[ARCHIVED THREAD] - The GIANT scheme of US “Treasuries”!

Posted: 9/20/2009 2:58:55 PM EDT

The GIANT scheme of US “Treasuries”!

Now it starting to make sense!

I was wondering who, in the right mind, is still buying US “Treasures” and financing skyrocketing US debt. I hear that Chinese are actually selling more of US debt than they are buying. Slowly trying to dump as much of it as they can.

http://www.hispanicbusiness.com/news/2009/8/24/china_reduces_us_treasury_bonds.htm

Arabs are not buying much since oil prices are still low and demand weak. Britain and Japan cannot be buying much since their own economies are in deep trouble

Apparently this is how it works:

Fed creates trillions out of thin air and gives it to major banks. Banks in turn ship money off shore to their overseas outfits and buy US debt pretending to be independent buyers and creating seemingly never ending “demand”.

http://www.washingtonsblog.com/2009/09/is-treasury-faking-foreign-purchases-of.html

So this is where trillions that Fed creates are going!

http://www.youtube.com/watch?v=PXlxBeAvsB8

And this is why “bailout” money is given directly to the banks instead of buying “toxic assets”. To “deal” with that problem all they had to do is change “mark to market” rules. By doing that “toxic assets” became not so toxic overnight and banks became “solvent” and even “profitable”. Alive enough to keep buying US debt through their offshore subsidiaries.

How long can it possibly go on! Nearly half US Government spending is borrowed money already! Not matter how gigantic scheme is it is bound to collapse sooner or later. This one, when it does, will take US down with it!

Posted: 9/20/2009 3:26:56 PM EDT

[#1]

Sunk like a rock this topic did. Just like I thought.
Truth is too horrible to face and hard to comment on.

Posted: 9/20/2009 3:33:47 PM EDT

[#2]

What you just said is the government is engaged in a massive shell game to hide the fact that
they have been and are continuing to monetize the debt.

Most people here on GD are already well aware of this fact. A few are so clueless about the issue
they simply can't understand it. And a few who do understand it would rather die defending the
government and this insanity before admitting we are all collectively hosed and the only question is
not if the bottom is gonna drop out but when.

Posted: 9/20/2009 3:47:21 PM EDT

[#3]

Quoted:
What you just said is the government is engaged in a massive shell game to hide the fact that
they have been and are continuing to monetize the debt.

Most people here on GD are already well aware of this fact. A few are so clueless about the issue
they simply can't understand it. And a few who do understand it would rather die defending the
government and this insanity before admitting we are all collectively hosed and the only question is
not if the bottom is gonna drop out but when.

Well said.

Posted: 9/20/2009 3:49:43 PM EDT

[#4]

The Azteks are looking a lot smarter by the day. Their calendar ends on 12/21/2012.

Posted: 9/20/2009 3:51:50 PM EDT

[#5]

In before the nay-sayers are here to tell us it won't bite us in the arse big time.

Posted: 9/20/2009 3:58:56 PM EDT

[#6]

Here are the links made hot:

http://www.hispanicbusiness.com/news/2009/8/24/china_reduces_us_treasury_bonds.htm

http://www.washingtonsblog.com/2009/09/is-treasury-faking-foreign-purchases-of.html

And the absolutely priceless video of Alan Grayson asking Inspector General Elizabeth Coleman what's going on, but getting no answer:
http://www.youtube.com/watch?v=PXlxBeAvsB8

Posted: 9/20/2009 4:08:21 PM EDT

[#7]

Yeah, I am pretty sure this is the biggest, most well known "secret" of modern US fiscal policy.

