Ukraine sends new military equipment to east

The Ukrainian government has sent new military equipment to the eastern parts of the country.

On Tuesday, Ukrainian Prime Minister Arseniy Yatsenyuk inspected the new armored vehicles during a visit to a base for National Guard soldiers near the capital, Kiev.

The new equipment includes armored vehicles with off-road capability.

The nearly 5,000 Ukrainian troops at the base also received new winter gear.

Ukraine’s mainly Russian-speaking regions in the east have witnessed deadly clashes between pro-Moscow forces and the Ukrainian army since Kiev launched military operations to silence pro-Russians in mid-April.

Violence intensified in May after the two flashpoint regions of Donetsk and Luhansk held local referendums in which their residents voted overwhelmingly in favor of independence from Ukraine.

On September 5, a truce was agreed between representatives from the Ukrainian government and pro-Russian forces to pave the way for an end to the crisis in the country's eastern regions.

The United Nations says over 3,500 people have been killed during the conflict in eastern Ukraine.

Kiev and its Western allies have repeatedly accused Moscow of destabilizing Ukraine by supplying arms to the pro-Russian forces, but the Kremlin denies the accusation.

Obama’s Chief Of Staff Caught Shaking Hands With Muslim Terrorist

In 2012, Denis McDonough, the man who would later be promoted to Chief of Staff to President Barack Obama was photographed in Doha, Qatar shaking hands and consorting with a known terrorist. The man McDonough was seen pressing flesh with is Sheikh Abdullah bin Bayyah, a deputy to Muslim Brotherhood’s spiritual leader Yusuf al-Qaradawi. Al-Qaradawi was banned from the U.S. in 1999 and now lives in Qatar.

Denis McDonough greets Sheikh Abdallah bin Bayyah in Doha, Qatar in 2012.

McDonough and Bayyah with ISNA President Mohammed Magid in between.

McDonough and Bayyah with Rashad Hussain on far right.

The occasion of the meeting between Bayyah and McDonough was that both men were featured speakers at the 2012 U.S.-Islamic World Forum (US-IWF), held annually in Doha, Qatar. Yes, McDonough and the Deputy of an virulently anti-Semitic terrorist shared a stage. It is an event co-sponsored by the Brookings Institute and the nation of Qatar. At the time the above photos were taken, bin Bayyah was the Deputy Head of the Union of Muslim Scholars, with al-Qaradawi as the Head. Bayyah’s bio also listed him as being a member of the Organization of the Islamic Conference (OIC).

One of the primary objectives of the OIC is to suppress and ultimately eliminate any speech or expression critical of Islam. Where it can’t be outright criminalized, as Hillary Clinton said at one of the group’s “Istanbul Process” meetings, then we need…

“…to use some old-fashioned techniques of peer pressure and shaming, so that people don’t feel that they have the support to do what we abhor.”

As Obama’s envoy to the OIC, Rashad Hussain has more than once echoed this sentiment. Bin Bayyah’s membership in OIC places all of these individuals at the center of a shared agenda. That agenda was engaged in the days after the Benghazi attack when a video was blamed, less than four months after the aforementioned meeting attended by McDonough and bin Bayyah.

In June of 2013, bin Bayyah was at the center of controversy when he visited the White House. How could the deputy of a Muslim Brotherhood terrorist banned from the U.S. not only find his way into America but into the White House? In this photo, bin Bayyah is seated at a table with several others, including Rashad Hussain:

Abdullah Bin Bayyah at the White House with Hussain (second from right).

A few months later, bin Bayyah formally resigned his position as al-Qaradawi’s deputy. Bin Bayyah was the center of attention again, thanks to the U.S. State Department, which tweeted a link to bin Bayyah’s website, at which he condemned the actions of Boko Haram, relative to the #BringBackOurGirls campaign that was conspicuously launched as the House Select Committee on Benghazi was announced.

