Central Banks ‘printing,’ nationalizing economies. Danger ahead. America’s ‘powerhouse’ rescue strategy: The Leviticus 25 Plan

Central Bank debt-based monetary measures are leading global economies toward an eventual fiat currency grand cliff-dive..

We are getting ‘set up’ for a catastrophic collapse… but there is a powerful corrective action to change everything…


Are Central Banks Nationalising the Economy?

Mises Institute – 08/24/2017 – Daniel Lacalle

The FT recently ran an article that states that “leading central banks now own a fifth of their governments’ total debt.”

The figures are staggering.

  • Without any recession or crisis, major central banks are purchasing more than $200 billion a month in government and private debt, led by the ECB and the Bank of Japan.
  • The Federal Reserve owns more than 14% of the US total public debt.
  • The ECB and BOJ balance sheets exceed 35% and 70% of their GDP.
  • The Bank of Japan is now a top 10 shareholder in 90% of the Nikkei.
  • The ECB owns 9.2% of the European corporate bond market and more than 10% of the main European countries’ total sovereign debt.
  • The Bank of England owns between 25% and 30% of the UK’s sovereign debt.

A recent report by Nick Smith, an analyst at CLSA, warns of what he calls ”the nationalization of the secondary market.”

The Bank of Japan, with its ultra-expansionary policy, which only expands its balance sheet, is on course to become the largest shareholder of the Nikkei 225’s largest companies. In fact, the Japanese central bank already accounts for 60% of the ETFs market (Exchange traded funds) in Japan.

What can go wrong? Overall, the central bank not only generates greater imbalances and a poor result in a “zombified” economy as the extremely loose policies perpetuate imbalances, weaken money velocity, and incentivize debt and malinvestment.

Believing that this policy is harmless because “there is no inflation” and unemployment is low is dangerous. The government issues massive amounts of debt and cheap money promotes overcapacity and poor capital allocation. As such, productivity growth collapses, real wages fall and purchasing power of currencies fall, driving the real cost of living up and debt to grow more than real GDP. That is why, as we have shown in previous articles, total debt has soared to 325% of GDP while zombie companies reach crisis-high levels, according to the Bank of International Settlements.

Government-issued liabilities monetized by the central bank are not high-quality assets, they are an IOU that is transferred to the next generations, and it will be repaid in three ways: with massive inflation, with a series of financial crises, or with large unemployment. Currency purchasing power destruction is not a growth policy, it is stealing from future generations. The “placebo” effect of spending today the Net Present Value of those IOUs means that, as GDP, productivity and real disposable income do not improve, at least as much as the debt issued, we are creating a time bomb of economic imbalances that only grows and will explode sometime in the future. The fact that the evident ball of risk is delayed another year does not mean that it does not exist.

The government is not issuing “productive money” just a promise of higher revenues from higher taxes, higher prices or confiscation of wealth in the future. Money supply growth is a loan that government borrows but we, citizens, pay. The payment comes with the destruction of purchasing power and confiscation of wealth via devaluation and inflation. The “wealth effect” of stocks and bonds rising is in-existent for the vast majority of citizens, as more than 90% of average household wealth is in deposits.

In fact, massive monetization of debt is just a way of perpetuating and strengthening the crowding-out effect of the public sector over the private sector. It is a de facto nationalization. Because the central bank does not go “bankrupt,” it just transfers its financial imbalances to private banks, businesses, and families.


No wonder that government spending to GDP is now almost 40% in the OECD and rising, the tax burden is at all-time highs and public debt soars.

Monetization is a perfect system to nationalize the economy passing all the risks of excess spending and imbalances to taxpayers. And it always ends badly. Because two plus two does not equal twenty-two. As we tax the productive to perpetuate and subsidize the unproductive, the impact on purchasing power and wealth destruction is exponential.

