Bankster Gangsters: Bailout Number Two

Helicopter Ben Bernanke, Chairman of the Federal Reserve, which is neither Federal, nor has any reserves, has announced the “purchase” of $105 billion of US Treasury Bonds, the first installment purchase of an estimated $600 billion of US Treasury bonds over the next six months. At SHTF America we are wondering with what Helicopter Ben “purchased” those US Treasury Bonds.

Helicopter Ben Bernanke

Did he “buy” those bonds with gold? With silver? These are the recognized means of exchange according to the US Constitution. Did he “buy” those bonds with dollars? If he “bought” those bonds with dollars that would be counter-productive wouldn’t it? I mean, that would take $105 billion out of the Federal Reserve System, wouldn’t it? And the intent is to increase the liquidity of the Fed, isn’t it?

Let’s face it. No purchase was necessary. The US Treasury transferred $105 billion of American taxpayer wealth to the Federal Reserve, a private banking cartel of member banks. It was designed to increase the liquidity of those same Federal Reserve member banks. Why? Those member banks are loaded with dollars that they are not loaning now. Why give them more dollars to not lend?

The answer is simple really. These dollars are not intended for loan purposes. They are intended to be held by the member banks of the Fed for two very important reasons:

First, this money is intended to be used to purchase, rewrite, or modify delinquent securitized mortgage pools and protect the institutional investors that hold them: meaning Fannie Mae, Freddie Mac, Major Insurance Companies like AIG, and Major Commercial Banks; both foreign and domestic, without a major financial institution failing and plunging the financial system into chaos once again.

Second, these funds will be used to help unwind the unfettered credit swaps held by these same institutional investors. Unlike the credit swaps recently offered in China for national consumption, these credit swaps in the US had no parameters or limitations. It wasn’t investing. It was gambling with depositor funds, and anyone was allowed to bet. “Craps” anyone?

Some credit swaps will fail. When they are eventually allowed to fail, those losses, hidden now, must be written off of the books of the member banks of the Federal Reserve. These losses must be managed discretely, in a way that doesn’t threaten the entire financial community as it did in January 2009. They must not exceed a reasonable percentage of any individual bank’s cash as they are orderly dissolved. These losses cannot exceed the individual bank’s reserve requirement and this why the big banks, banks that really are too big to fail have been booking lots of profit, but no loans.

This is not “quantitative easing” as suggested by the Lame Stream Media. This is another bailout of the member banks of the Federal Reserve, by another name, and is intended to support the balance sheet of these Bankster Gangsters. That’s why inflation is not a major problem within the United States, and impacts only international transactions and currency valuations.

These dollars are not reaching and will not reach the American marketplace. Eventually, there will be a spillover effect and inflation will increase in America by a thousand cuts. But that’s why there is no “financial collapse” coming.

Sorry National Inflation Association, I love your work but you are wrong on this one.

http://www.shtfeconomics.blogspot.com/