Dollar & US Treasury Dumping Continue While Civil Asset Forfeitures Exceed Burglary; Bank Deposits at Risk

When the United States economy is being threatened by large foreign creditors, e.g. China and Japan, it has no other option but to seize people’s assets, i.e. real estate properties and bank deposits. Already, the amount of police civil asset forfeitures have exceeded burglary in 2014 alone.

This means that officially the real thieves are those behind the Fascist State known as USA, Inc.. Yes, corporatocracy can only survive by being fascist.

So, don’t wait until the banks skim on your hard earned deposits, too, legally.

Once the Biggest Buyer, China Starts Dumping U.S. Government Debt

Min Zeng and Lingling Wei

Oct. 7, 2015 1:34 a.m. ET

Central banks around the world are selling U.S. government bonds at the fastest pace on record, the most dramatic shift in the $12.8 trillion Treasury market since the financial crisis.

Sales by China, Russia, Brazil and Taiwan are the latest sign of an emerging-markets slowdown that is threatening to spill over into the U.S. economy. Previously, all four were large purchasers of U.S. debt.

While central banks have been selling, a large swath of other buyers has stepped in, including U.S. and foreign firms. That buying, driven in large part by worries about the world’s economic outlook, has helped keep bond yields at low levels from a historical standpoint.

In the past decade, large trade surpluses or commodity revenues permitted many emerging-market countries to accumulate large foreign-exchange reserves. Many purchased U.S. debt because the Treasury market is the most liquid and the U.S. dollar is the world’s reserve currency.

Foreign official purchases rose as high as a net $230 billion in the year ended in January 2013, the Deutsche Bank data show.

But as global economic growth weakened, commodity prices slumped and the dollar rose in anticipation of expected Federal Reserve interest-rate increases, capital flowed out of emerging economies, forcing some central banks to raise cash to buy their local currencies.

In recent months, China’s central bank in particular has stepped up its selling of Treasurys.

The People’s Bank of China surprised investors by devaluing the yuan on Aug. 11. The heavy selloff that followed—triggered by concerns that Beijing would permit more weakening of the yuan to help spur growth—caught officials at the central bank somewhat off guard, according to people close to the central bank.

To contain the selloff, the PBOC has been buying yuan and selling dollars to prevent the yuan from weakening beyond around 6.40 per dollar, according to the people.

Data published Wednesday showed China’s foreign-exchange reserves dwindled further in September, a trend that likely will force the country’s central bank to step up monetary easing. The PBOC said currency reserves fell $43.3 billion last month to $3.51 trillion as more funds left the country, the fifth consecutive monthly drop but a less-sharp one than the record $93.9 billion plunge the previous month.

Internal estimates at the PBOC show that it spent between $120 billion and $130 billion in August alone in bolstering the yuan’s value, according to people close to the central bank.

China, the biggest foreign owner of Treasury securities, owned $1.241 trillion Treasury debt at the end of July, down from a record of $1.317 trillion in November 2013, according to the latest data available from the Treasury.

China isn’t alone. Russia’s holdings of all U.S. Treasury debt fell by $32.8 billion in the year ended in July, according to the latest data available from the U.S. Treasury. Taiwan’s holdings dropped by $6.8 billion. Norway, a developed nation hit by the oil-price decline, reduced its Treasury holdings by $18.3 billion.

Some other central banks increased holdings. India increased its Treasury debt holdings to $116.3 billion at the end of July 2015 from $79.7 billion a year ago. The Federal Reserve held $2.45 trillion of Treasury debt at the end of September and isn’t expected to sell U.S. debt soon.

Traders said China’s selling has been a factor in why 10-year Treasury yields have remained near 2% as stock and commodity markets tumbled in recent months. The yield fell as low as 1.6% before the so-called taper tantrum in mid-2013 as the Fed prepared to end monthly bond purchases.

The 10-year yield settled at 2.061% Wednesday, compared with 2.173% at the end of 2014 and 3.03% at the end of 2013. Yields fall as prices rise.

