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Dollar Plummets As Expectations Of QE3 Spread

Tyler Durden's picture


While it is not surprising that the Swiss Franc is surging almost as much as silver in today's flight to safety episode, and even "value investor" Whitney Tilson is rumored to be shorting Netflix again after topticking his cover with immaculate perfection, what is a little disturbing is that the dollar has plunged to the lowest levels since February 3. The reason, of course, is that with global unrest spreading like Molotov cocktail fire, and implied US GDP plunging by 5% in the past week on the hike in oil prices, it is becoming very evident that the recovery myth is now over, despite claims by the NAR charlatans, and another round of quantitative easing is almost inevitable. What that means for the dollar is precisely what one can see on the chart below. As for the use of funds in the upcoming QE episode, perhaps the Fed can instruct the Primary Dealers to go out and buy some WTI this time instead of just crowding into Apple and REITs...


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Wed, 02/23/2011 - 11:53 | 988543 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Economists think a weaker dollar will improve the economy.


Wed, 02/23/2011 - 12:01 | 988593 Dr. Richard Head
Dr. Richard Head's picture

The double-speak of the "media" and "economists" indeed numbs the mind.  Numb numb numb. 


Wed, 02/23/2011 - 12:25 | 988699 Ragnarok
Ragnarok's picture

Haven't we all learned to love Big Brother -> Ben Bernanke.

Wed, 02/23/2011 - 12:28 | 988715 MsCreant
MsCreant's picture

The kind of love Big Brother gives is called "incest."

Wed, 02/23/2011 - 13:10 | 988932 optimator
optimator's picture

But, remember the "Tribes" definition of incest.

"Incest is like money, its best kept in the family."

Wed, 02/23/2011 - 12:49 | 988805 VegasBD
VegasBD's picture

The last couple times this has happened, I BTFD midday on forex and woke up to nice profits. Me regular trades make no sense now, but Im gonna keep BTFDs till it doesn't work anymore.


Wed, 02/23/2011 - 12:02 | 988595 Cindy_Dies_In_T...
Cindy_Dies_In_The_End's picture

dude naw.


the rumor yesterday was that Ben has to pull the plug.


Too many ticked off countries waiving their fists.

Wed, 02/23/2011 - 12:06 | 988615 unwashedmass
unwashedmass's picture


good job, Ben, good job. the world is in flames.

Wed, 02/23/2011 - 12:06 | 988616 unwashedmass
unwashedmass's picture


good job, Ben, good job. the world is in flames.

Wed, 02/23/2011 - 12:17 | 988665 redpill
redpill's picture

OT: Existing Home Sales released


As I've previously described, NAR Existing Home Sales are massively overstated, which was confirmed recently by a press release from CoreLogic, who tracks actual transactions.

So when you see the NAR Existing Home Sales reported today,

Ignore the change in volume, it's statistically meaningless at this point.  The real news is that prices continue to fall.  In fact they've fallen to 2002 lows.  That means you would have needed to purchase your home over 9 years ago to be in positive territory.  Nothing like a lost decade of home equity to give folks another push toward strategic default.  (Try pricing them in gold for a greatly depressing view).

Further, I await the first bold property owner to get legal council and pursue the market-pumping Realtors for knowingly releasing inflated and fraudulent data.  Ok, so I won't hold my breath.

Wed, 02/23/2011 - 12:27 | 988711 DonnieD
DonnieD's picture

I heard Baghdad Bob is the new spokesperson for the NAR. Apparently that Lawrence Yun clown wasn't doing a good enough job.

Wed, 02/23/2011 - 16:09 | 989962 Temporalist
Temporalist's picture

More on the topic:

""It is really a foreclosure-driven market," said Ethan Harris, head of developed markets at Bank of America Merrill Lynch Global Research in New York, who projected sales would increase to a 5.38 million rate. "I don't think it is a sign of the market returning to health.""

Wed, 02/23/2011 - 12:33 | 988732 the mad hatter
the mad hatter's picture

pray for king dollar that the DX doesn't break 77. That's the uptrend line that has been in play since 08.


i wouldn't be surprised if it did though. flight to safety does not mean flight to dollar anymore so one should back the truck on PMs.

Wed, 02/23/2011 - 11:54 | 988544 Circlehook
Circlehook's picture

Anything REAL  Bitchezzzzzz!

Wed, 02/23/2011 - 11:54 | 988547 umop episdn
umop episdn's picture

The Mock Starket goes up and the d lol ar is as good as GLD...until it's time for another round of queasing.

Wed, 02/23/2011 - 12:46 | 988796 Cocomaan
Cocomaan's picture

"Queasing". I like it!

Wed, 02/23/2011 - 14:00 | 989267 whatz that smell
whatz that smell's picture

...just like that fuking midget G.G.'s sister!- she's queasy!

Wed, 02/23/2011 - 11:54 | 988548 Sancho Ponzi
Sancho Ponzi's picture

The dollar is down more than half a percent today, and equities are still in the red. Rock meet hard place.

Wed, 02/23/2011 - 12:05 | 988609 spartan117
spartan117's picture

Yeah, I noticed that as well.  Not a very good sign. 