As the timeline published by Shoebat.com illustrates, the #BringBackOurGirls campaign was clearly launched to distract attention away from Benghazi. The decision to link to bin Bayyah’s website was presented by the State Department as a mistake but it too was likely another log on the distraction fire.

Then, last week, Barack Obama himself touted bin Bayyah while speaking at the United Nations. Doing so likely took a little attention off the fight with ISIS.

Muslim Brotherhood Spiritual leader Yusuf al-Qaradawi (L) and his Deputy Abdallah bin Bayyah (R)

You can watch video of McDonough’s speech below (before he speaks, you can see bin Bayyah in the front row of the audience). To read more about the US-IWF event, visit Shoebat.com:

"If Something Rattles This Ponzi Scheme, Life In America Will Change Overnight"

I know that headline sounds completely outrageous.  But it is actually true.  The U.S. government is borrowing about 8 trillion dollars a year, and you are about to see the hard numbers that prove this.  When discussing the national debt, most people tend to only focus on the amount that it increases each 12 months.  And as I wrote about recently, the U.S. national debt has increased by more than a trillion dollars in fiscal year 2014.  But that does not count the huge amounts of U.S. Treasury securities that the federal government must redeem each year.  When these debt instruments hit their maturity date, the U.S. government must pay them off.  This is done by borrowing more money to pay off the previous debts.  In fiscal year 2013, redemptions of U.S. Treasury securities totaled $7,546,726,000,000 and new debt totaling $8,323,949,000,000 was issued.  The final numbers for fiscal year 2014 are likely to be significantly higher than that.

So why does so much government debt come due each year?

Well, in recent years government officials figured out that they could save a lot of money on interest payments by borrowing over shorter time frames.  For example, it costs the government far more to borrow money for 10 years than it does for 1 year.  So a strategy was hatched to borrow money for very short periods of time and to keep "rolling it over" again and again and again.

This strategy has indeed saved the federal government hundreds of billions of dollars in interest payments, but it has also created a situation where the federal government must borrow about 8 trillion dollars a year just to keep up with the game.

So what happens when the rest of the world decides that it does not want to loan us 8 trillion dollars a year at ultra-low interest rates?

Well, the game will be over and we will be in a massive amount of trouble.

I am about to share with you some numbers that were originally reported by CNS News.  As you can see, far more debt is being redeemed and issued today than back during the middle part of the last decade...

2013

Redeemed: $7,546,726,000,000

Issued: $8,323,949,000,000

Increase: $777,223,000,000

2012

Redeemed: $6,804,956,000,000

Issued: $7,924,651,000,000

Increase: $1,119,695,000,000

2011

Redeemed: $7,026,617,000,000

Issued: $8,078,266,000,000

Increase: $1,051,649,000,000

2010

Redeemed: $7,206,965,000,000

Issued: $8,649,171,000,000

Increase: $1,442,206,000,000

2009

Redeemed: $7,306,512,000,000

Issued: $9,027,399,000,000

Increase: $1,720,887,000,000

2008

Redeemed: $4,898,607,000,000

Issued: $5,580,644,000,000

Increase: $682,037,000,000

2007

Redeemed: $4,402,395,000,000

Issued: $4,532,698,000,000

Increase: $130,303,000,000

2006

Redeemed: $4,297,869,000,000

Issued: $4,459,341,000,000

Increase: $161,472,000,000

The only way that this game can continue is if the U.S. government can continue to borrow gigantic piles of money at ridiculously low interest rates.

And our current standard of living greatly depends on the continuation of this game.

If something comes along and rattles this Ponzi scheme, life in America could change radically almost overnight.

In the United States today, we have a heavily socialized system that hands out checks to nearly half the population.  In fact, 49 percent of all Americans live in a home that gets direct monetary benefits from the federal government each month according to the U.S. Census Bureau.  And it is hard to believe, but Americans received more than 2 trillion dollars in benefits from the federal government last year alone.  At this point, the primary function of the federal government is taking money from some people and giving it to others.  In fact, more than 70 percent of all federal spending goes to "dependence-creating programs", and the government runs approximately 80 different "means-tested welfare programs" right now.  But the big problem is that the government is giving out far more money than it is taking in, so it has to borrow the difference.  As long as we can continue to borrow at super low interest rates, the status quo can continue.

