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Old 07-03-2013, 06:19 AM
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The Federal Reserve Is Paying Banks NOT To Lend 1.8 Trillion Dollars To The American

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Did you know that U.S. banks have more than 1.8 trillion dollars parked at the Federal Reserve and that the Fed is actually paying them not to lend that money to us? We were always told that the goal of quantitative easing was to "help the economy", but the truth is that the vast majority of the money that the Fed has created through quantitative easing has not even gotten into the system. Instead, most of it is sitting at the Fed slowly earning interest for the bankers.

Back in October 2008, just as the last financial crisis was starting, Federal Reserve Chairman Ben Bernanke announced that the Federal Reserve would start paying interest on the reserves that banks keep at the Fed. This caused an absolute explosion in the size of these reserves. Back in 2008, U.S. banks had less than 2 billion dollars of excess reserves parked at the Fed. Today, they have more than 1.8 trillion. In less than five years, the pile of excess reserves has gotten nearly 1,000 times larger. This is utter insanity, and it will have very serious consequences down the road.

Posted below is a chart that shows the explosive growth of these excess reserves in recent years...

This explains why all of the crazy money printing that the Fed has been doing has not caused tremendous inflation yet. Most of the money has not even gotten into the economy. The Fed has been paying banks not to lend it out.

But now that big pile of money is sitting out there, and at some point it is going to come pouring in to the U.S. economy. When that happens, we could very well see an absolutely massive tsunami of inflation.
http://theeconomiccollapseblog.com/a...merican-people

I have read somewhere else the same thing, the fed keep the money, what a great job to boost the economy!
 
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Old 07-03-2013, 07:16 AM
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It gets better (worse?)...

Now that the banks have all that extra cash in their Fed account, it counts as an asset that they can borrow against.
Do you think the banks have been borrowing against it? Yes.
Do you think they have expanded their derivatives portfolio with that borrowed cash? Yes.
Will the added leverage on those borrowed funds cause issues down the road? What do you think?
That will necessitate even larger bailouts than were needed in 2008 but this time, they are more likely to be called "bail-ins" because the money will come from the bank's "investors" {depositors} Cyprus Style.
Cyprus was a test, people. We failed that test, so that model will be used again in other places.
The US, Canada, Australia, New Zealand and other places all have that ability to siphon off cash from depositor accounts in order to make the banks whole now.
 
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Old 07-03-2013, 07:53 AM
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Bitcoin to the rescue!
 
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Old 07-03-2013, 08:21 AM
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Originally Posted by enterscope View Post
Bitcoin to the rescue!
You are kidding, right?

Bitcoin compliant: Mt. Gox registers as money service, seeks federal blessing to continue operations
http://www.extremetech.com/computing...nue-operations
 
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Old 07-03-2013, 08:23 AM
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Originally Posted by Zap View Post
It gets better (worse?)...

Now that the banks have all that extra cash in their Fed account, it counts as an asset that they can borrow against.
Do you think the banks have been borrowing against it? Yes.
Do you think they have expanded their derivatives portfolio with that borrowed cash? Yes.
Will the added leverage on those borrowed funds cause issues down the road? What do you think?
That will necessitate even larger bailouts than were needed in 2008 but this time, they are more likely to be called "bail-ins" because the money will come from the bank's "investors" {depositors} Cyprus Style.
Cyprus was a test, people. We failed that test, so that model will be used again in other places.
The US, Canada, Australia, New Zealand and other places all have that ability to siphon off cash from depositor accounts in order to make the banks whole now.

Like George Carlin said: "It's one big club and you ain't in it"
 
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Old 07-03-2013, 08:35 AM
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Originally Posted by Brave7 View Post
Like George Carlin said: "It's one big club and you ain't in it"
Oh! We're all going to be in the club when it comes time to pay the bill.
 
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Old 07-03-2013, 08:43 AM
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Originally Posted by Zap View Post
Oh! We're all going to be in the club when it comes time to pay the bill.
Of course, we are always very welcome to pay the bills

I don't know if you have already watched this documentary, but I recommend it to anyone

[YT]lKXspt459LE[/YT]

Last edited by Franc Tireur; 07-03-2013 at 08:47 AM.
 
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