Goldman Attempts To Answer The $2.9 Trillion Question: "What Happens When The Fed Stops Buying?"

Tyler Durden's picture

Your rating: None

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Wed, 04/20/2011 - 16:07 | 1189701 Silver Bug
Silver Bug's picture

Basically, the game of musically chairs comes to a end. And we quickly realize. There just isn't that many chairs. It won't be pretty. Better have your Gold and Silver for that Hurricane.

Wed, 04/20/2011 - 16:11 | 1189735 camaro68ss
camaro68ss's picture

Is this serious or am I suppose to laugh because I’m laughing right now.

We are all fucked

Wed, 04/20/2011 - 17:04 | 1189958 MarketTruth
MarketTruth's picture

Who is this 'we' you talk about? Only the stupid sheeple will be left as bag holders as physical gold and silver holders will have the security of not seeing their hard earning being inflated and devalued away.

Wed, 04/20/2011 - 17:22 | 1190029 camaro68ss
camaro68ss's picture

 I hold silver, I just talking in general

Wed, 04/20/2011 - 18:22 | 1190243 cranky-old-geezer
cranky-old-geezer's picture

Not exactly. 

PMs aren't the only way to store wealth safe from currency debasement.  There are other ways also.

But we agree that any dollar-denominated asset will lose value as the currency looses value.

Thu, 04/21/2011 - 02:44 | 1191470 Michael
Michael's picture

Get this strait you fucking morons, not you MT; It is impossible for Ben Bernank to stop QE to infinity, for the exact second he does there will be an immediate complete and total worldwide economic collapse of biblical proportions that will make the great depression look like a fucking picnic. Got it?

Wed, 04/20/2011 - 16:30 | 1189829 Popo
Popo's picture

So you're saying at the cusp of our deflationary implosion you should buy metals?

Wed, 04/20/2011 - 16:52 | 1189854 redpill
redpill's picture

Actually I don't think he's really saying anything, he's typing some words and pasting a link to his blog.

But to your point, typically a deflationary environment would result in a rush to cash as a haven, but with the current dollar devaluation situation, we may see a reversion from the historical norm and witness PMs resist the decline because they have begun to supplant the dollar a crisis shelter.

Wed, 04/20/2011 - 17:06 | 1189966 The Profit Prophet
The Profit Prophet's picture


T.E.I.N. everyone.

Wed, 04/20/2011 - 18:28 | 1190266 cranky-old-geezer
cranky-old-geezer's picture

But there won't be deflation. 

Inflation is baked in now.  To keep the federal govt operating if no other reason.

Wed, 04/20/2011 - 22:06 | 1190853 Ned Zeppelin
Ned Zeppelin's picture

Be ready for the 180 degree head fake.  I think it may be coming. Engineered from the very top.  

Wed, 04/20/2011 - 22:32 | 1190931 JFK.4PREZ
JFK.4PREZ's picture

I agree- IMO no immediate QE3.  Banksters want to see a sell-off in PMs and commodities.  They may be shorting them on one side with fiat, but I wouldn't be surprised if theyre buying out the other end (for personal gain).   fucking douche magooshes.  But right before SHTF - helicopter ben will fly by with money bags for all!   QE3 YAY!  

Where's the best place to get a degree in Ponzinomics?  Princeton?

Thu, 04/21/2011 - 04:53 | 1191594 MadeOfQuarks
MadeOfQuarks's picture

Yep, could definitely happen. I purchased a fairly large amout of cheap stock puts to hedge my silver, could be worth considering.

Wed, 04/20/2011 - 19:14 | 1190403 long juan silver
long juan silver's picture

Dont expect change from your GOLD eagles when I sell you a ham sandwich.

Wed, 04/20/2011 - 20:33 | 1190588 Max Hunter
Max Hunter's picture

Pre 65 quarters and dimes will be quite suitable in most cases.. Not to mention, most people with PM's also have food and other necessities stocked up as well..  I wouldn't be holding my breath waiting for someone to offer you a gold eagle for that ham sandwich..

Thu, 04/21/2011 - 01:56 | 1191389 Clancy
Clancy's picture

See this gun?

