Fed's Evans Says US Is In A Liquidity Trap, Says Boosting Inflation Is "Entirely Appropriate"

Tyler Durden's picture

As if we needed any further confirmation that the Fed is now willing to risk an all out bout of hyperinflation, here it comes courtesy of Chicago Fed's Charles Evans, whose comments that inflation is "acceptable", and welcome, and is the only way to battle the "liquidity trap" the US finds itself in, mirror those of NY Fed's Dudley who earlier confirmed Zero Hedge expectations that $100 billion is too low a QE2 number. Which means that very soon the Fed will buy up every single Treasury in existence. It will also kill the dollar absent Europe continuing on its path from earlier today, and saying the stress test was, in fact, a lie.

Here are the highlights from the full speech presented below.

  • Fed's Evans says temporarily boosting inflation may be hard pill to swallow, but potentially beneficial
  • Fed's Evans says boosting inflation temporarily is an entirely appropriate strategy to escape liquidity trap
  • Fed's Evans says it's likely the US in a liquidity trap, first time since Great Depression
  • Fed's Evans says price-level targeting would call for series of large scale asset purchases by Fed
  • Fed's Evans says sees US unemployment rate above 8% through 2012
  • Fed's Evans says it would be desirable to increase monetary policy accommodation
  • Fed's Evans sees US GDP growing 2%-2.5% in the second half of 2010, 3%-3.5% in 2011
  • Fed's Evans says if currency forecasts hold, sees 1% inflation in 2012, and below 1.5% in 2013

Good luck with that "temporarily" thing. Also, this is where PIMCO got its 2.5% GDP leak it appears.

Below is the full Evans speech according to which "much more accomodation is appropriate." And yes, the Fed guy quotes Krugman meaning it really is game over.

Monetary Policy in a Low-Inflation Environment: Developing a State-Contingent Price-Level Target

Introductory Remarks


I would like to thank Eric Rosengren, Jeff Fuhrer and the
organizers for giving me the opportunity to speak on this panel today. I
would like to use this opportunity to expand the discussion about
additional communications tools available to central banks in a
low-inflation environment. In a nutshell, I think there are special
circumstances when price-level targeting would be a helpful complement
to our current and prospective strategies in the U.S. Clearly
communicating an expected path for prices would help guide the public’s
understanding of the Fed’s intentions while we carry a large balance
sheet and promise continued low interest rates for an extended period.

There are quite a number of academic studies of liquidity trap crises
that find either price-level targeting or temporary above-average
inflation to be nearly optimal policies;[1]
and yet, central bankers and the public generally loathe the idea that
even a temporarily higher inflation rate could be beneficial or be
consistent with price stability over the longer term.

Nevertheless, with potentially beneficial policies so well grounded
in rigorous economic analysis, I cannot stare at our current projections
for high unemployment and low inflation and think that these
projections are consistent with the best monetary policies to address
the Fed’s dual mandate responsibilities. Today, I want to expand the
discussion of these tools. After all, debate on the merits is healthy.

Of course, these are my views only and not those of my colleagues on
the Federal Open Market Committee (FOMC) or in the Federal Reserve

Rationale: Much More Accommodation Is Appropriate

Let me be very clear about the setting for this proposal. In my
opinion, much more policy accommodation is appropriate today. In a
speech two weeks ago,[2]
I stated that I believe the U.S. economy is best described as being in a
bona fide liquidity trap. This belief is not a new development for me;
instead, it is a dawning realization. Risk-free short-term interest
rates are essentially zero. Both households and businesses have an
excess of savings relative to the new investment demands for these
funds. With nominal interest rates at zero, market clearing at lower
real interest rates is stymied.

