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1929crash

Fed Buying Us Treasuries By Laundering Through Belgium

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The Federal Reserve and an Unsustainable Empire
by PAUL CRAIG ROBERTS and DAVE KRANZLER

Is the Fed “tapering”? Did the Fed really cut its bond purchases during the three month period November 2013 through January 2014? Apparently not if foreign holders of Treasuries are unloading them.

From November 2013 through January 2014 Belgium with a GDP of $480 billion purchased $141.2 billion of US Treasury bonds. Somehow Belgium came up with enough money to allocate during a 3-month period 29 percent of its annual GDP to the purchase of US Treasury bonds.

Certainly Belgium did not have a budget surplus of $141.2 billion. Was Belgium running a trade surplus during a 3-month period equal to 29 percent of Belgium GDP?

No, Belgium’s trade and current accounts are in deficit.

Did Belgium’s central bank print $141.2 billion worth of euros in order to make the purchase?

No, Belgium is a member of the euro system, and its central bank cannot increase the money supply.

So where did the $141.2 billion come from?

There is only one source. The money came from the US Federal Reserve, and the purchase was laundered through Belgium in order to hide the fact that actual Federal Reserve bond purchases during November 2013 through January 2014 were $112 billion per month.

In other words, during those 3 months there was a sharp rise in bond purchases by the Fed. The Fed’s actual bond purchases for those three months are $27 billion per month above the original $85 billion monthly purchase and $47 billion above the official $65 billion monthly purchase at that time. (In March 2014, official QE was tapered to $55 billion per month and to $45 billion for May.)

Edited by 1929crash

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Not necessarily. Could be China!

Why would China hide behind Belgium? And, of course, who is the secret seller of chunks of US treasuries?

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Could be the buyer is just using money held in Belgium or a broker based there

Edited by Sancho Panza

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http://blogs.marketwatch.com/thetell/2014/04/15/belgium-is-buying-up-tons-of-u-s-treasurys/

'So why are investors using the custodial services of Belgium, rather than other countries? The Financial Times has one interesting explanation in a Tuesday report, noting that it goes back to the use of U.S. Treasurys as collateral for derivatives trades. Because financial reform now requires the use of high-quality government debt as collateral (enter Treasurys), one widely used collateral management system in Belgium has seen its holdings of such U.S. government debt grow. That suggests the surge in custodian holdings could be for collateral purposes.

FT reporters Michael Mackenzie and Philip Stafford explain:

“Euroclear, which holds more than €22tn in assets under custody, confirmed that the volume of US Treasurys it holds had “gone up dramatically” in recent months. Traders say Euroclear is renowned for its sophisticated collateral management system, which helps global investors move bonds to various clearing houses around the world.”'

'

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Pretty obvious they've been doing this. They used to use certain Virgin Island/Cayman instiututions for similar goings on until everyone caught onto it.

They are desperate of course - which also explains the increasingly strange behaviour over Ukraine.

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This is a significant article IMO, because it helps to answer the oft-asked question on here - why has everything not collapsed yet?

There may be legitimate reasons for derivatives trades being made through Belgium that just happens to increase the demand for US dollar denominated assets, but the effect is to keep up the value of the USD and maintain its reserve currency status. Somehow, i don't think Russia, China and possibly others, like KSA, want to go along with this anymore.

I think it is reasonable to conclude that the Fed is behind it all.

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Not necessarily. Could be China!

+1

Or Putin attempting to hide his reserves from confiscation.

Strange anyone would conclude it's the FED though unless they're spinning for Russia/China.

Edited by R K

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There is only once source.

BS. Belgium has foreign exchange and assets just like any other country. May have rotated that into treasuries for one of a dozen reasons.

Paul Craig Roberts is a geriatric fossil who has gone on the alex jones show to predict 12 of the last zero global wars. I may have made that up, but his predictions ain't much better.

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There is only once source.

BS. Belgium has foreign exchange and assets just like any other country. May have rotated that into treasuries for one of a dozen reasons.

Paul Craig Roberts is a geriatric fossil who has gone on the alex jones show to predict 12 of the last zero global wars. I may have made that up, but his predictions ain't much better.

His predictions have not been wrong, and what do have against older people?

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This article is a bit more enlightening. Suggests Putin has been selling US bonds, using a belgium based company called Euroclear to hold them instead,

http://www.24hgold.com/english/contributor.aspx?article=5384471786H11690&contributor=Wolf+Richter

At least that what i read from it.

Interestingly it would pre-empt developments in the Ukraine if this was to be true, suggesting amazing, er, 'foresight' in Putins decisions.

