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Mike Krieger Explains Why QE 3 Will Merely Keep The Lights On

Tyler Durden's picture


From Mike Krieger of KAM LP

Whenever the economic life of a nation becomes pre¬carious, the central government is forced to assume additional responsibilities for the general welfare.  It must work out elaborate plans for dealing with a criti-cal situation; it must impose ever greater restrictions upon the activities of its subjects; and if, as is very likely, worsening economic conditions result in polit¬ical unrest, or open rebellion, the central government must intervene to preserve public order and its own authority. More and more power is thus concentrated in the hands of the executives and their bureaucratic managers. But the nature of power is such that even those who have not sought it, but have had it forced upon them, tend to acquire a taste for more. "Lead us not into temptation," we pray -- and with good reason; for when human beings are tempted too enticingly or too long, they generally yield. A democratic constitu¬tion is a device for preventing the local rulers from yielding to those particularly dangerous temptations that arise when too much power is concentrated in too few hands.

- Aldus Huxley, Brave New World Revisited

A nation can survive its fools, and even the ambitious. But it cannot survive treason from within. An enemy at the gates is less formidable, for he is known and carries his banner openly. But the traitor moves amongst those within the gate freely, his sly whispers rustling through all the alleys, heard in the very halls of government itself. …He rots the soul of a nation, he works secretly and unknown in the night to undermine the pillars of the city, he infects the body politic so that it can no longer resist.

- Marcus Tullius Cicero (106 BC—43 BC)

QE3:  It Will Merely Keep the Lights On

This is a piece that has been festering in my head for quite some time now and I was waiting for the right moment to pen it.  That time is now.  In some ways The Bernank made a huge mistake by not launching QE3 right away when he had the chance.  Now don’t get me wrong, I am not in favor of any of this nonsense and I think The Bernank’s profession needs to go the way of the dodo bird, but I mean from the perspective of a Central Banker I think he made a big mistake by taking a breather from at least the printing and manipulations that they admit to.  The reason I say this is because up until the last month or so The Fed had been essentially telling the American sheeple that all was under control and that since The Bernank had studied the Great Depression and Japan he could save us from all the mistakes that were made back in those less enlightened times.  The Fed was saying that they could pull off the equivalent of preventing a serious hangover for someone that chugged an entire bottle of tequila.  They basically claimed to have found a way to break the laws of the universe. 
Unfortunately for them, the cruel forces of reality have intervened and proven that they actually did not figure out how to change the immutable laws of physics.  This truth became abundantly clear at The Bernank’s most recent press conference (which if he is smart will be his last) where it became all too clear that even he comprehends on some level that his theories and in fact his entire life has been a complete waste of time and energy.  That would be ok if he were confined to some University lecture hall; however, his lunacy was unleashed on the entire planet and we will all suffer the dire consequences of it for many years to come.  He has basically shoved another bottle of tequila down the throat of the already passed out drunkard and now he not just unconscious but is DYING. 

The response by TPTB to the utter failure of QE2 and everything else these mad intellectually bankrupt central planners have done was to try to smash commodities.  First, they released oil from the SPR in an act that more than any other proved to me we are in now in the final stage of this thing.  Not only was it pathetic in its desperation to anyone that knows the commodity markets but it was an utter failure.  For example, wholesale gasoline prices are now 5% HIGHER than they were the day before the raid.  Then just last week there was the crop planting data, which everyone I talked to involved in the agricultural sector thought was a complete sham.  Nevertheless, the “data” was used to create a 10% plunge in corn and 9% smash in wheat.  Of course, China was reported to have been a size buyer on the weakness.  How convenient.  What a disgrace.  This thing had TPTB fingerprints all over it and that is exactly why I do not participate in futures markets at all.  It’s a giant controlled game in the short-term.  Nevertheless, grains prices are of course moving back up again and I expect a huge spike in food prices in the months ahead related to weather that has already occurred around the world and the dire flood situation on the Missouri river.  More importantly, if TPTB continue to play their little games in the commodities futures markets we are going to have actual shortages.  In oil and in food in particular.  They are playing with fire.  Big time.  Reread the quote at the top by Huxley.  Whenever anyone one claims they need to do something for the “general welfare” run the other way as far and as fast as humanly possible.  That is the line of every tyrant and wanna be dictator.     

Ok, so time to talk about what is next.  The Bernank has already gone too far and there is no turning back.  There will be QE to infinity until the point where the system collapses on itself, which is probably not too far off once the next round of official QE is started.  What form this may take is anyone’s guess but as I mentioned in a recent email, the whole rate cap idea makes the most sense since it will allow infinite QE to occur without having to announce subsequent iterations.  The simple fact that they tried to pretend QE would end and then tried to raid commodities to create the justification for it later on demonstrates to me how much trouble we really are in.  If The Bernank had merely gone ahead and continued the program he had a CHANCE of perpetuating Disneyland for a little longer at least.  Instead, he is praying that the economy can stand on its own, which of course it can’t and so then when he launches into QE3 after the economy weakens and proves QE1 and QE2 did nothing to create a self-sustaining recovery the entire mindset and understanding going into the next money printing party will be entirely different from a psychological standpoint.  QE3 will not lead to confidence or anything even similar to the last rounds.  Rather it will be used to basically “keep the lights on.”  More than anything it will serve as that proverbial “bell” that will ring and in the minds of the savviest and wealthiest people on the planet to get the hell out of the system while they can.  This is inevitable.  It is already happening.  The stampede is yet to come.  But come it will.  It is time for everyone to take additional steps whatever that may mean for you personally.  I know I am.   Don’t get gorged. 

Things to Read

There are two pieces I suggest as must reads for the weekend.  First, I have attached an incredible piece by the always brilliant Brodsky and Quaintance.  Second, the latest from Martin Armstrong.  Read it here 

One last thing, given the market action today I would expect some sort of major desperate move by TPTB on Monday.  Whenever we have had days like this that his what they have done.  Brace yourself indeed.  Have a great weekend.