To believe that this time will be different and governments will spend all that massive “very expensive free money” wisely is simply delusional. The government has all the incentives to overspend as its goal is to maximize budget and increase bureaucracy as means of power. It also has all the incentives to blame its mistakes on an external enemy. Governments always blame someone else for their mistakes. Who lowers rates from 10% to 1%? Governments and central banks. Who is blamed for taking “excessive risk” when it explodes? You and me. Who increases money supply, demands “credit flow,” and imposes financial repression because “savings are too high”? Governments and central banks. Who is blamed when it explodes? Banks for “reckless lending” and “de-regulation”.

Originally published at DLacalle.com


It is time to end this big government central-planning madness, and put U.S. citizens back in charge of personally allocating their own  financial resources.

The Leviticus 25 Plan will restore economic liberty, eliminate massive amounts of debt burdening citizens, generate $1.02 trillion federal budget surpluses, solve the entitlement crisis and permanently downscale dependence on government, re-ignite powerful economic growth… and engender financial stability and social blessings all across America.

The Leviticus 25 Plan 2018 –  $75,000 per U.S. citizen

The Leviticus 25 Plan 2018 (2508)

Stockman: Federal Budget “a Doomsday Machine”… (Not so fast… there is a powerful plan to ‘blow off’ the debt shackles and turn everything around – fast: The Leviticus 25 Plan)

Massive future fiscal deficits are ‘baked” into the cake, and they will ‘inevitably’ lead to severe credit disorder and economic chaos at some point in America’s future.

…. Unless we come up with an ‘inspired’ plan, a dynamic economic acceleration plan to blow off the shackles of debt on U.S. citizens…


Stockman Exposes America’s Fiscal Doomsday Machine

ZeroHedge, Sep 12, 2017 – Excerpts:

The Federal budget is a Fiscal Doomsday Machine. The depository of American wars and entitlements have run rampant. Under the pile drivers of a global empire and the retiring baby boom, it is rapidly propelling the nation toward fiscal catastrophe. That grim outcome is virtually guaranteed if the only remaining safety brake — the debt ceiling — is summarily abolished.

Due to entitlements, debt service and the slow pipeline of appropriated spending there is no such thing as an annual Federal budget or accountability for how much Uncle Sam spends and borrows. Instead, the $4.1 trillion that Congressional Budget Office (CBO) projects the Federal government will spend in FY 2018, and the $563 billion it will borrow, reflects the dead hand of the past.

Entitlements and other mandatory spending alone is projected to reach $2.566 trillion or 63% of total FY 2018 outlays.

Another $307 billion will be required for interest on the nation’s $20 trillion public debt, while upwards of half the $1.22 trillion for so-called “discretionary” or appropriated programs also reflects funds appropriated years ago.

Altogether, $3.5 trillion, or 85% of outlays, will be essentially baked into the cake before a single Congressional vote is taken on anything regarding the FY 2018 budget.

The Federal spending machine is almost entirely on autopilot and heading for disaster owing to ballooning populations and debt. Ten years from now the combined cost of mandatory programs and debt service will reach $5.12 trillion compared to just $2.87 trillion during FY 2018.

Entitlement spending will be nearly double — even if Congress took a 10-year recess!

As shown below, that means the Federal spending share of GDP is now inexorably climbing toward 30% owing to baby boom retirements, even as revenue under current law is stuck at about 18% of GDP. The CBO’s latest projection of the widening fiscal gap — soon more than 10% of GDP annually — leaves nothing to the imagination.

America really does have in place a Fiscal Doomsday Machine.

The Fiscal Doomsday Gap Is Uncloseable — The Crisis Is Permanent

1 Federal Spending and Revenues Fiscal Doomsday


And now.. on to the solution:

$1.02 trillion annual budget surpluses yearly 2017-2021: The Leviticus 25 Plan

The U.S. Government  budget deficit for FY2016 came in at $587 billion. The Congressional Budget Office Updated Budget Projections 2016-2026 has forecast the following annual budget deficits for each of the next five years:

2017: -$550 billion

2018: -$549 billion

2019: -$710 billion

2020: -$798 billion

2021: -$890 billion

According to the CBO, our government is on track to add a minimum of $3.497 trillion to the national debt over the next five years, an average annual deficit or $699.4 billion.

The five year accumulating deficit increases, totaling $3.497 trillion, will be weighed down further with a related interest expense (2.23% per annum) amounting to $200.96 billion, for a total of $4.196 trillion.

