Fed's Kocherlakota Advocates 50 bps Interest Rate Hike After Q3

Tyler Durden's picture

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HamyWanger's picture

It's not the first time Kocherlakota says idiot things with no follow-up.

The FED will never raise rates, and that's a good thing. Anything else would harm the global economic recovery. 

Alcoholic Native American's picture

I agree with you. Why do they keep saying they are going to raise rates.  It's obvious that they are not going to do it.



Calvin Jones and the 13th Apostle's picture

As Bill over at Calculated Risk says, the Fed isn't going to raise rates till the middle of 2012 at the very earliest.  And probably not until 2013.

nope-1004's picture

This entire week was planned.

1)  Debt ceiling needs to be raised, late last week increase margin on silver.

2)  "Kill" Osama on Sunday, attempt to bring major distraction to the public.

3)  Sunday night hammer Silver.

4)  Mon-Wed raise margin on silver again.

5)  Hammer silver to bring down crude and other commods, as ADP numbers (known before hand) for Thursday will be the worst in many months.

6)  Set up the talk for "weaker than expected economy" and double dip in housing to rationalize QE3.

They need QE3 no matter what.  But how do you convince everyone with oil at near all time highs, silver within a hair of all time highs, and DXY tanking?

It really all makes sense when you look back on it.  Watch next week unfold and then the picture will start to look even clearer.

We are all being lied to and the script is meant to distract the majority.


scatterbrains's picture

they miscalculated taking down silver before the announcement, the short covering alone, once the weak handed throats are slit will rocket silver back to 50. They should have announced QE3 and then hammered silver.. give it that sell the news feel to it.

Franken_Stein's picture

Brilliantly observed !

You da man.

Sudden Debt's picture

Like Bernanke once said:



That's fortune cookie Dailhi Lama Shit man!


ElvisDog's picture

I'm not even sure the Fed could raise rates by 50bp. According to John Hussman's analysis, if they did raise by 50bp they would have to sell something like $1T of their reserves in order to keep inflation in check. Who is going to buy the $1T of crap from the Fed.

reachsb's picture

Never put anything past them. At stake is not only the global economic recovery but the need to maintain the USD as the world's reserve currency. There is a behind the scenes global fight going on, wherein; everyone's jockeying to become the next reserve currency (IMF, China, Russia, Euro, etc.). And why not. Having the ability to print the world's reserve currency enabled the Fed to print as much as $20T to back-stop the entire collapsing financial system. How many Central banks around the world would have been able to print that much money and exchange it for absolutely trashy toxic assets with their respective imploding financial instutitions (without the ability to print the reserve currency)?? None!! 

I expect the Fed to tighten this summer/fall to maintain the false facade of fiscal responsibilty and sound monetary policies. It also needs to nip its chief rival (precious metals). Gold and Silver have become the de-facto reserve currencies in the past 6 months. This measure of tightening will only be for show while it can still indulge in other QE like programs to hand out free money to its friends (big banks). Seems like it has learnt from its earlier mistakes and it will be careful to not call such future QE programs by their names (like Easing) but something so convulated that even the financial mavens won't be able to figure it out. For e.g; how many folks know that the USD currency swaps that the Fed performed with the various Central banks around the world in 2008 (during a USD liquidity crisis) were nothing but sheer money printing?

reachsb's picture

Also, I would like to add that today's ramblings from Kocher is in continuation of the cabal's orchestrated moves to take out the primary competitor - Precious metals. The chronology of events so far:

  1. Spook investors by dropping the bid on Sunday night (when Asia was closed).
  2. CME and various brokerages raised margins on futures contracts continuously to unheard of levels. 
  3. Parrot out the secondary players (who are part of this game) to announce that they are selling PMs (Soros, Carlos Slim, etc.).
  4. Kocher comes in and says that the Fed needs to tighten.
They will keep doing this till they won't slay the monster. They are not even letting the PMs base.




MrPike's picture

0% interest rates encourage companies that operate with a 1% profit margin to exist.  What happens to those companies when the Fed decides to raise interest rates above that 1% mark?  Do you think it will be pretty?  

Imminent Crucible's picture

Kocherlakota: What a gasbag.  The headline should have read

Kocherlakota Advocates 50 bp Rate Hike After QE3, 4

Franken_Stein's picture


The Fed is a fraud and must be abolished.

