The commerical banks have an unlimted ability to create money…

Unfortunately, consumers have a limited ability to request it’s creation.

This is just to keep the banks from imploding due to the drop in consumer requests to create new money…the circulation is broken…

This will do nothing to address the inability of the consumers to request the required amount of new money to service the continued existance of the previously created money.

It’s the difference between swimming to safety or treading water until you grow tired and drown.

The unlimted is ultimately limited…

How FED borrowing works…Is a commercial bank uses its income or an assest as collateral for a loan short term at wholesale rates that it will sell to consumers for long term at retail rates.

Without a consumer signing on the dotted line and servicing it….jigs up.

like all the sub primes that blew up…scraped the bottom of the barrel and found signers….but they could not service them…poof game over.

And at some point increasing the supply of treasuries will cause rates to rise…Which will cause further consumer demand destruction.

The consumers are strapped and can not feed the top anymore.. Maximum borrowing potential has been reached.

The Paulson Ponzi Plunder Plan is the first installment of their final attempt to bankrupt the sheople, who they hope to beat into submission by hyper-inflating and Weimarizing them with bailout after bailout, ad nauseam, knowing full well that these bailouts are futile and useless. The Illuminati will now attempt to force the poor, hapless sheople into a fascist police state as the next giant step toward the creation of a New World Disorder called Novus Ordo Seclorum (a New Order of the Ages), as set forth on the back of every dollar bill under the all-seeing eye overlooking the unfinished pyramid, both symbols of the new age, the occult and the ancient mystery religions. What else would you expect from the satanic trillionaires who hope to become the new lords of the universe. Nice try fellas, but we suspect that God, the current and eternal Lord of the Universe, has other plans. Many of their own henchmen are going to go down in the chaos to follow, but the raving madmen we refer to as the Illuminati will gleefully sacrifice them on the alter of world government.

The New World Disorder is the hope and dream of the Illuminati which they have been planning for centuries. But we believe that something is going to happen on the way to that Forum, and that in the end they are all going to end up “swingin’ in the breeze.” Their plans are unraveling. The destruction is far greater than they had planned. The whole plan is going up in smoke thanks to the bungling of their “Chaos” henchmen in our government and on Wall Street. To think that they attempted to use naked credit default swaps to cover bonds and derivatives secured by houses borrowers could not afford on such a gargantuan scale tells you everything you need to know about their financial acumen. They even permitted ownership of derivatives by those who did not own the underlying assets to be hedged (known as “dry derivatives,” which are essentially the equivalent of insurance policies taken out on someone or something in whom the policy holder has no insurable interest), thus turning the world’s financial markets into a giant gambling casino, with the added bonus that many unscrupulous people were put into a position where they could force an event that would give them a big payoff without suffering any pain on their end. In essence, by coming up with all these obtuse, Byzantine, rocket-scientist-created derivatives, the smugly clever Illuminati have finally outsmarted themselves.

Then there is the one-rate-fits-all plan in the now-doomed European Union. What a freaking blooper that was! We have been saying that this conglomerate banking scheme could not work from the inception of this ill-conceived union of what are very diverse and culturally unique nations, but of course no one listened. They have so thoroughly destroyed the financial system that there is now no hope of keeping the EU together. The plan did not even work well in a period of substantial prosperity, and now they are going to attempt to keep the plan going in circumstances, which are the antithesis of prosperity. Good Luck! If they hadn’t allowed their system to be corrupted by all these financial weapons of mass destruction, out of their unending, boundless greed to milk their sheople, they might have had a shot at preserving the EU and then moving on to world government. Now they are the proud owners of 75% of all the toxic waste derivatives produced by the American branch of the Illuminati. And they have piles of banking bonds covered by credit default swaps issued by AIG, and by who knows what other zombie entity, so their stock and bond ratings, as well as their cost of capital, are in serious jeopardy. As the implosion of these derivatives transpires, the majority of their economies are going down in flames as inflation, recession, and eventually depression set in, adding to their already substantial woes. Their fascist dream is about to go up in flames along with their precious EU, the revived British Mercantilist system and the debt-based, fractional reserve Ponzi scheme of the evil European bankers and their Black Nobility clientele. Their American counterparts will fare little better.

