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QE2 Is Not Only a Mistake, "It's Criminal"
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Printing money is not wealth. Fake wealth is what FIAT is. US Dollar is toast!
Go Packers!
QE2 is indeed criminal. But there's something that's even more criminal, and that's the structure of the Federal Reserve itself and its access to public funds.
You see, the public simply doesn't understand that the big U.S. banks ARE the Fed. I cannot stress the importance of this enough. If you look at the board of directors (http://www.federalreserve.gov/generalinfo/listdirectors/),you'll find the following:
Class A
There are many more banks that comprise the Fed. The ones that I've listed here are simply among the largest. So, since JPMorgan Chase, Bank of America, and Wells Fargo help comprise the Fed and the Fed bailed them out with our money, that means that these banks essentially took our money and gave it to themselves.
It gets better. These Fed loans were largely interest-free. The big banks also pretended that the Fed was a separate entity and loaned the money back to the Fed in return for interest payments. So, this would be the same as my going to Capital One Auto and saying, "I need an interest-free $10,000 auto loan, and you must pay me $300 per month for the loan until you've paid it off."
This is theft in broad daylight. It gets even more outrageous, though. Only banks that are part of the Federal Reserve received bailouts. And if you're wondering why General Electric got a Fed bailout, wonder no more. GE's Jeffrey R. Immelt is a board of director of the New York branch of the Fed.
Sorry for the double post, itchy mouse finger ;-)
yeah happens to all of us.
The more the powers that be disconnect real value from fiat currencies, the more the elite and powerful will steal. However, every good attorney knows that possession is nine tenths of the law. As the disconnect grows, so will the value of hard assets like farmable land, clean water, brass, bullets, and gunpowder. I hope everyone is properly positioned (hedged if you will) when 500K per year becomes the new poverty line that makes you eligible for food stamps. The laws of physics and thermodynamics (market fundamentals) always win eventually. History shows this over and over. Cheap labor and cheap energy drive economies, not cheap paper. We have seen the fallout of cheap paper before in WWI and WWII. The big difference here is we now have a world population of 8 billion (not sustainable by the way). It is pretty easy to see were all this is heading people but I do thank zerohedge for helping to front run the capital flows. I saw a similar thing in the 80's.
LP, you imply dollar printing is happening in a vacuum? I would contend the dollar will rise in value because other countries are printing at an even faster rate. The race to devalue first is on and I think we are still behind. The destruction of credit and asset value is still happening at an alarming rate is it not?
My comments are directed at all fiat reserves. I happen to agree that the dollar will strengthen in the near term.
The more the powers that be disconnect real value from fiat currencies, the more the elite and powerful will steal. However, every good attorney knows that possession is nine tenths of the law. As the disconnect grows, so will the value of hard assets like farmable land, clean water, brass, bullets, and gunpowder. I hope everyone is properly positioned (hedged if you will) when 500K per year becomes the new poverty line that makes you eligible for food stamps. The laws of physics and thermodynamics (market fundamentals) always win eventually. History shows this over and over. Cheap labor and cheap energy drive economies, not cheap paper. We have seen the fallout of cheap paper before in WWI and WWII. The big difference here is we now have a world population of 8 billion (not sustainable by the way). It is pretty easy to see were all this is heading people but I do thank zerohedge for helping to front run the capital flows. I saw a similar thing in the 80's.
You know I used to criticize this also. However it is our only hope. Those of you with a bunch of gold and silver rooting for a collapse will find that it is none too pleasant for you either. Muddle through with morally compromised choices isn't a bad outcome. We should hope it works! Even if it works your silver and gold will still be worth a lot.
Your heart is in the right place. I, for one, don't hope for a collapse. I wish they'd quit funneling resources into an economic boondoggle. The collapse would in all probability be the outcome of cutting off the fire hose of money into the black hole. The anticipation you see in "gold bugs" is in getting the show on the road. As was pointed out above, reversion to some mean will be the result, but there is usually a pendulum swing in the decent past that mean. Being ready for the big dip is what it's all about. It is the death or decimation of fiat currency that causes the preparation by accumulating the historically preferred form of money.
We are in uncharted territory, as Bernanke himself has admitted. The truth is that no one has a fucking clue what will happen. This is like the Manhattan Project before they tested the first nuke. They wondered then if the atmosphere would catch on fire. And they went ahead anyway. Just like Bernanke. Will the US dollar survive? Who the fuck knows. Certainly not the economists at the Fed.
If you don’t like getting SCREWED by the Federal Government, then WATCH the YouTube video “OBAMA DOUBLESPEAK, More Lies, Tax Breaks for the Mega-Rich J” at (http://www.youtube.com/watch?v=_CLiyb7LnCw).
God Bless Wall Street Crooks and the Political Inept!! It’s like “Corky” Runs the Country from the TV show Life Goes On!
WELL GUYS, IT'S BEEN FUN.