Peace and wisdom,


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Fri, 07/08/2011 - 13:14 | 1437301 coppertop
coppertop's picture

I like stimilus

Fri, 07/08/2011 - 13:16 | 1437304 nope-1004
nope-1004's picture

Stimilus?  Do you teach spelling in some USA grade school?


Good stuff Mike, appreciated as always

Fri, 07/08/2011 - 13:18 | 1437308 coppertop
coppertop's picture

I'll bet you read every word too.

Fri, 07/08/2011 - 13:24 | 1437344 narapoiddyslexia
narapoiddyslexia's picture

gorged? Slow down, dude. It's "gored," surely.

Fri, 07/08/2011 - 13:48 | 1437417 mynhair
mynhair's picture

Perhaps he's thinking of the Gorge at George concerts in WA.

Fri, 07/08/2011 - 14:36 | 1437616 coppertop
coppertop's picture

look at her learn to rope and ride

Fri, 07/08/2011 - 14:49 | 1437671 Harlequin001
Harlequin001's picture

that bull doesn't look very happy does it...

Fri, 07/08/2011 - 20:33 | 1438778 eureka
eureka's picture

Who - in our socio-financial power battle - does the bull symbolize?

"Whenever anyone one claims they need to do something for the “general welfare” run the other way as far and as fast as humanly possible.  That is the line of every tyrant and wanna be dictator."

Well, never the less, I claim that the general wellfare would be well served by anyone who kills the financial and all other bull markets before they kill themselves. Have mercy on the bulls; euthenasia and assasinations now, please - if not for any other reason than to fulfill the subconscious desire of the US masses, who gobble up Hollywood assasination flicks 24/7.

Wanna rule the world? Bomb Wall Street! Life is just like a computer game - from Microsoft or Sony or some other mafia-scam, tax-evading corporation - ONLY BETTER; REAL BLOOD.     

Sat, 07/09/2011 - 02:01 | 1439216 Ahmeexnal
Ahmeexnal's picture


Fri, 07/08/2011 - 13:32 | 1437373 SilverIsKing
SilverIsKing's picture

Who doesn't like to get stimulated?

Fri, 07/08/2011 - 14:37 | 1437617 deselby
deselby's picture

Speaking of spelling, I think Mike meant gored not "gorged."

Fri, 07/08/2011 - 13:19 | 1437310 nope-1004
nope-1004's picture


Fri, 07/08/2011 - 13:25 | 1437345 TruthInSunshine
TruthInSunshine's picture

The Great Deleveraging is going to roll in like a tsunami, and regardless of inflation, stagflation, deflation or hyper any of those, the result will be an Economic Depression.

Actually, some quite bright people (whether they're early or wrong, time will tell) have made the claim that the first waves have begun to roll in upon the coastline.

Fri, 07/08/2011 - 21:07 | 1438846 CompassionateFascist
CompassionateFascist's picture

Real unemployment now >20%. That IS a depression. What's coming, they'll have to invent a new name for.

Fri, 07/08/2011 - 14:19 | 1437527 konputa
konputa's picture

I'm not going down with the ship. Nope, I ain't going. Sing along.

Fri, 07/08/2011 - 13:19 | 1437318 Dr. No
Dr. No's picture

The picture cracked me up.  For next year, Spain should announce no medical attention to bull runners due to austerity.  Perhaps this would cause participants to conclude tormenting a wild animal and then running away in the name of fun is dangerous?

Fri, 07/08/2011 - 14:41 | 1437632 Harlequin001
Harlequin001's picture

Nah, it takes intelligence to work that one out...

Fri, 07/08/2011 - 13:21 | 1437325 Youri Carma
Youri Carma's picture

Sherlock : Economy moving in the wrong direction ahaahahaahaahahahahaha

“First, we need to get America back to work” – No kiddn’ what a brilliant thought but how? lOlz no way of doing that while all the jobs went to China and the Worldeconomy lays in shambles.

Fri, 07/08/2011 - 13:31 | 1437372 Dr. Richard Head
Dr. Richard Head's picture

Come on Youri.  You have been here long enough to know how. 

Step 1 - Government needs to stop diverting productive assets to non-productive ventures (AIG, GM, Greece, Goldman, Freddie, Fannie, etc.)

Step 2 - Interest rates need to be based on savings rates in order to spur savings.  The Federal Reserve needs to get out of price fixing the cost of money.

Step 3 - Reinstitute actual accounting where assets are assets and liabilities are liabilities.  None of the new age hiding the pickle accounting.

Step 4 - Discontinue all stimuli through all shadow banking avenues, including overt primary dealer bond stuffing operations.

Step 5 - let the chips fall where they may.

Step 6 - repeal all legal tender laws and fractional reserve lending.

Sure it will be painful short term, but we could actually get back to work in the mid-term.  This dancing on the casket shit that the central planners are pulling needs to stop.

Fri, 07/08/2011 - 14:26 | 1437562 FreedomGuy
FreedomGuy's picture

The problem is that in a political economy (which is what we have now) there is far more money to be made in money than in producing anything. With heavy currency and monetary interventions along with political favors the productive class is dieing a slow painful death and relocating overseas. Meanwhile, Sachs, Morgan, banks and the like can and will make money all the way down. They will even design the exit strategies.

Central planning, political economies,'s a great thing if you're in the welfare, warfare or financial classes. Everyone else loses.

Fri, 07/08/2011 - 14:54 | 1437668 Dr. Richard Head
Dr. Richard Head's picture

Dead on with your analysis.  The plan which I outlined,  not my ideas per se, would be the cure, but the status quo will not allow for it to happen.  Iceland - here I come.

Fri, 07/08/2011 - 15:00 | 1437733 DosZap
DosZap's picture

Like Volcano's huh?.Temperate clime.

Guess you takes yer chances, where ya take em'.