Note that the major Wall Street investment banks, all leveraged to the hilt, are now all gone, whether by bankruptcy, buyout or change of charter. Goldman Sachs, the only investment bank, which has retained its namesake, other than the bankrupt Lehman Brothers, is on the verge of going under in a Bear Stearns-like squeeze on their liquidity and net equity. The recent demise of all these investment banks is just the first round. Things are going to get much worse as the money from the Paulson Ponzi Plunder Plan gets doled out to the various Illuminist toadies. The latest idea, suggested by the Bank of England (what a feeling of confidence we get knowing that this bastion of financial acumen supports this idea!) and now adopted by Hanky Panky, is to make liquidity injections into the fraudster banks in return for equity positions, such as preferred stock ownership. What a joke. Like that is going to chase the credit default swap monster away and restore a feeling of safety and confidence so banks can start lending again. We have news for you. Even the bondholders of these toxic waste sites are going to get vaporized, so the sheople stockholders can expect to get a Big Zippo. At least by acquiring toxic waste assets we might have an outside chance of picking up some chump change later, but with this new plan to fleece the sheople, you are throwing your money down a rat hole. We are told that this will get the money to where it is needed faster. The only “faster” we see is the rate at which taxpayers will get fleeced.

All these toxic cesspool repositories are headed for bankruptcy and nationalization. All you will be doing is keeping people employed with exorbitant salaries and bonuses as they continue to rip you off with insider trading and fraudulent derivative schemes. These witless, pipe-dreaming dolts seem to think that they can get their fractional reserve multiplier going again as the Illuminati try to reinvigorate and re-inflate rampant market speculation along with their profligate money and credit system. They seem to think they can re-inflate the otherwise tanking real estate markets, using their perfect fraud machines, Phony and Fraudie, because they no longer have to worry about ticking off wealthy, influential and politically connected entities that own their stocks. All losses that are suffered by Phony and Fraudie will now go directly to the sheople, do not pass Go, do not collect $200.

What are these people thinking? Again we say: “It’s the swaps, stupid!!!” The credit default swaps will be the first to blow as we move from hundreds of billions to trillions in quarterly losses. That will send risk into the ozone while the bailouts send inflation into the stratosphere. And that of course means double-digit interest rates are on the way, which are the main fuse leading to the interest rate swap powder keg, which is the largest of all the derivative powder kegs by notional value, and thus by potential loss. Take JP Morgan Chase for example, and their $90 trillion derivative portfolio by notional value. Let’s say that $50 trillion are in interest rate swaps. If they have even a mere two percent overhang where they have to pay out variable rates of interest on two percent more of their total interest rate swaps than the portion of swaps on which they are, by contrast, receiving variable rates of interest, they could suffer horrendous losses that could easily put them under. Let’s say that everything balances at 4%. But now rates move to 14% as everyone totally ignores the rates set by the central banks sending LIBOR and T-Bill rates to unheard of levels, which are the types of rate indexes commonly used in these swaps. (Note that corporate debt in Europe, due to the lack of so-called insurance from credit default swaps, has already doubled from previous lower single digit rates into much higher double-digit rates in the 12% area). Two percent of $50 trillion is a trillion dollars of notional value overhang on which you are now paying out ten percent more, and ten percent of one trillion is $100 billion, a killer loss. That would put them under. Even an overhang of only one half of one percent pumps out a loss of $25 billion. And what if the overhang is 5%, or 10%, or 20%? With an overhang of 20%, we hit one trillion in losses. Now, what if rates go to 24%? And this is only one bank! As you can see, assuming that the system can survive the credit default swaps, which we very seriously doubt, we will be jumping out of the fire only to land face down in a red-hot frying pan.

It is only fitting that the credit-default swaps lie at the heart of the problem, which the fraudster banks now face. When you look at what has been done by these reprobates in the past, this is a most fitting fate for them. First, they had President Reagan pass an Executive Order in 1988 forming the President’s Working Group on Financial Markets so they could manipulate markets 24/7 with the PPT. That was forced by the 1987 Stock Market Crash, an event orchestrated by the Illuminati to convince everyone that we had to have an interventional team to stop such extreme market gyrations. Then Slick Willie does away with Glass-Steagall in 1999 to do away with the system of checks and balances that allowed banks to pass on paper that was falsely rated as AAA on to their patsy clients. Then for a double whammy, Slick Willie leaves OTC derivatives unregulated with the passage of the Commodity Futures Modernization Act in 2000, so Wall Street could write insurance policies called credit default swaps without having to comply with annoying, silly and burdensome rules requiring such things as loss reserves or an insurable interest. These were all passed to cover up the devastating losses our economy was suffering on account of free trade, globalization, off-shoring, outsourcing and both legal and illegal immigration.

