing up ANOTHER 35 billion to put in the system.
In case no one is paying attention, in the past six months, the Fed has put (by my lazy count) OVER 100 BILLION DOLLARS in to the system.
They did 14 billion, and 39 billion, and another 18 billion, and on and on ... every couple of weeks, CNBC quietly announces "the fed added liquidity this morning" and then the story dissapears.
100BILLION is a TEN PERCENT increase in TOTAL paper dollar supply, FYI. Although at 9 to 1 lending, it is a ONE percent increase.
Hmm.
And headline inflation is under 5%, huh?
Bullshit. Garbage. Rubbish.
If I was to smile and I held out my hand
If I opened it now would you not understand?
If I opened it now would you not understand?
Post edited by Unknown User on
0
Comments
a. Markets react VERY myopicaly over the short term. Any signal that tells Wallstreet, "Hey, you will make money tomorrow" will drive stocks up. Most of the major investment institutions MUST invest in EQUITY. They can not bet AGAINST the market, they are "LONG only" corporations. So in the short term, this announcement gets markets rallying.
b. Markets NEVER look to the long term collectively. That is why you hear people on CNBC saying "The Fed should just forget about inflation. They should give up on that. They have more important things to worry about." Translation -- Wallstreet is SO myopic about making money today and tomorrow, that as long as the news (yesterdays case - a rate cut) is good enough to get markets rallying at this minute, they could give two shits if it causes permanent harm in the long term. When the Fed cuts rates, it IS inflating the currency by definition. It is printing up more money so it can give it out cheaper. THAT Is horrible for the dollar.
c. How is it going to impact the dollar and the economy? Well, they are different questions. The economy is going to improve in the VERY SHORT TERM because of this. Banks know they have easier access to money and so do the corporations that feed on the teet of the banks. HOWEVER, the dollars value will CONTINUE to decline. In fact, that is JUST what the Euro Vs. Dollar Foreign Exchange markets show today. Yesterday, on news that the rate cut would not be a big as expected, the Euro DECLINED vs. the dollar. Today, after the Fed says it will basicaly be printing up another 35 billion, the Euro RALLIED STRONG.
Long term, regardless of what the talking head morons on CNBC may tell you ("We need the dollar to continue to decline so that we can even out our trade imbalance"), the dollar will decline and you will suffer very real consequences.
In fact, i am willing to bet that the dollar will break .60 on teh Euro by next summer. Its sitting around .76 to .78 right now.
We will lose another 10% at least, and if this "Oil For Dollars" fiasco picks up steam (more countries join on), we may see 15 to 20%.
NOT GOOD!
BTW, once the dollar reaches a certain loss of value, you will see a MASSIVE sell off. In other words, maybe it only peels off 11% of its value in the next 6 months, but there are people out there (the Chinese and the Saudis for starters) that hold INCREDIBLE dollar reserves (in hard dollars or treasury bills exchangeable for dollars) and maybe 10% is their magic number. Maybe 20% is. But once the dollar loses that magic "X" % value, they will be forced to SELL SELL SELL.
THEN we are REALLY fucked.
If I opened it now would you not understand?
Thanks for taking the time to lay it out like that for me. So basically we are really fucking ourselves in the long run just to make a quick buck today.
that's a common theme across the board
thanks for the explanation DBTS
Yes.
This is what happens when you have a Fed that oversteps its bounds.
I don't really agree with the central bank\fiat money premise in general. But it would be much more stable if they would just watch the real fundamentals, and just ensure price stability and inflation stay under "control".
Instead they heft their weigth around and try to ENGINEER the markets. Unfortunately, like EVERYTHING the government gets involved with, they create MORE problems than existed before they put their foot in the water.
BTW.
The market has just shorted 50% off of this rally. In other words, the market SHOT up (about 20 points in S&P futures, 250 in Dow index) on the news this morning, and it went down over the last 2 hours down (about 10-13 points in S&P and 125 pts Dow index). I think that shows that this new move is not a long term fix, and moreover, the markets are actualy confused. They are confused because announcing a new fix the day after announcing a rate cut is like the fed admitting that they
a. screwed up
b. are even more worried than they admitted yesterday
This is the "largest coordinated move of the central banking systems of the world since September 11th" ... that should tell you something about the gravity of the situation.
I think the markets (2 hours out now) finaly are coming to grips with that, and are perhaps no longer as excited about it. The initial rally was just a knee jerk reaciton, and now people are realizing that, fundamentaly, this is bad news. It's bad because it means the Fed knows the situation is bad and is trying to do more about it, and that scares the market.
If I opened it now would you not understand?
You wont make money on that until we get some more truly horrific news.
Oil is probably a better bet in the short term.
BTW.
The Fed just announced that today's Temporary Auction Facility plan had NOTHING to do with the Feds OTHER announcement yesterday.
"Oh no no no. We didn't announce this today because we felt guilty about making the market dive bomb yesterday. No. We just got it finalized this morning."