In this setting, even a moderate expansion without a double dip will not lead to appropriate labor market improvement.[3]
Accordingly, highly plausible projections are 1 percent for core
Personal Consumption Expenditure Price Index (PCE) inflation at the end
of 2012 and 8 percent for the unemployment rate. For me, the Fed’s dual
mandate misses are too large to shrug off, and there is currently no
policy conflict between improving employment and inflation outcomes. The
economic theories that central bankers rely on for evaluating
appropriate monetary policy suggest to me that we need lower short-term
real interest rates than the current real federal funds rate of –1
percent. Indeed, if the federal funds rate were positive, I would
advocate substantial nominal reductions. But we are effectively at zero.

A variety of typical linear Taylor rules suggests around –4 percent.
In addition, some calculations for optimal monetary policy simulations I
have seen indicate that real rates of –3 or –4 percent between now and
the end of 2012 would boost aggregate demand enough to deliver
substantially lower unemployment by the end of 2012. If you reach the
conclusion that we are in a liquidity trap, or even near a perilous
liquidity trap, more accommodation is not data-dependent or a close

How Does Price-level Targeting Help with Policy Communications?

If the Federal Reserve decided to increase the degree of policy
accommodation today, two avenues could be: 1) additional large-scale
asset purchases, and 2) a communication that policy rates will remain at
zero for longer than “an extended period.”

A third and complementary policy tool would be to announce that, given
the current liquidity trap conditions, monetary policy would seek to
target a path for the price level. Simply stated, a price-level target
is a path for the price level that the central bank should strive to hit
within a reasonable period of time. For example, if the slope of the
price path, which I will refer to as P*, is 2 percent and inflation has
been underrunning the path for some time, monetary policy would strive
to catch up to the path: Inflation would be higher than 2 percent for a
time until the path was reattained. I refer to this as a
state-contingent policy because the price-level targeting regime is only
intended for the duration of the liquidity trap episode. I will be more
concrete in just a moment, but first, where does such a policy come

A policy that targets a price-level objective emerges from analyzing
standard—modern macroeconomic theory. The desirable properties of the
price-level target (or temporarily above-average inflation) become most
apparent in analyses that consider liquidity traps.

Figure 1(pdf) displays
the simplest example of a price path P* and its essential attributes.
The reader must judge for herself whether this policy could be
communicated straightforwardly and transparently to the public; my
personal viewpoint is that it is horribly cynical to think that good
communication is beyond our ability, especially if that is the best
policy. Here are some key elements:

  • The first policy component consists of announcing a state-contingent
    entry into the P* policy. I think most of us imagine liquidity traps
    with double-digit unemployment rates to be relatively rare events, on
    the order of twice a century or less. Under such circumstances where the
    central bank is missing both components of its dual mandate by a large
    margin, there is justification for targeting a higher price-level path
    in an effective, disciplined, and limited fashion. A credible
    announcement of the policy is clearly crucial for stimulating the
    correct expectations by the public.
  • The second policy component is to select the parameters for the
    price-level path: the initial date when the index-path begins and the
    slope of the path. Given the recognition delay in understanding the
    implications of the liquidity trap, it seems reasonable that the path
    would begin at some date in the past. My preference would be to select
    December 2007, in part because it is the National Bureau of Economic
    Research (NBER) peak of the business cycle. With regard to the slope,
    for the sake of concreteness, I will illustratively suggest 2 percent
    for the average inflation rate; this rate corresponds to the mode of
    FOMC participants’ forecast endpoints for PCE inflation.[4] With this definition of the P* path, it is easy to see an emerging “inflation deficit” to date.
  • The third policy component is to communicate regularly and often to
    the public that the intention of the FOMC’s policy actions is to achieve
    this path within a reasonable period of time. At a minimal level, this
    could simply be a disciplined guarantee regarding how long policy rates
    will be held at zero; it is an elaboration of what the current “extended
    period” language means. Other accommodative policies could be used to
    further build the public’s confidence that the Fed is pursuing this
    price-level path. The task of communicating many operational details
    would follow the announcement. Indeed, even before reaching the P* path,
    closing the gap would set the stage eventually for adjustments in
    operational policy, such as the altering size of the Fed’s balance
    sheet, taking reserve-draining actions along the way, and increasing the
    rate of interest on excess reserves (IOER), among others.
  • The fourth policy component is to clearly state the terms for the
    final, state-contingent exit from the P* policy. Determining that the
    price-level path has been achieved with confidence is a critical
    determination. Presumably, spending a few months at the price-level path
    would be more important than simply the first achievement of the path.
    Once the price-level path is achieved with confidence, the
    forward-looking monetary policy strategy would return to focusing on 2
    percent inflation over the medium term. Future policy misses on either
    side of 2 percent would be “bygones.” Policy would continue to strive
    for price stability over the medium term, which would be 2 percent PCE
    inflation. The past inflation misses would be used to simply inform
    current analyses of inflation pressures and improve future projections
    and policy responses.

