Exchange Stabilization Fund – The Dark Shadows of Money

Research Links

• Wikipedia: Exchange Stabilization Fund

Summary Overview of Podcast

During the great depression of 1934 the government confiscated gold at a price of 20 dollars per ounce and after completing this revalued at 35 dollars per ounce.  The "profit" from this action was about 3 billion dollars in the purchasing power of the time.  This profit was given to the ESF.  Ever since ESF has a mission statement to protect and perpetuate the use of the US Dollar in world trade.  It is very secretive.  No oversight by congress or any type.  They produce no financials.  They operate at the discretion of the secretary of the treasury.  Kirby posits they are involved in everything including drug trade, arms trade, human bondage and regime change. He also suggests they have many trillions of dollars off book "dark dollars".  He suggests the reason why it is such a national security issue is because if the world assumes the US money supply is X and not several multiples of this the value of the dollar could drop by that same multiple.  Many dollars would come home quickly to buy physical assets to get out of dollars.  Hugo Salinas Price of Mexico was trying to figure out why the reserves as reported by the US Treasury around the world were dropping so suddenly.  Kirby dialoged with Price and explained it was because countries around the world were selling their US Treasuries.  So then the question becomes if foreigners are selling why are not interest rates going back up and why is the dollar strengthening?  The FedRes was on an imminent tightening cycle ( Dec 2015 ) and rates were going down.  The narrative and what was happening did not match.  Who or what has the resources to buy a trillion dollar of bonds in a 9 month period when the biggest creditor nations are dumping their treasury bonds. There is only one thing it can be. ESF is the only entity on the planet with the resources, motivation and mission statement to do such a thing.  ESF is active in all financial markets.  They are picking winners and with stealth.  Who are making these decisions? Who decides who and what goes up or down.  The rest of the world is not ignorant of what the ESF is doing.  Foreign governments that have the ability are buying physical precious metals.  Kirby sees this buying increasing monotonically for the forseable future.  He predicts the paper gold system breaking down because of these purchases when they run out of gold.  For every ounce of gold COMEX has there are 500 paper ounces on the market. At what point does someone claim the physical gold the paper gold has claim on.  Some big players understand this is a Ponzi scheme.  880 million ounces of silver are mined per year and 88 million ounces of gold are mined every year.  Roughly 10:1 ratio.  Why is the price of silver 1/88 the price of gold? Kirby posits the price suppression of precious metals can not be maintained long term.

Rob Kirby makes the argument that the ESF is a power above the law and it was behind some anomalies in the economy.  He characterizes the ESF as the "stealth arm" of the US Treasury.

Podcast Notes bullet points

1. Federal Reserve gave a token interest rate increase in December 2015 – They needed to inject reserves in the form of government securities back into the system – The reason? Point #2
2. ESF has been gobbling up all the treasury bonds foreigners have been forced to sell recently.  Approximately 1 trillions.  
3. ESF uses off book dollars – stealth dollars to buy the bonds.  Most accounting methods do not acknowledge these dollars exist.
4. Treasury had to find a way to get these bonds back into the system.  
5. Federal Reserve has only one method to get the bonds back into the system: "Reverse Repo" – Fed sells government securities into the system and takes cash out.
6. With 0% interest rate they could not do the reverses – Thus they had to give the head fake so they could do the reverse repo's.
7. When the ESF using dark dollars to buy treasuries that foreigners are selling those treasuries can't go into a reserve account because those dollars were dark.  So they have to go to a dark place.  They go to a slush account where there is no transparent accounting at all.
8. This is why these treasuries were not showing up in official reserve accounts.  
9. There has to be big enough float for banks to complete their interest rate swap trades. There was beginning to be insufficient on the market because ESF had vacuumed too much up.   The above till now is how Kirby explains why the Federal Reserve head fake with raising interest rates.
10. He explicitly states that the reason rates were raised was not because the "economy was doing well".  We all know that is not true and that the economy appears to be rolling over in reality.  We've been fed an endless stream of doctored data to convince us everything is ok.