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John Taylor: "Next Year Is Going To Be Truly Miserable" And QE 3 Will Come

Tyler Durden's picture





 

As usual, FX Concept's John Taylor (not the guy with the inflation rule, or the guy with the bass guitar) does not sugarcoat his views, and as disclosed by his latest outlook on the world, things, especially if there is no QE3, are about to get much worse: "Next year is going to be pretty miserable." The reason: the same one that caused us to predict, correctly, late in 2010 when we mocked Goldman's call for a US economic renaissance, namely that with the Fed blowing its wad on QE2 at a time when fiscal "consolidation" was about to become the norm in Washington, that the impact of monetary policy would have an increasingly less pronounced impact. We are surprised by how few people still get it: that cutting deficits at the same time as monetary easing is ending, will be an unmitigated disaster for the economy, and, yes, eventually the markets: "I'm afraid that the cutting the deficit means cutting final demand. It means the economy is going to slow. It might not be a bad thing to cut the deficit, but unfortunately, when you cut the deficit, you're going to get a slowdown. The more you cut the deficit, the worse it's going to be." As a reminder, DC hopes to cut up to $4 trillion in future deficits. And this is happening as the president is entering the fight for his second term. Basically, his only reelection chance, now that Europe is fully austere and China is tightening is some miracle out of Japan (which will not happen), or, cue surprise, the Fed, and QE 3. Ironically, the only hope left for the administration is that "this time it is different" and the Fed can get it right. Which it can't. But it won't stop it from trying. Taylor agrees: "QE 3 will start or not? No. No more? Well, eventually it will start I would argue. I think the fed has to really see the economy printing minus numbers first." So there's the benchmark: contraction, or at least collapsing growth. Which is precisely where we are now. Yes, QE3 is a certainty, and when it is announced, to borrow a phrase, hide your kids, hide your wife, and certainly hide your gold.

 


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Thu, 06/02/2011 - 11:15 | Link to Comment surferexx
surferexx's picture

obviously going to be at least a small gap between QE2 to #3.  how long is anyone's guess.  Market going to bounce around even today or are we going to see a follow through?

Thu, 06/02/2011 - 11:56 | Link to Comment RafterManFMJ
RafterManFMJ's picture

*Caressing a stack of ASE* "So pretty...so shiny...my precioussssss..."

Thu, 06/02/2011 - 12:04 | Link to Comment Dolemite
Dolemite's picture


Silver short term top in at 37.50

Equites and oil dont look too hot either...

http://deadcatbouncing.blogspot.com/2011/06/silver-to-have-significant-downside.html

Thu, 06/02/2011 - 23:09 | Link to Comment FlyPaper
FlyPaper's picture

Gap between QE2 and QE3xx - duration:  seems to me that Obama can't get reelected if the economy is in shambles.  Also, the public that is onto the debt threat can be quashed if the economy tumbles and the government 'cuts back.'  

Hence a strategy is to let things cool enough then wait for Joe public to be mislead by the mainstream media to cry out for relief.  That's when QE3 comes; time to dump money into the economy as the election cycle heats up.

Just a theory, but since the thread is always power and money, this seems to fit both criteria.

 

Thu, 06/02/2011 - 11:16 | Link to Comment Deep
Deep's picture

See while everyone here and mainstream media think QE3 will be a replay of QE2, where we rally 25%, IMHO i dont think so. By then it will be all too obivious that this will not work either, and i see a massive run on the markets.

Thu, 06/02/2011 - 11:20 | Link to Comment SheepDog-One
SheepDog-One's picture

A QE3 would simply be a momentary feeding frenzy like throwing a pig carcass into a school of Great Whites. Who is left to believe whats failed will now work? I really believe soon as further 'easing' is announced the wheels fall off immediately after maybe a quick spike up at best.

Thu, 06/02/2011 - 14:04 | Link to Comment Alexandre Stavisky
Alexandre Stavisky's picture

Austerity? Ha-ha

You mean the one in seven who has his daily calories and shelter provided by Big brother.  How about all the gov't employees and military and social security recipients, most of whom are fully dependent and have all their forward payments factored completely to their lifestyle?

You would have revolution.  All the mortgage writers, all the construction and manufacturing workers, all the marginalized finance guys--no work.  Additionally, austerity means the money supply must contract and fast.  That means necessary add'l defaults, add'l bankruptcies, add'l strain on the already broken beyond fix financial system.

With all the printing, stealth monetization, restructuring and "reprofiling" to keep sovereigns from default, and gimmick felonious accounting keeping banks appearing solvent, the global financial system barely passed the guffaw test.

Austerity, money supply shrinkage, recognition of insolvency, 40-60% reduction in social welfare?

No way.  The globe will print until every outlier who has so far escaped the rapacious destruction of monetary and economic mismanagement capitulates.  Then "free market" western capitalism which is truly just command and control socialism disguised, will resort to strong arm command economy.

There will never be a willing acceptance of austerity.  Too long have TPTB shown NO tolerance for discipline.

No thank you currency.  No thank you negative cash flow, maintenance nightmare, annual tax tribute RE, no thanks pretty equity and debt certificates with no fundamental underpinning and twice exposed to degradation--denominated in arbitrary fiat and derived from super-impaired volatile opaque cash-flows.