Wed, 02/23/2011 - 12:07 | 988623 T Rex
T Rex's picture

Would you loan money to a rapidly devaluing currency?

It ain't QE3 it's the piper.



Wed, 02/23/2011 - 12:10 | 988641 LawsofPhysics
LawsofPhysics's picture

Yep, both equities and dollar down, hard place indeed.  Anything real indeed, including titys and beer.

Wed, 02/23/2011 - 12:10 | 988642 LawsofPhysics
LawsofPhysics's picture

Yep, both equities and dollar down, hard place indeed.  Anything real indeed, including titys and beer.

Wed, 02/23/2011 - 12:25 | 988707 topcallingtroll
topcallingtroll's picture

titys and beer are down too.  At least at my local tity bar.

Wed, 02/23/2011 - 16:12 | 989991 Temporalist
Temporalist's picture

This may be disappointing then:

Lawmakers lukewarm, brothel owners seethe over Reid's call to outlaw prostitution

"The gallery in the Assembly chambers went silent Tuesday when Reid paused for applause after he told lawmakers from both houses that "the time has come for us to outlaw prostitution.""


Wed, 02/23/2011 - 11:54 | 988549 Fish Gone Bad
Fish Gone Bad's picture

"Primary Dealers to go out and buy some WTI this time instead of just crowding into Apple and REITs..."

They could, but everyone knows that REITs and Apple are sure things </humor>

Wed, 02/23/2011 - 11:55 | 988551 jus_lite_reading
jus_lite_reading's picture

There is only one way to prop up stock prices- devalue the dollar so it takes more dollars to buy less stock. Everything is great according to Dr. Deficit, a.k.a Kamikazi Ben.

Don't worry about oil. We don't need no stinkin' oil!

Whoops! There goes Axel Weber fleeing to his minisub!

Wed, 02/23/2011 - 11:55 | 988559 scythian empire
scythian empire's picture

So long stocks or something right

Wed, 02/23/2011 - 12:05 | 988606 jus_lite_reading
jus_lite_reading's picture

No. Long silver/gold or anything tangible or that can be bartered.

If you go long stocks, you may never be able to find a buyer or sell out. Dr. Deficit has made sure, retail can only BUY but never SELL.

I won't even short deliciously cooked book companies like TOLL BROS simply because I may never be able to take profit.

Buy physical and all you can.

Wed, 02/23/2011 - 12:17 | 988660 scythian empire
scythian empire's picture

I've owned a bit of silver (no longer at these levels as I'm thinking there could be some pull back), but based on the comment you yourself made, retail can buy but not sell (implying that i'd get some return in equities if owning over time).

Given the herd behaviour and adversion of change for the masses, I'm not quite ready to say that the dollar is flushed.  Maybe getting there for its status as a reserve currency though.  Ping Pang Pong is pretty annoyed with the monetezation stuff, though, really, what did they expect.

Wed, 02/23/2011 - 12:24 | 988701 topcallingtroll
topcallingtroll's picture

Yeah what should they expect for attempting to peg us to oblivion?

Wed, 02/23/2011 - 12:45 | 988785 scythian empire
scythian empire's picture


Wed, 02/23/2011 - 11:57 | 988563 dcb
dcb's picture

could be europe buying bonds as well with italy cds spreads, etc. I noticed it and thought this move strange as well

Wed, 02/23/2011 - 11:58 | 988567 Hondo
Hondo's picture

In which case Japan here we come......if we're going to create debt like water there is in fact NO differnce in the expected outcome of the US versus Japan.......all this proves one therom...that being every government official no matter where located is as dumb as a box of rocks.......makes no differnce....they can yelp all they want...the facts speak for themselves and you can't change those.

Wed, 02/23/2011 - 12:08 | 988620 SWRichmond
SWRichmond's picture

...if we're going to create debt like water there is in fact NO differnce in the expected outcome of the US versus Japan

Mish, is that you?  OMFG.  Empire?  Two wars in progress?  Domestric savings?  Reserve currency?  Export-based earnings?

Wed, 02/23/2011 - 12:23 | 988694 topcallingtroll
topcallingtroll's picture

turning japanese is the optimist scenario!

Wed, 02/23/2011 - 11:57 | 988570 scythian empire
scythian empire's picture

Maybe the mandate is to devalue the dollar just enough to get these home prices just in the black and thus take some of the stress of the banks?  Oh did they already give those back to the government, ie, we the people?

Wed, 02/23/2011 - 12:02 | 988571 Cognitive Dissonance
Cognitive Dissonance's picture

More power Scotty. I've got to have more power.


And yes Star Trek fans, I know the picture doesn't match the comment.

Wed, 02/23/2011 - 12:04 | 988607 Cindy_Dies_In_T...
Cindy_Dies_In_The_End's picture

Wait for'll work eventually.


I heard yesterday Ben is pulling the plug. He'll have to go about his plan another way.

Wed, 02/23/2011 - 12:17 | 988662 slackrabbit
slackrabbit's picture

I canna print the money  fast enuf cap'n

Wed, 02/23/2011 - 12:21 | 988685 SWRichmond
SWRichmond's picture

Try reversing polarity, Mr. Scott.

Wed, 02/23/2011 - 12:22 | 988691 I Got Worms
I Got Worms's picture

An I'm a given' er all shees goot!