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His predictions have not been wrong, and what do have against older people?

They dawdle in shopping aisles

Theyre oblivious to other motorists.

They smell funny.

They get ripped off by scam artists and expect everyone else to make up their loss.

They make up the overwhelming majority of the NIMBY contingent.

Theyve voted lab-tory since 1930.

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Is it maybe something to do with the eu/ecb trying to circumvent their statements that they're not going to QE - it being done in Belgium with Brussels being the eu HQ.

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Is it maybe something to do with the eu/ecb trying to circumvent their statements that they're not going to QE - it being done in Belgium with Brussels being the eu HQ.

That would involve them buying eurobonds, not dollar denominated assets like US Treasuries..

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There is only once source.

BS. Belgium has foreign exchange and assets just like any other country. May have rotated that into treasuries for one of a dozen reasons.

29% of their GDP is 'rotation into!'

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Denningers take on things...

If you want a more-likely explanation you could consider that there is a tiny little nation south of another one that happens to hold a metric ton of Treasuries and might be convinced to do something about their northern neighbor dumping them. Oh, and they seem to have a budget surplus and their government doesn't bother with silly things like balance sheets (especially not ones ordinary people can look at with enough specificity to verify) too.

http://market-ticker.org/post=229010

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Denningers take on things...

If you want a more-likely explanation you could consider that there is a tiny little nation south of another one that happens to hold a metric ton of Treasuries and might be convinced to do something about their northern neighbor dumping them. Oh, and they seem to have a budget surplus and their government doesn't bother with silly things like balance sheets (especially not ones ordinary people can look at with enough specificity to verify) too.

http://market-ticker.org/post=229010

Korea? Luxembourg? Switzerland?

Scotland. I ******ing knew it. So they think they're all "southern" now.

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Korea? Luxembourg? Switzerland?

Scotland. I ******ing knew it. So they think they're all "southern" now.

I dont think he's talking about Scotland.

I wonder if PCR really believes what he is writing or not? He always seems a bit unhinged on the alex jones show, although i guess normal people dont get invited on.

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This is a non-story. Euroclear are the largest custodian of bonds (of all sorts) in Europe and are located in Belgium. If the Fed (or anyone else for that matter) buys US bonds in Europe, it's highly likely they'd settle through Euroclear and, from there, be reported as being Belgian transactions.

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Russia Dumps 20% Of Its Treasury Holdings As Mystery "Belgium" Buyer Adds Another Whopping $40 Billion

Belgium%20March_0.jpgBack in mid-March, there was a brief scare after the start of the Ukraine conflict, when Fed custody holdings plunged by a record $104.5 billion (if promptly bouncing back the following week), leading many to believe that Russia may have dumped its Treasurys, or at least change its bond custodian. We noted that we wouldn't have a definitive answer until the May TIC number came out to know for sure how much Russia had sold, or if indeed, anything. Moments ago the May TIC numbers did come out, and as expected, Russia indeed dumped a record $26 billion, or some 20% of all of its holdings, bringing its post-March total to just over $100 billion - the lowest since the Lehman crisis. But as shocking as this largely pre-telegraphed dump was, it pales in comparison with what we first observed, is the country that has quietly and quite rapidly become the third largest holder of US paper: Belgium.

Go Belgium.

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Russia Dumps 20% Of Its Treasury Holdings As Mystery "Belgium" Buyer Adds Another Whopping $40 Billion

Belgium%20March_0.jpgBack in mid-March, there was a brief scare after the start of the Ukraine conflict, when Fed custody holdings plunged by a record $104.5 billion (if promptly bouncing back the following week), leading many to believe that Russia may have dumped its Treasurys, or at least change its bond custodian. We noted that we wouldn't have a definitive answer until the May TIC number came out to know for sure how much Russia had sold, or if indeed, anything. Moments ago the May TIC numbers did come out, and as expected, Russia indeed dumped a record $26 billion, or some 20% of all of its holdings, bringing its post-March total to just over $100 billion - the lowest since the Lehman crisis. But as shocking as this largely pre-telegraphed dump was, it pales in comparison with what we first observed, is the country that has quietly and quite rapidly become the third largest holder of US paper: Belgium.

Go Belgium.

Didnt Ukraine only begin to kick off in late dec?

This started in nov. Probably shows Putin to be even more shrewd than we give him credit for.

Meanwhile Obummy and his shit for brains government have resorted to tweeting '#please return the girls boko haram, pretty please' '#we beg you mr putin, leave our mickey mouse ukraine govt alone' Pathetic, truly pathetic. How the mighty have fallen.

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