Lets say youre Putin. You know youre going to invade Crimea. You can expect U.S. financial sanctions....So what do you do..? You basically mitigate the impact of the sanctions, start dumping treasuries in advance so that when you make your move and the Treasury tries to come against you, youve insulated yourself @ 2 billion dollars a day since October last year. We know the Russians and Chinese are working together. So is it any surprise that when the Russians started dumping… The Chinese started dumping also.. Does the Intelligence Community have the ability to defend the US in the event that this escalates even further..? Believe it or not, theres an intelligence unit inside the Treasury. And they actually have a war room. That tells you that financial warfare is here and its real. So,. if the Russians are dumping… The Chinese are dumping… Who is going to buy all this debt..? Well, a mystery buyer has shown up....! Belgium has bought enormous amounts… In the hundreds of billions of dollars of U.S. government securities. So,. Belgium started loading up on treasuries, coincidentally at the exact same time Russia and China began dumping theirs..! Its not the Belgians... These amounts are bigger than the Belgian current account surplus. public doesnt know who the mystery buyer is, but the national security community does. Now, the Treasury is operating through this war room, and the Fed,.. they are mystery buyers in Belgium… For now, they have managed to prop up the treasury market. It hasnt collapsed yet. But theyre not going to be able to keep pulling these rabbits out of a hat, theres a limit. This should be very scary, because the Fed is tapped out ,the Fed is leveraged 77 to 1. So the Fed is at the limit of what they can do. The foreigners are now dumping treasuries and if no one buys it, guess what, interest rates go up. Thatll sink the stock market, thatll sink the housing market. Higher interest rates mean the debt gets higher, so interest rates go up some more. So,..We start a death spiral and theres no way out of it..
Posted on: Tue, 14 Oct 2014 00:38:34 +0000