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Quantitative Easing Explained

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Tue, 11/16/2010 - 04:41 | 730097 paragshah12
paragshah12's picture

Quantitative easing is aimed at keeping Wall Street bonuses at record high levels QE is aimed at depressing the value of the dollar so the the USG and the Fed can pay their debts with toilet paper. QE is aimed at funneling more of the assets owned by the middle class into the pockets of the lower class and the financially elite class. QE is aimed at impoverishing Main Street in order to enrich Wall Street and its Prime Dealers.
http://www.financemetrics.com/quantitative-easing/

Mon, 11/15/2010 - 23:19 | 729456 MaldelBot
MaldelBot's picture

It's oddly adorable. 

The Ben Ber-nack will be the end of all of us

Fave part:

"I want to hit my head against the wall."

"Do not do that"

"Why not"

"Because health care is very expensive."

hahhaha!!

Sun, 11/14/2010 - 04:16 | 725842 Mediocritas
Mediocritas's picture

Why do people think this video is so great? The criticisms it levels at the Fed are almost completely wrong. I'm no fan of the Fed, but I'm even less of a fan of bullshit and this video is full of it.

Sun, 11/14/2010 - 04:39 | 725847 blindman
blindman's picture

the beauty is in the phrasing, rhythm and inflection.  the target of

the thing is the fed.  the fed exists to support the investment banks

right or wrong.  this is the problem.  when they break the law, steal

the money, commit fraud and dehumanize the culture the fed supports

them and bails them out.  this is just fascism.  the cartoon attacks it.

it is not a scholarly dissertation exposing the raw power play to transfer

wealth and power from a republic to private accounts with global

designs.  it is just a cartoon that correctly identifies the enemy of

99% of all potential viewers.  that is why we love it.  i have my doubt

about some of the other stuff these people produce but this one is

alright.

Mon, 11/15/2010 - 21:00 | 729084 chopper read
chopper read's picture

spot on. 

the revolt is brewing. 

Sun, 11/14/2010 - 04:21 | 725844 honestann
honestann's picture

Oh really?  What planet are you from, sucker?

Sun, 11/14/2010 - 05:03 | 725857 Mediocritas
Mediocritas's picture

The planet where the Fed isn't actually printing money, it's swapping reserves for gov bonds.

The planet where this "inflation" is caused by speculators driving prices higher on the *perception* of inflation while producers chase those prices, producing huge supply overhangs in an environment of declining demand. Hint: deflationary.

The planet where the Fed doesn't have the expertise to trade directly so engages brokers (primary dealers) that earn commission to participate in OMO, no different to how you engage a stockbroker when making an equity trade.

The planet where the enormous black holes sitting in the shadow banking system massively outweigh the potential inflation caused by releasing reserves.

The planet where this video is completely full of shit.

That would be Earth. How about you? What planet are you from?

Mon, 11/15/2010 - 02:15 | 726744 honestann
honestann's picture

You just don't get it, do you?

Ever look at the balance sheet of the FederalReserve over the past few years?  Go do so.

When the FederalReserve buys those US bonds (and other trash assets in QE1 and etc), the "money" it pays for them is created out of thin air at zero cost.  That is a fact.  And that is called "money printing", whether they do so electronically or not.

You see, you have fallen for the exact linguistic fraud that most "mainstream media folks" fall for - the fraud they want most folks to fall for, for fear they would be burned at the stake as justice demands.

You also need to look up "fractional reserve banking", because you probably also don't understand that when a bank makes a loan to a customer (for car, home mortgate, etc), the bank literally does create the funds it loans out of thin air - whoosh - just like that.

You need to learn how the criminal gangster bankster banking system works, buddy.  Because until you do, you'll sanction that system and assign some degree of legitimacy and respect to it... which it most certainly does not deserve.  The scam of central banking has caused endless disasters and wars throughout history.  You ought to ask yourself why.  Better yet, go read some good descriptive, historical books sometime.