The Leviticus 25 Plan generates a total government recapture benefit over the first five years of the program (federal income tax refund recapture plus federal expenditures recapture) of $8.56 trillion, an average of $1.72 trillion per year.

The Leviticus 25 Plan recapture provisions thereby generate an average annual budget surplus over the next five years of $1.02 trillion per year ($1.72 trillion – $699.4 billion) plus additional savings of $200.7 billion in unrealized interest expense.

The annual $1.02 trillion surplus during each year (2017-2021) will be used, in turn, to reduce the Federal Reserve Citizens Credit Facility balance sheet from the initial expansion event.

The Leviticus 25 Plan is unquestionably the most powerful economic acceleration plan in America.  It is the only economic plan that pays for itself over 10-15 years.

The Leviticus 25 Plan is a dynamic economic initiative providing direct liquidity benefits for American families, while at the same time scaling back the role of government in managing and controlling the affairs of citizens.  It is a comprehensive plan with long-term economic and social benefits for citizens and government.

The inspiration for this plan is based upon Biblical principles set forth in the Book of Leviticus, principles tendering direct economic liberties to the people.

The Leviticus 25 Plan 2018 –  $75,000 per U.S. citizen

The Leviticus 25 Plan 2018 (2506)

97 million Americans, buried in debt, living paycheck to paycheck – no way out. Until now… The Leviticus 25 Plan

American families are buried under heavy debt burdens… with no comprehensive economic plan to restore economic stability and turn things around.

Until now……


97 Million American Workers Are Living Paycheck To Paycheck

ZeroHedge,  Sep 14, 2017 – Excerpts:

…The Federal Reserve recently released data showing that aggregate credit card debt had hit an all-time high of $1.027 trillion, eclipsing the previous high that was set before the Great Recession. Add in another trillion of auto-loan debt and $1.4 trillion in student-loan debt, and the aggregate debt pile is not only larger than ever before – it’s growing at its fastest rate in decades.

And in what’s perhaps the most troubling statistic highlighted by Motley Fool, a recent survey by CareerBuilder and The Harris Poll found that 78% of full-time US workers – nearly 100 million Americans – are now living paycheck to paycheck, up from 75% in 2016.


Americans are eyeball deep in debt, household income growth is stagnant. Government central-planning promotes intrusion into the daily lives of Americans.

Social welfare programs ‘disincentivize’ work.

Government debt recently broke through the $20 trillion level – guaranteeing staggering annual deficits in the coming years.

We have one gigantic mess on our hands.

There is one, and only one, economic acceleration plan with the raw power to turn this socioeconomic catastrophe around, massively shrinking government debt, eliminating vast tracts of public debt, restoring economic liberty, reducing dependence on government entitlement programs and social welfare, and reigniting economic growth.

The Leviticus 25 Plan is a dynamic economic initiative providing direct liquidity benefits for American families, while at the same time scaling back the role of government in managing and controlling the affairs of citizens.  It is a comprehensive plan with long-term economic and social benefits for citizens and government.

The inspiration for this plan is based upon Biblical principles set forth in the Book of Leviticus, principles tendering direct economic liberties to the people.

The Leviticus 25 Plan 2018 –  $75,000 per U.S. citizen

The Leviticus 25 Plan 2018 (2501)


Milton Friedman – Equality vs Freedom

Milton Friedman (1912 – 2006), American economist, Nobel Prize in Economic Sciences 1976:

“A society that puts equality — in the sense of equality of outcome — ahead of freedom will end up with neither equality nor freedom. The use of force to achieve equality will destroy freedom, and the force, introduced for good purposes, will end up in the hands of people who use it to promote their own interests.

On the other hand, a society that puts freedom first will, as a happy by-product, end up with both greater freedom and greater equality.  Though a by-product of freedom, greater equality is not an accident.  A free society releases the energies and abilities of people to pursue their own objectives.