This structure is so wobbly it couldn't support the flimsiest austerity.  Print, pretend, pray.  Philosophy of men that would be king.

Thu, 06/02/2011 - 14:42 | Link to Comment Lucius Corneliu...
Lucius Cornelius Sulla's picture

Great comment.  Better learn to grow your own food and raise your own chickens!

Thu, 06/02/2011 - 15:00 | Link to Comment JW n FL
JW n FL's picture

I think you missed the fact that he is not happy with the way things are..

 

I think that you missed the fact that $18 Trillion Dollars was handed to Wall Street not the po' folk of the land in the last 3 years with no benefit to the economy or "We the People"...

 

Thusly, you need to read more and respond less.. you stupid fuck!

Thu, 06/02/2011 - 11:21 | Link to Comment chrisd
chrisd's picture

Don't underestimate the stupidity of those receiving the money

Thu, 06/02/2011 - 11:27 | Link to Comment SheepDog-One
SheepDog-One's picture

What money, the fiat worthless dollars they'd move the decimal point on? Big deal. Lets see how good the fiat money is when Syria style riots show up here when the millions living on SNAP get cut off suddenly as congress is talking about doing.

Thu, 06/02/2011 - 11:48 | Link to Comment Chump
Chump's picture

You're right.  QEIII is not coming.  Calling it a certainty in every other headline on ZH is not going to change reality.

Thu, 06/02/2011 - 13:23 | Link to Comment Alpha Monkey
Alpha Monkey's picture

Do banks still have tons of bad loans they need to offload?  Is there a new buyer of last resort (someone that has confidence in the US and it's financial institutions)?  Does our economy collapse if new debt isn't created?  Is under/unemployment at all time high levels?  Are people able to take on debt if there are no jobs?  Are companies hiring?  Are people already up to their eyeballs in debt.  Are banks willing to loan to poeple if there is a chance they won't be able to collect on those debts?  Is wall street still running the country? Perhaps you're not looking from the right perspective...

Thu, 06/02/2011 - 13:46 | Link to Comment Chump
Chump's picture

Did QE, QE-lite, and QEII do a single thing to help alleviate any of that, or did it ultimately make all those things worse?  Has QEII even ended yet?  C'mon man, think!

Thu, 06/02/2011 - 15:03 | Link to Comment Bwahaha WAGFDSMB
Bwahaha WAGFDSMB's picture

Does our economy collapse if new debt isn't created?

The Fed will delay the inevitable as long as it can.  When it can't delay any longer, TEOTWAKI.

Fri, 06/03/2011 - 00:49 | Link to Comment h3m1ngw4y
h3m1ngw4y's picture

not that i am interested in this crap but its TEOTWAWKI. not that id care about your spelling. it only proves the point

Thu, 06/02/2011 - 15:42 | Link to Comment WakeyWakey
WakeyWakey's picture

I agree they didn't alleviate the problems they were meant to solve, however it has made the millionaires and billionaires of the world even richer, and it is they who pull the strings....C'mon think, its a plutocracy and without us being in debt they dont make money.

Thu, 06/02/2011 - 12:20 | Link to Comment DosZap
DosZap's picture

They have bass ackwarded the QE funds.

Obama wants 2.5T more coin.

GOP wants 4T cuts.

Wet dream for both.

IF a QE were to be done, it should go directly to the PEOPLE.

Not the banks,not the Treasuries.

Dole out that kind of cash to John Q, and watch the spending spree.

Might be the last hope for at least a kick start on the economy,( likely way too late) and would guarantee Owambas re-election.

Thu, 06/02/2011 - 12:46 | Link to Comment sschu
sschu's picture

Dole out that kind of cash to John Q

Politically this is what Bam etal wants, direct cash in the hands of the voters, or maybe something around a mortgage refinance program to bring everyone to 2%.

Bennie wants more juice for his Wall Street cronies, I suspect we will end up with a bit of both.

Neither has worked so far, but this of course will provide a 9 month economic jump start to get the Bamster elected.  Look for it around October.  If this happens, 2013 will make 2009 look like a party. 

sschu

Thu, 06/02/2011 - 13:07 | Link to Comment Chump
Chump's picture

If printing money and handing it to citizens is an even mildly effective way of giving an economy a "kick start" then why the fuck should anyone ever work a day in their life?  Why doesn't the government just print money and deliver checks to every citizen every Friday?

ZH outlines the various pitfalls of money printing almost daily, not the least of which is currency debasement.  You rightly acknowledge that QE isn't even making it into the "real" economy, and yet we see the $ getting crushed.  Do you somehow think that when some type of QE is actually focused on delivering checks to commoners that said debasement of the $ will...subside?  Or do you think it will accelerate and negate any effects of this populist crack pipe dream?

Thu, 06/02/2011 - 15:47 | Link to Comment WakeyWakey
WakeyWakey's picture

i refer to my earlier answer. They are doing exactly that, ensuring their rich friends never have to work a day in their lives. They get 'free' money at our expense, and the politicians get to join the plutocracy.

