• Steve H. Hanke
    05/04/2016 - 08:00
    Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke. A few weeks ago, the Monetary Authority of Singapore (MAS) sprang a surprise. It announced that a...

Philly Fed's Plosser: If Deflation Accelerates May Need More QE

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Thu, 12/02/2010 - 13:35 | 772216 SpeakerFTD
SpeakerFTD's picture

QE4eva!

Thu, 12/02/2010 - 13:43 | 772244 Mercury
Mercury's picture

Oh WB7, please make this into a tramp-stamp for the boys!

But not on a sexy/trashy version of Lady Liberty please.  I couldn't handle the shame....

Thu, 12/02/2010 - 13:57 | 772323 knukles
knukles's picture

First Dibs on Calling Bullshit!

Back in the good old days (when things were just a tidge more sane mind you) some of us Bond Daddies (or Vigilantes as the press used to call us) called shit like QE for what it is;

Panic Buying

Thu, 12/02/2010 - 14:03 | 772373 SheepDog-One
SheepDog-One's picture

QE is a fancy name for monetizing the debt, and is the last gasp of nations. End of story.

Thu, 12/02/2010 - 14:27 | 772517 espirit
espirit's picture

Not until the Fed & Pd's run out of worthless crap to trade back and forth.

Thu, 12/02/2010 - 14:45 | 772591 knukles
knukles's picture

Oh, of course it's magnetization, but that sounds just too, well, intellectual, studious, refined, cerebral, and sorta carries the connotation of under control, disciplined, measured, logical, planned...
Panic Buying just seems the zeitgeist.  For the life of me, I cannot think of how buying another bond, bill or note, mortgage backed, asset backed, equity, junk, uncollateralized IOU's whatthefuckever is gonna do.

Lower interest rates another 5 basis points....at the margin with rates where they are don't mean shit.  Let alone at some point, inflationary expectations take hold and whoopie doopie, no bids in bondville.

Add additional reserves to the banking system...as if there's not a record amount of Net Free Reserves not being used by anybody for any fucking purpose, anyhow.  Except phenomenally unearned undeserved bonuses.

Bang the dollar a bit lower versus the trading partners to goose exports, when America's largest single export is Fucking Waste Paper, and we gotta buy a whole buncha shit load Chinese crap to get the waste paper to export, whatever part gets recycled, anyway.

Ah, Panic Buying just seemed like a good idea at the time.

Fri, 12/03/2010 - 04:24 | 774593 scaleindependent
scaleindependent's picture

Great post.

 

"Let alone at some point, inflationary expectations take hold and whoopie doopie, no bids in bondville."

That scares the hell out of me. Once interest rates start climbing, the US is kaboodle. If they can barely keep the economy on a pseudo-life zombie state with real negative rates, QE, etc.  what does that imply when they can no longer control the mid or long bonds?

Greenspan mentioned once that the one thing that scared him was rising long bond rates, that the first thing he does at the beginning and end of the day is to see how the 10 and 30 yr bond rates are doing.

Hmmm...,.

Thu, 12/02/2010 - 20:54 | 773842 revenue_anticip...
revenue_anticipation_believer's picture

 

Philly Fed's Plosser: If Deflation Accelerates May Need More QE

no, no, no "deflation" as if it were a true 'possible outcome' and prudence, of course...and 'in control' no matter which way it goes inflate/deflate...THAT IS THE MESSAGE, overtly

but near the end of that long long hypnotic speech:

".if we don’t act aggressively and promptly, we may find ourselves behind the curve and at risk for substantial inflation. I think we need to bear in mind this future potential complication when considering further expansion of the Fed’s balance sheet......"  

""risk for substantial inflation"" => THAT IS THE ISSUE

 


 

 

 

Thu, 12/02/2010 - 13:35 | 772217 Battleaxe
Battleaxe's picture

More COWBELL!!!!!!!!

Thu, 12/02/2010 - 13:36 | 772222 Ragnarok
Ragnarok's picture

.... we will immediately present the latest meltdown in the shadow economy when the quarterly update is posted at noon on December 9.

 

Looking forward to it. Everything IS noise.

Thu, 12/02/2010 - 13:36 | 772224 Spalding_Smailes
Spalding_Smailes's picture

Book it.

China = Inflation hub.

Thu, 12/02/2010 - 13:40 | 772234 TruthInSunshine
TruthInSunshine's picture

This just means that banks will be nationalized, as 'Bernank' couldn't successfully reflate their toxic assets, no matter how hard he tried - and brother, did he try.

The banks around the U.S. and the world, with few exceptions, are a bottomless pit of worthless, accrued assets, on a true net basis, and keeping them alive means money literally can't be printed as quickly as it's being destroyed, EVEN WITH FAIRY TALE VALUATIONS.

