This page has been archived and commenting is disabled.
M2, Up 19 Out Of 21 Consecutive Weeks, Hits Fresh All Time High Of $8,809,200,000,000
And once again we are back to discussing just how the Fed does "not" print money... Or does it? If the data from the just released M2 is to be believed (which is becoming near impossible now that even critical economic data is gamed merely to achieve policy goals - today's NFP number was nothing more than Obama's way to get his desired UI extension; look for a surge in the December NFP numbers as the spin machine picks up back on the economic recovery trope), the $1 trillion in Fed excess reserves continues to trickle into broader currency aggregates. To wit: last week M2 grow by $10.3 billion, which is a fresh all time high of $8,809.2 billion (this was at $4.6 trillion at the beginning of the decade). This more cheap money that is increasingly making its way into commodities and risky assets. For now it is a trickle. Soon, it will be a flood.
Probably more interesting are the components of the M2. As can be seen on the chart below while the last week saw a rather normal move in most M2 components, the two weeks prior exhibited some seismic shocks, with tens of billions of demand deposits and savings deposits flip flopping for no apparent reason. If anyone has any idea what may have caused this major shift in M2 components in mid November, we would be delighted to hear.
»
- 6252 reads
- Printer-friendly version
- Send to friend
- advertisements -
Dang...Mo' Monee, Mo' Monee, Mo' Monee!
This guy has mo' carats than a salad! Swimmin in dead pres-o-dents!
Right, this is the $8.8 Trillion porfolio of printed money that is currently circulating in our economy.
Remember, we must 'return' these Federal Reserve Notes to the cartel WITH INTEREST. This requires even MORE debt to create an even BIGGER money supply, which must be paid back WITH INTEREST, etc., etc., etc.
know what I'm say'n? (wink, wink)
PRETTY GOOD DEAL FOR THE FED, EH?
This market continues to push on a string. It is starting to feel very toppy after watching this week's price action. Price spikes, followed by extreme sideway trading in very tight ranges, follwed by another price spike. This type price action never builds a foundation. This is a very unstable environment. We are scaling out of our recent longs to lock in profits. Manage risk. Good luck everyone.
The Bernank has succeeded in creating money faster than it's being destroyed...
...IF ONE ASSUMES ASSET VALUATIONS REPORTED ARE ACCURATE.
*pay attention to 'Repurchase Agreements' (aka Repo or Sale and Repurchase Agreements) which are a suspect component of M3.
A comparison of M2+ Shadow Banking velocity vs GDP. We expect a $4.5 trillion drop in GDP in the next few years based on the plunge in Shadow Liabilities (more than just M3) assuming flattish M2 levels.
Looks like 8-12 more years of deflation...
Blawkhawk, "Man the printers!"
If this is deflation, I'd hate to see a no inflation environment.
That would be middle of the tax revolt. You will see a no inflation environment.
How right you are.
It begins at the local level. But it won't be voluntary. In fact, it's already begun. If more people realized how many property owners are not paying their property taxes, there would be more stunned people, and a much dimmer view on the economy.
As far as income taxes, they've plunged, but people who make no money or little money pay no taxes to Uncle Sam.
Watch for states to ramp up service, licensing, permit fees, etc. to try and mitigate this loss of revenue (property tax losses).
A person can really learn a lot about the economy, and cut through all the CNBCbs, by studying personal, business and other tax revenue data. People and businesses pay when they can, and don't when they can't or don't have to, and this is very revealing in terms of allowing a window into the true state of the economy.
70% of cosumer debt = mortgages = deflation.
Right, inflation in what no-one gives a shit about, and inflation in whatever will cause you die if you can't afford it.
Schmuck.
Yes, time to buy US Dollars, because they're not making any more!
I'm simply pointing out that M3 includes Repo Agreements, which (IMO) may very well skew the data.
Repos included in M3 are forward contracts, that assume non-defaults in the future. They are a scam. They are treated as cash equivalents, and in reality, they aren't.
I agree that the shadow banking system is imploding. In fact, I'd go further and argue that the real banking system is imploding, literally.
