If you want to know what kind of monetary morons we have in charge of the Federal Reserve, then you have come to the right place, because a record of sorts was set last week, in that the loathsome, disastrous Federal Reserve bought up – in the last 12 short months – $1.011 trillion in US government securities! Yikes!

And remember… This is the Federal Reserve! This is a lousy private bank operating irresponsibly, at the behest of the Congress, and whose shadowy owners include, to one degree or another, foreigners and foreign central banks that are operating by the grace of their own governments which are just as corrupt and desperate as our own, but it was the Fed that created enough money to buy a trillion dollar’s worth of US government bonds for itself! A trillion!

It’s called “monetizing the debt”, which Ben Bernanke said, in response to a direct

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Foreign central banks, proving that they are just as stupid and corrupt as I thought they were, continue to buy American Treasury and agency debt with both hands, and their holdings stashed at the Fed jumped a big $26 billion last week as a result!

I ended that with an exclamation point because when I multiply $26 billion a week times 52 weeks, I get $1.352 trillion, a headache and a feeling of impending doom, which I figure in some primordial, primitive way MUST be significant, thus explaining my use of the exclamation point.

The new total holdings of these foreigners, in that one account alone, is a huge clot of debt for which they have paid a cumulative $2.710 trillion, although with interest rates trickling upwards, they surely lost some money as the prices of bonds went down. Hahaha! Morons!

And so with all of this foreign money flooding into Treasury and

div align=”justify”The system of quasi-fixed exchange rates that dates back to the Nixon era, and which itself was an evolution of the gold standard span class=”blsp-spelling-error” id=”SPELLING_ERROR_0″Bretton/span Woods regime agreed in 1944 (which couldn’t survive the 1960’s spike in Vietnam war inspired US inflation), has become unsustainable. In the original gold standard regime (fixed exchange at $35 for an ounce), the capacity of the US to issue dollars to the world was strictly limited, as was the capacity to run up deficits. A key factor driving financial crises is extreme trade imbalances between nations; debt gets accumulated partly as a result of financing a trade deficit. For smaller countries, a vicious spiral can ensue which ends in recourse to the IMF. In 1944, the US was the world’s biggest creditor, and imposed a system that placed the whole burden of maintaining the balance of trade on deficit nations; there would …

There's a lot of commentary -- more comprehensive and up to date than I can provide -- on the crisis and the attempts to resolve the logjam in the financial markets.[0], [1] But I stilll have a couple of thoughts about the causes, and the implications, of the process that has resulted in so much turmoil this week.

First, what is the source of the crisis? Is it as is asserted here in this statement from John McCain today?

....

There are certainly plenty of places to point fingers, and it may be hard to pinpoint the original event that set it all in motion. But let me give you an educated guess. The financial crisis we're living through today started with the corruption and manipulation of our home mortgage system. At the center of the problem were the lobbyists, politicians, and bureaucrats who succeeded in persuading Congress and the

There's a lot of commentary -- more comprehensive and up to date than I can provide -- on the crisis and the attempts to resolve the logjam in the financial markets.[0], [1] But I stilll have a couple of thoughts about the causes, and the implications, of the process that has resulted in so much turmoil this week.

First, what is the source of the crisis? Is it as is asserted here in this statement from John McCain today?

....

There are certainly plenty of places to point fingers, and it may be hard to pinpoint the original event that set it all in motion. But let me give you an educated guess. The financial crisis we're living through today started with the corruption and manipulation of our home mortgage system. At the center of the problem were the lobbyists, politicians, and bureaucrats who succeeded in persuading Congress and the

No, it wasn’t Bill Gross from PIMCO talking his own book on CNBC and demanding an immediate rescue plan. The shocking truth of the sudden GSE bailout this weekend, after months of prevarication by the Treasury, was that it was forced upon a reluctant US government by the realisation that both Fannie and Freddie had cooked the books by hiding huge off-balance sheet liabilities (and I bet they’re not the only ones). As a result, Morgan Stanley concluded in their review of GSE finances on behalf of Hank Paulson that both were dangerously undercapitalised and needed an urgent infusion of cash. The dumping of GSE debt by the Chinese and Russians among others has also hastened this decision. The equity markets may well see a knee-jerk relief rally on this historic intervention, but it will prove short lived I suspect, for several …