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Personal comments are in brackets "[....]"
START THE PRESSES
HANK & BEN TO PRINT $800B
FOR CREDIT-MART RESCUE
"HANK" = Treasury Secretary Hank Paulson
"BEN" = Federal Reserve Chief Ben Bernanke
By PAUL THARP
Posted: 1:18 am
November 26, 2008
One chore high on Ben Bernanke's to-do list was ordering the
rebuilding of Uncle Sam's money presses a week ago to make
sure they won't break down trying to keep up with the government's new $800
billion relief plan.
The Federal Reserve chief yesterday said the central bank will start buying
up as much as $800 billion of private assets - ranging from troubled
mortgage-backed securities to car loans and
credit card accounts that have become illiquid over the
past month.
The latest rescue swells the government's overall economic support plan,
which includes money spent - as well as money allotted but not spent - to a
staggering $8.2 trillion
price tag.
Treasury Secretary Hank Paulson said the government will buy up to
$100 billion in direct debt from government-controlled mortgage lenders Fannie
Mae and Freddie Mac.
Paulson said the feds will buy up $500 billion more in the
mortgage-backed securities the GSE's issued and another $200 billion would be
used to buy consumer, auto and small business
loans.
As part of the ambitious moves, the government's two huge printing
facilities - in Washington, DC, and Fort Worth, Tex. - will have to expand their
already strained, 24-hour output.
To upgrade and rebuild money presses, the government said with little
notice on Nov. 14 that it began negotiating an exclusive
contract with Swiss printing giant KBA-Giori, SA to provide labor, parts,
repairs, upgrades, improvements, service, software and equipment in a long-term
contract.
"This new $800 billion initiative (by the Fed)
will cause an increase in currency requirements, and there is, of course, the realization that printing too much will cause
inflation," said Mark Gertler, a professor of economics
at New York University.
Essentially, the $800 billion in the new moves will come through a series of
yard-sale swaps back and forth - starting with hard cash that's swapped for a holder's risky
assets.
The holder, in turn, then swaps his newly gained cash back to Uncle
Sam for government IOU's,
such as one-year Treasury
bills, and the cash goes back
into the hands of the Fed to be traded out again in other rounds of similar
horse-trading - leveraging the cash many times over.
[ Take a wild guess as to WHO is
going to be put on the hook for covering (coming up with the money to pay
for ) those "one-year Treasury bills" when they
come due? You guessed it! YOU! THE
TAXPAYER! *AND* Since
they admit to the fact that they are going to play this game with that
money over and over
again that $800 Billion could EASILY mushroom into the
TRILLIONS OF DOLLARS which the taxpayers will be forced to repay
to the government! This is a U.S. Government ENFORCED financial RAPE of the citizens of this
country!!! ]
"It's called sanitizing the cash," said Gertler, noting that
theoretically there's no limit on how much cash
Uncle Sam can print.
"Basically, the government is now performing like an
ordinary bank - lending out cash and acquiring risks," said
Gertler.
[ How much do you want to bet that that lent out cash is never repaid
and that YOU are put on the hook for that money through higher taxes on you,
your family, your children and your children's children's children!
]
"It's replacing the private assets with more desired
T-bills, with the objective to free up credit markets."
He said the aim is to replace at least
$600 billion in high-interest Fannie Mae and Freddie Mac bonds with T-bills that
had interest as low as zero at times.
"This will narrow the very
wide credit spreads [between Fannie and Freddie notes and T-bills
yields] to more normal spreads so that lending and spending can proceed
back to their normal levels," said
Gertler.
[ What do you say that we cut the crap
here! What is happening here is that the U.S. Government is
REPLACING worthless Fannie Mae and Freddie Mac loans and outstanding debt with
HARD CASH that they can use as they please. Fannie Mae and Freddie Mac are being
BAILED OUT and given a fresh start as if nothing ever happened AND YOU THE
TAXPAYER will be left holding the bill at tax time!! ]
[ When they talk about "the very wide
credit spreads" between "Fannie and
Freddie notes and
T-bills
yields" what they are really saying is that they
are going to fix things so that Fannie and Freddie "notes" (or contractual loans owed to
Fannie and Freddie) which are
worthless are going to be replaced with government backed
T-Bills which are backed by "The Full Faith and Credit of The
United States." And WHO is it that is put on the
financial hook for the "Full Faith and Credit of The United
States"? YOU, THE TAXPAYER!!
]
[ Wake up folks! What they are doing right now is financially raping you,
your family, your children's future and THEIR children's future!! They are -
right now - stealing your financial future! ]
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