But a Ponzi scheme like this can only last for so long.

It has been said that when the checks stop coming in, chaos will begin in the streets of America.

The looting that took place when a technical glitch caused the EBT system to go down for a short time in some areas last year and the rioting in the streets of Ferguson, Missouri this year were both small previews of what we will see in the future.

And there is no way that we will be able to "grow" our way out of this problem.

As the Baby Boomers continue to retire, the amount of money that the federal government is handing out each year is projected to absolutely skyrocket.  Just consider the following numbers...

-Back in 1965, only one out of every 50 Americans was on Medicaid.  Today, more than 70 million Americans are on Medicaid, and it is being projected that Obamacare will add16 million more Americans to the Medicaid rolls.

-When Medicare was first established, we were told that it would cost about $12 billion a year by the time 1990 rolled around.  Instead, the federal government ended up spending $110 billion on the program in 1990, and the federal government spent approximately $600 billion on the program in 2013.

-It is being projected that the number of Americans on Medicare will grow from 50.7 million in 2012 to 73.2 million in 2025.

-At this point, Medicare is facing unfunded liabilities of more than 38 trillion dollars over the next 75 years.  That comes to approximately $328,404 for every single household in the United States.

-In 1945, there were 42 workers for every retiree receiving Social Security benefits.  Today, that number has fallen to2.5 workers, and if you eliminate all government workers, that leaves only 1.6 private sector workers for every retiree receiving Social Security benefits.

-Right now, there are approximately 63 million Americanscollecting Social Security benefits.  By 2035, that number is projected to soar to an astounding 91 million.

-Overall, the Social Security system is facing a 134 trillion dollar shortfall over the next 75 years.

-The U.S. government is facing a total of 222 trillion dollars in unfunded liabilities during the years ahead.  Social Security and Medicare make up the bulk of that.

Yes, things seem somewhat stable for the moment in America today.

But the same thing could have been said about 2007.  The stock market was soaring, the economy seemed like it was rolling right along and people were generally optimistic about the future.

Then the financial crisis of 2008 erupted and it seemed like the world was going to end.

Well, the truth is that another great crisis is rapidly approaching, and we are in far worse shape financially than we were back in 2008.

Don't get blindsided by what is ahead.  Evidence of the coming catastrophe is all around you.

Credit to Zero Hedge

THE U.S. GOVERNMENT IS BORROWING ABOUT 8 TRILLION DOLLARS A YEAR

I know that headline sounds completely outrageous. But it is actually true




I know that headline sounds completely outrageous. But it is actually true. The U.S. government is borrowing about 8 trillion dollars a year, and you are about to see the hard numbers that prove this. When discussing the national debt, most people tend to only focus on the amount that it increases each 12 months. And as I wrote about recently, the U.S. national debt has increased by more than a trillion dollars in fiscal year 2014. But that does not count the huge amounts of U.S. Treasury securities that the federal government must redeem each year. When these debt instruments hit their maturity date, the U.S. government must pay them off. This is done by borrowing more money to pay off the previous debts. In fiscal year 2013, redemptions of U.S. Treasury securities totaled $7,546,726,000,000 and new debt totaling $8,323,949,000,000 was issued. The final numbers for fiscal year 2014 are likely to be significantly higher than that.

So why does so much government debt come due each year?

Well, in recent years government officials figured out that they could save a lot of money on interest payments by borrowing over shorter time frames. For example, it costs the government far more to borrow money for 10 years than it does for 1 year. So a strategy was hatched to borrow money for very short periods of time and to keep “rolling it over” again and again and again.


This strategy has indeed saved the federal government hundreds of billions of dollars in interest payments, but it has also created a situation where the federal government must borrow about 8 trillion dollars a year just to keep up with the game.