Thu, 06/02/2011 - 15:48 | Link to Comment RKDS
RKDS's picture

That's only if people waste the money on new stuff and speculation.  If they responsibly retire debt, then they'll be much better off.  Heck, that's what I would do with any government check that came in.  The banksters were going to get a free money handjob anyway, so why not help those who actually need the help at the same time?

Thu, 06/02/2011 - 16:25 | Link to Comment Bwahaha WAGFDSMB
Bwahaha WAGFDSMB's picture

You assume that if the Fed knows QE is destructive they will stop doing it.  That assumption is false.

Fri, 06/03/2011 - 05:59 | Link to Comment jedimarkus
jedimarkus's picture

I totally agree.  I would not expect the same market reaction as we have had.   Less and less buying the big lie...

Thu, 06/02/2011 - 11:16 | Link to Comment mayhem_korner
mayhem_korner's picture

Sales of deadbolts and bolt-action rifles robust...

Thu, 06/02/2011 - 20:03 | Link to Comment Vlad Tepid
Vlad Tepid's picture

And P-47 Thunderbolts and neck bolts.  As long as it has a bolt in the name, I'm buying!

Thu, 06/02/2011 - 11:17 | Link to Comment TradingJoe
TradingJoe's picture

QE3: One BIG move upwards then woooossshhhh and that's IT folks, lights out!

Good Luck to You All!

Thu, 06/02/2011 - 11:21 | Link to Comment SheepDog-One
SheepDog-One's picture

Yes good luck, people will need a lot of it, in particular those who really have no idea of whats set to go down, that would be most all americans.

Thu, 06/02/2011 - 11:26 | Link to Comment Dr. Engali
Dr. Engali's picture

We won't make it that far. Once it is announced that will be it. The dollar will break all support vs all other currencies and be dead.

Thu, 06/02/2011 - 11:25 | Link to Comment SheepDog-One
SheepDog-One's picture

Yea I seriously doubt the 'move up' part will happen at all, just a sudden bubble pop and this time they have zero answers. 

Thu, 06/02/2011 - 11:21 | Link to Comment SheepDog-One
SheepDog-One's picture

No way out, and the world central bankster cabal is about to take it out on the people. Really its been the plan all along, its their 'new world order', but people liked calling that 'conspiracy theory' and therefore it couldnt be true. But it is totaly true.

Thu, 06/02/2011 - 12:26 | Link to Comment DosZap
DosZap's picture

Been preaching that for YEARS, only to thought a loonie.

Wish I had been incorrect.......

 Really its been the plan all along, its their 'new world order', but people liked calling that 'conspiracy theory' and therefore it couldnt be true. But it is totaly true.

 

Thu, 06/02/2011 - 16:04 | Link to Comment WakeyWakey
WakeyWakey's picture

I agree, the 'Solution' will be a one world government with a single world bank using a single world currency.

 

The only problem with that is China is never going to agree to that, especially as it is about to take over the mantle as world super power. So what is the solution to that ?

Easy, The US goes to war with China. How ? maybe have the Pentagon change the rules of engagement for war to include cyber terrorism, and then have the Chinese Govet conduct an unverifiable hack on the US govt...but start small, like hacking the g-mails of senior US gov staff....See how easy this shit is, sow the seeds and roll out the propaganda when required.

As China holds most of America's debt, if the US declares war on China, does that cancel the debt? I mean, surely a debtor nation would not credit it's enemy in time of war.

Its kill four birds with one stone

1) Cancel the debt

2) Send the Chinese back to the stone age to decimate their economy

3) Bring all the jobs back that the Chinese can no longer do

4) War generates business in arms, weapons and ballistics..good for stimulating the economy...look at WWII, it was the catalyst that brought the US out of the great depression.

 

I hope to fuck I am wrong on all this, but the dumb fuckers in charge have their safe bunker under Denver airport to survive the nuclear fallout for a few years.

Thu, 06/02/2011 - 16:21 | Link to Comment Bwahaha WAGFDSMB
Bwahaha WAGFDSMB's picture

You think it's possible to have a US/China war that doesn't go nuclear?

Thu, 06/02/2011 - 20:09 | Link to Comment Vlad Tepid
Vlad Tepid's picture

Yes, but not one that the US wins.  US military leadership would be stupid enough to fight it in Western Pacific...China would never go to San Diego.  They'll lure in the 7th fleet and wipe it out.  End of the war pretty much.  Then the Pentagon dingbats go nuclear as was said above.  It's a possibility but I don't think a one-world currency will have anything to do with it.  More like resource hegemony, if the US is still on it's feet.  If China thinks were becoming a threat to them, they will cut our economy out from under us. 

Thu, 06/02/2011 - 11:18 | Link to Comment fuu
fuu's picture

...they raping e'erbody out here.

Thu, 06/02/2011 - 11:25 | Link to Comment chrisd
chrisd's picture

hide your kids, hide your wife

Thu, 06/02/2011 - 11:32 | Link to Comment jomama
jomama's picture

and hide yo husbands

Thu, 06/02/2011 - 13:03 | Link to Comment johny2
johny2's picture

hide with your neighbours wife

Thu, 06/02/2011 - 14:07 | Link to Comment Thomas
Thomas's picture

What? No daughters?