The PPT moved our markets, contrary to what market fundamentals would indicate, to give the appearance of prosperity when we were really getting hammered by the free trade agenda. Our government chimed in with their deceitful and fraudulent economic statistics by use of hedonics. Then credit default swaps were used to falsely suppress interest rates by insuring the risk of default for potential investors, and never mind that there were no loss reserves, collateral or requirement of an insurable interest. AAA credit was assigned to otherwise risky companies based on Ponzi scam bond insurers who were insuring bonds with little or nothing to back up their promises. If our corporations were forced to pay the higher rates demanded by the market without the benefit of these swaps, our corporate earnings would have been dismal, and would have reflected the losses suffered by the globalist free trade agenda. Then the falsely rated subprime derivatives were created so that Wall Street could earn oodles of fees, commissions and spreads by continually rolling over the same money which they were borrowing short-term and lending long-term. These earnings helped to boost our GDP and thus to further cover up the losses being suffered by our bloodied manufacturing sector as everyone became Walmart greeters and hamburger flippers instead of being tool and die makers and machinists and as 5 million of our best-paying jobs were moved overseas. Let’s hear it for the Illuminist free trade agenda. Yeah, rah.

It appears that for whatever reason the Illuminati now want Obama to become president instead of McCain. The current financial carnage is of course being associated with Caligula, and since McCain is a Caligula Clone, by association he gets hit vicariously with voter ire. Listen to the two of them promise to save the borrowers who were given mortgages based on fraudulent information about their financial circumstances. Let’s bail them out too. Why should the fraudsters on Main Street be treated any differently than the fraudsters on Wall Street? Now we will have equal opportunity bailouts. It’s enough to make you puke. Worse yet, Obama is the biggest recipient of big banking largesse in the form of campaign contributions, especially from Fannie and Freddie, and he actively encouraged these organizations to pump out mortgages to people who could not afford them. Fortunately for Obama, McCain is not much better.

So what’s going down in Illuminati town? In pondering the current pounding of gold and silver, we smell lots of rats. We hold out to you the following potential scenario: On September 15 and 16, the Illuminati thought they had the precious metals markets under wraps, driving gold below $800 per ounce and silver below $11 per ounce, in anticipation of their coming announcement of the Lehman Brothers and Merrill Lynch debacles that were made public late on September 16. Then the specs go wild, and gold is up $90 in one day, giving the Illuminists a collective myocardial infarction. As punishment for such insolence, on Friday, September 19, the SEC takes away their right to short 800 financial companies, a big money maker. They are told to butt out, or they will never get to place another short again, but if they cooperate, they will get the mother of all crashes, which they can short with impunity. Note how open interest in COMEX gold futures declined from 398,386 contracts on September 15 to 321,021 on October 8. Yet the price of gold during this period kept pressing past $900, which means that there was some short-covering to the tune of some 77,000 contracts. The specs under threat from the SEC, are told to butt out while the commercials cover their shorts. They are told that a crash is on its way, so they short all the non-financials, and stay out of the commodity markets. Then the Paulson Plan is introduced around September 20, and prior to the vote, the markets are crashed to make it look like a “no” vote will send us into the deepest depths of Mordor, knowing all along that markets will be crashed anyway no matter how Congress votes. Fortunes are being made shorting with knowledge of when markets will be crashed. A short-covering rally occurs on Tuesday, September 30, as word is received that the Paulson Plan will be reconsidered and probably passed, but insiders know this is all for show as roughly half of Monday’s 777 point loss on the Dow is recovered. Markets are crashed again on October 1 and 2 erasing Tuesday’s gains, those being the two days leading up to the second vote on October 3, to convince Congressional boneheads that the Paulson Plan must be passed to save the markets, and when the vote starts to look positive on October 3, up the markets go in the early going that day just before the vote in order to give our bribed and threatened Congressional morons the impression that markets will rally if the Paulson Plan is passed. Congressional dimwitted idiots pass the bill, and the markets nose-dive, all as planned. On October 6, paragon of virtue Jim Cramer scares the living daylights out of retirees, telling them they must get out of the markets. Panic hits the streets, and the cascade of losses is under way. The shorts are now cleaning up and are rolling in dough, but of course that was not enough for them. The Paulson Ponzi Plunder Plan also calls for an end to the ban on shorts against financials just before midnight on Wednesday, October 8, and because the specs have all been good little boys, the SEC lets the ban on shorts expire even though they could have extended it another week. The bloodbath continues on Thursday and Friday as the financials get bombed, the specs are fat and happy, and down go gold and silver while the grateful specs look the other way. Meanwhile, the carry trade is unwound and both the dollar and the yen go ballistic due to the crashes around the globe which send traders into yen and dollars to buy Japanese and US treasuries, respectively, and the yen even outperforms the dollar, causing precious metal liquidations by thoroughly bloodying carry traders while the stronger dollar hits the metals also. And of course, just as we predicted, oil gets hammered below 80, giving more dollar support through the euro effect, and reducing the need for gold and silver as a hedge against higher oil costs.