This is the 'key to the kingdom,' IMO - or an example of it.
Bernank and Trichet and others are racing to save the banking system. All the talk of inflation and the rest is window dressing. They are pumping money as fast as they can as they watch asset values plunge - the very asset values banks are most likely to be carrying.
Without fixing the fundamental economy, and creating jobs and stabilizing wages for the meaty center of American and European populations, they lose. Period.
The banks are in the most danger since the Great Depression. That's no exaggeration.
"Magic is believing in yourself, if you can do that, you can make anything happen."
- Johann Wolfgang Von Goethe
Uncle Ben = Harry Houdini
As far as I can tell that's the two big counterforces in current economics. On one side you have the Fed and other central banks creating money and competitively devalueing currencies. On the other side you have central planning numbnuts like Obama wrecking or at least flatlining the economy. Even with large amount of Benanke bucks in bank vaults it cannot move because no one who's unemployed, underemployed or afraid of either of those is going to take out a loan on a large purchase. So the assets the banks hold, like mortgage notes and the actual properties are seriously deflating. It seems to me that unless Bernanke can actually get a helicopter and start dropping those dollars they will remain relatively dormant in the short run while assets deflate and perhaps the economy in general.
What's the money velocity of a JP Morgan sparrow with a 1.5 trillion dollar silver book that just evaporated into thin air?
And don't say african or european.
great stuff, TD. thank you!
You have this mostly right. It is the item most ZHers don't absorb.
Money Is Being Destroyed. By falling house prices that have not stopped falling. Every price downtick is another unpaid mortgage that destroys more money in the bank MBS inventories. They may not record it mark to market, but it's being destroyed nonetheless.
Bernanke is not stupid. He KNOWS this. He has to print.
He's filling a hole, a very big hole
Actually, this is doomed to failure.
All of the obfuscation and meaningless detail is in front of the problem. The problem is falling house prices. It is THAT which should be attacked.
Either Congress should fund destruction of foreclosed houses, reimbursing at market price, or pass a law forbidding sale of a house for less than present county tax appraisal.
The specifics don't really matter. House prices have to stop falling or nothing is going improve -- until oil destroys everything regardless.
JOBS.
This is the problem The Bernank can't solve.
Falling housing prices are a symptom of structural (NOT cyclical) job losses.
If more people realized that The Bernank can't put the global economy back into immediate post-WWII phase, where the U.S. was one of the few developed nations with intact government and infrastructure, and therefore a logical and even inevitable center of mass production and consumption, they'd awaken to the folly of The Bernank's policies.
We aren't in Kansas anymore, Bernank.
Remember, the Debt Ceiling must be raised in order to create the new money to meet existing government obligations which includes interest payments to the existing debtholders, the largest being private Federal Reserve Bank themselves.
In my opinion, the only way the American public would allow the debt ceiling to be raised is if we went to war.
at which time, the newly created 'debt-based' money will go into the bank accounts of individuals in the military industrial complex which will then get circulated back out into the private sector where it can be taxed back again from private sector service providers.
of course, how they will continue this charade without a full-on revolt and a return to asset-back money, i cannot be sure.
however, the clear 'solution' is for the International Banking Cartel is to keep charging an interest rate on our money and allow the coming depression, which will lead to a subsequent 'rescue' from the International Monetary Fund via "Special Drawing Rights", at which time we will be further enslaved via debt to a one-world private banking cartel and the pillaging and war will continue.
anyway, my short-term suggestion is to find an heiress to the Rockefellers and marry her immediately.
good times!!
Are you certain that govt spending manufactures money or are bonds purchased with existing dollars from the existing money supply?
