Saturday, March 26, 2011

Banking Bribery Exposed In European Parliament

Adrian Severin, one of the guilty, presented an invoice for payment of his bribe.


On the front page of the Sunday Times you will see the headline ‘Euro MPs exposed in ‘cash-for-laws’ scandal’ (£). Journalists from the lauded Insight investigative team posed as financial lobbyists and approached MEPs offering them large sums of money in return for weakening banking reform legislation.

Three MEPs took the bait and were employed by the fake lobbying company on a yearly salary of €100,000. One of those was 56 year old former Romanian deputy prime minister, Adrian Severin, who apparently emailed the journalists posing as lobbyists writing “Just to let you know that the amendment desired by you has been tabled in due time”. He then sent an invoice for €12,000.

The other two MEPs caught up in the scandal was Slovenian foreign minister Zoran Thaler, and former Austrian interior minister Ernst Strasser. It is said that Ernst additionally boasted about serving at least five commercial clients who each paid him €100,000 per year.

These are pretty shocking revelations. But the most telling quote in the Sunday Times expose comes from Adrian Severin, "I didn’t do anything that was, let’s say, illegal or against any normal behaviour we have here."

Continue reading...

Lloyd Blankfein At Raj Trial: "We’re Like A Middleman - It's A Service We Do For The World"

An update from the Galleon SEC case...


Blankfein Checks Goldman Profit Daily: Galleon Trial

Bloomberg -- Goldman Sachs Group Inc. (GS) Chief Executive Officer Lloyd Blankfein checks his bank’s profit daily, prefers voice mail to e-mail and makes unscheduled calls to board members at times of market “uncertainty.”

His testimony at the insider trading trial of Raj Rajaratnam was intended by prosecutors to show how one of those board members, Rajat Gupta, who served in 2007 and 2008, passed on information he learned from the board. Blankfein’s 3 1/2 hours on the witness stand yesterday before a packed Manhattan federal courtroom also included a few questions about the CEO’s personal life.

“Where did you grow up?” Assistant U.S. Attorney Andrew Michaelson asked Blankfein, who wore a blue tie, dark suit and white shirt. “Brooklyn,” the 56-year-old CEO replied.

“Where did you go to high school?” Michaelson asked. “Thomas Jefferson High School, East New York, Brooklyn,” Blankfein said.

No other witness during the three-week trial has been asked such questions. Prosecutors painted a picture of a CEO who grew up in an outer borough of New York City to eventually run the fifth-biggest U.S. bank by assets. Along with asking him about his roots, Michaelson explored his management style.

Blankfein, who responded in a deferential fashion, testified he checks the firm’s “p-and-l,” or profit and loss, daily and relies mainly on voice mail. In times of market stress, he said he likes to have one-on-one conversations with board members. An e-mail shown to jurors referred to such talks as “just-checking-in-calls.”

He also briefly shared his view of Goldman Sachs’s function. Asked by the prosecutor about the bank’s market-making business, Blankfein said, “We’re like a middleman.”

“It’s a service we do for the world,” the CEO testified.

He then changed the last two words to “our clients.”

Continue reading...


Story background:

Blankfein Testifies In Galleon Insider Trading Case

William Cohan Interview On Galleon Trial, Lloyd Blankfein

Rajat Gupta: Timeline Of Insider Trading Case Against Goldman Sachs Director

Fed's Fisher Sees U.S. Debt 'Tipping Point': "If We Continue On Our Current Path The U.S. Will Become Insolvent"

Catch Fisher's interview with Bloomberg from yesterday...


FRANKFURT (Reuters) - The U.S. debt situation is at a "tipping point," Dallas Federal Reserve Bank President Richard Fisher said on Thursday, and urged the U.S. central bank to refrain from any further stimulus measures.

"If we continue down on the path on which the fiscal authorities put us, we will become insolvent. The question is when," Fisher said in a speech at the University of Frankfurt.