Can anyone do this? No. “This works if you, your banks, and the buyers of your paper are all sufficiently greedy. Why would banks loan you $100 million on $10 million collateral? The short answer is they wouldn’t for you or me, but they would and did to financial companies because of the fees and interest they made off of such transactions and because they ‘knew’ those companies were good for it. . . .”

Here is another scam vehicle known as ‘swaps.’ “This was a kind of insurance policy in the event that some mortgages declined in value. This derivative basically said if you pay me a certain fixed amount, say every 6 months, I will make good on any difference between what you initially paid for your mortgage-backed security and what it is worth when you come see me. When the housing market was going up, this amounted to essentially free money for the issuers of this kind of derivative. They could sell it as extra insurance to conservative institutions secure in the knowledge that the housing market would rise forever.

“Except of course it didn’t. The original idea was that if a package of mortgages or tranch lost value because of a high rate of defaults, the swaps or insurance buyer could demand a settlement from the swaps issuer to make up for the loss of revenue. Now on the upside of the bubble, default rates were low. Homes that went into default could be resold at even higher prices so there was no downside. However, when the bubble burst, default rates went up and issuers of these derivatives didn’t face payouts on one or two of them but on a huge number of them.”

But these devices could not occur without a kind of dangerous “we’re all connected” web. It is made up of the banks, investment houses, mortgage companies, brokers, hedge funds, insurance companies, international money launderers, Buffets, Greenbergs, Soroses all around the world, now connected by greed and computer terminals, and able to leverage or debit billions on paper or swaps in a nanosecond.

Among other favorite ploys, “are mortgage-backed securities. They are not the mortgages themselves but a financial instrument (or to use the technical term, “thingy”) based upon or derived from them. (Buyers of these are not interested in the underlying asset but in the cash flow from it, i.e., the mortgage payments.) These can themselves be further sliced and diced into further generations of derivatives . . . one that is based on 50% of this derivative plus 30% of that one and a final 20% of a third. And so on and so on. All this was to dilute and spread risk or moral hazard, but it also had the effect of putting vast distance between the mortgage title and the holders of the derivatives based on that mortgage.”

The derivatives crept like succubae into the incubus of America’s body politic and financial system. Obviously, many financial types could not “just say no” to them? In fact, in order to get their $700 billion bailout, they could manipulate the market for hundreds (even thousands if necessary) of losses in Dow points — trillions in assets wiped out, pensions, credit, bank accounts, trusts, even freezing assets of universities and colleges beyond the ability of the average Joe Sixpack to fight back, other than to vote for a demented Sarah Barracuda and Citizen McCain.

By Craig Torres

Oct. 7 (Bloomberg) — The Federal Reserve will create a special fund to purchase U.S. commercial paper after the credit crunch threatened to cut off a key source of funding for corporations.

The Treasury will make a deposit with the Fed’s New York district bank to help set up the special purpose vehicle. The central bank will also lend to the program at policy makers’ target rate for overnight loans between banks. The Fed Board invoked emergency powers to set up the unit, the central bank said in a statement released in Washington.

Today’s action follows a slide in the commercial-paper market to a three-year low of $1.6 trillion last week as investors fled even companies with few links to the subprime mortgage crisis. Companies from newspaper firm Gannett Co. to electricity producer Southern Co. have been forced to tap credit lines or forego raising debt because of the market’s disruption.

The Fed didn’t say how much commercial paper, which hundreds of companies use to finance payrolls and meet other cash needs, it plans to purchase.

Stocks climbed and Treasuries sank after the Fed’s announcement. Futures on the Standard & Poor’s 500 Stock Index gained 1.9 percent to 1,073.60 at 9:15 a.m. in New York. Yields on benchmark 10-year notes climbed to 3.55 percent from 3.45 percent late yesterday.

Bernanke Speech

Today’s announcement came hours before Fed Chairman Ben S. Bernanke speaks on the economic outlook at 1:15 p.m. in Washington. He and Treasury Secretary Henry Paulson held discussions yesterday as stock markets slid and money market rates climbed as the crisis deepened.

The Fed’s new unit will buy three-month dollar-denominated commercial paper at a spread over the three-month overnight- indexed swap rate, which is a measure of traders’ expectations for the Fed’s benchmark rate.

Commercial paper purchased by the vehicle must be rated at least A1/P1/F1, the Fed said. Issuers will pay the unit an upfront fee based on the commercial paper initially sold to the vehicle. The vehicle will cease buying commercial paper on April 30, 2009, unless the Board of Governors agrees to extend it.

