Fed Laundering Treasury Purchases to Disguise What’s Happening-Paul Craig Roberts

Dr. Paul Crag Roberts: Belgium and US Treasury DebtBy Greg Hunter’s USAWatchdog.com 

In his latest article, former Assistant Treasury Secretary Dr. Paul Craig Roberts says, “The Fed is the great deceiver.”   Why is he making this shocking accusation?   The reason is tiny Belgium’s whopping purchase of $141 billion in Treasury bonds earlier this year.   Dr. Roberts explains, “We know that Belgium didn’t have any money to buy $141 billion worth of bonds over a three month period.  That sum comes to 29% of the Belgium GDP.  So, they don’t have a surplus in their budget that is 29% of their GDP, and they don’t have trade or current account surplus in that amount.  In fact, everything is in the red.  Their budget deficit is in the red, and their trade and current accounts are in the red.  So, Belgium didn’t have the money, and yet, they managed to pick up $141.2 billion in U.S. Treasuries over a three month period.  So, where did they get the money?”  Dr. Roberts, who holds a PhD in economics, goes on to say, “We know their central bank couldn’t have printed euros to buy the bonds with because the Belgium central bank can’t print euros.  Belgium is part of the euro system and has lost the ability to create its own money.  So, the only source for that kind of money would have been the Federal Reserve.  The Federal Reserve thought it needed to hide the fact it was buying $141 billion in bonds over a three month period when it was officially reducing or tapering the quantitative easing down to $65 billion.  It didn’t want to have to admit it was really purchasing $112 billion a month, almost double the announced purchases.” 

Dr. Roberts also says, “I think also the Fed did not want it to get out that some large country is unloading Treasuries.  Somebody dropped over $100 billion in Treasuries in one week.  If that was a large holder and that became known, it could panic smaller holders and you could see a stampede, and the Fed could lose control of interest rates.  So, I think the Fed thought the best thing to do is launder its purchase through a different country; and, thereby, disguise what is actually happening.” 

Why is the Fed worrying about the shell game of Treasury purchases?  Dr. Roberts says, “I think there wasn’t any buyer for the $104 billion in one week.  So, if that kind of bond sale sat unattended, interest rates would rise; and so, the Fed had to buy the bonds in order to protect its interest rate policy.  But, if it outright bought them and this was known, then it starts to interfere with the ‘tapering’ that it promised to do because all of a sudden it’s not ‘tapering,’ at least not for those three months.  It signals somebody is unloading Treasuries, and that could stampede others.  What it indicates is they are not feeling all that confident that the dollar is on such a sound footing, or the U.S. financial system is on all that much sound footing that they can openly step in and take up that type of purchase.” 

On the steep drop in GDP growth of a paltry .1% in the first quarter, Dr. Roberts says, “What I find most amusing about this is they had to claim some real growth in the first quarter; so, they eked out .1%.  Now we know they got that by rigging the inflation number they used to deflate the gross domestic product (GDP).  The real GDP in the first quarter, properly deflated, was negative and probably also in the fourth quarter.  Most likely, this coming quarter, they are not going to be able to hide the fact that it is negative. . . . I am convinced the first quarter was negative, and I don’t see how it could possibly go positive in the second quarter.” 

On Fed Head Janet Yellen’s rosy outlook on the economy, Dr. Roberts debates, “I don’t see how she can see that the economy is going to start growing.  What is going to make it grow?  Why should investors invest money when consumers don’t have any money?  There are not retail sales.  I think it is just part of the rah, rah talk.  Everywhere else in the world is going down the tube.  So, what’s going to push the American economy up?–Nothing that I know of.” 

On the Ukraine crisis, Dr. Roberts says, “I think Washington badly miscalculated this whole Ukraine business.  It was an act of hubris, arrogance and stupidity.  They are mad at Russia for blocking their attack on Syria and blocking their attack on Iran. They said ‘we’ll teach them.’  We’ll give them trouble in their own backyard and not to get in our way anymore.”  The threat of sanctions has made the Russians realize the dollar system is not in their interest, and they are going to leave it. . . . If any significant part of the world stops using the dollar, the price of the dollar falls because demand for dollars falls, and the import cost for America would rise.  When you see how import dependent we are, it would mean a substantial rise in the real cost of living for most Americans.”  

