The Great Ponzi

Mon, Nov 28, 2011 - 9:36am

I have maintained for years that the ongoing U.S. federal deficit is being actively funded by the Fed, through their primary dealers. More evidence has emerged today due to some great reporting by Bloomberg.

It's quite simple, actually. The U.S. government has a spending problem. Again this year, it will spend about $1,500,000,000,000 more than it takes in in tax revenue. OK, so where do we get that $1.5T? By borrowing, of course. The problem is: Folks aren't exactly lining up to loan the U.S. billions and billions of dollars at 1-2% interest. In a free and fair market, rates would rise to the point where buyers would emerge and a new equilibrium would be reached. However, rates cannot be allowed to rise so, what to do?

Since 2008, the primary dealer banks have had virtually unlimited access to the Fed's "discount window". Through this lending facility, banks are able to borrow nearly infinite amounts of money from the Fed. What do they do with this money? They buy treasury bonds and notes! What a deal! Instead of creating the obvious problems associated with overt money printing to fund the U.S. deficit, the Fed funds the deficit covertly by having their PDs borrow funds at 0% and "re-invest" the money into treasuries. All the while, the big banks book the risk-free spread as profit, report healthy earnings on CNBS and pay their executives and traders fat and lavish bonuses. Pretty slick, huh? You don't believe me? OK, read this:

Another classic Fed/TBTF/Congressional shell game. Watch the right hand while the left does all the real damage.

While the country bickered over $700B in TARP, the Fed was secretly doling out $7.7T through the discount window. Let's actually lay out the numbers, just in case you don't catch the gravity of this:

$700,000,000,000 in TARP

$7,700,000,000,000 in actual Fed lending



Well, by now, you know. The ultimate question is: Does it matter? Is there anything you can do, anyway? You can rally with the "tea partiers" but the spending and the corruption continues. You can march with the "occupiers" but the power base and the bonuses continue unabated.

I'm sorry to say that all you can do is protect yourself. By visiting this site and others such as ZeroHedge, you've educated yourself. You now see what's really going on. Continue to prepare. The day is coming when the music will finally stop and the entire ponzi will collapse. Continue buying and stacking. Continue warning others and counseling them to do the same.


About the Author

turd [at] tfmetalsreport [dot] com ()


Zehme · Nov 28, 2011 - 9:46am



Thanks alot for the insite Turd, it is greatly appreciated

single6 · Nov 28, 2011 - 9:46am

I am my own central bank..... a continuing path towards personal liberty...

fats · Nov 28, 2011 - 9:47am


I pity the fools who tell me to save USD in a "high yield" CD.

I just keep telling people:

  • water
  • food
  • precious metal
  • guns
  • non-grid heat/power alternative
ggnewmex · Nov 28, 2011 - 9:49am

first??? Thanks Turd

I try to make sense of this to my family, who is educated, ( 6+ each) and they do not see it the way we do. What hope is there for the masses who simply watch American Idol, and thinking of BLack Friday as a highlight of the year, and all that is good in America.

The amrkets are up 290 on the (reported false) rumors,

amazing. what is one to do???? yeah keep stacking, which I do,..... it really is no wonder that things continue the way they are.

TO watch congress and senate with their cronyism (?) make a person ill, and they make the laws, good grief

no wonder the rest of the world looks at us with contempt

LongGoldLongSilver · Nov 28, 2011 - 9:54am

B&B Found Guilty For War Crimes

The Kuala Lumpur War Crimes Tribunal found former British prime minister Tony Blair and his American counterpart George W. Bushguilty and will lobby for them to be charged internationally for war crimes. Good luck with that. Nevertheless it's a noble decision and deserves attention. Hopefully these criminals and many alike will get their fair verdict in the future.

Bush, Blair found guilty of war crimes in Malaysia tribunal

33 and a turd · Nov 28, 2011 - 9:55am
GoldMania3000 · Nov 28, 2011 - 9:55am

when does 7T$ get reconzied

when will it get reconized by the street, the masses...think about it --this amount of $s should have us at santa's 10000$ gold already

· Nov 28, 2011 - 9:55am

Even Kiyosaki is prepping

I know many of you are not fans of Robert Kiyosaki... But I recently heard him speak about the 5 Gs on a free podcast

  • Gold
  • Guns
  • Grub
  • Ground
  • Gas

He will certainly still accept your money to train you how to get rich in business or Real estate, but this was a twist that surprised me. I like the Alliteration--helps me remember what to tell people on how to prepare.

Bezalel · Nov 28, 2011 - 9:58am

Gold Behaves as Currency

This article asks which currency correlates best to gold, and the answer is both the Japanese Yen and the Swiss Franc. The analysis is that these are valued as reserve currencies, and that therefore gold should also be viewed as a reserve currency, rather than as a commodity. In fact, they support the view that gold is a safer reserve currency than the others.

GoldMania3000 · Nov 28, 2011 - 10:00am


I like him. I saw him over 5 years ago. And he was talking gold, silver and oil.. That was where he was recommending people put their money. That's where he said the rich where putting the money. I have respect for him..don't know him, but he was on the gold silver ban waggon even in the 90s

Dr G · Nov 28, 2011 - 10:04am

Spent the past week on

Spent the past week on vacation with my wife and kids. My younger brother tagged along. He's a good guy, 7 years younger than me. He has a successful business that he can do from anywhere at any time. This allows him a good income (over $400k last year) and time to travel and play. He isn't married and has no children.

