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VOODOO ECONOMICS: ‘The Covid-19 Dominoes Fall’, The World Is Insolvent

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Of Two Minds

– By Charles Hugh Smith

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Source – oftwominds.com

“…Everyone expecting the financial markets to magically return to January 2020 levels once the pandemic dies down is delusional. All the dominoes of crashing market valuations, crashing incomes, crashing profits and soaring defaults will take down all the fantasy-based valuations of bubblicious assets: stocks, bonds, real estate, bat guano, you name it….The global financial system has already lost $100 trillion in market value, and therefore it’s already insolvent”

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Subtract their immense debts and they have negative net worth, and therefore the market value of their stock is zero.

To understand why the financial dominoes toppled by the Covid-19 pandemic lead to global insolvency, let’s start with a household example. The point of this exercise is to distinguish between the market value of assets and net worth, which is what’s left after debts are subtracted from the market value of assets.

Let’s say the household has done very well for itself and owns assets worth $1 million: a home, a family business, 401K retirement accounts and a portfolio of stocks and other investments.

The household also has $500,000 in debts: home mortgage, auto loans, student loans and credit card balances.

The household net worth is thus $1,000,000 minus $500,000 = $500,000.

Let’s say a typical financial crisis and recession occur, and the household’s assets fall 30%. 30% of $1 million is $300,000, so the the market value of the household’s assets falls to $700,000.

Deduct the $500,000 in debts and the household’s net worth has fallen to $200,000. The point here is debts remain regardless of what happens to the market value of assets owned by the household.

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Federal Reserve to Offer $270 Billion in Loans to Wall Street Tomorrow

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By Pam Martens and Russ Martens: March 11, 2020 ~

John Williams, President of the Federal Reserve Bank of New York

John Williams, President of the Federal Reserve Bank of New York

The little people in America will have to continue to wait to hear any concrete plans for their government to provide financial relief to them for business disruptions resulting from the coronavirus. But Wall Street banks and their sprawling trading desks got the word today that the Fed’s money gusher (repo loans) that began on September 17 of last year will offer them up another $270 billion in cold hard cash at unprecedented low interest rates tomorrow.

The Fed announced that its 1-day emergency loans that it has been making each weekday will increase to as much as $175 billion a day beginning tomorrow; its 14-day loans, which will continue to be offered twice a week, will remain at the elevated amount of $45 billion; and the Fed will add three one-month loans of a whopping $50 billion each. The first one-month loan will be funneled out tomorrow, along with a cap of $45 billion in a 14-day loan and up to $175 billion in a one-day loan, bringing the one-day tally to the astounding sum of $270 billion – all without so much as a vote, or debate or even a hearing in Congress.

All of this money gusher will be dispensed by the New York Fed, the same regional Fed bank that funneled the bulk of the secret $16 trillion in aggregate emergency loans to Wall Street during the last financial crisis. (See chart below.)

For detailed background on this stealth bailout of Wall Street that has now been running without making headlines for the past six months, see our in-depth series here.

GAO Data on Emergency Lending Programs During Financial Crisis

Government Accountability Office Data on Fed’s Emergency Lending Programs During Financial Crisis

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Fed Has 10-Year Plan to Save Banks, But No Plan to Save Americans Devastated By Fallout, Admits Powell

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Is the Fed’s latest money funnel to unnamed trading houses on Wall Street part of the plan?

By Pam Martens and Russ Martens of Wall Street on Parade.

During his testimony to the Senate Banking Committee yesterday, Federal Reserve Chairman Jerome Powell let it slip out, for the first time, that the Federal Reserve has had a 10-year game plan to deal with the financial crisis. In response to a question on cyber threats from Senator Ben Sasse of Nebraska, Powell stated the following:

“They kind of pay us to be awake at night worrying about things. I would say that if you look at what happened in the financial crisis, we had a game plan there. We implemented it over the course of 10 years. I won’t say that it’s perfect or anything like that, but we have a plan that is meant to address those kinds of things.”

“Those kinds of things?” The financial crisis, fueled by corruption and lax regulation of Wall Street banks, destroyed the housing market in the U.S. and left the U.S. economy in tatters. Millions of Americans lost their jobs and their homes to foreclosure. The New York Fed was the supervisor of key Wall Street banks that caused this problem – shouldn’t it have had a 10-year game plan to prevent “Those kinds of things” instead of creating the game plan after the damage had been done?

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FEDERAL RESERVE: FOIA, AND AUDIT

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Olde Reb

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Conspiracy theorists have a history of sullying the good name of the Federal Reserve. They even attempt to get legislation passed in Congress so that an audit can be authorized. Their efforts have been unsuccessful.

The Federal Reserve banks have claimed they are privately owned institutions and not subject to FOIA requests, and support the claim with two Federal court adjudications on other issues. Those court opinions specifically identify the holdings are restricted to the issues before the court.

