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Bernanke Has Injected Foreign Banks With Over $1 Trillion In Cash For First Time

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http://www.naturalnews.com/2017-08-11-new-fda-approved-hepatitis-b-vaccine-found-to-increase-heart-attack-risk-by-700.html
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Author Topic: Bernanke Has Injected Foreign Banks With Over $1 Trillion In Cash For First Time  (Read 528 times)
Psalm 51:17
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« on: May 21, 2013, 08:34:06 pm »

Thanks To QE Bernanke Has Injected Foreign Banks With Over $1 Trillion In Cash For First Time Ever
5/21/13
Two years ago, Zero Hedge first made the observation that the bulk of Fed reserves (also known simply as "cash created out of thin air" because money is first and foremost fungible no matter what textbook theoreticians may claim, and the only cash allocation preference is the capital allocation IRR analysis) had been parked not with US banks, but with foreign banks with US-based operations. We followed that with more analyses, showing explicitly how the Fed was providing a constant cash injection to foreign banks courtesy of the rate on overnight reserves which is the amount Fed pays to banks that hold reserves with it, as the bulk of reserves continued to end up with foreign banks - a situation set to become a huge political storm some time in 2014-2015 when the IOER has to rise and the Fed is "found" to have injected tens of billions of "interest" not into US banks but in foreign banks operating in the US, and which then can upstream the "profits" to insolvent offshore domiciled holding companies.

So it was our expectation that while if not slowing down its rate of money-creation (i.e., reserve-production) - something that won't happen for a long time as it would crash the stock market - the Fed's reserves would at least revert to being accumulated at US-based banks. No such luck. In fact as the latest H.8 report demonstrates, as of the most recently weekly data, the Fed's policies have led to foreign banks operating in the US holding an all time high amount of reserves, surpassing $1 trillion for the first time, or $1,033 billion to be precise.



This means that, as we expected several months ago, the only recipient of ongoing Fed money printing are not US banks, but foreign banks operating in the US. For those confused about the big picture, here is a chart showing the breakdown of cash held by big and small US banks as well as foreign banks, superimposed to total reserves created by the Fed since the start of the Great Financial Crisis. The correlation is 100%.



And just to prove that ALL the unsterilized cash from both QE2 and QEternity has essentially gone to support offshore banks, here is the conclusive chart showing the change in Fed reserves and cash held by foreign banks:



Finally, tying it all together, here is chart showing cash at US banks vs cash at foreign banks operating in the US. At $1.03 trillion in foreign cash, the Fed's policies have once again led to more cash being held by foreign banks than all cash held by domestic banks.



We are confident that we speak for all when we say: "Thank you Ben - insolvent foreign banks appreciate your ongoing QE2 and QEternity-funded generosity"

http://www.zerohedge.com/news/2013-05-21/thanks-qe-bernanke-has-injected-foreign-banks-over-1-trillion-cash-first-time-ever
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Psalm 51:17
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« Reply #1 on: May 24, 2013, 12:47:36 pm »

Bernanke out by August, QE ends, rates up: Crash
http://www.marketwatch.com/story/bernanke-out-by-august-qe-ends-rates-up-crash-2013-05-22
5/24/13

SAN LUIS OBISPO, Calif. (MarketWatch) — The “Dr. Boom” scenario: America is about to “unleash a spending spree. Years of self-denial give way to pent-up demand,” predicts UBS economist Maury Harris in USA Today’s bold lead story.

His clue? Consumer sentiment: “Harris estimates that in the next five years, catch-up consumption will boost annual consumer spending growth by a half point to above 3% from about 2%.”

Reassuring? No, wishful thinking. Be very skeptical. As Robert Kuttner, author of the new “Debtors’ Prison: The Politics of Austerity Versus Prosperity” once wrote in BusinessWeek, “What do you call an economist with a prediction? Wrong.”

Harris is bucking the headwinds of history. As Jeremy Grantham, chief strategist of the $100 billion GMO money managers, recently told InvestmentNews, the newspaper of record for America’s 90,000 professional investment advisers, “3% annual GDP growth is history.”

Here’s why you better be preparing today for a crash dead ahead. As Pimco’s Bill Gross warned in his recent newsletter: “You’re going to lose money investing ... because the central banks say so.” That’s right, this is a Fed-driven rally. Soon the Fed will be forced to stop printing cheap money.

Here’s the alternative “Dr. Doom’s August scenario:” Aging bull market. Fifth year. Markets at risk. Down soon. August. Will Obama reappoint Bernanke again? No way. But who? New blood? Shake things up with Wall Street mastermind Mayor Michael Bloomberg? After more than two decades of Greenspan/Bernanke’s misguided, destructive monetary policies, America could use a guy like him at this crucial turning point.

But expect a safe bet. Obama favors a woman. The high rollers are already betting on Janet Yellen, vice chairman of the Fed, long-time monetary insider. Former San Francisco Federal Reserve Bank CEO. Also chairman of Clinton’s Council of Economic Advisers.

But watch out, even a sure bet can misjudge hidden dangers lurking ahead of a Titanic like the $15 trillion U.S. economy. As the Wall Street Journal’s Matt Wirz wrote in March:

The Fed “won’t be able to keep a lid on interest rates forever.” So “large money managers such as BlackRock, TCW Group and Pimco are getting ready for the day when rates take their first turn higher. It isn’t coming anytime soon, these investors say. But when it does, they worry, the ascent will be swift and steep.”

Get it? Rates will go up. Way up. Very fast. And America’s 95 million Main Street investors will be unprepared. Markets will crash. Like 1994’s 24% bond crash after Fed rate increases, notes Wirz.

The big players say the crash “won’t happen soon.” Don’t believe them. They’re betting with trillions. And they are hedging their bets, already preparing for “when rates take their first turn higher,” because rates will soar “swift and steep,” and when that happens it will be too late to prepare.

“Dr. Doom,” the economist Nouriel Roubini is also hedging his bet, misleading investors, telling us to expect a “huge rally in risky assets” the next couple years “setting markets up for a major sell-off.”

Warning, a crash is more likely to happen in August 2013 than in 2015 when the next presidential election campaign is kicking into high gear. So start preparing for a crash when the new Fed chairman ends cheap money.
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« Reply #2 on: May 24, 2013, 12:54:36 pm »

Warning, a crash is more likely to happen in August 2013 than in 2015 when the next presidential election campaign is kicking into high gear. So start preparing for a crash when the new Fed chairman ends cheap money.

Not saying I agree with this, but isn't it a coincidence that the MSM is already flooding stories with potential 2016 election candidates? Since when has the MSM done this the same year the new(or incumbent) President started his term?
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« Reply #3 on: May 24, 2013, 03:49:44 pm »

Quote
Will Obama reappoint Bernanke again? No way. But who? New blood? Shake things up with Wall Street mastermind Mayor Michael Bloomberg? After more than two decades of Greenspan/Bernanke’s misguided, destructive monetary policies, America could use a guy like him at this crucial turning point.

America needs a guy like Bloomberg? That author is nuts! He thinks Greenspan and Bernanke were bad?  Roll Eyes
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