It prevents some people from arbitrarily suppressing others.  It does not prevent some people from achieving position of privilege, but so long as freedom is maintained, it prevents those positions of privilege from becoming institutionalized; they are subject to continued attack from other able, ambitious people.  Freedom means diversity but also mobility.  It preserves the opportunity for today’s disadvantaged to become tomorrow’s privileged and, in the process, enables almost everyone, from top to bottom, to enjoy a fuller and richer life.


America’s one and only economic acceleration plan – to protect freedoms and restore economic liberty:

The Leviticus 25 Plan 2018 –  $75,000 per U.S. citizen

The Leviticus 25 Plan 2018 (2496)

U.S. Banks – $222 trillion in derivatives underwriting / hedging. What could possibly go wrong?

U.S. banks are up to their eyeballs in financial derivatives…


 Financial Weapons Of Mass Destruction: Top 25 US Banks Have 222 Trillion Dollars Derivatives Exposure             ZeroHedge, May 17, 2017  Excerpts:

Authored by Michael Snyder via The Economic Collapse blog,

The recklessness of the “too big to fail” banks almost doomed them the last time around, but apparently they still haven’t learned from their past mistakes.  Today, the top 25 U.S. banks have 222 trillion dollars of exposure to derivatives. 

As long as stock prices continue to rise and the U.S. economy stays fairly stable, these extremely risky financial weapons of mass destruction will probably not take down our entire financial system.  But someday another major crisis will inevitably happen, and when that day arrives the devastation that these financial instruments will cause will be absolutely unprecedented.

During the great financial crisis of 2008, derivatives played a starring role, and U.S. taxpayers were forced to step in and bail out companies such as AIG that were on the verge of collapse because the risks that they took were just too great.

The following numbers regarding exposure to derivatives contracts come directly from the OCC’s most recent quarterly report (see Table 2), and as you can see the level of recklessness that we are currently witnessing is more than just a little bit alarming…

Citigroup – Total Assets: $1,792,077,000,000 (slightly less than 1.8 trillion dollars)

Total Exposure To Derivatives: $47,092,584,000,000 (more than 47 trillion dollars)

JPMorgan Chase  – Total Assets: $2,490,972,000,000 (just under 2.5 trillion dollars)

Total Exposure To Derivatives: $46,992,293,000,000 (nearly 47 trillion dollars)

Goldman Sachs  – Total Assets: $860,185,000,000 (less than a trillion dollars)

Total Exposure To Derivatives: $41,227,878,000,000 (more than 41 trillion dollars)

Bank Of America  – Total Assets: $2,189,266,000,000 (a little bit more than 2.1 trillion dollars)

Total Exposure To Derivatives: $33,132,582,000,000 (more than 33 trillion dollars)

Morgan Stanley  – Total Assets: $814,949,000,000 (less than a trillion dollars)

Total Exposure To Derivatives: $28,569,553,000,000 (more than 28 trillion dollars)

Wells Fargo  – Total Assets: $1,930,115,000,000 (more than 1.9 trillion dollars)

Total Exposure To Derivatives: $7,098,952,000,000 (more than 7 trillion dollars)

Collectively, the top 25 banks have a total of 222 trillion dollars of exposure to derivatives.


Note – The system is only as strong as the weakest link(s). And when one or more of the under-reserved counterparties fails, things can, and will, unravel.

And then Central Banks will again open up the liquidity transfusion channels for another massive bailout for the global financial industry. And ordinary ‘citizens’ across the globe will ultimately pay – for the inevitable degrading of the fiat currency system.

It is time to enact a preventative economic ‘back-fire’ event with a massive, ground-level debt elimination plan.  It is time to grant U.S. citizens the same direct access to liquidity that was provided to Wall Street’s financial sector during the last great financial crisis.

The Leviticus 25 Plan 2018 –  $75,000 per U.S. citizen

The Leviticus 25 Plan 2018 (2488)



Trillions of dollars in bailouts to citizens of bankrupt foreign nations. It is now time to grant U.S. citizens the same direct access to liquidity. Solution: The Leviticus 25 Plan

U.S. taxpayer dollars have been used to support the IMF bail-out of Greece. The U.S. funded at least $780 million (17.09%) of the July $4.6 billion IMF transfer to Greece (purportedly funding interest payments to hedge funds which had speculated in purchasing the high-risk Greek debt).