Mon, 11/15/2010 - 19:26 | 728795 Mediocritas
Mediocritas's picture

When the FederalReserve buys those US bonds (and other trash assets in QE1 and etc), the "money" it pays for them is created out of thin air at zero cost.  That is a fact.  And that is called "money printing", whether they do so electronically or not.

Utter, utter bullshit. You know, perhaps before you accuse someone of not knowing what they're talking about, you should perhaps know what you're talking about.

Maybe also, you should learn how the fractional reserve banking system works, then you might understand what it means for the Fed to swap liabilities for assets and how this is NOT money printing.

Wed, 11/17/2010 - 04:03 | 733427 honestann
honestann's picture

What?  Do you really believe that the owners of the FederalReserve are multi-trillionaires... and those altruist owners bought 2 trillion dollars worth of "assets" with their own money... then put those "assets" on the balance sheet of the FederalReserve?

Because if you do NOT believe that... you need to explain where they got the 2-trillion dollars to add those assets.

We are listening.  Go for it.

Wed, 11/17/2010 - 06:42 | 733493 i-dog
i-dog's picture

By all accounts, the Fed's initial $144million capital was raised by the banker shareholders drawing cheques on their own banks. In other words, there were NEVER any reserves!! Greatest scam in the history of the planet.

In fact, if the Fed were to become part of the Treasury, you would be presented with the insane sight of the Treasury exchanging IOUs (bonds) with itself (FRNs).  hahahahahahaha

Wed, 11/17/2010 - 23:13 | 736713 honestann
honestann's picture

Yup, that sounds about right.  Of course, only those holding the strings know every detail, but you can be certain those cretins never risk their own wealth.

Amazing how easily humans ignore basic facts and quantities.

Mon, 11/15/2010 - 19:54 | 728887 blindman
blindman's picture

are the assets wothless piles of fraud?

are the liabilities money?

Tue, 11/16/2010 - 16:13 | 732020 DaveyJones
DaveyJones's picture

hmmm, no answer 

Sun, 11/14/2010 - 09:57 | 725935 slemarie
slemarie's picture

The genious of this video is on so many different levels it is a thing of beauty....I agree on the reset...but the fed is not our friend.

Sun, 11/14/2010 - 19:03 | 726496 Mediocritas
Mediocritas's picture

I agree that the Fed is not our friend...but this video is not the work of genius.

Sun, 11/14/2010 - 21:50 | 726773 honestann
honestann's picture

Correct.  This video is not the work of genius - it is simple, straightforward fact.  That makes this video even more important.

Today we live in a world where almost every human being is literally, clinically, technically massively insane.  Probably 99.99999% of humans do not realize that governments, corporations and other organizations literally do not exist.  The few sane folks remaining stare in wonder as the rest of the world walks around every day, acting as if these fictional ideas and concepts refer to something real.

Perhaps most amazingly, these fictions are clearly identified as fictions right in front of everyone... yet the masses never catch onto the scam.  I mean, really!

Just look in fundamental law, and you'll find that all organizations (governments, corporations, etc) are called "fictitious entities".  Thus, right in front of everyone, these frauds are called what they are --- fictions.  Yet the masses ignore this and wander around clueless slaves of these ideas, treating them as real.  You are one of these suckers.

Oh, and how about that fiction known as a "dollar".  The "dollar" is acknowledged by everyone, including the FederalReserve and government of the USSA, and everyone else... to be a "fiat currency".  Well, just look up "fiat" someday, and think about it.

So we have people in fictional organizations - like the FederalReserve, government of the USSA, IMF, UnitedNations, and so forth.  And they print, issue and loan their fictional fiat money to manipulate, control and enslave everyone.

This is a fact.  These fictions are no more real or legitimate than SantaClaus or the tooth-fairy.  Yet supposedly intelligent well-educated humans spend most of their lives acting as if they are real, ethical and legitimate.

SOMETHING like this video is needed to crack open the shell of insanity that encases human minds.  It is valuable precisely because it is simple.

Sun, 11/14/2010 - 06:18 | 725879 Al Gorerhythm
Al Gorerhythm's picture

What reserves exactly has the Fed got to swap? MBSs perhaps?

