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Author Topic: "Bernanke Has Injected Foreign Banks With Over $1 Trillion In Cash..."  (Read 2336 times)
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WhiskeyGirl
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« on: May 22, 2013, 08:00:36 AM »

"Thanks To QE Bernanke Has Injected Foreign Banks With Over $1 Trillion In Cash For First Time Ever"
What happened to fixing America first?  Where is the benefit to everyday people?  Main Street?

Quote
Two years ago, Zero Hedge first made the observation that the bulk of Fed reserves (also known simply as "cash created out of thin air" because money is first and foremost fungible no matter what textbook theoreticians may claim, and the only cash allocation preference is the capital allocation IRR analysis) had been parked not with US banks, but with foreign banks with US-based operations. We followed that with more analyses, showing explicitly how the Fed was providing a constant cash injection to foreign banks courtesy of the rate on overnight reserves which is the amount Fed pays to banks that hold reserves with it, as the bulk of reserves continued to end up with foreign banks - a situation set to become a huge political storm some time in 2014-2015 when the IOER has to rise and the Fed is "found" to have injected tens of billions of "interest" not into US banks but in foreign banks operating in the US, and which then can upstream the "profits" to insolvent offshore domiciled holding companies.

So it was our expectation that while if not slowing down its rate of money-creation (i.e., reserve-production) - something that won't happen for a long time as it would crash the stock market - the Fed's reserves would at least revert to being accumulated at US-based banks. No such luck. In fact as the latest H.8 report demonstrates, as of the most recently weekly data, the Fed's policies have led to foreign banks operating in the US holding an all time high amount of reserves, surpassing $1 trillion for the first time, or $1,033 billion to be precise.

'We are confident that we speak for all when we say: "Thank you Ben - insolvent foreign banks appreciate your ongoing QE2 and QEternity-funded generosity"'

Where is the American recovery?  Why aren't these nations bailing out their own banks?  Why is the bailout of foreigners being thrust on the backs of Americans?  Future generations?

read more and view charts here - http://www.zerohedge.com/news/2013-05-21/thanks-qe-bernanke-has-injected-foreign-banks-over-1-trillion-cash-first-time-ever
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WhiskeyGirl
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« Reply #1 on: May 22, 2013, 08:15:25 AM »

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BELGIAN FINANCE MINISTER KOEN GEENS ON DEBT REDUCTION:
    "The global economy remains confronted with significant legacies from the
build-up of imbalances prior to the crisis. So far, these have not been fully
addressed. Public debt levels remain very elevated in many advanced economies.
The (IMF) Fund rightly recommends ... comprehensive medium-term deficit
reduction plans that would achieve gradual but persistent consolidation."
   
    GEENS ON NEED FOR STRUCTURAL ADJUSTMENTS
    "The accommodative monetary policies of the major central banks have reduced
risk aversion and supported balance sheet corrections and growth. However, such
policies do not provide a lasting solution to the structural problems that
governments and prudential supervisors should help address. Without structural
adjustments, monetary policy may become overburdened." 
 
    ANDERS BORG, SWEDEN'S FINANCE MINISTER, ON FISCAL PLANS:
    "The unsustainable fiscal situation in the U.S. and Japan is a source of
concern and uncertainty. Credible medium-term fiscal plans should be promptly
developed."

read more here - http://www.reuters.com/article/2013/04/20/imf-idUSL2N0D70CV20130420
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WhiskeyGirl
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« Reply #2 on: May 22, 2013, 08:24:31 AM »

Put this in the wrong thread...

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CHIDAMBARAM ON QE IN U.S., EUROPE:
    "Europe adopted quantitative easing and the U.S. adopted quantitative
easing. We are concerned about what happens if they withdraw from quantitative
easing - that's our present concern."
    "Quantitative easing does spur capital outflows out of those countries,
which come as capital inflows into emerging markets like India."
    "The question is when the direction turns or changes or reverses, then what
happens? We'll have to be very watchful about that."

read more here - http://www.reuters.com/article/2013/04/19/imf-idUSL2N0D602X20130419

Is QE about building America?  Creating American jobs?  Provide good things for the masses?  Or, just create more wealth for the elites?  Big global businesses and banks?

Why have a central bank / Federal Reserve if it doesn't serve the best interests of Americans?

jmho

 
 
 
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« Reply #3 on: May 22, 2013, 08:28:57 AM »

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Ben Bernanke says high unemployment means that the Fed can do more

PAUL WISEMAN, Assocaited Press,   
 

Aug. 31, 2012 at 1:41 PM ET


 JACKSON HOLE, Wyo. -- Chairman Ben Bernanke made clear Friday that the Federal Reserve will do more to boost the economy because of high U.S. unemployment and an economic recovery that remains "far from satisfactory."

He also argued that the Fed's moves so far to keep interest rates at record lows and encourage borrowing and spending have helped bolster the economy.


read more here - http://www.nbcnews.com/business/entry-974230

What has the Fed done since August of 2012?

Hmmm...Obama 'GM is Alive' and sending Cadillac production to China.  I wonder if they would be going if GM had gone through a standard bankruptcy?  No cronyism, favoritism, and nepotism?

Obama 'Mexico has a manufacturing...growing middle class'

What does the US have?  MILLION in illegal aliens?  MILLIONs in new Obamaphone and welfare participants?  HIGHER unemployment?

Why isn't America's star rising?  Why are folks on Main St. getting the short end of the stick?  Massive growing debt?  Destruction of their economy, jobs, and savings?

Who exactly does the Fed benefit?  Who exactly benefitted from 'our' financial system?  All the bailouts?  Stimulus? 

