This is just hilarious.

Today in Bernake's speach the FED intend to drain liquidity by taking up the banks excess reserves supposedly so they do not enter the market place and create inflation hahahahahahahahahahahahahahahahaha.

In order for this money to get into the market place and create price inflation it normally would have to have been lent out. However with the few people who are credit worthy not willing to borrow as seen by the ever dropping amounts of credit outstanding and the rest of the masses so totally saturated with debt that the banks are unwilling to lend to them how is a US bank to make money and pay those big bonus's.

Fortunately with the repeal of the glass steagall act US banks were allowed to speculate in the equity markets which have now been thrown them into disarray.

This leaves few options for these parasite to make the kind of profits they need without directly going against the politicians interests of getting re-elected. So what are they doing now, well under the guise of draining liquidity the FED was given the new power to pay interest on deposits to it by the banks. Thus the FED which the banks own will take all that money the banks are unwilling and can't loan out and pay interest on it. Now where does the FED get this money, why it prints it and thus in a round about way the banks are printing there own money hahahahahahahahahahahahah.

This is just another shell game and back door bailout to recapitalize the banks and keep them in business as usual.

This does not drain liquidity but actually creates more potential liquidity and future potential price inflation as the rest of the world realizes that these banks are getting a free lunch at there expense.

It will not be long before other countries that actually produce things to sell will not be willing to except the endless supply of US funny money that between the US banks and governemnt is being printed into oblivion.

This latest scheme is just a disguised form of QE or money printing and banker bailout.

What a joke.

All in my honest opinion of course as always.

F.F.