 

These comments are a GINORMOUS, RED FLAG tip off that the economy is basically in a depression.

Black Friday will also be renamed Blood Red Friday.

 

Also, that 'wiki' thing probably is going to be HUGE, with 'the Plosser' talking the talk today.

 

Details at 11.

Thu, 12/02/2010 - 14:08 | 772392 SheepDog-One
SheepDog-One's picture

Asange needs to race to dump those bank documents, hell with waiting for January dump em now!

Thu, 12/02/2010 - 14:21 | 772486 Traianus Augustus
Traianus Augustus's picture

+1000

Thu, 12/02/2010 - 13:39 | 772237 Mercury
Mercury's picture

I guess when the only tool you have is a hammer...

Thu, 12/02/2010 - 13:43 | 772265 reading
reading's picture

A hammer really works great when you don't have a scalpel handy -- if you bludgeon is long enough....right?

Thu, 12/02/2010 - 13:38 | 772238 Everybodys All ...
Everybodys All American's picture

In other words no one else will buy our debt.

Thu, 12/02/2010 - 13:41 | 772254 hedgeless_horseman
hedgeless_horseman's picture

That's a bingo!

Thu, 12/02/2010 - 13:40 | 772246 SheepDog-One
SheepDog-One's picture

All-out race to tank every currency to -0-, rise it back up under 1 world govt banker control. It will be soon, pensions being seized all across Europe, and they see theres nothing to stop them frankly Id be surprised if meltdown and pension 401K seizing doesnt happen here before Jan.

Thu, 12/02/2010 - 13:51 | 772281 TruthInSunshine
TruthInSunshine's picture

You won't get an argument from me.

I was a kool-aid drinking 'intellect' at a liberal university at a not too distant past.

This isn't about money; it's about using money as a tool to accrue power. Money is a powerful tool of control.

Or, as it appears in the fine script of a popular media medium ('The Dark Night'):

"You and your kind, all you care about is money. This city deserves a better class of criminal. And I'm gonna give it to them!"

http://www.youtube.com/watch?v=rr9mqLw9uMw


Thu, 12/02/2010 - 14:06 | 772388 SheepDog-One
SheepDog-One's picture

Ah yes love that Joker, sick of these common dull criminals. All they care about is money.

Thu, 12/02/2010 - 13:41 | 772249 taraxias
taraxias's picture

QE to infinity bitchez !

Thu, 12/02/2010 - 13:46 | 772275 Gimp
Gimp's picture

Move over Zimbabwe - QE + n - forever!

Thu, 12/02/2010 - 13:48 | 772288 e_u_r_o
e_u_r_o's picture

fire away (please)!

Thu, 12/02/2010 - 13:49 | 772296 thepigman
thepigman's picture

Watch the yield curve. The fed is

incompetent. QE2 is an epic fail.

Thu, 12/02/2010 - 13:53 | 772313 thepigman
thepigman's picture

Rates continue to rise. Fed has no

control whatsoever over the yield

curve.

Thu, 12/02/2010 - 14:11 | 772418 SpeakerFTD
SpeakerFTD's picture

This is why I am not really a gold bull.    Would you want to own gold in an environment of double digit IRs?  I wouldn't.

Thu, 12/02/2010 - 15:36 | 772828 Bill Lumbergh
Bill Lumbergh's picture

The answer to that depends upon the rate of currency depreciation...if the currency loses 15% per annum and you receive 10% interest then gold would still be enticing...not certain if that type of environment has ever existed but we live in atypical times.

Thu, 12/02/2010 - 20:38 | 773799 akak
akak's picture

The only way we are going to see interest rates in the low double digits is if (when) inflation rises to the middle double digits.  REAL interest rates of even 6 or 8% would rapidly cause the complete implosion of the US dollar, as the federal deficit (via interest payments on the federal debt) skyrockets to near infinity.

Thu, 12/02/2010 - 13:49 | 772300 scatterbrains
scatterbrains's picture

wow look at'm taking down gold.. when should I step in and scoop more ?

Thu, 12/02/2010 - 14:07 | 772386 Battleaxe
Battleaxe's picture

Just a slight bounce off of the $1400 resistance ($1398.62). Buy now!

Thu, 12/02/2010 - 13:53 | 772314 sabra1
sabra1's picture
CNBC: Fed's Bailout Report Shows Financial Crisis Is Over: Bove

 

Thu, 12/02/2010 - 14:04 | 772375 buzlightening
buzlightening's picture

Bove weavel wealsel strikes again!!  Someone put a sock in the fall street paid pimps pie hole!!