Join Greg Hunter as he goes One-on-One with Dr. Paul Craig Roberts. 

(There is much more in the video interview.) 

After the interview:   
To make a tax deductible donation to help support Dr. Paul Craig Roberts’ work, please click here.  (Please note there is also a snail mail option on the right side of this page.)  To buy or download a copy of Dr. Roberts recent book titled “How America Was Lost,” please click here.   

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Comments
  1. Justin King

    Considering that PCR is now well known on the internet news cycle, this Belgium story will have to be picked-up by someone in the mainstream media, right ?
    RIGHT ?????

  2. armando

    Greg, as someone with an extensive background in both Economics and Geopolitics (recently retired US Naval Officer with a Masters in Economics), I found myself captivated by this superb interview – your fine work truly stands out from the rest! Taking into account that Dr Roberts is a former Assistant US Treasury Secretary (and the father of Reaganomics), this gentleman is probably the most credible individual speaking out on the true state of the US Economy and Geopolitical situation. It seems incredible that the information he provides isn´t on the front page of every newspaper & the top story in every financial news show, the Main Street Media is obviously completely controled by the Government & Wall Street. I can only hope that his message wakes up more people before ¨the wall comes tumbling down¨ or before one of our three-letter agencies decides that his message is too ¨dangerous¨ to permit.

    • Greg Hunter

      Thank you Armando. I hope people wake up too my friend.
      Greg

      • armando

        Greg: I´m not sure what your operation and financial situation are like – but I worry about the safety of people like Dr Roberts and those who put out his message like yourself. While I realize that our bankster-controlled government may drag this out for longer than I believe possible, I cant help but wonder if it will be safe to be at ¨ground zero¨ when the reset takes place. I´ve chosen to reside in safer jurisdictions and have permanently relocated my family overseas. I now enjoy freedom and economic benefits similiar to what we had in the USA in the 1950´s. If it´s a possibility please consider it – and that goes for all freedom lovers.

        • TexasAZ

          I’m curious..Where did you relocate to?

        • wd

          Armando,

          Congrats on that decison. I believe a lot more people will be doing that and I believe they are doing that ( we just don’t get accurate numbers). I am torn between staying here and making that life change. I wish I could ask you but I understand theend for anonymity. I have three countries I am looking at moving to, but its just not in the stars yet. Good luck!!

        • Rickey

          Aramdo; what country did you find that freedom in I know several people looking for a place to relocate to, however there always seems to be an issue with their prospective new home.

        • armando

          After 22 years in the military 8stationed overseas for much of that time) – I realized that the ¨Land of the Free¨ line we´ve been sold is now little more than propaganda. While the US has historically provided many financial advantages and ¨liberties¨ not easily available in most other countries – sadly, times have changed. In fact I generally feel much more ¨Free¨ in almost any other country and I certainly spend alot less to live comfortably. The country I´ve chosen is not necesarily the ideal place for everyone, since there are many factors to consider (such as your particular economic situation and your willingness to adapt to another culture/language). I personally like Central and South America but Southern Europe, Southeast Asia and possibly Australia or New Zealand may be more suitable options for some.

          Minimum monthly income (for a family of 4):
          $1,000-$1,200 – Ecuador, Philipines
          $1,200-$1,500 – Panama, Belize, Mexico, Thailand
          $1,500-$2,000 – Dominican Republic, Spain, Portugal
          $2,000-$2,500 – Chile, Costa Rica, Italy
          $3,000-$4,000 – Australia, New Zealand, Switzerland
          (Belize, Australia and New Zealand are English speaking)

      • nikunj

        I think somewhere Media is not showing correct picture of US inside shadow economy… how can Belgium can buy FED bonds?
        If true information will not come out now then in future common people hhave to face issue.

