explaining the 'magic' handling of money by the Federal Reserve and its henchmen

Abra Cadabra

Abra Cadabra

One of the best Kunstler publications  explaining the 'magic' handling of money by the Federal Reserve and its henchmen  . Certainly all the modern financial world is a "virtual house of cards" doomed to fall. But meanwhile, it is better to invest in physical assets, including those that directly support life. Priorities, priorities!

James Howard Kunstler

December 11, 2917

And so, as they say in the movies horror  begins ...  ! Unwinding balance sheet of the Federal Reserve. Such esoteric concept! Is there one in ten thousand of the millions of people who sit at desks all day from sea to shining sea have a clue how this works? Or what is your relationship to the real world? 

I confess, my understanding of it is incomplete and schematic at best, in the way that my understanding of a magic act in Las Vegas could be. All the flash and dazzle hidden magician misdirection. The magician is a terrifying supernatural being or a great fraud. Anyway, the audience "out there" for the magical act of the Federal Reserve: x millions of people concerned about the future, their cars are crumbling, charging $ 53,000 for your child to college or bill of $ 6,000 they just received for attending the emergency room with a cut finger - not give a good damn, even if they knew the magic show the Fed was on.

So the Fed has called this balance, which is actually a computer file, filled with entries denoting the values it has. These securities, mostly government bonds the US. UU. Various categories and mortgage packages assembled by the mysterious entity called government - sponsored Freddie Mac, represent about $ 4.5 trillion in debt. They are allegedly notes pay interest for a certain number of years.  When that period expires years, the Fed recover the money lent, called capital. Ahhhh, here's the neat part!

You see, the money the Fed lent the US government. UU. (In exchange for bonus) he was never there in the first place. The Fed presidigió it from an alternate universe. They gave the money to a bank "primary dealer" in exchange for the guarantee, the bank abracadabraed  for the Treasury of the United States. Well not really. In fact, the Fed just scored in the account "reserve" the bank money alternate universe appeared there. Somehow that money was sent through a virtual pneumatic tube to the US Treasury. UU. , Where it was used to pay drones to fly Yemeni weddings parties, and the Secret Service visit dance bars when the president traveled to foreign lands.

Here's the fun part. The Fed announces that it will throw this nasty debt, about $ 10 billion a month since last October. Its stated objective is toachieve a rate of final settlement of $ 50 billion a month (laughter track reference). If ever (laugh track) get there, it would take 20 years tocomplete the process. The possibility of that happening is almost the same as the possibility that Janet Yellen down your chimney on  Dec. 24 with a sack full of chocolate Bitcoins. But no matter the long view for now.

One way they plan to accomplish this feat is to "dismantle" the links. That is, when the bonds mature, ie reach the end of its mandate, will cease to exist. Fagot! Wait a minute! When a bond matures, the issuer must return the principal to the lender. After all, the Fed lent to the Treasury of the United States X-trillion, the Treasury of the United States paid interest on the loan for X years and now have to spend the full value of the loan (hopefully dollar magically they have inflated over the years and is now worth less than when they were delivered - another magic trick!). But that does not happen.

Instead, when the leading theorist is returned to the Federal Reserve, the Fed money disappears, like the girl in a bikini on stage entering the sacred box wizard and disappears. Now you see her , not now. The explanation, of course, could be that, first, the money was never really there, so it makes sense back to the alternate universe from which it comes.  Well I guess ...

The trick is that for a time he was here on earth and people were doing things with it, like drone attacks mentioned above and pole dancers. Not only that, but the banks "primary dealers" were allowed to pay ten times the  book  Minimum denoted in their accounts of the Fed to participate in the scheme.  Who would they paid all that money? Apparently, much of it to corporations that borrowed at rates of ultralow interest in order to repurchase its own shares, paying much higher than the interest rate calling borrowed to buy those things dividends are allocated, and also they drove the share value of the shares, which also made the corporate executives became more rich in terms of their stock options and bonuses(granted to increase the value of the shares).

And so,  Shazzam  : I give you one percent! And a bankruptcy of the United States of America. 

And do not even ask for all these packages mortgages Freddie Mac that were taken away from the Fed.  The reason I did first was because those mortgages were not being paid, and banks and insurance companies that they had were dying rein. So they parked in a space below the Eccles Building Fed in Washington, hoping only resorted to compost. And guess what: there are more valuable now than they were then. File that one underNecrophilia  . 

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