U.S. taxpayers also funded approximately $2.9 trillion of a massive 2014 IMF loan to Ukraine to help Kiev pay off creditors including Western banks, Gazprom (the big Russian oil company), and previous IMF loan payment obligations).

The U.S. Treasury Department followed that up by guaranteeing a $1 billion Ukrainian bond issuance.

Trillions of dollars in U.S. taxpayer funds have been used to bail out the citizens of bankrupt foreign nations, and now U.S. citizens deserve the very same access to their own money that foreign citizens have been receiving in foreign assistance payments from the U.S.

It is time to activate America’s powerhouse economic acceleration plan – and to eliminate massive amounts of debt stress and restore financial health at the family level.


The Leviticus 25 Plan 2018 –  $75,000 per U.S. citizen

The Leviticus 25 Plan 2018 (2483)



Global Banks 2008: “We need a transfusion.” And $23.7 trillion later, the Fed said: “Tell Us When to Stop.”

And transfuse they did.

The U.S. Treasury turned the spigot into the ‘flow’ position with the Troubled Asset Relief Program (TARP).

And the Fed followed up by turning the spigot into the ‘gusher’ position with their emergency lending, discount window lending, and their QE-based purchases of cesspool-grade MBS and agency debt from various global lending institutions.


Notes on the liquidity transfusions:
1. SIGTARP, the oversight agency of the Troubled Asset Relief Program (TARP), in its July 2009 report, vetted by Treasury, noted that the U.S. Government’s “Total Potential Support Related to Crisis” (page 138) amounted to $23.7 trillion. While this figure represents a backstop commitment, not a measure of total potential loss, it is nonetheless an astounding degree of support, in the form of liquidity infusions, credit extensions and guarantees, various other forms of assistance for financial institutions and other business entities affected by the financial crisis.

One example of the mechanics of these backstop commitments involved two of the major investment-banks which were at the forefront of the U.S. financial crisis, Goldman Sachs and JP Morgan who, through their high-risk exposure to subprime debt and derivatives, received enormous financial assistance at the expense of U.S. taxpayers.

Goldman Sachs and J.P. Morgan received these direct liquidity infusions during the financial crisis via Fed disbursements through the Primary Dealer Credit Facility and numerous other credit facilities. The two (according to ZeroHedge 4-1-11) “had the temerity to pledge bonds that had defaulted (i.e. had a rating of D)… as in bankrupt, and pretty much worthless. . . that have no value whatsoever. . .” Goldman Sachs received $24.7 million and JP Morgan $1.4 million on the worthless collateral (September 15, 2008). Goldman Sachs pledged D-rated securities again September 29, 2008 and received $82.7 million (Citigroup received $102.8 million; Merrill Lynch – $217.8 million; Morgan Stanley – $261.0 million; UBS – $202.2 million).

In addition, the same two investment banking giants, Goldman Sachs and JP Morgan, earned free interest (again at taxpayer expense) through their access to credit extensions at the Federal Reserve discount window. Within two years, Goldman Sachs was paying out $111.3 million in “delayed bonuses” for the years 2007 and 2009 (NY Times 12-15-10).


U.S. citizens deserve nothing less than the same access to credit extensions for resolving liquidity issues of their own at the family level, that have been extended to major domestic and foreign financial institutions.

The initial credit extension outlay with The Leviticus 25 Plan ($18.0 trillion – assuming an 80% participation rate by U.S. citizens) would hardly be prohibitive, in light of the trillions of dollars in Federal Reserve and Treasury outlays over the past 5 years to major U.S. banking and financial institutions (Morgan Stanley, Citigroup, Bank of America, State Street Corp, Goldman Sachs, Merrill Lynch, JPMorgan Chase, Wachovia, Lehman Brothers, Wells Fargo, Bear Stearns) and major foreign financial institutions (Royal Bank of Scotland, UGS AG, Deutsche Bank AG, Barclays, Credit Suisse. Dexia, BNP Paribas).