If Ben Bernanke decided today, that he wanted to create a trillion dollars at the push of a button and give half of it to himself and the other half to his closest cronies, he can do it, and nobody can stop him from doing so.

It's totally arbitrary, random and unlimited in size.
It's a monetary oligarchy with no oversight or audit.

And all the financial journalists all over the world constantly create and nurture the illusion of officiality and trustworthyness around this fake and criminal private enterprise.

The Federal Reserve is not an institution.

Their issued linen is to the sheeple population what the glass beads were to the Native Indians when in 1492 they traded their gold to the Conquistadores in exchange for it.

Dollar = glass beads = worthless, since abundant and replicable
Gold = gold = valuable, since rare and non-replicable


Alcoholic Native American's picture

To be fair, the Pentagon can do this too.  It's a matter of national security, and complete systematic collapse is not acceptable.  The Military and the banking institutions are too big to fail.

Imminent Crucible's picture

Complete systematic collapse is perfectly okay by me.

Shredd the FED's picture

Highly agree with you, but in order to fight the FED we need to fight who runs and controls it... Please help with petition...  http://salsa.democracyinaction.org/o/641/p/dia/action/public/?action_KEY...  Zionist that control israel and US as well... You better start believing this that they are NOT friend of the United States... otherwise we will be fighting invisible enemy...


TruthInSunshine's picture

Hike the rates, default on the debt, declare that it was all a fat fingered mistake, apologize profusely and send some fruit baskets, chocolates and flowers out, and hit the fucking reset button.

And then have the USAF carpet bomb every building the Federal Reserve Bank occupies.

Sutton's picture

And at the next meeting(s) he'll vote for whatever BB wants.

Urban Redneck's picture

They all do, they're the Chairsatan's cheerleading BITCHEZ

Free to parrot the propaganda by day, but they all bend over at his command behind the closed doors of Marriner Eccles.

Re-Discovery's picture

PR game.  Just trying to get market to position itself on expectation of tightening, i.e. cool commodity speculation.  Then when they do it -- 7 years from now -- they will have recieved the most bang for their buck.

All statements coordinated from center by the Chairistan.

RobotTrader's picture

Hope a lot of you guys learned a lesson.

Any and all runaway commodity markets can be pushed down with paper contract shorting, margin hikes, or whatever tools are at TPTB's disposal.

Note how the Fed-sponsored, TPTB-supported QQQ remains pinned at 52-week highs.

Meanwhile the "Silver Bitchez" have been decimated.

Never fight City Hall.  Never.

Anyone who wants to trade for a living must follow this rule.  Otherwise, prepare to get wiped out by Uncle Gorilla.

spartan117's picture

No person, entity, business, or even government, is bigger than the market.  They can move the PMs in the short term, but intermediate to long term, their actions will result in even higher prices than where we should have gone if they had just stayed out of it.

Edit:  I'm not trading, but I would agree with that part of your premise.

tmosley's picture

Hey dumbshit--you have still been outperformed by silver over the last 12 months.  Also, all other timeframes longer than that.

"Uncle Gorilla" is tired.  He's got strength on paper, but the truth is he's got very little staying power, and is unable to overpower real things.

My stack will be growing next week.  And the month after, and the month after that, and the month after that, and so on.  Nothing can be done to stop that.  Nothing short of the finale of this farce, anyways.

camaro68ss's picture

GOD what was i thinking, i should not have bought so much silver at $25. your right, goverment is always right and will never fail. im going to sale everything and buy Netfix and Apple stocks


Thanks Robo for shining the light on me

Re-Discovery's picture

What lesson?  To do it again?  My Silver/Gold performance is up 93.7% since September not counting very small positions I continue to hold for shits and giggles.

Stop trying to teach lessons and go beat that performance with your 'top tick' picks.

Tracerfan's picture

The U.S. is still bankrupt.

Actually more bankrupt today than yesterday.

Fiat and more fiat will be printed.  Go ahead and put your more of your assets in fiat.

I am getting more and more physical with real money (for the past 5,000 years).

Franken_Stein's picture


I hope they'll hammer silver to $5 / oz. so I can buy even more !


I personally know people who have held silver for some 30 years now.

This little dent in the chart is nothing.