Sun, 11/14/2010 - 19:02 | 726494 Mediocritas
Mediocritas's picture

Why do you think it's called the Federal Reserve? What do you think the "reserve" means in "fractional reserve banking system"?

Next.

Sun, 11/14/2010 - 20:55 | 726675 i-dog
i-dog's picture

Why indeed did they call it the "Federal Reserve System"?

It is not 'federal' ... it's privately owned.

It has no 'reserves' ... if you can't see them, then assume they're not there.

It is not a 'system' ... it's a criminal enterprise.

They have "created" trillions of US Dollars in just the past year alone!!

Sun, 11/14/2010 - 05:27 | 725861 Miles Kendig
Miles Kendig's picture

The planet where the enormous black holes sitting in the shadow banking system massively outweigh the potential inflation caused by releasing reserves.

I've been equating this process with farmers during the dust bowl attempting to use buckets of water to keep crops going in the face of a ragin' black blizzard.  The picture is the same.  The continuing ripples from the implosion of the shadow system are nothing short of epic.  And printing up 5 or 10T sure isn't going to change that, just ease the pain of its passing a little while transferring a few of the many trillions in liabilities to the public purse.  (Back to brining tumbleweeds - see item 4 in link)

http://www.mentalfloss.com/blogs/archives/16329

Yes indeed, the shadow system has been on desperate ground for 3+ years now.  The real question is how to collapse a black hole once it has started going? I suspect that what ever the fed attempts will just be pissin' into the wind until the shadow either gets fully revived or resolved.

On a side note, I remember a ? a bit ago.  Hope this helps with my drift at the time.  I'll try to get more when there is a pause.  Best -

http://www.businessweek.com/bwdaily/dnflash/may2006/nf20060523_2210.htm?...

Sun, 11/14/2010 - 05:34 | 725866 Mediocritas
Mediocritas's picture

The futility is made even more clear when you realize that they aren't actually "printing up" anything, they're just engaging the reserve (effectively dropping the reserve requirement).

There's basically only one way out of this mess. Hit the big rewind button, implemented as  putting a freeze on all exotic derivative trading, banning any future trading and cancelling every single damn open position.

The problem at the moment is that I made a billion dollar bet with you (when neither of us have a billion). I lost and now I'm desperately trying to stay active while I hope a billion dollars will magically fall into my lap, which *might* happen because I also made 100 other billion dollar bets with other people but don't know the result yet. The whole system is locked up this way requiring CB intervention and screwing the global economy because said intervention means funnels from the zombie economy suck from the living.

It's all zero sum in the end. Just cancel it. If institutions go down during the Great Unwind then let them, they will be absorbed by those that don't.

The Great Unwind also applies to mortgagees who didn't even realize that they were entering exotic derivative positions, they just thought they were taking a damn mortgage. Unwind those trades by reducing the principal on their outstanding loans to match (lower) reality. Any consequent losses deserve to be eaten by the same banks that took fraudulent gains. Zero sum.

Sun, 11/14/2010 - 08:57 | 725909 Clapham Junction
Clapham Junction's picture

To THE Mediocritas:

  Make the bet a Quadrillion and your on.

Sun, 11/14/2010 - 05:57 | 725870 Miles Kendig
Miles Kendig's picture

Yep, and a o hell ya to getting out of the way of the natural M&A process.  The principle applies broadly to the associated subsystems.  Actually I believe that this would make the unwinding/devolution process easier. Nice thwack!

Sun, 11/14/2010 - 04:09 | 725837 Mediocritas
Mediocritas's picture

Why do people think this video is so great? The criticisms it levels at the Fed are almost completely wrong. I'm no fan of the Fed, but I'm even less of a fan of bullshit and this video is full of it.

Sun, 11/14/2010 - 03:53 | 725833 blindman
blindman's picture

sanity.

.

George Carlin - People are Boring

.

http://www.youtube.com/watch?v=eyWsFfd9pqE&feature=more_related

Sun, 11/14/2010 - 03:43 | 725831 ebworthen
ebworthen's picture

LOL

Perfect.

