High of pharmaceuticals in financial wonderland

US taxpayers maybe high of pharmaceuticals while experiencing a financial hallucination. Taxpayers may have over medicated into a legal comatose state of mind with residue now detected in the sewer, water and air. Fed’s exit strategy is similar to Alice trapped in wonderland.

As long as taxpayer Alice is experiencing a hallucinary global financial crisis time is running out on defusing the mother of all hyperinflationary explosions. A Hyperinflation explosion will probably crush the dollar making Weimar Republic and Zimbabwe seem like the pageantry of the King of Heart’s court.

The banking industry continues to deflate through conscript consolidation by forcing good banks to cover the losses of bad banks. FDIC has access to $500 billion of taxpayer’s debt to cover $4.5 trillion in taxpayer’s deposits. A watch list of 500 banks and $8.5 billion in the red FDIC is requesting good banks to cough up $23 billion.

Alice was extricated from the wonderland system by falling into a bottomless hole. When will US taxpayers wake up to the Fed’s newest wonderland scheme called “Reverse Repo”? Fed has pumped trillions of borrowed dollars into the banking system. Congress continues to lead taxpayers deeper into debt with interest bequeath to the FRS.

Congress was told that a $700 billion bailout would be used by banks to unfreeze an illiquid system. Banks have no intention on injecting liquidity into the economy because it would only bring about hyperinflation. The problem is excess credit produced outside of the FRS by a $600 trillion plus fraudulent, unregulated derivatives industry.

How does FRS drain the global economy of excess derivative dollars before they are released into a global economy thereby producing hyperinflation? Fed has allowed a recession to establish roots and swapped toxic assets at inflated prices for taxpayer debt. The Fed in return repurchases taxpayers debt from primary bank dealers.

Fed will now reverse repo the very same taxpayer debt recently purchased by primary bank dealers for cash raised through leveraged taxpayer debt to third parties. The deeper Alice the taxpayer ventures into financial wonderland the more “curiouser and curiouser” the Fed becomes.

Fed will conduct another reverse repo in the future and buy back taxpayer debt at an even higher price. This will create more excess liquidity then before and shorten the time for a hyperinflationary explosion. At this point taxpayers will have slipped deeper into a wonderland of financial debt.

Fed will once again rearrange the chairs around a circular table. Banks will end up with larger excess reserves in the system. Fed will have taxpayer debt on its balance sheet. Fed will claim should banks start lending excess reserves into the economy hyperinflation will surge.

Any exit strategy by the Fed represents a change in policy and should be interpreted as a sign the situation has changed on the ground. Eventually a door will lead back to a hallway of financial crisis with many doors. The key is to find the door that allows taxpayers to break perpetual deficit spending.

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