Gargoyles Guard Funny Money™ For Santa Claus

May 2, 2008

Elaine Meinel Supkis

It is Friday and everyone will go home and sleep like babies. All is well. The US Fed has found ways to feed the Debt Monster and the Derivatives Beast and so we will continue on the course of infinite debt. The TAFL window run by Helicopter Ben is DOUBLING the amounts it is lending to all and sundry. Including a host of bankrupt European banks! So long as the Fed can pretend to not be bankrupt, they can prop up the entire G7 banking systems. Because the Fed is DOUBLING its Funny Money™ output, pundits are claiming, 'The Banking Crisis Is OVER! Open the party keg of beer!' The yield curve between the value of bond and the new super-low rates now mean we will have a super-duper bubble. One that will save all the wealthy people on earth. And kill us mere mortals.

Fed Revs Up Lending in Latest Jolt to Credit Market

The Federal Reserve, seeking to prevent a deeper economic slowdown, took another stab at coaxing banks into lending at lower rates.

The Fed boosted its biweekly Term Auction Facility sales of cash to banks by 50 percent to $75 billion and expanded the collateral it takes from bond dealers through loans of Treasury securities. It also raised the amount of dollars it makes available to the European Central Bank and Swiss National Bank through swap lines to a combined $62 billion from $36 billion.

Today's actions follow a jump in banks' borrowing costs of as much as 0.38 percentage point since the Fed's March meeting that had blunted the impact of the cash injections that began in December. An index of U.S. financial stocks climbed to the highest level in three months after the announcements before surrendering the gains.

``The world is awash in liquidity, it just isn't reaching the right financial borrowers,'' said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. ``Today's action from the central banks is another strong dose of medicine that will help cure what ails the credit markets.''

As far as I am concerned, the fact that all the main bankers in the Western half of the world, the sector that is building up huge, huge debts and deindustrializing, are seeking MORE money from the Fed----this is BAD NEWS. The fact that this need for instant, totally out of thin air money, is DOUBLING every month should scare us. This is a clear sign that the banks are bankrupt. The fact is, they need liquidity. The Arabs offered this in the form of bonds the have an 11% interest rate tacked on. But the Fed is Santa Claus. They have an artificial, low rate and everyone across the planet wants these new loans. Why bother with old type banking when one can belly up to the bar and get drinks on the house? The US is running our own banking system as if the Fed chief is a bartender who yells, 'Come and get it! And you don't have to pay until next month! And not even then!' Well, I call this 'super-liquidity time' or 'Miller Time.' Anyway, the point is, everyone can drink their fill and not pay the bill.

Note also the comment about money not going to the 'right people.' HAHAHA. The pirates are supposed to get this loot! Not the Chinese! Not the Iranians! Certainly, not the Saudi royals. No, all wealth is to flow through the imperial capitals and then be sluiced into the secret offshore bank accounts that are on Queen Elizabeth's many tiny islands.

Fed Delivers a Steep Yield Curve: A Bull’s Best Friend

Steep Yield Curve

This fourth state is usually rare but that is what we are seeing now. The 20 year treasury note currently yields 4.45% , the 10 year treasury note 3.8% and in contrast, the 90 day or 3 month treasury note is currently yielding 1.45%.

So the current differential between the 20 year note is 3.05% and the 10 year note 2.35%. During the mid-March 2008 market upheaval, the 20 year and 90 day treasury yield difference ballooned to 3.54%. Since the historical differential for the 20 year note is approximately 2% and the differential for the 10 year note appx. 1.35% this qualifies today’s yield curve as a steep yield curve.

So what? Why should you care if some esoteric fixed income construct like the yield curve is steep?

Because the yield curve has some heavy real world significance. It is a symbolic representation of how money filters through our economy and how it creates the prerequisites for economic growth.

The Fed had two choices: to stop inflation that is killing the elderly, the working classes, the poor or feed inflation down the road if this allows endless debts to be created and then dumped on top of everything in sight. Of course, they chose the latter course. This is because the rich can funnel off or skim off a percentage of this inflationary free money. It also pleases the rulers of the empires because they can hand out free money and bill future generations for this. Everyone wants Santa Claus. I hear virtually no talk about paying debts.

Want to know why the media turned on Obama? First, the poor man co-sponsored the anti-pirate of the Caribbean bill that will close the tax loopholes in the Cayman Islands, etc. And the, the worse crime: he took on VOLCKER as his economics advisor. Oh my god! Fiscal responsibility and rewarding savers, not spenders! Pure political poison. Since the media couldn't simply ignore Obama to death like they did to Kucinich or Ron Paul, the chose the character assassination route. Now, there isn't any chance of Obama seeing the White House. If he does manage to go further, the Kennedy solution will be applied.

So the yield curve is now moving in the direction it must move in order to inflate bubbles. Great news if you are a pirate or hate America. But then, it seems that the entire nation has decided, life as outlaws is better than sober financing. I was looking for information about Mt. Shasta when a reader sent me this interesting link:

Mysterious
Mount Shasta

The most remarkable stories are the legends about the mysterious people who supposedly live inside the mountain. They are said to be descendants of an ancient society from Lemuria, a lost continent that sunk eons ago. These Lemurians supposedly live deep inside the mountain in apartments plated with gold. In this secret colony, they preserve their ancient customs.
*snip*
A Dr. M. Doreal claimed years ago that he visited the Lemurians inside their mountain. “The space we came into was about two miles in height and about 20 miles long and 15 miles wide,” he wrote. “It was as light as a bright summer day because suspended almost in the center of that great cavern of space was a giant glowing mass of light.”

