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Title: Why the Fed Will Be Powerless to Stop The Real Crash
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URL Source: http://www.marketoracle.co.uk/Article33942.html
Published: Apr 3, 2012
Author: Graham_Summers
Post Date: 2012-04-03 16:37:13 by Capitalist Eric
Keywords: None
Views: 2913
Comments: 6
Over the last two years, I’ve been caught into believing a Crash was coming several times. In some ways I was right: we got sizable corrections of 15+%. But we never got the REAL CRASH I thought we would because the Fed stepped in.
So what makes this time different?
Several items:
1) The Crisis coming from Europe will be far, far larger in scope than anything the Fed has dealt with before.
2) The Fed is now politically toxic and cannot engage in aggressive monetary policy without experiencing severe political backlash (this is an election year).
3) The Fed’s resources are spent to the point that the only thing the Fed could do would be to announce an ENORMOUS monetary program which would cause a Crisis in of itself.
Let me walk through each of these one at a time.
Regarding #1, we have several facts that we need to remember. They are:
1) According to the IMF, European banks as a whole are leveraged at 26 to 1 (this data point is based on reported loans... the real leverage levels are likely much, much higher.) These are a Lehman Brothers leverage levels.
2) The European Banking system is over $46 trillion in size (nearly 3X total EU GDP).
3) The European Central Bank’s (ECB) balance sheet is now nearly $4 trillion in size (larger than Germany’s economy and roughly 1/3 the size of the ENTIRE EU’s GDP). Aside from the inflationary and systemic risks this poses (the ECB is now leveraged at over 36 to 1).
4) Over a quarter of the ECB’s balance sheet is PIIGS debt which the ECB will dump any and all losses from onto national Central Banks (read: Germany)
So we’re talking about a banking system that is nearly four times that of the US ($46 trillion vs. $12 trillion) with at least twice the amount of leverage (26 to 1 for the EU vs. 13 to 1 for the US), and a Central Bank that has stuffed its balance sheet with loads of garbage debts, giving it a leverage level of 36 to 1.
And all of this is occurring in a region of 17 different countries none of which have a great history of getting along... at a time when old political tensions are rapidly heating up.
As bad as the above points may be, they don’t even come close to describing the REAL situation in Europe. Case in point, regarding leverage levels, PIMCO’s Co-CIO Mohammad El-Erian (one of the most connected insiders in the financial elite) recently noted that French banks (not Greece or Spain) currently have 1-1.5% capital relative to their assets, putting them at leverage levels of nearly 100-to-1.
And that’s France we’re talking about: one of the alleged key backstops for the EU as a whole.
To be clear, the Fed, indeed, Global Central Banks in general, have never had to deal with a problem the size of the coming EU’s Banking Crisis. There are already signs that bank runs are in progress in the PIIGS and now spreading to France (see El-Erian’s comments in the article above).
I want to stress all of these facts because I am often labeled as being just “doom and gloom” all the time. But I am not in fact doom and gloom. I am a realist. And EU is a colossal mess beyond the scope of anyone’s imagination. The World’s Central Banks cannot possibly hope to contain it. They literally have one of two choices:
1) Monetize everything (hyperinflation)
2) Allow the defaults and collapse to happen (mega-deflation)
If they opt for #1, Germany will leave the Euro. End of story. They’ve experienced what comes from rampant monetization before (Weimar) So even the initial impact of a massive coordinated effort to monetize debt would be rendered moot as the Euro currency would enter a free-fall, forcing the US dollar sharply higher which in turn would trigger a 2008 type event at the minimum.
Moreover, we need to consider that the Fed is now so politically toxic that Ben Bernanke is literally going on the campaign trail to attempt to convince the American people that the Fed is an honest and helpful organization. Put another way, there is NO CHANCE the Fed can announce a large-scale monetary policy unless a massive Crisis hits and stocks fall at least 15%.
Finally, regarding my third point... if the Fed were to announce a new policy it would have to be MASSIVE, as in more than $2 trillion in scope. Remember, the $600 billion spent during QE 2 barely bought three months of improved economic data in the US and that was a pre-emptive move by the Fed (the system wasn’t collapsing at the time).
