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Evans-Pritchard Announces Fed Contemplating $5 Trillion QE Expansion
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)
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The Fed is now Fedzilla which eats all junk bonds , mortgages and swaps that comes its way
Well, I believe I called exactly $5 Trillion QE 2.0 several months ago right here on ZH, and low and behold. The people will not stand for this money to be squandered on housing or bankers, its already proven that doesn't work. IF they are even going to do something like this, they better give the money to the people in a large lump sum through coupons to pay off debt, or there are going to be riots in the streets. No doubts about it.
" they better give the money to the people in a large lump sum through coupons to pay off debt"
...and empower the little people? Surely you jest?
I believe that the money will be used to bail out US States, pension funds, and a Fed window will exist for every asset in the world. Once all world assets are dollarized then what is the point of discussing a new world reserve currency?
Money becomes meaningless and everyone with an address is issued a credit card.
Total madness...the collapse will be spectacular!
What exactly will "the people" do? Vote out the board of the Federal Reserve? And what makes you think what "the people" would do is any better? These are the same people who think Social Security and Medicare are great bang for the buck and scream like hungry infants when so much of a whisper of any change to make the programs solvent is heard o'er our blessed land. How many people in this country have any clue about what the Fed is or how it works? Not enough that ZHers and other critics (mises.org guys, etc) would be anything but completely drowned out by the waves and waves of state-funded agitprop were the idea of the Fed being anything but saintly guardians of our economy to gain traction. If "the people" knew what the Fed was, they'd be clamoring for a $10 trn QE program of $33K paid out to every man, woman, and child in this country.
Most of us know the history behind the creation of the Federal Reserve. One angle people aren't seeing is that, what if, the fed was created as a ticking time bomb with the ultimate goal of bringing down America.
For reference please watch/listen to Yuri Bezmenov, John Coleman.
So the actions of our glorious leaders might to us seem brain dead, but achieves their ultimate objective.
Overheard Marla on the phone with Tyler - or
was it Bernanke with Blankfein? Can't remember which, but it went something like this...
"Have you ever heard a death rattle?"
<Whatever he "inherited", he injected with steroids and handed it a bag of crack...>
With your permission I would like to use that phrase for a children's book that I am working on. The title of the book is Don't Trust Grown Ups!. Thank you in advance :-)
Both parties are bought and paid for. The problems are getting larger because there is no political will to enforce law, act with fiscal responsibility or to stop a gang rape of the taxpayer that is still in progress...
Your theme will set you free.
Your theme will set you free.
The bearish RBS chap mentioned the same figure.
ALL-IN with a busted flush
Hey what do you know...Derivatives language changed and Volcker rule softened.Who would have guessed it. Traitor Scott Brown turns into a typical politician and lobbies on behalf of getting State Street exempted in Mass. under some "insurer" provision. Meanwhile MSNBC is giving kudos and high fives all around. Here is a question..If I contract a disease and then change the name of the disease a year later have I defeated the disease?
Well according to Washington the answer is yes. Some more sodomy of the United States citizen brought to you by your local captured politicians.
1. There is never a recession on Wall Street
2. There is never a recession in the Capitol.
You all make me sick.
http://www.msnbc.msn.com/id/37908345/ns/business-us_business/
i just tried changing my name to Albert Einstein, but alas, i am what i am.
good points, john.
I doubt some dude at the Daily Telegraph has an inside to the Fed. Having said that, QEII has always been on the board and waiting to be unleashed. However, they need to have a serious sustained stock market dive again like March 2009 before they can scare the sheeple enough not to complain. Janjuah's time frame would seem to be right. I see it post-election Nov-Dec. Have to keep the sheeple happy at Christmas. When they do QEII I am going long equities, I was short QE I and paid the price.
Five trillion dollars funnelled into what exactly? They take our money and we see nothing from it.
For Christ's sake plant a million wind turbines, put a solar panel on every building's roof, payoff every mortgage in America, buy me a goddam porsche....you're using my effing credit card for all this I want to see something in return.
"you're using my effing credit card for all this I want to see something in return."
Didn't you see Wall Street's bonus numbers?!?!?
Me thinks Joe Saluzzi just got his headline.......
The "reports" of US Bond auctions have been great. Check out the uber-low yields on Treasurys. No need to step into the market by the Fed to absorb supply I wouldn't think. However, as revenues into the Treasury fall, and the economy continues meekly along, at some point, the Fed will have to step up to buy Federal Debt to keep interest rates down, and keep the Social Security and Unemployment Checks flowing. As many credit card borrowers know, if you run up a big balance and then your interest rates spike, you're financial toast.
<<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,>>
Are we "almost" to the point where the USA should start cutting its military budget and closing bases on foreign soil ?
NAH !
Naw, they're scared shitless of their own military at this point.
When the government defaults on its treasuries it'll need its military!
When the money runs out and they can't afford to carry on paying off half the worlds corrupt regimes they'll be told to leave the countries, and not even the US military has the ability to wage war across 120 different nations, though I'm sure some Neo-Con idiot will post an article on WSJ telling us that it's not only possible but "our" moral imperative to do so, to keep the bases and the wars ongoing.
As for the returning soldiers, all those years of wars, desensitizing, propaganda, drugs etc are gonna have one heck of a blowback on the US internally. If the US govt was smart (which they're clearly not) they'd start planning to rehabilitate these soldiers one by one.
I actually believe to continue the Military Industrial complex and keep the companies solvent, the war machine going etc, they will internalise the military and operations onto US soil and possibly even smaller, cheaper wars across Central America. Not a nice prospect at all.
Print our way out? Is this like stuffing the fat man blocking the exit out of the cave full of cake until he exploes? I think dynomite is much quicker. Let's get the hell outta here.
If this goes through I will 100% percent believe in the so called "conspiracy theories" (is there anything even conspiratorial left about the govt anymore?) saying that all this financial turmoil was a planned attack and collapse, predominantly by the insiders running the show.
There are certain limits even for incompetency.
Let's do what japan has done .... 21 years of nothing