Having trouble finding a conclusive answer to this.
zerohedge.com
Christ, it doesn't get any clearer.
jdrose, I explain it all here with "THE ONGOING PLOT TO ENSLAVE YOU."
http://www.zerohedge.com/forum/ongoing-plot-enslave-you
non-asset backed money is counterfeited at the direction of the private Federal Reserve Bank, then given to the U.S. Treasury in return for a U.S. Treasury Bond. After this 'money creation' takes place, the private Federal Reserve can re-sell this U.S. Treasury Bond into the open market and take Federal Reserve Notes back out of circulation. Or, the U.S. Treasury can auction off U.S. Treasury Bonds directly to the public to raise additional funds from the existing money supply. However, all existing money originates as debt to the private Federal Reserve Bank. Remember, China, for example, holds our U.S. Treasury Bonds that were bought with their existing private Federal Reserve Note supply. This money exists already. A better example may be the debt that the U.S. Treasury (we, the taxpayer) incurred in order to fight WW II. All of our soldiers were given newly printed money, and existing money raised from selling 'war bonds'. All of this money served to create an economic boom upon their arrival home. importantly, although the U.S. Treasury ran a budget surplus for many of these years after the war, the bonds could never be retired because it would have extinguished the money supply.
in other words, the private Federal Reserve Bank makes an interest rate on our money supply, simply for deciding it should be created. this makes us nothing short of livestock, and is a clear reason why wealth continues to concentrate in DC where the newly counterfeited money is handed out, and NYC, where existing money can be further counterfeited out of thin air via the 'fractional reserve' counterfeiting process of debt enslavement.
How does keeping housing prices artificially inflated to the point where they're unaffordable by the population help?
Or did I miss the cynicism?
There is a massive shadow inventory of homes that could be foreclosed on (banks don't want them, especially where the occupant is mainting the house and paying taxes - carrying costs are high, and they can't resell them) or have been foreclosed on (banks can't sell them because they would lose their ass or the redemption rights haven't matured).
From SOME accounts - this inventory is building, not declining. I don't know who's right, but suffice to say the inventory is massive, and probably will increase given economic structural problems.
Banks know that doing the aggressive thing, and foreclosing on everything, complicates their dilemna. They would then have to be in the active management of REO business, and have huge carrying costs - taxes, repairs, maintenance, management fees.
They would also have to list a tidal wave of homes, which would depress real estate values even further and faster.
The Bernank has floated a lifeline to these insolvent banks in a few ways, two of which were the carry trade on discount window loans, and now the POMO action. This guarantees them some operating revenue to maintain extend and pretend a bit, while they pray for a miracle that is not going to come.
Fact: There are 19 million vacant homes in the U.S. This figure does not include homes with occupants who are not making mortgage payments (and may not have for as long as 3 years - I know of cases like this from my line of work).
Here's a possible scenario. Banks ramp up foreclousures and own the 19 million vacant homes. They sell China and India on the idea moving their management classes over here where they can run things back home and take advantage of the newly impoverished U.S. workforce, and voila, immediate re-inflation of the housing bubble, while soaking up all those Chinese/Indian dollar reserves.
I have the gist of the overall problem.
But as wages are flat or falling and unemployment is very high, there just isn't a market for homes at the price point of the peak of the RE bubble.
If you maintain the inflated prices of the homes, I suppose you can make the case that the banks aren't insolvent, but people currently aren't making the payments and/or can't afford to buy the overpriced homes.
The ONLY WAY maintaining the overinflated prices can save the financial system is for *wages* to increase to compensate for stratospheric asset valuations so that there's a set of customers for the RE market. The top 2% of the population isn't suddenly going to run out and buy 50 or 100 homes each.
You see any employers out there giving their workers big-ass raises?
Repeat after me - Base money does not equal credit money
But artificially supporting home prices isn't the answer either, as it just keep people out of the market. Houses need to find their their own level that is commensurate with incomes. And yeah, since the employment picture sucks, that might mean prices come down another 20-30%.
We can't avoid the pain, it's going to happen regardless. It's a question of whether we want it swift and deep but with a healthier recovery, or slow and agonizing with a declining standard of living. The Bernank is desparately trying to avoid the pain, dooming many of us (especially the bottom 20-40% of incomes) to a lower quality of life.
The problem is falling house prices. It is THAT which should be attacked.