Thu, 06/02/2011 - 11:19 | Link to Comment tip e. canoe
tip e. canoe's picture

thread music in honor of the Taylors:

http://www.youtube.com/watch?v=6Uxc9eFcZyM

Thu, 06/02/2011 - 11:24 | Link to Comment unky
unky's picture

reminds me of the NIA movie: The day the dollar died

Thu, 06/02/2011 - 11:25 | Link to Comment francis_sawyer
francis_sawyer's picture

Titanic bitchez!

Gold first... Then women & children...

Thu, 06/02/2011 - 11:26 | Link to Comment chartcruzer
chartcruzer's picture

VERY LONG TERM,,   S&P500 IN GOLD

http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3225058&cmd=show[s235939273]&disp=P

How much lower can it go.   Simply consider the size of the current debt bubble relative to 1929

Thu, 06/02/2011 - 11:24 | Link to Comment buzzsaw99
buzzsaw99's picture

The stock market is the economy.

A depression means stock prices are low.

"They" know at what level of the stock market QE3 will be applied and you don't.

Thu, 06/02/2011 - 11:29 | Link to Comment kridkrid
kridkrid's picture

Ha!  Hide your kids, hide your wife, hide your gold. 

"You're talking the real economy, not markets"... the world has gone mad.

"Europe can't do anything... Europe is falling apart"... may you live in interesting times.

"Housing is not going to save us"?  How can those words come out of the interviewer's mouth?

"We are looking like the Weimer Republic"... "When fascism comes to America, it will come wrapped in the flag and waving a cross"... Wait for it... wait for it....

Thu, 06/02/2011 - 11:41 | Link to Comment TwoShortPlanks
TwoShortPlanks's picture

And behind door number 2 i-i-i-s, National Socialism 2.0....congratulations America! And here's your friendly dictator, G-L-E-N  B-E-C-K! (Secretly Trump was hoping to get the gig, but he got fired).

Thu, 06/02/2011 - 12:11 | Link to Comment HellFish
HellFish's picture

Two Ns in Glenn Beck dummy.

Thu, 06/02/2011 - 12:29 | Link to Comment kridkrid
kridkrid's picture

Not sure why the junks... must be a lot of Glenn Beck fans here.  I watch the R's with interest to see if there is someone who could foot the bill.  And before you junk me... this isn't an anti-R thing... it's a timing thing.  And it's the R's who will be challenging the "Wiemar Republic".  Our current predicament would be unchanged had John McCain won.  Had he won, I would be watching the D's with interest.

Thu, 06/02/2011 - 15:44 | Link to Comment myshadow
myshadow's picture

Actually I think it would be a lot worse.  phil gramm would have been in charge instead of timmeh, he certainly would have fucked things up big time.  Otherwise, as a guy who voted D, I agree with you.

Thu, 06/02/2011 - 23:17 | Link to Comment FlyPaper
FlyPaper's picture

If *nothing else* Beck was one of the first media guys that lifted the covers on Obama, banker fraud, neo-marxism/socialism.   In that regard he gets major credit for trying to draw attention to the workings of the cartel.

Thu, 06/02/2011 - 11:26 | Link to Comment PaperBear
PaperBear's picture

How much money has been spent abroad on military adventures and military bases ?

$500BN for Afghanistan and presumably Pakistan

$3T for Iraq

Only $1BN so far for Libya

How come most Americans are not outraged ?

Thu, 06/02/2011 - 11:31 | Link to Comment I am Jobe
I am Jobe's picture

Americans are more concerned about Oprah ending her show than anything else.

Thu, 06/02/2011 - 11:38 | Link to Comment TwoShortPlanks
TwoShortPlanks's picture

At the moment!

Thu, 06/02/2011 - 11:59 | Link to Comment j0nx
j0nx's picture

The only thing Americans give 2 shits about is whether or not 2 fags can marry each other or whether or not DWTS is on and beer is in the fridge. We are a pathetic population who deserves everything that is coming our way. The funniest part will be the look on the faces of the 99% of the population when shit finally does hit the fan. They will all be scrambling around with absolutely ZERO idea what happened and who the villains are and making no plans to make them pay for what they have done to us. After all, who coulda known?

Thu, 06/02/2011 - 12:11 | Link to Comment Vic Vinegar
Vic Vinegar's picture

And one of the funniest parts of reading this website are posts like this!

Thu, 06/02/2011 - 12:08 | Link to Comment Silver Dreamer
Silver Dreamer's picture

Zombies are real.  Here comes the Zombie Horde!

Thu, 06/02/2011 - 12:10 | Link to Comment brew
brew's picture

You are right on!  People really wondering if it's Weiner's weenie or not...is Sarah Palin going to run or not...maybe Trump will get back in - wish Americans would tune-in to zh instead of the hogwash that dominates the news!

 

Thu, 06/02/2011 - 12:44 | Link to Comment DosZap
DosZap's picture

Do you think that GARBAGE is running on the news because any one cares?.

The MSM is Owned by the bstds that brought us this damnation.They are, and have been their puppets for 20+yrs.

