Fed’s “Reserve Balances” flow almost exclusively to foreign banks in Q1

The primary beneficiaries of growth in the Fed’s “Total Fed Reserve Balances” are … (drum roll)… Foreign Banks.

In America today, we have a Record 23,116,441 households on food stamps…    

We just had 148,054 foreclosure filings  in May (1 for every 885 households in the U.S.).  There were approximately 23,000 bank repossessions (REOs) of family homes in May.       And we currently have U6 unemployment hovering around 14%.  

And the Fed was pumping up the “cash balance” for foreign banks in Q1…(??)              Here are the charts (courtesy of Zero Hedge 6-10-13):

“Presenting Exhibit D – total Fed reserve creation and the cash held by domestic and foreign banks, as reported by the Fed’s weekly H.8 statement:

And Exhibit E – the direct correlation between cash holdings of domestic branches of foreign banks and the reserves created by the Fed. As the chart makes all too clear, all the Fed’s new reserves are going almost on a dollar for dollar basis to foreign banks!

By this logic it should also come as no surprise that total cash parked at Foreign banks operating in the US just rose to an all time record of $1.12 trillion, or more than all the cash held by domestic US banks, which was $100 billion less or $1.02 trillion. This was confirmed by the non-seasonally adjusted number as well, which too rose to a record high of $1.13 trillion up tom $1.1 trillion. Here is Exhibit F: total cash held by foreign banks in the US. (btw, NSA stands for Not Seasonally Adjusted, not this chart was created by the NSA)

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U.S. citizens deserve equal treatment – in the form of direct credit extensions from the Federal Reserve. “Cash balance” growth for American families.

The Leviticus 25 Plan provides the mechanism for that targeted liquidity flow.

 

 

Stockman: Main street economy remains dismal – after 4 years of Fed pumping

The Fed has been funneling trillions of dollars of liquidity and credit guarantees to major domestic and foreign financial enterprises and ‘politically connected’ interest groups since the spring of 2009.

David Stockman reviews the effects of this 4-year central-planning fiasco in “The Great Deformation.”                                                                                                        [Excerpts from Zero Hedge 6-17-13 ]

“[There] has been no recovery of the Main Street economy where it counts; that is, no revival of breadwinner jobs and earned incomes on the free market. What we have once again is faux prosperity. In fact, the current Bernanke Bubble is an even sketchier version of the last one and consists essentially of the deliberate and relentless reflation of financial asset prices.

In practice, this amounts to a monetary version of “trickle down” economics. By September 2012, personal consumption expenditure (PCE) was up by $1.2 trillion from the prior peak, representing a modest 2.2 percent per year (0.6 percent after inflation) gain from the level of late 2007. Yet half of this gain—more than $600 billion—reflected the massive growth of government transfer payments, and much of the rebound which did occur in private consumption spending was concentrated in the top 10–20 percent of households. In short, the Fed’s financial repression policies enabled Uncle Sam to fund transfer payments for the bottom rungs of society at virtually no carry cost on the debt, while they juiced the top rungs with a wealth effects tonic that boosted spending at Nordstrom’s and Coach.

The Fed’s post-Lehman money printing spree has thus failed to revive Main Street, but it has ignited yet another round of rampant speculation in the risk asset classes. Accordingly, the net worth of the 1 percent is temporarily back to the pre-crisis status quo ante. Needless to say, successful speculation in the fast money complex is not a sign of honest economic recovery: it merely marks the prelude to another spectacular meltdown in the canyons of Wall Street next time the music stops.”

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The only comprehensive solution currently available to turn the tide and ignite economic recovery in America:  The Leviticus 25 Plan.

 

 

Stockman: Fed has been “relentlessly pumping freshly minted cash into the bank accounts” of the 21 Primary Dealers. After 5 years: little effect beyond camouflaging “the failing internals of the American economy.”

David Stockman – “The Great Deformation”                                                          Accessed from ZeroHedge                                                                                     [Excerpts]

The Wall Street meltdown of September 2008 accelerated the recessionary forces already in motion, causing a total job loss of 7.3 million between the December 2007 peak and the end of the recession in June 2009. That the Fed’s bubble finance had camouflaged the failing internals of the American economy then became starkly apparent. Nearly three-fourths of this reduction was accounted for by the above mentioned loss of 5.6 million breadwinner jobs; that is, nearly 8 percent of their pre-recession total.

