The $15 Trillion Mystery: Opinion
By Jeff Nielson - 02/24/12 - 8:06 AM ESTThe following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage. NEW YORK (Bullion Bulls Canada) -- Where did it come from? Where did it go? These are the two principal questions being framed today, after Lord James of Blackheath (a member of the UK House of Lords) unveiled documentation (and accusations) concerning a mounting of illegitimate cash: $15 trillion. At the moment, only Lord James is asking these questions. However, if he gets his way there will be an official inquiry into this massive, money-laundering operation. Already, Lord James possesses documents with the signatures of people like Alan Greenspan and Timothy Geithner on them, as well as massive transfers of funds to virtually every mega-bank in the U.S. and UK. While Lord James (himself a former banker) is holding the "paper trail" for all of this dirty money, he has no firm ideas about either the source of the money nor the intent of all of these massive transfers (all in the hundreds of billions) to U.S. and UK banks. Perhaps I can help him out?
- There are (virtually) no visible buyers for U.S. Treasuries on the planet (at any price).
- Even if there were interested buyers, there are no sources of capital available to mop up all the trillions in supply being dumped onto the market each year.
- Even if there actually were interested buyers, and even if they could scrounge the $trillions to buy this worthless paper, it is utterly absurd to suggest that these buyers would pay (by far) the highest prices in history for this paper at a time of maximum supply. It defies every basic principle of supply and demand.
- Taking this scenario from "absurd" to outright insanity, the U.S. economy has never been less solvent in its entire history. This directly implies that U.S. Treasuries should be fetching the lowest prices in history -- not the highest -- just like the worthless bonds being flogged by Europe's deadbeat-debtors.
Alternative UniverseFor those clinging to the belief that there must be some rational/legitimate explanation for the paper-trail uncovered by Lord James, he dispels that with some further observations of his own. To begin with, concrete financial protocols have been created to integrate any new large batch of the bankers' fiat paper into global financial markets. None of those protocols was followed. Lord James also pointed out that hundreds of billions of dollars in profits were generated, with none of those profits ever being recorded let alone reported (and taxed). In short, this is every bit as illegal as the hundreds of billions in heroin-trade profits laundered by Wall Street each year -- from the poppy-fields of Afghanistan. Ultra-leveraged Wall Street balance sheets (greater than 30:1) only required a drop in U.S. housing prices of 3% to take their entire paper empires to zero. U.S. housing prices have fallen more than 10 times that far. We can only guess at how many trillions (in secret hand-outs) it has taken to delay the implosion of those fraud-factories even this long. This also explains the fanatical desperation which the Federal Reserve has shown in fighting even the tiniest request for disclosure about its "lending operations." When you're secretly counterfeiting trillions of dollars every year, the last thing you want to hear is anything that even faintly resembles an "audit." The U.S. Treasuries market is nothing but a gigantic (and clumsy) fraud. Along with the motive that I have previously supplied for this fraud, Lord James of Blackheath has added "means" and "opportunity" through his own diligent investigations. If the Rule of Law was not already dead in the U.S., there is more than enough evidence here to justify a formal (and public) inquiry. Don't hold your breath!
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