What Might the Experience with P* Look Like? Some Favorable Cases

Let me spend some time discussing alternative outcomes from this
state-contingent price-level targeting regime. Remember, the regime is
one where policy actions like large scale assets purchases (LSAPs),
communications actions, etc., strive to increase monetary accommodation
to hit the P* path within a reasonable period of time. Figure 2(pdf) shows
the implied inflation rates for a 2 percent P* path where the current
price gap is closed by the end of 2012. Given current forecasts for
inflation, this would be a rapid turnaround in the inflation picture.
Many questions regarding operational responses during this adjustment
would need to be addressed:

  • The inflation rates are relatively modest: 2.2 percent core
    inflation in 2011 and 2.9 percent in 2012. For a policymaker with a
    symmetric loss function around 2 percent, 2.9 percent is about the same
    loss as 1 percent. This is not a significant change from current
    expectations of policy losses. Of course, ensuring commitment to the
    policy exit is presumably crucial for achieving 2 percent in 2013.
  • If short-term interest rates remain near zero during this
    adjustment, real interest rates would be between –2 and –3 percent.
    Perhaps that would be enough to improve labor markets and aggregate
    demand sufficiently, but I personally put more faith in analyses that
    suggest the liquidity trap is larger than this.
  • Consequently, in this scenario at the end of 2012, if resource slack
    remains substantial and inflationary pressures are returning toward 2
    percent over the medium term on account of credible policy commitment,
    then a standard Taylor-rule prescription may still call for a relatively
    low federal funds rate. And the size and composition of the Fed’s
    balance sheet might also be consistent with accommodation. How much? The
    ultimate decisions for monetary policy would continue to focus on our
    dual mandate responsibilities; but inflation would be nearer our goal of
    price stability and aggregate demand would be stronger.

As I mentioned, a 2 percent P* policy that achieves the target
path by the end of 2012 might leave unemployment still relatively high
given the implied real rates. Figure 3(pdf) displays
a more aggressive P* policy that is assumed to close by the end of
2013. This path rises at a 3 percent rate from December 2007 until
December 2012, and then reverts to the 2 percent slope, taken as price
stability. This path incorporates what Svensson (2003) refers to as an
initial “price gap to undo:” It allows the eventual price adjustment to
incorporate a lower real rate if that is what the economic analysis
suggests is most useful to increase aggregate demand. Over the course of
this hypothetical adjustment, inflation is about 3, 4, and 3 percent
from 2011 through 2013. Thus, policy can generate –3 and –4 percent real
rates: This achieves a substantially higher opportunity cost of holding
on to cash-like assets rather than lending and investing excess
reserves in productive activities and workforces.


Again, credible commitment to the price path P* is, of course,
critical to achieving the inflation endpoint of 2 percent over the
medium term. In this regard, a reduction in the size of the Fed’s dual
mandate shortfalls would reinforce the public’s perception that the
Fed’s incentives are appropriately aligned with exiting the P* policy
with medium-term price-stability in sight.