Thu, 06/02/2011 - 12:18 | Link to Comment citizen2084
citizen2084's picture

+1 

Thu, 06/02/2011 - 12:36 | Link to Comment pupton
pupton's picture

"The zombies are already here" is right.  Hide yo' kids, wife, Dunkin Donuts, MACdonalds, Gap...basically keep yo' white ass off the street cuz we be takin' over.  Uhem, please substitute the insensitive comments above for some "intelligent discussion" about the reprecussions of an entitlement state, deliberate destruction of the family unit, duct-taping of religious values in public etc....

We are doomed once they turn off the spigot and those fucks have to fend for themselves! 

 

http://www.americanthinker.com/2011/06/racial_violence_has_not_made_it_into_the_conversation_about_race.html#disqus_thread

Thu, 06/02/2011 - 12:53 | Link to Comment DosZap
DosZap's picture

We are doomed once they turn off the spigot and those fucks have to fend for themselves! 

 

The District of Columbia will be doomed.( as will a lot of Main St USA.)

 

Most middle class/upper middle class neighborhoods will do fine,street barricades, and lots of very well armed neighbors, will see to that.

Those assholes had better be in their bunkers,out of the country, anywhere but here, if it get's that bad.

 

See, it won't be ALL bad, we finally get to depopulate what needs popping.

Thu, 06/02/2011 - 13:01 | Link to Comment XitSam
XitSam's picture

The clueless are much more than 99%.  More like 99.999%.

Thu, 06/02/2011 - 11:35 | Link to Comment A_MacLaren
A_MacLaren's picture

Anyone study enough history to remember or know of the Mistake of 1937?

Ben "Making-Sure-It-Does-Not-Happen-Here" Bernanke and "Balance-The-Budget-No-Matter-What" Boehner are GUARANTEEING the Greater Depression will arrive promptly.

Because Montary policy alone will ensure a hyperinflationary economic collapse.

Thu, 06/02/2011 - 11:35 | Link to Comment kridkrid
kridkrid's picture

oh... I'm not so sure that "history" is entirely correct.

Thu, 06/02/2011 - 12:44 | Link to Comment Withdrawn Sanction
Withdrawn Sanction's picture

oh... I'm not so sure that "history" is entirely correct.

Meh...close enough for government work.

The principal causes behind the Roosevelt Recession were increases in death taxes (beginning in 1935/36), the undistributed profits tax (1936), and the increases in reserve requirements instituted by the Fed.

The key w/r/t the tax increases was not a mindless drive to balance the budget (as is often erroneously portrayed), but was rather animated by the idea of forcing unspent money into circulation.   The old canard of underconsumptionism was in play in other words.  Spending (not investment) was the key to economic vitality acc to FDR and his advisors.

Indeed, FDR succeeded in juicing consumption in the short-run, but the more lasting outcome was a drastic curtailment of private investment, with a consequent rise in unemployment and a corresponding drop in industrial production.  Coincidentally, industrial production's drop (34%) mirrored that of the stock market at the time.  Although not as deep as the stock market's drop in 1929-1932, the speed of the drop in 1937 was far faster.  A case perhaps of "burned me once...."

While the boyz in DC today may not be repeating exactly the same mistakes as FDR, the current belief that government "demand" can fill in the gaps in GDP would be charming (in its naivete) were it not so dangerous.  In any case, current policy certainly has a distinct 1930s odor to it.

Thu, 06/02/2011 - 12:53 | Link to Comment DosZap
DosZap's picture

If we had done a Coolidge when this hit, it would have been over long ago.

But, then that was never the plan, was it.

Thu, 06/02/2011 - 13:14 | Link to Comment Chump
Chump's picture

Good post.  Much appreciated.

Thu, 06/02/2011 - 11:27 | Link to Comment I am Jobe
I am Jobe's picture

Does this mean Obama will be cancelling his golfing next weekend?

Thu, 06/02/2011 - 13:13 | Link to Comment Ace Ventura
Ace Ventura's picture

Only if a wicked-righteous game of hoops suddenly pops up, and Beyonce is providing background vocals and scenery.

Thu, 06/02/2011 - 11:33 | Link to Comment TwoShortPlanks
TwoShortPlanks's picture

Some entities on Wall Street will try to crash the market just to get QE3 as soon as possible.
Who's going to be sacrificed this time???????

Thu, 06/02/2011 - 11:36 | Link to Comment Clowns on Acid
Clowns on Acid's picture

Taylor presents the timeline, deflation first, then when all the whining and "do something" cries from the dependents in the large US cities reach a crescendo, Uncle Ben will dispense the candy.

Just in time for the 2012 election. It's gonna get real nasty.

Thu, 06/02/2011 - 11:39 | Link to Comment Double down
Double down's picture

Strictly politically:

Did not QE2 cause rates to go up somewhat, stocks to go up more and commodities to go up the most?  I bet that sounds good to the average saver/investor.

Also, if QE did not cause the political measure known as CPI to go up then there is no harm in continuing it.  If no harm is done but the benefits are not exactly what were expected then why stop it?

I am not sure sufficient political will or insight exist among the US electorate to trace price increases to QE.  Speculators will be held out to be the source of these increases.

 

Thu, 06/02/2011 - 13:21 | Link to Comment SYantiss
SYantiss's picture

CPI did not go up?

I must have misunderstood the cashier last time I was shopping.