    • Sadeus MaConnell a r m a n a d o

      The dumbing down of the American populace since the Clinton administration has truly been accomplished. The only hopes and dream’s of the present American administration (dopes), are, Pipe dreams, due to the administrations quest for the legalizations of Marijuana (dope) and the elimination of any drug law enforcement, plus the release of all drug related criminals from prison and any stigma of criminality, from their, records. Put that in your pipes and smoke it, because you toked away any hope, you dopes!
      P.S. To bad Bill didn’t inhale, we might have some hope, because he never would have made it, to president and the maimstreem media wouldn’t have as their only concern today, wither Monica swallowed or not. L O L, Vanity Affair!

  3. Colin - 'the farmer from NZ'

    Hi Greg
    It is always a treat for me to hear PCR’s words of wisdom.
    It would seem to me that if the Fed has to launder bond buying through Belgium to hide the fact that there are a whole lot of bonds coming onto the market that no-one wants, then things are indeed getting pretty desperate. It would be very interesting to know which countries dumped $100b in treasuries in just one week.
    I wonder what country will “buy” the next $100b “worth” and the $2 trillion worth after that!
    Cheers
    Col

    • chris m.

      As I understand it from a Zerohedge blog it was Russia that unloaded their Treasuries.

  4. Kevin

    “Even the grandest of Dog and Pony shows are nothing more than a simple distraction to what really matters” (Nivek)

  5. art barnes

    Greg, if we know the Belgium bought the bonds why don’t we know who dumped and or sold the 100 billion in bonds? Did the FED have to make a deal and pay the Belgium’s to do this purchase and or play along if you will since the premise is that the “deal” wasn’t on the up and up? Is the FED ever subject to having to reveal such “deals”? Since I don’t have a Doctorate in economics your guest raises these questions in my mind and maybe others. Thanks, a.b. PS, Love Dr. Roberts chuckel(s).

  6. Joe Gee

    Good day Greg, Great interview with Dr. Paul Roberts ! I just sent Dr. Paul Roberts a donation….Greg, God bless you and your work…..Joe Gee….

  7. Jerry

    Greg
    I have been saying for the past several months that the Chinese are going to collapse the dollar.

    PCR ( Perfectly Credible Rock star) pretty much puts this in focus when he talked about the Belgium Bond buying scheme. The reason why the Fed was forced to buy bonds and hide them in Belgium , is because no one else wants them. If that isn’t a statement about the confidence in the dollar, I don’t know what is. Forget about the taper talk. Its all lies. Like PCR said, its more like 125 Billion a month instead of the reported 65 Billion.

    Greg, here’s the real kicker. According to my sources, most of the central banks are ready to convert to a new Gold backed Yuan system. In fact I have heard that they have gone as far as a trial run to make sure all their computer systems mesh together in the new network. This is not a new development. The Chinese have had a team of engineers working on this project for at least four years. This upcoming meeting with the Russians is not for show, its is to implement the first phase of this new exchange system. And just remember, the Russians made a deal with the Iranians for cheap oil, so I expect a move on the petrodollar soon, as well. Brace yourself Greg.

    • Greg Hunter

      Jerry,
      I am braced but nobody will be totally ready for what is coming.
      Greg

    • wd

      Jerry,

      Good point! The upcoming news caption should read:

      FOLLOW YELLOW(GOLDEN) “BRICS” ROAD. The BRICS have back.

      1) Gold backed currency
      2) Manufacturing
      3) Strong commodities market
      4) Fundametally sound econ direction.

      This is why US wants to escalate war in Ukraine. Desperation!

      • Jerry

        Good one WD.

      • Galaxy 500

        While I can see international transactions settled in gold, I dont see the evil bankers and their govt lackeys allowing the population this privilege. They give up too much power. It will take second American Revolution to retake the power from the bankers and we would have to be careful about who the leaders are as they may set up their own fiefdom.
        Via the Second Revolution…

    • Sadeus MaConnell________J e r r y,

      What’s to happen to Janet Yellen?
      All the men at the Fed have jumped ship. . . Greenspam. . . Bernake- attack Ben, ect. . .
      Poor Janet will be left holding the bag and the blame, as captain, at the helm, of the sinking, USS Titanic, to go down with this sad, ship of fools! R. I. P.__~