The Fed yesterday said it will double its cash auctions to banks to as much as $900 billion, and telegraphed today’s announcement by saying it was looking for other ways to alleviate liquidity strains.

To contact the reporters on this story: Craig Torres in Washington at ctorres3@bloomberg.net.
Last Updated: October 7, 2008 09:31 EDT

RESULT:
Treasuries Tumble as Fed Agrees to Purchase Commercial Paper

By Dakin Campbell and Bo Nielsen

Oct. 7 (Bloomberg) — Treasuries declined after the Federal Reserve said it will purchase commercial paper through a special unit in an effort to thaw short-term lending markets, damping demand for the haven of government debt.

Two-year notes fell for the first time in five days, pushing yields up from the lowest level since March, after the central bank invoked emergency powers to support the financing needs of corporations. The U.K. may invest as much as $79 billion in the country’s three largest banks, while Iceland today took over Landsbanki Islands hf, the island nation’s No. 2 lender, and pegged its currency to a trade-weighted index.

The yield on the 2-year note rose 10 basis points to 1.54 percent as of 9:11 a.m. in New York, according to BGCantor Market Data. The 4 percent security maturing in August 2018 dropped 7/32, or $2.19 per $1,000 face amount, to 100 28/32.

To contact the reporter on this story: Bo Nielsen in Copenhagen at bnielsen4@bloomberg.net
Last Updated: October 7, 2008 09:15 EDT

Commentary:

it will get worse before it gets better. Buying up commercial paper is just a first step in a larger debt-acquisition game.

According to yesterdays most fear-inspiring finance article:

“As for the US itself, it has not yet exhausted its policy arsenal. It can escalate further up the nuclear ladder. The Fed can cut interest rates from 2pc to zero. If that fails, it can let rip with the mass purchase of US debt.

‘The US government has a technology, called a printing press,’ said Fed chief Ben Bernanke in November 2002. (His helicopter speech).“

1) Have a fiscal policy that creates immense deficits in good times and bad, burdening America’s posterity with staggering burdens of repaying the debt.
2) Eliminate regulation of Wall Street and/or fail to enforce the regulations that already exist, instead trusting Wall Street and other money managers and speculators to manage other people’s money with few or no regulations and little oversight.
3) Have an energy policy that disallows producing our own energy and instead requires that we buy energy from abroad, thus making our oil prices highly volatile and creating large balance of payments deficits, lowering the value of the dollar and thus making the problem get progressively worse.
4) Have Congress mandate that banks and other financial entities lend money to persons they know in advance to have poor credit ratings or none at all.
5) Allow investment banks, insurers, and banks to bet their entire net worth and then some on the premise that borrowers known to be improvident will in fact repay those loans.
6) Allow the creation of large betting pools called “hedge funds” that can move markets and control the outcome of trading, thus taking a forum for savings and retirement for families and making it into a rigged casino game that exists primarily to fleece suckers like ordinary working men and women.
7) Have laws that protect corporate officers from being sued for misconduct but at the same time punish lawyers in the private sector who ferret out such misconduct and try to make accountable the people responsible for shareholder and investor losses. If one of those lawyers gets particularly aggressive in protecting stockholders, put him in prison.
Appoint as head of the United States Treasury Department a man whose whole life was spent on Wall Street, who became fantastically rich through his peddling of junk bonds at his firm while the firm later sold short those same sorts of bonds.
9) Scare Americans into putting up $750 billion of their hard earned money to bail out the billionaires and their friends who created the market for loans to poor credit risks (The “subprime” market) and the unbelievably large side bets on those loans, promising that such a bailout would save the retirement savings of Americans, then allow the immense hedge funds to make the market crater immediately afterwards.
10) Propose to save the situation by surtaxing the oil industry, which is owned by our fellow Americans, mostly in their retirement plans, thus penalizing Americans for investing in companies that efficiently and legally produce an indispensable product.
11) Insist that the free market requires that banks and insurers with friends of the Secretary of the Treasury be saved but allow other entities not so fortunate to fail, thus creating total uncertainty and terror among financial institutions, and demolishing all of the confidence built up in financial circles since the days of FDR.

12) Then have the Republican candidate say he would keep on the job the Treasury Secretary who facilitated the crisis, failed to protect the nation from the crisis, got the taxpayers to pony up to save his Wall Street buddies, and have the Democratic candidate, as noted, say he would save the day by taxing the stockholders of energy companies.
There, that should do it.

Posted on Monday, October 6, 2008, 12:00AM

The authorities in the UK are preparing for the bank’s parent in Iceland, Landsbanki, to be declared insolvent.

The Icelandic government took control of the country’s second biggest bank on Tuesday to stop it collapsing.

