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Does It Really Matter If We Get Another QE?
Most of the
investment world is a chatter with trying to discern when the Fed will announce
another QE Program. When is it coming? How big will it be? How high will stocks
soar when it hits?
The “Big
Picture” thinkers already know that regardless of what Bernanke says or
promises, the END GAME for Fed monetary intervention is at hand. If Bernanke
DOES announce some new massive QE 2 program the subsequent spike in equities
will only last a short time before stocks enter a free-fall (Europe’s $1
trillion bailout only bought a few days worth of gains back in June).
Moreover,
the announcement of a massive QE 2 program would also kick the US Dollar off a
cliff, sending a huge signal to international investors that the EXTREME moves
Bernanker committed during the 2008-2009 Crisis are actually ALL he knows how
to do and will remain the norm rather than the exceptional measures they were
promised to be.
All of this would be HUGELY Dollar negative
and ultimately stock negative though we might see a brief spike in equities for
a few days.
In contrast,
if the Fed DOESN’T announce a new QE 2 or some similar monetary intervention,
we are very likely heading into another deflationary collapse similar to that
of Autumn 2008. Looking at Treasuries, the bond market seems to be favoring
this outcome. Indeed, if you only looked at US Treasuries you would think
stocks were already in a free-fall akin to that of October-November 2008.
Thus,
regardless of what the Fed does, stocks are likely to tank in the near future.
The question
is WHEN?
Honestly, I
cannot predict when Bernanke will unveil QE 2. All I can say is that it largely
does not matter in the grand scheme of things. Yes, it will cause some short-term
volatility. But ultimately QE 2 will simply be a catalyst that speeds up the
processes that are already underway. Those processes are:
1) Systemic
collapse
2) Destruction
of fiat money
3) Massive
loss of wealth
Good
Trading!
Graham
Summers
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i enjoy reading posts by the gold bugs and traders but the best is always when the survival nuts get together and talk about their canning machines n'shit.
its so funny.
i mean i love mad max 2 too but i cant see us going us ending up like bartertown.
your skills and muscle are more use than a jar of gherkins.
i enjoy reading posts by the gold bugs and traders but the best is always when the survival nuts get together and talk about their canning machines n'shit.
its so funny.
i mean i love mad max 2 too but i cant see us going us ending up like bartertown.
your skills and muscle are more use than a jar of gherkins.
MESHUGGE
http://williambanzai7.blogspot.com/2010/09/meshugge.html
QE2 : a child peeing into the ocean of deleveraging.
Honestly, based on the first QE, there does not seem to be any benefit to QE2 unless all of the banks are in much worse shape than they pretend to be. QE2 would be the way to fix more of the "chosen" balance sheets and then quietly sweep the dross under the rug.
Did QE create employment? No! because no one was able to (or felt comfortable enough to) borrow money except the international banks and consumer debt only went away through default.
It does not appear that there is ANY benefit to anyone in the world from making the interntional banks more profitable. Or am I missing something?
IMO, just screw inflating our way to stronger bankers and weaker main street and let the banks work out their balance sheets on their own.
QE2...already somewhat discounted....
let's just get on with this collapse. i'm sick of warning my friends, "stockpile food ! buy silver !" . my own family doesn't believe me, my friends think i'm wacko & hate to even see me coming. they call me "Debbie Downer" . but, at least I'll be Debbie Downer with the bottled water, the canned goods & the silver........... god only knows how long i can make it last. the thought of starving to death scares me terribly.
I stockpiled food after the initial crash. I got called the Debbie Downer too! Try stockpiling alcohol! It has a longer shelf-life and will be very tradeable if and when TSHTF! Plus, no one will call you Debbie Downer when you are sitting on top of 100 bottles of fun!
I pray for a reason to not work, enjoy my days and to tap this reserve.......come on people, start hanging banksters!
Prescription drugs work a whole lot better for that purpose, and don't take up as much room!
Good luck convincing a Doctor that you're just "Stockpiling" in case TSHTF. I suspect (s)he'll prescribe some prozac or anti-psychotics for ya, though! :D
Food is still relatively cheap. You can stock up on a lot for the amount of money that clueless people blow on a single cruise reservation.
You can also supplement your ability to capitalize on sudden food aquisition by getting a canning setup... extra cash here and there goes to food on sale that we can preserve.
As exhibit A, I recall images from the recent fires in Russia where towns were leveled... there were people pulling jars of pickled stuff out of the ruins. I bet they're glad they had them.
I recently bought Preserving Food Without Freezing or Canning by Deborah Madison (she collected rural french preservation techniques) and have been trying some out -- I already have garden green beans preserved in salt that have lasted much longer than an identical batch in the 'fridge, no electricity or boiling water required.
I am also going to be developing an ad-hoc root cellar and storing root vegis in sand and/or sawdust in various places on the property to see how they do. I got a lot of ideas from the "old standby" book Root Cellaring by Mike and Nancy Bubel.
I'm also experimenting in growing fresh food year round using the approach developed by Eliot Coleman, as described in his book Four-Season Harvest. If he can pick fresh food in December off the coast of Maine, I think I can manage something here.
I've gotten pretty used to the fact that other people think I'm nuts. I've got teenagers!
Hi salt is deadly. You need a different approach.
So is starvation. Which one are you more likely to survive, a year without food or a year with higher than normal salt intake?
Good stuff here, also a link on how to make a home-made root cellar:
http://corditecountry.com/Survive_.html
The notional value of US obligations is over $900T. So tell me something new.
The debt deleveraging is going to take over with implementation of QE II or not. It is impossible to stop a flood on the order of $100 trillions of USD from defaulting causing all sorts of chaos. QE II will just grant us about a 6 month continuation in this economic ponzi scheme.
International investors dont already know that all Bernanke knows how to do is drop more money from a helicopter? I find it hard to believe, if I knew that in 08 surely big intl investors must know it!
The bond market isnt buying the 'all is well' equities pumping at all.
Somethings got to break in all this. And I dont believe THIS Q/E2 has any positive effect at all, very short lived anyway as the dollar turns to ash and prices of anything become irrelevant. Chase around worthless dollars hey have fun Wall St.
He basically came out(no, not basically), He said, that the policy of bailing TBTF's was over.If they go, start to roll over, they were not going to help.Based on what they saw from their First moves.
Hello?,Your running the Fed policies, and even a dumb ass like me knew that,THEN?.
Heres my question, Phoenix Capital Research, WHERE'S anyone to STOP these lunatics??
Yeah I'm looking at February 2011 before we really get hit with the ugly stick. Til then, I fully expect the Dow to remain above 10K.
http://money.cnn.com/2010/09/02/news/economy/harrisburg_bond/index.htm?source=cnn_bin&hpt=Sbin
Or will things in the real world fall apart much sooner ?
You know, the financial market might actually like QE2 - it means we're not gonna have a collapse. It think it's QE2, maybe some turbulence in the markets this fall, but we end up cruising until next spring. Heck, this whole thing might last longer than anybody expects...
It already has. Much longer and it can continue with, as the gentleperson above asks, "Who the fuck can stop them"?