When you roll it into a ball and toss it back and forth, it really does encroach upon sanity.

Sun, 11/14/2010 - 01:59 | 725788 DaveyJones
DaveyJones's picture

"you should not bang your head against the wall because the medical insurance is too expensive"

great piece

 

Sun, 11/14/2010 - 01:47 | 725732 blindman
blindman's picture

George Carlin describing the economic crisis in 1978

http://www.youtube.com/watch?v=rPqm3Xbwd9I&feature=related

.

http://www.youtube.com/watch?v=sDkhzHQO7jY&feature=related

.

George Carlin - We Like War

Sun, 11/14/2010 - 00:26 | 725709 Chuck Mentzel
Chuck Mentzel's picture

They should call it Quantitative Weaseling.

Sun, 11/14/2010 - 00:22 | 725703 sub Z
sub Z's picture

lulz...

CPI chart: http://research.stlouisfed.org/fred2/data/CPIAUCSL_Max_630_378.png

"The Fed can produce new money, but it cannot produce new jobs. Fiscal policy — and its threat of overtaxing, over-regulating, and overspending — is what’s ailing the economy."

Larry Kudlow

Sun, 11/14/2010 - 05:01 | 725859 Miles Kendig
Miles Kendig's picture

Ya, the problems that ill the economy are premised upon over bearing regulators, especially in the financial sector.  (See the many cases brought by the following over the past decade the SEC, CFTC, COTC, FDIC, FBI, US Atty's)  So, if we weakened these overbearing regulators free markets would be fostered?!  ROFLMAO  Sounds like "self regulating markets" and Larry Kudlow still tread where even Greenspan refuses to go any more....

Sun, 11/14/2010 - 02:50 | 725821 Bear
Bear's picture

But unfortunately it is over-all

Sun, 11/14/2010 - 04:45 | 725851 sub Z
sub Z's picture

good point, feel free to add.

Sun, 11/14/2010 - 04:57 | 725856 blindman
blindman's picture

rolling inflation via fractional reserve lending into the global

marketplace provides the ponzi recipients of interest the finance

to enslave the world.  debt slaves of new rather than chattel of old.

politically correct enslavement as long as the sheeple accept it on

morally ingrained guilt.  legacy cost provides opportunity to

exploit other peoples to labor in debt and financed from interest and assets

collected in a previously indebted location.  etc.. it is a time and

expectation manipulation being played on simple honest humanity who know

nothing about finance personal or public.

Sun, 11/14/2010 - 17:59 | 726402 chopper read
chopper read's picture

it all begins when 'you can only pay your temple tax with a special coin'.  government creates the mechanism for control.  centralized government 'legal tender' as opposed to competing currencies, including gold and silver, creates the opportunity for counterfeiting.  however, a strict law with capital penalties against counterfeiting curtails treason.

it is when counterfeiting becomes legal and institutionalized that a system is created which favors the existing rich at the expense of the existing poor.  the temple siphones wealth upwards at the expense of liberty.  This process creates an everburdened working peasantry while simultaneously fueling gluttoneous consumption at the top.  

fractional reserve counterfeiting is maximized with fiat money.  the fraud expands exponentially allowing for incredible leverage for the existing rich against the existing poor who have no such ability to counterfeit.  they must run faster or starve.  bankers must do less and less to control more and more resources.  they can enact environmental laws that favor themselves and restrict upward mobility.  

imagine this:

 
if you lend money out directly (buy a bond), the money leaves your hands and goes into the hands of the borrower, who can then either pay this money back to you with interest or lose this money (or some combination of the two).
 
if you deposit money in a bank, the bank can lend this money out while simultaneously keeping this money in your account.  The borrower can then either pay this money back to the bank with interest or lose this money (or some combination of the two), in which case the taxpayer bails out the bank.
 
in essence, there are two sets of rules.  one for bankers, and one for everyone else. 

of course, you do not have to imagine this as it takes place each moment that you are either awake or asleep. 

