Mark Fisher Slams Bernanke: "QE Is Going To End Bad...This Is Going To Be The Bubble Of All Bubbles"

Tyler Durden's picture

Today's must watch clip comes from Mark Fisher. Key highlights: "QE2 can't end right. Worthless paper after endless paper.... What's good for the equity markets is not necessarily good for the economy. The equity markets are not going to create jobs. If you have a paper bag full of money are you going to go out and hire workers and take risk with healthcare and all these other regulatory restrictions? No, you are going to go ahead and buy high yield, you will buy equities, you will buy risk assets. The fallacy in the whole thing is that you are not going to go ahead and create jobs just by pushing up the market by 20%, 15%. In fact, to some degree by pushing up commodity price to levels that are going to be obscene, which is what is going to happen, you are hurting everybody in mainstream America... If you have all this money coming into the system, and this money stays in the equity and commodity markets, when at some point you take this money out of the system, where is this money going to come out of? Parabolic moves have Parabolic corrections. This is going to end bad. It is not a matter of if, just a matter of when. This is going to be the ultimate bubble, this is going to make 2000 look like a cakewalk. This is going to be the bubble of all bubbles."

Fisher is absolutely correct. The argument is pretty simple - if the Fed was right, it would just print a quadrillion $ right now, openly buy every single security, monetize every single bond ever, and presto: full unemployment, no slack, and a perfectly functioning economy. In other words, Utopia, through the magic of central planning.

When did this fail last time it was attempted? And how many years have we been saying this is precisely the key fallacy in the Fed's thought process. But this is so obvious, the Chairman will obviously never grasp it.

This video has to go viral.

 

And some more thoughts on commodities:

 

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John McCloy's picture

It already is the bubble of all bubbles. Unless he begins to raise rates ASAP and not just a token amount it is all over. We cannot have  nationalized stock market but that is exactly what we have.

NoBull1994's picture

I can only imagine what would happen if Bernanke changed course right now and killed QE and started raising rates.  Stock markets would have to close for a week before reopening down 30%....  

John McCloy's picture

I suppose we know why we extended the 10% rule in short selling recently. What they have attempted to do since March of 2009 is the worst idea in the history of terrible ideas. I agree with you about the 30%. Another round of instant wealth evaporation that will surpass the 2008 vaporization but I imagine the TBTFs would get a heads up about a change in course and would we see a massive leg down as they liquidate their equities since they are insiders.

 

GoldSilverDoc's picture

OK, I thought the fat guy was smart until he started on the "gold has no end use, so it won't be a part of the monetary solution"  nonsense... the same baloney that every ignorant nitwit has tried to foist off on the world since the "new paradigm" of no real money.

So now, I have to wonder about everything he said....

LowProfile's picture

Watch it again.  He's just puzzled on what the new currency will be other than the dollar.

Answer:  No new currency.  Dollar and all other mis-valued fiat are revalued against gold (gold to five digits), paper games surrounding gold and markets are ended, gold is allowed to trade freely.

Freegold.

He just hasn't figured it out yet.

Janice's picture

The hosts said he was an oil guy.  He is an oil expert, so I would expect him to try & figure out a way to make fiat money oily.  But what do turbans want if they have all the oil in the world? Gold! You can't eat oil.

wake the roach's picture

You can't eat oil.

 

Actually, the net energy gains produced from oil feeds the majority of the world... So I would argue that we in fact can and do, eat oil and I bet those "turbans" would like arable land more than gold...  

Also, all money, whether paper or commidity is "oily". The real value all money represents is a claim on an economys energy consumption at any point in time. Net energy gains produced from natural resources that are then embodied into the production of goods and services of exchange value to which profit (credit) is added. All gold and paper bugs need to wake up to this. Money is energy. Golds historical monetary trust was always due to the energy it embodied. To replace an ounce of gold required access to an enormous surplus of energy just as it does today. Scarcity has nothing to do with it, scarcity is just another way of saying that gold requires enormous ammounts of energy to find and extract. Do we really need to waste the worlds last remaining sources of net energy surplus digging up shiny metals to embody the energy wasted in digging up the metal in the first place? Insanity. Makes me wonder, what energy exchange value will all this gold and silver have 20 years from now when mankind does not have the net energy available to even produce enough food? The world does not need and cannot afford gold money, let alone more excuses  for resource wars. We need 21st century solutions to THE age old problem that has always plagued mankind and always will. We need more energy (money). 

dark pools of soros's picture

have you tried any gulf shrimp lately???  FDA will let you eat as much of it as you want

Bartanist's picture

Tell me what is the logic that you use for gold having value? Is it because gold has always had value and is real money? Why is that? What is inherently more valuable about gold than rocks painted with the number 4 on them?

