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ECB Buys A €2 Billion In Sovereign Bonds Last Week
It is confirmed: last week's incursion by the ECB in buying any and all offered Irish and Portuguese bonds is now in the history books. As the ECB reports, "in the week from Monday 29 November to Friday 3 December were of a
volume of EUR 1,965 million, the rounded settled amount - and the
intended amount for absorption accordingly - increased to EUR 69
billion. The transactions made between Wednesday 1 December and Friday 3
December have, with few exceptions, not yet settled and hence are not
reflected in this figure." In other words, the bulk of the peripheral bond buying is not even included, and we will share the final tally with readers next Sunday night. We fully expect the amount for the week ended December 13 to be another all time record. In the meantime, the chart below shows all of the recent purchases under the ECB's SMP (aka sterilized open market monetization) program. As an aside, the biggest amount monetized occurred in the first week of the program's launch when the ECB monetized €16.5 billion.
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that's alot of toilet paper
Drop in the bucket... Brian Sack buys that minimium daily
http://www.cbsnews.com/video/watch/?id=7120553n
what a load of C#@$ ...
In short there is no inflation for me (Ben) and who cares about the food and gas.... they are not included in CPI ...
So the plan seems to be print electornic money, but don't print cash... this way the sheepe will think we are in deflation until the inflation-surprise us again...
Buy MBS with bank-stocks as collateral, make the banks buy with this money ty's, don't print cash .... sweet deal if you are on it.
http://research.stlouisfed.org/fred2/graph/?chart_type=line&s[1][id]=WSECOUT&s[1][range]=5yrs
ECB = European Clone of Bernanke
haha! +1
Farcist policy off the cliff. Blackhawk and Tricky Trichet holding hands like Thelma and Louise.
Ambrose Evans-Pritchard
China's credit bubble on borrowed time as inflation bitesOfficially, inflation was 4.4pc in October, and may reach 5pc in November, but it is to hard find anybody in China who believes it is that low. Vegetables have risen 20pc in a month.
The Royal Bank of Scotland has advised clients to take out protection against the risk of a sovereign default by China as one of its top trade trades for 2011. This is a new twist.Ms Choyleva said China drew a false conclusion from the global credit crisis that their top-down economy trumps the free market, failing to see that the events of 2008-2009 did equally great damage to them – though of a different kind. It closed the door on mercantilist export strategies that depend on cheap loans, a cheap currency, and the willingness of the West to tolerate predatory trade.
China is trying to keep the game going as if nothing has changed, but cannot do so. It dares not raise rates fast enough to let air out of the bubble because this would expose the bad debts of the banking system. The regime is stymied.
"The Chinese growth machine is likely to continue to function in the minds of people long after it has no visible means of support. China’s potential growth rate could well halve to 5pc in this decade," she said.
As it happens, Fitch Ratings has just done a study with Oxford Economics on what would happen if China does indeed slow to under 5pc next year, tantamount to a recession for China. The risk is clearly there. Fitch said private credit has grown to 148pc of GDP, compared to a median of 41pc for emerging markets. It said the true scale of loans to local governments and state entities has been disguised.
The result of such a hard landing would be a 20pc fall in global commodity prices, a 100 basis point widening of spreads on emerging market debt, a 25pc fall in Asian bourses, a fall in the growth in emerging Asia by 2.6 percentage points, with a risk that toxic politics could make matters much worse.
It is sobering that even a slight cooling of China’s credit growth led to economic contraction in Malaysia and Thailand in the third quarter, and sharp slowdowns across Asia. Japan’s economy will almost certainly contract this quarter.
Albert Edwards from Societe General said the OECD’s leading indicators are signalling a "downturn" for Asia’s big five (Japan, Korea, China, India, and Indonesia). The China indicator composed by Beijing’s National Bureau of Statistics has fallen almost as far as it did at the onset of the 2008 crash.
"I remain convinced we are witnessing a bubble of epic proportions which will burst – catching investors as unawares as the bursting of the Asian bubbles of the mid-1990s. Ignore these indicators at your peril," he said
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/818260...
Let em buy it all, the sooner the better, then they become the ultimate bagholders.
Austerity- We don't need no stinking austerity! Just keep printing!!
clearly, these assholes see no destruction in removing all incentives to save and conserve allowing for all incentives to borrow recklessly and consume rabidly. Yep, this is going to end well.
this is a battle between savers, conservationists, and lovers of liberty versus borrowers, consumers, and oligarchial fascists. our monetary system is the deciding factor over who wins the battle.
the only recipe they know is printing... the bastards
Well, printing seems to work just fine for the moment. Austerity? Not on the federal level. It's too late now.