So what happens when the rest of the world decides that it does not want to loan us 8 trillion dollars a year at ultra-low interest rates?

Well, the game will be over and we will be in a massive amount of trouble.

I am about to share with you some numbers that were originally reported by CNS News. As you can see, far more debt is being redeemed and issued today than back during the middle part of the last decade…

2013

Redeemed: $7,546,726,000,000

Issued: $8,323,949,000,000

Increase: $777,223,000,000

2012

Redeemed: $6,804,956,000,000

Issued: $7,924,651,000,000

Increase: $1,119,695,000,000

2011

Redeemed: $7,026,617,000,000

Issued: $8,078,266,000,000

Increase: $1,051,649,000,000

2010

Redeemed: $7,206,965,000,000

Issued: $8,649,171,000,000

Increase: $1,442,206,000,000

2009

Redeemed: $7,306,512,000,000

Issued: $9,027,399,000,000

Increase: $1,720,887,000,000

2008

Redeemed: $4,898,607,000,000

Issued: $5,580,644,000,000

Increase: $682,037,000,000

2007

Redeemed: $4,402,395,000,000

Issued: $4,532,698,000,000

Increase: $130,303,000,000

2006

Redeemed: $4,297,869,000,000

Issued: $4,459,341,000,000

Increase: $161,472,000,000

The only way that this game can continue is if the U.S. government can continue to borrow gigantic piles of money at ridiculously low interest rates.

And our current standard of living greatly depends on the continuation of this game.

If something comes along and rattles this Ponzi scheme, life in America could change radically almost overnight.

In the United States today, we have a heavily socialized system that hands out checks to nearly half the population. In fact, 49 percent of all Americans live in a home that gets direct monetary benefits from the federal government each month according to the U.S. Census Bureau. And it is hard to believe, but Americans received more than 2 trillion dollars in benefits from the federal government last year alone. At this point, the primary function of the federal government is taking money from some people and giving it to others. In fact, more than 70 percent of all federal spending goes to “dependence-creating programs”, and the government runs approximately 80 different “means-tested welfare programs” right now. But the big problem is that the government is giving out far more money than it is taking in, so it has to borrow the difference. As long as we can continue to borrow at super low interest rates, the status quo can continue.

But a Ponzi scheme like this can only last for so long.

It has been said that when the checks stop coming in, chaos will begin in the streets of America.

The looting that took place when a technical glitch caused the EBT system to go down for a short time in some areas last year and the rioting in the streets of Ferguson, Missouri this year were both small previews of what we will see in the future.

And there is no way that we will be able to “grow” our way out of this problem.

As the Baby Boomers continue to retire, the amount of money that the federal government is handing out each year is projected to absolutely skyrocket. Just consider the following numbers…

-Back in 1965, only one out of every 50 Americans was on Medicaid. Today, more than 70 million Americans are on Medicaid, and it is being projected that Obamacare will add 16 million more Americansto the Medicaid rolls.

-When Medicare was first established, we were told that it would cost about $12 billion a year by the time 1990 rolled around. Instead, the federal government ended up spending $110 billion on the program in 1990, and the federal government spent approximately $600 billion on the program in 2013.

-It is being projected that the number of Americans on Medicare will grow from 50.7 million in 2012 to 73.2 million in 2025.

-At this point, Medicare is facing unfunded liabilities of more than 38 trillion dollars over the next 75 years. That comes to approximately$328,404 for every single household in the United States.

-In 1945, there were 42 workers for every retiree receiving Social Security benefits. Today, that number has fallen to 2.5 workers, and if you eliminate all government workers, that leaves only 1.6 private sector workers for every retiree receiving Social Security benefits.

-Right now, there are approximately 63 million Americans collecting Social Security benefits. By 2035, that number is projected to soar to an astounding 91 million.

-Overall, the Social Security system is facing a 134 trillion dollar shortfall over the next 75 years.

-The U.S. government is facing a total of 222 trillion dollars in unfunded liabilities during the years ahead. Social Security and Medicare make up the bulk of that.

