REPO Window Hidden $Trillion QE Monthly Volume
Stock-Markets / Quantitative Easing Aug 31, 2015 - 04:53 PM GMTBy: Jim_Willie_CB
The massive Quantitative Easing (QE) abuse by the USFed and steeped lies are centered on its volume, which in reality is an order of magnitude higher than admitted. The recent usage of certain REPO windows has been effective to disguise huge volume of bond purchases. The entire bond system is irreparably corrupted. The REPO window hides QE extras with naked bond shorting linked to a $1 trillion extravaganza that receives almost no publicity. While the public, and even more financial market participants, focus on the Dow Jones stock index, the Treasury Bond yield, the crude oil price, and very little else, they overlook the Reverse REPO window and the related Failures to Deliver data for USTreasury Bonds. The two work like a hand and glove.
The abuse is laced all through the USTreasury Bond market. These big banks never pay for their crimes, as they repeat them in other forms. Since JPM is the official USFed market agent, no consequence in criminal charges. It is given praise and more bond redemptions. When caught, the Wall Street and London Centre banks pay fines and penalties, sometimes even meager restitution, but they chalk it all up to a business expense. Criminal fraud is merely a cost of doing business in New York and London. The public is none the wiser. The American public by and large are in need of remedial education, lately showing no knowledge of money, capital, banking reserves concepts, the USDollar status, or economic meters. The greatest shortcoming is knowledge of how to grow an economy, since tin cupping with handouts aint the answer. The answer is found in business investment, something our Marxist leaders oppose unless they have personal investments involved. See Chertoff and airport devices. See Rumsfeld and Tamiflu programs. See Obama and Solyndra investments.
REVERSE REPO ABUSE
Focus on the Reverse REPO, which is highly innovative from two angles. Normally the USFed requires collateral to be placed at the REPO window, from companies seeking cash infusions on a temporary basis. Sometimes the USFed announces a ripe volume of Reverse REPO infusions into the system. They occasionally attract bad attention, but it wanes with the next fiction on strong markets and recovering economies, or even debate among fools who anticipate official rate hikes. The USFed uses the Reverse REPO to hide some of its QE volume. It is concealed QE volume, part of the biggest lie in US financial history since the USFed has generated multiple $trillions in hidden channel support, massive gushers. The key is no collateral placed on the opposite side of the window. It is neither stimulus nor minor in volume. The central bank helm is managing a gigantic volume, hidden in numerous ways. The John Q Public is none the wiser, reading the controlled fiction in financial press publications, about wondrous stimulus. In reality, QE kills capital and assures an economic collapse. It is happening before our eyes.
The related other side of the table features the Failures to Deliver on USTreasury Bonds. The Wall Street Journal and New York Times report on the phenomenon, but quickly move off the topic. To have a significant figure of undelivered USTBonds speaks of more deep criminality. It indicates counterfeit or naked shorting by Wall Street banks. They have found a way to bring in liquidity to their broken insolvent big banks, selling USTBonds they do not own, receiving the funds into the corporate treasuries, improving handsomely their cash flow, never to deliver on the product. The buyer is often none other than the US Federal Reserve, which does not force prosecution for counterfeit or bond fraud from its vassal bank accomplices in the crime of counterfeit. Other buyers must wait, since no penalty is meted out for violations. The result is a fancy pants infusion of big $billions into the Wall Street banks with no costs associated. One must wonder how they hide the funds within their balance sheets, 10-Q filings, and quarterly statements. Probably they do so by mixing it in with their ample busy narco funds within New York money center banks.