Thu, 06/02/2011 - 11:42 | Link to Comment Robslob
Robslob's picture

DEBT

Thu, 06/02/2011 - 12:01 | Link to Comment SilverFocker
SilverFocker's picture

DEBT, its the new food staple.

More of, you cant have your wheat and eat it to.

Thu, 06/02/2011 - 11:49 | Link to Comment PaperBear
PaperBear's picture

"Gold will come down next 12-18 months" ?

The fiat paper USD will be dead between 12-18 months from now.

If only the USD was gold/silver coins.

(sigh)

Thu, 06/02/2011 - 11:48 | Link to Comment Franken_Stein
Franken_Stein's picture

 

I love it how they constantly refer to the Weimar Republic.

Goethe and Schiller lived in Weimar for a long time.

There you also have the German National Theatre.

 

Goethe had this to say:

"None are more hopelessly enslaved than those who falsely believe they're free."

 

Thu, 06/02/2011 - 12:18 | Link to Comment Freebird
Freebird's picture

True dat.

Thu, 06/02/2011 - 11:52 | Link to Comment PaperBear
PaperBear's picture

Burn some houses to the ground, that will stimulate the economy.

Thu, 06/02/2011 - 11:56 | Link to Comment Biggvs
Biggvs's picture

"or the guy with the bass guitar" - thanks for the laugh!

Thu, 06/02/2011 - 12:06 | Link to Comment Bazooka
Bazooka's picture

SLV has started it's Wave 3 descent.....just like the equities. I believe the greatest shocker that might prevent QE3 could be Russell Nappier says, "...USA must not lose the faith of its creditors". Further QEs will exacerbate the emerging countries....imagine if China says Fuck You to Bernanke and begins dumping half of its treasuries?

 

Silver to $25 for Wave 3 down target.

Disclosure: Long FAZ, VXX, UUP

Thu, 06/02/2011 - 12:59 | Link to Comment DosZap
DosZap's picture

USA must not lose the faith of its creditors

 

You think WE haven't?.

 

Also;

 

imagine if China says Fuck You to Bernanke and begins dumping half of its treasuries?.

 

You think they Are not already?.

 

 

As for $25.00 Silver, bring it.

Thu, 06/02/2011 - 13:17 | Link to Comment American Sucker
American Sucker's picture

China dumps its Treasuries, dollar tanks, renminbi rises, Chinese exports collapse.

China's just as trapped in this stupid mess as America is.  Our national debt is China's stimulus.

Thu, 06/02/2011 - 12:03 | Link to Comment Quinvarius
Quinvarius's picture

His Dollar bullishness is foolishness.  I assure you, not raising the debt ceiling is far worse for the dollar than raising it.  But this guy has old school normalcy bias.  We can print and inflate or we can take one to the head by cutting off new money from going into the ponzi scheme.

This guy had better review what happened in Iceland.  Stocks dropped with the currency because a debt ponzi ended.  The dollar is the basis of our own debt ponzi.

Thu, 06/02/2011 - 13:01 | Link to Comment DosZap
DosZap's picture

  I assure you, not raising the debt ceiling is far worse for the dollar than raising it. 

 

 

Done deal, will be raised in , or before August.

Thu, 06/02/2011 - 16:42 | Link to Comment earnyermoney
earnyermoney's picture

I've read recent articles that indicate Iceland is on the road to recovery.

Thu, 06/02/2011 - 12:08 | Link to Comment FreeNewEnergy
FreeNewEnergy's picture

Interesting that Taylor says he will be buying dollars as the economy implodes. That's extremely counterintuitive, and I'm not sure he is right, though I will go along and trust his judgement. If he's correct that everything's going down - stocks, commodities, etc. - then, for sure, buy dollars. Cash is king will be the rallying cry late this year and into the first half of 2012.

Thu, 06/02/2011 - 12:17 | Link to Comment Quinvarius
Quinvarius's picture

So far his run to the dollar trade has gotten him reamed since the debt ceiling vote.  He doesn't get it.  He doesn't quite grasp what debt backed fiat money is yet and how it responds to an impossible debt burden with no tax base.

Thu, 06/02/2011 - 12:21 | Link to Comment HpDeskjet
HpDeskjet's picture

US can easily balance it budget deficit if only it shows the political will

1) US tax rates are ridiculously low (although mostly for the rich). Simply taking some wealth of those rich people by raising taxes will make a huge contribution to the budget deficit.

2) Nobody needs consumption-stimulus like cash-for-clunkers, homebuyers credit etc. Very easy to cut those

3) Entitlements are based upon bullshit assumptions. Everybody knows this and it should be corrected. And yes, this is fair, since the people who will get hurt most, are the same people that profited from 30-40y "borrowed" wealth

 

W. Churchill: "America always does the right thing, after they have tried everything else"

Thu, 06/02/2011 - 12:49 | Link to Comment Quinvarius
Quinvarius's picture

At this point, it is about having a tax base that can service the debt while keeping the goverment somewhat functional.  I don't think we have that. 

I'd like to think you are right.  But the moons have aligned for crisis of a different flavor. 

Thu, 06/02/2011 - 13:08 | Link to Comment DosZap
DosZap's picture

If we had 100% employment, the taxes would not service the current debt.

