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 ()


Nov 28, 2011 - 9:46am



Thanks alot for the insite Turd, it is greatly appreciated

Nov 28, 2011 - 9:46am

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

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
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

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
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.

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.

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

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Key Economic Events Week of 10/21

10/22 10:00 ET Existing home sales
10/24 8:30 ET Durable Goods
10/24 9:45 ET Markit flash PMIs
10/24 10:00 ET New home sales
10/25 10:00 ET Consumer Sentiment

Key Economic Events Week of 10/14

10/15 8:30 ET Empire State Fed MI
10/16 8:30 ET Retail Sales
10/16 10:00 ET Business Inventories
10/17 8:30 ET Housing Starts and Bldg Perms
10/17 8:30 ET Philly Fed MI
10/17 9:15 ET Cap Ute and Ind Prod
10/18 10:00 ET LEIII
10/18 Speeches from Goons Kaplan, George and Chlamydia

Key Economic Events Week of 10/7

10/8 8:30 ET Producer Price Index
10/9 10:00 ET Job Openings
10/9 10:00 ET Wholesale Inventories
10/9 2:00 ET September FOMC minutes
10/10 8:30 ET Consumer Price Index
10/11 10:00 ET Consumer Sentiment

Key Economic Events Week of 9/30

9/30 9:45 ET Chicago PMI
10/1 9:45 ET Markit Manu PMI
10/1 10:00 ET ISM Manu PMI
10/1 10:00 ET Construction Spending
10/2 China Golden Week Begins
10/2 8:15 ET ADP jobs report
10/3 9:45 ET Markit Service PMI
10/3 10:00 ET ISM Service PMI
10/3 10:00 ET Factory Orders
10/4 8:30 ET BLSBS
10/4 8:30 ET US Trade Deficit

Key Economic Events Week of 9/23

9/23 9:45 ET Markit flash PMIs
9/24 10:00 ET Consumer Confidence
9/26 8:30 ET Q2 GDP third guess
9/27 8:30 ET Durable Goods
9/27 8:30 ET Pers Inc and Cons Spend
9/27 8:30 ET Core Inflation

Key Economic Events Week of 9/16

9/17 9:15 ET Cap Ute & Ind Prod
9/18 8:30 ET Housing Starts & Bldg Perm.
9/18 2:00 ET Fedlines
9/18 2:30 ET CGP presser
9/19 8:30 ET Philly Fed
9/19 10:00 ET Existing Home Sales

Key Economic Events Week of 9/9

9/10 10:00 ET Job openings
9/11 8:30 ET PPI
9/11 10:00 ET Wholesale Inv.
9/12 8:30 ET CPI
9/13 8:30 ET Retail Sales
9/13 10:00 ET Consumer Sentiment
9/13 10:00 ET Business Inv.

Key Economic Events Week of 9/3

9/3 9:45 ET Markit Manu PMI
9/3 10:00 ET ISM Manu PMI
9/3 10:00 ET Construction Spending
9/4 8:30 ET Foreign Trade Deficit
9/5 9:45 ET Markit Svc PMI
9/5 10:00 ET ISM Svc PMI
9/5 10:00 ET Factory Orders
9/6 8:30 ET BLSBS

Key Economic Events Week of 8/26

8/26 8:30 ET Durable Goods
8/27 9:00 ET Case-Shiller Home Price Idx
8/27 10:00 ET Consumer Confidence
8/29 8:30 ET Q2 GDP 2nd guess
8/29 8:30 ET Advance Trade in Goods
8/30 8:30 ET Pers. Inc. and Cons. Spend.
8/30 8:30 ET Core Inflation
8/30 9:45 ET Chicago PMI

Key Economic Events Week of 8/19

8/21 10:00 ET Existing home sales
8/21 2:00 ET July FOMC minutes
8/22 9:45 ET Markit Manu and Svc PMIs
8/22 Jackson Holedown begins
8/23 10:00 ET Chief Goon Powell speaks

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