Claims from Icesave’s UK customers will be handled by the Financial Services Compensation Scheme (FSCS).

Restructuring work

Under the depositor protection arrangements in Iceland and the UK, the Icelandic authorities will be liable for the first 20,887 euros (£16,300) of compensation.

We are gearing up to be ready to do whatever we can in order to get compensation back to UK savers as quickly as possible FSCS spokesman

The UK’s FCSC will pay out the rest of the claims, up to the newly introduced ceiling of £50,000 per person.

“If, as expected, the Icelandic authorities put the firm into insolvency proceedings this would trigger a default under the FSCS,” said the Financial Services Authority.

“In this case, savers with Icesave could make a claim to get their money back,” it said.

Landsbanki later issued a statement saying it had gone into receivership, not liquidation, and that the Icelandic Financial Services Authority had appointed a receivership committee.

“Work has already begun on the restructuring of the operations of Landsbanki,” it said.

A spokesman for the FSCS said that if Icesave were declared insolvent, UK customers would not have to make two separate claims and that it would probably handle all UK claims on one form.

“We are working with the Icelandic authorities to confirm the procedure,” a spokesman said.

“We are gearing up to be ready to do whatever we can in order to get compensation back to UK savers as quickly as possible,” he added.

However during the morning the FSCS help-line went collapsed.

“We are doing everything we can to sort that out as quickly as we can,” said a spokeswoman.

“We are trying to get an alternative number installed.”

Icesave Homepage tells users that they cannot access their accounts.

Insolvent

The Financial Services Authority (FSA) said it was expecting Icesave’s parent bank to be declared insolvent soon, following its takeover by the Icelandic Financial Supervisory Authority (IFSA).

I haven’t slept for a couple of days. This was money put away for retirement Icesave customer Mike Davis

Icesave has 350,000 savers in the UK and Netherlands, with about £4.5bn of deposits.

It is not currently allowing customers to take money out of their accounts or to put in deposits.

This dismayed customer Mike Davis, 62, who has £75,000 in retirement savings locked up in an Icesave account until 25 October.

His daughter also has savings there and his partner, Pam Henson, 67, has £23,000 with the same bank.

The couple are getting married on 1 November, and Mr Davis, who lives in Gloucestershire, said he was “shaking with worry” when he heard about problems with Icesave.

“This cannot have come at a worse time. It is a pretty devastating blow,” said Mr Davis, a landscape architect.

“I haven’t slept for a couple of days. This was money put away for retirement.”

He was expecting a long process of trying to recover savings and called for governments to guarantee 100% of savings.

Emergency

Landsbanki is the second Icelandic bank to be taken over to prevent a collapse of the country’s banking system.

What we are doing here is saving a banking system Geir Haarde, Iceland’s prime minister

In an announcement on state radio, the commerce and banking minister Bjorgvin Sigurdsson said the board of directors of Landsbanki had been dismissed and the bank put into receivership.

He said the state takeover was made “in co-operation” with Landsbanki and the bank would stay open and operate as normal.

Glitnir, the country’s third-largest bank, was nationalised last week to stop it being driven into bankruptcy by the international financial crisis.

In a parallel move, Iceland’s largest bank Kaupthing has been given a loan of 500m euros from the country’s central bank.

“The central bank of Iceland has provided Kaupthing with a 500m euro loan to facilitate operations, and Kaupthing is committed to working with the government to ensure regular workings of the Icelandic financial system,” the bank said in a statement.

Meanwhile the Icelandic government has asked Russia to give it a loan of 4bn euros lasting for three to four years, to strengthen its foreign exchange reserves.

“The Russian Ambassador to Iceland, Victor I Tatarintsev, informed the chairman of the board of governors of the central bank of Iceland this morning that Russia would grant the central bank a loan in the amount of 4bn euros,” said the bank in a statement.

At first the Russian ministry of finance denied that any decision on giving a loan to Iceland had been made.

Later the Russian finance minister, Alexei Kudrin, said: “We have a request from the Icelandic government to provide a loan. We view it positively. The result will be announced after negotiations.”

Continued operations

On Monday the Icelandic government passed emergency legislation to try to rescue the country’s banking system and avoid what Prime Minister Geir Haarde described as “national bankruptcy”.

This included an unlimited guarantee for all bank customers’ savings accounts.

“What we are doing here is saving a banking system - saving the domestic banking system - and making sure that it can function properly,” he said after the decision to rescue Landsbanki.

“And I think, also, through our declaration on domestic deposits in these banks and saving institutions, we have been able to avoid a run on the banks here, and therefore prevent it,” he added.

The website of Icesave tells customers that: “We are not currently processing any deposits or any withdrawal requests through our Icesave internet accounts.

