Global Financial Intrigue. What is the Fed up to?

[Dover]

Okay, I'm no economist or weatherman, and I don't read tea leaves either. So what does this mean and why does it leave me with a sense of foreboding of a coming economic mega-storm?

December 23, 2005

What's the Fed Up To With the Money Supply?
by Robert McHugh


Over the past two days, December 21st - when our first Hindenburg Omen (of whatever cluster is coming) - and Thursday December 22nd, the Federal Reserve has conducted one of the largest two-day Repo injections of money into the system since back in September 2001. On Wednesday they added $18.0 billion in reserves and on Thursday they added another $20.0 billion. Is this a coincidence, coming right as we get another Hindenburg Omen? Probably not. Is something high-risk going on behind the scenes here? Let's review some facts at the Fed. On November 10th, 2005, shortly after appointing Bernanke to replace Greenbackspan, the Fed mysteriously announced with little comment and no palatable justification that they will hide M-3 effective March 2006. M-3 has been the main staple of money supply measurement and transparent disclosure since the Fed was founded back in 1913. It is the key monetary aggregate that includes Fed Repo transactions, that mechanism whereby the Fed increases reserves. The date when M-3 will start being hidden also happens to be the exact month that Iran will declare economic war against the U.S. Dollar by trading its oil in Petro-Euros on its new bourse. But there is more. The Federal Reserve currently has three vacancies within the 19 top Regional Bank and Board of Governor spots. Why? Part of ongoing wholesale resignations.

...cont'd

http://www.safehaven.com/showarticle.cfm?id=4331&pv=1

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An old article on the intrigue surrounding Iran's new oil Bourse (currency exchange in petro-euros).

The Real Reasons Why Iran is the Next Target:
The Emerging Euro-denominated International Oil Marker


The Iranians are about to commit an "offense" far greater than Saddam Hussein's conversion to the euro of Iraq’s oil exports in the fall of 2000. Numerous articles have revealed Pentagon planning for operations against Iran as early as 2005. While the publicly stated reasons will be over Iran's nuclear ambitions, there are unspoken macroeconomic drivers explaining the Real Reasons regarding the 2nd stage of petrodollar warfare - Iran's upcoming euro-based oil Bourse.

In 2005-2006, The Tehran government has a developed a plan to begin competing with New York's NYMEX and London's IPE with respect to international oil trades - using a euro-denominated international oil-trading mechanism. This means that without some form of US intervention, the euro is going to establish a firm foothold in the international oil trade. Given U.S. debt levels and the stated neoconservative project for U.S. global domination, Tehran's objective constitutes an obvious encroachment on U.S. dollar supremacy in the international oil market.

Cont'd

The URL of this article is: http://globalresearch.ca/articles/CLA410A.html
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Red lines in the Iranian sand
By Praful Bidwai

NEW DELHI - Now that Iran has broken the seals it put two-and-a-half years ago on an atomic research facility at Natanz, 250 kilometers south of Tehran, it has passed a "red line" that makes a tough response almost inevitable.

British, French and German foreign ministers (the European Union 3 - EU-3) were due to meet in Berlin on Thursday to call for an emergency session this month of the International Atomic Energy Agency (IAEA), the United Nations' nuclear watchdog, which would then discuss a referral of the dispute to the Security Council.

European officials warned that Tehran would have to reinstate the
seals and refrain from all the activities it announced this week if it wanted to avoid a UN referral. Tehran has given no indication that it will back down.

Mohamed ElBaradei, the IAEA's head, said by resuming nuclear fuel research in defiance of previous agreements, "Tehran had crossed a red line ... We are at a stage where what is happening this week could turn into a major crisis." cont'd

http://www.atimes.com/atimes/Middle_East/HA13Ak02.html

[katsy]

1. Isn't this why Iraq was attacked?

Wasn't Saddam going to trade oil in Euros?

[Dover]

3. It seems that had something to do with it.

Might want to check out this thread:

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=364&topic_id=51519

[FloridaPat]

5. Sadam was trading in Euros since right after 9-11.

This was probably 1 of 2 reasons Iraq was invaded - the other being the oil since that invasion had been planned since the late 1990's.

[katsy]

8. Thanks n/t

[depakid]

2. Yep- I figured the M-3 deal was tied to the Bourse

this article just confirms what I've been thinking.... it'll be curious to see how this all plays out.

[Dover]

4. Would you mind, terribly, explaining to those of us who need a little help

with these economic indicators? Apparently you have been watching and making connections between these events and I, for one, would really like to understand it better.

Thanks!

[FloridaPat]

9. I;'ve been asking the same thing. I think it means we're in big trouble.

Seems * has increased the total world US dollar money supply around 40-45% since he's been in office. Remember Germany right before WWII? They had to bring in a wheelbarrow full of marks to buy bread. Now there was a picture where printing these dollars has something to do with the national debt. But I was under the impression foreign countries are buying that debt. Some people have told me the two are different things. Which means we're in even worse shape.

Everytime * hides something it's to protect him from us. I don't think this is good.

[FloridaPat]

6. You missed the 1-8 article about how there is $92 billion more added

to the M3. Don't know if this includes the Xmas amounts or not. Either way, it's not pretty.

http://www.safehaven.com/article-4403.htm

[Dover]

7. Thanks for the update. Yikes! Over 177.8 Billion over the past 6 weeks.

From this article:

The following is pure educated speculation: What if Iran goes through with its threat to sell oil for Euros instead of U.S. Dollars? Well, then Dollars won't help you much if you want to buy oil from Iran. So, you sell the Dollars you are holding for Euros. Whenever anything is sold en masse, its value drops. This means less demand for Dollars, which means the Fed will not be able to print excessive amounts of Dollars without further driving down the Dollar's value. There would simply be too much supply. Right now, the Fed can print all the Dollars they want because the demand for Dollars has been on the rise, especially as the cost of oil has risen. In other words, lately it has taken more Dollars to buy oil, so the demand for Dollars has been up. Again, this extra demand has allowed the Fed to print all it feels like with little consequent damage to the Dollar.

However, if the Dollar were to tank - and the Iran oil Bourse should push the Dollar in that direction - it puts pressure on Treasury Bonds and other U.S. financial assets to fall as well, since they are denominated in a declining-value currency. In this event, the Fed would have to step up its buying of U.S. financial assets to lend support to these asset prices - to stabilize U.S. markets. In other words, the Fed would have to monetize the U.S. Treasury's debt, and also monetize equity markets (be the buyer that keeps prices from falling). This would take so much fresh money that the Fed would need to create it in secret. Thus, they would have to announce that they are no longer going to transparently reveal the level of the money supply, but will hide it. The alternative is to punish Iran for - and make no mistake about this - effectively declaring economic war against the United States.