OMG...This is scary! from the federal reserve....

Urgent! Look at this from the Federal Reserve!!!:

research.stlouisfed.org...

Note the data dated 9/1/01...10 days before 9/11....is about 15 times higher than all the prior average data dating back to 1959 which was very static and stable up to that point...the data then returns to normal until march 1 2008, at which time it goes bezerk. Then it hits a new peak....an astronomically high new peak...on April 1st 2010, the same month Deepwater Horizon blew up...after that it begins to reverse...

Here's the chart version that should scare the hell out of you:

research.stlouisfed.org...

Look how small the 9/11 blip on the chart is compared to recent activity....

What is this???

Please if you know anything about economics, help explain!

What I think this is (and I may be wrong) is a cocked and loaded economic disaster ready to fire off....A mountain of money printed, and ready to be pumped into the economy triggering disasterous hyperinflation reminiscent of 1930's germany...

I think this is the collapse of the dollar and the American economy...and were just going over the cliff now...

Please tell me I'm wrong!

I can't explain it so hopefully someone who has experience with these charts will come in and give us an explanation.

Ill be checking in on this thanks s and f.

Thanks...this has me thinking I better stock up on the canned foods quickly!

Ok... sooooo... what you have here is chart that shows how much money banks are borrowing from the federal reserve to shore up thier personal reserves. It is important to remember that banks are required to have a certain percentage of cash on hand for the deposits that show on their books. Since banks are also creditors, in addition to holding deposits, what you are seeing on this chart is that revenue is so low that the bank is required to borrow money from the federal reserve to maintain their required reserves. It appears alarming but in reality is VERY expected given the current economy. Pay particular attention to he fact that the chart does NOT cover the period of the great depression so it lacks historical context.

It's funny you should post this. This very chart, when it initially went negative is one of the first things that woke me up, caused me to start doing research and ultimately led me to this site.

Because I had only looked at the chart, I didn't see that bizarre anomaly 10 days before 9/11... THAT is odd.

What I think this chart represents is (earlier) the negative state the banks had run into when they went to the government demanding their bailout and the following spike is the result of said bailouts and the money they have made using that bailout money.

I am by no means any kind of expert so if a better explanation comes along I'd sure be glad to hear it.

Ok heres one that goes back to before the great depression:

research.stlouisfed.org...

Your suggesting that banks aquiring unprecedented dollars for thier reseves unlike any time before in history is nothing to worry about? Then why hasn't this happened before on the chart?

Something that abnormal in the change of banking behavior in decades seems hella-scary to me!

Maybe also Bank Run #1...remember the threads?
Where is #2?

reply to post by grom0007


You are not understanding this chart. It is NOT representative of teh amount of cash on hand. It represents what banks are BORROWING from the Federal Reserve in order to maintain their required cash reserves.

Let me paint it like this... banks lend money, they also maintain deposits. Because our system is fractional reserve it means that they must reserve a fraction of their assets as liquid to satisfy depositors withdrawal requests. If receipts from debt payments are not being made, and they're definitely not, then the bank must borrow against its outstanding loans from the federal reserve to maintain their legally required cash reserves. Again, these are NOT representative of cash reserves on hand, but representative of what they must borrow from the federal reserves to maintain their cash reserves. Again, not good, but not tragic either. Mostly it would seem to support deflation if the trend were to continue upward. It seems to have momntarily reversed. Good thing to keep and eye on. But at this point, my best economic idicators are those in my own community.

please take note of the disclaimer
on that page that explains some
of the jumps.

The series is calculated by the Federal Reserve Bank of St.Louis.
Prior to 2003-01-01, the data are calculated as excess reserves
minus total borrowings plus extended borrowings.

From 2003-01-01 till 2007-11-01, the observations reflect
excess reserves minus total borrowings plus secondary
borrowings.

From 2007-12-01, the definition changes to excess reserves
minus discount window borrowings plus secondary borrowings.