Wed, 02/23/2011 - 12:43 | 988746 slackrabbit
slackrabbit's picture

For gods sake Scotty, we've got the UK, China & EU helping US to print the Austrailians, the Indians, Elvis and the women who runs the burger joint on the corner.....shit  even call Zero Hedge ...print man, print...Ohura call CNBS call in every last favour you have and dump every last bit of intergrity and get them to tell everyone 'OIL PRICES WILL NOT RISE'...we've got to keep this bs spinning

Wed, 02/23/2011 - 12:43 | 988736 Pez
Pez's picture

Timmay: What if, now this is a big if, I give big banks US Treasury gift cards on top of 0% interest?

TheBernank: Hmmmm....rewards points, BRILLIANT!


Wed, 02/23/2011 - 12:32 | 988729 Calculated_Risk
Calculated_Risk's picture

I'm doubling down on dilithium crystals!!!!

Wed, 02/23/2011 - 12:40 | 988765 Cognitive Dissonance
Cognitive Dissonance's picture

What is this, a Star Trek convention? Sheesh. :>)

Wed, 02/23/2011 - 13:12 | 988944 TBT or not TBT
TBT or not TBT's picture

Cell phones?   The original series called em "Communicators"

Teleconferencing?    "On Screen"

1960's dude.   Everyone is infected by now.    Now if only the food replicators were on the market, this series of arab psychostate failures might not have happened.

Wed, 02/23/2011 - 11:59 | 988574 Sucks_to_be_Smart
Sucks_to_be_Smart's picture

I think it is slightly different? 

I believe Euro crosses are up because the Euro area + England has been talking more actively about possibility of raising rates to fight inflation.  With oil up so much and commodities following in an escalating geo political event, this might be a pair trade with commodities--if the trend continues, ECB and BOE will be faster to raise rates and thus currency will appreciate vs dollar where bernanke sees no signs of inflation. 


Does this make sense?

Wed, 02/23/2011 - 12:07 | 988613 Dr. Richard Head
Dr. Richard Head's picture

It does make sense, but rhetoric and action are different in the world politic.  A rate raise would surely increase debt to GDP levels in the Eurozone and England. 

Either way, things seem to be flaring up in Greece yet again -


Wed, 02/23/2011 - 12:08 | 988621 pazmaker
pazmaker's picture

"Does this make sense?"



Wed, 02/23/2011 - 12:25 | 988703 zaknick
zaknick's picture

Dont forget that the Russians and Chinese are actively propping up the euro with public rhetoric and deeds while worrying out loud about the banksters' dollar QE. These are the battle lines for now.

Wed, 02/23/2011 - 13:21 | 988993 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

The dollar dropping against the Euro? The Euro is going to hit toilet paper status way before the USD. Lots of investors are going to get burned quickly.

Wed, 02/23/2011 - 12:36 | 988755 Jack Sheet
Jack Sheet's picture

Greece and Portugal will have to be thrown out of the EUR before interest rates are raised. Until then it is just talk.


Wed, 02/23/2011 - 11:58 | 988576 apberusdisvet
apberusdisvet's picture

DOW to 8000 by April Fools' Day, as even the robots realize that the biggest banana republic can no longer function on fake, manipulated, obfuscated, and total BS "hope and change".

Wed, 02/23/2011 - 12:00 | 988582 alien-IQ
alien-IQ's picture

looks like next "support" that needs to hold is in the 76.75 range. After that we're looking at 75.75...then 74.25...after that we're into Zimbabwe territory.

All in don't look pretty.

Wed, 02/23/2011 - 13:02 | 988873 TradingJoe
TradingJoe's picture

75.63 is the support that needs to hold, below that we can "go fishing"!

I guess that the FEDs an "Dr.ScrewYou" will be forced to do something because

a low dollar is good but too high commodities are not...for "ThePlan", ergo

They'll have to do something, I guess we all ain't sick enough to even dream

Just What That Sick Fuck will do next!?

Wed, 02/23/2011 - 12:02 | 988585 gordengeko
gordengeko's picture

Med term/ out-of money calls on SPXU, DIG and AGQ sound pretty solid to me for a small bet.

Wed, 02/23/2011 - 12:19 | 988677 topcallingtroll
topcallingtroll's picture


Wed, 02/23/2011 - 12:01 | 988586 Josh Randall
Josh Randall's picture

The Ben Bernake says "just give me the d@mn ball..."

Wed, 02/23/2011 - 12:00 | 988587 HedgeFundLIVE
HedgeFundLIVE's picture

It is clear that QE2 and vast government intervention is creating a mirage that equity holders are happy about because it creates the illusion that the worst of the crisis is behind us:

Wed, 02/23/2011 - 12:01 | 988588 tmosley
tmosley's picture


I had hardly even noticed the dollar with all the oil hub-bub.


Wed, 02/23/2011 - 12:01 | 988590 Ferg .
Ferg .'s picture

DXY is approaching a multi-year rising trend channel that has held beautifully on several occasions . I'm a buyer if it hits again .

