Monday, December 27, 2010

A Pyramid DESIGNED to Collapse

A financial post as the country's finances are little more than a pyramid scheme these days:

From Scott Blier of

It is beyond the scope of comprehension that the FED actually wants and needs to CREATE inflation when their job is to supposedly suppress and limit it. But it is all a part of the perverting of the price mechanism of today’s markets. Does this sound legal to you?

1. The FED and Treasury (THEY) creates money out of thin air.
2. THEY then lend it to banks for nothing (0%, free money).
3. Banks then lend back to THEM.
4. THEY allow banks to act as intermediary to make a guaranteed profit.
5. THEY buy Treasuries from banks for cash and allow them to Hypothecate that money the standard 11:1.
6. THEY allow banks to take the hypothicated money and buy other assets on margin.
7. THEY allow commodities to have the lowest margin requirements of any financial instruments other than Treasuries.

Can you see the money machine at work? THEY create a dollar and it can become $100 and allows it to buy anything and everything market-related. Then prices rise and everyone is happy!

Do you wonder who is buying stocks and commodities? All this price perversion in the name of “saving the system”.

The desire is to get everyone hurrying to spend and invest before prices go too high. But the continuously rising prices crowd out end users because they can no longer afford the materials in question for end usage. The only buyers then become financial speculators. That is until the price is so high that nobody can buy and then prices crash from lack of buyers. Then speculators will need to sell to meet their margin calls.

The end result is that all the money THEY created will go to money heaven and we’ll be knee deep, again. And the higher the price of materials go, the closer we come to that end.

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