So given that the Fed will only be able to announce a large scale program in reaction to a Crisis, whatever it did announce would have to be ENORMOUS, a kind of shock and awe, attempt to rein in the markets.
Moreover, it would literally be THE LAST QE the Fed could hope to ever announce as political outrage from the ensuing Dollar collapse and inflationary pressures would likely see the open riots and/or the Fed dismantled (this has happened twice before in the US’s history).
In simple terms, the Fed’s hands are tied until a huge Crisis hits. And then, if the Fed acts it’s going to have to go “all in” with a massive program. If it does, we will still experience a Crisis, as the Dollar would collapse pushing inflation through the roof as well as interest rates (which in turn would destroy the banks as well as the US economy).
In simple terms, this time around, when Europe goes down (and it will) it’s going to be bigger than anything we’ve seen in our lifetimes. And this time around, the world Central Banks are already leveraged to the hilt having spent virtually all of their dry powder propping up the markets for the last four years.
Again, this time it is different. I realize most people believe the Fed can just hit “print” and solve everything, but they’re wrong. The last time the Fed hit “print” food prices hit records and revolutions began spreading in emerging markets. If the Fed does it again, especially in a more aggressive manner as it would have to, we would indeed enter a dark period in the world and the capital markets.
| Country | GDP |
| European Union | $16 trillion |
| United States of America | $14.5 trillion |
| China | $5.8 trillion |
| Japan | $5.4 trillion |
| European Central Bank | $3.8 trillion |
| Germany | $3.2 trillion |
| US Federal Reserve | $2.8 trillion |
| France | $2.5 trillion |
| United Kingdom | $2.2 trillion |
| Banking System | Total Assets | Total Assets Relative to GDP | Total Assets Relative to Central Bank Balance Sheet |
| Europe | $46 trillion | 287% | 1,210% |
| US | $12 trillion | 82% | 428% |
Again, this is not Doom and Gloom, this is reality.
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Federal Reserve: A Private Jewish Bank Strangling America
FEDERAL RESERVE:
A PRIVATE JEWISH BANK
STRANGLING AMERICA
By Brother Nathanael Kapner, Copyright 2008-2010
Articles May Be Reproduced Only With Authorship of Br Nathanael Kapner
& Link To Real Jew News (SM)
Please Help Support This Site!
Or Send Your Contribution To:
Brother Nathanael Kapner; PO Box 1242; Frisco CO 80443
E-mail: bronathanael@yahoo.com
Source: “Secrets of the Temple: How the Federal Reserve Runs the Country,” by William Greider; “Controlling The Money,” Silver Bear Cafe Here
ZIONIST JEWS CONTROL THE MONEY in America. Zionist Jews own & run the Federal Reserve Bank that the US government continually borrows from and is in debt to.
Napoleon said:
— “When a government is dependent for money upon the bankers, they and not the government leaders control the nation. This is because the hand that gives is above the hand that takes. Financiers are without patriotism and without decency.” —
The Federal Reserve Bank is a consortium of 9 Jewish-owned & associated banks with the Rothschilds at the head:
$1. Rothschild Banks of London and Berlin
$2. Lazard Brothers Banks of Paris
$3. Israel Moses Seif Banks of Italy
$4. Warburg Bank of Hamburg and Amsterdam
$5. Lehman Brothers of NY
$6. Kuhn, Loeb Bank of NY (Now Shearson American Express)
$7. Goldman, Sachs of NY
$8. National Bank of Commerce NY/Morgan Guaranty Trust (J. P. Morgan Bank - Equitable Life - Levi P. Morton are principal shareholders)
$9. Hanover Trust of NY (William and David Rockefeller & Chase National Bank NY are principal shareholders). Here & Here
1791-1811: Rothschilds’ First Bank of the United States
1816-1836: Rothschilds’ Second Bank of the United States
1837-1862: Free Banking Era - no formal Central Bank through the efforts of President Andrew Jackson
1862-1913: System of National Banks through the efforts of President Andrew Jackson
1913-Current: Federal Reserve Act effects a consortium of privately held Jewish & associated banks called the Federal Reserve Bank. The largest shareholders of the Federal Reserve Bank are the Rothschilds of London holding 57% of the stock which is not available for public trading
On May 23 1933, Congressman Louis T. McFadden brought impeachment charges against the members of the Federal Reserve Bank. A smear campaign against McFadden ensued and he was poisoned 3 years later Here (Scroll Down).