Fri, 07/08/2011 - 15:16 | 1437825 iinthesky
iinthesky's picture

Yeah.. and how about the people wake up to the fact that THEY are the creditors to the corporation called the USA and how about we get first use of money and give the banks a cut of the rates instead of the other way around where they make ridiculous sums of credit off our backs and share a dollar out of every ten thousand-- maybe, if they feel generous or they haven't dug themselves into the abyss. An entire shift of the consciousness paradigm is needed if this problem is to be fixes. Otherwise these crooks will do this untill the music stops and then dismantle everything only to replace it with something much much worse.  Most of use won't even know till its already complete and operating for 10 years. Then some will wake up and say "hey.... wait... a... minute!"

Those folks will be SWAT teamed and disappeared. It's all good.. nothing is wrong.

Fri, 07/08/2011 - 17:55 | 1438469 iinthesky
iinthesky's picture

Yeah.. and how about the people wake up to the fact that THEY are the creditors to the corporation called the USA and how about we get first use of money and give the banks a cut of the rates instead of the other way around where they make ridiculous sums of credit off our backs and share a dollar out of every ten thousand-- maybe, if they feel generous or they haven't dug themselves into the abyss. An entire shift of the consciousness paradigm is needed if this problem is to be fixes. Otherwise these crooks will do this untill the music stops and then dismantle everything only to replace it with something much much worse.  Most of use won't even know till its already complete and operating for 10 years. Then some will wake up and say "hey.... wait... a... minute!"

Those folks will be SWAT teamed and disappeared. It's all good.. nothing is wrong.

Fri, 07/08/2011 - 13:22 | 1437329 ziggy59
ziggy59's picture

Kitco moves into creditor protection

Fri, 07/08/2011 - 13:26 | 1437355 Josh Randall
Josh Randall's picture

Paper Pozi Traders starting to get a spotlight on them. I wonder if the fact Sprott is based in Canada and this is happening there is any coincidence

Fri, 07/08/2011 - 13:29 | 1437362 Dr. No
Dr. No's picture

Actually, i view it as an attack by gold haters on gold bugs.  Are you telling me if JPM Canada had the same issues, Quebec would have went after them?

Fri, 07/08/2011 - 13:48 | 1437418 Josh Randall
Josh Randall's picture

I am probably pollyanish but I believe at some point the worm will turn in the paper PM ponzi. So someone at some point will climb into the ring with The Morgue in the US, Canada or elsewhere

Fri, 07/08/2011 - 13:23 | 1437333 bigdumbnugly
bigdumbnugly's picture

at least it appears the bull is taking the time to pleasure the doomed citizen before he finishes him off.

funny how art imitates life like that.

Fri, 07/08/2011 - 14:46 | 1437655 Harlequin001
Harlequin001's picture

Yeah, now that's what I call 'feeling horny'.


Fri, 07/08/2011 - 13:24 | 1437340 baby_BLYTHE
baby_BLYTHE's picture

the money printer will continue to print, that I am sure

Fri, 07/08/2011 - 13:43 | 1437400 Dr. Richard Head
Dr. Richard Head's picture

As sure as an Irishman loves whiskey.  Just wish the reset would makes its way in ernest.

Fri, 07/08/2011 - 16:08 | 1438118 Herbert_guthrie
Herbert_guthrie's picture

I don't like whiskey, much prefer beer.
Do you know what your head feels like the next day after listening to fiddles all night drinking whiskey???

As far as waiting on the reset, probably not going to happen.
This won't be like an elevator with a broke cable, falling to the bottom; more like an escalator slowly descending.

Fri, 07/08/2011 - 21:12 | 1438854 baby_BLYTHE
baby_BLYTHE's picture

Gentleman Jack+Coke FTW

Sat, 07/09/2011 - 19:13 | 1440368 Prometheus418
Prometheus418's picture

I'm Irish, and I like Full Throttle and Raspberry Vodka- but it is green, so I guess that's all right.

Fri, 07/08/2011 - 13:51 | 1437430 Caviar Emptor
Caviar Emptor's picture

Yup, on turbo

Fri, 07/08/2011 - 14:06 | 1437476 DoChenRollingBearing
DoChenRollingBearing's picture

@ baby_BLYTHE,

Since there is no will to take the steps necessary to fix our financial system, I regret that I have to agree with you 100%.

Gold is talking to us...  Let's listen and act!

Fri, 07/08/2011 - 14:32 | 1437588 SheepDog-One
SheepDog-One's picture

But no matter how much they print now, it will only keep the lights on in the rigged casino. Game over people.

Fri, 07/08/2011 - 13:27 | 1437356 Westcoastliberal
Westcoastliberal's picture

While I agree 100% with your post, Mike, shouldn't it be "gored"?

Fri, 07/08/2011 - 13:44 | 1437402 Double down
Double down's picture

The second "g" is transitory.

Fri, 07/08/2011 - 14:06 | 1437479 DoChenRollingBearing
DoChenRollingBearing's picture


Fri, 07/08/2011 - 14:08 | 1437492 LetThemEatRand
LetThemEatRand's picture

It's also a softpatch (silent) g.  Doesn't count.

Fri, 07/08/2011 - 14:53 | 1437699 akak
akak's picture

Naw, it's just a stray green shoot of a consonant.

Fri, 07/08/2011 - 14:57 | 1437722 cossack55
cossack55's picture

Looks like that bull is gorging to me.

Fri, 07/08/2011 - 15:18 | 1437842 Silver Dreamer
Silver Dreamer's picture

It's a glorious gory gorging.

Fri, 07/08/2011 - 14:58 | 1437726 cossack55
cossack55's picture

Looks like that bull is gorging to me.

Its a Wall Street bull, you know, the only carnivorous type.

Fri, 07/08/2011 - 13:29 | 1437364 Gold Man-Sacks
Gold Man-Sacks's picture

Could someone please explain why the Fed's manipulation of longer-term interest rates (Operation Twist 2) is so much worse than what they do now with their short-term-interest open market operations?  Does it simply take much more money creation to control longer-term rates?  thanks.

