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The Fed’s charter prohibits its from directly purchasing bonds or bills issued by the US Treasury: that process is also known as monetization and various Fed chairs have repeatedly testified under oath to Congress that the Fed does not do it. Of course, the alternative is what is known as “Helicopter Money”, when the central bank directly purchases bonds issued by the Treasury and forms the backbone of the MMT monetary cult.

But what if there is at a several day interval between Treasury issuance and subsequent purchase? Well, that’s perfectly legal, and it’s something the Fed has done not only during QE1, QE2 and QE3, but is continuing to do now as part of its “QE4/NOT QE.” 

Here’s how.

On December 16, the US Treasury sold $36 billion in T-Bills with a 182-day term, maturing on June 18, 2020, with CUSIP SV2. And, as shown in the Treasury Direct snapshot below, of the total $34.3 billion in competitive purchases, Dealers acquired $23.7 billion.

What happened next?

For the answer we go to the Fed’s POMO page, which shows which specific T-Bill CUSIPs were purchased by its markets desk on any given POMO day when Dealers sell up to $7.5 billion in Bills to the Fed.

Exhibit 1: on December 19, just three days after the above T-Bill was issued and on the very day the issue settled (Dec 19), Dealers flipped the same Bills they bought from the Treasury back to the Fed for an unknown markup. Specifically, of the $7.5BN in total POMO, the SV2 CUSIP which had been issued earlier that week, represented the biggest bond “put” to the Fed, amounting to $3.9 billion, more than half of the total POMO on that day, and by far the most of any CUSIP sold to the NY Fed’s markets desk on that day.

But wait, there’s more.

Exhibit 2: during the next POMO conducted the very next day, or December 20, and just four days after the issuance of T-Bill SV2, which as a reminder saw $23.7 billion in Dealer purchase, those same Dealers flipped more of the same Bills they “bought” from the Treasury back to the Fed. Why? To once again pocket the unspecific markup the Fed generously provided to them just because they are Dealers. Of the $7.5BN in total POMO held on Dec 20, the SV2 CUSIP once again represented the single biggest bond “put” to the Fed, amounting to $1.6 billion, the most of any CUSIP sold to the NY Fed’s markets desk on that day.

So what is going on? Well, for all those saying the US may soon unleash helicopter money, and/or MMT, we have some ‘news’: helicopter money is already here, and the Fed is now actively monetizing debt the Treasury sold just days earlier using Dealers as a conduit… a “conduit” which is generously rewarded by the Fed’s market desk with its marked up purchase price.

In other words, the Fed is already conducting Helicopter Money (and MMT) in all but name. As shown above, the Fed monetized T-Bills that were issued just three days earlier – and just because it is circumventing the one hurdle that prevents it from directly purchasing securities sold outright by the Treasury, the Fed is providing the Dealers that made this legal debt circle-jerk possible with millions in profits, even as the outcome is identical if merely offset by a few days. 

Perhaps during Fed Chair Powell’s next Congressional hearings, someone actually has the guts to ask the only question that matters: why is the Fed now monetizing US debt, and pretending it isn’t doing so just because it grants Dealers a 3-day “holding” period, for which it then rewards them generously?

Authored by Michael Snyder via TheMostImportantNews.com,

Many of us are expecting 2020 to be a very unusual year, and it certainly didn’t take long for the weirdness to start. In this article I am going to share several examples of this weirdness with you, and I have a feeling that this is just the beginning of what we are going to experience over the next 12 months. We live at a time when the pace of change has reached at an exponential rate, and our society is literally coming apart at the seams all around us. That makes this a perfect environment for weird stuff to happen, and that means that I will have no shortage of things to write about in the coming days.

I would like to start off by discussing the really bizarre phenomenon that is happening in the skies over Colorado and Nebraska right now. According to the New York Times, hordes of sophisticated drones have been “flying in precise formations” over those two states at night and nobody knows where they are from…

They come in the night: Drones — lots of them — flying in precise formations over the Colorado and Nebraska prairie.

Why are they there? Unclear.

“It’s creepy,” said Missy Blackman, who saw three drones hovering over her farm outside Palisade, Neb., on a recent evening, including one that lingered right above her house. “I have a lot of questions of why and what are they, and nobody seems to have any answers.”

One or two unidentified drones is not a big deal, but we are talking about hundreds and potentially even thousands of drones that are operating in coordination with one another, and nobody has any idea who owns them.

According to the Denver Post, these very large drones “have 6-foot wingspans and spend the nighttime hours flying in grid-like patterns”…

The sheriffs of Lincoln, Washington and Sedgwick counties told The Denver Post on Friday that their offices have been getting calls this week about the unknown winged devices, days after initial reports out of Phillips and Yuma counties caused a national stir.

Local and national authorities say they have no idea who is operating the groups of large drones, reported to have 6-foot wingspans and spend the nighttime hours flying in grid-like patterns.