I respectfully disagree, Crash. This sounds like Bernanke's approach, keeping interest rates artificially low so that people will buy homes and force prices higher. But this is similar to the fallacy that the rain will never stop until the sidewalks are dry. In the real world, the problem won't be solved until houses are affordable, i.e. until the median income can buy the median house. That means that the employment picture has to improve, and a huge inventory of unsold homes has to be whittled down, and these things take time.
Unfortunately, gov't programs to destroy foreclosed homes, impose price controls, etc. are doomed to failure, as history has shown repeatedly.
Knowledge and stupidity coexist in The Ben Bernank.
Knowledge and understanding are different, as deflationists demonstrate.
Potentially creatable money supply is infinite. Current liabilities are vast, but finite.
This is a case of an unstoppable force meeting a sticky but movable object. The "deflation" we see now is some of that stickiness absorbing the shock from the money printing. It is going to be compressed to a point at which it will explode. And that doesn't even incorporate the likely loss of confidence in the currency, which will only make it all the more sudden and unpredictable.
Add an additional element of 'political' liabilities, which are also finite, as in angering (truly angering) the masses, and only then can your fine comments thus far achieve completeness, and allow for a true and full analysis.
Many a central banker enraged a large public - ask Paul Volcker, who had to tamp the rage (19% interest rate on 30 year treasuries, circa 1981) right here in the U.S caused, in part, by his predecessor.
Ah, thanks! That made sense to me!
If you're in your spaceship next to a star whose photosphere is collapsing rapidly, that does *not* mean that it's just going to keep 'deflating' forever. It means that you need to get the heck away from it as fast as your warp drive will carry you.
Metaphorical gobbledygook.
House prices continue to fall. They are erasing money from the universe. There remains none for small business, so they can't pay people and can't hire them.
Done. Finished. No more need to wave hands in the air and contort thinking about chickens and eggs. Oil price explosion destroyed mortgage paying and that pushed an already weak system over the edge.
You can't create oil. That death is inevitable. But you can make the brief remaining time better by attacking falling house prices. A traumatized man who gets a job doesn't become a house buyer. A floor under house prices puts money back into the universe and jobs get created.
This is not that difficult to figure out. It's almost impossible to implement. The Fed can't order banks to bulldoze their house inventory.
The falling prices are erasing credit-money that the banks created. If fractional reserve lending were outlawed today, yes that credit-money is gone for good. But since this will probably not happen, the 'money' that the Fed is feeding to the banks right now still represents a potential credit explosion...which will be very difficult to control.
Stop conflating inflation with economic growth. This isn't the 90's. The inflation we are experiencing now is 100% cost-push inflation. Those things that aren't used up quickly, like houses and electronics, will naturally go down in price because we have a big surplus of them. Those things that are used up quickly, like food and oil, are going up in price due to several factors, including bankers parking dollars in commodities and reallocation of budgets, where spending on those things that are not NEEDED is cut, while spending on that which is NEEDED remains the same, or is increasing with increased price per unit of food/energy/whatever.
And, yes, the Fed can order the banks to bulldoze their housing inventory. The Fed can and will do anything they want, because they issue the currency, and they are (apparently) above the law. This points no-where but out of control printing in an attempt to maintain the unsustainable status quo.
Yeah, I guess this is what Astyk, Hussman et al refer to. I'm onboard but I'm not smart enough to see if there's a 'relationship' or inference between Tyler's graph and the QE 'printing' to date. I guess what I'm asking is, looking at the graph, if The Bernank could just print another 4.5T and get it into the banks hands would that be "problem solved"?
With all that said however the The Bernank can't print energy!! And that' the fucking rub right there.
OH, and nice you can speak for 'what most ZHers don't absorb'...gee as long as youre not too arrogant or anything.
I realize that wasn't directed at me, but I have to say, ZH is literally the ONE place online where the awareness is off the charts high.
Every single other site purporting to be full of people with unique and informative insight pales by comparison.
IMO.
Monie in da bank!
