QE2 is Damaging the Economy and Reducing GDP Growth

asiablues's picture

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TexDenim's picture

Agree with this analysis totally. The issue now, in the waning months, is how to wean the US economy from this addictive drug of QE2. I think that we have to expect a couple of months of pain -- a 10% correction in S&P, perhaps worse than that in bonds. If we can recover from that, then perhaps in hindsight we can say that Bernanke pulled us out of 2007/2008 with less overall pain than would otherwise have occurred, but that was likely attributable entirely to QE1, not this most recent extension. And I hope that Zimbabwe Ben is smart enough not to test the patience of America with any talk of QE3.

nah's picture

the federal reserve is not a neutral party in nothin'

.

if the military/industrial complex wants more money... from seniors/14yrolds/productive capitol/material resources... there wont be a debate thats not what we pay any of these guys for

.

there will be more money till we run out... fact is we vote too much

SparkyvonBellagio's picture

The ol'#6 is where they come a ridin' into town, a whompin and a whoopin' ever last thing thing in sight to within' an inch of it's life.

 

 

Then they do a bunch of shit to the women at the #6 dance that night.

 

Google/Youtube-  Blazing Saddles.

Stuck on Zero's picture

Expect nothing less than the Fed to just jerk everyone around.  Watch the Fed take these steps:

1) End QE2, declare there will be no QE3 because of public pressure

2) Crash markets and commodities everywhere and cause massive unemployment

3) Declare a mess and that they were right all along

4) Start QE3 with a vengeance

5) Cause skyrocketing inflation and massive starvation

7) Take over the world.

Why?  Thanks to insider information passed out by the Fed to the billionaire banksters they have made trillions in the markets.

 

 

bothsidesnow's picture

#1 Check

# 2 Should read crash speculative bets by removing the dollar carry trade and bringing the dollars home where they belong. 

# 3 Look like stars when Europe and the Emerging markets puke

# 4 No way

#5 Not if liquidity is removed

#7 Taking over the world is one sided bet casinos only work when there are two side to the trade and the house i.e. the Fed is skimming the vigorish so to speak.

You forgot # 6 Have dinner with Blythe and Jamie. LMFAO.

 

longorshort's picture

Almost everyone here bashes the silver bears, the shorts, and anyone skeptical.  I see people calling 150 dollar silver on these boards.  I see Clarks Jewelry, not a pawn shop, advertising in a big cheesy sign that they buy gold silver and diamonds, pawn shops, the radio, the internet, the stock boards buying, people saying its not a top because on X or X% of their friends have bought XYZ yet.  The dollar droped what about 22% in last 8 years give or take a percent and physicals are up way over a 100%.  If it were me I would be taking a profit.  Its really not real till you sell.  Profit is better than loss.  Here is the other thing that bothers me about this commodity bubble, its the commodity groups like CME that are at fault as well as the government regulators.  They are selling more contracts than can possibley be filled and instead of limiting the number of total contracts based on % of real physical available with established accounting practices there is probably a trail that makes the MERS mortgage system look better than Canadian banks right now LOL.  I am being sarcastic there.  Instead they keep hiking margins and limiting the number of contracts individuals can get but keeps making exceptions for large players.  This will end badly when one large invester launches the crapstorm on another.  If you have craploads of physical do you think thats going to be easy to offload, best of luck.  If your hedging for the end of the dollar only, I think id rather have some name brand canned goods I like to eat and gameboy batteries to keep from being too boarde vs a  pile of silver well thats not too tastey but works great on wearwolves I hear.  I own some physical and have not shorted yet.  But if this thing keeps going I may have to come try to take a bear crap on this parade.

bothsidesnow's picture

Reminds me of watching Art Cashen during the crash of 2008 always sticks in my mind

"Bettting on the end of the world is not a good bet it only happens once."

Oh I forgot the guns and ammo crowd will survive and trade their physical with each other because the rest of us fucktards will be dead or starving. That's just a bad bet if you in anway believe in karma.

 

alexwest's picture

i cant stand stupid bitch's words anymore
please send her back where she belongs, some shithole back in China/HongKong/etc

#The time to buy Physical Silver was when the Fed Funds Rate was 5.25%

no stupud bitch, when Fed Funds Rate was 5.25 it was time to buy 30y bond.

##Silver Market Signals Irrational Investing

no stupid bitch, market simply says THERE'S NO PHYSICAL SIVLER .. read Eric sprott. at least he manages real money,not blubbering endlessly here..

#because the investor will be stuck with a well under water investment in a 5% rate environment

no stupid bitch ,, US federal goverment cant have Feds fund rate at 5% again, its that simple.. 10y will be 8-9%, so debt servicing will half of budget..

so USA FEDERAL GOVERMENT cant have only 2 choices ahead - zero rate 4ever, then hyperinlation

alx

Sutton's picture

Bernanke will NEVER raise rates.

slow_roast's picture

But there is no inflation Dian; put a Chu in it.