Fisher, seen by economists as one of the most hawkish policymakers within the Fed, said that although debt-cutting measures would be painful, he expected the U.S. to take the necessary actions.

"The short-term negotiations are very important. I look at this as a tipping point."

He said the U.S. economy was now growing under its own steam, but voiced his concerns about building global inflation pressures and said it was now time for the central bank to stop pumping out extra support.

"The Fed has done enough, if not too much, and we should do no more.. In my opinion no further accommodation is necessary after June either by tapering off the bottom of treasuries or by adding another tranche of purchases outright."

Continue reading...

US Finances Rank Near Worst in the World: Study

The US ranks near the bottom of developed global economies in terms of financial stability and will stay there unless it addresses its burgeoning debt problems, a new study has found.

US Capitol Building with cash

In the Sovereign Fiscal Responsibility Index, the Comeback America Initiative ranked 34 countries according to their ability to meet their financial challenges, and the US finished 28th, said David Walker, head of the organization and former US comptroller general.

"We think it is important for the American people to understand where the United States is as compared to other countries with regard to fiscal responsibility and sustainability," Walker said in a CNBC interview. "Americans are used to rankings and they're used to ranking very high, but frankly in this area we rank very low."

While the news is bad, there is a bright side.

"Here's the good news: Some of the top countries had their own fiscal challenges, made reforms and now rank highly," Walker said. "If we adopt the recommendations of the National Fiscal Responsibility and Reform Commission or ones that have similar bottom-line impact, we move from 28 to 8."

As the US languishes near the bottom, these countries make up the top five: Australia, New Zealand, Estonia, Sweden, China and Luxembourg.

Walker acknowledged that some of the countries that rank ahead of the US do not have the same type of challenges.

But he said policymakers in Washington can learn much from countries like New Zealand, which faced a currency crisis and made the necessary reforms to get back to prosperity.

"First, they're arguing over the bar tab on the Titanic," Walker said. "We need to cut spending. Frankly we need to cut spending more than what has been talked about but over a longer period of time. But what's imperative is that we need to attach some conditions to increasing the debt ceiling limit that will bring back tough budget controls..."

Walker predicted the US will have a debt crisis "within the next two to three years" and implored Washington lawmakers to "wake up."

Emergency Plans in Louisville Raise Eyebrows (Confiscate Private Property)

Intel Hub Note: This is simply more proof that in the event of a disaster the local and federal governments have plans in place to CONFISCATE private property.

In the event of a disaster, your government will NOT be on your side. I repeat, your government will NOT be on your side!

Council members express concern over sanctity of private property rights
By John Aguilar Camera Staff Writer
March 23rd, 2011

Language in Louisville’s proposed emergency response plan, which would give the city the power to “commandeer private property” and “seize” buildings in a crisis, has given several of the city’s elected leaders pause.

The emergency ordinance, which was supposed to have gotten an up or down vote earlier this month, was instead tabled until April so that the council can figure out how it wants to deal with what one member called the measure’s “stark” language.

“I think any time you talk about government seizing private property — that’s not something I’m comfortable with,” Councilman Bob Muckle said Tuesday.

Muckle said he understood that in extraordinary circumstances, extraordinary measures must be taken, but he said he wants to hear from the police chief and other city staff on exactly how they envision implementing Louisville’s emergency measures.

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Utah House stamps gold, silver as legal tender

It may not fold as conveniently as dollar bills, but the Utah House took a first step Friday to recognize gold and silver as legal tender.

It voted 47-26 to pass HB317 by Rep. Brad Galvez, R-West Haven, and sent it to the Senate. The measure would recognize as legal tender gold and silver coins issued by the federal government — not just their face value, but also their value in gold and silver or to a collector.

It also would order the state to study whether Utah should establish an alternative form of legal tender, such as one backed by silver and gold.

“This is a step in preparedness, a step in security,” Galvez said, “that allows us to be able to help hold up our economy as the dollar continues to shrink.”