The sooner the Chinese and their central bank call on the American CRIMEX bluff, the better.

Imagine if the Chinese invested part of their $3 tn sovereign wealth fund into PMs, especially silver at COMEX, and then demanded delivery.

If I were the Chinese, I'd do it.


And if they can't deliver, I'd demand a 100% premium in dollars.

Or 1000 %.


They could inflict some serious damage on the Manhattan, New York based criminal mafia cartel and to CME group.


A-hahahahaha !


topcallingtroll's picture

ZSL been bely bely good to me. Never made over 50 percent in a single week. I admit it is mostly luck. I am going to play the tortoise for a while and hang out in cash. Does anybody have a better idea? Name and price?

oogs66's picture

Yes, extremely tough to trade against the government short term.  But on other hand, their actions tend to be temporary.  Most recent case in point, Yen intervention.  Its almost back to 80.  The intervention worked briefly but has run out of steam and the natural order is taking over again.

SheepDog-One's picture

How much does Tyler pay for this ongoing clown act of yours RainblowTrader?

malek's picture

From time to time, you should not look at ticks but widen your perspective to decades.

ElvisDog's picture

Robotrader has a good point. If you're buying silver with cash (no margin) as a long-term insurance policy, you can ignore price swings. If you are trading or using margin, you have to pay attention to signals coming from organizations that have the ability to manipulate price over the short term. I'm not an expert trader, but I had a moderate position in UNG. Something just didn't feel right and I dumped it on Monday. I'm feeling pretty good about that decision.

spartan117's picture

They are trying very hard to kill the PMs.  Wow, they are pulling out all stops here. 

malek's picture

How can they kill PMs?
They can kill paper or the PM day traders. Which is a good thing.

tmosley's picture

Yeah, let's stop shooting heroine into our nutsacks after the next hit!

Sudden Debt's picture

Tmosley... I like you... but shooting heroine in your nutsack just can't be good for you man!

Better stick with cocaine and also remember: God gave you a nose to use it like he intended it to be used.



tmosley's picture

Maybe my sardonicism radar is off for the day, but I was saying that from the perspective of the Fed.

Like saying "I'm going to lose weight by going on a diet--right after I polish off six buckets of ice cream."

carbonmutant's picture

This administration and its cronies are trying to find something that sticks...

alexwest's picture

core inflation rate of 1.5 percent is still markedly below the Fed's price stability objective of 2 percent

another ipad eater..
fuck the guy... ship his fucking body down the filthy river of Gang where he belongs


FreeNewEnergy's picture

Release the Hounds!

Deflate at will!

Give Timmah another Tootsie Roll! He's drooling again.


monmick's picture
Fed's Kocherlakota Advocates 50 bps Interest Rate Hike After Q3

Surely you mean "... after QE3..."!

Drag Racer's picture

of course, discourage borrowing after you lend it all out. It's just like raising the debt limit after you promise not to spend it.

NotApplicable's picture

On the other hand, my forecast for core PCE inflation might be too low. For example, core PCE inflation might rise to 1.8 percent over the course of 2011. But incoming data would reveal such a rapid increase to the FOMC early in the third quarter of 2011. I would recommend raising the target fed funds interest rate shortly thereafter.

Law97's picture

Glad to see here no one else is buying this hawkish Fed jawboning BS.  Actions still speak louder than words.

Alcoholic Native American's picture

I love the avatar.  I'm the one who origionally made it, I had it over on ticker forums before they teabagged me.

Sudden Debt's picture

and 55 bps after QE4!


Boilermaker's picture

REITs all the way back, positive, and climbing.

God bless strip malls...at all costs....literally.

jbaressi's picture

Core inflation is BELOW target, and so the Fed must TIGHTEN.


To say the least, this guy is reading from a different Econ 101 text book than the rest of us.

alexanderstollznow's picture

perhaps if ZN hadnt intentionally quoted Kochi in a deliberately misleading way, it wouldnt come across like you suggest.  What he actually said is that if core inflation was 1.5%, it would have risen by 0.8% from its current level of 0.7%, and therefore a modest rate hike would be in order, as inflation would have risen.

amazing what you can discover when you read source materials and not someone else's biased edited version.  also shows that there is no point putting the source document in front of ZH readers, as they cant even bother to open their eyes to read it.  too much effort.