Some analysts have warned for years that persistent fiscal deficits made the U.S. Treasury market vulnerable to a reduction in foreign purchases. But many investors say they believe longtime holders such as China won’t sell bonds in a way that threatens to disrupt the market.

“I can’t rule out China being a big risk to the bond market but it’s not something that is keeping me awake at night,’’ said James Sarni, senior managing partner at Payden & Rygel in Los Angeles, which manages $95 billion. “While they may decide to sell more Treasury bonds, the transactions are likely to be done in a prudent way.”

Indeed, bond yields have remained persistently low for the past decade and have fallen sharply since the 2008 crisis, thanks in part to strong official and private demand for debt deemed safe.

In the 12 months to July, foreign private investors bought long-term Treasury debt at the fastest pace in more than three years.

U.S. bond mutual funds and exchange-traded funds targeting U.S. government debt have attracted $20.4 billion net cash this year through the end of September, poised for the biggest calendar-year inflow since 2009, according to fund tracker Lipper.

A $21 billion auction of 10-year U.S. government notes on Wednesday attracted the second-highest overseas demand on record.

Sales by foreign central banks could accompany a further decline in bond yields, by underscoring the depth of economic problems hitting emerging regions. For over a decade before the recent slowdown, developing nations, led by China, were viewed as the engine for global economic growth.

“We have a problem of insufficient [economic] demand globally,’’ said Michael Pettis, professor of finance at Guanghua School of Management at Peking University in Beijing.

Slack in the U.S. economy argues against a sharp rise in rates, said Mr. Pettis.

“U.S. bond yields are not going to rise significantly unless we have much stronger growth and higher inflation,” he said.

Write to Min Zeng at and Lingling Wei at

Five Major US Creditors Want Their Money Back

17:14 19.11.2015

The US Federal Reserve is going to launch QE4 for the same reason they launched QE3, 2 and 1. They're going to try to stimulate the economy. Now that they stopped QE, the air is coming out of this bubble, says financial analyst Peter Schiff.

Five major purchasers of US debt have been selling US government bonds in a sign of a global economic slowdown spurred by China, according to figures just released by the Federal Reserve Board in Washington.

The largest holder of US Treasuries, China shed $12.5 billion in American bonds in September with Japan selling a hefty $19.9 billion.

The Caribbean offshore companies dumped $7.2 billion, the OPEC countries — $1.9 billion and Brazil – $3.7 billion.

Russia slashed its holdings by a mere $0.8 billion to $89.1 billion after a seven-year record purchase of $21.4 billion in July and August.

In September Britain and India shed $8.9 billion and $2.1 billion in US bonds while the BRICS countries sold an equivalent of $18.9 billion.

These sell-offs were made up for by massive purchases by Ireland, Switzerland, Luxembourg, Singapore and a number of other creditors.

As a result, September saw foreign central banks buying 3 billion dollars’ worth of US Treasuries in the first such jump in five months bringing the total figure to just over $6.1 trillion.

Since January, large government purchasers of US debt have shed 115.3 billion dollars’ worth of US notes and bonds.

If this trend continues, 2015 will become the first time sovereign creditors have sold US Treasury bonds.

Police Civil Asset Forfeitures Exceed All Burglaries in 2014

Submitted by IWB, on November 17th, 2015


by Martin Armstrong

Between 1989 and 2010, U.S. attorneys seized an estimated $12.6 billion in asset forfeiture cases. The growth rate during that time averaged +19.4% annually. In 2010 alone, the value of assets seized grew by +52.8% from 2009 and was six times greater than the total for 1989. Then by 2014, that number had ballooned to roughly $4.5 billion for the year, making this 35% of the entire number of assets collected from 1989 to 2010 in a single year. According to the FBI, the total amount of goods stolen by criminals in 2014 burglary offenses suffered an estimated $3.9 billion in property losses. This means that the police are now taking more assets than the criminals.

The police have been violating the laws to confiscate assets all over the country. A scathing report on California warns of pervasive abuse by police to rob the people without proving that any crime occurred. Even Eric Holder came out in January suggesting reform because of the widespread abuse of the civil asset forfeiture laws by police.