That devastating hit left the nation with only 66.2 million prime jobs and set the clock back to the level of early 1998. This is an astonishing fact:  before any of the Greenspan-Bernanke maneuvers to coddle Wall Street and pump up the wealth effects elixir—that is, the 1998 LTCM bailout, the 2001–2003 rate-cutting panic, the August 2007 Bernanke Put, and the Fed’s post-Lehman tripling of its balance sheet – there were more breadwinner jobs than there are today. Since the BlackBerry Panic the Fed has relentlessly pumped freshly minted cash into the bank accounts of the twenty-one government bond dealers. Not surprisingly, therefore, there has been a jarringly divergent outcome between Wall Street and Main Street.

By September 2012, the S&P 500 was up by 115 percent from its recession lows and had recovered all of its losses from the peak of the second Greenspan bubble. By contrast, only 200,000 of the 5.6 million lost breadwinner jobs had been recovered by that same point in time. To be sure, the Fed’s Wall Street shills breathlessly reported the improved jobs “print” every month, picking and choosing starting and ending points and using continuously revised and seasonally maladjusted data to support that illusion. Yet the fundamentals with respect to breadwinner jobs could not be obfuscated.

On the eve of the 2012 election, for example, there were 18.3 million jobs in the goods-producing sectors: manufacturing, mining, and construction. These core sectors of the productive economy had taken a beating during the Great Recession, shedding 3.5 million jobs, or 15 percent. Yet after three and a half years of so-called recovery, the jobs count in the goods-producing sectors had not rebounded in the slightest; it had actually declined slightly from the 18.5 million jobs recorded at the end of the recession in June 2009.

Likewise, there were 7.8 million jobs in finance, insurance, and real estate, meaning virtually no gain from the 7.7 million jobs at the end of the recession.

In short, after forty months of “recovery” there was virtually no change in every category of breadwinner jobs that had been slammed by the Great Recession.

Thus, there had been 130.8 million total jobs in January 2000, and this figure had reached 138.0 million by the December 2007 peak. The Great Recession sent the jobs count tumbling all the way back to the starting point, actually dipping slightly lower to 130.6 million by June 2009. Then, after forty months of “recovery,” the BLS reported 133.5 million nonfarm payroll jobs for September 2012. The Bernanke bubble had thus “recreated” only 40 percent of the jobs that had been “created” by the Greenspan bubble the first time around.”

Full report – accessed from ZeroHedge

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The Leviticus 25 Plan initiates economic recovery at ‘ground level’ in America.  It provides direct credit extensions to American citizens for the express purpose of eliminating debt at the family level.

Big government central planning has been a dismal failure.

It is time for a fresh start – one that advances the cause of economic liberty in America.

The Leviticus 25 Plan.

Bloomberg: major banks have been ‘rigging’ $4.7 trillion-per-day currency markets

Some of the very banks that received trillions of dollars in cash transfusions and loan guarantees from the Federal Reserve and U.S. government – at tax-payer expense, directly or indirectly – are now “manipulating benchmark foreign-exchange rates used to set the value of trillions of dollars of investments, according to a Bloomberg investigation.”

ZeroHedge 6-12-2013:                                                                                               Banks Rig $4.7 Trillion A Day Currency Markets To Profit Off Clients                        [Excerpts]

“Employees have been front-running client orders and rigging WM/Reuters rates by pushing through trades before and during the 60-second windows when the benchmarks are set, said five current and former traders, who requested anonymity because the practice is controversial.

Dealers colluded with counterparts to boost chances of moving the rates, said two of the people, who worked in the industry for a total of more than 20 years.

The behavior occurred daily in the spot foreign-exchange market and has been going on for at least a decade, affecting the value of funds and derivatives and all investments.

The Financial Conduct Authority, Britain’s markets supervisor, is considering opening a probe into potential manipulation of the rates, according to a person briefed on the matter.

Informed observers have long warned that the global $4.7-trillion-a-day foreign exchange market, the biggest in the financial system has all the hallmarks of a casino.

The inherent conflict banks face between executing client orders and profiting from their own trades is exacerbated because most currency trading takes place away from exchanges.

“The price mechanism is the anchor of our entire economic system,” said Tom Kirchmaier, a fellow in the financial-markets group at the London School of Economics. “Any rigging of the price mechanism leads to a misallocation of capital and is extremely costly to society.”

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The traders interviewed by Bloomberg News declined to identify which banks engaged in manipulative practices and didn’t specifically allege that any of the top four firms were involved. Spokesmen for Deutsche Bank, Citigroup, Barclays and UBS declined to comment.

It is becoming increasingly evident that many key financial markets are being rigged and manipulated by banks and central banks today. Some of the manipulation is overt, some is covert.