Thu, 06/02/2011 - 13:02 | Link to Comment Libertarian777
Libertarian777's picture

I still fail to see how 'taxing the rich' helps?

The 'rich' now are defined as a couple making $250,000.

The Fed will inflate the crap out of the US$ until your minimum wage is $70/hr, then everyone is making $250,000.

So you earn a debased dollar + you're taxed at a higher 'rich' rate.

AMT was suppose to be for the 'very rich'. It was never adjusted correctly, resulting in many middle class people now falling under its net. When they talk about removing them from that net every year, the conversation shifts towards it being a 'tax cut'.

In fact your statement even says "simply taking some wealth'... that is the crux of the matter. You believe the government should TAKE and redistribute. If that's your position, then you are all for welfare, farm subsidies, and, ironically tax cuts (although only tax cuts for some and tax hikes for the rest).

I thought the whole point of capitalism and 'democracy' is I get to keep what I earn (incentive for me to be productive), and I must pay for what I consume (incentive for others to work; note also, if I don't consume I should not pay). 

Socialism is the government gets to keep what I earn, and I must pay for what others consume.

If I don't use I don't pay, if I work I keep the fruits of my labours. Should I contribute to those less fortunate? Absolutely, but that's a moral / philosophical argument that is mine to decide, not some government bureaucrat to say how much I should contribute to charity/welfare. The bureaucrat cannot make a financial decision about how much I need to live, vs how much I can afford to contribute to charity, they will make some arbitrary rule, not taking into account the myriad possiblities of my current financial position (sick parent/sibling/spouse, chronic disease, # of children, etc. etc.).

The counter argument of the 'rich bankers' is that they should not be funded by the government/Fed. Then they could not have 22 no loss $100m trading days a month. So don't tax the rich but don't fund them either.

Thu, 06/02/2011 - 13:45 | Link to Comment DosZap
DosZap's picture

Welcome to the NEW America..................

You are living under Socio/Fascism.

Thu, 06/02/2011 - 16:39 | Link to Comment earnyermoney
earnyermoney's picture

We need to close every personal and corporate loophole in the tax code before we muddle with the rates. Read BK's post on Corporate fleecing of the country.

Thu, 06/02/2011 - 12:26 | Link to Comment citizen2084
citizen2084's picture

Just to clarify ...

I dont think he is in the $ yet. That is were he will move to once the last bit of growth is done; then he leaves south a and AUZ into greenback.

 

ciao

Thu, 06/02/2011 - 12:55 | Link to Comment The Profit Prophet
The Profit Prophet's picture

He said that he thinks that austerity will work for the US....that makes him a fool.  The collapse (when it comes) will be like none other and dollar gains will be as fleeting as a morning drop of dew.  If he thinks he can time the currency chaos....that makes him a big fool.

T.E.I.N. everyone!

Thu, 06/02/2011 - 12:15 | Link to Comment HpDeskjet
HpDeskjet's picture

Depends how you look at it ... Short term it seems counterintuitive (recession => rates down => currency down) but longer term

Recession/Deleveraging = less supply of dollars = price of $ must go up... Happened not too long ago. And see what is happening in Japan => economy sucks + deleveraging = 20y rally in the JPY.

Thu, 06/02/2011 - 12:13 | Link to Comment citta vritti
citta vritti's picture

a little too much easy snark in TD’s comments for me today (cutting spending as monetary easing coming to an end = “unmitigated disaster”), when the alternative QEn is so much worse. What, QEn should start now? Does anyone really think there’s a painless way (if indeed there is a way, let alone will) to wring out decades of excessive debt from the system, or reinstitute (if it ever existed) some kind of economic system founded on individual and corporate responsibility, without well-intentioned let alone captive officials or regulators helping one or more interested parties ease the hardship of their own mistakes?

Thu, 06/02/2011 - 13:51 | Link to Comment DosZap
DosZap's picture

decades of excessive debt from the system

 

Surely you jest.Try just the last 6yrs, and that will set your hair on fire.

 

Remember what STARTED this whole shitfest.

Wall Street, and the Big Bankers.

 

What could have ENDED it?.

 

TARP, and an immediate austerity program.

 

Coolidge had a Depression in the late 20's, and HE did not prop it up, and it was finished in 18 months.

 

FDR had a less severe one, and his policies caused the programs we have today, and the SO called great Depression to go on for years.

 

Why?, becasuse he pulled the same crap that Bernicky DID.

Thu, 06/02/2011 - 12:16 | Link to Comment King_of_simpletons
King_of_simpletons's picture

QE3 will not be called such. It will be given a fancy name like 'Freedom and Patriot Snugglefest' and it will be spaced such that QE1, QE2, Financial Crisis, The Great Recession have receded from the minds of the sheep.

Thu, 06/02/2011 - 13:31 | Link to Comment Watauga
Watauga's picture

And it will be about, laregely, BHO's re-election.

Thu, 06/02/2011 - 12:42 | Link to Comment AldoHux_IV
AldoHux_IV's picture

These silly idiotic pundits can't look beyond the view from their ivory towers: 'you're saying the real economy will be in a recession'.  The real economy never recovered, GDP is a joke measure and only grew on leverage, and all this talk is bullshit until we end the true cancer to theconomy which are the TPTB.