Rep. Ken Ivory, R-West Jordan, said, for example, that a 1960s John F. Kennedy half-dollar coin — 90 percent silver — would have bought three gallons of gasoline with its face value in the mid-60s. But the value of the silver in it today would buy about five gallons of gas, while the face value of the coin would buy only a fraction of a gallon.

Ivory said the bill is “a way for us to preserve for the citizens of Utah … the purchasing power of the money they hold.”

The bill would not require anyone to accept gold and silver coins as legal tender. It also would exempt the sale of such U.S. coins from state sales taxes and from capital-gains taxes.

Rep. Steve Eliason, R-Sandy, a certified public accountant, opposed the bill, saying it could create tax loopholes. He said people seeking to escape capital-gains taxes on other assets — such as gold bullion — might be able to do so by selling it for coins under the bill.

Britain's £200bn time bomb of debt interest

A little bit of inflation is a good thing, right? Well, that's one way of looking at it, and if you were being charitable, it might even provide a decent explanation of why the Bank of England appears to have given up on the inflation target.

One of the effects of relatively high inflation is to ease the burden of debt by reducing its real value. For a highly indebted nation such as Britain, inflation therefore seems to make sense as an economic strategy.

With no control over their own monetary policy, the Portuguese and other fiscally-challenged eurozone nations don't have that luxury. Without inflation to do the work for them, the austerity required to get public debt under control becomes that much greater, which is one of the reasons why Portugal will soon be following Greece and Ireland into seeking a bail-out. Britain, by contrast, gets a relatively pain-free way out of the mire.

That's the conventional wisdom, anyway, but it is also largely rubbish. Wednesday's analysis of the public finances by the Office for Budget Responsibility provides further evidence of why elevated inflation can never be economically benign.

Three powerfully negative effects are identified by the OBR. As a result of higher than expected inflation, living standards will fall for longer than previously anticipated, public borrowing will end up higher, and real terms cuts in public spending will have to be deeper.

So adverse are the consequences that the Government may have to abandon its commitment to real increases in health spending over the Parliament.

Using the OBR numbers, the Institute for Fiscal Studies calculates that in fact real spending on the National Health Service will fall by 0.9pc unless the Government tops it up from somewhere else. In the round, the public spending cuts will have to be £4bn deeper, while borrowing will end up £46bn higher. So much for inflating away the nation's debts.

The cause of this phenomenon is obvious when you think about it. Large elements of spending, including benefits and the costs of servicing index linked gilts, will continue to rise in line with inflation, but because earnings are lagging prices, there will be a shortfall on the revenue side of the ledger, thereby increasing the amount the Government has to borrow.

Similarly, higher inflation – but no change to the cash size of departmental spending limits means that the real size of the cuts will be bigger.

One of the biggest shockers from the detail of Thursday's OBR assessment is the escalating amount of money going straight down the drain of debt servicing costs. As public debt rises, these payments rise from £30.9bn last year to £66.8bn in 2015/16, or from 4.6pc to 8.8pc of all government spending.

Worse, these numbers are an understatement of the true position. According to data aired at a Taxpayers' Alliance seminar on Thursday, once private finance initiative payments, public sector pensions and other off-balance sheet liabilities are taken into account, the true size of the interest bill will be more like £200bn by the end of the Parliament. I won't trouble you with the projected costs of social security and tax credits, but they are little less alarming.

Against this backdrop of rising expenditure, Ed Balls, the shadow chancellor, accuses the Government of putting the economy "back in the danger zone" by seeking to apply at least a degree of restraint. Mr Balls is much more highly qualified in economics than I am, but he obviously understands nothing about the basic principles of finance.

The miracle is that the bond markets remain as compliant as they are given this toxic mix of inflation and continued public indebtedness. Moody's reaffirmed the UK's triple A rating on Thursday, but it warned inflation posed a significant risk. They can say that again. There must come a point when the gilts market turns. What higher interest rates would do to that £200bn debt servicing bill scarcely bears thinking about.