Fri, 07/08/2011 - 15:42 | 1437926 Sancho Ponzi
Sancho Ponzi's picture

The Fed doesn't need to create any money to control any note/bill/bond rate. All that is required is for the Fed to notify dealers that they will always and without exception defend a certain rate on (x) year treasurys. If the magic number is 4.5% for the 30 year, that's the ceiling, and there's nothing dealers or the 'market' can do about it. 

Like a ponzi scheme, this works, until one day it doesn't.

Added: It is commonly believed central banks cannot control long-term interest rates, but if you've got a bunch of Bernanks who make it known they will purchase trillions of 30 year bonds if that is what is required to keep rates down, the 'market' no longer comes into play.

Fri, 07/08/2011 - 16:15 | 1438158 Gold Man-Sacks
Gold Man-Sacks's picture

I thought the Fed would have to create the money to buy the bonds, as you stated at the end of your comment.  In regards to the first part, are you saying that at the auction, they simply won't go any higher on the yield than a specified number?  Wouldn't buyers simply not purchase them then?

Fri, 07/08/2011 - 16:22 | 1438162 Gold Man-Sacks
Gold Man-Sacks's picture


Fri, 07/08/2011 - 17:43 | 1438447 Sancho Ponzi
Sancho Ponzi's picture

The theory is that the Fed merely has to make it known that they will buy bonds if interest rates climb to a certain rate. The threat in itself is enough to put a lid on rates, so the Fed doesn't need to purchase anything. 


Like I said, it works up to a point, which could be years or even decades. Until it doesn't, at which time the Fed would have to purchase bonds or the economy will require a reset.

Fri, 07/08/2011 - 14:55 | 1437709 SDRII
Fri, 07/08/2011 - 13:30 | 1437367 Sudden Debt
Sudden Debt's picture

I wonder how big it will be. I think it will be arround 1.3 to 2 trillion dollar this time.


Fri, 07/08/2011 - 13:39 | 1437394 bigdumbnugly
bigdumbnugly's picture

you gotta dream bigger, SD.

why not 1.3 to 2 quadzillionmillion?

Fri, 07/08/2011 - 13:45 | 1437404 Dr. Richard Head
Dr. Richard Head's picture

I'm pulling for a decamillion or three.

Fri, 07/08/2011 - 14:38 | 1437620 coppertop
coppertop's picture

does it hurt when you think?:>

Fri, 07/08/2011 - 14:50 | 1437682 Dr. Richard Head
Dr. Richard Head's picture

I no longer think.  My words are reactionary intution and instinct anymore.  Thinking is for the political class.  I am just here for the candy.  Someone said they were handing out candy right?

Fri, 07/08/2011 - 15:00 | 1437732 Harlequin001
Harlequin001's picture

'I'm so highly trained I don't need to think before I open my mouth..."

That was a John Candy line wasn't it?


Fri, 07/08/2011 - 14:12 | 1437508 LetThemEatRand
LetThemEatRand's picture

Geitner has been measuring The Bernank's index finger and thumb all morning trying to answer that.  Of course Obama knows how big it is going to get, from experience.

Fri, 07/08/2011 - 14:24 | 1437547 EscapeKey
EscapeKey's picture

I wonder how big it will be. I think it will be arround 132 trillion dollar this time.


Fri, 07/08/2011 - 14:24 | 1437548 hambone
hambone's picture

For BB to work, it must be open ended but sure to be maintained until full inflation / employment targets are reached. 

That should be all the big dogs need to ensure every last asset is striped from the bone.  And then, blame it on a scapegoat, enjoy your winnings, and yell I'm king of the world as you enter the gates to face Hades.

Fri, 07/08/2011 - 14:25 | 1437553 EscapeKey
EscapeKey's picture

It's the durn speculators, innit?

Fri, 07/08/2011 - 13:31 | 1437371 Seasmoke
Seasmoke's picture

i have decided to have my family hedge .......i will be on disablity, my wife will work in the private sector, i will have one son work as a public employee and another son be a small business entrepreneur

Fri, 07/08/2011 - 13:53 | 1437438 IBelieveInMagic
IBelieveInMagic's picture

F'ing Brilliant!

Show a little ambition -- your personal goal should be to get on disability, SNAP, 99 weeks!

Fri, 07/08/2011 - 14:29 | 1437572 mick_richfield
mick_richfield's picture

You need another son, quick, and make him a farmer with a nice piece of land and a large house in a remote location.

Fri, 07/08/2011 - 14:44 | 1437646 Seasmoke
Seasmoke's picture

the father n law already has that well under control......but thats only if ALL 4 of my hedges collapse

Fri, 07/08/2011 - 17:40 | 1438434 DaveyJones
DaveyJones's picture


Fri, 07/08/2011 - 15:08 | 1437776 DosZap
DosZap's picture

To truly Hedge well, you must have a Federal job in the mix.

Seeing as how the nat'l Avg for pay is 40% higher in .gub jobs, v.s. the private sector.

Fri, 07/08/2011 - 13:32 | 1437375 Seasmoke
Seasmoke's picture

great news......silver will zoom past $50 shortly

Fri, 07/08/2011 - 14:46 | 1437657 TheTmfreak
TheTmfreak's picture

Unless my paycheck increases at the same rate of silver then thats not good.

Less silver you can purchase.

Fri, 07/08/2011 - 13:32 | 1437376 BeerWhisperer
BeerWhisperer's picture


Any guesstimates on Earnings starting next week? I'm seeing positives few negatives but that completely makes no sense to me. All the reserves were already tapped by most companies. Of course since everyone on here is a bear I'm going to guess the conesuses is negative EPS coming in.



Fri, 07/08/2011 - 13:50 | 1437421 Franken_Stein
Franken_Stein's picture


Alcoa will start the earnings season.

It is ruled by local NWO viceroy Klaus Kleinfeld, ex-CEO of Siemens.