What Might the Experience with P* Look Like? Some More Challenging Cases

There are many operational aspects of a P* policy that require
much more elaboration and study. Nevertheless, let me mention three
clear situations that require more complicated responses. It is a
hallmark of the uncertain times that we face that these are at polar

Delayed inflation

The first challenge is to imagine that inflation continues to remain
very low even after an announcement that monetary policy is following a
price-level path. As inflation delay continues, the “inflation deficit”
account builds. That is, the price gap gets larger, and implied future
inflation to attain the P* path grows. This would clearly be
nerve-wracking for policymakers, and the credibility of our commitment
to ever growing inflation rates would be crucial for the success of the
policy. If our resolve is credible, well-functioning financial markets
should get the message. After all, investors and lenders sitting on
cash-like assets would be building up an exposure to adverse future real
interest rates. And I would expect the financial press to help
communicate these investment risks on a regular basis. (I know I’ve felt
that sting already.)

As cash moves out of investment portfolios into the general economy,
inflation will rise as required by the price-level targeting policy.

Smaller resource slack and greater inflation pressures

The second challenge is to imagine that the degree of resource slack
in the economy is much smaller than many presume. One example would be
if the structural rate of unemployment was upward of 8 percent. In this
case, more accommodation could lead to higher inflation and a rapid
closing of the price gap.

As it turns out, this is not a challenge for the P* policy: A quicker
closing of the price gap harkens the exit of the state-contingent
price-level policy. The fact that unemployment would remain high would
be a signal that increasing aggregate demand alone is not enough to
address this problem. But monetary policy would have succeeded in moving
closer to price stability with the attending benefits from achieving
that policy goal. Confidently switching to the post-P* policy would
enhance credibility for price stability over the medium term. And we
would have done all that we could to address the employment
situation—which would also enhance Fed credibility, in my judgment. 

Accelerating inflation once the price gap has been closed

The third challenge would be if inflation was surprisingly high at
the point when the price gap was eliminated and policy reverted to
targeting 2 percent inflation over the medium term. I regard this case
as extremely unlikely. Recall that we are embarking on this price-level
targeting policy in an environment of huge resource gaps, with minimal
inflationary pressures. (I actually think that the greater difficulty
will be getting inflation going in the first place.) But in the unlikely
occurrence that inflation accelerates beyond the levels we anticipate,
we have the tools to deal with it. Specifically, relative to initial
baseline scenarios, the Fed could more aggressively increase the federal
funds rate and interest on excess reserves (IOER), as well as drain
liquidity from our balance sheet. Furthermore, any higher inflation
would almost surely be associated with stronger economic growth and job
creation, so these stronger “exit strategy” actions would be entirely

Concluding Remarks

My objective today has been a simple one: to discuss a policy
tool that has received almost zero discussion, though it regularly comes
out of careful analyses of mainstream economic models that we use to
assess monetary policy options. We should put this policy tool on the
table and debate its suitability to the current situation in the U.S.

Most critiques I have heard of this type of policy tool involve the
risk of runaway inflation expectations or the loss of hard-earned
credibility. My response is to continually fall back on the discipline
of the state-contingent exit plan. A central bank exercising this policy
would have to credibly convey to the public that this policy will end
when the price gap is closed. An important risk would be the temptation
to keep policy easy if the labor market has not reached the vicinity of
full employment. Depending on the parameters of the P* path, inflation
expectations and the size of resource slack, the price gap could close
before unemployment is reduced toward 6 percent or lower. Nevertheless,
credibility requires exiting the P* policy at this point. Doing so
ensures that this is a conservative policy, with prudent risk-mitigants
against outcomes that monetary policy is unable to improve upon.

But I am more hopeful for this policy’s potential to improve upon our
current liquidity trap economic conditions. I hope that my comments
have helped expand the debate over the past few weeks.


An essential reference list would begin with Krugman (1998), Eggertsson
and Woodford (2003), Svensson (2003), and Auerbach and Obstfeld (2005).