Wed, 02/23/2011 - 12:20 | 988681 Sophist Economicus
Sophist Economicus's picture

I agree.  To the extent CBs can influence anything, it is their fiat domain...I'm in too, these guys know it's game-over if that baby falls through

Wed, 02/23/2011 - 12:10 | 988636 jus_lite_reading
jus_lite_reading's picture

Try $5.

TPTB are running out of time and they know it. If Celente is correct, the next trend will be to abolish religion.

Wed, 02/23/2011 - 12:24 | 988700 Oh regional Indian
Oh regional Indian's picture

I really really feel teh Vatican is coming back. you said in Philly?

How? Where?


Wed, 02/23/2011 - 12:29 | 988704 nonclaim
nonclaim's picture

Not abolish, it is impossible as they go underground, sometimes literally. It is more along the lines of Bernard Shaw, when he proposed to *substitute* religion for science, but that didn't work entirely. Note he didn't say religion wasn't necessary, but that it needed to be replaced; this is key.

So be ready for the bastard cross-breeding, a scientifically created religion devoid of any meaning conceived in the bowels of the UN.

Yes, according to its creators it's a silly conspiracy.

Wed, 02/23/2011 - 12:41 | 988763 Rogerwilco
Rogerwilco's picture

They already have the prototype for the replacement -- environmentalism + global warming. The faithful number in the hundreds of millions and they are willing, compliant, and have no other basis for their morality beyond the "science" dogma presented by authority figures. All they need is a charismatic leader (sorry Al, you're 150 pounds too late) and marching orders.

Wed, 02/23/2011 - 13:56 | 989239 Oh regional Indian
Oh regional Indian's picture

Very True.


Wed, 02/23/2011 - 13:06 | 988905 born2bmild
born2bmild's picture

And how. We need more sites like this:

Don't forget there is a youtube video on how to beat every lock you have on every door especially the electric remote control varieties.

Wed, 02/23/2011 - 13:56 | 989210 born2bmild
born2bmild's picture

Regardless of your beliefs around peak oil you may find Dimitry Orlov's essay informative, a history of the Soviet collapse (in english):


Wed, 02/23/2011 - 14:18 | 989397 Rick64
Rick64's picture

Good video. Excellent insights into whats coming.

Wed, 02/23/2011 - 12:02 | 988599 AldoHux_IV
AldoHux_IV's picture

It's time we start protesting the federal reserve-- let's bring this harmful economic terrorist down.  Wait a minute, I forgot everybody's busy watching American Idol and Jersey Shore instead.

Wed, 02/23/2011 - 12:13 | 988650 jus_lite_reading
jus_lite_reading's picture

Financial terrorism, headed by Dr. Deficit.

As you said, the sheeple have far more important things to worry about like who is sleeping with who on Jersey Whore.

Wed, 02/23/2011 - 12:20 | 988682 wandstrasse
wandstrasse's picture

Hallo Amerika, hier ist die Stimme aus Deutschland!

we Germans will not revolt because of hunger, exploitation etc (in these cases we usually vote a dictatorship into power)... we will ONLY revolt if either somebody introduces a general speed limit on the Autobahn, and/or if long-haul holiday travels are prohibited.

Wed, 02/23/2011 - 13:07 | 988915 TradingJoe
TradingJoe's picture

Darueber laesst sich Streiten mein Freund!

Ich lebe hier in Amy Land schon seit 10 Jahren und eines kann ich Dir sagen,

es sind die Amis die "Schlafen"! Wenn Merkel in BW verliert dann ist Licht Aus fuer

den Euro! Alles ist politisiert! Buckle Up my Krautie Friend!

Wed, 02/23/2011 - 13:49 | 989183 optimator
optimator's picture

Und meine Mutter werde sagen, "JesManJosef", und Opa, "Furichbar".

Wed, 02/23/2011 - 12:04 | 988603 Goldbugger
Goldbugger's picture

Think about this,Oil went up almost $10 in the last two days.For each dollar that crude rises we transfer 95 billion outside the US. GDP gets the big HiT which then totally invalidates QE2. 

Wed, 02/23/2011 - 12:11 | 988639 Tyler Durden
Wed, 02/23/2011 - 12:14 | 988652 Cognitive Dissonance
Cognitive Dissonance's picture

It's those evil speculators. It has nothing to do with Zimbabwe Ben.

Wed, 02/23/2011 - 12:21 | 988684 tmosley
tmosley's picture

It's that damn oil killing all the fish in the gulf.  It has nothing to do with BP.

It's those evil soldiers killing all those protestors in the middle east.  It has nothing to do with the floundering dictators.

Funny how people can so easily see the source of so many other problems, but not this one (ie Benny and the Inkjets).

Wed, 02/23/2011 - 12:30 | 988716 Cognitive Dissonance
Cognitive Dissonance's picture

We all see and hear what we want to see and hear. It's just that some of us are worse than others. The very worse are afflicted with Cockatoo disease, constantly repeating whatever confirms their belief system.

Polly wanna cracker?

Wed, 02/23/2011 - 12:42 | 988776 topcallingtroll
topcallingtroll's picture

we will know in a year or two who is the cockatoo

Wed, 02/23/2011 - 12:56 | 988846 Cognitive Dissonance
Cognitive Dissonance's picture

Here's some water to wash those crackers down.