The USFed has been also concealing its QE volume by export. They have arranged since 2012 to create a group of secondary nations for second sourcing gigantic USTreasury Bond purchases. The source of funds is both Dollar Swaps for the USFed to buy USTBonds at arm's length in Europe, but also dumped Chinese USTBonds from their reserves. Some Russian held USTBonds might also be in the mix. The nations are the BLICS nations, namely Belgium, Luxembourg, Ireland, Cayman, and Switzerland. The latter is not a small nation, but probably helps to manage the slush funds from the Basel fortress. The Belgium location is important as seat of the European Commission and Parliament. The BLICS as a group have invested in over $800 billion in USTBonds since mid-2012, almost equal to the USFed itself on its stated (lies for sure) QE volume. The official USFed understates the true QE volume by at least two-fold. Add in the derivative contract coverage, and the Jackass believes the true QE volume is perhaps 10x to 30x greater. It is an end game signal for Zimbabwe style monetary policy with grand grotesque rupture. The abuses, beginning with QE and extending to Reverse REPO, invites an Eastern rejection of the USDollar.
FAILURES TO DELIVER
Failures to deliver in USTreasurys signals breakdown as well as naked shorting abuse. Wall Street firms funnel in free money without criminal consequence, to tune of $40 billion per day. It is a nice racket, protected by the USGovt and their goon squad. The public is none the wiser, cheering the stuck low rates. They seem unaware that QE destroys capital. Few seem to focus on the deep decline in Money Velocity, which in itself proves that QE is not stimulus.
The gimmicked rigged corrupted USTreasury Bond market is currently cruising along with about $40 billion Failures to Deliver on a daily basis in the bonds. This is a veritable bonanza for the Wall Street firms, probably London and Western European banks as well. It is free money, and disguised QE volume which totals over $1 trillion per month in magnitude. Yet the counterfeit receives very little publicity, since it provides ample cash flow for the broken criminal banks. Think over $1 trillion per year in free cash flow to the big broken banks. Compare to the minor $40bn per month admitted by the USFed, even the other $40bn per month by the BLICS nations in exported QE. The Failures to Deliver is 12 to 25 times larger in volume, surely hidden QE by any other name.
The USTBonds are not being bought by legitimate investors, while the USDollar is rising. At the same time, the globe is liquidating the USD-based derivatives. Doing so is leaving them with little USD general exposure. The enormous $40bn in failures to deliver come from naked shorting, principally by Wall Street banks in league with the USFed. They have found a sweet channel for pushing up liquidity via fraud, of course with full impunity. It is linked for sure with both QE and the Reverse REPO angle, to complete the loop. The USFed shoves money into the system, which finds its way to the big banks via fraudulent naked bond shorting. There is no demand for USTBonds outside QE of substance, except maybe for Japan. The graph below shows a staggering volume of bond delivery failures, which is HIDDEN QE VOLUME.
DTCC's Fixed Income Clearing Corporation serves as the clearing house for markets that trade in USGovt securities. Assume that a firm fails on a $50 million position on which it is owed $50.1 million. If the Target Fed funds rate the previous day was 1%, then the fails charge will be 2% per year, to be applied to the $50.1 million total value of the trade. The resulting charge for the firm would be $2783 for that day. It is a mere pittance, a 2% fee per year for the theft which retains 98% of the funds gratis.
The Jackass would like to embark on a business of selling cars and plasma televisions and Air Jordan shoes, take in the cash on the sales, and never deliver on the products. The concept is patently illegal, yet the Wall Street banks are routinely selling USTBonds without delivering on the bonds on the other end. The buyer does not care, since it is the USFed, the helm of the banker crime syndicate. Witness the exceptional nation at work in the cash register. The public is almost completely unaware, since Zero Hedge is not favored over network news, reality shows, and other pablum.
NEW SCHEISS DOLLAR & GOLD TRADE STANDARD
Events of the last two or three weeks could not be more disruptive, dangerous, or ominous. The IMF refused inclusion of the RMB in their currency basket, clearly feeling threatened. In response, expect China to hasten its efforts to dislocate the USDollar from its perch in trade and banking. Expect extreme pressures to accelerate the increasing required usage of Chinese RMB in trade settlement. The Chinese are even more motivated after the strategically important Tianjin business center and logistics data center was converted into a crater. Langley finger prints might soon be found. Almost a full decade has passed for setting up the widespread usage of Yuan Swap Facilities for bilateral trade between nations with China. Expect a major step toward coercing the Saudis to accept RMB currency for payment in oil shipments, a movement sure to spread to all Gulf Emirate nations. The oil card is the flash point.