FOIA requests directed to the Federal Reserve system are codified at 12 CFR 261. 12 CFR § 261.3 (a) identifies the Secretary of the Board of Governors as custodian of all Federal Reserve records. 12 CFR § 261.3 (c) directs service to the Secretary of the Board. Procedures for requesting records are detailed at 12 CFR § 261.12.(b) and (c). Bloomberg media received court support for their demand for FOIA access to Federal Reserve bank information:

“So long as records at the [Federal Reserve Banks] satisfy the plain language meaning of 12 C.F.R. § 261.2(i)(1), they qualify as agency records of the Board and are subject to FOIA requests. …[The CFR reads]: Records of the Board include . . . all information coming into the possession and under the control of the Board, any Board member, any Federal Reserve Bank, or any officer, employee, or agent of the Board or of any Federal Reserve Bank, in the performance of functions for or on behalf of the Board that constitute part of the Board’s official files; or [records] [t]hat are maintained for administrative reasons in the regular course of business in official files in any division or office of the Board or any Federal Reserve Bank in connection with the transaction of any official business..[provisions are to be broadly applied].The FRBs give all revenue in excess of expenses to the U.S. Treasury. 12 U.S.C. § 289.” Bloomberg L.P. v. Board. of Governors of Federal Reserve System, 649 F. Supp. 2d 262, 274++ (S.D.N.Y. 2009), aff’d, 601 F.3d 143 (2d Cir. 2010). emphasis added.

But what records would be of interest ? Well, it has been theorized that a considerable amount of funds from the Federal Reserve’s handling of government funds from auctions of Treasury securities disappears.1 The FRBNY, as fiscal agent of the U.S. government, has exclusive management of disbursement of the funds and any related function they wish to claim.2 The accounts currently handle over $10 trillion annually and no audit of the funds has been found.

Treasury Direct identifies securities for redeeming market securities usually have an approximate 10% “new cash” allocation.3 That would appear to relate to deficit spending. Funds for redeeming securities are disbursed in large part to select Primary Dealers who collect designated securities—or who have the securities they hold identified for recall. PDs also bid on auctioned securities. Transfer of funds for redeeming securities from funds received by auction does not increase the currency in circulation (inflation) nor does it increase the National Debt.

If funds designated as ‘new cash’ went to the government, they would have to purchase securities. There is no known government account that receives the approximate $1 trillion annual funds. If the funds purchased securities, they would eliminate any increase in currency in circulation (inflation) and would not increase the national debt. This obviously does not occur. Where do the funds go ? It undoubtedly involves a scramble of CUSIP numbers.4

The above discussion should not be confused with QEs or non-QEs. Those involve collateralized credit [not to be confused with money] extended by the Federal Reserve authorized by 12 CFR § 201.3 (a) identified as loans and, in large part, have been paid back. Some pundits claim they were made to prevent an economic collapse; some same it was a postponement.5 If a commercial bank was doing it, it would be called fractional reserve lending without any reserve requirement; it is the key to rampant inflation.

It would appear that FOIA can be used to obtain the records maintained by the FRBNY as to the disbursement of ‘new cash’ funds and the consideration received for them from the identified recipients. Some pundits claim the central bank is owned by the Rothschild.6 Other pundits claim the BOG is a privately held corporation with shares owned by select Primary Dealers and others.7 Maybe FOIA can find out what is correct.

Failure to take any action has been prophesied to result in a Greek/ Argentina oppression and collapse of the U.S. society.8

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Footnotes:

1 .. https://thedailycoin.org/2018/08/21/the-federal-reserve-a-different-view-updated/ ; https://ppjg.me/2019/11/18/the-federal-reserve-a-different-view/

2..31 CFR 375.3.

3..https://www.treasurydirect.gov/instit/annceresult/press/press_cashpydwn.htm

4..https://www.zerohedge.com/markets/helicopter-money-here-how-fed-monetized-billions-debt-sold-just-days-earlier?utm_campaign=&utm_content=ZeroHedge

5..https://www.zerohedge.com/markets/944-trillion-reasons-why-fed-quietly-bailing-out-hedge-funds; https://realinvestmentadvice.com/yes-rates-are-still-going-to-zero/

6..https://usahitman.com/o3clwrcb/

7 …https://www.spartareport.com/2019/11/the-federal-reserve-a-different-view/;

8…https://ppjg.me/2019/11/18/scenario-of-national-bankruptcy/.

OPEN LETTER TO CONGRESS

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J.Q. Public
freedom@Qmail.nix

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Dear Congresscritter,

The impeachment farce in Congress is the same modus operandi that has been used by Wall Street to create civil dissension and establish puppet governments with tyrannical control worldwide for decades. Can we prevent such an occurrence in the United States ?