I'VE SPENT ABOUT 6 WEEKS WRITING NOTHING BUT BULLSHIT, AND FROM WHAT I CAN TELL, NOBODY READS ANYBODY ELSE'S POSTS TOO CAREFULLY. I WILL SAY THAT IT'S INTERESTING TO SEE HISTORY REPEATING, AND THAT THE JEWS ARE TO BLAME AS FAR AS MOST OF YOU ASSHOLES ARE CONCERNED. THAT IN ITSELF IS EDUCATIONAL AND TRAGIC. I DISCOVERED THE CAPS-LOCK KEY, AND THAT HAS BEEN VERY EDUCATIONAL AS WELL. THE ARTICLES HERE ARE INTERESTING, BUT AT THE END OF THE DAY, DO NOT HELP MUCH.
I'M LOGGING OUT. I HOPE A JEW FUCKS YOUR MOTHER.
Buh-bye.
And there I was, thinking of your name as a symbol of the economic train wreck caused by tinkering with the wrong wires ..er..QE1, and then you go and flatline.
What could have been will never be known.
Hey I read your posts jewboy! Jew bashing is the newest latest fad! Kill a zionist! Win valuable prizes! Oh wait. I thought this was an investment site. Oh well.. Let's get us some Jews!
Hey CJ. Pull on your boots, whistle for the mutt and go take a hike. It'll all fall a little into place. Not certain what set you off but I read your posts cover to cover and have never once junked you. ~V~
Yes indeed, they are try to prevent a natural revision to mean or long term economic equilibrium. The market got overvalued in 1995 and should have had a meaningful correction in 1998 except the fed intervene with their hocus pocus and recued LTCM and provided excess liquidity to the world. This was the start of the current moral hazard, excessive risk taking and too big to fail. We all know what happen next an internet bubble than crash. But again, instead of taking it on the chin and returning to long term trend line, the fed flooded the system with liquidity and the government push long term fiscal stimulus like the Tax cuts without triggers to surpluses. They created a housing bubble and added to GDP but all bubbles must pop. Now all the king men are trying to prevent the market from returning to long term trend line and flush out the excesses. When will they realize the more they intervene in the equilibrium process the more pain they will cause. WHEN YOU DO A CRIME YOU WILL HAVE TO DO THE TIME. The Federal Reserve actions in the past 15 years are the crime and of course the irresponsible fiscal policy of our recent leaders is the crime. But instead of taking it on the chin and doing the time our current monetary and fiscal policy want to do more crime making the ultimate punishment more severe.
By th way:
When Lehman Brothers didn’t participate in the criminal act of rescuing LTCM the crime bosses decide that when the time is right they would be executed for their disobedience. (LOL)
This may be a ponzi but it is our damn ponzi and all of us have a stake in it. Keep it going just another generation and we win the entire world pot. Euro out. China too fearfull of turning Japanese to ever allow their currency to float (and thus truly compete with gold and the dollar).
If Ron Paul becomes head of the finance he will audit the Fed. Then only then will the truth be know how deep the Fed has Fu*k'ed the common man. Then pichforks and rope will rule the day. This i feel will not end well for the american public in the near future. QE1,QE2,=Hyperinflation....Two words to live by: Food & ammo
Ron Paul may have help from the senate side from Bernie Sanders. That filibuster yesterday had some good information. It was rather heartening to hear a senator wail on the Fed and the big banks. He said he intended to have an investigation into the circle formed by the Fed's lending and the banks' use of the funds to buy treasuries essentially creating a system in which the people have to lend to the banks to have the banks charge us interest to lend the same money back to us.
http://www.c-span.org/Watch/Media/2010/12/10/HP/R/41779/Sen+Sanders+Held...
Sanders already sold out in the first try of auditing the Fed.
Bernie Sanders is all talk and nothing more.
finally! that's good to hear. go, bernie!
Both Ron and Bernie better stay away from dog leashes.
yikes, that's a bit morbid.
There are no laws for the chosen...
Yeah. Screw Hank Paulson.
Wait. What?
empty post
Of course, there are many critics of the Fed who say the second round of quantitative easing is wrong and even harmful. "The failure of QE2 doesn't worry me. It's the success that worries me," says Vitaliy Katsenelson of Investment Management Associates.
"I think it's criminal," he tells Aaron in the accompanying clip. "They're forcing people that should not be taking risk to take risk." The fear is the Fed is repeating its past mistakes -- helping to build an asset bubble that will eventually burst with grave consequences.
Even if the Fed is successful in keeping down rates, Katsenelson doesn't believe it will have any positive economic effect. On the contrary, he says it will lead to a period of "stagflation" as the Fed simply monetizes the debt, lowering the value of the dollar and failing to create economic growth.
Click here to watch the video
Vitaliy N. Katsenelson, CFA, is Chief Investment Officer at Investment Management Associates in Denver, Colo. He is the author of upcoming The Little Book of Sideways Markets (Wiley, December 2010). To receive Vitaliy’s future articles by email, click here.
I'm not an expert, but I would think that even the original founders of the FED would be completely dumbfounded by the sheepishness of the American public's willingness to let the FED take actions with the intention of holding up stock prices for some ephemeral "wealth effect". Have we all gone mad?
@VK
I watched this on Tech Ticker yesterday. Well done. Thanks for speaking so eloquently and simply about why QE is wrong. This gives the answer to the question, "Why did grandma lose everything betting on floating interest rate derivatives."
~Cursive
"Money isn't everything and soon it may be nothing at all."