In time, expect an eventual refusal by Eastern manufacturing nations to accept USTreasury Bills in payment. The IMF reversal decision assures this USTBill blockade in time, and might accelerate the timetable. The United States Govt cannot continue on five glaring fronts of gross violations. These violations have prompted the BRICS & Alliance nations to hasten their development of diverse non-USD platforms toward the goal of displacing the USDollar while at the same time take steps toward the return of the Gold Standard. The violations are:
1) to import finished goods and crude commodities, paying with IOU coupons
2) to commit multi-$trillion bond fraud in its big banks, done without legal prosecution
3) to do QE bond purchases in applied hyper monetary inflation, monetizing debt
4) to rig all major financial markets in favor of the primal USDollar
5) to engage in numerous regional wars to support the USDollar.
The key step upcoming is the Gulf Emirates soon to accept RMB for oil payment from all Eastern & Asian countries, the major flash point. Such event will sound the global alarm. Coupled with broadbased RMB trade settlement and more purchase of Chinese Govt debt securities, the movement will be on to finally initiate the grand dump of USTreasurys from Eastern banking systems. Then later the entire world (except for England and Canada and certain Western European coulee nations) will diversify out of USTBonds in their banking systems. The result will be then a forced reaction by USFed and USDept Treasury to launch the New Scheiss Dollar, which will at the outset have a phony gold foundation. A formal international audit process will break down the fraudulent basis, and lead to a series of painful New Dollar devaluations. Then comes the import price inflation, the supply shortages, and the civil disorder.
The New Scheiss Dollar will have a 30% devaluation out of the gate, then many more devaluations of similar variety. The New Dollar will fail all foreign and Eastern scrutiny. The USGovt will be forced to react to USTBill rejection at the ports. The USMilitary and Langley threats will not work much longer. The Langley crew might attack the entire world, which could result in an American Quarantine. The US must accommodate with the New Scheiss Dollar in order to assure import supply, and to alleviate the many stalemates to come. The United States finds itself on the slippery slope that leads to the Third World, a Jackass forecast that has been presented since Lehman fell (better described as killed by JPM and GSax).
The Gold price will find its true value and price over $10,000 per ounce. The Silver price will find its true value and price over $400 per ounce. In reaching these levels, the ratio will return to the 25-1 range. Several steps have been laid out by the Hat Trick Letter toward the return of proper price to precious metals. The major upcoming events will be exciting to watch unfold, one after the other, in an inevitable sequence away from fascism and concentrated uni-polar power, with a strong movement toward freedom and equitable systems with distributed power. The steps will each involve a quantum jump in the Gold & Silver prices. The process will take a few years, but might be breath-taking in speed once the process is begun. The steps involve:
- the critical mass of rejected USTBills in trade settlement, citing its corrupt roots and illicit monetary policy as foundation
- the return to the Gold Trade Standard and introduction of Gold Trade Notes as letters of credit, in replacement for a fair tangible payment system (no more IOU coupons)
- the recapitalization of the global banking system with Gold as primary reserve asset, so as to relieve the grotesque stagnation, insolvency, and dysfunction
- the seeking of equilibrium in Supply vs Demand in the new fair uninhibited market, with exclusive control removed from London and New York, and placed elsewhere like in Shanghai, Hong Kong, Dubai, and Singapore.
- the seeding of BRICS gold & silver backed currencies from participating nations within the Alliance (likely several with slight variation in features)
- the re-opening of the gold mine industry with some blue sky, and relief from the Evergreen element at Barrick
- the remedy toward owners of over 40,000 tons of rehypothecated and stolen gold in bullion banks across the world (primarily in Switzerland.
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