The growth forecasts are precarious enough as it is without the hammer blow to the public finances and the wider economy that higher borrowing costs would deliver.

Gold And Silver Are Thriving While The U.S. Dollar Is Dying

Have you heard the news? Gold hit another new record high on Thursday. It reached $1447.40 before settling back a bit. Most people responded to that news with a yawn. Why? Well, because it is happening so frequently these days. It seems like the price of gold is constantly setting a new record. Silver likewise is thriving. The price of an ounce of silver briefly hit $38.13 on Thursday. That was the highest price for silver in 31 years. But most people also responded to that news with a yawn. Why? Well, because the price of silver always seems to be going higher these days. Meanwhile, the U.S. dollar is struggling. The ICE Dollar Index fell to 75.340 earlier this week. That was the lowest it has been since December 2009. Even at a time when the sovereign debt crisis in Europe is flaring up again and there is tremendous instability all over the world the U.S. dollar still can't find much traction. In fact, many are convinced that the U.S. dollar is on the verge of another major fall. So what in the world is causing all of this?

Well, as is always the case, there are many factors. But one of the biggest factors is that the world is simply starting to lose faith in the U.S. dollar.
You see, the rest of the world is not stupid. They know that the U.S. cannot run trillion dollar deficits indefinitely. They know that at some point the mountain of debt that the U.S. government has accumulated is going to come crashing down.
In addition, the rest of the world was really put off by this most recent round of quantitative easing. Most analysts around the world saw that move by the Fed as something that would really cause the U.S. dollar to lose value.
Even some top Fed officials are now admitting that QE2 may have been a mistake.
Richard Fisher, the head of the Federal Reserve Bank of Dallas recently gave a speech in Frankfurt during which he admitted that the Fed had done "a bit too much" quantitative easing and that "there's lots of liquidity sloshing around the US financial system. We are seeing signs of all the intoxication that typically takes place when we have the ambrosia of cheap and readily available capital."

Ya think?
The truth is that all of this money printing may give the economy a short-term "rush" right now, but in the long-run it is just going to cause even more pain. Peter Schiff recently described it this way....
To me, it's like watching someone walk into the same sliding glass door again and again. Wall Street must know by now that large infusions of liquidity from the Fed spur present consumption at the expense of investment for the future. We are an indebted family going out for an expensive meal to celebrate getting approved for a new credit card. It might feel good (at the time), but we're still simply delaying the inevitable.
Whenever more dollars are introduced into the financial system, the value of all existing dollars goes down. As the U.S. dollar continues to lose value, we will continue to see oil, agricultural commodities and precious metals go up.
In the long run, many believe that the U.S. dollar is going to completely collapse. For example, John Williams of Shadow Government Statistics is particularly pessimistic....

As an economist, I look for the U.S. dollar ultimately to lose virtually all of its current purchasing power. Accordingly, for those living in a U.S. dollar-denominated world, it would make sense to move to preserve wealth and assets over the long-term. Physical gold is a primary hedge (as is silver). Holding some stronger currencies outside the U.S. dollar, as well as having some assets outside the United States, also may make sense.
But it is not just the the U.S. dollar is losing value. There is something deeper going on here.
For decades, the U.S. dollar has been the reserve currency of the world. Traditionally, virtually all of the governments of the world have wanted to stockpile U.S. dollars.
But now that is changing. Central banks around the world are moving away from the U.S. dollar and they are starting to hoard gold and silver.
So are gold and silver now regarded as "reserve currencies" by many central banks around the globe? Certainly something fundamental is shifting out there. The behavior of central banks around the world is rapidly changing as an article on CNBC recently noted....