Gimp's picture

Last I heard, the gubbermint said there was no inflation...

Korrath's picture

More babbling Captain Obvious bullshit from a silver shorter with an agenda.

Market Analyst's picture

Your the best writer on ZH, keep up the excellent work:)

Market Analyst's picture

Your the best writer on ZH, keep up the excellent work:)

Market Analyst's picture

Your the best writer on ZH, keep up the excellent work:)

Wm the Shrubber's picture

Pretty one dimensional analysis.  Should the Fed end QE2 early (if ever), the corollary of a strengthening dollar would be rising interest rates and a tanking of the risk trade for commodities and equities.  It is inconceivable that the real economy has sufficient organic strength to withstand higher rates (not to mention the government's increased debt servicing obligations), and a significant market reversal would undue the Fed's good handiwork of promoting the weath effect, their only purported accomplishment to date.  This may in fact be the plan thus setting the stage for a subsequent QE3 (though not so named) just in time to juice markets once more heading into the election year.  It is total clusterf*ck!

Zodiac's picture

Excellent points.  Who will buy those U.S. Government debt instruments, if not the Fed?  The traditional buyers, the Japanese won't be there.  The Chinese still need massive consumer buying for their products in the U.S. so the U.S. and China are like Siamese twins.  They might, or both will go down together.  But still, the supply of Treasuries has gotten ginormous.  Not to mention the interest burden.

Arkadaba's picture

No expert but agree with your post. Any analysis has to take into account the inevitable higher interest rates if QE ends. No matter any way I look at it, we're screwed.

Thomas Jefferson's picture

This article is garbage.

Thomas Jefferson's picture

This article is garbage.

Thomas Jefferson's picture

This article is garbage.

disabledvet's picture

How can this possibly be knowable by a "mere mortal"?  We all know it is not when the Fed itself admits as it must that "it's because equity markets are rising."  In other words THEY have no clue.  The whole thesis behind "Waiting for Godot" is that "Godot never comes."  And so it is with so much that clever humans do..."they do nothing" and "nothing comes."  And so it is with QE2.  "The Fed has done nothing" and "nothing happens"--so we must "move along."  this is in NO WAY saying "should massive failue in a treasury auction occur followed by an immediate repudiation of the dollar as exhibited by a single ounce of gold costing $30,000 ($300,000) US dollars an ounce and "simply no more food at Wal Mart et al..for now" won't occur nor be the fault of the Fed should it happen.  All this comment is saying is "good luck blaming 'them' should this speculation prove true."  Of course there is a thrill not only "having the speculation be proven true in a matter of days" (ZH on CME and silver) but to then be called "an enemy of the State" by no less than the President himself!  A compliment that I am paying you as well?  I would like to think so.

duncecap rack's picture

Copper silver gold and crude all going down on the eve of the fomc meeting. Coincidence?

SparkyvonBellagio's picture

VVVVVVVVVVVVVVVVVVVVVVVVVVVV

 

Bernank has No Idea what he is doing.

Bernank will KILL THE USA as a viable Country going forward.

He and the FED ARE NO FRIENDS OF THE USA.

The USA won the Revolutionary but lost the Banking War!

The FED and BERNANK are pissing&sheeeitting on the memory of all of those who fought, those that gave the ultimate sacrafice for this Country, our Founding Fathers and the Constitution!

Don't let them do it folks!

 

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

 

LudwigVon's picture

The FED and BERNANK are pissing&sheeeitting on the memory of all of those who fought, those that gave the ultimate sacrafice for this Country, our Founding Fathers and the Constitution!

It goes deeper than that, Rothschild funded the British, we still won tho.

They have sought to leech our country since day one and have accomplished that feat no less than three times in our short history as a Republic. The constituion was specific in prohibiting this, but the politicians subvert that trivial issue, lie under oath and summarily sell their fellow countrymen and their children. TREASON --> HANGING.

NewThor's picture

From Bloomberg

The Fed’s trade-weighted dollar index fell to a record low last week, according to data released yesterday. The index, which tracks the value of the dollar versus the currencies of U.S. trading partners such as Japan and the U.K., declined to as low as 69.0337 on April 21, the data showed.

“We expect the Fed will leave its policy rate on hold,” said Mike Jones, a currency strategist at Bank of New Zealand Ltd. in Wellington. “Should Chairman Ben S. Bernanke indicate the Fed is in no hurry to start reversing policy accommodation, further dollar weakness may be on the cards.”

The U.S. central bank will leave its target rate for overnight lending between banks at zero to 0.25 percent at its two-day meeting starting today, according to another survey. The Fed may say it plans to complete the purchase of $600 billion of Treasuries by June.

Ben Bernanke says "I am Shiva, destroyer of worlds."


VegasBob's picture

The Fed is clueless.

Execute Bernanke!

OldPhart's picture

Won't do any good.  The Fed is a thirteen headed hydra.  Gotta get them all at the same time...along with the underlings.