Everyone agrees that gold has perceived value. Some people are simply blind to the fact that there is no rational reason why. Can I interest you in a tulip?

thefatasswilly's picture

1) Does not degrade / deteriorate.

2) Effectively static amount available.

3) Pretty.

Same reasons silver / platinum are valuable.

Captain Obviousness's picture

Repeat after me: Gold is scarce. That is why it has value, and it is the ONLY reason it has value. Rocks painted with the number 4 are not scarce. Tulip bulbs are not scarce (if there was huge demand for tulip bulbs today, is there any doubt that nurseries would be cranking them out by the millions within a year???).

Oil is scarce, but a large percentage of its value comes from its industrial value as opposed to its scarcity. For that reason it is not an ideal money - the value fluctuates too much based on economic cycles and changes in technology (and its value will crater eventually when economically viable unsubsidized alternative to the internal combustion engine is developed, which is inevitable). The only reason gold has value is that it is scarce, and that is why it is has always been money and always will be, at least when the shit hits the fan.

jpintx's picture

1) Fisher ain't a dummy,

2)in the gravest extreme, gold has value due to scarcity only so long as you can trade it for needs

3) in the absolute worst case future someone will gladly trade 10 lbs of gold for a brick of 22LR ammo

 

just my $.02

 

technovelist's picture

in the absolute worst case future someone will gladly trade 10 lbs of gold for a brick of 22LR ammo

That would really be a worst-case future! 22 LR is only good for hunting rabbits and other very small game. Now if you were talking real rifle ammunition, then that might be a different story.

FreedomGuy's picture

It's not really complicated. It's the old supply and demand, or scarcity and desireability. Clear carbon stones called diamonds are really valuable, too and have served as money in the past, too. You could settle debts with treasure. Gold and silver just seem to have characteristics of maleability, universal availability and universal value.

Works for me.

Bartanist's picture

And that is why there is no confidence in the markets, the Fed or the government.

ElvisDog's picture

And a 30% down leg in the stock market is the "end of the world"? If that's the only cost for changing the direction of our society from the abyss, it's a small price to pay. And I would argue it's the perfect time to raise interest rates - right after a midterm election

Assetman's picture

In a perfect world, that's what might happen.

The reality is (a) moving interest rates higher is a process; and (b) the revalution of the equity markets may be 80 percent lower when all is said and done. 

I think what is implied is that the 30% is just for starters, as there is no guarantee that rates won't still go move higher.  Otherwise, I'd take that trade as well.

Pragmatically, the Fed is going to take a very incremental approach with rates, meaning that the QE stuff will likely be unwound first before those Bozos detach from ZIRP.  The problem is, they've gone so far up the QE road that reducing the balance sheet may be very problematic.

Rasna's picture

Ahhhhhhhhhhhhhhhhhhhhhhhhhh...

Transparency & Oversight... If it's not too late!

Ron Paul Is About to Totally Revolutionize the House Monetary Policy Panel

http://www.cnbc.com/id/40013227

High Plains Drifter's picture

As far as gold and silver are concerned, there would not be that big of a problem, if they had not created paper gold and silver and ETF's where they are leveraged 100 to 1 paper to product.

traderjoe's picture

FYI to y'all: APMEX is now out of silver 100 oz bars for immediate delivery. 

Bigger Dickus's picture

This fat guy is a bubble himself... (rimshot)

 

 

citationneeded's picture

These fat guy jokes are in a bubble... (ironic rimshot) :)

Bigger Dickus's picture

Confucius say: it is unwise for hooker to blow Bubbles when Bubbles don't want to pay

TraderMark's picture

Here is the downgrade of U.S. debt by Dagong

http://www.fundmymutualfund.com/2010/11/chinas-dagong-downgrades-us-debt...

Basically in short order, the US actions are harmful to creditors as they have reduced ability AND intent to pay back debt (unless inflating away debt is the ability and intent)  They speak the truth.

 

Ironically in Sept the SEC denied them entry into the U.S. market to compete with S&P and Moody's. I wonder why

StychoKiller's picture

Ironically in Sept the SEC denied them entry into the U.S. market to compete with S&P and Moody's. I wonder why

But you know the answer:  TPTB can only put out effective propaganda if and only if THEY control it!

WALLST8MY8BALL's picture

Mark's a great guy, hard to work for, but overall a kind hearted man. He has given alot to the business, and charities as well. Dont bet against that man!

B9K9's picture

Well, he may or may not be a great guy, but anyone who prefaces a series of observations & comments with:

The fallacy in the whole thing

Doesn't have a clue. That is, anyone who gives even one iota worth of legitimacy to the various rationalizations of QE X.0 by deeming them worthy of rebuttal is already lost.