“We apologise for any inconvenience this may cause our customers. We hope to provide you with more information shortly,” it adds.

A spokeswoman for the bank said the website was not operating “due to technical difficulties”, but did not offer any further reason for it being down.

Explaining its action in taking over Landsbanki, the IFSA said: “Based on new legislation, the Icelandic Financial Supervisory Authority (IFSA) proceeds to take control of Landsbanki to ensure continued commercial bank operations in Iceland.

“Domestic deposits are fully guaranteed, as declared by the government.

“Landsbanki’s domestic branches, call centres, cash machines and internet operations will be open for business as usual,” it added.

———–Comment’s from Affected People:

“I first found out about the problems at Icesave when I switched on BBC News this morning.

“I have since then logged on and seen the message on the website and I’ve not been able to withdraw any money”

Martin Scully has around £2,000 in a savings account which he uses to pay his tax bill at the end of the year.

“If I don’t get my money back by the time I have to pay my bill, I will struggle to find the money to cover it.”

Mr Scully said he had not received any communication from the bank and that he has already cancelled his direct debit.

“I want to close the account down and move the money from it to a UK-based bank.”

————

“This is looking bleaker by the day. With rumours that Iceland is on the brink of bankruptcy, many UK depositors - myself included - face losing vast sums of money.

“Governments have encouraged people to save rather than borrow, but even this seems an unsafe option now.

“The end result can only be shattered confidence in the financial markets with future borrowing being on strict terms - perhaps £2,000 credit card limits secured on your home? - and a return to the habits of the 1930s/40s with people saving cash in biscuit tins in the airing cupboard.

“Governments need to stop ‘talking’ and start ‘doing’ to avert a complete meltdown.”

“I have the bulk of my family’s savings with Icesave, having moved from ING .

“I have £50,000 in a fixed-rate, one year deal which I can’t touch till January, so everything in my easy access account is vulnerable.

“The bulk of this is required to pay large bills for work on my house over the next month or two.

“I withdrew £37k on Friday at 4 pm and will require large sums in instalments over the next few weeks.

“I made a conscious decision to leave my money with Icesave and not add to the panic, but I will lose out whatever the eventual security of my deposits if I can’t withdraw money for legitimate reasons to pay bills.

“I find that though the first money has left my Icesave account, it hasn’t turned up in my bank account, which incidentally leaves me perilously close to being overdrawn.

“I can understand Icesave and/or the Icelandic government wanting to stop withdrawals because of panic, but it leaves someone like myself in a lose/lose situation. What happens if I can’t pay my builder?

“I find it frustrating that Icesave is in this position when it hasn’t lent recklessly like Northern Rock, hasn’t betrayed its customers, but I guess we did know in terms of the size of the Icelandic economy that Icesave and Kaupthing were punching above their weight.”

It’s all over…the top takes effects that the bottom is being exposed to and then says they are causes and because the bottom has no real ability to think…Accepts the lie as truth.

The USA has been hyperinflating for 64 years…It’s just been hidden with accounting tricks…Yes that’s 51 Trillion Dollars…because the USA like all countries on Earth has a credit system…the money supply of 51 trillion dollars is also the total debt that everyone owes.

And every country on Earth basically has a doomsday spike like the below.

The daily growth rate of that green line that hyperinflationists need to keep going up faster and faster forever? Slowed by 42.6% from the end of 2007 to now.

The largest slowdown of the daily growth rate of the US money supply in 62 years

Yes a sure sign that the hyperinflation of the world the past 64 years is on track.

The only hyperinflation I see is if producers cut production quicker than demand..until that doesn’t work and the strongest cave in…In the case of gold…The production is already insignificant.

All gold needs is an increase in demand…Nothing significant can be done on the production end.

But huge spikes up and down will make it so that nobody can accurately value gold so only dealers short of supply and speculators gaming it will be playing with it…

At some point that will just shut the market down.

Tighter financial regulation would have just accelerated the implosion to this point sooner.

All these morons haven’t the foggiest clue what the cause of this is…it’s not about regulations.

Wait until India begins imploding as the inflow of consumer debt inflation from the rest of the world dries up…then they will be bawling too.

The banks have an unlimited ability to create credit…Unfortunately consumers have a finite ability to request the commercial banks to manufacture and service it…

All the money pumped in the markets today is not going to fill in the hole left by the consumers who have for the past year become more and more exhausted…it’s to keep the banks from collapsing due to the drop in inflation the consumers are no longer supplying to the bank to keep them inflated.