No one I know.

just my humble opinions
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« Reply #4 on: May 22, 2013, 08:42:49 AM »

Quote
"If a medicine does not work as expected, it's not necessarily because the dosage was too low. Maybe instead the course of treatment should be reconsidered," said the bank's chief Jaime Caruana.

The BIS enjoys huge prestige. It was the only major institution to warn persistently before 2008 that credit excess threatened to trigger a global crisis. The bank's monetary veteran Claudio Borio is esteemed by specialists as one of the world's most brilliant economists.

Mr Caruana said central bank largesse is distorting the financial system and storing up trouble for the future. It is also letting governments "kick the can down the road" and delay reform.

Similar arguments were made by the IMF in a working paper on "Unconventional Monetary Policies". While concluding that emergency action had prevented a deeper downturn, it said potency is "diminishing", and side-effects are becoming worse.

There are signs of a "mispricing of credit risk", a euphemism for asset bubbles. The longer it goes on, the harder it will be for central banks to extricate themselves. The IMF said losses from soaring bond yields -- and therefore falling values -- could reach 7pc of GDP for the Bank of Japan, 6pc for the Bank of England, and 4pc for the Fed.


read more here - http://www.telegraph.co.uk/finance/economics/10067080/BIS-and-IMF-attacks-on-quantitative-easing-deeply-misguided-warn-monetarists.html

It seems to me that keeping deflation under control destroys savings.  If my dollar was worth $1 yesterday, and today the bank printed another and give it to someone else, my money is now worth $.50.  Trying to stop deflation seems to destroy the savings of everyday people.

Which is better? 

Deflation control seems to benefit a few, the foreign banks, the elite global banks and companies...nothing for Main Street. 

Re-inflating the bubbles, trying to keep them from deflating seems to be destroying the economy, savings, and prosperity for generations to come.  Stealing from future generations...those that did not spend the money.

just my humble opinions

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WhiskeyGirl
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« Reply #5 on: May 22, 2013, 08:48:26 AM »

Gas has been over $4 a gallon for some time.  That is inflation you can believe in.  The kind that affects those that actually fill their own gas tank and have to make ends meet every month.

Does $4 gas affect the elite?  Political classes?  Those living the high life in DC?  I don't think so!
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« Reply #6 on: May 22, 2013, 08:51:46 AM »

Quote
Markets Insight: Central bankers turn deaf ear on balance sheets

By John Plender

Yields on US and UK government bonds fell and their currencies appreciated, pointing to resurgent inflation

For much of the past two years, markets have been happy to reward profligate sovereign debtors, provided they had their own central banks to hand, ready and able to print money and thus to prevent formal default. The biggest beneficiaries of this largesse were the US and UK.

Among their more obvious attractions were the fact that they were not the eurozone. So despite poor progress on reducing big deficits and debt, the yields on their government bonds fell and their currencies appreciated. That game is now unravelling.

read more here - http://www.ft.com/intl/cms/s/0/d426e0c2-c21f-11e2-ab66-00144feab7de.html#axzz2U1W1BWGc
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« Reply #7 on: May 22, 2013, 09:01:17 AM »

Quote
Markets are on a crazy, sugar-fuelled journey
'When the music stops,” Chuck Prince famously observed back in mid-2007, “things will get complicated”.


The then chief executive of the US banking giant Citigroup was admitting that growing concerns about sub-prime loans could ultimately shatter what we now know was “irrational exuberance” on global financial markets.

“As long as the music is playing, though, you’ve got to get up and dance,” Prince continued. “And we’re still dancing.”

There’s a “we’re still dancing” mood on global markets today, just as there was six years ago in the run-up to what turned out to be the disastrous market meltdown of September 2008.

Rather than the securitisation of recklessly extended commercial credit providing the music, the beat now comes from “quantitative easing”, courtesy of the world’s leading central banks.


read more here - http://www.telegraph.co.uk/finance/comment/liamhalligan/10066060/Markets-are-on-a-crazy-sugar-fuelled-journey.html
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« Reply #8 on: May 22, 2013, 09:04:27 AM »

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Instead, QE has become an open-ended life-support mechanism for living-dead “zombie banks”, a mask to cover up financial wrongdoing. It’s also become a comfort blanket for politicians, allowing most of them to delay the really tough fiscal decisions.

Money printing on the scale we’ve seen has gone way, way beyond a necessary palliative and been transformed from legitimate temporary emergency measure into lifestyle choice — the economic equivalent of crack cocaine.

File the IMF’s calibrated hair-splitting nonsense in the historical dustbin and read instead a brave and important speech given last week by Jaime Caruana of the Bank for International Settlements (BIS), an umbrella group for the world’s central banks.

“Monetary policy can buy time to implement the necessary balance sheet repair and structural reforms,” thundered Caruana. “But it cannot substitute for them.” I couldn’t have put it better myself. “After five years of buying time, one has to ask if that time has been — or will be — used wisely.”


How do you avoid the tough choices in the US?  Import more illegal aliens?  Give away 30 million more Obamaphones, creating massive profits for foreign businesses and bigger debt for Main St.?

read more here - http://www.telegraph.co.uk/finance/comment/liamhalligan/10066060/Markets-are-on-a-crazy-sugar-fuelled-journey.html

When is it time to kill off the Zombie Banks and claw back the bonuses?  Squander and waste? 

Are you really a 'private' bank when you get so much taxpayer money?

Privatized (faux) profits and socialized losses?
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All my posts are just my humble opinions.  Please take with a grain of salt.  Smile

It doesn't do any good to hate anyone,
they'll end up in your family anyway...
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