The Bishop and the Butterfly: Murder, Politics, and the End of the Jazz Age
    jollyroger's picture

    Debt Limit: Follow the Money: Fed lends bank 100 B @ .25%. Bank buys 10 yr bonds @3% Holds bonds lends hedge 500 B @ 3.5%Hedge buys 30 yr's @ 4% Treas uses 500 B to pay Fan/Freddie losses to.....Banks

    Talk about *"getting paid off the top and the bottom"

    Let's walk through this in some more detail, because the caption leaves out the really good part at the end, where the banks evict us from the homes on which they are being made whole by our moneyl

    And they charge us big "servicing" fees to throw us on the street.

    Remember that at the beginning of this transaction, instead of lendng to the banks at the discount window Bernanke can walk down the block to the treasury and not only will he get the 3% interest (it's called disntermediation) the interest will go back to the treasury (us) so it's giving our money away to let the banks get in the middle.

    Then, of course, through the miracle of fractional reserve banking, the 100 B we front turns into 500 B we borrow and we add it to our debt ceiling problem so we can give it to the banks.  Now because we are bumping our debt ceiling, we have to cut head start to our kids  and cut taxes to ...the bankers.

    Am I missing something here, or are you feeling screwed yet?

    The best part: All it takes to work the scam is two stooges: One at the Fed (Bernanke), one at Treasury (Geithner).

    CLASS WAR, Y'ALL

     

    *(ghetto expression describing person middling dope deal, charging commission from both seller and buyer while assuring each that he is working that side for free)

    Comments

    What a scheme.

    Jolly, When does this house of cards fall, or can it go on forever?

    Did you get a chance to read coatsed' article  and the link to solving the housing crisis and economy. 

    http://dagblog.com/reader-blogs/celebrating-independence-seeking-regain-it-10935

     Any thoughts?


    can it go on forever

     

    thats what's being played out in ireland, iceland, spain, greece, and portugal.

     So far its Iceland, +1 our side

    Ireland -1

    Greece -1

    Porugal -1

    Spain, in play.

    Oh yeah, USA -10 our side