Bloomberg News has reported now that Stop-and-Seize authority is turning the Police Into Self-Funding Gangs. They are simply confiscating money all under the abuse of this civil asset forfeiture where they do not have to prove you did anything. Prosecutorsare now instructing police on how to confiscate money within the grey area of the law.

A class action lawsuit was filed against Washington DC where police were robbing people for as little as having $100 in their pocket.  This is getting really out of hand and it has indeed converted police into legal criminals or “gangs” as Bloomberg News calls them.

U.S. banks already can take your money

2010 Dodd-Frank gives FDIC authority to skim accounts for ‘bail-in’

Published: 10/01/2013 at 9:07 PM


Michael Maloof

WASHINGTON – Banks “too big to fail,” or TBTFs, already have authority in the United States to impose an unlimited Cyprus-style “bail-in” that confiscates the savings of depositors, stockholders and shareholders in lieu of a federal taxpayer bailout.

The Cyprus-style bail-in for banks occurred last year when the Cypriot government decided to take all uninsured deposits above 100,000 euros to apply to recapitalizing the island’s failing banks. WND recently detailed the initial impact that such action caused depositors on that island country.

Such a bail-in is considered to be the “new collapse template for the Western banking system,” according to financial expert James Sinclair.

This template now is being applied in the United States on bank depositors’ savings accounts and on shareholders and stockholders, especially of banks said to be too big to fail.

These TBTSs inclue Citigroup, Bank of America and JP Morgan Chase.

“It’s now legal for a big bank to confiscate your money without warning and at their discretion,” Sinclair said.

Similar action is being undertaken in Europe following the example of Cyprus. As WND recently pointed out, finance ministers of the 27-member European Union in June had approved forcing bondholders, shareholders and large depositors with more than 100,000 euros in their accounts to make the financial sacrifice before turning to the government for help with taxpayer funds.

That authority derives from a little-noticed 15-page December 10, 2012, joint resolution paper from the Federal Deposit Insurance Corporation, or FDIC, and the Bank of England, or BOE.

FDIC and BOE decided to issue this joint authority to make sure that financial institutions operating in their respective countries will operate “unaffected, thereby minimizing risks to cross-border implementation.”

“The FDIC and the Bank of England have developed resolution strategies that take control of the failed company at the top of the group, impose losses on shareholders and unsecured creditors – not on taxpayers – and remove top management and hold them accountable for their actions,” the FDIC/BOE paper said.

The FDIC/BOE paper points out that its authority to act in such a way is buried in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 which was passed in response to the 2009 financial crisis.

Their purpose is to “ensure continuity of all critical services performed by the operating firm(s), thereby reducing risks to financial stability.

“The financial crisis that began in 2007 has driven home the importance of an orderly resolution process for globally active systemically important financial institutions,” the joint paper said.

The paper said that losses would be assigned to shareholders and unsecured creditors of the holding company, and “transfer sound operating subsidiaries to a new solvent entity or entities.”

“The unsecured debt holders can expect that their claims would be written down to reflect any losses that shareholders cannot cover, with some converted partly into equity in order to provide sufficient capital to return the sound businesses of the G-SIFI (globally active, systemically important, financial institutions) to private sector operation,” the joint document said..

“Sound subsidiaries (domestic and foreign) would be kept open and operating, thereby limiting contagion effects and cross-border complications,” it said.

The joint resolution said that large financial institutions can resolve their recapitalization needs through depositor wealth confiscation that can be pursued in the case of a systemically important institution such as the Bank of America, JP Morgan and Goldman Sachs, to name a few.

The irony is that the FDIC is not sufficiently capitalized to sustain FDIC-insured deposits for any major bail-in, Sinclair said.

“FDIC will not pay in cash, but will rather pay in special issue U.S. Treasury instruments that will be salable only over a five-year period,” he said.

Sinclair said that the risk of implementing bail-ins will be much higher in 2013 and 2014 than it was at the height of the 2009 financial crisis.

He said that bail-ins don’t even require a crisis to occur and can surface one bank at a time and spread out over years.

As a consequence, Sinclair said that “too big to fail is no longer valid at all.”

He said that the major concern is over deposits above insurance levels in banks too big to fail.