The Federal Reserve’s various credit facilities, discount window transactions, emergency loans, Foreign Exchange swap lines, Interest on Excess Reserves (IOER) for foreign banks, and Treasury’s TARP and stimulus programs have done little to improve the financial status for the majority of American families. These government programs have also done nothing to change the dominance and risk profile of “too big to fail banks,” and they have done little to lessen the counterparty default risk in the global derivatives markets.

The time is now to balance things out, and grant U.S. citizens the same direct access to liquidity that was provided to Wall Street’s financial sector.

The Leviticus 25 Plan 2018 –  $75,000 per U.S. citizen

The Leviticus 25 Plan 2018 (2483)




New Record Highs: US Credit Card Debt, Student Loans and Auto Loans. America’s one and only debt-vaporizing economic plan: The Leviticus 25 Plan

The Fed’s massive liquidity transfusions rescued Wall Street’s financial sector during the great financial crisis. The very institutions whose subprime debt gambling binge precipitated the crisis received a ‘get out of debt free’ card.

Mains Street America paid for the subprime misdeeds of the global banking and insurance companies with lost jobs, reduced wages, foreclosed mortgages.  Retail business suffered from a crushing liquidity shrinkage.

And Main Street America received nothing of any meaningful value to restore its own financial health.

American families remain neck-deep in debt…


US Credit Card Debt Surpasses Financial Crisis Record, As Student And Auto Loans Hit New All Time High

ZeroHedge, Aug 7, 2017 – Excerpts:

[Today’s] monthly update from the Federal Reserve confirmed that as of the end of June, total revolving (i.e. credit card) credit rose to $1,021.7 billion, an increase of $4.1 billion on the month, and a new all time high, taking out the previous record high set during the summer of 2008.

Taking a closer look at the quarterly update in non-revolving debt, we find that for another consecutive quarter, both student and auto loans hit record highs, of $1.450 trillion and $1.131 trillion respectively, although there does appears to be a modest slowdown in credit issuance for these two largest categories.


Big-Government central planning, in the wake of the crisis, has led to freedom restrictions and dependence on government.

It is time for an economic acceleration plan that restores the “shining light of freedom” in America.

The Leviticus 25 Plan is a dynamic economic initiative providing direct liquidity benefits for American families, while at the same time scaling back the role of government in managing and controlling the affairs of citizens.  It is a comprehensive plan with long-term economic and social benefits for citizens and government.

The inspiration for this plan is based upon Biblical principles set forth in the Book of Leviticus, principles tendering direct economic liberties to the people.

The Leviticus 25 Plan 2018 –  $75,000 per U.S. citizen

The Leviticus 25 Plan 2018 (2481)

“He who will not apply new remedies must expect new evils.” – Sir Francis Bacon


Universal Basic Income Plans – their limited benefits and their freedom-crushing powers. There is a better way…

Universal Basic Income (UBI) – Musk, Zuckerberg, and now Richard Branson all support it in some form.

UBIs sounds good on the surface, but these plans are infected with the virus that could easily, over time, destroy freedom in America.

There is a better plan…


Billionaire Richard Branson Weighs in on Free Cash Handouts      Aug 16, 2017 – Excerpts:

 Billionaire entrepreneur Richard Branson is the latest in a string of iconic businessmen to talk about cash handouts, or universal basic income, as a solution to jobs being replaced by technology.

“With the acceleration of [artificial intelligence] and other new technology … the world is changing fast,” Branson writes in a post published this week.

“A lot of exciting new innovations are going to be created, which will generate a lot of opportunities and a lot of wealth, but there is a real danger it could also reduce the amount of jobs,” he says.

“This will make experimenting with ideas like basic income even more important in the years to come.”


The positive: Universal Basic Income (UBI) plans do provide a mechanism to deliver a basic stipend for people.  This monthly stipend is normally designed to replace certain social welfare payments, so it does allow for the direct allocation of resources by the people.

The negatives:  The UBI plans are very light on details regarding how much government assistance (social welfare) these plans would eliminate.  They may therefore have very little impact on America’s entitlement spending crisis.