Yes, things seem somewhat stable for the moment in America today.

But the same thing could have been said about 2007. The stock market was soaring, the economy seemed like it was rolling right along and people were generally optimistic about the future.

Then the financial crisis of 2008 erupted and it seemed like the world was going to end.

Well, the truth is that another great crisis is rapidly approaching, and we are in far worse shape financially than we were back in 2008.

Don’t get blindsided by what is ahead. Evidence of the coming catastrophe is all around you.

Credit to Infowars

EMERGENCY MEASURES AFTER EBOLA CONFIRMED IN US

Provisions would allow for quarantine of "well persons" who "do not show symptoms" of virus

Confirmation that the first case of Ebola has arrived in the United States will prompt questions as to whether the CDC will enact emergency procedures that could see even healthy Americans detained against their will.

The Centers for Disease Control confirmed today that an Ebola victim was admitted to the Texas Health Presbyterian Hospital in Dallas. Reference to the patient’s “recent travel history” suggests that the victim arrived from one of the African countries hit by the virus.

The patient has been held in “strict isolation” and the hospital is “complying with all recommendations from the Centers for Disease Control and the Texas Department of Health to ensure the safety of other patients and medical staff,” according to WFAA.


In an understandable effort to prevent hysteria, the CDC has been reticent to release too many details about its preparations for a potential Ebola outbreak inside the United States, although plans currently on the record allow for the quarantine of “well persons” as well as those who “do not show symptoms” of the virus.

The official CDC website details ‘Specific Laws and Regulations Governing the Control of Communicable Diseases’, under which even healthy citizens who show no symptoms of Ebola whatsoever would be forcibly quarantined at the behest of medical authorities.

“Quarantine is used to separate and restrict the movement of well persons who may have been exposed to a communicable disease to see if they become ill. These people may have been exposed to a disease and do not know it, or they may have the disease but do not show symptoms,” states the CDC (emphasis mine).

Last month, former FDA official Scott Gottlieb, M.D. wrote in Forbes that the CDC will invoke powers to “hold a healthy person against his will” in the event of an Ebola outbreak, warning that the feds may assume “too much jurisdiction to detain people involuntarily,” leading to “spooky scenarios where people could be detained for long periods, merely on a suspicion they might have been exposed to some pathogen. And forced to submit to certain medical interventions to gain their freedom.”

An executive order signed by President Obama at the end of July also allows for the “apprehension, detention, or conditional release of individuals to prevent the introduction, transmission, or spread of suspected communicable diseases.”

As we reported earlier today, the CDC has also instructed funeral homes to prepare for Ebola victims, telling workers not to embalm corpses or carry out autopsies.

Credit to Zero Hedge

Another Conspiracy Theory Becomes Fact: The Fed's "Stealth Bailout" Of Foreign Banks Goes Mainstream

Back in June 2011, Zero Hedge first posted:

• "Exclusive: The Fed's $600 Billion Stealth Bailout Of Foreign Banks Continues At The Expense Of The Domestic Economy, Or Explaining Where All The QE2 Money Went"

which we followed up on various occasions, most notably with

• "How The Fed's Latest QE Is Just Another European Bailout" and
• "The Fed's Bailout Of Europe Continues With Record $237 Billion Injected Into Foreign Banks In Past Month."

With the following key chart:

Of course, the conformist counter-contrarian punditry, for example the FT's Alphaville, promptly said this was a non-issue and was purely due to some completely irrelevant microarbing of a few basis points in FDIC penalty surcharges, which as we explained extensively over the past 3 years, has nothing at all to do with the actual motive of hoarding Fed reserves by offshore (or onshore) banks, and which has everything to do with accumulating billions in "dry powder" reserves to use for risk-purchasing purposes (alas understanding that would require grasping that reserves are perfectly valid collateral to use as margin against purchase of such market moving products as e-mini futures, which in turn explains why traders usually don't end up as journos).