Meanwhile, Gypsies deplete France's silver hoarde (at least that is what the rumor is. Was it a Band of Gypsies? Jimi wants to know!). Rumors and windmills, either way, JPM are bastards, and silver is rare.
I have a feeling it is not only gypsies who are fed up.
Motorhead beat up bankers in Christmas single:http://www.telegraph.co.uk/culture/culturevideo/musicvideo/8174693/Motor...
Now you can do it funk, or you can disco, but one of the five million ways to kill a ceo is to buy silver.
Just buy silver.
Now if we could only get that pesky velocity to pick up, we could really have some fun.
The real action is in M1, where the growth rate shot up from a 4% annual pace in April to July to 15% in August to November.
M1 has grown by $120.7 billion YTD (currency up $54.9 billion). M2 less M1 components $155.4 billion.
did BOJ park money in MM accounts during the lost decade, seems I heard that. Is this was BB is doing?
Yes, besides the growth rate of M1 being way above normal since August, there is also the fact that M1, despite being only about a quarter as big as non-M1 M2, is growing almost quickly in absolute terms. That's also very weird, and obviously to do with QE2 and anticipation of it.
OT: Kinnucan Subpoenaed
http://finance.yahoo.com/news/BREAKING-Hedge-Fund-Hero-John-siliconalley-2294448691.html
Looks like it sort of did this to some extent in January also.
People laugh at UFO's, Aliens and the paranormal- then they blithely accept that manufacturing money and dumping it into an economy that is having money destroyed at the same time is useful and good for the economy.
Which only goes to show that humans may be the denseist particle on the planet.
Speck for yourself.
To quote a man wise in his wisdom, "We're freakin' doomed!!!"
See the future!
Could this have any relation to the outflows of equity mutual funds..........maybe moving to savings accounts???
Chipotle getting monkeyhammered.
repost: sorry to those that read this previosly.
Fundamentally, interest rates are about the risk to reward ratios necessary for free exchange. By extension the Federal Reserve's observable activity is setting interest rates for the borrowing of money. When interest rates arezero other means of reducing risk must be found. Enter the Bernanke Put. First at 10K on the Dow and now 11K. Simply put; guaranteeing returns is the reverse of risk and that is what the FED is doing by trying to keep exchanges at their pre-crash levels.
Negative interest rates are the oppostie of risk; what is now missing is a mechanism for measuring the negative interest rates. I think the simplist method is to divide the DOW and S&P averages by the 2, 5, 10 and 30 year bond returns. Thoughts?
Oil crossed $89 and still rising...the side effects of pumping money to save banks will soon destroy the economy...or what's left of it.
With dollar devaluation back in effect, watch for oil to quickly shoot past $100 simply on dollar weakness...then what, tap the strategic reserve? Seriously, seems this could be an early 2011 event by our bread and circus politicians?
This is why Bernanke CAN'T AND WON'T succeed.
In trying to save the banks, Bernanke gooses investment in alternate asset classes such as commodities, by people sick of low-yielding savings' and money market accounts held at banks.
This money flow, despite underlying real demand, temporarily spikes commodity prices - as we're witnessing now.
The higher prices lead to higher input prices and reduced margins for businesses, unless they raise retail prices, which is difficult to do in many sectors with a high structural unemployment rate, stagnant or falling wages, and peoples' homes (their biggest single investment, by and large) losing value.
If retail prices rise, demand destruction occurs, leading to more unemployment and even lower wages.
Then, of course, The Bernank has a 'little bit' of a gold and silver alternate currency crisis brewing, too. This is definitely not good for The Bernank, as it undermines everything he is attempting.
The Bernank is clueless - or is he? - maybe he really wants to destroy the economy, and I'll leave it for others to guess at his motives.
The Bernank isn't stupid by any stretch, so what's the real play, here?
I have been struggling with that since March 2009 - is Bernanke merely incompetent or maliciously corrupt? Does he think printing money will really help the real economy, or does he know it won't but wants to help his banker-owners abscond as much real wealth before he collapses the whole system.
I honestly don't know the answer, but for me it doesn't much matter - as long as he is printing dollars, I want to hold as few as possible.