Estimated earnings per share: $0.34

Current share price: $16.30


Fri, 07/08/2011 - 14:07 | 1437484 Panafrican Funk...
Panafrican Funktron Robot's picture

I would suggest that most here are are actually neutral regarding equity market direction and, if they trade at all, are of the pennies/steamroller variety.  If there's one thing I've learned in my time here, it's that having a strong conviction either way is a sure sign that you are a complete fucking moron.

Fri, 07/08/2011 - 15:16 | 1437829 Smiddywesson
Smiddywesson's picture


Any idiot can make money in a bull market.  The task is to be so bipolar that you can trade like an idiot during the bull and still get out when the end arrives. 

However, the markets can remain irrational longer than we can remain solvent, so getting out too soon is the main problem. 

People tend to leave too early, and then sound like perma-bears while they whine and wait for the inevitable crash.  This market is a perfect example of how traders are either completely oblivious to their danger, or cannot bring themselves to trade in a make believe "market" rising on nothing but leprechan and unicorn farts.

Your task is to not be either or these people.  Trade like a drunken sailor.  Hold overnight and use leverage.  When you sense danger, lighten up on the leverage and hang in there, knowing that the extra profit will pay for your losses when the market turns.  Sometimes (like this time) the danger part of the ride outperforms the easy money during the early part of the bull market.  I wish I had realized this back in March of 2009, but live and learn.

Fri, 07/08/2011 - 13:33 | 1437377 Youri Carma
Youri Carma's picture

Bernankesan is doing a great Job no worries: U.S. 10-year yields below 3% after Obama, job data

Fri, 07/08/2011 - 13:34 | 1437381 espirit
espirit's picture

Let's hope we get another chance to BTFD with cheaper ponzifiat before the collapse.

PM dollah cost averaging works well.

Fri, 07/08/2011 - 15:17 | 1437841 DosZap
DosZap's picture


I think WE just missed the last BTD on both PM's.

I do not see Slvr at $33.00 again, nor Gld at below $1,475.00.( and that would be a BTD price)

Fri, 07/08/2011 - 13:35 | 1437382 Greeny
Greeny's picture

Buy the f* deep! We moving up quickly,

Yeah, baby, yeah!!!

Fri, 07/08/2011 - 13:35 | 1437384 YesWeKahn
YesWeKahn's picture

you basically said that Bernanke is either a crook or a beginner politician.

Fri, 07/08/2011 - 13:38 | 1437391 dwdollar
dwdollar's picture

Here comes the meltup.

Fri, 07/08/2011 - 14:09 | 1437497 Panafrican Funk...
Panafrican Funktron Robot's picture

Yeah, it stunned everyone that completely forgot about every piece of macro data over the past month.  Sorry, Wall Street and US politicians tend to be horrible human beings, but they're not stupid enough to be stunned by that jobs report.

Fri, 07/08/2011 - 15:19 | 1437849 Smiddywesson
Smiddywesson's picture

Right again Funk.  It's Keynes beauty paegent, where everybody is trying to gauge everybody else's reaction to data everybody knows is completely false. 

Fri, 07/08/2011 - 16:25 | 1438177 brian oblivion
brian oblivion's picture

It has nothing to do with Keynes.



Fri, 07/08/2011 - 22:10 | 1438974 DeadFred
DeadFred's picture

It only stunned us that they let bad data out. What's the matter, their creative writing intern took an extended weekend off?

Fri, 07/08/2011 - 13:45 | 1437407 carbonmutant
carbonmutant's picture

Treason indeed...

Show trials coming up...

Fri, 07/08/2011 - 13:45 | 1437410 Bartanist
Bartanist's picture

Main Street is still in reasonable shape and recoverable if the banks and the government get off their ass.

Just wipe out the freaking bank equity and bond holders, save the dollar and start all over.

It is not too late for Main Street. It may be too late for the banks ... and they deserve to be slaughtered.


Fri, 07/08/2011 - 13:50 | 1437423 Youri Carma
Youri Carma's picture

Not it's not. Fraud is the main businessmodel on Wall Street. America is fully corrupted. You're delusional.

Fri, 07/08/2011 - 14:00 | 1437462 Caviar Emptor
Caviar Emptor's picture

The interdependencies are now too high

Fri, 07/08/2011 - 14:16 | 1437516 Panafrican Funk...
Panafrican Funktron Robot's picture

They've already set up the M.A.D. grim trigger, and they have actual boots on the ground to back it up.  Things are looking eerily similar to 1860; an Obama re-election would probably set the necessary spark.

Fri, 07/08/2011 - 15:24 | 1437886 DosZap
DosZap's picture

Or, he is foolish enough to sign on to the U.N. Small Arms Treaty prior to '12.

He may as well, he has nothing to lose, no way he is relected,period end of story.

There is NO miracle huge enough to get him re-elected at this juncture.I seriously doubt he will even get 94% of the black vote again.

A lot of them have wised up considerably.

Fri, 07/08/2011 - 17:55 | 1438466 cgbspender
cgbspender's picture

Doubtful, In my opinion. Once 2012 rolls around, identity politics will be back in full swing. The wagons will circle around their respective candidates and Democrats will default back to the notion of "It doesn't matter what Obama does, a Republican would be worse". The left/right paradigm is alive and well and it's ready to devour your children.

Fri, 07/08/2011 - 14:36 | 1437615 mt paul
mt paul's picture

my production costs 

up 60 % since 2008...

there is no recovery 

only survival...

Fri, 07/08/2011 - 14:42 | 1437633 Mad Marv
Mad Marv's picture

I think we are too far gone. If there is no trust in society, then it is hard to do business. Blame moral relativism?

Fri, 07/08/2011 - 13:46 | 1437413 virgilcaine
virgilcaine's picture

'Martin' had his cycle low for 6.11 instead we went to a New High.. oh well.

Fri, 07/08/2011 - 13:50 | 1437424 nevadan
nevadan's picture

Then just last week there was the crop planting data, which everyone I talked to involved in the agricultural sector thought was a complete sham.

How so?

