Commercial Paper Market Froze in 2008: Warning of Things to Come

The Fed’s Latest Gambit

The new Commercial Paper Funding Facility (CPFF) will provide a backstop to the commercial paper market that has been brought to a standstill, even for those firms far removed from the financial sector.

The immediate threat to the real economy is that large corporations are having difficulty obtaining funds via the commercial paper market,” Mark Gertler, a New York University economist, told Bloomberg.

The commercial paper market reached a three-year low of $1.6 trillion as money-market fund managers, typically huge buyers of commercial paper, became extremely risk averse after a handful of funds “broke the buck.” In a flight to quality mainly into U.S. Treasuries, money market funds liquidated commercial paper holdings by $200.3 billion, or 29%, in the final two weeks of September, according to data compiled by IMoneyNet Inc., Bloomberg reported.

Auto manufacturers, utilities and others make use of short-term lending in the commercial paper market – borrowing money for periods ranging from just overnight to three months – to cover occasional gaps in daily cash flows. The commercial paper market is vital to the ongoing operations for many large corporations, which use the short-term funds to make payroll or pay bills. …

Interstate trucking companies that bring produce to your grocery store in “just in time” deliveries would have come to a standstill.  Gasoline deliveries would stop.  Get the picture?

Our overlords have hollowed out the life support system to the point where we are all dependent on the kindness of strangers.  But it’s all an accident and has nothing to do with the banksters’ decades of planning for a global takeover.  That’s just a conspiracy theory despite the documented evidence like “Tragedy and Hope”

Or the algorithmic application of similar economic tactics around the world as documented in “Confessions of an Economic Hitman” and “The Shock Doctrine”.  Of course the US is a special case, but they’ve done quite well so far.  No wonder they needed a fake “war on terror”, they needed legal justification for domestic repression to decimate local economic activity and bring ownership of everything under the sun into their combine, just as they’ve done in other 3rd world countries for decades.

9/11 was a terrorist attack alright.  But who are the terrorists?