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

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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

P.A.N.I.C.

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.

 

http://www.youtube.com/watch?v=KQ1GReZaB7E

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, statism...it'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

http://www.vancouversun.com/Kitco+mo...303/story.html

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'.

Ouch...

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

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

http://www.youtube.com/watch?v=Ns2QEqOUi4A

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

Bullish.

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?

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