It’s too funny…it’s the workers/consumers which power the banks…but you morons think it’s the other way around…

The banks are not “lending” because consumers have borrowed all they can and are “unwilling” or “unable” to borrow any more…

The top lives off the yield from the bottom…Until of course the bottom can’t or refuses to continue servicing it.

Then all the people holding you up…let go and you all fall down.

The real estate sector and markets and bankings system collapses once the hyperinflation reaches maximum potential…not before…

Hyperinflation is the investment the top got you all to BUY AND HOLD onto…

Certainly things inflate better if you are all brainwashed into thinking inflation is the bet to place all your chips on…Because if deflation was the bet you all put your chips on…the system would implode.

Ben said he would print money in 2002 so that all you morons would think hyperinflation was a done deal…and you all believed it…and when the consumers of the USA caould no longer sustain power to the hyperinflation salvation delusion…it shattered.

They are all singing the same tune…

The Wall Street corruption/toxic debt/deregulation is not the cause…those are effects…

The top take effects and market them as the cause to the mass of braindead morons and you all lap it up.

The cause is the attachment of interest to the medium of exchange…which basically forces all below to request the commercial banking system to manufacture more and more new money.

Until the bottom reaches their maximum potential to request the commercial banking system to manufacture more new money…then the system implodes.

All the effects are then marketed to the public as the cause and and since they are oblivious drones are forced to accept the official fable as truth…

At this point you are all just a massive pile of oblivious puppets.

It’s easy to find who the pretenders are…when you tell a whole bunch of people that they are oblivious drones…the ones that bawl the loudest are the the ones who have been outed.

In 1990 Japan collapsed…and since then all the Japanese car producers have been subsidized by the Bank of Japan with 1% loans..Japan has made emission standards so high that almost no car can pass after 5 years…

The Japanese devalued the yen so that US consumers would buy Japanese imports…

Japan has been on US consumer Life support for 18 years…

It’s so funny…Somehow the population has been socially engineered to destroy America by worshiping Japan…

Really Americans spit on their own country…

Everytime a US consumer buys an Import…They are slowly committing economic suicide.

Cry and moan all you want.

There is no salvation coming…The just think positive ignore the negative religion strikes again…

The system will at some point implode way past the Great Depression…

This excitement will transform into terror when you all forced to wake up from the daydream into the nightmare.

All the pumping is just short term loans that have to be paid back…90 day loans…

Reguardless the cause of all this is the inability of the US consumer to continue requesting the commercial banks to manufacture new money…it works like this…

In 2007 US consumers were requesting commercial banks to manufacture 12 Billion dollars a day of new money.

Bank prime average this time last year was 8% roughly.

What was the discount window rate at that time? 5.5%

Borrow short term at 5.5% and then sell to consumers long term at 8%

The FED is not pumping…consumers are requesting.

But the discount window was only overnight back in 2007 and then the rules were changed…now it’s been extended to 90 days because consumers have become exhausted and can no longer request commercial banks to manufacture 12 Billion a day like in 2007…now they can only on average request 6.99 Billion dollars a day…

A shortfall of 5 billion dollars a day…meaning the banks are borrowing from the FED just to sustain operations…

Because the consumer can’t…The 42% slowdown in the daily growth rate of the money supply/total debt of the USA is the largest in 62 years.

It’s like this…you are running a business that costs 1000-1200 dollars a day to operate but the customers are only spending 700 dollars a day to support it…and you decide to borrow the difference you need to keep from having to go bankrupt for 90 days in the hope that everything is going to turn around in that time.

And in order to do that…borrowing from the FED…all these banks and financial institutions need collateral…assets…

Without consumers willing and able to service greater and greater amounts of debt…like they have been doing the past 64 years…it’s game over.

The bottom supports the top….the top does not support the bottom at all…and when the bottom reaches the maximum potential to support the top…game over.

There’s the rider…top and the horse bottom…and the rider whips the horse over and over trying to get the horse to ride straight up faster and faster…but the horse is exhausted won’t move and eventually drops dead from the whippings…

The rider then runs to congress and demands they change the regulations making it illegal for exhausted horses to refuse to do what the master wants them to do.

Problem solved…

At some point they will have to shut everything down…

Stages of a compounding interest commercial banking system.

Stage 1

Bankruptcy of the banks, collapse of the economy/division of labor, and the consolidation of power.

Attaching interest to the medium of exchange bacially forces the population to request more and more new money to be manufactured by the commercial banking system until maximum potential is reached…then the population either can’t or refuses to request more new money to be manufactured and the system cannibalizes itself and implodes.

There are 1000’s of banks in the USA that are going to implode…

The FED is pumping?…Like your heart pumps when you are bleeding to death…

source: http://hypertiger.blogspot.com/