UBI plans would do very little, if anything, to:

  • Eliminate vast tracts of debt at the family level.
  • Generate massive government tax revenue growth and trillion dollar government budget surpluses.
  • Reignite powerful economic growth in America.

Lastly, and most importantly, UBI plans, with their modest stipends, would keep people dependent upon government for their monthly handout trickle.  Government dependence means government control.  They would keep people shackled by debt to credit institutions.

UBIs would not advance the cause of economic liberty in America.  

UBIs would, over time, lead to a freedom-crushing control of government and land the banking industry over citizens.


The Leviticus 25 Plan, on the other hand, grants citizens a direct access to liquidity on scale that would deliver massive debt reduction at the family level.  It would therefore free citizens, significantly, from the shackles of debt.

It would generate massive tax revenue growth – with an astounding  $1.02 trillion in government budget surpluses over the first five years in force.

It would re-fire America’s economic engine, generating explosive growth with long-term sustainability.

It would allow for a citizen-centered health care system, providing citizens with the freedom to allocate resources directly for the majority of their primary care needs and basic out-patient healthcare services.

And most importantly:

The Leviticus 25 Plan would restore economic liberty in America.

The time is now…

The Leviticus 25 Plan 2018 –  $75,000 per U.S. citizen

The Leviticus 25 Plan 2018 (2475)


Fed QE Liquidity Transfusions (2008 – 2013): Billions in Free Interest to… Foreign Banks

A brief review of the U.S. Federal Reserve free money handouts to foreign banks:

How The Fed Is Handing Over Billions In “Profits” To Foreign Banks Each Year   Zero Hedge 2/11/13 – Excerpts:

Fed QE flows over the past 4 years, dating back to March 2009, show that foreign banks have been the primary recipients of “cash generated by Fed excess reserves.”

Small domestic banks and large domestic bank cash reserves have been flat to modestly higher (a ‘steady’ $800 billion) over the 4-year period, while “Foreign Banks” have nearly doubled their cash reserves during that same time – from the newly created reserves.

This was confirmed by the Fed itself, which in a paper from November 2012, admitted just this when it said that “the recent unprecedented build-up of cash balances by [foreign banks] was almost entirely composed of excess reserves.”

And where does this “foreign bank” cash ‘park itself?’

Answer:  These foreign bank excess cash reserves are parked at “Reserve Banks” – currently about $954 billion, earning 0.25% interest (which the Fed decided to start paying out in December 2008).

The “Fed paid some $6 billion in interest to foreign banks, in the process subsidizing and keeping insolvent European and other foreign banks, in business and explicitly to the detriment of countless US-based banks who have to compete with Fed-funded foreign banks and who have to fire countless workers courtesy of this Fed subsidy to foreign workers.”

“From December 2008 through the last week of January [2013], the Fed has paid out some $6 billion in cash (red line) to European banks simply as interest on excess reserves:”

“But that’s just the beginning. If we are correct in assuming that QE3 will be a replica of QE2 when all the new reserves created ended up as cash on foreign bank balance sheets, it means that we can quite accurately forecast what the total foreign bank cash position will be on December 31, 2013 (as the Fed will certainly not end its open ended monetization of the US deficit before then, or likely, ever). The result: just under $2 trillion in cash held by foreign banks operating in the US, which also means that in calendar 2013, the Fed will fund and subsidize foreign banks a blended interest payment of $3.5 billion! This is entirely separate from the $2 trillion liquidity subsidy that Bernanke will also have handed out to keep these banks afloat, and is $3.5 billion that will flow right through the P&L and end up in the pockets of offshore shareholders who otherwise would very likely be wiped out had it not been for the Fed’s relentless efforts to bailout foreign banks.”


U.S. citizens deserve nothing less than the same direct access to liquidity that the Federal Reserve provided to foreign banks during the financial crisis (2008-2013).

It is time for U.S. citizens themselves to step up to the head of the line and receive their own credit extensions direct from the Federal Reserve.

It is our money, and we deserve the same direct access to it – through a Citizens Credit Facility.


The Leviticus 25 Plan 2018 –  $75,000 per U.S. citizen

The Leviticus 25 Plan 2018 (2471)