Evans-Pritchard Announces Fed Contemplating $5 Trillion QE Expansion

Tyler Durden's picture

In his latest column, the Daily Telegraph's A. Evans-Pritchard does a good job of recapping all the various reasons why Bernanke has now completely cornered himself, and facing a newly collapsing economy, is left with just one recourse: the printing of more, more, more paper. This should not come as a surprise to anyone who has read even a few posts on Zero Hedge - the only response the Fed is left with as deflation accelerates, and as the Fed and the banking cabal refuse to do an orderly reorganization whereby financial firms grow into their balance sheets via a debt restructuring (and equity wipe out), is the spewage of more, inflation-stimulating, fiat. Ironically, as this newly printed and rapidly diluted monetary representation (because it increasingly is not equivalent to money) makes its way only and almost exclusively to those with direct discount window access, i.e., the mega banks (and for some ungodly reason, the clearinghouses soon), the assets that will be bid up are all tangible commodities, while secondary assets, which are contingent on a properly functioning reserve banking (money multiplier) system, collapse in a deflated heap of liquidations. Yet one notable section in AEP's post draw our attention: "Key members of the five-man Board are quietly mulling a fresh burst of asset purchases, if necessary by pushing the Fed's balance sheet from $2.4 trillion (£1.6 trillion) to uncharted levels of $5 trillion." We are very curious where the DT's reporter has found this information, since if it comes from a credible source this is a massive game changer, and while many have speculated this will happen sooner or later, to know for a fact that QE is definitely coming is major news, and, if true, we are stunned the WSJ's Jon Hilsenrath, who recently has had his ear "very close" to the Fed's internal process, has not reported on this yet.

Incidentally, the $5 trillion number was referenced previously on Zero Hedge in a post by RBS economist, and uber-realist, Bob Janjuah, as follows:

All that's now left, as I have said before, is for the Fed to shift to
a USD5trn or so new QE programme, likely in co-ordination with a bunch
of other central banks, which in total may give us USD10trn or more of
new QE. But this isn't happening until much much later this yr or, more
likely, next yr.

We agree with Bob: the next QE phase will most certainly not occur before the midterms, which as the recent abdication of a national budget demonstrated, are a critical priority for the administration, over and above the telegraphing of the country's catastrophic state to the general population, which is precisely what a nuclear monetary blast would be (let alone a new fiscal one - it is no incident that today, for the first time, a new $35 billion unemployment stimulus bill crashed in the Congress after it could not muster enough votes). Therefore, we are confident that the Fed has its hands tied well until December, although we anticipate a January lift off date for QE version 2 and final, which, as Bob Janjuah notes, will likely come in collaboration with every single central bank in the world, in one last (failed) reflation attempt: the final spasm for the Keynesian religion.

(Recommended reading: Bob Janjuah Prepares For A Sell Off To Below 850, And A Coordinated $10 Trillion Quantitative Easing Part 2)

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
TuesdayBen's picture

Don't you ever sleep?

epsilonphase's picture

i think the correct response is "money never sleeps pal"



Inspector Asset's picture

seen today at www.WallStOnion.blogspot.com


Al Gore, Global warming in his pants?


Al Gore was recently described as a "Crazed Sex Poodle" in this article at the Smoking Gun. The licensed masseuse reported that Al Gore repeatedly groped her and Frenched kissed her before pinning her to the bed and humping her like a"crazed sex poodle." Apparently all this talk about global warming, was causing Al Gore to over heat in the genital area, causing volcanic like eruptions from Al's penal member. The spew, subsequently dried on the licensed masseuse black slacks and is now considered evidence. Al Gore was at Hotel Lucia, in Portland Oregon when this alleged sex crime took place over 2 years ago. It is not the first time the Al Gore has been accused of such accusations. In fact his wife, Tipper, just left him in June for similar reasons. Tipper claims that she would routinely wake up to find Al humping her leg like a "crazed sex poodle." "It was cute for a couple years when we first got married but it gets old after awhile" explains Tipper Gore. Some are wondering if global warming itself has contributed to the sex crazed state of Al Gore or could it be, just all the talk of global warming has put a heavy undue burden on Al Gore, and the pressure has gotten to him. Or could it be just being rich and famous makes people feel above the law, legal or moral? This incident puts a crack into Gore's character, that is if he had any to begin with. With something like global warming, where the verdict is still not in, and the debate rages on, we turn to experts and trusted politicians for guidance. When the head spokes person, for the movement, the man who invented the movement, turns out to be a crazed sex maniac with violent inclinations, we have to question weather we can trust this mans agenda with global warming. I say, along with the Czech President, that the whole global warming thing is a fraud. A fraud created to get more(total) control on the populace, while creating Ponza schemes (Carbon Tax Credits) to enrich the bankers again. In the end all will pay with new carbon taxes on everything. This will be the first elitist scheme to entangle the entire world and be executed from a single agency(institution). It is socialism with a green flag on it. Al Gore, and his obnoxious behavior is just a symptom of the attitudes of these elitist and their bogus science and paid experts. Al Gore should check himself into Obama's "Behavior Modification program" for sex and for food. Or at the very least, call Tiger Woods, and get some recovery pointers.
Turd Ferguson's picture

"I just made a hundred thousand in Hong Kong gold. Play with it."