Bullshit.
If I opened it now would you not understand?
Is there anything a common person can do about this whole mess?
Not really.
In terms of managing your savings,
i would just take a hard look at your holdings, maybe call up your financial advisor if you have one.
If you are holding a lot of financial stock, you should have gotten out months ago. If you are holding tech, medical, or industrial, you aren't doing to shabby in the short term.
In terms of protecting your money from an outright dollar crash?
The only thing you could really do is divest yourself completely of dollar assets. That's pretty radical, but you'd be in good company. Jim Rodgers is getting 100% out of the dollar. Buffet keeps talking about latin america and china.
A middle ground compromise would be to pull your funds out of US stocks and in to something averaged like a foreign energy or foreign agriculture fund. Investmenting in commodities funds in general is probably the safest way to keep your funds protected, but again, an outright crash of the markets and the underlying currency is likely to keep you exposed even then.
???
sorry man.
The system will drag us all down with it.
You could always still buy physical gold, but gold has doubled in the last 4 months, and that makes it a tough sell. Although, as the dollar collapses it will continue to go up, just not in the short term.
If I opened it now would you not understand?
Stretched too thin, and now the popular currency is losing face (value).
I've read a few articles on the planned collapse theory, but honestly, how the fuck did they not potentially see this coming? I suppose the "take it by force" plan backfired and now the recoil begins. All or none didn't quite make it to all . Damn those peace activists. Unfortunately the peaceful route fails to provide that instant gratification for the greedy elites.
and reveling in it's loyalty. It's made by forming coalitions
over specific principles, goals, and policies.
http://i36.tinypic.com/66j31x.jpg
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( o.O)
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if you invested in gold; this wouldn't be an issue would it?
when i've got a fight ahead of me; (court, etc); i line up the big guns and shut them down at the gate. i don't like playing games and that's what this war has become. send in the people we need to finish the job and get the hell out.
DOH!
thanks for rubbing dirt on my wound.
:(
FYI -- The futures market has now 100% discounted the gift from the fed. The S&P value as of this second is actualy 3 full points below where it was at 9 this morning.
It was at 1491, the fed announced and it sky rocketed in 10 seconds up to 1516, and over the past 4 hours has sold right back off down to 1488!
Sheesh.
Thanks Fed for totaly confusing and fucking the market!
If I opened it now would you not understand?
So what would be the best thing for the Fed to do. Should they just let the market take it's course untill it self-corrects.
Lol.
That's like asking what a blind man trying to cross a 8 lane highway should do.
Honest answer?
Give up, dismantle and call it a day. Try a gold\silver standard.
A more status-quo based answer?
Yes. If they were going to do anything status-quo, they SHOULD have just fucking cut the rate .50 points yesterday, instead of pissing off the market with a pussy-foot .25 point cut.
If you are asking ME what the Fed should do, i would say what you said. Stand firm.
But that is a PURELY academic call. The Fed did this during the recession (arguably it was DELIBERATE so that the principals involved could profit by buying up failing firms on the cheap) and it did NOT work. They retracted the money supply nearly 20% and it caused a decade of woe and suffering for all.
I think the point for the American public to extract from this is that the Federal Reserve is a PRIVATELY owned institution, backed by the largest private banking institutions in America. Citigroup, Bank of America, Chase Manhattan, and JP Morgan are THE owners of the Federal Reserve.
ANY time there is a decision for the Fed to make regarding the tradeoffs between:
a. preserving the real wealth of the public through prudent inflationary management (not inflating the money supply and easing rates)
or
b. protecting their owners from bankruptcy and giving them the money they need to do business as usual
the Fed will ALWAYS vote on option B!
The banks get greedy (make loans to people who can't afford them) and then they start to fail.
The banks own the Fed.
The Fed votes to save the banks by giving them more money to get greedy with.
The banks make MORE bad loans to "cover" their previous losses.
5 or 10 years later, THOSE loans come to surface
The process starts ALL over again.
It is in THIS context that you must view the status quo.
Do you see why the question "What should the Fed do?" becomes somewhat laughable when you step back and see that it IS THE FED that is the problem?
Here is an example i saw on a message board the other day, (paraphrased): "Back when i was a kid, i used to have pockets full of real silver change. A silver dollar would buy me a ticket to a movie, a lunch, and gallon of gas. Today the government still sells these silver dollars with a face value of $1, but it costs FOURTEEN dollars for me to buy. THAT is how much value your dollar has lost since the late 60's alone. But look at that silver dollar. It will STILL buy you a lunch, a matinee movie, and a gallon of gas."
Real wealth is tied to real market forces and will faithfully maintain a near equal relationship with that market.
Fiat currency fluctuates at the whim of the government and its desire to print more so it can spend more -- OR to print more so it can bail out its owners.
People need to understand this.
They need to get over their fear of a gold standard.
"oh there isn't enough gold."
???