Thu, 12/02/2010 - 13:54 | 772320 RheologyMan
RheologyMan's picture

Treason........is about to be redefined throughout the globe..........no sense in having borders as the updated definition will be outdated by an "in progress" creation of the new ONE WORLD BANKING entity of the TBTF lobbyists.........no seperate independent nations.............just a bunch of peasants looking to buy something (cocoa leaves) to get through the pain of seeing crime(s) really begin to affect their very existence..............Federal employee PAY FREEZE.........WILL SOON BE CHANGED TO PAY RAISES.......JUST WAIT.

Thu, 12/02/2010 - 14:01 | 772353 buzlightening
buzlightening's picture

DINKERS! Dollar inkers to infinity!  bernon burnokio says he wants inflation!!  What better time to devalue the dollar and get all USD hoarders domestic & foreign to dump!!  They'll be screamin more QE as gold hits 2k and silver 60 USD 1st quarter of '11!!  This is what the goonzi's want right now is a dollar crises!  Get all the DIMMS to spend those hoarded dollars like there's no tomorrow ifin you trust in the arm of flesh; paper fiat currency!!  Saw it right off with euro pining and now time for USD ponging!!!

Thu, 12/02/2010 - 14:05 | 772369 the grateful un...
the grateful unemployed's picture

In conclusion, our nation’s economy is now emerging from entering the worst financial and economic crisis since the Great Depression. that's funny when i put the strike through "on emerging" from the system rejects it.

hmmm

Thu, 12/02/2010 - 14:08 | 772395 Die Weiße Rose
Die Weiße Rose's picture

The Federal Reserve made $9 trillion in overnight loans
to major banks and Wall Street firms during the financial crisis, according to newly revealed data released Wednesday.

US $9 trillion Stimulus and still want more QE ?

Its official: The US is fucked !

and you call Europe an 'experiment'?

 

Usage of Federal Reserve Credit and Liquidity Facilities

http://www.federalreserve.gov/newsevents/reform_transaction.htm

 

Thu, 12/02/2010 - 14:12 | 772425 SpeakerFTD
SpeakerFTD's picture

overnight loan =/= stimulus

Thu, 12/02/2010 - 14:29 | 772528 treemagnet
treemagnet's picture

Is there a "shadow banking for dummies" or can one of you break it down simply.  Is it all bonds/loans/MBS etc. outside of a standard bank loan?

Thu, 12/02/2010 - 14:50 | 772625 Spalding_Smailes
Spalding_Smailes's picture

Google it.....Or Tyler posted tons of info 1 or 2 years ago.

Siv's,CDSwaps off balance sheet hedgefunds for the banks.

Read all the articles that pop up.

Also ...

http://www.financial-edu.com/history-of-credit-derivatives.php

Thu, 12/02/2010 - 14:46 | 772608 gunsmoke011
gunsmoke011's picture

Why do they keep labeling these QE's with impossibly complicated numbers? They need to just introduce QE - I witht eh I standing for infinaty. After all - unless numbers have something to do with "Door Buster Specials" - they are really meaningless anyway.

Thu, 12/02/2010 - 14:52 | 772639 Stevm30
Stevm30's picture

Or in other words:  "Spend you bastards, SPEND!"  (clenched fist, menacing posture, loud voice)

Thu, 12/02/2010 - 14:59 | 772677 Black Friday
Black Friday's picture

Quadrillionative Easing coming up!

Thu, 12/02/2010 - 15:06 | 772690 T Rex
T Rex's picture

Something stinky cometh.

Thu, 12/02/2010 - 16:55 | 773133 NERVEAGENTVX
NERVEAGENTVX's picture

I just love the quoting of all those economic data points that the books are completely cooked on.

Thu, 12/02/2010 - 17:03 | 773149 trav7777
trav7777's picture

QE3 going to be priced in soon...the results of 2.0 are not pleasing the Fed

Thu, 12/02/2010 - 17:33 | 773272 gwar5
gwar5's picture

QE III? That was quick. Can't a guy even finish supper first?

Thu, 12/02/2010 - 17:38 | 773293 gwar5
gwar5's picture

Maybe The BenBernank keeps printing money and people keep removing their reserves from the MiniBernanks to protect themselves, beating the BenBernank.

If everybody is like me there's nothing left in the MiniBernanks

Thu, 12/02/2010 - 18:11 | 773429 Snidley Whipsnae
Snidley Whipsnae's picture

If the azzhats really wanted inflation all they need do is lower the interest rate on revolving credit to ~ 1% above Fed funds rate and raise the credit limits of every individual that can fog a mirror.

That they will not do this because the bankers are in control of revolving credit rates is telling of who is running the country. CONgress and the Fled are taking their orders from the people behind the screen of GS, JPM, HSBC, et al.

Plusser is full of it....Plus some!

Thu, 12/02/2010 - 18:42 | 773541 tony bonn
tony bonn's picture

oh of course an excuse is needed for the financial terrorists to continue their unwanton aggression....yep got to whip deflation now....i'm sure that's what jesus would do....

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