This post is in partnership with 24/7Wall Street. The article below was originally published on 247wallst.com. The United States is currently engulfed in one of the worst droughts in recent memory. More than 30% of the country experienced at least moderate drought as of last week’s data.
Let me start by saying that the US Federal Reserve Bank has of late been doing "quantitative easing" or "QE" in various rounds - QE1, QE2, etc. They are buying back their own bonds to keep bond values high despite continuing low interest rates.
The above seems to be saying that while the official QE programs are being discontinued, the Fed is in fact doing even more by laundering their purchases through Belgium. Worse, they appear to be doing it in response to some other country or entity dumping Treasury bonds in a fashion and extent ($104bil in one go) that could crash the US economy if everything went exactly wrong.
I think the likely candidate for the "dumper" is Putin/Russia, although I guess it's possible a really big player like George Soros could do it if he thought the US economy was going to go "splat" soon?
Part two - shows that the amount being laundered through Belgium is even higher than the above report shows, and names Russia as at least part of the known dumping:
One of the comments in the Zerohedge report shows other Eurozone nations also holding suspiciously high levels of US Treasury bonds - Ireland for example at over $100bil, lots of others. Looks like the reason the US dollar hasn't collapsed already is the quiet buying by parties unknown (coughFEDERAL-RESERVE-BANKcough) scattered all over Europe, not just Belgium although they seem to be the big hot-spot right now.
In unrelated news, the Fed resists being audited the way a ferret resists being shoved through a tea strainer...
The only other governmental entity that might try to crash the US economy is China and I don't see them doing that - we're too interconnected with them and if we stop buying stuff at WalMart and the like they are hosed. Plus they have a bunch of industrial bonds that need to be rolled over right now (May/June/July) and many are mining company bonds that are in real trouble. The worst are the coal mines because everybody knows China has to get off coal before they all choke to death.
Mind you, China's national government CAN step in and save those bonds, but if they do they risk sending a "buy gov't backed bonds at 8% plus!" frenzy message. So this would be a really bad time for them to piss all over the US economy with all that drama hanging over their heads.
Is there a quiet bonds war going between Putin and the Fed?
Is the Fed's apparent policy of secret QE as dangerous as it looks?
Is it a sign of desperation, or that the US economy's stability might be questionable?
Chhek Sambo works a little farm on the fertile plains stemming from a sacred Cambodian mountain known as Phnom Kulen. For 17 years this tropical plot has given Sambo and her family rice, cassava, mangoes, bananas, lychees, “everything we can eat.” She and her neighbors raise chickens and ducks (free-range)...
Groundwater levels are hitting record lows across much of California, and the drought is compounding the problem by leading to heavier pumping from aquifers, the state Department of Water Resources said in a report released Wednesday.
In the past several years, one of the topics covered in detail on these pages has been the surge in such gimmicks designed to disguise lack of demand and end customer sales, used extensively by US automotive manufacturers, better known as "channel stuffing", of which General Motors is particularly guilty and whose inventory at dealer lots just hit a new record high. But did you know that when it comes to flat or declining sales and stagnant end demand, channel stuffing is merely the beginning? Presenting... Where the World's Unsold Cars Go To Die
Future Directions International is an independent, not-for-profit research institute based in Perth Western Australia. It was established in 2000 by Major General the Hon. Michael Jeffery (former Governor General of Australia) together with a small group of leading Australians to conduct comprehensive research of important medium to long-term issues facing Australia.
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