Sat, 11/13/2010 - 22:01 | 725556 LarryKudlow
LarryKudlow's picture

QE is the simplest and the most elegant solution to get the US economy to be more competitive.

Sun, 11/14/2010 - 02:53 | 725822 Bear
Bear's picture

QEx is elegant if you want the dollar debased and you own a lot of gold. Hyperinflation is never elegant ... no one wins

Sun, 11/14/2010 - 00:37 | 725713 blindman
blindman's picture

o.k..  tell it to the retired,  especially about the elegant part.

it is hard to look elegant eating cat food, but i suppose some

can pull it off.  and elegance living in a cardboard box?  under a bridge

is never elegant.  even in a tent or on a neighbors couch, never elegant.

but competitive , yes.  and simple for the bankers.  they make untold

fortunes.  simple and elegant for them.  watch for the lack of competition

in banking coming your way.

.

http://www.youtube.com/watch?v=qAYLD06MefI&list=MLGxdCwVVULXc4I9UtzCjOFFq8D0mJgkWI&playnext=4

.

George Carlin   Bankers

http://www.youtube.com/watch?v=FeLLR3LWtv4

" ..they want your fucking retirement money.  they want it back,  so they

can give it to their criminal friends on wall st..  and you know somethin' .."

Sun, 11/14/2010 - 10:16 | 725955 AmericaRacket
AmericaRacket's picture

George Carlin:  No Specifics, no solutions, no jokes.  He might as well work for them.

Sun, 11/14/2010 - 21:03 | 726697 blindman
blindman's picture

http://www.zerohedge.com/article/secret-oz-truth-behind-modern-financial-system-and-money-political-complex

.

here specifics and solutions.  george did the jokes well

i thought.  he also identified the problems,  bless his

beautiful heart.

Sat, 11/13/2010 - 20:54 | 725488 huntergvl
huntergvl's picture

I posted this on Facebook for all my family and friends....these are the people that never come to places like zerohedge. Already got some good feedback.....Thanks for posting George! Any way to get word out is welcome!!

Sun, 11/14/2010 - 09:36 | 725925 slemarie
slemarie's picture

I posted it 3 times and it has not been commented on once....that is also the first time I posted anything and it may be the last if nobody is interested enought to watch...I will sy that I visit 5 websites including this on a regular basis...this video was posted on all of them.

Sun, 11/14/2010 - 02:54 | 725824 Bear
Bear's picture

Me too ... +99

Sat, 11/13/2010 - 19:36 | 725382 blindman
blindman's picture

" i feel like banging my head against a wall " .

this is the best cartoon ever made.

Sat, 11/13/2010 - 19:19 | 725359 High Plains Drifter
High Plains Drifter's picture

The coming false flag nuclear attack on America.

http://www.veteranstoday.com/2010/11/11/gordon-duff-in-motion-the-plot-t...

I don't know what to say about this article. But I will say this. It probably will be something like this. I have long feared about the coming nuclear attack that will be blamed on the Iranians, kind of like 911 was blamed on the Arabs. One this is for sure. It is very sobering reading on this beautiful Saturday afternoon. The trouble is, to get anyone to listen to something like this, is almost impossible. The final word is: Prepare.

Sat, 11/13/2010 - 19:41 | 725388 Irwin Fletcher
Irwin Fletcher's picture

I like to keep an open mind, but the article is a little hard to swallow. For example, 

"Anyone who doesn’t think the real heart of American politics has always been racism is a liar. ... Every political position in today’s America is derived from institutionalized racism, be it immigration, health care or “constitution.”"

I'd have guessed money instead of racism.

Sat, 11/13/2010 - 19:47 | 725401 High Plains Drifter
High Plains Drifter's picture

Well I myself do not agree with everything but I fear that the bombs have already been smuggled into the United States. It makes perfect sense. I just hope I am upwind of one of these badboys. Someone may say, well this article is anti semitic, (whatever that means) but the problem with that old tired lame argument is that Duff is jewish and a Vietnam combat veteran.  He has been going off now for years on this stuff. 

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