Central banks are shedding dollars, reducing their holdings by about $9 billion in previous quarter, according to Nomura Securities’ Jens Nordvig, global head of G10 FX Strategy.
What are they buying instead? Gold.
Central banks are increasingly viewing gold and silver as great hedges against financial instability. They understand that all paper money will eventually become worthless but that gold and silver will always maintain their value.
Some nations are reportedly gobbling up gold as fast as they can right now. For example, there are persistent rumors that China is hoarding gold in anticipation of a global financial meltdown.
In previous years China had been buying up large amounts of U.S. Treasuries, but that is no longer true. China appears to have changed strategies. China is still buying some U.S. Treasuries, but they also appear to be extremely interested in precious metals right now.

But China is far from alone. The demand for precious metals is growing all over the globe and this is likely to continue to push up the prices of gold and silver over the long-term.
In fact, some highly respected researchers are already talking about $2000 gold. Of course the price of gold will fluctuate up and down in the short-term, but over the long-term the decline of the U.S. dollar is going to continue to mean good things for gold and silver.
Unfortunately, a declining U.S. dollar is going to mean bad things for average American families.
It is going to cost more to fill their cars with gas.
It is going to cost more for them to buy groceries at the supermarket.
It is going to cost more to heat their homes.

Already there are some very disturbing signs of inflation. The average price of a gallon of gasoline is rapidly approaching $4 a gallon and in February the price of food in the United States rose at the fastest rate in 36 years.
So the truth is that rising prices for gold and silver and the decline of the U.S. dollar are not going to be good news for a whole lot of people.
Millions of American families are going to deeply suffer as the purchasing power of the U.S. dollar goes into the toilet.
Some really tough times are coming.
Are you prepared?

read more:

Mass. job fair canceled because of lack of jobs

TAUNTON -- A Massachusetts employment organization has canceled its annual job fair because not enough companies have come forward to offer jobs.

Richard Shafer, chairman of the Taunton Employment Task Force, says 20 to 25 employers are needed for the fair scheduled for April 6, but just 10 tables had been reserved. One table was reserved by a nonprofit that offers human services to job seekers, and three by temporary employment agencies.

Shafer tells the Taunton Daily Gazette the lack of employers means the task force won't have enough money to properly advertise the fair.

The task force has been organizing the job fair nearly every year since 1984.

Shafer says the cancellation reflects the current economy -- even though things are getting better, companies are still cautious about hiring full-time workers.

IMF Prepares For “Threat To International Monetary System”

IMF Member Nations - Wiki Commons
Zero Hedge

Back in April 2010, before Waddell and Reed sold a few shares of ES, effectively destroying the market on news that Europe was insolvent, we made the following observation: “The IMF has just announced that it is expanding its New Arrangement to Borrow (NAB) multilateral facility from its existing $50 billion by a whopping $500 billion (SDR333.5 billion), to $550 billion.”

Little did we know that our conclusion “something big must be coming” would prove spot on just a month later after Greece, then Ireland, then Portgual, and soon Spain, Italy, Belgium, and pretty much all other European countries would topple like dominoes tethered together by a flawed monetary regime. Well, based on news from Dow Jones we can now safely predict the following: “something bigger must be coming.” As if the IMF’s trillions in open lending facilities (many of which have recently been adjusted to uncapped) were not enough, we now learn that the world lender of last resort (which in theory is the Fed, but apparently Bernanke has been getting a little shy lately so is offsetting his direct lending directives to secondary organizations like the IMF, leaving the Fed with only USD liquidity swaps) is about to activate a “Special Funding Pool” – Dow Jones explains:
The International Monetary Fund is expected to soon activate a special funding pool that will boost the fund’s ability to prevent or resolve economic crises, two people familiar with the situation said Thursday. One of the people said the activation of the funding–which can only be made by a special request from the IMF managing director to the board–was in anticipation of an expected wave of new IMF programs, including the possible expansion of the Greek bailout package.
Wonderful. Global financial cataclysm rinse repeat all over again…

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How Likely is QE-Three?

