Dollar shortage alleviated by deficit spending

Taxpaying consumers are aware the $700 billion bailout to an international financial cartel was no where close to what is needed for unwinding dark pool derivatives, forex positions and central bank loans swaps. Financial institution continue to hoard billions of dollars instead of making qualified loans

Inaction by the Administration, Congress and FRS has given the green light to fast trading, primary dealer treasury buyers and shadow exchanges. Inactivation of regulatory and monitoring agencies may slowly deep six the dollar, rule of law and maybe the constitution.

Government’s constitutional mandate to protect, preserve and promote the national interest of the U S of A is inert. It was the IFC that conducted a run on institutional money market funds. Allowing a rouge IFC to capture the national banking system, surrender the capital and robbed the treasury demonstrates the fallacy of government being “to big to fail”.

Taxpayers have experienced an exponential explosion of M3 money supply. This is a classic case of “out of site out of mind”. With more than a conservative $600 trillion unwound derivative market drowning the global economy, a massive supply of dollars are needed to resolve the currency shortage.

Where will this type of money come from? The burden will ultimately rest on the backs of the US taxpayers. How will government justify plunging taxpayers deeper into debt through deficit spending? Possibly another financial crisis caused by a “to big to fail” institution like BOA.

BOA could end up receiving trillions of dollars in toxic assets rendering it insolvent. Solvency of another failed bank, maybe BOA, will force smaller solvent regional and local banks to finance winding down a bailed out institution. Unable to finance the unwinding of a mega bank, smaller banks might end under the control of bailed out institution.

FRS should finance dissolving private member banks when insolvency becomes an issue not government or taxpayers. Potentially bankrupt FRS may not have the financial resources to intervene when member banks become insolvent. Leading the next bailout charge on Capital Hill FRS, Treasury and FDIC will exploit congress’s ineptitude.

Another forced rescue plan with very few strings attached is in the making. Immediately FRS will begin printing trillions of debauched promissory notes at an unknown interest rate. Monetary easement by FRS will cover the auction of treasuries authorized by government.

A continuous devaluation of dollars will enable repayment of foreign creditor at discount prices. Instead foreign creditors have decided to revert to a partial gold standard as a hedge against a debauched dollar carry trade. At zero percent interest rate, a borrowed dollar carry trade is being used to profit from the spread between foreign bond rates.

India’s 200 ton purchase of gold pushed price up to $1100. Under normal circumstances an increase in the supply of gold should pull price down. There could be a shortage of gold in storage preventing a decline in price. US stock exchanges appreciated since March 2009 despite millions of job losses.

Who is investing in these markets? It’s the taxpayer’s increasing debt that is propping up markets through deficit spending, bailouts and stimulus.

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