The world’s largest banks are fixing prices in many key markets and benchmarks which is affecting the value of money itself and will ultimately leading to the value of money in your pocket becoming worth much less.”   Full article

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And the key question remains… “If America chooses to continue transfusing billions-trillions of dollars to major banks (which continue ton engage in “overt” or “covert” criminal activity –  according to Bloomberg) – at the expense of U.S. taxpayers and others around the world, then shouldn’t honest American citizens also be granted the provision of direct credit extensions to resolve financial stresses at ‘ground level’ in America?

Answer:  Yes.

The Leviticus 25 Plan.

Global economies unravelling: China is ‘wobbling.’ U.S. needs to decentralize – now.

 

U.K. Telegraph                                                                                                               16 June 2013  Ambrose Evans-Pritchard                                                                 (Excerpts) 

Fitch says China credit bubble unprecedented in modern world history

China’s shadow banking system is out of control and under mounting stress as borrowers struggle to roll over short-term debts, Fitch Ratings has warned…Fitch warned that wealth products worth $2 trillion of lending are in reality a “hidden second balance sheet” for banks, allowing them to circumvent loan curbs and dodge efforts by regulators to halt the excesses.

The agency said the scale of credit was so extreme that the country would find it very hard to grow its way out of the excesses as in past episodes, implying tougher times ahead.

“The credit-driven growth model is clearly falling apart. This could feed into a massive over-capacity problem, and potentially into a Japanese-style deflation,” said Charlene Chu, the agency’s senior director in Beijing.

“There is no transparency in the shadow banking system, and systemic risk is rising. We have no idea who the borrowers are, who the lenders are, and what the quality of assets is, and this undermines signalling,” she told The Daily Telegraph.

Overall credit has jumped from $9 trillion to $23 trillion since the Lehman crisis. “They have replicated the entire US commercial banking system in five years,” she said.

The ratio of credit to GDP has jumped by 75 percentage points to 200pc of GDP, compared to roughly 40 points in the US over five years leading up to the subprime bubble, or in Japan before the Nikkei bubble burst in 1990. “This is beyond anything we have ever seen before in a large economy. We don’t know how this will play out. The next six months will be crucial,” she said.

The agency downgraded China’s long-term currency rating to AA- debt in April but still thinks the government can handle any banking crisis, however bad. “The Chinese state has a lot of firepower. It is very able and very willing to support the banking sector. The real question is what this means for growth, and therefore for social and political risk,” said Mrs Chu.

“There is no way they can grow out of their asset problems as they did in the past. We think this will be very different from the banking crisis in the late 1990s. With credit at 200pc of GDP, the numerator is growing twice as fast as the denominator. You can’t grow out of that.”

Full article:  http://www.telegraph.co.uk/finance/china-business/10123507/Fitch-says-China-credit-bubble-unprecedented-in-modern-world-history.html

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These global economy is headed for ’tilt’ mode… and there will be spill-over to the U.S. – with potentially severe financial dislocation for U.S. citizens.

It is time now to enact the only economic plan that will eliminate massive tracts of debt at the family level, re-energize the economy, and decentralize:

The Leviticus 25 Plan.

 

Big-government central planning 5 year ‘recovery’ outcome; record households on foodstamps, record numbers of Americans on disability…

U.S. government ‘central planning’ has featured trillions of dollars in funding for TARP, various forms of credit extensions to major domestic and foreign banks, several rounds of government-directed stimulus programs, Fed-targeted interest rates, and various other non-free market initiatives … all benefiting the financial sector and the politically-connected class in America.

American citizens have seen little, if any, benefit.

Real (inflation-adjusted) median household income is 5% lower now than it was in January of 2009.

Food stamp – record set in March                                                                               The number of American households on food stamps  reached a new record high in March, according to new data released by the  Agriculture Department.

The March numbers the USDA released Friday reveal 23,116,441 households enrolled in the Supplemental Nutrition Assistance  Program (SNAP), or food stamps, each receiving an average monthly benefit of  $274.30.

The number of individuals on SNAP did not break any records but remained  high, with 47,727,052 people enrolled in SNAP, receiving an average monthly  benefit of $132.86.

Record numbers of Americans are now on disability (for many this is the next ‘move’ when unemployment benefits run out).

(May 29, 2013 – CNSNews.com) – The total number of people in the United States now receiving federal  disability benefits hit a record 10,978,040 in May, up from 10,962,532  million in April, according to newly released data from the Social  Security Administration.

The 10,978,040 disability beneficiaries in the United States now  exceed the population of all but seven states. For example, there are more Americans  collecting disability today than there are people living in Georgia,  Michigan, North Carolina, New Jersey or Virginia.