The dems are showing no intentions of backing off spending - hell, now's the perfect time for Healthcare!

so unless the organized taxpayers vote MAJOR change in `10, it is all for naught. Just prepare for the falling out as best you can, and realize that these kinds of things have tremendous amounts of inertia: there are literally hundreds of governments and billions of people who WANT the world to go on turning - they keep having faith in the US dollar and the cooperative governments/financial institutions because the alternative (the truth in this case) is just too fucking scary to admit.

thus, the status quo keeps propagating until some random event will bring it all to a very unpleasant stop. The problem that many of us share is just WHEN that is going to happen (or how quickly it will happen when the time comes).

Posted: 9/20/2009 4:25:21 PM EDT

[#8]

Quoted:
Yeah, I am pretty sure this is the biggest, most well known "secret" of modern US fiscal policy.

The dems are showing no intentions of backing off spending - hell, now's the perfect time for Healthcare!

so unless the organized taxpayers vote MAJOR change in `10, it is all for naught. Just prepare for the falling out as best you can, and realize that these kinds of things have tremendous amounts of inertia: there are literally hundreds of governments and billions of people who WANT the world to go on turning - they keep having faith in the US dollar and the cooperative governments/financial institutions because the alternative (the truth in this case) is just too fucking scary to admit.

thus, the status quo keeps propagating until some random event will bring it all to a very unpleasant stop. The problem that many of us share is just WHEN that is going to happen (or how quickly it will happen when the time comes).

I see all of this in exactly the same light. The big question in my mind is how does the average Joe go about preparing for the falling out as best he can. Not talking about the basic firearms/ammo stockpile that most here have pretty much already aquired anyway. I'd like to hear folks financial preperation ideas for themselves and families to best weather this coming storm. Most people(sheeple) that i interact with on a day to day basis don't even have a clue that there's any problems and are TOTALLY unprepared for dealing with any type of adversity.

Posted: 9/20/2009 4:45:00 PM EDT

[#9]

Quoted:
The Azteks are looking a lot smarter by the day. Their calendar ends on 12/21/2012.

That would be the Mayans, buddy.

Posted: 9/20/2009 7:43:10 PM EDT

[#10]

bump

Posted: 9/20/2009 7:44:37 PM EDT

[#11]

Quoted:

Quoted:
The Azteks are looking a lot smarter by the day. Their calendar ends on 12/21/2012.

That would be the Mayans, buddy.

owned

Posted: 9/20/2009 7:49:57 PM EDT

[#12]

Quoted:
Yeah, I am pretty sure this is the biggest, most well known "secret" of modern US fiscal policy.

The dems are showing no intentions of backing off spending - hell, now's the perfect time for Healthcare!

so unless the organized taxpayers vote MAJOR change in `10, it is all for naught. Just prepare for the falling out as best you can, and realize that these kinds of things have tremendous amounts of inertia: there are literally hundreds of governments and billions of people who WANT the world to go on turning - they keep having faith in the US dollar and the cooperative governments/financial institutions because the alternative (the truth in this case) is just too fucking scary to admit.

thus, the status quo keeps propagating until some random event will bring it all to a very unpleasant stop. The problem that many of us share is just WHEN that is going to happen (or how quickly it will happen when the time comes).

True....so true. There is a lot of wishful thinking and pie in the sky hope that is a huge factor in economic cycles. While the fundamentals of supply, demand,
GDP, national debt and interest are the basics at work what people believe or don't is a huge factor in the timing of what happens.
Enough people believe the BS from DC about the "recovery" and things continue on the old SSDD course. What happens is that the wishful thinking
only buys time. Time for the mess to get bigger and bigger and thus the disaster that always follows to get bigger and bigger.

If the massive correction needed to undo our countries fiscal woes had occurred a decade ago it would have been quite painful but the country
would have survived relatively intact. Now the fall from grace is going to be so huge that what happens to the US and the world is anyone's guess.
We are in deep deep uncharted waters economically.

Posted: 9/20/2009 7:50:47 PM EDT

[#13]

I was there when USSR collapsed.

Basically imagine the day when you wake up and there in no money. None. No paper, no savings, nothing. Whatever money you had in the bank – GONE. Whatever money you had on hands is less useful than toilet paper (too small and too coarse).