Wall Street created the CIA in 1946 using their crony Allen Dulles to hide their nefarious war-mongering, such as getting the US involved in WW I and WW II, under a guise of “national security.” Then the CIA used that cover to thwart President Eisenhower’s attempt for Peace talks with Khrushchev by sabotaging their own U-2 flight. Then they sabotaged their own invasion of Cuba in a failed attempt to commit the U.S to all-out war with Cuba [Dulles countermanded JFK’s order]. Then they labeled JFK a traitor when they discovered his secret back-channel peace talks with Moscow (along with JFK’s attack on the Federal Reserve). Mark Lane, John Groden, and Mark North claim the CIA killed JFK. Then they successfully impeached (with bogus CIA corrupted evidence and MSM hype) RMN after he closed the CIA school to teach Tibetans to invade China, and then RMN destroyed the CIA’s straw enemy by opening trade with China in addition to his Midnight Massacre of 1700 CIA agents. Then they schemed to prevent the reelection of JEC [OCTOBER SURPRISE] after he torpedoed a nuclear powered aircraft carrier and his Halloween Massacre of 700 CIA agents. “Conspiracy theorists” conclude 1000 architects and engineers, and Rebekah Roth, present a scenario that appears impossible without the CIA and US military involvement on 9/11. Then the CIA lied to create war in Iraq, Afghanistan, Syria, among many other coups by Wall Street, behind cutouts, as indicated by John Perkins.

Wall Street bankers have initiated and utilized the military to engage in perpetual warfare by lies and deception for their economic profit since 1915. This continuity of influence and control over government policy is now evidenced in the Ukraine and is leading the impeachment fraud against the President after his attempts to avoid nuclear hostility with a super Power. Wall Street cannot tolerate peace.

What action can be taken to discontinue the madness of these psychopathic homicidal megalomaniacs? Well, may I respectfully suggest WHENSE THE DEEP STATE may be one consideration. Ref https://ncc-1776.org/tle2019/tle1050-20191208-10.html

J.Q. Public
freedom@Qmail.nix

Ref. https://ppjg.me/2019/11/18/the-federal-reserve-a-different-view/
How can Fed be used to foreclose on the $22 trillion National Debt for the benefit of Wall Street?
Ref. https://ppjg.me/2019/11/18/scenario-of-national-bankruptcy/.

SCENARIO OF NATIONAL BANKRUPTCY

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Author: OldReb

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Doom and gloom are appearing with increased frequency in U.S. and global financial writings but specific details of a potential economic catastrophe are never given. Let us speculate on what could happen in the United States.

Is a view into an economic catastrophe available ?

ANSWER: Sure, that is easy. Read what has happened to Greece and Argentina. William Blum, John Perkins, and Chossudovsky give many more examples. Bank deposits have been seized; pensions have been wiped out; jobs have been terminated; real estate and assets are selectively confiscated; the economy crashes; national assets are sold at fire-sale prices to financiers; financiers must approve every government action; etc. The same New York City parties, and their proxies, are repeatedly involved.

How might it be handled in the U.S. ?

ANSWER: The Federal Reserve Bank of New York City will handle it. They have exclusive handling of funds to redeem Treasury securities—as a fiscal agent for the government. They will select who gets funds which the government has available. Ref. 31 CFR 375.3.

Who will benefit from the crash?

ANSWER: Primary Dealers currently receive >$10 trillion annually for redeeming Treasury securities. Some of them were involved in creating the Federal Reserve. The concept that they hold ownership of the Board of Governors, in a closely held corporation that does not have to file with the SEC, should not be overlooked. Furtive acts abound in the creation of the Fed. Their derivatives creations have obtained super-priority status in bankruptcy. More

THE FEDERAL RESERVE: A DIFFERENT VIEW

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Author: oldreb

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“What difference does an increase in the National Debt make? We owe it to ourselves.” virtually every congress-critter has declared. Such a paraphrased statement, reflecting on the exoskeleton structure of the Federal Reserve, ignores the inner historic mechanisms of Rothschild banking, the intense subterfuge and arm-twisting of the Fed’s creation, and the proven destructive forces inherent but hidden therein. 1

The medieval Rothschild Banks established a line of credit for the King provided the King issued a written promise to pay gold, with interest, to the bank at a time in the future. The book-entry Rothschild credit was used to pay for obligations incurred by the king. The credit continued to be circulated in the kingdom between merchants. The bankers sold the king’s interest bearing promise of gold to investors. The promise was renewed by the king on its maturing date and became perpetually rolled-over. 2

VOILA !!! The king made the suppliers of services happy with Rothschild credit; the bankers had the gold from investors; the investors had a promise the king would eventually pay them in gold—which would never happen. 3 Everything went smoothly as long as the bankers could sell the promise and the investors did not demand the gold. 4 As Benjamin Ginsburg has lamented in FATAL EMBRACE; (bankers) AND THE STATE 5, eventually the schemes, which stole the wealth from the people with book-entry fiat money, would come to a catastrophic climax. 6

The Federal Reserve system, claimed to be “staffed and run by Council on Foreign Relations members” 7 does the same thing for the U.S. government’s deficit spending. Their wizard is hiding behind Frank Baum’s curtain as obscurant to any public inquiry.8

The Federal Reserve Bank of New York will grant credit (not “create money”) in an account of the US government with an amount that the government will pledge. 9 The government will expend the book-entry-credit account (deficit spending) to pay for goods and services consumed by the government. The suppliers are content. Evidence that the supplier has received a credit voucher is obvious. [It is touted to the public as a loan.10] The heading of the currency given to the supplier by a local commercial bank is Federal Reserve Note; i.e., a debt obligation of the Federal Reserve also identified as a “tender” (substitute) required by law to be accepted for an imprinted number of dollars. 11 More

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