RaymondKHessel's picture

Explains the PIMCO equity interest.

A Clear thinker's picture

I have to wonder, what do they know is coming...

RoRoTrader's picture

support below and Evans Pritcard is such a dork.

A Clear thinker's picture

Yep... I have tight buy stops, this breaks down from here or I switch to all GLD. Ya can almost smell the oil, massive layoff coming... very sad.

RoRoTrader's picture

pre-emptive FED strike........Greek Islands for sale.

The $5T is old news........coordinated CB number is $12 to $15 T with all major CBs participating. ZH wrote about this a few weeka ago.

Hdawg's picture

i thought it was 15 each for europe and US

Shameful's picture

It's not like Zimbabwe Ben didn't warn us.  He told us that what he would do with the printing press.  If a lunatic is constantly ranting about how he wants to shoot people and he is given a gun no one really should be suprised by the eventual outcome.

DoChenRollingBearing's picture

Ding, ding!  Shameful wins the prize tonight!

Beb B has never hid his wish that we never have Great Depression v. 2.

What should your prize be?  Hmm.  How about a stint in law school or a trip to Singapore.  Ohh, wait....

Good seeing you around Shameful!

Popo's picture

Great Hyperinflation or Great Depression 2.0  -- they're both just different flavors of economic collapse -- the difference being that in the former the banks survive and savers are sacrificed.



Miss Expectations's picture

Interesting...Bernake as the Good Humor Man.  In the summer of 2012 the popsicles will either be 5 cents or $500.00.  Somehow I don't think Ben is going to make small change. Right now he's selling my favorite childhood flavor, Sky Blue.

Mr Lennon Hendrix's picture

Maybe candy stays the same price, but gold's price is in the hundreds of thousands.  "I thought there was gold in Fort Knox, I swear!" -BS

johngaltfla's picture

The problem also for the Fed is that if they DON'T prevent GD II (which they can't) by attempting to hyperinflate, then they will be abolished and the banksters no longer given free reign to play with the monetary supply or interest rates, the mother's milk of the entire financial system. That and cities burning to the ground are probably good considerations when facing a deflationary depression scenario.

Ned Zeppelin's picture

Like Ahmedimijad-a-ma-whatever saying Israel must be wiped from the face of the earth kind of thing?

FrankIvy's picture

No.  Not like that.  Quite the opposite.  Most news sources in the U.S. translate Ben's fedspeak in a manner that reflects positively on him, regardless of the fact that he's a monster who's going to wipe out the U.S.  Ahmadinijad, on the other hand, has his words translated incorrectly and reflects poorly on him, regardless of the fact that he's not a monster, just wants to be left alone, is being constantly threatened by his nuclear armed neighbor, and is not a threat to the U.S..

fearsomepirate's picture

Yeah, when Ahmadinejad says he wants to "wipe Israel off the map," what he *really* said was, "I want to wipe this smudge off my map," because hey, a guy's map gets dirty from time to time.  But the scrofulous American press, which is manipulated from behind the scenes by greedy Jews following the Protocols of the Elders of Zion, always mistranslates "smudge" as "Israel."  And it's very obvious that the reason this giant, oil-rich country (along with every other Muslim country) can't get its shit together is malicious conniving and plotting in a country smaller than most U.S. states a thousand miles away.  It might seem crazy how a handful of sneaky Jews in a tiny little country can keep around 1 billion Muslims in poverty, but then you are underestimating how sneaky and conniving the filthy Jew truly is.

goldfish1's picture

Ahmadinejad, on the other hand, has his words translated incorrectly

Yes. Here's a good analysis:


GoldBricker's picture

Like Ahmedimijad-a-ma-whatever saying Israel must be wiped from the face of the earth kind of thing?

When I was a kid in the 1960s I often heard that Kruschev said of America "We will bury you", which was interpreted as a threat. Then in the 1970s I studied Russian and found out that the expression means not to kill, but to out-live, as in "the old lady had buried 3 husbands".

So, unless you know Farsi (as you strike me as the kind of person who knows only English, and maybe some Hebrew), you have to take others' word for it, don't you? And the MSM would never mislead you, would it?

the grateful unemployed's picture

we should buy equities with both hands, and buy on the rumor sell on the news

Cursive's picture

If the Fed is the only buyer left, I still don't see how that will save the economy.  Prop up financial asset prices maybe, but not stimulate the economy.

Ausbroker's picture

Won't save the economy, but when the crash comes, they want to be holding all the assets

thesapein's picture

Those aren't real assets the Fed is holding. 

Augustus's picture

They aren't buying them with real money either.  Eventually they will all have the same value - Zero.

fearsomepirate's picture

It doesn't matter to them.  All profits of the Fed go into the Treasury.  No one at the Fed is conspiring to hold a wealth of "assets" (the assets are all junk anyway).  They're doing everything they can to keep the bonuses coming to their pals at Goldman Sachs.

