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View Full Version : Bob Chapman - Federal Reserve: Banks which received TARP funds are to restrict commercial lending



Rajiv
11-30-09, 07:45 PM
Farreaching Decision of the Federal Reserve: Banks which received TARP funds are to restrict commercial lending (http://www.globalresearch.ca/index.php?context=va&aid=16313)




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The following information may be the most important we have ever published. One of our Intel sources, highly placed in banking circles, tells us that on 1/1/10 all banks that have received TARP funds have been informed by the Federal Reserve that they must further restrict any commercial lending. Loans have to be 75% collateralized, 50% of which has to be in cash, which is a compensating balance.

The Fed has to do one of two things: They either have to pull $1.5 trillion out of the system by June, which would collapse the economy, or face hyperinflation. This is why the Fed has instructed banks to inform them when and how much of the TARP funds they can return. At best they can expect $300 to $400 billion plus the $200 billion the Fed already has in hand.

We believe the Fed will opt for letting the system run into hyperinflation. All signs tell us they cannot risk allowing the undertow of deflation to take over the economy. The system cannot stand such a withdrawal of funds. They also must depend on assistance from Congress in supplying a second stimulus plan. That would probably be $400 to $800 billion. A lack of such funding would send the economy and the stock market into a tailspin. Even with such funding the economy cannot expect any growth to speak of and at best a sideways movement for perhaps a year.

We have been told that the FDIC not only is $8.2 billion in the hole, but they have secretly borrowed an additional $80 billion from the Treasury. We have also been told that the FDIC is lying about the banks in trouble. The number in eminent danger are not 552, but a massive 2,035. The cost of bailing these banks out would be $800 billion to $1 trillion. That means 2,500 could be closed in 2010. Now get this, the FDIC is going to be collapsed before the end of 2010, which means no more deposit insurance. This follows the 9/18/09 end of government guarantees on money market funds. Both will force deposits into US government bonds and agency bonds in an attempt to save the system.

This will strip small and medium-sized banks and force them into shutting down or being absorbed. This means you have to get your money out of banks, especially CDs. We repeat get your cash values out of life insurance policies and annuities. They are invested 80% in stocks and 20% in bonds. Keep only enough money in banks for three months of operating expenses, six months for businesses.

Major and semi-major banks are being told to obtain secure storage for new currency-dollars. They expect official devaluation by the end of the year.
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Another audio




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Spartacus
11-30-09, 08:25 PM
if true, doesn't this put the lie to Niall Ferguson's assertion that

the FED "did the right thing" - lower rates for everyone , OFF-OFF-OFF-balance sheet[2]
and the government did exactly the WRONG thing - spread balance sheet money around to all comers?

Yet now we see the FED money is all staying on bank balance sheets and GOING NOWHERE ELSE.

It's an almost completely segregated, walled-in "rescue" - an " apartheid of commerce" if you will, with the politically unconnected out in the cold ...

if it had been true if would have been off any balance sheet but would still be damaging, inflation wise
[2] I suppose this is like off-broadway, but geeky-er

ThePythonicCow
11-30-09, 09:38 PM
They expect official devaluation by the end of the year.
I can't quite tell, but I figure that he means by the end of the year 2010 here, not the end of the year 2009.

I think we (Americans) are going to have see some more pain before we will sit still for a 3:1 currency devaluation. That much more pain is not happening in four weeks (he said sanguinely :)).

Rajiv
11-30-09, 09:48 PM
It is 2010 he means and it is quite clear in his talk

metalman
11-30-09, 09:57 PM
I can't quite tell, but I figure that he means by the end of the year 2010 here, not the end of the year 2009.

I think we (Americans) are going to have see some more pain before we will sit still for a 3:1 currency devaluation. That much more pain is not happening in four weeks (he said sanguinely :)).

bob chapman... alex jones... bob chapman... alex jones... bob chapman... alex jones... bob chapman... alex jones... bob chapman... alex jones... bob chapman... alex jones...

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ThePythonicCow
11-30-09, 10:08 PM
It is 2010 he means and it is quite clear in his talk
Ok - thanks.

Now the thing I can't figure out (perhaps because I never lived in Argentina) is what happens to debt, salaries, rents and other term arrangements in such a devaluation.

If all dollar denominated savings, debt, public and private, domestic and international is simply converted 1:1 to debt in the New Dollar, then the currency depreciation has accomplished nothing that I can see, other than perhaps smashing any physical dollar denominated paper currency, which is peanuts compared to all the rest of the stuff.

Would social security check go up by a nominal factor of three; or would most social security recipients lose 2/3's of their affective income (a disaster for most of them, already on the edge?)

Would credit card or mortgage debt balances remain nominally the same (good deal for endebted Americans) or would they go up by a nominal factor of three?

Would the private debt that one person has extended to another remain nominally the same (good deal for the borrower) or go up by the factor of three (lender at least breaks even?)

Would rent, utilities and fees go up or not?

If this is just a 3:1 swap of something still called a Dollar and all other time based dollar arrangements are expected to remain constant in nominal dollar terms, then this is nothing more or less than a one-time 66.6% confiscatory tax on all savings. That would go over like a lead balloon (or well, a lead something I won't discuss here :eek:.)

The only thing like this I have been able to wrap my cow-sized brain around is either (1) more foreign exchange volatility, with the dollar price of imports (e.g. oil) slamming around, sooner or later going higher, and (2) a new meta-international currency agreement making something like IMF SDR's a virtual basis (a paper gold) for foreign exchange, with all national currencies based on this new IMF meta-currency.

Rajiv
12-04-09, 09:08 AM
Pythonic,

If I were doing such a thing, and there are good reasons to be doing such things, I would first divide the world into domestic dollars, and international dollars. Domestic dollars being those held in within the geographic US. Then I would do a 1 to 1 conversion of new US dollar to domestic dollar (held in US banks.) Currency notes and foreign holdings of the US dollar I would do a 1 new US$ to 3 old US$

This way I would be taking care of the major portion of the US debt, and also lay the foundation for the strong re-emergence of the US economy.

A North American Monetary Union may be used as a good excuse.