Hints have been dropped repeatedly about the potential of the Federal Reserve issuing Federal Reserve Bonds along with less issuing of Treasury Bonds in order to sterilize (mop up) the new wobbling, out of control, universal monetary killer of “Galaxy Liquidity” the Fed and Treasury are creating. They had no other option facing this gargantuan and unprecedented crisis of CONFIDENCE called credit – a gift of the Western OTC derivative fabricators.
Letting Lehman collapse was a scheme with many proponents based on the assumption that the underlying debts, called assets, would recover in time, regardless of the implosion of the credit default derivatives thereupon.
Bankruptcy against these chains of obligations called ownership is their mistake.
Without trying to “geek you out,” the intellectual weapon of choice of those with large foreheads and sunken eyes, let me draw you a mental picture.
Any OTC derivative misnamed an asset, now in the inventory of the Fed, is a STRING with many knots.
The knots are counter parties.
The string is the thing called an asset.
Value, slipped or sliced, is called prefabrication.
(Titles changed for the purpose of mass understanding).
This string, having been assumed to be as asset, has formed the basis for more and more transactions until one string with a few knots has become a toxic spider web obscuring the Earth’s financial from being seen from outer space.
Here comes the scary Geek boo-boo:
Many of those knots are BANKRUPT. They are festering empty holes now unable to perform their specific performance duties, that being to hold together the web and therefore eternally preventing the string from holding if /when stressed one more time.
The stress is a crisis of confidence in the glue that has been applied to the failed knot which is now a gap.
The glue is the creation of huge numbers, called liquidity, that are like universe sized lumps of undulating maggot pie waiting for any pickup in economic volume to transmute themselves into the currency vermin of FLIES who carry the incurable Eastern Flu called HYPER-INFLATION, a currency event.
The end of economic days is game over hyperinflation, a currency event – not an economic event triggered by glue failure as above.
The spider web collapse reveals the real world, the failed universal reserve currency, the pug-ugly dollar!
Because the plan cannot work either within two generations, or in fact, the following is the real world financial matter at hand:
The Unavoidable Face Of Hyperinflation
Posted: Jan 14 2009 By: Jim Sinclair Post Edited: January 14, 2009 at 1:32 am
Filed under: General Editorial
CIGA Erik shows in chart form the face of unavoidable hyperinflation – a currency event.
It is horrifying what the Fed and Treasury injected in percentage terms. A true measure of comparison can be seen in the 3 months of 2008 when the Fed accomplished more than in the 7 years from 1929 to 1937.
This is beyond all reason, having its own new and terrible consequences well in excess of the consequences of the 1929 and 1932 breaks.
Markets have been run now for years by algorithms, manipulators and seeded interests that are like summer thunderstorms. They are loud and scary, but quite short term and in the end quite meaningless and non-productive.
The dollar cannot and will not remain strong, nor can a planetary Weimar experience now be avoided.
Click chart to enlarge in PDF format