Government issues “new money” but value of it crashes faster than Zimbabvian currency.

All kinds of local and regional Governments pop up and try to take control of the situation. Day to day you do not even know which country you may live in tomorrow. (without moving that is).

Now try to plan for this kind of situation.....

Fall of USSR was nothing compared to what is coming. To most of the world fall of USSR was almost a non-event. Most of the world just sat back and said; “Sucks being Russian now days”. Russia recovered by selling oil, gas, metals, lumber... everything they could to the West. What does US have to sell? US$ and Treasures?

US still does have pretty good agrarian sector but it will be devastated by severe seed shortages once farmers cannot buy non- reproducing, “terminator seed” from Monsanto every year.

Posted: 9/20/2009 7:52:07 PM EDT

[#14]

breaking news...Water is wet!..

Back to sports, Jim!

Posted: 9/20/2009 7:54:02 PM EDT

[#15]

Quoted:

Quoted:

What you just said is the government is engaged in a massive shell game to hide the fact that

they have been and are continuing to monetize the debt.

Most people here on GD are already well aware of this fact. A few are so clueless about the issue

they simply can't understand it. And a few who do understand it would rather die defending the

government and this insanity before admitting we are all collectively hosed and the only question is

not if the bottom is gonna drop out but when.

Well said.

Cogent.
5sub

Posted: 9/20/2009 7:55:47 PM EDT

[#16]

Quoted:
I was there when USSR collapsed.

Basically imagine the day when you wake up and there in no money. None. No paper, no savings, nothing. Whatever money you had in the bank – GONE. Whatever money you had on hands is less useful than toilet paper (too small and too coarse).

Government issues “new money” but value of it crashes faster than Zimbabvian currency.

All kinds of local and regional Governments pop up and try to take control of the situation. Day to day you do not even know which country you may live in tomorrow. (without moving that is).

Now try to plan for this kind of situation.....

Fall of USSR was nothing compared to what is coming. To most of the world fall of USSR was almost a non-event. Most of the world just sat back and said; “Sucks being Russian now days”. Russia recovered by selling oil, gas, metals, lumber... everything they could to the West. What does US have to sell? US$ and Treasures?

US still does have pretty good agrarian sector but it will be devastated by severe seed shortages once farmers cannot buy non- reproducing, “terminator seed” from Monsanto every year.

First hand accounts of the devastation shitty economic policies can have usually fall on deaf ears till it's way too late to undo the damage.
I believe you and feel America could be heading for a crash that could make the 1990's fall of the USSR look like a tea party.

Posted: 9/20/2009 7:58:56 PM EDT

[#17]

Quoted:

The GIANT scheme of US “Treasuries”!

Now it starting to make sense!

I was wondering who, in the right mind, is still buying US “Treasures” and financing skyrocketing US debt. I hear that Chinese are actually selling more of US debt than they are buying. Slowly trying to dump as much of it as they can.

http://www.hispanicbusiness.com/news/2009/8/24/china_reduces_us_treasury_bonds.htm

Arabs are not buying much since oil prices are still low and demand weak. Britain and Japan cannot be buying much since their own economies are in deep trouble

Apparently this is how it works:

Fed creates trillions out of thin air and gives it to major banks. Banks in turn ship money off shore to their overseas outfits and buy US debt pretending to be independent buyers and creating seemingly never ending “demand”.

http://www.washingtonsblog.com/2009/09/is-treasury-faking-foreign-purchases-of.html

So this is where trillions that Fed creates are going!

http://www.youtube.com/watch?v=PXlxBeAvsB8

And this is why “bailout” money is given directly to the banks instead of buying “toxic assets”. To “deal” with that problem all they had to do is change “mark to market” rules. By doing that “toxic assets” became not so toxic overnight and banks became “solvent” and even “profitable”. Alive enough to keep buying US debt through their offshore subsidiaries.