Let me ask you this:
I put 10 people in a locked room and give 9 of them 1 widget each. I give the tenth person 20 coins. I tell them they have to decide on an exchange value for trading the coins and widgets. What do they decide? How about 4 coins per widget. The guy with the coins can trade ALL of his coins for 5 of the widgets. And it can go from there.
What if i put those same 9 people in the same room with the same 9 widgets, but the 10th guy only gets 10 coins instead of 20? Does he no longer have enough coins to buy 5 widgets? Since he has only half as many coins, can he only buy 2.5? NO!!!!!!!!!!!! His 10 coins STILL represent ONE HUNDRED PERCENT of the "money" supply in the room. Therefore the 9 others will agree that TWO coins will buy one widget, and not four. and he can still buy 5 flipping widgets.
THIS is why people saying "there isn't enough gold" are full of shit.
The only thing a gold standard would do would be to regulate growth to something less suicidal for the planet; restrict the governments ability to spend; and keep those closest to the printing presses (wall street and the army) from unfairly benefiting at the expense of everyone else (what happens when you assume there are 10 coins in the room and are trading a widget for 2 coins, and then the greed fuck with the coins secretly pulls another 50 coins out of his back pocket? you just got screwed!)
:(
If I opened it now would you not understand?
I know that the Federal Reserve is the problem but the chances of us getting rid of the Fed and restoring the Gold Standard hinge upon someone like Ron Paul being elected president and even then the chances are slim of it happening. So I think we need to try to work with the shitty tools we have.
I appreciate you taking the time to spell it all out for a lay person like myself. I have definitely learned a lot from your posts on this issue.
Thanks
what are you doing here then? You should be busy shopping and consuming cheap overseas items for landfill.
and reveling in it's loyalty. It's made by forming coalitions
over specific principles, goals, and policies.
http://i36.tinypic.com/66j31x.jpg
(\__/)
( o.O)
(")_(")
The "insider lingo" is fabricated by the system to KEEP YOU CONFUSED! It's not my fault for godssake. I'm not going to reinvent the dictionary to dumb it down for you. EVEYRTHING I say i expound on as clearly as possible. If someone asks, i RE-iterate to make it MORE clear.
As for the "panic" and "alarmism", listen to what this VERY RICH man is saying ... listen to the headline -- "DITCHING THE DOOMED DOLLAR!"
LOOK AT THE DOLLAR GRAPH ... DOoOOOOOooooWwwWWwwwn!
its not alarmism! ITS REALITY.
You just don't hear it much in the news because it is detrimental to the system.
You think the system is going to tell you, "pull out of the stock market", "stop investing, and start day trading", "short the financial sector", "get a foreign bank account and keep your funds in euros" !?!
FUCK NO!
That would DOOM the system!
So why is it alarmism for me to come on here and explain that what the Federal Reserve is doing is devaluing your dollar, and that at some point that lossed-value is going to trigger a worldwide scare. A dollar-ditching scare?
If I opened it now would you not understand?
HOLY SHIT!
This isn't chicken little or fearmongering, this is just what is happening right now.
I WISH you guys could look at the charts i'm looking at right now. The Dow is DOWN 75 points (remember it was UP 250 this morning on the news this morning, but was already down 200 points from yesterdays announcement, so now its down a two day total of about 300 points!) ... and S&P futures is WAYYYYYYYYYYY down 25 points below where it was BEFORE the announcement this morning. (that is, it went UP 25 points, and FELL 50!)
The market is freaking out now. They chewed the meal the Fed served them, and now they are getting food poisoning.
I don't even know WHAT to make of this. But it ain't pretty. Between this and yesterdays announcement, a LOT of "long-only" folks are losing a shit ton of money!
You KNOW its bad when one of the biggest banks in America, Citibank, has to go begging for money from foregin government and only gets that money at JUNKBOND rates ... MY CREDIT CARD RATE IS FOUR PERCENTAGE POINTS LOWER than what they had to borrow at ! ! ! !
If I opened it now would you not understand?
http://en.wikipedia.org/wiki/Subprime_crisis_impact_timeline
Info that is easy to read and understand. Bail out your investments, especially if they have any holdings in the financial sector(which they all do).
You got to spend it all
I agree.
The money men want a way to start over and expand their territory.
They CLEARLY do not care about the strength of the dollar.
INFLATION IS UP 3%. That puts the offical numbers at like nearly 5%.
FYI, I've heard literally a half dozen analysts on CNBC proclaim that the numbers were "half baked" or "half truths" or "totaly fabricated", "just can't be accurate" ... in detailed discussions about dollar value and ppi reports.
There is a very real probability that inflation for the year ran at something between 6 and 8 percent or more!
That would mean your dollar would be worth 50 cents in less than 5 years! Actualy, investors selling would force the value WAY down below that, probably crash it out. I really don't think the dollar has a chance if it gets below the mid 60s on the US Dollar Index ... FYI, it's at 76 and change now.
:(
If I opened it now would you not understand?