OF THE FEDERAL RESERVE BANK
Here are the Jews that control the government of America:
1) Ben Shalom Bernanke: Chairman of the Board of Governors of Federal Reserve. Term ends 2020.
2) Donald L. Kohn: Vice Chairman of the Board of Governors of Federal Reserve. Term ends 2016.
3) Randall S. Kroszner: Member of Board of Governors of Federal Reserve.
4) Frederic S. Mishkin: Member of Board of Governors of Federal Reserve. Term ends 2014.
5) Alan Greenspan: Advisor to Board of Governors of Federal Reserve. Recent Chairman.
JEWISH BANKERS PRINT MONEY at heavily-armed & guarded Federal Reserve Bank buildings throughout the US. Then these Jewish bankers of the Federal Reserve Bank *loan* the money to the US government at *interest.*
Since the Federal Reserve Bank is privately owned, the Federal Reserve Bank of New York (and all the others) is listed in Dun & Bradstreet. But according to Article I, Section 8 of the U. S. Constitution, only Congress has the right to issue money and regulate its value.
Thus it is *illegal* for private interests to issue US money. But because influential Jews like Paul Warburg and Jacob Schiff bribed into enactment the Federal Reserve Act of 1913, the stockholders of the Federal Reserve Bank were to be kept a secret. Only recently have the Jewish stockholders of the Federal Reserve Bank come to light.
International cooperation with the Jew-owned Federal Reserve Bank has been intense to coordinate currency. In 1985, officials from the JP Morgan Bank of NY met with the Credit Lyonnais Bank of France. They established the European Currency Unit Banking Association (ECUBA) to get world cooperation for a unified currency.
In October 1987, the Association for the Monetary Union of Europe (AMUE), secretly met and recommended that the ECU (European Currency Unit) replace existing national currencies and that all European Central Banks be combined into one and issue the ECU as the official unified currency. This occurred in 1999 with the issuing of the Euro Here.
The plan of the international Jewish banking cabal is to have only 3 central banks in the world: The Federal Reserve Bank, the European Central Bank, and the Central Bank of Japan. All of these banks are headed by the Rothschilds.
___________________________________
For More See: “Federal Reserve Jews Control America!” Click Here
AND: “Will Jew-Owned Fed Reserve Bank Kill Ron Paul? ” Click Here
AND: “President Andrew Jackson Vs Jewish Bankers” Click Here
http://www.realjewnews.com/?p=177
#2. To: whyofcourse, *Yukon neo-Progressive Vermin* (#1)
Did the Rabbi cut off too much when he circumcised you, or what?
"We (government) need to do a lot less, a lot sooner" ~Ron Paul
Obama's watch stopped on 24 May 2008, but he's been too busy smoking crack to notice.
#3. To: whyofcourse (#1)
..
.
LOL!
Thanks for PROVING that you are just a "JOO" hating bigot.
You vile piece of gibbering shit.
You have NO argument.
I pi$$ on you and all of yours Sturmabteilung.
Nice and warm isn't it bitch?
Spoiled, stupid and ignorant, brain dead phuckwads, libTURD fools, tools, and idiots, are the real sickness; the messiah "king" obammy and his regime are only the symptoms.
#4. To: Mad Dog (#3)
A lady tried to stop the 08 CRASH but nooooooooo Berneke, Summers, and one more Jewish , head of the Treasury, Rubin would not have that
#5. To: whyofcourse (#4)
.
You vile piece of gibbering shit.
You have NO argument.
I pi$$ on you and all of yours Sturmabteilung.
Nice and warm isn't it bitch?
Spoiled, stupid and ignorant, brain dead phuckwads, libTURD fools, tools, and idiots, are the real sickness; the messiah "king" obammy and his regime are only the symptoms.
#6. To: whyofcourse (#1)
Thank you for posting...indeed!
Never swear "allegiance" to anything other than the 'right to change your mind'!
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