Fri, 07/08/2011 - 13:51 | 1437432 Franken_Stein
Franken_Stein's picture


Clarence Beeks gave em the wrong suitcase. Darn !


Fri, 07/08/2011 - 14:02 | 1437468 TN Jed
TN Jed's picture

Beef-jerky time.

Fri, 07/08/2011 - 14:06 | 1437483 Osmium
Osmium's picture

What was that line he had?  "Back off, or I'll rip your eyes out and piss on your brain"

Fri, 07/08/2011 - 13:53 | 1437435 Caviar Emptor
Caviar Emptor's picture

Look, QE Trillions will all trickle down!

Fri, 07/08/2011 - 13:53 | 1437437 zorba THE GREEK
zorba THE GREEK's picture

 After considering all the feasible options available to The Fed and the

 Gov., it really isn't that difficult to see what direction they will choose.

 The voting public gives them only one: Print until the lights go out.

 Everyone wants their promised piece of the pie and there's nowhere

 near enough pie to go around. 

Fri, 07/08/2011 - 13:53 | 1437443 DonutBoy
DonutBoy's picture

This is a good piece, thanks.  There seems to be a large appetite for these desparation moves, like the SPR release.  I thought cash for clunkers was desparate and insane.  The same for first-time home buyers tax-credit and the renewed government-sponsored zero-down loans. 

Fri, 07/08/2011 - 14:09 | 1437494 DoChenRollingBearing
DoChenRollingBearing's picture

+ $1540

So much stupidity...

Fight them by buying gold!  Be your own central bank!

Fri, 07/08/2011 - 15:32 | 1437928 DosZap
DosZap's picture

SPR was the dumbest of all, as far as doing anything.

Selling reserves unecessarily was stupid,gained zero political capital off that move.

The only folks that helped was JPMorgue.

Those darn banksters keep showing up in the weirdest pWaces!!!

Fri, 07/08/2011 - 13:57 | 1437450 Juice Box
Juice Box's picture

Bernie Madoff would be proud!

Fri, 07/08/2011 - 15:34 | 1437942 DosZap
DosZap's picture

He is, now he's no longer the biggest crook ever on the STREET.

Fri, 07/08/2011 - 13:57 | 1437452 White.Star.Line
White.Star.Line's picture

QE 3 will not merely keep the lights on.

QE3 is lights out.

Fri, 07/08/2011 - 13:58 | 1437457 Caviar Emptor
Caviar Emptor's picture

NY Fed published an article yesterday explaining how heir latest research proves that their old models for the interaction between employment and inflation are no longer valid. They claimed they now have it all figured out, but they don't. They still don't see it. You regulars know what I'm talking about 

Fri, 07/08/2011 - 14:08 | 1437490 Gringo Viejo
Gringo Viejo's picture

Zig,zag and keep the sheeple baffled with hourly updates of bullshit. Speaking of which, where can I send this guy a get well card?

Fri, 07/08/2011 - 14:02 | 1437466 Caviar Emptor
Caviar Emptor's picture

If Americans would only shop harder....we could call the whole crisis off

Fri, 07/08/2011 - 15:36 | 1437962 DosZap
DosZap's picture


Do a QE3,  and send a couple of Trillion to the people directly,tax free (ya know, like the Banks!) and it just might.

Fri, 07/08/2011 - 14:11 | 1437501 Amish Hacker
Amish Hacker's picture

they released oil from the SPR in an act that more than any other proved to me we are in now in the final stage of this thing

Yup. The other tip-off is that Timmy is headed for the door, so he can claim that none of the really nasty stuff happened "on his watch."

Fri, 07/08/2011 - 16:01 | 1438081 DoChenRollingBearing
DoChenRollingBearing's picture

Yes, smart rat Timmy is...

Fri, 07/08/2011 - 14:19 | 1437502 Franken_Stein
Franken_Stein's picture


One thing is clear:


Saudi-Arabia has lied to the power brokers in the U.S. .


They lied to George H.W. Bush, lied to Rockefeller.

Overstated their oil reserves at Saudi Aramco.


George H. Bush and the Rockefellers are not amused by this.

They were wrong-footed by this admission.

Didn't have time to prepare America and the military for a post-oil age.


They know that oil is America's lifeline.

The whole army, airforce, navy (except nuclear powered carriers) and marine corps depend on it.


The American military empire is on the brink of collapse, should oil reach $200/barrel.

Then all the vassall states will start to break away from the U.S. empire.


Of course due to the oil/dollar peg, the Fed just would have to print more money, since the Saudis have a gun to their head if they don't accept greenback toilet paper for their oil.


But different from the mafia, who demand to be paid "protection money", all the U.S. wants from SA in exchange for the U.S. "protecting" it, is to accept those Hamiltons, Grants and Franklins for that viscuous tangible asset made up of dead animals' remains.


So George probably called the Saudi oil minister and said:

"Listen, bro, you saw what we did in the MENA states, how we can induce CIA/food price riots.

That Gaddhafi sonofabitch got too greedy and spoilt.

You have a Shiite problem festering there, don't you ?

If you want the House al-Saud to stay in power any longer, then ramp up your production for fuck's sake or we will find some other puppet who will replace you to do it !

I don't care what OPEC says ! Opec is a talking-shop ! Ramp it up, now !"

Then he hung up the telephone.


Fri, 07/08/2011 - 14:30 | 1437579 CrashisOptimistic
CrashisOptimistic's picture

Folks just can't accept it.

It's not discretionary.  It's not finance.  It's not monetary.

It's Not There.

There is not enough oil for 7 billion people.  If you want there be be enough, you have to kill people.  By the billions.

It's not politics.  It's not ideology.  It's not morality.

It's math.

Fri, 07/08/2011 - 15:46 | 1438009 Abitdodgie
Abitdodgie's picture

Its just business

Fri, 07/08/2011 - 16:10 | 1438128 Herbert_guthrie
Herbert_guthrie's picture

Like placing chopped-off horse heads in the bed.....