Wed, 02/23/2011 - 14:21 | 989409 Rick64
Rick64's picture

Maybe the water will dilute all the koolaid he has been drinking.

Wed, 02/23/2011 - 12:59 | 988860 ColonelCooper
ColonelCooper's picture

You honestly believe this shit can hold out that long?  I'll save you a cracker.

Wed, 02/23/2011 - 12:27 | 988705 slackrabbit
slackrabbit's picture

And who are these evil speculators?

Well the best larf I have had this decede is: 

US Government 911 - blamed on islamic fundamentalists

UK Government  7/7 - blamed on islamic fundamentalists

and now

Libya aka Gadafi also blaming the riots on islamic fundamentalists.

Therefore I am sure the IMF and the US FED can only conclude the all speculators are islamic fundamentalists!....and I bet none of us, even knew we were ones!

Wed, 02/23/2011 - 12:19 | 988671 jus_lite_reading
jus_lite_reading's picture

"GDP gets the big HiT which then totally invalidates QE2."

Going forward, GDP gets the big hit which then totally perpetuates QE infinium, aka, the death spiral, aka the endless pit, aka Kamikazi Ben's "piece de resistance"

Wed, 02/23/2011 - 12:06 | 988617 StopScrewingThe...
StopScrewingTheTaxPayers's picture

Does congress have any power to tell the Bernank and the Federal Reserve no to anymore QE?

Wed, 02/23/2011 - 12:19 | 988669 Sean7k
Sean7k's picture

They can cancel the charter, otherwise. no.

Wed, 02/23/2011 - 12:22 | 988686 jus_lite_reading
jus_lite_reading's picture

And why would they bite the hand that feeds them? We all know the cycle...

Wed, 02/23/2011 - 12:20 | 988680 JustPrintMoreDuh
JustPrintMoreDuh's picture


Wed, 02/23/2011 - 12:07 | 988619 Richard Head
Richard Head's picture

Where's Smailes or Wanger to tell us how everything hinges on how investors respond to Lululemon stock?

Wed, 02/23/2011 - 12:09 | 988631 pazmaker
pazmaker's picture



I was wondering here those two guys were as well....I haven't seen them in awhile!

Wed, 02/23/2011 - 12:22 | 988690 Cognitive Dissonance
Cognitive Dissonance's picture

They got called back to Homeland Security headquarters for re-education and re-assignment to AOL-Huff and Puff.

Wed, 02/23/2011 - 12:24 | 988695 Atomizer
Atomizer's picture

The spin doctors have returned to Murdoch Watch site.

Wed, 02/23/2011 - 12:16 | 988657 Sophist Economicus
Sophist Economicus's picture

Would be a little careful here.   This could be a short-term bear trap.   ES hugging the 20 day right now.  If it stays close to here most of today, 15:45 volume will push this puppy green into the close and validate the 20 day again....

IMHO, Better bet is just continue buying gold and silver....leave the casino games to high rollers and suckers



Wed, 02/23/2011 - 12:42 | 988772 UninterestedObserver
UninterestedObserver's picture

Smart money is fleeing risk until the smoke clears (if it ever does this time)

Wed, 02/23/2011 - 13:34 | 989070 karzai_luver
karzai_luver's picture

Wanger is in CHitown working to make sure of the Rahms coronation.


Smailes is being tested for donor status at the Jobs residence.


Wed, 02/23/2011 - 12:10 | 988624 DonnieD
DonnieD's picture

What happened to the megaphone? I bet some people use chart formations to tell them when to shit.

Wed, 02/23/2011 - 12:09 | 988627 Dangertime
Dangertime's picture

.55% is not a plummet.


The dollar is still more likely to rally over the next several months.  Time will tell.

Wed, 02/23/2011 - 13:01 | 988868 ColonelCooper
ColonelCooper's picture

Then all you have to do it BTFD.

Wed, 02/23/2011 - 12:09 | 988630 Timmay
Timmay's picture

We need a new name for the Bernank "squeeze".


Dollar printing begets Revolution begets higher oil and commodity prices begets slower economy begets margin compression begets lower stock valuations begets more Dollar Printing.

So, QE3 is really going to inflate the commodity markets priced in US$? Big boys MUST know this, yes?

Bigger question is are we going to NEED a war to put a lid on exploding Treasury Yields??

"The U.S. Dollar; it might not be worth much but there are plenty of them..."

Wed, 02/23/2011 - 12:20 | 988678 Caviar Emptor
Caviar Emptor's picture

Yep. What you're describing is the Biflationary nightmare that the Fed has created (along with its global partners in crime). 

I've said it a million times: they're a one trick pony. They only have one response: print! But worse, they're not doing out of stupidity (though it looks that way): they're doing out of conviction! They believe in Milton Friedman and Expansionary Monetary policy like a religion. And because it worked in 1981 and 1991 it must work now. And they believe that it "would have" shortened the Great Depression (disagree strongly).

But like anybody caught up in ideology they ignore what was wrong and what has changed. QE is now feeding a vicious cycle down. They can't reflate the burst US real estate and economic bubble but they are creating global inflation and a loss of confidence in the US Buck. These things tend to become self-reinforcing and self-fulfilling. We;re in the early innings of it

Wed, 02/23/2011 - 14:27 | 989440 optimator
optimator's picture

For Binny B., if your're reading this board, remember the old saying,

"If at first you don't succeed, Stop -- why make a fool out of yourself twice in a row".

