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Who will bail out the FED?The current crisis is so severe, and it has already forced the Fed to reach into its own balance sheet grab-bag so deeply, that a very legitimate question arises, and the question is this: when the Fed ploughs all the way through its own balance sheet and gets to the bottom of the barrel, who will bail it out? Before boring you to tears with the gory details, I can give you the answer right now: And so will I, and every other American. Isn’t that nice of us? And how will we do that? Not by choice, mind you. Oh no! No one would be this altruistic. Americans may hold some vague notions of emotional attachment to the Fed. They might even see some actual benefit to their economy, which they have long since turned over to be ruled by sort of a softer, more socially acceptable form of tyranny, but foreigners? Fat chance. So, how will you bail out the Fed, then? (I wish I had published this article earlier, because I have been playing around with a draft for over a week now. Had I done so, could have bragged about my “prescience.” However, when it comes to the Fed and other corrupt power centers in today’s world (or that of ant day and age), all you have to do is assume the worst case scenario, and you’ll be pretty much on target.) The point: You will bail out the Fed because, once the Fed burns through its balance sheet of US treasuries with its current Term Securities Lending Facility (TSLF), it can only get more treasuries onto its balance sheet by having Congress allow the Treasury to borrow more money from the Fed than the Treasury really needs. We are talking monetization of the debt on steroids, here! Mega-steroids, that is. So what about my “prescience”? An article just came out in the Wall Street Journal an hour ago at the time of this writing (actually, make that a "notice" since it has all but two very short paragraphs) that states the following, verbatim: WASHINGTON -- The Federal Reserve is considering contingency plans for expanding its lending power in the event its recent steps to unfreeze credit markets fail. Actually, I wasn’t prescient enough. I take that back. I did not come up with the idea that the Fed would ask Congress for authority to issue debt UNDER ITS OWN NAME rather than under the name of the Treasury!! Just take that in for a second. The Fed bankers, whose progenitors have already bribed our Congress to un-constitutionally turn over Congress’ exclusive power to “coin money” back in 1913, are now trying to persuade Congress to turn over its borrowing power to them as well, thus allowing the Fed to virtually borrow money from itself and issue itself IOUs for that debt. It is difficult for me to do the gravity of this new idea justice, so as to correctly and adequately imprint upon your conscious mind the sheer and absolute fiscal insanity of such a proposal. Congress might as well turn its entire legislative function over to the Fed, because that’s pretty much what it amounts to. Once The Fed has the power to borrow from itself and leave Americans on the hook for the loan, it can literally dictate to Congress what laws to pass. (Not that it doesn’t have that power already, but it will be far more obvious then – and it will be too late for you and I to do anything about it.) Naturally, Congress, lying prostrate and with its members as ignorant as they are in matters of economic significance, will bend way over forward, drop its trousers down to its ankles, and tell the Fed, "Sure, Sir. Any time, Sir. Go ahead, master.” In case you don’t know, when Congress via the Treasury borrows money from the Fed, that money is literally loaned into existence by virtue of the Fed’s ability to simply type a "credit" into the government’s account at the Fed, just like your commercial bank does when you borrow money from it. The new account balance is then counted as part of the money supply. And here we have the perfect way to bring the gravity of what the Fed proposes here back home to the ordinary investor and bank depositor: It’s as if you gave your bank the power to put you in debt at its own, free will, without even asking you for permission! Naturally, when your bank does that, you will be on the hook financially to pay that balance back - with interest. Now, let’s translate this example back into the upper echelons of ueber-corrupt government power. When Congress allows the Fed to thus put Congress into its debt, where do you think Congress gets the money to pay the Fed "back" what the Fed has thus decreed as necessary to have Congress "borrow" from it? From you. This entire farce would represent perfect, divine justice if Congress told the Fed, "Yeah, sure. You borrow money from yourself – so go ahead and pay yourself back, as well. Don’t ask us to pay you for what you ‘borrow’ from yourself!" But, you already know that Congress doesn’t have enough grits in its collectiv(ist?) brain to come up with an idea like that. No, Congress will simply lie down and tell the Fed bankers to have their way with it – and via Congress, with you and me. Only two or three congressmen will stand alongside Ron Paul and protest this latest move – utterly to no avail. The proverbial ‘fleecing of the flock’ has just gone into overdrive, except that now, you will not only be fleeced, but the ‘shepherd’ has suddenly discovered a newfound fondness for bestiality. You know what I mean. This is the utter and complete raping of the American public – and guess what? Americans by and large are going to go along with it. And, just in case a significant number of Americans should find it in their hearts to resist this effort, we will have a simultaneous outbreak of a full-scale war with Iran to divert our attention - the same diversionary tactic that occurred when the Dow got into really hot water back in 2002-2003 (and when Clinton got into hot water with Monica Lewinski in 1998).
And, oh yeah, lest I forget: Hyperinflation isn’t just "on its way" anymore. It is here. The floodgates have already been open for a while, now. When Congress approves this insanity (probably sooner rather than later), it will blow not just the gates, but the entire dam that has kept the fiat-flood at bay so far, sky-high. Financially speaking, this will wash the United States economy off the world map. Russia and China will take up the slack, both economically and militarily. Russia will take defenseless Europe, and China will take the rest of Asia and America. They already own us, anyway – because we owe them, just like the Federal Reserve Bankers own you and me. Congress owes the Fed, so the Fed owns Congress. Nothing new. It will only get worse. Even owning gold will not protect you from this. Alex Wallenwein To stay up-to-date on important developments, sign up for our RSS Blog. It's FREE - and there are no email delivery problems! |