“Those deposits are directly in harm’s way,” Sinclair said. “The next situation is your retirement account as targets for the IMF and governments to secure as fonts of capital into which to place sovereign paper.”

FDIC insures deposits up to $250,000, but Sinclair said that the FDIC is not capitalized to insure this amount of deposit, especially with many depositors.

In addition, it may be questionable whether the insured can collect on multiple FDIC insured accounts of $250,000.

The idea that you can have multiple FDIC insured account at $250,000 and collect on all of them is a pure gamble on the goodness of the government’s interpretation,” Sinclair said.

“The idea that the FDIC or SIPC (Securities Investor Protection Corporation) will pay in cash is total madness in a systemic crisis,” he said. “They will pay in special issue U.S. Treasury instruments that will be salable only over a specific amount of years, more than likely five years.”


California public workers may be at risk of losing promised pensions

Los Angeles Times

CalPERS building

As millions of private employees lost their pension benefits in recent years, government workers rested easy, believing that their promised retirements couldn’t be touched.

Now the safety of a government pension in California may be fading fast.

Feeling the heat is the state’s huge public pension fund, the California Public Employees’ Retirement System, known as CalPERS.

The fund spent millions of dollars to defend itself and public employee pensions in the bankruptcy cases of two California cities — only to lose the legal protections that it had spent years building through legislation.

The agency’s most significant setback came in Stockton’s bankruptcy case. The judge approved the city’s recovery plan, including maintaining employees’ pensions, but ruled that Stockton could have legally chosen to cut workers’ retirements.

In his written opinion, U.S. Bankruptcy Court Judge Christopher M. Klein blasted CalPERS as “a bully” for weighing in on the proceeding to insist — wrongly — that the city had no choice but to pay workers their promised pensions.

Karol Denniston, a public finance lawyer at Squire Patton Boggs, said Klein’s ruling was “critical for every municipality in California.”

“Next time we see a Chapter 9 bankruptcy filing,” she said, “pensions will be up for negotiation just like every other creditor.”

The skyrocketing bill for pensions is a problem for cities across the state. Californians now owe nearly $200 billion for pensions promised to state and local government workers, according to an analysis by Adam Tatum, research director at California Common Sense, a nonprofit think tank.

Rising pension costs are eating up money needed for things such as fire trucks and street repairs, Tatum said.

As the focus now shifts 400 miles south — to the city of San Bernardino’s bankruptcy case — the pension fund faces a new legal challenge from two companies owed $50 million. The companies say it’s illegal for the city to continue paying CalPERS to fund workers’ pensions while they get nothing.

Moody’s, the Wall Street rating firm, warned last fall that the two cities will continue to face financial stress after bankruptcy if they don’t reduce workers’ pensions.

Pensions on the cutting block. Are you at risk?

John W. Schoen

When it comes to the recent improvement in state finances, one retiree’s pain is another one’s gain.

More than five years after the Great Recession tore a giant hole in their budgets, most states have made big progress in stabilizing their finances.

That’s good news for millions of state taxpayers and the millions of investors who hold state-issued municipal bonds—many of whom are retirees that depend on them for a steady stream of safe income.

But the improved fiscal health owes much to a wave of cuts that have whittled away at pension benefits for current and future retirees.

“Nearly every state since 2009 enacted substantive reform to their retirement programs—including increased eligibility requirements, increased employee contributions reducing benefits, including suspending or limiting cost-of-living increases,” said Alex Brown, research manager at the National Association of State Retirement Administrators.

More than 45 states have wielded the budget knife on pension benefits, deploying a variety of these changes and resulting in overall benefit cuts averaging 7.5 percent, according to an analysis by the NASRA. That also means new employees can expect to work longer and will need to save more on their own to match the benefits paid to existing employees and current retirees.

Pressure to cut public pension benefits rose sharply in 2007, when the global economy collapsed under the weight of a massive credit bubble, and states fromMaine to Hawaii were hit by the fiscal storm of a lifetime. Surging unemployment cut deeply into income and sales taxes. Collapsing property values undermined a once reliable tax base.

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