Wed, 02/23/2011 - 12:11 | 988634 Caviar Emptor
Caviar Emptor's picture

Yesterday, there was almost no "flight to safety" into the dollar and a clear divergence from past events since the crisis. 

I think beyond expecting QE3/infinity, the market is slowly losing faith in the dollar as global reserve currency.

That 's of course a political thing and things aren't looking so good for the dollar on the global stage. Lots of reasons for that. Bottom line, populist revolutions and oil shocks are not dollar bullish. And many big central banks have accumulated big gold reserves in anticipation of the end of dollar hegemony. The vultures are circling

Wed, 02/23/2011 - 12:15 | 988655 John McCloy
John McCloy's picture

What if the market is deciding all on it's own to ignore all currencies as a flight to safety regardless of QE en route or not. I cannot see how QE3 can be considered because it assures Oil over 100.00 even if we subtract Middle East tensions. Unless Ben wants to use Middle East tensions as cover/excuse for oil rise if he does QE3.

          We all know however that the entire financial markets are reliant upon 0% rates and QE just to have a pulse so what is Ben to do? More QE = margin compression ..what a situation he has placed us all in.

Wed, 02/23/2011 - 12:32 | 988722 Caviar Emptor
Caviar Emptor's picture

JM: Hat tip to ya. And you raise a perfect point.

That point being: what is the point? Of QE3. 

The disciples of Friedman have been in power in Central Banks all over the developed world since the Reagan/Thatcher "Revolution". Their beliefs have been codified into dogma. To deviate from those beliefs is heresy. And they believe in one thing: expansionary monetary policy on the grandest, grandest scale. 

Beyond their doomed belief that they can reflate the burst US economic and real estate bubble, here are their core beliefs that keep them from changing course: Got inflation? No Problem! Just build overcapacity everywhere using cheap credit and "supply side" favorable tax and regulatory policy. So go ahead, offshore jobs, build houses, run the assembly lines, and grow crops from fence to fence. Well there's a problem when you run out of demand for reasons you did not expect like aging demographics. Or deflating real incomes and net worths. Or higher prices when the developing world starts to want to become the developed world and that ocean of dollars you printed up wants t get spent instead of saved. Or when you sucked natural resources dry and now everybody wants them. 

But they don't want to adapt because that would prove their theories and beliefs were wrong and they'd be out of jobs, careers and their historical legacy would be discredited. The latter will happen anyway. 

Wed, 02/23/2011 - 12:51 | 988812 Rogerwilco
Rogerwilco's picture

What makes you think the Fed cares about the overall economy? Yes, they pay lip service to it in testimony and via proclamations from the Open Mouth Committee. If you watch their actions versus their words, it appears Bernanke's main concern is helping the balance sheets of the member banks.

Wed, 02/23/2011 - 12:54 | 988821 Caviar Emptor
Caviar Emptor's picture

Remember they believe it all "Trickles Down". Inflate the market, strengthen the banks, make oceans of dollars available and everybody will be happy. :-) Game over, boyz~

Wed, 02/23/2011 - 12:57 | 988847 Snidley Whipsnae
Snidley Whipsnae's picture

CE...agreed. I think of this as one snap shot of a slow motion train wreck. The monster has lots of momentum but is running into an immovable object.

Wed, 02/23/2011 - 12:10 | 988635 zaknick
zaknick's picture

Love the headline.... except it's QEiii or WWWiii.

Wed, 02/23/2011 - 12:16 | 988644 huggy_in_london
huggy_in_london's picture

What are you talking about?!  There is no appetite for QE3.  It won't happen.  Euro and GBP are up cause both these guys are going to raise rates.  DXY is 69.5% euro and gbp.   Vs jpy and chf, well usd never going to rally against these in a risk off trade.  No offense, but I think you are confused on this one.....

Wed, 02/23/2011 - 13:28 | 989037 karzai_luver
karzai_luver's picture

qe stops ..... shit dies ...... banks soon after .......don't doubt qe or it's cousin will come.....



they will not take one for the team since they have no team spirit!he heh heh.


Wed, 02/23/2011 - 15:05 | 989638 huggy_in_london
huggy_in_london's picture

well, the inside word is that there isn't qe3.  

Wed, 02/23/2011 - 12:12 | 988646 taraxias
taraxias's picture

Move along here folks, nothing to see, move along.

TheBernank is trying to stop the S&P from plunging the only way he knows how.

These dislocations are EXACTLY what happens when you hand the reins over to an economic madman.

Wed, 02/23/2011 - 12:15 | 988653 Jack Sheet
Jack Sheet's picture

The composition of the DXY is: EUR 57.6%, JPY 13.6%, GBP 11.9%, CAD 9.1% SEK 4.2% CHF 3.6%. The EUR, GBP and JPY are being ravaged by QE almost as much as is the US dollar - the respective central banks are just much less overt about it than the US FED, or they are getting less publicity. Also, the remaining 3 possibly harder currencies have a combined weight of only 16.9%. I would therefore question the utility of the DXY as a measure of whether the USD is plummeting in terms of "value".