Wed, 04/20/2011 - 16:09 | 1189712 Cleanclog
Cleanclog's picture

VIX just dropped to 14.99. Is anyone REALLY asking any questions? Suggests all is just dandy. Japan, Euro debt, future earnings, consumer purchases, or is it all just US dollar dropping so prices all look better?
Goldman doesn't answer client questions. They profit off their guidance to clients when they go the other way.

Wed, 04/20/2011 - 16:09 | 1189731 SheepDog-One
SheepDog-One's picture

No one is actually in the markets except for the 401K zombie brigades, totaly asleep after seeing some not so terrifying statements in the mail. All is well for now until placating the 401K zombies is no longer beneficial to banksters.

Wed, 04/20/2011 - 16:24 | 1189803 Misean
Misean's picture

My guess is the palcation is to roll through the next election cycle. Get the Baby bumblers another year toward exhaustion and age. Leave them hopeless, hungry and terribly frightened...

Wed, 04/20/2011 - 16:33 | 1189842 SheepDog-One
SheepDog-One's picture

I dont believe they can buy another calm 18 months with all the money they could print day and nite. Within a couple months, rocketing food prices, $5 gas, and a dollar that wont buy you what a nickel used to buy. Election schmecktion.

Wed, 04/20/2011 - 17:18 | 1190019 Misean
Misean's picture

I think they're gonna try...doesn't imply success.

Wed, 04/20/2011 - 22:09 | 1190860 Ned Zeppelin
Ned Zeppelin's picture

oh, and ever more heavily armed. . . . 

Wed, 04/20/2011 - 16:24 | 1189814 10kby2k
10kby2k's picture


Market closes daily where it was after 30 minutes of trade. No intra day action....let alone intra day reversals.  With all the obvious problems the economy faces....this is astounding. I've never seen anything like this.  Do all the trading desks have the same software? or is there a conspiracy? or both?

Wed, 04/20/2011 - 16:39 | 1189861 NotApplicable
NotApplicable's picture

They are all operating on behalf of the Fed.

All hail the POMO.

Wed, 04/20/2011 - 16:08 | 1189721 American idle
American idle's picture

Empirical evidence?

Wed, 04/20/2011 - 16:09 | 1189736 KTAISA
KTAISA's picture

is the answer yes?

Wed, 04/20/2011 - 16:15 | 1189760 Boilermaker
Boilermaker's picture

REITS just hit a 52 week high and up AH just make sure you don't dare fucking think about shorting those steaming piles of shit.

What difference does this garbage even make anymore?

Seriously, this has just become a pathetic comedy at this point.  Nobody believes it.  Nobody will believe it.  Slamming this shit even higher isn't going to convince anyone either.


Wed, 04/20/2011 - 16:17 | 1189772 SheepDog-One
SheepDog-One's picture

At this point its all they can do. As an earlier article mentioned their only game now is get thru today, and probably tomorrow...after that who cares. Its total lunatic policy at this point.

Wed, 04/20/2011 - 16:21 | 1189799 Boilermaker
Boilermaker's picture

I suppose so.  The comedy of it is that you can't hide the sale of CRE, it's publicly available.  Yet, they'll just slam it higher and higher anyway.  In some ways, the worse it gets the more they jack it higher.  I guess it's to force 'maximum pain' on anyone that dares to try to capitalize on the stupidity of it.

In any event, it's just fucking pitiful now.  But, as always, there are some stump-jumping fucking idiots that will buy into it.  So, what the fuck ever.

Wed, 04/20/2011 - 17:23 | 1190031 A Man without Q...
A Man without Qualities's picture

As I have said before, the bankers were fond of selling these things to pension funds.  

Quite often they'd sell the properties owned by the public sector, then arrange a sale and lease back and sell the equity from the REIT to the pension fund of same public sector.  It was a very lucrative racket for the banks, but obviously, they're terrified if it generates losses for the fund.  The idea that a government entity sells a building for a grossly inflated value to their own pension fund and pays the banks about 10% in the process doesn't look good, so the easiest thing is keep it propped up and hope nobody notices..

Wed, 04/20/2011 - 17:59 | 1190157 Boilermaker
Boilermaker's picture

I noticed.