Please, check the latest definition of the
discount window borrowings at

research.stlouisfed.org...

Originally posted by grom0007
Note the data dated 9/1/01...10 days before 9/11....is about 15 times higher than all the prior average data dating back to 1959 which was very static and stable up to that point...

If I had to guess I would say the data has been entered by month and not month-day. The fact that it is reported as 9-1-01 is an error and is really the data collected for the entire month, hence why there is such a huge anomaly.

I dont think that accounts for the spike. The chart stayed consistant for 5 years plus after that point. The definition change seems minor.

I do agree that it is a [somewhat?] changing metric without historically significant reference ranges included,

That last part of the graph, falls in the same metric,

& it is rising to about 1.1 Trillion dollars.

I suspect this is banks profiteering from very low interest rate borrowing from the Fed [0.0 - 0.5%] & putting it into significantly higher yet probably secure returns, such as treasuries, currently around 3.5%.

That is still one hell of a lot of money, which under normal times would be the Fed practically giving money away to banks,
but at this point it is probably the ICU last ditch life support for zombie [essentially insolvent] banks.

If there are any banks that were solvent going into this, they may be profiting quite handsomely.
Others are just propping up dividends & seeming profits, while their asset bases are largely rotten or wildly overstated.

Maybe something is wrong with me but i find i am somewhat complacent,
even when it comes to the BP oil spill that is destroying hundreds of miles of Southern US coastline as well as surrounding fishing zones.

I guess i feel helpless, but i also feel at ease about it.
I really can't see where i can or could do much if anything about it, so i guess i don't worry about it. Well not TOO much anyway.

Originally posted by grom0007
I dont think that accounts for the spike. The chart stayed consistant for 5 years plus after that point. The definition change seems minor.

I do not think they are minor.
Funny how they soar at the same time
Fannie and Freddie were losing ground.
Now there's a conspiracy

Fannie and Freddie's money went to the
Federal Reserve !!!!!

800+ BILLION dollar bailout would make sense for one giant spike like that.

Not sure though...

I've been re-reading Robert Anton Wilson's Schrodinger's Cat trilogy. It's amazing to me how Wilson's older works are still so very relevant. One thing stood out tonight...

"Money is the Schrodinger's Cat of economics."

Does that speak to anyone else or is it just me, lol?

Maybe it is some kind of game they are playing and they like to play it when everyone is looking the other way like 9/11 or the oil leak.



We must always watch the other hand. Like right now it is a perfect time to slip stuff by us unnoticed.

Well if you want to shock people with a blown economy then you need a distraction like the BP oil spill to draw their attention away from the causes...also one would need to have the ability to use that "natural" event to explain why the policies failed to bring economic recovery, I wouldn't put it past anyone with Executive power to not cause a problem to then later use to explain away the failures of policy, works the same with 9-11 and Bush and Gulf Spill and Obama, we do not look to recover anytime soon and so a "natural" explanation was "created'.

Originally posted by slank

but at this point it is probably the ICU last ditch life support for zombie [essentially insolvent] banks.

Ding ding ding! Something which has been on my mind lately is "Where are the multitude of failed banks the FDIC predicted at the beginning of the year?" What better way to completely expose this farcical "recovery" to the American people than by allowing failing banks to actually fail? Thus, they are being held on quiet life support by the FED until it is determined that we are either:
A) Out of the woods and really headed towards some perversion of a "recovery" (which will likely be more like a person who survives cancer, but never really regains their strength and lives the remainder of their life a sickly shadow of the robust being they once were)
B) Tanking

This is just one tiny piece of the puzzle which I've been wondering about. How are we surviving at all right now? Seriously I ask this. It seems like we are perpetually staring at certain doom if one more thing goes wrong, yet how many things have legitimately gone wrong lately... yet we survive. The system MUST be getting propped up from somewhere and maybe these spikes indicate the source?