Wed, 02/23/2011 - 12:19 | 988668 topcallingtroll
topcallingtroll's picture

the dollar needs to plummet against third world peggers, not against the developed world.  So far, so good.

Wed, 02/23/2011 - 14:16 | 989386 ConfusedIdiot
ConfusedIdiot's picture

Spot on JS. DXY is not indicative of USD purcashing power as it does not even include majority of our Largest Trading Partners - Canada(included but much underweighted), China,Mexico, Japan, Germany, UK (included but much underweighted). Not to mention all the other Asians including South Korea and Australia. Use the Trading Partners Index (TPI) to capture what BB is doing vis a vis our real dollar value. Regards CI

Wed, 02/23/2011 - 12:16 | 988658 koot
koot's picture

It is debt and all about debt.  Attempts to print out of debt is currency devaluation which must either be stopped and reversed or continued to hyperinflation.  There is no one in control of the White House, Capital hill or alleys of any big US city willing or capable of backing out through cutting government the necessary amount of that required, therefore it is "In for a penny in for a pound, In for a pound in for a ton, In for a ton in until the end"

Wed, 02/23/2011 - 12:17 | 988659 lieutenantjohnchard
lieutenantjohnchard's picture

as the old scroomer (and tyler) says, as zh's resident genius calls him, fed will print to infinity.

ps: the cat who said we're all working for free essentially given the printing was right in my mind.

Wed, 02/23/2011 - 12:20 | 988679 props2009
props2009's picture

It is not QE. It is yields in EU which is roiling dollar....qe has no impact dollar anymore....

Wed, 02/23/2011 - 12:22 | 988687 oh_bama
oh_bama's picture

More QEs? Great! haha.

Fed will win!! ALWAYS!! You guys are too unamerican!



Wed, 02/23/2011 - 12:24 | 988689 Temporalist
Temporalist's picture

Molotovs and violence in Greece.  Video and pics of firebombs...

Greek police in fresh clashes with protesters

Wed, 02/23/2011 - 12:29 | 988721 spartan117
spartan117's picture

Buy ammo.  If not for firefights, then for use as barter.  Ammo lasts as long as anything else out there, and people will want it when society breaks down. 

Wed, 02/23/2011 - 14:27 | 989446 Uncle Remus
Uncle Remus's picture

True that.

Wed, 02/23/2011 - 14:35 | 989485 RockyRacoon
RockyRacoon's picture

Yes.  And buy calibers other than the ones that you use.  A box or two of common stuff like 9mm, .380, or .223 will serve you even if you can't use it yourself.

Wed, 02/23/2011 - 12:28 | 988708 koot
koot's picture

Conspiratorial theories concerning "The Plan" regarding those who own and control the Fed, IMF, BIS and associated Central Banks have suggestions of why.  Indications appear that even the most wild ass theories on this could very well be real. One world government and single currency is a given and no longer even considered conspiratorial, it is not even hidden in the cabal agenda anymore, but is front and center everyday.  But the cabal is wrong about how this will play out, certainly dead wrong.  And for that we can  give at least part thanks to ZeroHedge.

Wed, 02/23/2011 - 12:52 | 988815 Milton Waddams
Milton Waddams's picture

It is far from a conspiracy. Post WW2, some members of the Federal Reserve (Beardsly Ruml) were vocally in support of world governance. Some even predicted it's emergence within a decade (shocking that anyone at the Federal Reserve would get it so wrong, I know).

Until then ... look at that, look at that ... Money for nothin' and your chicks for free I want my, I want my, I want my QE3 Money for nothin' and chicks for free I want my, I want my, I want my QE3

Wed, 02/23/2011 - 12:30 | 988728 max2205
max2205's picture

3 QE's don't make a right

Wed, 02/23/2011 - 12:35 | 988750 innsbrooklad
innsbrooklad's picture

There is NO QE 3 coming....Bernanke and the left leaning guys will get hung.

The market is proving QE2 an error and a distructive force. The $1.6 T deficit that idiot Obama proposed will not be funded..period..get ready for a bond force manure.

Wed, 02/23/2011 - 12:38 | 988758 topcallingtroll
topcallingtroll's picture

does that mean bondholders eat shit and die?

Wed, 02/23/2011 - 12:35 | 988751 innsbrooklad
innsbrooklad's picture

There is NO QE 3 coming....Bernanke and the left leaning guys will get hung.

The market is proving QE2 an error and a distructive force. The $1.6 T deficit that idiot Obama proposed will not be funded..period..get ready for a bond force manure.

Wed, 02/23/2011 - 12:40 | 988764 Caviar Emptor
Caviar Emptor's picture

No QE3, then stock market returns to bear mode

Wed, 02/23/2011 - 12:58 | 988838 flight risk
flight risk's picture

and on other stations:


wow.. jason bourne type stuff. Motorcycle chases? Really?


Like the world is a circus performance and we can prep stage two for the next act while eyes are on stage one!


Any cooraboration on this anywhere?  not sure about this EUTIMES!





Wed, 02/23/2011 - 13:27 | 989035 Hephasteus
Hephasteus's picture

If you give a man a nuclear bomb. You make him a threat for a day. If yout teach a man to nuclear bomb you make him a threat for a lifetime.

