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Discussion Starter · #1 ·
Ewww, InfoWars, Conspiracy Theory! :laughing:

Peter Schiff
Euro Pacific Capital
April 1, 2011

Very few people have either the time or patience to sift through the data released by the Treasury Department in the wake of its bond auctions. But the numbers do provide direct evidence of the country’s current financial condition that in many ways mirror a financial shell game that typifies our entire economy.

Despite continued deterioration of America’s fiscal health, the Treasury is still attracting adequate numbers of buyers of its debt, even with the ultra low coupon rates. Market watchers take these successful auctions as proof that our current monetary and fiscal stimulus efforts are prudent. But who’s doing the buying, and what do they do with the bonds after they have been purchased?

Most people are aware that foreign central banks figure very prominently into the mix. They buy for political reasons and to suppress the value of their currencies relative to the dollar. And while we think their rationale is silly, we do not dispute that they will continue to buy as long as they believe the policy serves their own national interests. When that will change is harder to determine. But another very large chunk of Treasuries go to “primary dealers,” the very large financial institutions that are designated middle men for Treasury bonds. In a late February auction, these dealers took down 46% of the entire $29 billion issue of seven year bonds. While this is hardly remarkable, it is shocking what happened next.

According to analysis that appeared in Zero Hedge, nearly 53% of those bonds were then sold to the Federal Reserve on March 8, under the rubric of the Fed’s quantitative easing plan. While it’s certainly hard to determine the profits that were made on this two week trade, it’s virtually impossible to imagine that the private banks lost money. What’s more, knowing that the Fed was sure to make a bid, the profits were made essentially risk free. It’s good to be on the government’s short list.

Given that the Treasury is essentially selling its debt to the Fed, in a process that we would call debt monetization, some may wonder why it doesn’t just cut out the middle man and sell directly. But the Treasury is prevented by law from doing this, so the private banks provide a vital fig leaf that disguises the underlying activity and makes it appear as if there is legitimate private demand for Treasury debt. But this is just an illusion, and a clumsy one to boot.

http://www.infowars.com/the-treasury-auction-shell-game/
 

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Let's face it. The rules and operations of the financial sector are so convoluted, complex and arcane that few people outside the industry can begin to understand what is going on. I read the article, and understand what the guy is saying, but just because he makes it sound sinister - how do I know it is - or isn't? Is this something new? I doubt it. It probably is part of the way treasuries have been sold for decades. Does it serve a purpose or does it need to be fixed? Who knows? :huh:
 

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Let's face it. The rules and operations of the financial sector are so convoluted, complex and arcane that few people outside the industry can begin to understand what is going on. I read the article, and understand what the guy is saying, but just because he makes it sound sinister - how do I know it is - or isn't? Is this something new? I doubt it. It probably is part of the way treasuries have been sold for decades. Does it serve a purpose or does it need to be fixed? Who knows? :huh:
Well whatever they're doing Doesn't work very well

Thus I wont waste time studying it

Let's study something that works like Bringing up the nations

Gross national product

Hey ! now theres a tried an true concept

We have enough freeloaders in society that produce Nothing

throw some cash out over at NYSE and expect a big return though they have done nothing produced nothing for it


Nobody actually wants to work these days they just want to trade dollars or shuffle numbers

Many are willing to send their cash to China just to save a few dollars vs Supporting the US
 

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Discussion Starter · #4 ·
Let's face it. The rules and operations of the financial sector are so convoluted, complex and arcane that few people outside the industry can begin to understand what is going on. I read the article, and understand what the guy is saying, but just because he makes it sound sinister - how do I know it is - or isn't? Is this something new? I doubt it. It probably is part of the way treasuries have been sold for decades. Does it serve a purpose or does it need to be fixed? Who knows? :huh:
:laughing: Why are you in this thread? It has a disclaimer for the intro!

I mean, who the hell could ever understand how a ponzi scheme works? And a shell game? That is for MIT professors, not lay people.

Run along and by some good chinese ****, they need the $$$.. and God knows those kids need the work..:cheers:
 

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:laughing: Why are you in this thread? It has a disclaimer for the intro!

I mean, who the hell could ever understand how a ponzi scheme works? And a shell game? That is for MIT professors, not lay people.

Run along and by some good chinese ****, they need the $$$.. and God knows those kids need the work..:cheers:
I was trying to make a point. Just because some op-ed writer decides to write an article and make it sound like he has discovered the most diabolical conspiracy in history, doesn't mean he really has. If he is writing about something no one understands, he knows he can lead the reader to any conclusion he wants. I'm saying we shouldn't be that gullible. If we are going to play follow the leader, we should look for corroboration from people we trust.
 
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