(or, “Is That Your Retirement Account You’re Holding On To So Tightly? Or Are You Just Happy To See Me?” Said The Man From The Government)
So back in September 2008—in the throes of the Global Financial Crisis—the Federal Reserve under its chairman, Ben Bernanke, unleashed what was then known as “Quantitative Easing”.

Sure: It’s fine when they do it to Saddam—
it’s another thing when they do it to you.
They basically printed money out of thin air—about $1.25 trillion—and used it to purchase the so-called “toxic assets” from all the banks up and down Wall Street which were about to keel over dead. The reason they were about to keel over dead was because the “toxic assets”—mortgage backed securities and so on—were worth fractions of their nominal value. Very small fractions. All these banks were broke, because of their bad bets on these toxic assets. So in order to keep them from going broke—and thereby wrecking the world economy—the Fed payed 100 cents on the dollar for this crap.

In other words, the Fed saved Wall Street by printing money, and then giving it to them in exchange for bad paper.

Time passes, we move on.

Then, in November 2010, the Federal Reserve—still under Ben Bernanke—unleashed what is colloquially known as QE-2: The Fed announced that it would purchase $600 billion worth of Treasury bonds over the next eight months.

The rationale was so as to stimulate lending. But really, it was so that the Federal government wouldn’t go broke. The Federal government deficit for fiscal year 2011 is $1.6 trillion—the national debt is beyond 100% of GDP, at about $14 trillion. The Federal government issues Treasury bonds in order to fund this deficit. Ergo, by way of QE-2, the Federal Reserve bought roughly 40% of the Federal government deficit for FY 2011. Add on other Treasury bond purchases by the Fed via QE-lite (the reinvestment of the excedents of the toxic assets on the Fed’s books), and the Federal Reserve is buying up half the deficit of the Federal government, as I discussed here in some detail.

In other words, the Fed saved Washington by printing up money, and then giving it to them in exchange for—well, not bad paper, but at least questionable paper.

So! . . . let’s see now . . . Fed money printing—check! Saving someone’s bacon (even though they shoulda known better)—check! Taking on dodgy paper—check!

Did it in 2008 for Wall Street, then did it again in 2010 for Washington.

But the key difference between these two events is, the banks didn’t have any more toxic assets, once they sold them all to the Fed.

But the Federal government will still have more Treasury bonds it will have to sell, once the Federal Reserve ends QE-2 this coming June.

The fiscal year 2012 deficit will be on an order of 10% of GDP—roughly $1.5 trillion. And 2013 and 2014? Around the same range.

Over at Zero Hedge, they are past masters at timing the funding needs of the Federal government. But we don’t need to go into the monthly figures of POMO purchases and Treasury auctions and all the rest of it. All due respect to Tyler and his wonderful team at ZH, all that is merely the mechanics of Federal Reserve monetization.

What we should look at is the simple, macro question: If the Fed ends QE-2 in June as they have said they will, who will take up the slack? Who will purchase between $75 and $100 billion worth of Treasury bonds at yields of 3.5% for the 10-year?

Is there someone?


The answer is, No one will take up the slack.

Who, Japan? They’ve got some well-known troubles of their own—they’re all about selling Treasuries and buying up yens, both now and for the foreseeable future.

The Chinese? They’ve been quietly exiting Treasuries for a couple of years now, and going into every commodity known to man.

Europe? Are you serious—Europe? Please don’t make me laugh that hard—it hurts.

The fact is, there is no one outside the United States that I can think of who would willingly buy Treasury bonds—not to the tune of +$75 billion a month.

Therefore, if no one outside the United States would willingly give money to Washington to fund the deficit, then someone inside the U.S. will have to step up.

The obvious-obvious-obvious solution to this mess is for the Federal government to stop spending its way to oblivion—but does anyone realistically see this happening?

Therefore, as Spock always sez, if you eliminate the impossible, whatever remains, however improbable, must be the truth.