How long can it possibly go on! Nearly half US Government spending is borrowed money already! Not matter how gigantic scheme is it is bound to collapse sooner or later. This one, when it does, will take US down with it!

And this is why “bailout” money is given directly to the banks instead of buying “toxic assets”.

bush's insane economic bullshit continued by obama. (IIRC TWENTY toxic mortgages were purchased.)

To “deal” with that problem all they had to do is change “mark to market” rules. By doing that “toxic assets” became not so toxic overnight

Did the .gov change the "mark-to-market" rules ??
5sub

Posted: 9/20/2009 8:07:12 PM EDT

[#18]

Quoted:

The GIANT scheme of US “Treasuries”!

Now it starting to make sense!

I was wondering who, in the right mind, is still buying US “Treasures” and financing skyrocketing US debt. I hear that Chinese are actually selling more of US debt than they are buying. Slowly trying to dump as much of it as they can.

http://www.hispanicbusiness.com/news/2009/8/24/china_reduces_us_treasury_bonds.htm

Arabs are not buying much since oil prices are still low and demand weak. Britain and Japan cannot be buying much since their own economies are in deep trouble

Apparently this is how it works:

Fed creates trillions out of thin air and gives it to major banks. Banks in turn ship money off shore to their overseas outfits and buy US debt pretending to be independent buyers and creating seemingly never ending “demand”.

http://www.washingtonsblog.com/2009/09/is-treasury-faking-foreign-purchases-of.html

So this is where trillions that Fed creates are going!

http://www.youtube.com/watch?v=PXlxBeAvsB8

And this is why “bailout” money is given directly to the banks instead of buying “toxic assets”. To “deal” with that problem all they had to do is change “mark to market” rules. By doing that “toxic assets” became not so toxic overnight and banks became “solvent” and even “profitable”. Alive enough to keep buying US debt through their offshore subsidiaries.

How long can it possibly go on! Nearly half US Government spending is borrowed money already! Not matter how gigantic scheme is it is bound to collapse sooner or later. This one, when it does, will take US down with it!

http://www.washingtonsblog.com/2009/09/is-treasury-faking-foreign-purchases-of.html

Monday, September 14, 2009

Are Foreign Purchases of U.S. Treasury Bonds Being Faked?

Everyone knows that the American government is gaming the market for treasury bonds to some extent.

For example, the government has itself bought some U.S. Treasuries.

Some writers, such as Rob Kirby and Ellen Brown, go much further, alleging that Bernanke and the boys have also used hedge funds in the Cayman Islands to secretly buy huge sums of U.S. treasuries using dollars printed by the Federal Reserve, while pretending that independent "Caribbean banks" are doing the buying. See this, this and this. I have no idea whether or not they are right.

Perhaps most dramatically, Keith Fitz-Gerald (Contributing Editor to Money Morning, Investment Director of the Money Map Report and editor of the New China Trader) - who has seemed like a very level-headed guy in the past - is now claiming that the U.S. government has recently changed the rules so that the Fed can itself buy U.S. treasuries but claim that the buyers are foreign:

The U.S. Government wants the public to believe that China, Japan and Europe are still happily buying U.S. debt to fund the American economic turnaround. The only problem is - they're not...

The reality is that the Treasury changed the way U.S. debt is accounted for when purchased on the open market. U.S. debt selling on the open market can be considered as having been sold to "foreigners" even if the purchaser was the Federal Reserve! Voila! A sleight of hand by the U.S. Government, and China and Japan can appear to be buying debt while at the same time selling debt.

If Fitz-Gerald is right, then the story that China was a net seller of U.S. Treasury bonds for the first time ever in June takes on added significance. And the claim that China's bond purchases have increased recently loses credibility.

It is obviously important to quickly either debunk or verify Fitz-Gerald's claim. Can anyone at Treasury or one of the relevant market makers tell us one way or the other?