Let me give you an alternative theory:  Every head of every major industry believes the economy depends on his industry.  It's just natural.  For example, my father's a diesel executive.  He's been in the diesel industry for almost 20 years and knows it inside and out.  If you asked him, he'd say the country's health depends on his company staying afloat, and he'd mean it sincerely.  Of course, if his company *does* go bankrupt, that's that.

Now, take the guys at the Fed and Treasury.  Their whole lives have been high finance.  Yeah, they're corrupt, but you're missing this other part--they truly believe that if Goldman Sachs goes down, the whole country comes down with it.  It's not just propaganda.  They really believe it themselves.  Now, you take even the most pure-souled guy, if he's a true believer in the economy's absolute dependence on the profitability of Goldman, and give him the unlimited money-printing power of the Fed, what exactly do you *think* he's going to do?

Thisson's picture

"All profits of the Fed go into the Treasury."

That's not true, they only remit interest received from the treasury back to the treasury.  They get to keep their other profits (e.g. from trading bonds).

rsi1's picture

Press the restart button and you get a new economy, smaller, but with much less debt, and you can start growing/indebting yourself again.

Rusty Shorts's picture

Hells Bells, double or nothing  !!

thesapein's picture

But can they really hold out until next year?

TBT or not TBT's picture

You'd think the deflationary signs would be making them twitchy, insomniac, and punchy.  Ben thinks of himself as a student of the Great Depression.   How could he/they sit by through November?

Madcow's picture

The Dems do not understand what is happening. Frightening blithering babbling idiocy. Barney Frank is totally insane. I just watched him on C-SPAN, explaining that we're going to fight the financial meltdown with sharks and hats.






fearsomepirate's picture

But are they bowlers or fedoras?  The country's future depends on it.

Kreditanstalt's picture


They don't have to do it before November.  The mere TELEGRAPHING of their intentions before the mid-term elections will be enough to have the desired effect.  Don't expect Obongo to do this dirty work: but wait for a hint from Vice-President Geithner or Secretary Bernanke...

Amish Hacker's picture

No more calls, please. We have a winner.

JLee2027's picture

I call BS on the 5 trillion plan.

faustian bargain's picture

Indeed. They might go straight to 8 trillion.

Anton LaVey's picture

8 Trillion? Tsk tsk tsk, such a lack of ambition.

I think the total QE, worldwide, will probably number in the tens of trillions by the time we are finished.

You know, "A trillion here, a trillion there, and pretty soon, you are talking about some serious money".

trav7777's picture

Maybe I need a louder avatar to get people to pay attention.

They have to QE the entire credit base.  Otherwise, the math says that the compound interest function will consume the money supply in a cascading sequence of defaults.

They have no choice, as a matter of math, but to print the interest at least.  The marginal utility of debt has gone to 0.

NotApplicable's picture

"They have to QE the entire credit base."

This is what I'm thinking, else you will always have the next weak link still needing to be rolled forward. I mean, if you kick the can, you have to kick the whole can, not just part of it, right?

Oh, and given that all the new debt is just going toward servicing the old debt, doesn't that make its marginal utility negative?

yabs's picture

the criminal

he should be shot on site

he is worse than any bin laden

an economic terrorist

the world should pay 5 trillion to whoever shoots him

Hdawg's picture

The whole world is a stage... so the truth is probably somewhere in the middle.

Caviar Emptor's picture

I knew it! I knew it! The one trick pony will ride again!

It's almost too cartoonish to be real. But that's our Fed! A caricature of a bumbling cartoon clown. 

Good thinking, Ben! One more big shot of Wild Turkey oughta lick them blues but good. Hit us with your best shot! Shock n Freakin' Awe, baby! 

Go for the Quad!....the Quadrillion.

DoChenRollingBearing's picture

I have known, sort of, what a quadrillion was when I was a kid (you know, the semi-nerdy ones who knew the ranks in the Army, etc.).  Still, even with the size of our country, a quadrillion is a HUGE number.  A million times a billion (American system). 

If that were in FRNs, then the average amount of cash per capita would be an impressive $3,030,000,000 for each American!  [all of these zeros makes it hard to calculate at 1:00 AM, so please feel free to check my math]

Do it Ben!  Makes us all multi-billionaires!  Those of us with any doubts will hold some gold, thank you.

Carry on.

Caviar Emptor's picture

Yup, the numbers check. But the Quad Bazooka would put Ben in the record books as the Caligula of Monetary Porn. It would also wipe away all the failed bank balance sheets, all the SIVs, unwind all the potentially toxic derivatives, unwind FNM/FRE/AIG, and the hundreds of lesser dependents on the Fed's largess. The Quad could wipe away the sins of the fathers and of the unholy banks, it could wipe the slate clean of all reminders of the folly of the last 3 decades. Psychologically that would be worth it to many Americans even if a stick of butter costs $25,000. Yes, one could say it would be worth its weight in gold :) Bring it on!