Fri, 07/08/2011 - 15:28 | 1437903 Smiddywesson
Smiddywesson's picture

The American military empire is on the brink of collapse, should oil reach $200/barrel.


That result is preordained even without expensive oil.  Remember the old Soviet fleet mothballed and rusting at the docks?  That's what happens when you bust.

The USS Constitution is still available though if we want to go after those Somali pirates

Fri, 07/08/2011 - 15:45 | 1438002 DosZap
DosZap's picture


I disagree, H had time to ramp up, and shut down all the EPA crap, and Special interest groups HAD he wanted to, and started to Drill baby Drill, right here.

The Gulf is still mostly off limits, and no new reserves ,or old known ones have been allowed to be touched.

I call that treasonous.

To not do all that you can,balls out is inexcusable,lied to or not.

Your talking 20yrs ago.Just think of the new sources we could have found, and tapped, while investing alternate energy sources.

Sat, 07/09/2011 - 03:43 | 1438533 Urban Redneck
Urban Redneck's picture

Saudi Arabia is complex.

H. Bush knows and has known what's going on (or has the option to, unlike Obama, but since he might go for analysis, instead to the horse’s mouth, there is risk H. Bush could go to a certain group he has ties to that has  a high reputation but actually has a very poor grasp of Saudi inner-workings).

The US actually doesn't have the strongest hand there. 

The US 5th fleet in Bahrain serves as a thug/ useful idiot/ hostage/ obstacle/ target depending on one's vantage point.  But the US can't send the military into the Kingdom.  Otherwise, the next crusade to "free the Holy Land" kicks off and the crusaders are bringing WMD this time.

Iran is actually in a similar position, they can diddle with Bahrain and the Tunb islands, but if they set foot in the Kingdom then the Twelfth Imam gets flagellated and decapitated.  Which is the desired outcome of neither the 1000+ year Sunni-Shia schism nor the several thousand year Arab-Persian pissing match.

Meanwhile, Saudi Arabia and China have become an interesting pairing at the ball, especially given China's influence over Iran irrespective of US presence in Bahrain.

There is a high stakes game of Khaleej brinkmanship going on.  The situation is not really any more volatile than it was in 1971, but a lot of the key players from '71 are no longer around to draw correct parallels and contrasts.

Ahmadnutjod may actually be a nut job, which would explain the conflict within the Republic.  However, the members of Guardian and Expediency councils are not nut jobs, and as far as anyone outside knows- the 12th Imam hasn't come knocking.

The US administration is hobbled by a lack of friends both in the Republic and in the Kingdom.  The Saudis are hobbled by the fact that their friends in the US are not particularly welcome at the White House, until the Administration inevitably fucks things up (which is after the fact).  The Russians, of all people, seem to be building their rolodex of the few players who are welcome guests in both Tehran and Riyadh.

The US administration's strongest bluff is that it would withdraw beyond the Straight of Hormuz, but oil would reach $200 before the first carrier actually crosses the line, which serves the wealth transfer interests of both Gulf States just fine.  The threat of invading Iran is equally counter-productive.  Prince Turki (Sudairi) has been doing the "reform now" thing for years.  Ironically, the most effective solution to the domestic threat is ramping up Yanbu and the Jubail expansion even faster, which cuts oil available for export (except in the minds of the intellectual niggers who believe that at a nation with the population of Texas, and a climate to match, uses a huge share of its 12% of global oil production to run air-conditioners in the summer). 

I suspect that, as usual, the law of unintended consequences will be biting the bureaucrats in Foggy Bottom in the ass a few years down the road (if not sooner), regardless of which path the US chooses.


Fri, 07/08/2011 - 14:13 | 1437503 Boston
Boston's picture

Straight from the horse's mouth.  Here's John Hilsenrath (Ben's boy at the WSJ) explaining that the Fed won't do ANYTHING for at least a while.  I agree.

Fri, 07/08/2011 - 14:19 | 1437526 razorthin
razorthin's picture

A slam dunk below the 200 day MAs on all major indices will be needed with SPX losing 1249 support.  Everyone - fundies and techies alike - must first be convinced we are heading to 666.

Fri, 07/08/2011 - 14:26 | 1437557 Boston
Boston's picture


Fri, 07/08/2011 - 14:32 | 1437590 Greeny
Greeny's picture

Bold man, what are you smoking? Markets going higher.

Those jobs they wanna create is for low income people.

You have to move in China, if you wanna work in manufacturing,

or otherwise you will have to accept $4/hour paycheck.

There is plenty jobs in Medical and High-tech fields,

might as well get educated, while unemployment pays for it.

Not possible to have competitive manufacturing in America.

You just have to accept the fact.

Fri, 07/08/2011 - 15:06 | 1437742 razorthin
razorthin's picture

How true.  I am in Healthcare IT/Decision Support and I get daily emails and calls from head hunters.  I will never get rich in this field, but I am fortunate to be in the niche.  If lives weren't directly at stake, my field would also be farmed out to Asia.

But here's a thought.  As global wage entropy runs its course, it may not be many years before the domestic labor market is cheap and the skilled middle-class jobs return.

But until then, and if the Fed is to make good (for an intermediate period) on its latest mandate to support the ES, it must first arrange for it to take a dive.

Fri, 07/08/2011 - 15:31 | 1437923 Smiddywesson
Smiddywesson's picture

Don't worry, there will be plenty of jobs when they are forced to raise trade barriers.  They already would have done so if TPTB would allow it.  The situation has to force it first.

Fri, 07/08/2011 - 15:33 | 1437931 SoNH80
SoNH80's picture

Ah, "health care."  The marvellous world of $7 aspirins, overflowing bedpans, where hard-earned money goes to die.  What first-rank power was sustained by an economy based on wiping geezers' asses and selling hamburgers????  "Plenty jobs" in Medical and High-Tech? Hey, you bet.  Gimme dem jobs, umph.  Gotta make dem pay-mints on mah purple 1993 Toyota Tercel....