I want to accumulate them while they're being printed, I don't think I've ever heard the word "hyperdeflation" mentioned here and it makes for a nice asymmetric trade when dollars priced in oil act as a stop loss. Oil above $110 will send is into an instantaneous tailspin and possibly teotwawki
If you want to be taken seriously, name ONE instance of "hyperdeflation" in a fiat currency in the history or Earth and/or the Milky Way galaxy and associated galactic systems.
You can't, because it never happens. You think you're smart, but you're just going to impoverish yourself and your family. :(
BB is really in a bad place now,
the list of what he needs to accomplish and the contradictory nature of these tasks has even brilliant Ben handcuffed.
Actually, it's making more and more sense that Ben is fighting WWIII w/ the Chinese trying to force them off the dollar peg. I think he's just hoping they yell uncle or swerve in our game of chicken before we self implode?
The zombie/banks can roam this earth a very long time.
The rest will affect China much more than the USA. Look at the prices on black friday $150 dollar flat screens.
China will fall off the tracks because of this, more deflation in the shadow banking complex.
We (usa) spent on credit since the mid 80's all this (shadow banking credit) built up allowing more and more cheap credit. Well China is the other side of that coin she is built upon the cheap credit train(manufacturing complex). This global model of cheap/easy credit is broken (China had a stimulus package 3 times the size of uncle bens/ GDP)because of this implosion ...
If BB's *not* clueless, this would have to be the "global bankster rule" NWO coup attempt.
Break everything so badly that the only solution is to float a new global currency (or fixed-rate exchange agreement a la Bretton-Woods I, same net effect) which subjugates all sovereigns and citizens to the international banking consortium.
re post: sorry to those that read this previously.
Fundamentally, interest rates are about the risk to reward ratios necessary for free exchange. By extension the Federal Reserve's observable activity is setting interest rates for the borrowing of money. When interest rates are zero other means of reducing risk must be found. Enter the Bernanke Put. First at 10K on the Dow and now 11K. Simply put; guaranteeing returns is the reverse of risk and that is what the FED is doing by trying to keep exchanges at their pre-crash levels.
Negative interest rates are the opposite of risk; what is now missing is a mechanism for measuring the negative interest rates. I think the simplest method is to divide the DOW and S&P averages by the 2, 5, 10 and 30 year bond returns. Thoughts?
A flood into commodities? Oil is already at $88 a barrel, almost 89, and climbing daily.
At some point Bernanke is going to have to decide what is better for the economy - the Dow at 13k and oil at 100, or the Dow at 7k and oil at $30, or something in between.
You make a very good point!
Unfortunately, the Bernank appears to have already made up his mind! Let's hope reality can change it, or we're doomed!
"Something in between" would be the worst possible scenario, and one he would be least likely to choose. The only thing that would do is make sure we stay stuck in the mud which isn't politically acceptable.
If the Bernank succeeds in kicking the can down the road a few more years then that will effectively pull the rug out from under the newly elected deficit hawks who will be ignored on the prospects of a "recovering economy." Of course that will just set us up for much more pain further in the future, but since when did anyone care about the long term?
Banana Ben doesnt work for you.
If one presumes he works for the elite, then everything is clear.
I admit that this discussion is beyond my current understanding of economics. I just want to know what the prospective consequences are likely to be. In the last few lines, you are telling us that when all that M2 hits the streets, it's going to look like very costly risk assets, especially equities and commodities. Now that's something that I can comprehend. I don't know how to post it, but I've just been looking at the charts for the NYBOT Continuous Commodity Index. It is rising sharply again. We are now just a short distance from the resistance level we reached in early November. This is significant because while stocks are stagnant today, commodity prices are rising sharply again.
At some point, probably by early Spring 2011, we are going to see dramatically higher prices for food in the grocery stores. We'll see gasoline prices surging before that because there iss less lag time for fuel. Could that be the tipping point that could send the economy -- and stocks -- back into the abyss of another, much deeper, recession?
