The BLICS group is made up of …
Belgium, Luxembourg, Ireland, Carmen Islands, and Switzerland.
Countries like China and Russia actually have been turning into net “sellers” of US Treasuries since 2011 onwards. This could have been a huge financial disaster for the Federal Reserve to whom they were selling large amounts of US Government securities to.
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Thanks to these new 5 “BLICS” nations, they are being used to purchase huge amounts of US Treasury Bonds. The US Fed is using derivatives and Dollar Swap and Forward Rate Agreements to integrate this bond monetization scheme. QE is being exported through a global integration process using several front offices under their control that they construed many years ago.
It involves permanent reciprocal currency arrangements whereby these foreign central banks manipulate lines to invest in US Treasury’s. The emergence of the “BLICS”, not BRICS, nations, has been a new proxy entity designed solely for this purpose. This undisclosed systemic risk is being spread to secondary nations without the benefit of any investor/trader knowledge through the Financial World. This back door scheme could be the systemic failure that totally brings down our current existing global financial system.
Legitimate buyers of US Treasury Bonds have largely vanished. There has been a huge decline in official bond holdings by our typical traditional former allies.
Quantitative Easing was implemented when the US Federal Government and US Federal Reserve stepped in to manipulate the economy to increase asset values. This was to artificially increase asset prices and enhance the wealth effect. They were trying to postpone the inevitable crash that we are on the cusp of seeing with our own eyes. There has not been any economic growth since 2007. This purported fraud will bring down the whole western financial system and ensure its coming collapse.
Central banks, and central bankers, are in uncharted waters. They do not know how to create economic growth, they do not know how to fight the great boogeyman of ‘deflation’, and they do not know how, or, if they will ever be able to return to a time of “normal” monetary policy. Their pretense of knowledge, of being able to effectively control currencies used by billions of people, is coming to an end.
The US Federal Reserve is using 17 central banks working in concert through currency swaps to maintain the fraudulent monetary system, which are probably tied into Forward Rate Agreements (FRA) and Interest Rate Swap derivatives between central banks and BLICS, which have been quietly bought $818bn in US Treasury’s.
If you have seen the movie “The Big Short”, then think of the FED like the big banks which finally learn/figure out that that house market is about to implode. Even though mortgage defaults are skyrocketing, they hold the market prices steady and even inflate the market more until they can unload their positions and get positioned to prosper from the coming collapse.
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Debt and toxic assets are getting offloaded to unsuspecting investors and countries once again and when the music stops there will always be someone left holding the assets that eventually lose all their value.
In a couple days I will be posting a continuation to this article here, stay tuned!
Chris Vermeulen – www.TheGoldAndOilGuy.com
[Image Courtesy of Wikimedia]