By Steve St. Angelo,
By looking at the symptoms taking place in the financial system, we can see just how bad the situation is becoming.
The Fed was selling an average of $118 billion of its assets every four months over the 2-year period. However, it purchased more than three times that rate of $414 billion in the past 4-month period.
Now, think about this. The Fed announced on October 15th that it would start purchasing $60 billion a month of U.S. Treasuries. The Fed has purchased at most, $240 billion in U.S. Treasuries in the 4-month period. But, the total increase in the Fed’s balance sheet is $414 billion, or $174 billion higher.
So, it also has been slowly adding assets (liabilities) via its Repo Market operations. I call them liabilities because there is no real market for them.
And, as time goes by, the world is going to watch as the majority of so-called ASSETS turn into LIABILITIES.
As I mentioned in previous articles, I believe the “FINANCIAL CRISIS” started on September 15th, when the Fed had to step in with emergency Repo Market Operations and has continued to do so.
While the markets believe the Fed has fixed the problem, it’s only going to get worse. Why? Because the Thermodynamics of oil depletion doesn’t stop and the quality of oil (or net energy) that makes it to the market continues to decline.
Thus, The Federal Reserve increased the value of its balance sheet over the past 4-month period by nearly 10 times the value of all the global above-ground silver stocks:
Investors do not understand this CRITICAL comparison… YET. But, they will in time.
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