Wed, 02/23/2011 - 22:20 | 991291 Quaderratic Probing
Quaderratic Probing's picture

Give a man a Dollar and hes got a dollar.....Give him a printing press and there no problem he cant solve

Wed, 02/23/2011 - 13:40 | 989114 gwar5
gwar5's picture

Some of true, other reports give facts differently ...

2 on motorcycle with guns following Davis, try to rob. He kills both, but fired 9 shots -- 7 hit mark. Back up vehicle does hit, kill pedestrian on way to scene. True but....

The Pakistanis already agree that the two on motorcycle were robbers who had indeed just robbed somebody else shortly before they pulled alongside and brandished weapons upon Davis in his vehicle trying to rob him. Davis just smoked them. They weren't ISI agents and didn't follow Davis for 2 hours.

The case against Davis is that he killed them prematurely because they hadn't fired first, and therefore it is a crime in Pakistan. Meantime, yes he is CIA and they picked on the wrong guy. He was outed by our own people which was not helpful.

Pakis are pissed he wasn't on their list of CIA agents in the country so they're punishing USA.






Wed, 02/23/2011 - 14:09 | 989336 earnyermoney
earnyermoney's picture

The NY Times and WSJ admitted the robbery story was a cover under pressure from the Obama administration. Both papers seemed to admit that it was not a robbery but a killing of 2 ISI agents.

Wed, 02/23/2011 - 14:13 | 989362 viahj
viahj's picture

and if true, you now know why Rahm is in Chicago and why he won't be there when the time comes

Wed, 02/23/2011 - 12:57 | 988845 Richard Head
Richard Head's picture

Anybody been watching palladium slide these past few days while its cousins march higher?

Wed, 02/23/2011 - 13:34 | 989069 Hephasteus
Hephasteus's picture

Yep. Palladium is a 2nd stringer precious metal. Organic Light Emitting Diodes or OLED tv's which were supposd to replace lcd's but haven't ever quite worked out right and they've been trying since 1990 use a lot of palladium. Every manufacturer dumped oled but sony came back out with a 17" and 25" professional monitor for like 17k and 25k respectively. OLED is dead so a bunch of people who were counting on it are no longer holding palladium aces but palladium 2's. People used to say it was used in 'research' for superconductors and such but they never let out how much palladium oled's used until it was game over.

But for the last 2 years palladium and platinum have been used as I don't have gold and silver will you take these for payment metals. They are leveraged 50:1 instead of 100:1 in banking industry. So they go up and down much faster. They go up when they are trying to fake repo hide the price of gold and silver as collateral.

Wed, 02/23/2011 - 13:07 | 988917 sbenard
sbenard's picture

Where's the plunge protection team when you need them?

They must be out there protesting with the unions! Quick! Fire them all!

Wed, 02/23/2011 - 13:26 | 989026 the grateful un...
the grateful unemployed's picture

I am waiting for the PPT to join the angry protestors and shoot this market down.

Wed, 02/23/2011 - 13:13 | 988943 Rorschach
Rorschach's picture

Buying more Ammo Today. Best advice given in this thread. There will be a use for it to protect yourself, family and property and it can be used as a currency so to speak for barter. Ammo will be worth more than gold.

Wed, 02/23/2011 - 13:23 | 988997 Stuck on Zero
Stuck on Zero's picture

The Bernank must follow on with QE3.  The rest of the world is dumping U.S. treasury debt and if the Bernank doesn't buy the stuff no-one will. 

Wed, 02/23/2011 - 13:29 | 989031 Vernon Maxwell
Vernon Maxwell's picture

What the deflationists - particularly Denninger - fail to account for is that QE enables the government to create new liabilities.  Where traditional Open Market Operations are, essentially, an asset swap (Treasuries and other USG debt instruments for USDs), QE involves the creation of new instruments upon which loans can be pyramided (theoretically, anyway). 

They quite correctly claim that the monetary base in any fiat/fractional-reserve system is the sum of those assets against which one is both willing and able to borrow.  But they stop there, assuming that the asset base is finite.  QE is the naked monetization of new government liabilities.  Liabilities which are, of course, an asset to some primary dealer or other institutional investor.  Thus, the net effect is to increase the number of assets against which loans can be made.  That is, QE expands the monetary base, and it is precisely this marginal expansion that accounts for the inflationary pressures they claim can never materialize.

They fail.

Wed, 02/23/2011 - 13:27 | 989032 the grateful un...
the grateful unemployed's picture

The Tea Party blocks the motion to raise the debt ceiling because they know Bernank can keep the govmnt running. the pols get a symbolic victory, the Fed gets backed into a smaller corner.

Wed, 02/23/2011 - 13:37 | 989105 dark pools of soros
dark pools of soros's picture

iPad2 next week..  BTFD

Wed, 02/23/2011 - 13:46 | 989149 gwar5
gwar5's picture

Maybe conspirasts Alex Jones and Lindsey Williams are right:

TPTB want $200 oil, collapse of USD, NWO currency, and stiff ME for all the US paper they bought.

Then tap the 2 trillion bbl USA oil reserves they've been sitting on fro decades?

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