[2] Evans (2010). See also my interview with The Wall Street Journal in Hilsenrath (2010).

In the speech cited earlier, I also discussed the relevant evidence on
job mismatch and the Beveridge curve. I find unconvincing the argument
that the natural rate of unemployment has risen enough to deter
additional substantial policy accommodation.


For the remainder of my comments, I will take 2 percent to be the FOMC’s
explicit inflation objective over the medium term. This is not a
decision that has been taken by the FOMC. I simply use 2 percent to
facilitate the development of my comments.



Auerbach, Alan J., and Maurice Obstfeld, 2005, “The Case for Open-market Purchases in a Liquidity Trap,” American Economic Review, Vol. 95, No. 1, March, pp. 110–137.


Eggertsson, Gauti B., and Michael Woodford, 2003, “The Zero Bound on Interest Rates and Optimal Monetary Policy,” Brookings Papers on Economic Activity, Vol. 34, No. 1, pp. 139–211.


Evans, Charles L., 2010, “A Perspective on the Future of U.S. Monetary Policy,” Speech  at a conference sponsored by the Bank of France, The Future of Monetary Policy, Rome, Italy, October 1.


Hilsenrath, Jon, 2010, “Q&A: Chicago Fed’s Evans Elaborates on
His Call for Aggressive Fed Action,” Real Time Economics: Economic
Insights and Analysis from The Wall Street Journalblog(external), October 5.


Krugman, Paul R., 1998, “It’s Baaack: Japan’s Slump and the Return of the Liquidity Trap,” Brookings Papers on Economic Activity, Vol. 29, No. 2, pp. 137–187.

Svensson, Lars E. O., 2003, “Escaping from a Liquidity Trap and Deflation: The Foolproof Way and Others,” Journal of Economic Perspectives, Vol. 17, No. 4, pp. 145–166.

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Jack's picture

FX looks like a huge mess today.  What is going on out there?

hedgeless_horseman's picture

It looks a lot like the beginning of Rawles novel, Patriots.  Yes?

Noah Vail's picture

We don't need to worry about inflation anymore. The mega banks are going down and the great money machine goes down with them. There is no way the Fed can inflate when their cartel of megabanks are no longer functioning and in receivership. Anyone who thinks the Feds can bail these banks out of this disaster is drinking the kool aid.

fearsomepirate's picture

That's dangerously naive.  The Fed can always just funnel the money directly to the US government, which is more than willing to spend it on hookers and blow.

Jack's picture

FDouble post

Assetman's picture

Well... the Fed created their own liquidity trap, by essentially allowing banks to shelter capital into reserves... rather than have the liquidity move through the economy via real loan growth.  Of course, who in the world would want to take out a loan and lever growth even more these days?  Yeah... I know... there would be plenty of takers, if there were no consequences for default.

You want inflation, Mr. Evans?  Then find incentive for lending institutions to increase money velocity-- you'll get more than you bargained for.  I'm finding it very difficult buying into the argument of "liquidity trap" in an environment where the same Fed official is predicting economic growth of 2%-3% on an going forward basis, and inflation rates above zero.   If you provide disincentives for the banks to hoard excess reserves and use that liquidity to make make loans, then you'll get the growth and inflation you're looking for-- and probably MUCH more than you would expect.  Not that I would endorse that approach.

Bottom line... there is PLENTY of liquidity in the financial system-- there appears to be little demand for that liquidity.  The Fed is essentially responding to a drop in demand for wickers... by increasing the supply of wickers, and then lowering the price by a half percent-- and then letting the merchant (banks) decide if they want to actually sell the wicker to the customer (which in many cases, they don't).  Why does anyone in a Fed suit think that will work, especially if the merchant doesn't feel the need to make that loan??? 

So why is QE 2.0 even being discussed at this point?  QE 2.0 is primarily going to be used as an extended means of (a) transferring wealth from savers to those who have irresponsbily levered up; and (b) providing cheap finanacing for Treasury funding needs-- becuase foreign sources of capital are pulling away.   

