Government Gets Money For Free

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[Financial Meltdown]

While the stock market has soared 1,500 points off its lows and the government is throwing money at banks and assuming trillions of dollars in risk, the government wishes to assure all Americans that it can control the financial fallout. Perhaps this is true.

But the smart money does not believe this. Today American Financial History was made. For the first time in the history of Treasury Bills the yield on the three month Treasury Bill was recorded at -0.01%- as stated by American financial firms, foreign financial firms and foreign countries purchased $30 billion of three month Treasury Bills for $30 billion dollars- to yield a negative interest rate. Note: Three month Treasury Bills do not have a specified interest rate. The interest rate is determined by the bidder and in this case the bidders determined that they desired an interest rate of -0.01%.

The importance of this cannot be underestimated. The purchasers of these three month Treasury Bills were so afraid of placing their money in American banks (Citibank, JPMorgan-Chase, Bank of New York-Mellon, Goldman Sachs, etc.) for 90 days that these financial wizards merely wished to have their money returned to them intact in three months- and paid the government a small fee to guarantee this money. The money that these wizards paid is comparable to the rate that a federally chartered bank would pay the Federal Deposit Insurance Corporation to guarantee their money. These financial wizards have so little faith in the American banking system that they refused to deposit their money in American banks for fear that the American banking system would collapse.

Just as remarkable was the auction of four month Treasury Bills. The government auctioned off $32 billion of four month Treasury Bills. Foreign Governments, major financial institutions (probably the banks to whom the United States government lended billions of dollars) and scared individuals bid for $126 billion of four month Treasury Bills. The yield on these four month Treasury Bills was 0%. These major investors merely wished the American government to serve as their trustee and hold the money for them.

The only time that I have witnessed this was in the 1990s in Japan, when investors were so afraid of bank failures that investors literally paid the Japanese government to hold their money.

It appears that America is becoming an Islamic society- but not for the reason, which you may believe. The Koran preaches that interest may not be levied on a loan. In America it appears that the economic scene is so dire that interest rates are approaching the Koranic dicta.

In the days of the Roman Empire the denarius was the coin of the realm. The denarius was originally a solid silver coin of a specified weight, 3.9 grams. Nero, who famously played the violin as Rome burned, initiated the debasement of the denarius to a weight of 3.4 grams. Later it was debased to a silver wash coating a bronze coin.

It is readily apparent that the United States Empire shall follow its famous predecessor and debase its currency to further its economic and foreign wars.


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