This page has been archived and commenting is disabled.
Clarifying My Views on QE 3
I’ve been
getting a ton of mail concerning my recent assertion that we may have another
round of deflation soon. So I wanted to clarify my position on QE 3 and
inflation.
It is clear,
plain as day that inflation has arrived in the US and that it will be getting
worse in the coming months. However, the markets never move straight up or
straight down. And some of the price increases we’ve seen in commodities are
quite extreme: Silver up over 70% in six months, Oil up nearly 50%, etc.
While
ultimately its own entity, the Federal Reserve IS a political institution.
True, they pretty much do whatever they want… but only to a certain degree. The
Fed can’t just unleash $500 Oil in six months without causing full-scale
rioting. And money printing and interest rates don’t do much as defense against
angry mobs.
So with
political heat turning up due to price increases, not to mention we’re
approaching an election year, the Fed needed to step back for a bit. This is
why they didn’t announced QE 3 yet and why they’re letting QE 2 end: they want
to keep some powder dry to pump the system leading up to 2012.
Consider
that Obama’s legacy so far has been poor to say the least. His recent Bin Laden
success has been the first bump in his poll ratings in months. And he’s not
going to be aggressively moving to improve his image in preparation for the
2012 elections.
Now,
consider that it was Obama who reappointed Bernanke. Do you think Bernanke’s
going to stab the guy in the back? Not likely.
So what we’re
going to see is another brief round of deflation, possibly a few months in
duration. That’s when the Fed will announced QE 3 to juice the system and try
to work some positive economic data for Obama’s 2012 campaign.
Yes, I know
that the economic data in the US is a joke. But the vast majority of people
believe this stuff, so we need to consider its impact. And it’s clear Bernanke is
going to try to craft some kind of economic bounce for Obama’s 2012 campaign.
So, I firmly
believe that we could see another round of deflation this summer. And that’s
when the Fed will begin to stage its next round of intervention/ stimulus:
autumn 2011 going into 2012.
And that’s
when the US Dollar will fall off a cliff as inflation hedges explode across the
board.
On that
note, if you’ve yet to take steps to prepare your portfolio for the coming
inflationary disaster, our FREE Special Report, The Inflationary Holocaust explains not only why inflation is here
now, why the Fed is powerless to stop it, and three investments that absolutely
EXPLODE as a result of this.
All in all
its 14 pages contain a literal treasure trove of information on how to take
steps to prepare AND profit from what’s to come. And it’s all 100% FREE.
To pick up
your copy today, go to http://www.gainspainscapital.com
and click on FREE REPORTS.
Good
Investing!
Graham
Summers.
PS. We also
offer a FREE Special Report specifying exactly how to prepare for the coming
collapse in the US stock market (inflation will NOT be positive for stocks for
much longer).
I call it The
Financial Crisis “Round Two” Survival Kit. And its 17 pages contain a
wealth of information about portfolio protection, which investments to own and
how to take out Catastrophe Insurance on the stock market (this “insurance”
paid out triple digit gains in the Autumn of 2008).
Again, this
is all 100% FREE. To pick up your copy today, go to http://www.gainspainscapital.com
and click on FREE REPORTS.
- advertisements -
If the Fed stops printing, for any reason, Washington collapses and Wall Street collapses. End of story.
Obama may throw Bernanke under the bus, but the printing and the inflation will continue so Washington and Wall Street can keep operating.
No, there won't be deflation. It's not gonna happen.
... unless you call (temporary) reduction of inflation "deflation"
... sorta like congress calls reduction in spending growth "budget cutting".
I also want to clarify your views on QE3.
The first clarification I'd make is, STFU, please.
And finally, if they are stalling, you were closer with your first guess. It will help Treasury teach neophyte fiscal conservatives and Mr. Market a valuable lesson about exactly who's running their fucking planet. Water cannons and illegal searches only go so far.
While the lesson is being learned, the student is asked to remain still with jaw a'slack, providing his teacher access to any gaping maw where QE can be asserted.
Besides, Bill Gross, a certified oracle [no citation needed], suggested on Bloomberg that QE3 will be implemented via Text Messaging and Flash Mobs.
If the Fed stops printing, for any reason, Washington collapses and Wall Street collapses. End of story.
Obama may throw Bernanke under the bus, but the printing and the inflation will continue so Washington and Wall Street can keep operating.
No, there won't be deflation. It's not gonna happen.
... unless you call (temporary) reduction of inflation "deflation"
... sorta like congress calls reduction in spending growth "budget cutting".
Yeh...as mentioned in a earlier post by TruthIn Sunshine, Obama will let Berank take the knoife, and appoint Janet Yellen as Hesd of Fed.
Then the world will have 2 women at the helm...Christiane LaGarde at IMF and Yellen.
Hehe...gotta be close to the ned of the Western world.
Timing this stuff is impossible. Be positioned ahead of time or you miss the rise.
GL!
Deflation for the rest of the summer. I think most of us saw this coming. I'm gonna wait till about July/August, then buy up some silver. Meanwhile, I'm probably going to make sure I have some reasonable amount of cash out of the bank, just incase there's another unforseen disaster that triggers an unplanned collaspe, although I doubt that'll happen, it could.
As for Obama, 2012 and Bernanke, I expect things to be reasonably quiet until after the 2012 election. The banks don't want to give Obama or the Republicans an mandate to crack down on them and their excesses. BUT, after the election, you better get fucking ready becasue that's when shit will hit the fan. I think they'll do whatever they can to keep things steady until then.
As much as a big-eyed puppy in a window chooses its owner. He's soooooo cute, can we keep him?
"It is clear, plain as day..."
...that everything you write, Captain Obvious, is clear, plain as day.
At least it's "100% FREE" obviousness.
Voelcker didn't so much as stab Carter in the back, but he did know his actions (the right course) were going to doom Carter's chance of re-election.
However, and here's the twist - Obama will stab Bernanke in the back. It will be sometime within 6 months. It will be a deliberate means of taking Bernanke out and scapegoating him (not that Obama needs much help villifying Bernanke) well before November 2012.
But it will be theater. Bernanke will take the dive. He'll be blamed for the insidious inflation and terrible shape of the job market and all the disappointment and shock - shock, I tell you - that Obama lackeys will point to Bernanke at for their righteous indignation on the sorry shape of all things economic and populist anger.
The tell is that Obama's fundraising is absolutely anemic compared to 2007/2008, and the soon to be reported number as to how bad it is going will be a shocker. The Obama 2012 worker bees are going to claim that Obama has been more focused on raising money for the DNC than his own campaign.
Maybe, but somehow it will all be Bush's fault.
....It wasnt like he appointed the Bernank.
....It wasnt like he appointed the Bernank.
LOL
Rape charge in Bernanke's future
The Bernank is a serial rapist. Ask anyone who follows economics anywhere on the planet.
Oh, you meant sexual rape...
He'll be caught in an act of bestiality, in a high end hotel, no doubt involving a midget, a horned owl, a chimpanzee and two goats.
You went long oil at 110.
You stopped out of the euro at the top 1.47.
You closed all of your crisis trades for around -30%.
Try explaining that one before you post any more "free" articles.
Are you talking to me? ;)