And as was the cases with QE 1.0 and QE-Lite, no real economic value will be created from the nightmare exercise that will be QE 2.0.  Banks can continue to the game of playing the free money spread by increasing reserves, Timmy can sleep at night knowing that Uncle Ben will be there to sop up any new issuances at auction time, and asset values can remain artifically propped-- until the problem is passed down to the next round of unfortunate political and economic leaders. 

So... Mr. Evans rationale for another round of QE (inflation targeting, more lending, lower unemloyment) is disingenuous at best, and extremely dangerous at worst.  If we do get inflation (a desired outcome so it seems), it will likely be the stagflation variety, as there are no incentives to increase wages with 10%+ unemployment and 17% underemployment in the system.  If the rest of the globe does a "fuggit" on our approach to exporting deflation and sells their own $USD denomiated assets-- then we have our own currency crisis to worry about (and hyperinflation).

My hope is that the QE talk is a bluff in the international trade poker game, as others have mentioned.  But I'm really afraid these dolts at the Fed are so blinded by ideology, they are going to plow over the money printing cliff-- and do much more long term damage than good.  

These guys aren't re-introducing QE increase to inflation, reduce unemployment, or even spur economic growth-- they are doing QE to rescue a terribly insolvent financial system.  They should at least admit as much to the rest of us.

And it's STILL not likely to work.

101 years and counting's picture

Come on Europe.  Ball is in your court.  Just let Greece or Ireland default.  Absent QE2 of 5+ trillion, EUR will crash when the German and French banks take it up the rear.

the not so mighty maximiza's picture

Just give everyone a raise...problem solved!!!

sweet ebony diamond's picture

What do they call it when the Federal Reserve is the Buyer of Everything?

Turd Ferguson's picture

"A policy that targets a price-level objective emerges from analyzing standard—modern macroeconomic theory. The desirable properties of the price-level target (or temporarily above-average inflation) become most apparent in analyses that consider liquidity traps."

What pathetic, Keynesian nonsense this is. Classic man-controls-nature BS.

The arrogance of these fools is breathtaking. 

SheepDog-One's picture

Arrogance rules the times. 'Liquidity problem'? Oh, well thats because the core economy is totaly destroyed by you lunatics who had to leverage everything up 40X and swap it a million times. NOW they want to talk about economic fundamentals like an ECON101 prof? Ludicrous.

Bob's picture

+QE2.  Post of the day, SDO!

Xedus129's picture

ECON 101 is in the same lecture hall as my EECE class I usually get there early and they are always watching a John Stossel Movie or something ridiculous.  No Lie, great education system we have, hmmm.

Deflationburger with Fleas's picture

"We have a liquidity trqap.  Quick, add more liquidity"


"Hey fellas, there is a herion addict over here.  Quick, he needs more heroin!!"

Dagny Taggart's picture

Arrogance and hubris. Come on, why "might" there be liquidity traps when more than a quadrillion in derivatives have leveraged everything from Grandma to the Grandkids?

Racer's picture

"hard pill to swallow, but potentially beneficial"

All very well if you have lots of money, but if you have very little you will have to die because you cannot afford to live!

SheepDog-One's picture

Exactly. I suppose these multi billionaires dont care much if a loaf of bread goes to $50. But for the peasantry? Read up on living off the land as a mideval villager had to do, thats whats coming.

Hansel's picture

I'm *shocked* that a criminal, skimming bankster motherfucker thinks inflation is "entirely appropriate".

Mako's picture

In a system where compounding interest is attached, you always need more and more inflation or you collapse.  Inflation is always appropriate in the system you have in place or it collapses. 