Fast, or rather slow, forward to today when none other than the WSJ's Jon Hilsenrath debunks yet another "conspiracy theory" and reveals it as "unconspiracy fact" with "Fed Rate Policies Aid Foreign Banks: Lenders Pocket a Spread by Borrowing Cheaply, Parking Funds at Central Bank"

Wait... the Wall Street Journal said that? Yup.

Banks based outside the U.S. have been unlikely beneficiaries of the Federal Reserve's interest-rate policies, and they are likely to keep profiting as the Fed changes the way it controls borrowing costs.

Foreign firms have received nearly half of the $9.8 billion in interest the Fed has paid banks since the beginning of last year for the money, called reserves, they deposit at the U.S. central bankaccording to an analysis of Fed data by The Wall Street Journal. Those lenders control only about 17% of all bank assets in the U.S.

Moreover, the Fed's plans for raising interest rates make it likely banks will see those payments grow in coming years.

Hmm, we almost feel like we should bring up the dreaded "P" word considering the bolded sentence is a recap of what we said in February of 2013 in "How The Fed Is Handing Over Billions In "Profits" To Foreign Banks Each Year." That's ok, though: imitation, flattery and all that...

So here is Hilsy "figuring out" what we have been explaining for over 3 years!

Though small in relation to their overall revenues, interest payments from the Fed have been a source of virtually risk-free returns for foreign banks. Large holders of Fed reserves include Deutsche Bank, UBS AG, Bank of China and Bank of Tokyo-Mitsubishi UFJ, according to bank regulatory filings. U.S. banks including J.P. Morgan Chase, Wells Fargo and Bank of America Corp. are also big recipients of Fed interest payments, according to the filings.

"It is a small transfer from U.S. taxpayers to foreign taxpayers," said Joseph Gagnon, a former Fed economist at the Peterson Institute for International Economics. The transfer, he added, was a side effect of Fed policy, not a goal.

Actually it is a goal, but that would lead to a whole lot of embarrassing congressional hearings which the Fed would rather avoid, plus nobody really "gets" it. The reason why? Apparently things are so "complex" that anyone who figured it out years ago was clearly a conspiracy theorist:

Behind the payments is a complex interplay between new government regulatory policies and new methods the Fed has developed to control short-term interest rates.

The Fed has pumped nearly $3 trillion into the banking system since the 2008 financial crisis, increasing banks' reserves, in efforts to stabilize markets and boost economic growth.

Since 2008, it has paid banks interest of 0.25% on those reserves. The Fed affirmed this month that the rate it pays on reserves will be the primary tool it uses to raise short-term borrowing costs from near zero when the time comes, likely next year.

In part because regulatory requirements discourage domestic banks from holding more cash reserves than they need, many of the reserves created by the Fed are held by foreign banks.

In other words, the Fed-funded risk-free carry trade finally goes mainstream. Of course, all those who read ZH in 2011 will know all of this by now:

The interest payments totaled $4.7 billion so far this year and $5.1 billion last year, and will increase over time as the Fed raises rates. The Fed remits most of its profits to the U.S. Treasury, and the rising cost of the interest payments could put downward pressure on the amount the central bank sends to taxpayers each year, the Fed has said.

Some observers say this could become a political challenge for the Fed, especially the payments it makes to foreign banks.

"The fact is that the Fed is going to be paying very large amounts of interest to banks," said William Poole, a senior fellow at the Cato Institute and former president of the Federal Reserve Bank of St. Louis. "It's highly likely that some politicians will notice that and given the proclivity of some politicians anyway to demagogue issues, the Fed is going to have some political explaining to do."

Some Fed officials also have expressed concern about how these payments will look. "I think the optics are very difficult to defend and might get us into trouble," James Bullard, president of the Federal Reserve Bank of St. Louis, said in an August interview with MarketWatch.

Since 2009, foreign banks have earned roughly $5 billion by borrowing dollars cheaply, often at less than 0.10%, in short-term funding markets and depositing those funds at the Fed for 0.25%, according to the Journal analysis. That estimate doesn't take into account the costs of raising money through other means, overhead and taxes, which affect net income.