If foreign sources of funding will not cover the Federal government’s deficit after June 2011, and Washington will definitely not cut spending in any sort of realistic sense, then there really are only two—and only two—possibilities:
• The indefinite continuation of QE by the Federal Reserve.
• Or the requisitioning of private retirement accounts and pension funds.
Don’t dismiss the second possibility out of hand—think it over.

What pool of money is just sitting there, not doing much, while being legally barred from its owners? What pool of money is easily accessed, yet is large enough to fund the deficit?

The retirement accounts of the American people: Both individual private accounts, and pension funds.

After all, the total for all pension monies is roughly 100% of GDP (this includes Social Security). And the Federal government has already raided the “Social Security lock box”—that box is stuffed with Treasury IOU’s.

So the Federal government might well turn to the private sector for cash. The Federal government might conceivably claim that ongoing funding needs require that every single 401(k) and IRA divest from its portfolio of stocks and bonds, and be fully invested in Treasuries.

This could be accomplished very easily, from a practical standpoint—just inform banks, and have them turn over to the Federal government all your mutual funds and stocks you agonized over, and get long-term Treasury bonds of nominal equal value in exchange.

401(k)’s and IRA’s would be the first ones the Federal government would go after—for the obvious reason that union pension funds have the union’s political muscle. But individuals? They have no political machine. So they’re screwed.

Anyway, the language used for this maneuver by the Treasury department would make it difficult for a lot of (unaffected) people to get upset over the situation: The Treasury department wouldn’t call this process “retirement account confiscation”. They’d call it something innocuous, like “retirement asset swap”—or better yet, throw in some patriotic bullshit (indeed, the last refuge of the scoundrel) and call it “Americ-Aide Asset Swap”—or even better: Call it “Help America Retirement Treasury Bond Program”—otherwise known as HART-bonds. (Awww!!! Probably maudlin enough to get Geithner an appearance on fucking Oprah.)

There might be short-term political damage, but like losing your virginity or carrying out state-sponsored torture programs, it would be the necessary start for a slide that will never end. After this first “retirement asset swap” carried out on the 401(k)’s and IRA’s, the Treasury department would start doing more of this to ever-bigger pension funds, until eventually all retirement assets would be converted into Treasury bonds.

Hey, they did it in Argentina. And as Yves Smith always sez, America has become Argentina, but with nukes.

Now, this is one possibility, of the only two which I can see.

The other possibility, of course, is that the Federal Reserve will not end Quantitative Easing-2 come June. The Fed will extend the deficit monetization indefinitely. The Fed will be under the mistaken impression that this will somehow save the U.S. economy. (The best metaphor I’ve been able to come up with for this situation is, the Federal government is like a junkie who’s already OD’ed—and the Federal Reserve is trying to “save” him by shooting him up with even more heroin.)

So between these two possibilities—confiscating retirement accounts and forcing some sort of Treasury bond asset swap, or an endless continuation of QE—which is easier?

Obviously QE-three.

Therefore, that’s what I think is going to happen: QE money-printing as far as the eye can see.

Well, look on the bright side: At least you’ll get to keep your ever-shrinking retirement nest egg. Bully for you!

If you’re interested, you can find my recorded presentation “Hyperinflation In America” here. I discuss in detail what I would do, if and when the dollar crashes—or the Fed and Geithner get desperate.

It's Time To Close The National Money Hole

This is brilliant. The Onion understands what Bernanke does not.

Dallas Fed President Richard Fisher Says Fed Should 'Keep Its Word,' End QE2 in June: Bloomberg Interview

Federal Reserve Bank of Dallas President Richard W. Fisher talks about the outlook for an end to the central bank's quantitative easing program.

He speaks with Bloomberg's Rainer Buergin in Berlin.

00:00 Impact of Japan, Mideast crisis, end to QE
04:08 Support for policy stance, inflation pressure
05:47 Expects QE to end in June, Fed balance sheet

Running time 07:28