Mako's picture

The job of the Fed is to convince the lemmings there is unlimited inflation potential.  Every time the lemmings start to slowdown it's the Fed's job to get every ounce of growth possible before the collapse and liquidation.   The Fed has been very successful on a short-term basis of convincing the stupid lemmings that helicopters are coming, no helicopters are coming.

You can beat a dead horse all you want, but it ain't going to make him run any faster.


SheepDog-One's picture

I agree, no helicopters are coming. But in the mean time, GET TO DA CHOPPA!!

Mako's picture

Correct.  Keep the lemmings moving to the choppas that will never show up.

Bob's picture

I'm thinking it will take a few more helicopter deliveries before people catch on. 

tmosley's picture

You seem to think that inflation is growth.  Yet another error in your long list of false premises.

The Fed thinks that inflation is growth too, if that shows you the economic numbskulls you can count yourself among.

Mako's picture

You have serious learning disabilities.  Get out of the trailer from time to time.

tmosley's picture

Right, my serious learning disabilities that force me to work as the manager of a multimillion dollar material science and drug development laboratory.

What have you ever done?  Other than claim the world is going to end next Thursday, so everyone should just give up?

jdrose1985's picture

Yeah dude, you're like...smarter than the Fed, right?

Crude oil is going down in price and up in value (priced in dollars). Dollars priced in crude since 2008 are worth more.

Inflation of the money supply IS growth or is supposed to REPRESENT growth in the system as it exist(ed) until business aka ponzi activity peaked in 2007.

Problem is the Fed now must convince the lemmings for as long as possible not to look down. Apparently the FED is at the end of its rope as a hopelessly hard dollar priced in oil sucks the lifeblood out of commerce and creates the illusion we are swimming in oil.

The FED can NOT get any amount of dollars into the REAL economy. Who is willing to take out a loan with which to INFLATE the money supply?


QE2 will simply be more money sitting in bank reserves while cash dollars disappear from circulation.

Edit: Also anyone interested in there being a lack of oil, you need to research the most viable alternative fuel which is hemp. It would take roughly 20-25,000 acres of hemp per day to fuel America at 20mbpd.

1100-TACTICAL-12's picture

All they have to do is reset everyone's FICO score to O"say 750... Then it's Katie bar the door. Americans will do what Americans do best...

Mako's picture

Inflation has to continue to be exponential positive.  The only way you get more houses build then in 2006-2007 is to start digging up dead people at an exponential rate and making them sign on the line.  Good luck with all that.  Eventually you would not be able to find the amount of dead people you need.

People can get credit right now... that is the myth they want you believe.  I can go get a mortgage anytime I want for all-time low rates. 

jdrose1985's picture

Credit is disappearing along with trust along with cash dollars and people with jobs.

There is no spoon.

You just saw the beginnings of a $13T pyramid of mortgage debt sodomized by the big bad dick of debt repudiation. Byebye pensions and everything else.

tmosley's picture

My pet rock is smarter than the Fed.  The Fed has negative intelligence (because they see what happens, but always misinterpret the cause, and thus always fail to accurately predict the outcome of their actions).

Also, I guess you never heard of POMO.  Sure, all the money being printed is just sitting in bank vaults.  I'm sure it isn't going into the stock markets and breaking everything.

tip e. canoe's picture


"In 1941 Henry Ford built a plastic car made of fiber from hemp and wheat straw. Hemp plastic is biodegradable, synthetic plastic is not."

Turd Ferguson's picture

Screw the Fed. Let's talk UFOs!!!

How about this?


Bob's picture

Looks like the Military is fucking with our heads. 

hedgeless_horseman's picture

Four sky divers.

One had a flare malfunction that delayed it lighting.


Phat Stax's picture

One light was filmed the other evening above Richmond, VA as well.

tip e. canoe's picture

project bluebeam has launched?

bigdumbnugly's picture


first sighted in manhatten, huh?   benny getting airborne in his chopper to do the drops?

i don't know about you but i'm going to east el paso with a big bucket and looking for dollars spread out all over the ground.