Needless to say, this phenomenon is freaking a lot of people out, and it is spawning all sorts of theories…

While the powers that be have no answers, the mystery aircraft have inspired a wide range of theories online. It has to be the work of a Mexican drug cartel, one commenter on The Post’s website said. No, no — it’s obviously aliens from a far-off galaxy, another replied. Perhaps it’s the History Channel looking for lost cities, or ranchers trying to track their cows, others theorized.

If you live in Colorado or Nebraska and you have seen these drones, please send me some photos.

I would like to get to the bottom of this, because this is extremely alarming.

On a lighter note, over in Washington state officers recently “spent 10 hours” digging out vehicles that had literally been engulfed by giant tumbleweeds…

State troopers in Washington state spent 10 hours digging cars and a semi-truck out from under hills of tumbleweeds that flooded a road on New Year’s Eve in an event being dubbed “Tumblegeddon.”

Washington State Patrol Trooper Chris Thorson told USA TODAY on Tuesday that his district began receiving 911 calls around 6:30 p.m. local time about tumbleweeds blocking the roadway in an area about 20 miles west of Richland, one of the state’s Tri-Cities.

That particular area of Washington state does have to deal with tumbleweeds, but Washington State Patrol Trooper Chris Thorson has never seen things anywhere close to this bad. According to him, “a strange mixture of weather and circumstances” created just the right conditions for something like this to happen…

“Visibility was bad, which caused cars to slow down,” he said. “When they stopped, the tumbleweeds were piling so fast, they just fully engulfed in minutes. It’s kind a strange mixture of weather and circumstances.

“I don’t know how to really explain it,” he added. “It’s just odd. It’s so odd because it doesn’t happen. Typically, 99 percent of the time, you can drive through tumbleweeds.”

Meanwhile, down in southern Australia they are dealing with colossal wildfires that are unlike anything they have ever experienced before. These fires are so massive that they are actually creating their own weather. The thunderstorms that have been spawned as a result create even more fires, and embers are being pushed out by high winds over a very large area. At one point, thousands of people were forced to take refuge along the beaches because the fire had cut off all other escape routes…

Thousands of holidaymakers and locals were forced to flee to beaches in fire-ravaged southeast Australia Tuesday, as deadly blazes ripped through popular tourist areas and cut off several towns.

In fire-encircled seaside communities along a 200-kilometre (135-mile) strip of coast, terrified people — wrapped in blankets and make-shift facemasks — sought refuge near the water.

As they covered their faces with anything that was available, they huddled along the shore under “an eerie orange sky” as they waited to see what would happen…

Dozens of fires continue to burn out of control in the states of Victoria and New South Wales (NSW). Thousands more people were forced to evacuate their homes along the NSW coast on Tuesday, which is dotted with small beach towns popular with holiday-makers over the Christmas season.

In Batemans Bay, NSW, hundreds of families fled their homes Tuesday under an eerie orange sky. “It was like we were in hell,” vacationer Zoe Simmons told CNN. “We were all covered in ash.”

Of course firefighters are doing all they can to battle these enormous blazes, and quite a few of them have already perished.

One video that shows a raging fire overtaking a fire truck with the crew still inside has already been viewed more than four million times on Twitter.

On the other side of the world, unusually cold and snowy weather is making headlines. In fact, we are being told that some parts of the UK could be about to get as much as 20 inches of snow…

A cold band of weather will hit Norway later this month, bringing with it the potential of snow, ice and potentially sub-zero conditions. Such is the low-temperature forecast, that some reports have stated temperatures will drop to as low as -3C (26.6F) which could potentially drift across the North Sea towards the UK.

Moreover, in a model produced by WX Charts, the snow falling across the UK could be as much as 20 inches (50cm).

In middle America such a storm would not be unusual, but for the UK this is definitely weird.

Unfortunately, things are likely to get even weirder in the weeks and months ahead. Our planet is becoming increasingly unstable, global weather patterns are getting really crazy, we are on the precipice of war in the Middle East, the fabric of society is unraveling all over the world, and we have never been more primed for an economic meltdown than we are right now.

So buckle up and hold on tight, because the ride ahead is not going to be smooth.

A mere hours after Turkey’s parliament in an emergency session voted to authorize its military to send troops to war-torn Libya in order to stave off advancing pro-Haftar forces on the capital, there are new reports rebel forces have downed a Turkish plane, likely a drone, south of Tripoli. 

Benghazi-based General Khalifa Haftar had already long ago essentially declared he would enforce a No Fly Zone for all foreign aircraft, especially Turkish aircraft. 

Sky News Arabia was the first to report Thursday: “Based on our sources, the Libyan army shoots down Turkish plane to the south of the capital Tripoli.”

And in a statement immediately after the Turkish aircraft downing of what appears to be a UAV drone, a spokesman for Haftar’s Libyan National Army (LNA), said according to Sky News:

We reject the existence of any foreign power in Libya no matter what.

Though details are as yet unclear, if confirmed it would be the second Turkish military aircraft within three weeks brought down by the LNA, after a drone was shot down on Dec.14. 

The timing is clearly meant to send a message given earlier in the day Turkish lawmakers approved a controversial motion (325 to 184) at an emergency session to grant a one-year mandate for troop deployment to fight advancing Haftar forces.