But don't blame the banks - they are merely doing what the Fed is encouraging them to do. And after all who wouldn't collect billions in risk free cash?

A spokeswoman for one bank engaged in the trade, Bank of Tokyo Mitsubishi, said that the growth of excess reserves parked at the central banks is a natural consequence of the Fed's policy. "The share of excess reserve balances held by BTMU has been in alignment with its business footprint in the U.S.," she said.

Deutsche Bank, which had one of the largest reserve balances at the Fed as of June 30, declined to comment. UBS didn't respond to requests for comment. A Chinese official close to Bank of China said it has been parking funds at the Fed in order to help it comply with liquidity requirements in its home market.

The foreign banks' activity is "entirely legitimate because they are providing a financial service and they are taking a spread," said Lou Crandall, chief economist at research firm Wrightson ICAP.

Sadly, the WSJ ends just before it gets good. So without further ado, here is what happens if and when one extrapolates a rising rate environment in terms of Fed handouts to foreign banks, from what we said in February of 2013:

We show the surge in the foreign bank cash level, as well as the cumulative cash interest paid to these banks assuming a weekly cash interest payment. What the chart shows is that from December 2008 through the last week of January, the Fed has paid out some $6 billion in cash (red line) to European banks simply as interest on excess reserves.

But that's just the beginning. If we are correct in assuming that QE3 will be a replica of QE2 when all the new reserves created ended up as cash on foreign bank balance sheets, it means that we can quite accurately forecast what the total foreign bank cash position will be on December 31, 2013 (as the Fed will certainly not end its open ended monetization of the US deficit before then, or likely, ever). The result: just under $2 trillion in cash held be foreign banks operating in the US, which also means that in calendar 2013, the Fed will fund and subsidize foreign banks a blended interest payment of $3.5 billion! This is entirely separate from the $2 trillion liquidity subsidy that Bernanke will also have handed out to keep these banks afloat, and is $3.5 billion that will flow right through the P&L and end up in the pockets of offshore shareholders who otherwise would very likely be wiped out had it not been for the Fed's relentless efforts to bailout foreign banks.

And since it is improbable that excess reserves held by any banks will decline at all in the coming years, one can also assume that the annualized interest paid to foreign banks, which would amount to at least $5 billion pear year, every year, will continue indefinitely as a direct Fed subsidy to the bottom line of Foreign banks.

All of this, of course, ignores what happens should the Fed hike interest rates across the board, which will also mean rising the rates on IOER, once inflation finally strikes: simple math means a 1% IOER means some $20 billion in interest paid to foreign banks, 2% - $40 billion, 5% - $100 billion paid to foreign banks, and so on. Putting these numbers in perspective, let's recall that Italy's third largest bank just got a €3.9 billion bailout (its third), and has a market cap of some €2.9 billion.

We can only hope someone in Congress asks Ben Bernanke in two weeks just under which Fed charter it is that the Fed is more focused on generating profits (not just trillions in excess liquidity) for European banks, than on opening up consumer lending which has been stuck in "petrified" mode for the past 4 years, with the total amount of loans outstanding currently at all US banks - foreign and domestic - at levels last seen the week Lehman filed for bankruptcy.

Obviously, nobody asked Bernanke and nobody has asked Yellen this simple question, because until last night apparently nobody aside from the Zero Hedge community had any grasp of what is going on.

That said, we doubt that anyone in control will ask any related questions in the near of not so near future even with Hilsenrath's "How The Fed Is Bailing Out Foreign Banks For Dummies" primer, because let's not forget - the same banks that control the Fed are also the same banks that purchase politicians at every possible opportunity (see for example:With Cantor Down, Which Other Politicians Has Goldman Invested In?).

In fact, the only good news from Hilsenrath's report is that yet another conspiracy theory has been documented as unconspiracy fact. Then again, Zero Hedge readers knew all of this over three years ago, for free.

Credit to Zero hedge