Chickenshit when compared to BBs high powered money adventure.
If a central bank buys goverment bonds does it not just reduce the surplus interest income normally extracted by the private bond market ?
Surely there is a substantial difference between the QE 1 of buying shit securities and the QE 2 phenomena of buying the basic money supply.
Why is credit money good and high powered money bad ?
What has the vast increase in M3 done in terms of basic productivity?
I have been having serious doubts about zero hedges resistence to this basic function of the CBs.
Yes all bank bonds should have been destroyed or at least turned into equity ( Only before nationalisation and not the probable burning of Irish state holdings in the banks when or if private bonds get turned into equity).
But in the absence of this CBs must produce money.
ha, ha. THE PRIVATE CENTRAL BANK TAKES THE INTEREST INCOME ON THE BONDS!!!! HELLO!!!!
further, CBs are SELLING money supply by buying bonds at artificially high prices/low yields.
WTF is "high powered money"?
where have we seen a "vast increase in M3"? we have seen an increase in M1. M3 has been contracting reducing the multiplier effect of fractional reserve counterfeiting.
GET A FUCKING CLUE.
http://www.zerohedge.com/forum/plot-enslave-you
The Fed gives most of its interest income back to the treasury - as far as the ECB is concerned I believe they give income back to the subordinate CBs.
High powered money is money created by a central bank directly rather then through a commercial bank.
As regards the increase in M3 well I was referring to its massive increase since the end of Gold as a unit of account.
The recent decline in US M3 needs to be counteracted by central bank printing of core money.
You see the damage was done when credit money was created over the last few decades - trying to stop the CBs creating money now is irrational.
About the nature of 'money', I found this quote from the Argentine writer, Borges, to be apposite. He was well known for questioning reality and creating paradoxes. How appropriate in the times of fiat currency ponzi schemes:
'"Sleepless, obsessed, almost happy, I reflected that there is nothing less material than money, since any coin whatsoever (let us say a coin worth twenty centavos) is, strictly speaking, a repertory of possible futures. Money is abstract, I repeated; money is is the future tense....It is unforseeable time."
from The Zahir
Sounds like Keynes on uncertainty?
It would be interesting to know what % of issuance that represents? A large portion one suspects.
Can someone please correct eny errors in my statement below...also, do you think it may actually be a real senario???
Had a really bad thought. It's a scary idea, I hope it makes sense. My idea: A short time ago, the US Fed rallied Congress to expand its' international capacities. It succeeded. The Fed is now able to lend money to other Central Banks to enable global financial security (without permission and without Auditing!!!)...at first brush, this stabilising program seems like a good thing, right??..Wrong! The Fed is current funding European bail-outs (Ireland, Greece. Soon it will be Portugal and Spain) through the two most destructive entities this world has ever seen, the International Monetary Fund (IMF) and The World Bank (these two entities are destroyers of Second & Third World Countries). BUT, the Fed's also aiming to deflate the US Dollar at the same time, in order to pad-down existing debt (making the servicing of the debt and the principle, cheaper) however, if they do get inflation (maybe hyper), what happens to all those hundreds of billions which the Fed lent-out to Europe?? Simple, that money also gets eroded away by the same inflation power which erodes down existing debt to Asian Markets...the end result will be, 1) a weak hyper-inflated Dollar and , 2) A process where the real underlying wealth in the form of Bonds (bought by China, Japan etc) will be transferred across to real underlying wealth of [Sovereign] Debt created in Europe. Put simply, the Fed's push to expand its' role within the global arena will allow it to LAUNDER Real Wealth from Asian markets, across to the European Central Bank (ECB). Of course there's no reason to lend any EuroZone country money if it cannot make money from-it immediately...so, how do they make money from the money which they have just borrowed??? Simple, you create a bubble or two in which to invest, but in this case, 1) the Commodity Bubble and, 2) the Bond Bubble. Effectively, the Fed is funding a Quantitative Easing program which is in-turn funding a EuroZone Bailout; transferring Real Wealth from the USA and Asia into the European Central Bank (ECB). All done via the IMF/World Bank and the Fed. SO, the ECB not only gains Real Wealth from Asia, but also the ongoing debt servicing from countries within the EuroZone...could this be the cleverest scam in history?