Fri, 07/08/2011 - 14:18 | 1437517 Dempster
Dempster's picture

And would you prefer that the lights go out Mr Durden?

Places can be awfully dark when there are no lights.



Fri, 07/08/2011 - 14:39 | 1437627 mt paul
mt paul's picture

long candles


silver candle sticks...

Fri, 07/08/2011 - 14:17 | 1437519 Zer0head
Zer0head's picture

A few days ago I was happily napping in a sunny patch by the front window and I had a dream; in that dream there was an announcement of a new type of Quantitative Easing program.  In essence instead of declaring an amount and a duration the Bernank announced a new permanent mechanism whereby asset purchases would be conducted on an as needed / as required  basis.  Sort of like a catheter for the economy that allows Opiate$ to be delivered to the patient as required without notice or prior approval.

The market reaction in my dream was not the glee that greeted QE1 & 2 but instead one of despair and the cold and cruel reality that only a cat in its eighth life can relate to.

Fri, 07/08/2011 - 14:19 | 1437528 HileTroy
HileTroy's picture


For all my enlightened friends of ZH.

Tyler for supreme leader! ( 2 years only )

You cant make this shit up.

I have my resume in for leader of the revolution

My qualifications are:

Marine Sniper School

Amphibious Recon School

US Army Ranger School


18 years in residential construction management ( now worthless)

5 years running a small business (now worthless)

5 years trading (badly but i get the qist)

But I can shoot and lead "real men"


Semper Fi bitchez

Fri, 07/08/2011 - 14:36 | 1437608 Greeny
Greeny's picture

Get lost, punk.. F*ck your revolution, military maniac.


Fri, 07/08/2011 - 17:38 | 1438432 JW n FL
JW n FL's picture

would you like to spend another 30 - 40 years talking to the bankers? maybe if you just ask them nicely to stop robbing Grand Ma and Grand Pa Blind they will listen.. maybe just a little more talking to them to make them understand is all it will take..


and if not you dont have to fight.. you can opt out of the Prosecuting the Treasonous Scum..


and after all the really hard work is done by others you can join right back in with the crowd and enjoy the fruits of others labor!


you are one of many, most.. the majority in America that make this Country a truly Grande' Place to live!


Thank You for contributions, helping stop the Rape of "We the People"!

Fri, 07/08/2011 - 14:46 | 1437658 SoNH80
SoNH80's picture

I have a chipmunk problem in my yard.  Can I hire you?

Fri, 07/08/2011 - 18:25 | 1438439 JW n FL
JW n FL's picture



get up on it Bitchez!

Fri, 07/08/2011 - 15:24 | 1437883 Silver Dreamer
Silver Dreamer's picture

Don't you mean SERE?

Fri, 07/08/2011 - 23:32 | 1439102 Manthong
Manthong's picture

Must be SERE.

Fri, 07/08/2011 - 15:51 | 1438038 DosZap
DosZap's picture

Well you mentioned the schools did you get your MOS 8541?.

And the others as well.

Fri, 07/08/2011 - 19:09 | 1438628 eureka
eureka's picture

If you snipe Blankfein, Dimon, Bernank, Geithner, Summers and a bunch of other IvyIlk-Globa-Fi-Bankster Scum - you won't need Tyler Durden as leader, rather you will be the hero who launched the last US revolution - by litterally triggering it.

Fri, 07/08/2011 - 14:21 | 1437534 orangedrinkandchips
orangedrinkandchips's picture



Fri, 07/08/2011 - 14:21 | 1437535 orangedrinkandchips
orangedrinkandchips's picture



Fri, 07/08/2011 - 14:22 | 1437539 espirit
espirit's picture

It's really very simple and explainable to the sheeples by association.  The Pomo pump stops, and unemployment rises.  The Boyz will work this in tandem with... something else.

Jeez Louise, how stoopid do they think we are?

Fri, 07/08/2011 - 14:24 | 1437546 pinchedc
pinchedc's picture

Switt's daughter, Joan Langbord, contacted the government in 2004 to say she had found the coins in a bank deposit box a year earlier. She asked the Treasury Department to authenticate them. The government instead seized them, but the federal judge later ordered officials to defend the forfeiture at trial. The coins are being kept at Fort Knox.

Fri, 07/08/2011 - 14:30 | 1437580 jomama
jomama's picture

because the dude who had them had a rep for swiping coins.  in fact, he had been banned from trading... take a wild stab at his heritage.  the coins were from a rare minted series that were all supposed to be melted down, and there is a good chance they were stolen. this story isn't about just finding some rare coins that belong to someone and got seized for no reason...

Fri, 07/08/2011 - 16:02 | 1438085 DosZap
DosZap's picture


back then there were no laws aginst trading gold coins for like value gold coins.

True these were supposed to be destroyed,but in light of todays climate how big  a dumb ass does one have to be to turn in 10- 1933 $20 St's?. There are more in private hands, and will stay that way I am most assured.

The last one sold, that had to be  fought for in court,was obtained legally (from what was a gift to the King Of Siam from FDR),was sold for $8Million,or real close.

Don't get me wrong, I have never (at least since my very young age) taken, or stolen anything to my knowledge,and do not condone theft.

But, in light of what is happening and has happened to WE the people, I think that inheritance would have been kept in family.

Rather than spend hundreds of thousands fighting to regain them,only to lose it all.

Utter insanity.

Fri, 07/08/2011 - 21:25 | 1438881 CompassionateFascist
CompassionateFascist's picture

Well, at least now there's some gold in Fort Knox. It gets lonely in them vaultz.

Fri, 07/08/2011 - 14:24 | 1437550 Kiwi Pete
Kiwi Pete's picture

Hi Guys,   Check this out:   1) Download the latest version of Google Earth that has Mars on it too (version 5 or higher) 2) Click on View, Explore, Mars    to bring up the planet Mars 3) copy and paste these co-ordinates into the 'Fly to' box   71 49'19.73"N 29 33'06.53"W 4) zoom in to the maximum possible 5) Be amazed!   Cheers Peter

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