Wed, 04/20/2011 - 21:03 | 1190678 Matto
Matto's picture

It used to be you'd have to say something truly ludicrous to junked around here - there was space for all comments and all points of view. Look at it now, cant believe people junked your comments, whether they agree with them or not.


Pull your fkn heads in junkers - if you're gonna run around junking everything then provide an explanation & add to the discussion at least!

Wed, 04/20/2011 - 22:08 | 1190863 Ned Zeppelin
Ned Zeppelin's picture

Noticed the junker assholes are on the increase. Pay no attention.  

Wed, 04/20/2011 - 19:02 | 1190365 fxrxexexdxoxmx
fxrxexexdxoxmx's picture

No one will go to jail as a result of banksters, unions, and public workers greasing their pockets.

No one will go to jail.

What have they got to fear? The MSM will blame Bush and Zero will win the next election.

F***king Republicans........../s

Wed, 04/20/2011 - 16:18 | 1189774 d00daa
d00daa's picture

Short RWR?

Wed, 04/20/2011 - 16:20 | 1189785 Boilermaker
Boilermaker's picture

Are you short several dozen IQ points?

Wed, 04/20/2011 - 16:46 | 1189888 Bear
Bear's picture

Why not AAPL when you are at it

Wed, 04/20/2011 - 16:23 | 1189790 hedgeless_horseman
hedgeless_horseman's picture

Boilermaker, as you and I have discussed before, most apartment REITs should continue to do well, so long as more people continue to rent apartments.

Wed, 04/20/2011 - 16:25 | 1189807 Boilermaker
Boilermaker's picture

SPG, VNO, and BXP are not apartment REITs.

Wed, 04/20/2011 - 16:32 | 1189831 hedgeless_horseman
hedgeless_horseman's picture

Three of thousands, a minority, and you never specify, but rather always generalize.  Were you victimized by a bad REIT deal as a child? 

Speaking of victims, listen to this stuff:

Wed, 04/20/2011 - 16:44 | 1189871 Boilermaker
Boilermaker's picture

I'm not referring to the 'thousands'.  I'm referring to the giants which is what the Fed is monkey hammering higher every day.  Those are SPG, VNO, BXP, and GGP -OR- IYR and RMZ in ETF form.

I'm just fine.  I'm just so damned interested for anyone to justify the valuations and / or daily cornhole-the-shorts action.

I guess it could be organic buying from retail investors <barf>,

Wed, 04/20/2011 - 16:53 | 1189908 unununium
unununium's picture

I have lost a chunk of change shorting VNO but your idea sounds intruiging.

I think I could drink one little drink and if it doesn't work out, that would be it forever.  Just one little drink.

Wed, 04/20/2011 - 18:32 | 1190286 sunkeye
sunkeye's picture

@bolier that's the thing it makes no sense yet it continues

Wed, 04/20/2011 - 16:13 | 1189762 SheepDog-One
SheepDog-One's picture

Go ahead clowns, end QE, I dare ya! Damned if they do, more damned if they dont...and the realization when the music stops that theres only 1 termite eaten chair available and GS has dibs on it wont make for a very nice scene.

Wed, 04/20/2011 - 16:14 | 1189768 Practical Irrat...
Practical Irrationality's picture

Great write-up on what would happen IF the Fed stops buying.


The Fed will never be able to stop buying.

Wed, 04/20/2011 - 16:16 | 1189779 SheepDog-One
SheepDog-One's picture

Well they dont just keep buying to infinity. This game is on a timeline, it must end at some point.

Wed, 04/20/2011 - 16:21 | 1189789 Misean
Misean's picture

What happens? Cascading cross defaults. What does this BS from Goldman Sucks mean? Positioning the rubes for a buying frenzy from the squid at the end of QE2 before QE3 is announced. Of course Goldman Sucks has no inside information and has NOTHING to do with Feral Reserve bosses...

Wed, 04/20/2011 - 16:22 | 1189801 Sudden Debt
Sudden Debt's picture



Wed, 04/20/2011 - 16:24 | 1189802 zaknick
zaknick's picture

Aren't "conspiracy theories" fun???