The LNA has lately been successful in imposing its no-fly zone in Ain Zara axis, south of Tripoli, according to local sources. 

Turkish media reports have lately confirmed rumors that Turkey has already established a drone base in a Tripoli suburb to bolster air support to the GNA government of Prime Minister Fayez al-Sarraj.

Authored by William Suberg via CoinTelegraph.com,

Bitcoin has already hit a new record in 2020 as the cryptocurrency’s network hash rate once again topped previous all-time highs. 

image courtesy of CoinTelegraph

Data from multiple monitoring resources including Blockchain and Coin Dance confirmed hash rate was higher than ever on the first day of the new year. 

Estimates point to an all-time high for BTC network

A measure of the computing power devoted to validating the Bitcoin blockchain, hash rate spent much of 2019 in a continuous growth cycle. Only for a brief period in Q3 did the upward trend level off.

Strong hash rate suggests Bitcoin is a more appealing proposition for miners – more mining power translates into better network security and robustness against potential attacks.

According to Blockchain, the metric hit 119 quintillion hashes per second (h/s) on Jan. 1.

Bitcoin 1-year network hash rate. Source: Blockchain

Coin Dance’s figures are different, with 143 quintillion h/s recorded for the same date.

Bitcoin 14-month network hash rate. Source: Coin Dance

Markets await “price follows hash rate”

The reason for the variation lies in the fact that the hash rate is all but impossible to measure in real terms. Resources can only analyze recent network activity and from that create an estimate of presumed hash rate. 

In September, what appeared to be an overnight 40% drop in hash rate was subsequently attributed to the way it is calculated. 

The recent records have further come independent of Bitcoin price action. BTC/USD fluctuated between $3,100 and $13,800 last year, but the hash rate trend endured. 

Commentators, including Keiser Report host Max Keiser, have also claimed that hash rate highs will ultimately produce new Bitcoin price highs.

At press time, the pair traded at just above $7,100, down around 3% over the three days covering the hash rate record.

Bitcoin has recently set other technical records, which Cointelegraph reported last week.

At a moment pro-Haftar Libyan forces have reportedly made advanced near Tripoli International Airport, Turkey’s parliament has voted to approve Erdogan’s next controversial foreign military adventure — sending troops to Libya to bolster the government under Prime Minister Fayez al-Sarraj based in Tripoli. 

Turkish lawmakers approved the motion (325 to 184) at an emergency session on Thursday to grant a one-year mandate for troop deployment, despite the clearly ratcheting destabilization in the North African country which has been in essentially a state of anarchy since US-NATO regime change aimed at decades-long ruler Muammar Gaddafi.

GNA prime minister Sarraj made the request of Erdogan’s government last month, after the two leaders signed a maritime boundary and military cooperation deal that’s been hotly contested by other regional countries like Egypt, Greece, and Cyprus.

Interestingly, among the key arguments that supporters of deeper Libya involvement advanced during Thursday’s parliament vote is that national security would be weakened by continued fighting in Libya. “A Libya whose legal government is under threat can spread instability to Turkey,” ruling party legislator Ismet Yilmaz argued. “Those who shy away from taking steps on grounds that there is a risk will throw our children into a greater danger.”

Turkey’s main opposition party, CHP, argued that it would unnecessarily embroil the country into a complicated conflict with no end in sight that would inevitably contribute to the further “shedding of Muslim blood.” One option considered is to simply expand Turkish military training to GNA Libyan troops. 

It’s as yet unclear just how many troops Erdogan has in mind, but likely it would be in the thousands to make a difference against advancing Haftar’s army, who weeks ago declared the ‘final’ and ‘decisive’ offensive on Tripoli was on. 

Turkish Vice President Fuat Oktay said to state-run media Turkey is prepared to send “the necessary number (of troops) whenever there is a need”; however, he also suggested there would be no need to the battlefield tide turns decisively in favor of the GNA. “If the other side adopts a different stance and says ‘OK, we are withdrawing, we are backing down,’ then why would we go?” Oktay said.

Already for years Ankara has poured military hardware into Tripoli hoping to assist the GNA in pushing pack the long advance across the country of Haftar’s GNA. And there are widespread reports and some video evidence confirming Turkish-backed Syrian ‘rebels’ from FSA factions (TFSA) are on the ground fighting on behalf of Tripoli. 

Meanwhile, Gen. Haftar long ago issued an order to his forces to shoot down any unauthorized foreign aircraft, specifically targeting Turkish military aircraft and drones, which naturally raises the question: will Turkish escalation spiral out of control (akin to Syria) the moment Turkish units begin taking on casualties? 

As we observed last week, the whole bizarre Turkish intervention appears to be a “Syrian arms ratline in reverse” scenario, given that Erdogan’s Turkey has for years overseen a Libya-to-Turkey-to-Syria arms “rat line” which saw both heavy weaponry and jihadists fighters transported for the purpose of toppling Assad. But now with Erdogan’s eyes set on defeating the Benghazi-based Gen. Haftar, it appears this arms and jihadist rat line has conveniently been reversed.