Seems to be long on speculation but short on actual facts. However, I would be most 'un-surprised' if this shit is not true.
5sub

Posted: 9/20/2009 8:14:50 PM EDT

[#19]

Those incidents were apparently just dress rehearsals for bigger things to come. In late 2005, the Federal Reserve (or "Fed") announced that beginning in March 2006, it would no longer be publishing figures for M3 (the largest measure of the money supply). M3 has been the main staple of money supply measurement and transparent disclosure for the last half-century, the figure on which the world has relied in determining the soundness of the dollar. But the curtain was now to drop. What was it that we weren't supposed to know? March 2006 was also the month Iran announced it would begin selling oil in Euros. Some observers suspected that the Fed was gearing up to use newly-printed dollars to buy back a flood of U.S. securities dumped by foreign central banks. Another possibility was that the Fed had already been engaging in massive dollar printing to conceal a major derivatives default and was hiding the evidence.^{<small>6</small>}

http://www.webofdebt.com/articles/federal-debt-crisis.php

This is from one of the OP's links. Look at the fucking dates.
5sub

Posted: 9/20/2009 8:21:03 PM EDT

[#20]

To “deal” with that problem all they had to do is change “mark to market” rules. By doing that “toxic assets” became not so toxic overnight

Did the .gov change the "mark-to-market" rules ??

5sub

[/quote]

That is what I heard.

it was set by US GAAP

http://en.wikipedia.org/wiki/Generally_Accepted_Accounting_Principles_(United_States)

Posted: 9/20/2009 8:27:38 PM EDT

[#21]

Look at the date of this shit........2005.

http://www.ar15.com/forums/manageReply.html?a=write&b=1&f=5&t=930311&r=&page=1&x=wysiwyg&pvID=930311&pt=t

To say that today's news headlines are chock full of reporting about possible hedge fund problems arising from the downgrade of GM and Ford's credit ratings is an understatement. In fact, news outlets like yourselves at CNBC have flooded the airwaves with reports and have even gone so far as to investigate this story and question names like GLG partners as to whether or not they have been negatively impacted by this developing situation with the automakers' debt. We aren't the only ones who have noticed this development, with folks such as Eric Fry at the Rude Awakening reporting,

"..If a few big hedge funds are in trouble, as CNBC's Maria Bartiromo has been breathlessly reporting, are a lot of us little investors also in trouble?.."
––––––––––––––––––––––-

Now, if you take a look at the latest release of TIC data - you might notice that these numbers have been dramatically altered - after the fact. On May 16, 2005 - we received our latest installment of TIC data from the good folks at the Fed and Treasury. It is appended here.

(See link for tables)

Economic history has apparently been rewritten folks. The inconsistencies and conflicting data being fed to us by officialdom are brazenly astonishing. In the month of Jan. 05 alone, Japan's holdings of US securities have been retro altered to the tune of over 20 billion, China's by close to 30 billion and the United Kingdom's by more than 60 billion. Can any of us really believe anything these folks have to say? Imagine, a restatement of this magnitude without as much as an explanatory footnote or a press release? Somehow, none of this is even deemed to be newsworthy? What's beginning to scare me; if the US Treasury tells us the world is flat - what happens to the South Pole?

I knew bush became a piece of shit but I didn't know he had always been a piece of shit.
5sub

Posted: 9/20/2009 8:32:36 PM EDT

[#22]

Quoted:

To “deal” with that problem all they had to do is change “mark to market” rules. By doing that “toxic assets” became not so toxic overnight

Did the .gov change the "mark-to-market" rules ??
5sub

That is what I heard.

it was set by US GAAP

http://en.wikipedia.org/wiki/Generally_Accepted_Accounting_Principles_(United_States)

[/quote]

Only a GAAP discussion––––––––––-nothing about mark-to-market changes.
5sub

Posted: 9/20/2009 8:36:14 PM EDT

[#23]

Quoted:

To “deal” with that problem all they had to do is change “mark to market” rules. By doing that “toxic assets” became not so toxic overnight

Did the .gov change the "mark-to-market" rules ??