For the entire post-WWII period, the USA has enjoyed the benefits bestowed up it by Satan's marriage between the Fed & the MIC. However, that relationship is now on the rocks, so the situation we're dealing with involves national security issues and outright treason by certain parties.

Great Britain enjoyed reserve status for 200 odd years - dating from N American victory in the French-Indian war(s) until the end of WWII. What did it take to destroy this special status? How about the complete destruction & annihilation of their world-wide empire.

So let us now consider the USA. Are people trying to advance the notion that one man, or group of men, can unilaterally destroy the world's most privileged position in order to save a few financial institutions?

Excuse me while I laugh; I'm sorry, but the MIC is going to have the last word. And how convenient that they even have an oath that justifies their actions beforehand.

traderjoe's picture

What do you think is going to happen? I don't disagree with you concerning the MIC. Things certainly seem to be heating up all the way around. Just curious to understand your thinking concerning the likely next steps. 

Smu the Wonderhorse's picture

He leaves a great deal to be desired in terms of cogent presentation.  And why keep harping on currency pegs as if allowing other currencies to rise against the dollar would be some kind of magic fix?  He sounds like Tim Geithner.

Client 9's picture

It's all about the currency pegs.  America is suffering because America can't compete with China on goods.  The more expensive Chinese goods are the more competitive US goods are. The more competitive US goods are the more US goods are bought, the more manufacturing jobs are created.  The peg is a major (not only) factor is the destruction of the US manufacturing base.  Let it float to its true value and then let's see if people still want to buy Chinese drywall.

erik's picture

so why did gold/silver just take a serious nose-dive on the daily charts?  anyone know?

Cdad's picture

Sell programs coming through now...selling everything.  Indiscriminate.

erik's picture

seriously.  this is not stable right now.  it has a similar feeling to the flash crash day.  it all pretty much started calmly that day if i remember.  the market was down but not down so much that you would be worried, then the bottom fell out.

johnnynaps's picture

It was time to crush the small traders with a little manipulation.

badnews...buyspus's picture

Sure looks like the selling began just after the ZeroHedge post on the missile launch. The smart $ knows that if we piss off China more, we are over (reread The Art of War).

Ben is reading his text books again, Timmy is at recess and Obama is Indonesia renewing his passport. No one left to buy the dips.

Potemkin Nation's picture

The helicopters are flying. Hallelujah, Hallelujah!

RobotTrader's picture

Just cracked big....

Mr Lennon Hendrix's picture

Robo, you before anyone else should know by now what this means for equities.

by Mr Lennon Hendrix
on Tue, 11/09/2010 - 13:29
#712485

 

Flash crash coming....

John McCloy's picture

This whole selloff in the markets is being done to keep the metals at bay. It must be frightening the pants off them

Max Hunter's picture

Zackly.. it's gonna work about as well as Yen intervention..

erik's picture

why did you say "flash crash coming" in that post?  did you see something?

Mr Lennon Hendrix's picture

I thought it would move equities (Rus2k primarily) down a couple percent instead of the marginal sell off that happened.  I also figured to get a nice move out of the VIX.  I figure there was massive manipulation in 1) PMs (selling) 2) equities (buying) and the dollar (buying).  I think this move says a few things.  First, the game is only close to over, and the EE has been given permission by the BRIC nations to live to see another day. 

Scenario number two, which is the opposite of the first.  This move may also have been panic induced.  Maybe the G-20 has decided to cut the dollar as the reserve.  This would make sense then so that dollars could have one last opportunity to be used.  Cutting down gold would be the first thing one would do so to buy at a lower price.

It is probably something in between these two.

High Plains Drifter's picture

Robo just does that because he likes to fuck with the metal heads....

Buck Johnson's picture

Couldn't have said it better myself, this is a sign.  Also you see the way Faber was trying to get him to talk about the situation in more of an abstract way than a definite way.  The pundits know that they are supposed to say and think happy thoughts in regard to the markets now.

Internet Tough Guy's picture

Down .1%. You are kind of an idiot.

trav7777's picture

yea; monster drop...did the world just end or something?

tmosley's picture

How will we ever survive this terrible crash all the way down to levels last seen...12 hours ago...

You should cut yourself every time you post a chart for gold going down.  Destitute shithead.

akak's picture

+ 10X as many junks as tmosley's comment might receive from ignorant shitheads.

moofph's picture

...what a coincidence this "roll-over" occurred after catherine keating's tap dance for the cnbc talking air-heads as they were firing off some spitwads at her...one question for keatings pie chart...what was that big slice of "other" in the big-bad-JP-pie-in-the-sky chart?