Thu, 06/02/2011 - 13:03 | Link to Comment Miles Kendig
Miles Kendig's picture

When the government involves itself in every aspect of the economy then the economy is dependent upon government.  This being vastly different than the government & the economy being truly mutually supportive.  No wonder Koo, Krugman and the rest of the ivory tower are steadfast in their prescription of ever more government spending, and the greater empowerment of the macro at the express impairment of the micro to avoid the pain of withdrawal.  As we have been able to see over time this prescription is a death trip for the economy and the society that incorporates it.

Just as transitory is the new contained so to will rebalancing become the new transitory.  Until true rebalancing can occur we're just whistling past the graveyard since the current design is to make the whole of society so dependent upon the fed's dope that, as John Taylor makes plain, there will be the immense pain of withdrawal whenever a tapering of the dose level is attempted.

http://youtu.be/_TuYrDBp7Bc

Thu, 06/02/2011 - 13:03 | Link to Comment JW n FL
JW n FL's picture

1) House and Senate Renew PATRIOT Act With No Modifications
2) National Security Letters Increasingly Used on Americans
3) Proposed Senate Bill Would Add Civil Liberties Protections
4) Senators Raise Concerns on DOJ's Interpretation of PATRIOT
 

1) House and Senate Renew PATRIOT Act With No Modifications

On May 26, the House and Senate renewed three controversial provisions of law related to the USA PATRIOT Act that were set to expire the next day.  The renewal was passed in the form of an amendment to an unrelated bill, S. 990, that itself temporarily extended authorities of the Small Business Administration.  Despite efforts by individual Senators to introduce modifications to the Act's intelligence authorities, the final bill simply renewed the expiring provisions until June 1, 2015 without changes.

http://cdt.org/policy/four-more-years-patriot-provisions-renewed

Thu, 06/02/2011 - 14:11 | Link to Comment DosZap
DosZap's picture

JW,

And oh, so much more..............

http://www.wired.com/dangerroom/2011/05/secret-patriot-act

Thu, 06/02/2011 - 13:16 | Link to Comment PulauHantu29
PulauHantu29's picture

Wall STreet is headed for another record Bonus year I read. ..so it ain;t miserable for everyone except the Hoi Poloi.

Thu, 06/02/2011 - 13:16 | Link to Comment MrBoompi
MrBoompi's picture

I think we're all in for a good old case of shock doctrine, or economic terrorism, or whatever term will be applied to it. The hit to the markets will be so bad even the Fed's worse critics will be begging for QE3.

And that will start the farse all over again since the problems with our system of manipulated macroeconomics, overleverage, and toxic derivatives exposure have not been addressed, let alone corrected.

But we will have austerity forced upon us, even though it won't do anything to reduce the deficits. Yes, we have to have those cuts otherwise the last 30 years of effort will go to waste.

Thu, 06/02/2011 - 13:30 | Link to Comment Watauga
Watauga's picture

First, "they" don't want a way "out."  Why would they?  They are making billions off of the manufactured roller coaster ride that is killing alot of other people. 

Second, "they" will manipulate the markets to ensure a smooth ride for BHO in 2012.  2011 may be a miserable year, but BHO will "save the day" and be hailed as a hero who overcame the Republican Congress's attempt to destroy the United States. 

Third, "they" can only benefit from the ever expanding police authorities of the Federal government. 

Finally, "they" could care less what happens to you or your family, unless what happens were to screw up their long ride to untold wealth.

Thu, 06/02/2011 - 14:20 | Link to Comment AladdinSaneGirl
AladdinSaneGirl's picture

The money printed in QE1-2 mostly went into the near doubling of stocks since the 2008 crash. A lot of it has come off the table in the last month and gone WHERE? Must be sitting in investment banks/hedge funds etc. Can't they be forced to reinvest their profits? Or do I not understand correctly?

Thu, 06/02/2011 - 15:01 | Link to Comment Chump
Chump's picture

You do not understand correctly.

Thu, 06/02/2011 - 14:38 | Link to Comment Lucius Corneliu...
Lucius Cornelius Sulla's picture

deleted

Thu, 06/02/2011 - 19:03 | Link to Comment mist929292
mist929292's picture

I think I will be waiting patiently for word from the Fed.  My gut tells me QE3 is coming eventually, but I've been hearing too many intelligently dissenting opinions.  Besides, I can't stomach another commodity rout unless I'm looking to BTFD.

Thu, 06/02/2011 - 19:39 | Link to Comment Glasgow Gary
Glasgow Gary's picture

Did anyone notice that after years of the USD being in trouble, that now it finally really is in deep trouble?

GG

Thu, 06/02/2011 - 20:01 | Link to Comment Vlad Tepid
Vlad Tepid's picture

That last line will never get old:  "Hide you wife, hide your kids..."

Thu, 06/02/2011 - 21:43 | Link to Comment fellatio is not...
fellatio is not fattening's picture

So you're saying if/when QE3 is announced or just starts that the stock market will fall?  I know it signals that things are really shitty, but we already know things are really shitty, why does a QE3 announcement trigger a selloff?  I'm asking sincerely as I would have thought exactly the opposite.  Thanks

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