I spoke to him on vacation, yet again, about what he should be doing with his money and also what he shouldn't be doing. He is dead-set on purchasing a million $ home in a neighborhood that he fancies. He is planning on paying cash for the whole thing. No financing whatsoever. I told him that was a stupid decision. Nevermind that fact that a future spouse may not want to live in the home he has picked out, nevermind that real-estate prices are probably going to fall further. 

What I focused on was low interest rates. He could get a 30 year fixed for 4%. I wouldn't pay the entire amount in cash. I'd pay some in cash, a nice down payment to lower the monthly payments, and then I'd make extra payments throughout the life of the mortage. Heck, probably pay it off in 10 years or so. 

With the cash saved, I'd buy gold and silver and other prepping items. My brother laughed at me and said he would "do what his accountant tells him". Which led me to piont out that it is HIS money, not the accountant's.

We left it at that.

boatman · Nov 28, 2011 - 10:05am

jeez......looks like another gap this morning

to haunt us to get filled.

i'm thinking in late january right before QE3.

· Nov 28, 2011 - 10:22am


Turd need more coffee.

Eric Original · Nov 28, 2011 - 10:25am
GoldMania3000 · Nov 28, 2011 - 10:25am


as ricky ricardo would ask "can some one escplain how dis can be possible...7$t and gold 1715?"

metalhead · Nov 28, 2011 - 10:29am
Zoltan · Nov 28, 2011 - 10:32am

Not that this isn't offensive but....

Turd said:

"$700,000,000,000 in TARP

$7,700,000,000,000 in actual Fed lending



That is only 10 times larger (well 11 if you want to be picky) than was debated.


Fr. Bill TF · Nov 28, 2011 - 10:32am

Re: Oops

Turd need more coffee.

A mug o' joe with a turd floating in it. 

The mind boggles.

The stomach lurches.

The bowels quake.

The bladder empties.

survivalwstyle · Nov 28, 2011 - 10:36am

hold on folks

lite up a smoke. here we go!

Excalibur · Nov 28, 2011 - 10:41am

Corzine Podcast

I'm looking forward to the time when Turd interviews Corzine from prison.

I do mean that it is Corzine who is locked up, in case you misunderstand me ;)

hiway117 · Nov 28, 2011 - 10:42am

Every man for himself

"The ultimate question is: Does it matter? Is there anything you can do, anyway? You can rally with the "tea partiers" but the spending and the corruption continues. You can march with the "occupiers" but the power base and the bonuses continue unabated."

I generally appreciate the Turd. I visit the site often for the charts, for the comments and for the entertainment. However, I sense a pervasive attitude that there's nothing to be done other than get a gun and barricade yourself and your family in a bunker or something and that is really dangerous (assuming it is said in seriousness). Only through concerted action with numbers will disaster be avoided. For example, during WWII, while Hitler and the Nazis were on their murderous rampage, there were places where people refused to cooperate, where they worked together and looked out for eachother, where they didn't give up their fellow citizens to the then "inevitable" (for ex, Denmark and Bulgaria). This is not to say that I don't think the US and the world in in a shitload of trouble, but it is disconcerting when there are more and more people saying, "There's nothing to be done." Being prepared should not mean every man for himself, but should be a cry for political change that will peacefully bring about some sort of more economic justice. Maybe Ron Paul, maybe a third party. This is serious stuff, as the Turd keeps reminding everyone. And scary, too. Get involved. Isolation and being a bystander is not the answer. It can start with as little as helping a homeless family out through your church this Christmas season. A lot of little steps adds up. Keep calm and carry on.

iceman321 · Nov 28, 2011 - 10:43am
beinki · Nov 28, 2011 - 10:45am

Join the re inhabited Republic

It's good against evil, right vs wrong, Republic vs the US Corporation. I have joined the re inhabited Republic and those of you in the US can too.

Excalibur · Nov 28, 2011 - 10:54am

Who knows?

Given this, who can say for sure? Right now, it's probably 50/50 as to which one of us ends up in the hole.

redwood · Nov 28, 2011 - 10:59am

Wow Dr.G. That story really

Wow Dr.G.

That story really sucks! I'm sure your brother is probably another bright one in the family, yet it never ceases to amaze me how tight one's blinders can be. Your brother however is one of the few that might be able to weather storm, he just won't weather it as well as you....too bad really.

ggnewmex · Nov 28, 2011 - 11:12am

amazing NEW on YAHOO

The markets are up today because, "the IMF may propose new methods to fix the situation.

So now, markets move because something MAY happen, SOMETIME.

seriously, WOW

I Wazere · Nov 28, 2011 - 11:12am

@ Dr G

I'm with your brother on this one.

Perhaps not exactly "a million $ home in a neighborhood" but certainly a million $ property with home on productive land, paid in full would be excellent.

Located where the land won't blow away, wash away, "burn up", or be confiscated.

· Nov 28, 2011 - 11:22am

Let's hope it's not you TF

If you get sent to the hole we would, of course, rally in your support- but I hope we don't confuse people with our "Free Turd" T-shirts. 

single6 · Nov 28, 2011 - 11:25am


Just another that should be in the very least. Nobody in jail......after 2008......sad. Our system will work like all great ponzi wil work...until it won't

Orange · Nov 28, 2011 - 11:38am

What happened to PSLV?

On Yahoo finance, it shows 777,100 shares sold above $16. Short squeeze?

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