May 20, 2014 By Joseph P. Farrell

Many of you notices these two stories over at Zero Hedge, and since I have been predicting an inevitable backlash against Washington's heavy-handedness, and the inevitable BRICSA backlash against the reserve currency status of the US dollar, the following stories are worthy of mention:

Russia, China, Iran hold De-Dollarization Meeting

Of course, there's nothing new there, and, underneath it all, it's more of the same from those three countries. But it is in the context of that "de-dollarization" of the world that one might wish to consider the following story from Zero Hedge very carefully:

Russia Dumps 20% Of Its Treasury Holdings As Mystery "Belgium" Buyer Adds Another Whopping $40 Billion

As the second article makes clear, Belgium is probably acting as a custodial player for someone hidden, and it is equally clear that Russia is selling its US treasuries, or rather, hemorrhaging them.

The real question is, who is buying them, and what does this really mean? Well, here comes the high octane speculation: who has the money to buy this much US treasuries? One answer is the Federal Reserve itself. Why might it buying them through a custodian? There are the obvious answers that it is doing so to continue trying to prop up the dollar by convincing the world that there are still buyers for US treasuries in huge amounts, a scenario more or less suggested by Zero Hedge's article.

The problem with that scenario, as I see it, is that such huge amounts of buys through a cutout(Belgium) is not a move that would induce me - if I had a few billion lying around that I didn't know what to do with - to purchase US treasuries. In fact, it would make me run the other direction. It's not a move that I can fathom as one designed to introduce or restore confidence, but rather, the opposite: it's a measure that, in the final analysis, does not restore confidence, and that may indeed be part of the game plan. But there is another possibility here as well, and this is not only high octane speculation but sub-orbital speculation. In fact, it's so nutz, so crazy, I almost hesitate to mention it. Suppose those bonds that are being bought in/by Belgium were in some way earmarked for certain things at the time of their issuance. Suppose, in other words, that they are part and parcel of the whole 1990s, "pump and dump" scheme; suppose they are specifically or deliberately connected to the quadrillions derivatives and other bubbles out there...

... in that case, the buys make perfect sense, because it's about house-cleaning, not confidence. Indeed, one cannot have confidence, without a clean house. If this crazy scenario has any merit, then it will be interesting to watch the behavior of other major holders of US treasuries, and if in any major sell-off, Brussels once again steps forward as the cutout. If so, then I strongly suspect we're looking at a huge and coordinated effort to clean house. If this scenario - and I totally admit its radical crazy nature - is true, then Russia's actions and those of the BRICSA nations still makes sense: until you get your house in order, we're doing our own clearing and bi-lateral currency agreements.

...there is of course an even crazier  speculation, but I'm not even going there...

See you on the flip side.