Another man reported that he fell asleep on Mt. Shasta, to be awakened by a Lemurian who led him inside the mountain to his “cave, which was paved with gold.” The Lemurian told the man that there were a series of tunnels left by volcanoes that were under the earth like freeways -- a world within a world.

This crazy man, Mr. Doreal, convinced his gullible followers that there would be a world war in 1953. This was a possibility, of course. Since 1953, we have been one step away from total annihilation in a nuclear war. The recent horror story of the crazy man in Austria who built a nuclear war shelter and turned it into a sex torture chamber for his children is classic, by the way. The entire concept of secret deep caves where we hide from the dire effects of our own destruction of all living things leads us inevitably to crimes, immoral actions and hellish, demonic behavior.

This belief in an underground world that is filled with riches and is lined with gold and diamonds, etc, is very fundamental to most humans if not all humans. This is the Cave of Death where wealth is made. Wether it be aliens, Atlantians or dwarves, the beings who live in deep caves and are invisible but who lure humans to their fates using gold as a lure, this is very, very ancient.

Mt. Shasta:

Lemurians, it is said, possess supernatural powers that enable them to disappear at will -- one reason why they aren’t spotted very often. Their power also allows them to “will” an intruder away.

Like all the magic creatures who inhabit our souls, the guardians of these endless caves are clever, mind readers and prone to playing tricks on us. Being part of our psyches, they are invisible unless one does occult magic, then they 'appear' like Faust with his magic circles summoning the devil. Although it is fun to imagine all this, the truth is, the endless wealth really is there for the taking. Only it leads to death and destruction. This is why turning aside from the temptation of total, infinite wealth is life and death, literally. The Fed, for example, when offered a chance to save our futures, to protect America and fix the problems that are causing us to head into total bankruptcy, chose to do the opposite. I sense that everyone around me in this nation want to have Funny Money™ rather than real wealth! If we tell people, 'Your children will be slaves', the answer is, 'But I will have more money today! Why can't I do this? I'LL BE DEAD, ANYWAY!'

This is the attitude problem that is infecting all systems. Even children are now saying, 'Why not spend money now? Why work hard in school? We are all going to be destroyed, anyway?' This fatalism is pernicious. I remember when Ross Perot was running for President. He accurately talked about the 'Giant sucking sound' of jobs being sent away. He talked about dumping debt on future generations. If Obama wants to really be destroyed, he should ask Perot to write his speeches. Still, just like with Ron Paul, Perot got over 15% of the vote. So did Nader in 2000.

Asia Getting Fed Up With Bernanke's Rate Cuts: William Pesek

``I should just get rid of these dollars before they fall even more,'' joked the president of the Thailand Development Research Institute, as we exchanged U.S. currency for euros.

Thailand's currency, the baht, has risen 16 percent against the dollar over the past 18 months, part of an Asia-wide trend. Hastening the dollar's slide is a Federal Reserve set on avoiding recession at all costs. On April 30, the Fed lowered its benchmark interest rate by a quarter point to 2 percent, the seventh cut since September.

While the Fed hinted it may be ready to pause, the amount of monetary stimulus in the pipeline is a growing threat to Asia. One immediate side effect is rising currencies, which poses challenges for Asia's export-dependent economies.

There certainly will be a flood of money. Where will it all go? This is the big question. If the US workers get their hands on plenty of money, the buying of Asian goods will continue. But if it goes elsewhere, then Europe will be happy. Pirates love to buy European goods such as Italian or German cars, French clothes and wines, etc. This is why there is no consensus yet. Everyone is holding their breath, hoping the people who are praying for Santa Claus don't notice that the Rich Brats on the Hill get 90% of the toys and they are lucky to get a piece of coal in their stockings.

Central Banks Ponder Dollar-Debt Rate

Central banks on both sides of the Atlantic are debating causes of the surge in interest rates on commercial banks' dollar-borrowing in money markets and considering what they can do about it.

A major source of stress has been the London interbank offered rate, or Libor, a benchmark for the rates banks pay on dollar loans in the offshore market. It remains unusually high compared with expected Federal Reserve interest rates, an indication that banks continue to hoard dollars.

And I look at this news and say, 'HAHAHA. The banking crisis is so NOT over yet!' The Fed Reserve pumps in dollars and the bankers hold dollars. So where is all this new money to buy Mars Bars™ coming from, anyway? How about Japan? No one is saying a peep.

Bank of America May Not Guarantee Countrywide's Debt

Bank of America Corp., the second- biggest U.S. bank, said it may not guarantee $38.1 billion of Countrywide Financial Corp.'s debt after taking over the mortgage lender, increasing the likelihood of a default.

``There is no assurance that any such debt would be redeemed, assumed or guaranteed,'' the bank said in an April 30 regulatory filing, adding that no decision has been reached. Investors had grown more optimistic the bank would back Countrywide debt, and Standard & Poor's said this week it may raise Countrywide's rating to match Bank of America's.

HAHAHA. Everyone thought the Bank of America was going to be like the Fed: they will cover all the bad debts. So the ratings of Countrywide were artificially raised. Now, I would think they would drop to a more realistic level like C-. Worse, the probability of risk of a huge earthquake rendering many Countrywide mortgages worthless is very high in California. So risk should be rising just like lending to people building right on the ocean front where hurricanes rage and roar are risky. None of these can be AAA by definition. The risk is too great. 90% of these properties have no insurance. Uncle Sam is the main insurer. And old Uncle Sam is going destitute.

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