The record 10,978,040 total disability beneficiaries in May, included  a record 8,877,921 disabled workers (up from 8,865,586 in April), a  record 1,939,687 children of disabled workers (up from 1,936,236 in  April), and 160,432 spouses of disabled workers.

May was the 196th straight month that the number of American  workers collecting federal disability payments increased. The last time  the number of Americans collecting disability decreased was in January  1997. That month the number of workers taking disability dropped by 249  people—from 4,385,623 in December 1996 to 4,385,374 in January 1997.

As the overall number of American workers collecting disability has  increased, the ratio of full-time workers to disability-collecting  workers has decreased.

In December 1968, 1,295,428 American workers collected disability and, according to the Bureau of Labor Statistics,  65,630,000 worked full-time. Thus, there were about 51 full-time  workers for each worker collecting disability. In May 2013, with a  record 8,877,921 American workers collecting disability and 116,053,000  working full-time, there were only 13 Americans working full-time for  each worker on disability.

According to the latest Census Bureau population estimates, if  disability were a state in the union it would rank eighth in population,  coming in after Ohio but ahead of Georgia:

1. California 38,041,430

2. Texas 26,059,203

3. New York 19,570,261

4. Florida 19,317,568

5. Illinois 12,875,255

6. Pennsylvania 12,763,536

7. Ohio 11,544,225

8. Disability 10,978,040

9. Georgia 9,919,945

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America needs a new decentralized, free-market approach – one that provides citizens with the resources to manage their own lives.

The Leviticus 25 Plan is the only comprehensive economic recovery plan in America that delivers true benefits to American citizens in a timely fashion.

The Leviticus 25 Plan reinstates economic liberty for American citizens.

The answer to debt serfdom in America: The Leviticus 25 Plan

Her is where we now stand – after 5 years of economic recovery.

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The Trick to Suppressing Revolution: Keeping Debt/Tax Serfdom Bearable    OfTwoMinds blog,    Thursday, May 16, 2013                                                      Excerpts:

“The numbers of Americans drawing benefits from the state are astounding: almost 11 million people drawing lifetime disability from Social Security (The Number Of US Citizens On Disability Is Now Larger Than The Population Of Greece); Social Security (SSA) has 61 million beneficiaries as of March 2012;                   Medicare had 49.4 million beneficiaries in 2012, and                                                Medicaid has over 50 million beneficiaries (another source puts the current number at 58 million, but the Kaiser Family Foundation says roughly 7 million “dual-eligibles” receive both Medicaid and Medicare, so let’s use the data point of 50 million Medicaid-only recipients.)

This aligns fairly well with the 48 million drawing SNAP (food stamp) benefits:        Food stamp Recipients Hit Record (Zero Hedge). Those qualifying for one program likely qualify for the other.

This means roughly 110 million people are drawing significant direct benefits from the Federal government (central state) while the number of full-time workers is 116 million–about a 1-to-1 worker-beneficiary ratio.

The problem is two-fold: the entitlement programs are running massive deficits even though the Baby Boom has barely started to enter the programs, and the number of workers earning enough to pay significant income taxes is remarkably limited.

As I detailed in The Fraud at the Heart of Social Security (January 17, 2011), the program paid out $707 billion in 2010 and collected $631 billion in taxes, a $76 billion shortfall for 2010. The current program (2012) cost is $817 billion, a leap of $100 billion in a few short years as Baby Boomers flood into the program.

Of the roughly 142 million workers in the U.S., 38 million earn less than $10,000 per year, 50 million earn less that $15,000 a year and 61 million earn less than $20,000 annually. All these numbers are drawn directly from Social Security Administration payroll data.

100 million wage earners, or 2/3 the entire workforce, earn less than $40,000 per year.

Most of the heavy-lifting in terms of paying income taxes falls to about 30 million people, the top 20% of wage earners.

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The banks have written off some defaults but the debt load on the serfs hasn’t declined much:

Meanwhile, real wages have been declining, meaning there is less money left to service debt:

This presents the partnership of the financial kleptocracy and the state with an insoluble problem: their parasitic skimming of rentier debt payments and taxes has reduced the income of 95% of the workers, leaving them less able to service more debt and pay more taxes.

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Alas, financialization (debt-serfdom) and higher taxes (the transformation of the middle class into tax donkeys) have gutted the real economy, driving real income lower for 95% of the workforce that still has earned income.”                                                               End excerpts

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Real Median Household income is down.  Debt levels remain high.                                Big-government central planning is not the answer.  We need decentralization.

The Leviticus 25 Plan will eliminate massive degrees of debt at the family level.  It will restore economic liberty for American citizens.  And it will re-ignite economic growth.

And now is the perfect time.