Thanks for the insgihts Tyler, et al!
Chile is looking better every day!
all agreed and well said - except - that stocks will go down. This will likely be true if measured against gold or dollar devaluation...but short of a coup or massive paradigm shift in the admin (or whoever pulls the levers) the money will be printed to avoid the stock collapse. Dow level is the one economic indicator most Americans understand...inflation is ok as folks think in nominal #'s and don't realize the Dow at half the dollar value has also lost half it's purchasing power. Too nuanced. Stagnant or flat stocks I could see but abyss or collapse will not be allowed as that would be the signal to Joe Shmoe things have gone off the tracks and at that point TSHTF for present Gov...they'll keep up appearances until they absolutely can't.
This is why I believe there really is a secret and express pact between The Bernank and the banks and financial firms re POMO.
Equity market reflation has been The Bernank's only success so far (well, commodities, also, but hold off on that for now).
The 'wealth effect' The Bernank desperately needs is having people feel free to spend more money because they see that their 401(k) and/or pension fund is rising in value, despite that maybe their hours were cut, or their house keeps falling in value, or their wages are stagnant or falling, or worse, yet, they lost their job (if they're retired, then it's really all about the pension), or all of or most of the above.
But at some point, with a still deleveraging consumer, and worsening economy, any additional monies flowing into ultimate receptacles will have to be used for offsetting losses, and recapitalization, rather than investment in any asset class, including equities.
This is The Bernank Paradox - if he can't fix the economy's structural problem (and he can't), all he can hope for is a softer landing and more time than what would have ordinarily been possible. He temporarily injects consumers/retirees with more confidence derived from higher numbers on the indexes, while fewer care, have a stake, or can keep up with daily expenses due to larger and more pressing developments as a proportion of their costs and income (stock index values don't so cleanly mesh with people's problems as wages, dividend income, whether they are employed, whether their pension implodes).
At some point, if there's no structural economic fix, The Bernank has been checkmated, and in fact, he probably will have doomed himself politically (and yes, he's a politician - let's accept fact), as his policies have at least temporarily spiked the cost of living, which will have even those in Congress who supported him soon calling for his head when senior citizens start calling them and complaining about grocery prices and such.
He can't win because he's attempting to do something that he lacks the tools to do create structural employment in a global economy that we now have to compete in. That would mean outbidding the competition in lowering tax rates, transaction costs, lack of regulation on labor and pollution, dealing with unions, and doing all the other things that very large governments in centrally planned economies can do much easier (there's a joke in here about the U.S. being a centrally planned economy, but I'd argue that this really only has relevance to the financial industry, particularly).
TruthinSunshine for ruler of the post financial bust America!!!
Yeah, I think Ben's tricks are played out and unintended consequences are now going to swamp him.
More importantly, then what? Will America finally go protectionist and embark on a new Marshall plan for America (rebuild / recondition the factories, the machinery, employ Americans to run them, tax tariffs against all imports - some populist politician will win on this in time)? I'm still putting my money on this outcome...we have the resources and would allow us to default and restructure...just imagine the banks will fight this outcome as long as possible. Oh, and all current exporters of the world are ruined. This may create a bit of animosity.
Sold some of my OIH for $137. Bought it for $98 at the August lows.
Still holding on to FCX, FXI and a few others.
I'm still holding all my dividend plays, as they hardly ever move up or down.
Tempted to buy some KRE, but I need to wait and see how it acts when the market pulls back hard for a day or two. So far, it has been pretty resilient to any selloff.
Or, it might just take off and clear $24. Just watching and waiting.
How many times are you going to post this same vanilla chart today?
Uh...Big Bernank Christmas bonuses set to launch in stacks of Benjamins 2 miles high.
I can seen them from my house.
a poll i saw last night indicates the majority of voters are against making the new F-15 fighter, in favor of extending UI, and against changes to Medicare and SSN. The usual grow through defense spending is not going to be an option I am afraid.
wanna bet? since when did what the people want have the sightest thing to do with so-called "legislation" or "appropriations" or etc etc etc ?