5sub

That is what I heard.

it was set by US GAAP

http://en.wikipedia.org/wiki/Generally_Accepted_Accounting_Principles_(United_States)

Only a GAAP discussion––––––––––-nothing about mark-to-market changes.

5sub[/quote]

It is kinda complicated scheme. But is does not happen without US Congress approval.

http://en.wikipedia.org/wiki/Mark-to-market

Posted: 9/20/2009 8:42:06 PM EDT

[#24]

Quoted:

To “deal” with that problem all they had to do is change “mark to market” rules. By doing that “toxic assets” became not so toxic overnight

Did the .gov change the "mark-to-market" rules ??
5sub

That is what I heard.

it was set by US GAAP

http://en.wikipedia.org/wiki/Generally_Accepted_Accounting_Principles_(United_States)

Only a GAAP discussion––––––––––-nothing about mark-to-market changes.
5sub

It is kinda complicated scheme. But is does not happen without US Congress approval.

http://en.wikipedia.org/wiki/Mark-to-market

View Quote

Here we go........FASB....not GAAP:

FASB Eases Mark-to-Market Rules

View Quote

By KARA SCANNELL

U.S. accounting rule makers made it easier for banks to limit losses, but in an unexpected move they bowed to critics and backtracked on one proposal that would have let companies ignore market prices in some cases.

The vote by the Financial Accounting Standards Board followed a debate in which members of Congress pushed for steps to help banks weighed down by troubled assets, while some investor groups warned that the plans would allow executives to cover up losses. The rules change spurred Thursday's stock-market rally.

For the most part, the board ratified proposals it had put out for comment two weeks earlier, including changes that would lessen the need for banks to take an earnings hit when assets run into trouble. Financial stocks led the market up in the morning on the expectation that the rules would be approved, but faded and ended roughly on a par with the broader market.

More

Bankers argue that the "mark-to-market" principle of valuing assets at market prices is sometimes flawed because markets have ceased to function. They say that can lead to unnecessary alarm about the financial system's stability, an argument lawmakers have echoed.

One member of the five-member accounting standards board tried to address criticisms that the body had bowed to political pressure.

"We are an independent standard setter and it's important that we maintain our independence," said Lawrence Smith. But he said the board can't "ignore what's going on around us" as banks plead for help.

Under one of the changes adopted Thursday, the definition of an asset that is "other than temporarily impaired" will change. Once an asset gets that designation, it triggers a write-down in value that feeds through to the bottom line. In the case of banks, that may put capital below regulatory requirements.

Currently, to avoid the designation, management must assert that it has the intent and ability to hold on to the asset until its value recovers. Under the new rule, adopted by a 3-2 vote, companies could avoid the classification by stating that they intend to hold on to the asset and that it is more likely than not that they will, a looser standard.

(MORE at the below link.)

http://online.wsj.com/article/SB123867739560682309.html

Currently, to avoid the designation, management must assert that it has the intent and ability to hold on to the asset until its value recovers. Under the new rule, adopted by a 3-2 vote, companies could avoid the classification by stating that they intend to hold on to the asset and that it is more likely than not that they will, a looser standard.

Patrick Finnegan, director of financial reporting policy for the CFA Institute, said the move gives managers too much room to fudge the truth. "Financial statements are not there to reflect management's assumptions.," said Mr. Finnegan, whose group runs a self-study program for financial analysts.

5sub

Posted: 9/20/2009 8:56:12 PM EDT

[#25]

OP,

an army of accountants and economist would be needed to determine just what's happened to the US economy under bush and barry obama continues the bush policies. No fucking wonder barry kept the old bush economic hacks. He didn't dare do otherwise.

I expect the OP is rooted in truth.
5sub