Henry Kissinger, together with his international political directorate known as Kissinger Associates, is the individual who stands at the intersection point of every one of these networks: the back-channel with the Soviet Union, the drug and terror networks from Italy to Ibero-America, and the highest levels of finance, including his directorship in American Express, the entity into which has merged a major portion of Dope, command structure.

This command structure contains the following main groups:

* The British combination that controls offshore banking and precious metals trading, i.e., the Hongkong and Shanghai Bank, the Oppenheimer gold interests, top British financial institutions such as Eagle Star Insurance and Barclay's Bank, and their Canadian cousins such as Bank of Montreal and Bank of Nova Scotia;

* The major Swiss banks;

* The continuity of Venetian-Genoese financial manipulations in the personage of the late Roberto Calvi of Banco Ambrosiano, and the shadowy Edmund Safra of American Express;

* The combined offspring of the Swiss bankers and the old European fondi, the international grain cartel of Cargill, Continental (Fribourg family), Bunge, and Louis Dreyfus;

* The Boston Brahmin families and the big American financial institutions associated with Henry Kissinger, including Citibank, Chase Manhattan Bank, and American Express.

We identify a tightly closed financial network whose origins lie in the Dutch and British East India Companies and the modern origins of the narcotics traffic in the British Opium Wars of the 1840s. The paradigm for this network is the London Committee, or British-based directors, of the Hongkong and Shanghai Bank, the central bank for Dope, Incorporated. It ties in directly and immediately to the five big London clearing banks, the five London "gold pool" dealers, and the big Canadian international banks.

This network provides the offshore banking, precious metals, and related capabilities to cause several hundred billion dollars per year to disappear from the streets of New York, Amsterdam, Frankfurt, and Hong Kong, and reappear as apparently legitimate assets wherever convenient. We showed further that Anglo-Chinese collaboration in the Asian opiates traffic was a matter of official policy on the part of the People's Republic of China, and "business arrangements" of the British elite dating back to the first corruption of the Imperial Chinese bureaucracy by the British East India Company.

The Oppenheimer mining group, heirs to the empire of Cecil Rhodes, is the dominant force-in collaboration with HongShang and its Mideast subsidiaries-in the illegal traffic in gold and diamonds through which so much dirty money is turned into untraceable, portable assets. Through its diamond monopoly, De Beers, its mining corporations, Anglo-American Mining and Consolidated Gold Fields of South Africa, through its commodity trading organization, Phibro, the Oppenheimer group has expanded its tentacles across the world and, most of all, in the United States.

The old United Fruit Company, renamed United Brands in the 1960s, has been the center of American organized crime since the turn of this century ... United Fruit's banana boats coming into Baltimore harbor have been the freest vehicle for the physical passage of contraband into the United States. In its successive corporate reorganizations, United Brands has since wound up in the hands of Cincinnati, Ohio insurance financier Carl Lindner, the principal business partner through the last three decades of Michigan organized crime heir Max Fisher. And through an entanglement of financial interests that might have been invented by a gaudy but unimaginative mystery novelist, the fate of United Brands has been intertwined with that of American Express, the world's most efficient silent money-mover, and the prince of Levantine money-laundering, Syrian-Swiss financier Edmund Safra. American Express, the monster that devoured half the old great houses of Wall Street, ties together the United Brands crime and smuggling capability, the financial networks who created and funded the Argentine Monteneros and other terrorist organizations, as well as the Swiss-based interests who have acted, for a generation, as the private couriers of the Soviet Union in the international gold markets.

Investment banking in the United States is now almost wholly controlled by the ancient European fondi, that is, family trust funds whose pedigree goes back to the financing of the Crusades by Genoa and Venice.

From 1971 to 1981, in the decade after then-Treasury Undersecretary Paul Volcker removed its gold backing, the U.S. dollar fell to a mere 60% of its pre-devaluation level, while the combined effects of inflation and lower stock prices devalued American equity to about 30% of its 1971 level in terms of gold. From the standpoint of the old oligarchical fondi, secured through gold, American equity could be had for a fifth of its pre-1971 price during the late 1970s.

Wed, 04/20/2011 - 16:29 | 1189839 magpie
magpie's picture

There have always been conspiracies, but most of them fail.

That's the theory.

Do NOT follow this link or you will be banned from the site!