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Rosenberg On The Probability Of Another QE Round

Tyler Durden's picture


While Zero Hedge is confident that Bernanke will have absolutely no option but to continue with bond monetizations well beyond June, if for no other reason then because foreign Treasury buyers continue to be on a buying strike (except for the "UK" buyers of course) as confirmed by today's TIC data, which coupled with another $3 trillion in deficit funding needed over the next two years, means the Fed will increasingly have to step in and fill the debt issuance void which is now entirely picked up by the Frost-Sack FRBNY dynamic duo. That said there is one major trade off, and it is surging commodity price inflation, which as we have been predicting for over a year, will take the world by storm (literally and metaphorically) as excess liquidity finds new and unmet markets (and leading to such side effects as now well-publicized revolutions). Then again, Ben does not see it and thus it must not exist. By now everyone is aware that Benanke's self delusion is unmatched by any previously in the history of the world, so this can and will go on for a long time, until the same "excess slack" which forced the presidential overthrow in Tunisia reverberates around the developed world. And while we are confident that Bernanke will not stop at anything in his plan of global genocide to provide for infinite banker wealth, others such as David Rosenberg are not quite as sure. Here are Rosie's latest thoughts on the probability of yet another round of QE to follow once the current one is completed in June.

There is simply not a bailout plan, globally, that investors do not absolutely love (where exactly does the money come from and where would it have gone absent the need for these financial lifelines?). The U.S. dollar, in turn, is back in sick-bay as it slips back below its 50- and 100-day moving averages after a failed test, and this in turn is adding some impetus to the rally in commodity prices. The Canadian dollar has responded in kind (as have other resource-based currencies) by firming to its highest level in 2½ years.

Ben Bernanke’s QE program may well have induced a nice positive equity wealth effect but by inducing investment flows into all asset classes, food inflation has emerged, along with energy, as a potential source of global economic weakness and strife as prices soar in China and India and riots start to break out in Africa. Gold is rallying today though the chart does look quite choppy and sloppy right now — while we remain long-term bulls, one must wonder if things are starting to become a little nutty when you read stories (as we did this morning on Bloomberg News) that vending machines selling bullion are starting to be installed in Japan.

As we said before, movements in oil prices still exert a statistically significant impact on the economy and earnings with a 12-24 month lag. In other words, growth was still receiving a tailwind from the sharp downdraft in crude prices experienced from mid-2008 to early 2009 right through last year. But the gig is up and the economy is going to feel the effects of the near-120% surge in oil prices for the balance of 2011 and into 2012 barring a reversal. Only once in the past did the U.S. economy fail to sputter or head into outright recession after such a two-year surge in oil prices (food will only make matters worse in terms of depressing real wages) and that was in 2006 when the economy generated over two million jobs, the unemployment rate was 4.5%, wages were rising at a 6% annual rate, home prices rose an average of 8%, and bank credit expanded 10%. Those offsets are not in play this year.

And the question is whether the Fed would dare embark on QE3 with headline inflation in acceleration mode (even if core is still well contained). It’s one thing to bring on QE1 when oil prices are at $45/bbl and the CRB spot index is sitting at 325 (futures at 215) as was the case in March 2009. And then to announce QE2 nearly 18 months later when oil is sitting at $75/bbl and the CRB is sitting at 380 (futures were at 270). But can the Fed really be serious about yet another round of balance sheet expansion to please the stock market when oil is now above $90/bbl and the CRB is at a record high of over 530 (futures now north of 330)? Talk about rolling the dice with the bond market vigilantes.

Also, have a look at The Latest American Export: Inflation in the op-ed pages (A17 to be precise) of the WSJ. Indeed, not only has the Fed managed to create an illusion of prosperity by stepping up the print press and swinging the stock market around with QE2 chatter last summer, but now it is actually helping the government cause a de facto real appreciation of the yuan by pursing a back-door policy of boosting inflation in China. Bernanke is a true magician, no question about it.

Then again, the name of the game seems to be to kick the can down the road as far as it will go, buy as much time as possible, and hope that the economy can manage to grow out of all its imbalances from bad debt elimination, excess supply of housing, and pregnant government balance sheets. Bringing back mark-to-model accounting in the banking sector was the first move. Using TARP money as an industrial bailout strategy was next and right out of the 1930s FDR playbook. Goosing the fiscal system and adding to a deficit that was already running at nearly 10% of GDP was another, including a raid of Social Security and not allowing a 10-year tax cut to expire that was always destined to do so (a tax cut that was implemented to deal with the 2001 tech-wreck recession, not the 2010 stuck-in-the-mud recovery). The Fed was going to start shrinking its balance sheet a year ago, but instead re-expanded it by the end of the summer and is now thumbing the nose of the new Congress by hinting at doing even more to keep the speculative stock market rally alive. And the ballyhooed financial overhaul continues to miss deadlines and in fact has no teeth as it is — why cook the goose that lays the golden credit egg and must play a role in a leveraged economic expansion?

The complexity in the banking system remains as opaque as ever and now the lenders are generating profits by drawing on their loan loss reserves at a time when the unemployment rate is still perilously close to double-digits. The can has indeed been kicked down the road. Outside of selected state legislatures (see what Vallejo is doing to pension and benefits on page A6 of the WSJ), the tough decisions have been delayed and as a result, the next bear market and recession may end up looking just as bad as the last one. The only thing we seemed to have learned coming out of the credit bubble was to add even more debt to the overall national balance sheet. But as we saw in Ireland, not even the lucky can expand its debt at a faster rate than nominal income forever, especially now that the ratio in the U.S.A. is heading to unprecedented heights for a peace-time economy and to levels that end up impairing growth in the nation’s private sector capital stock. Borrowed time, that’s what the bulls have on their side. But we’ll see for how much longer, especially as the debt ceiling file plays out (see New Calls on GOP Side Not to Lift Debt Limit on page A8 of the WSJ).

With portfolio managers cash ratios back close to levels that they were at in the fall of 2007 and still just a trickle of inflows into mutual funds, the only source of buying power we can see in the equity market is leverage (the surge in margin borrowing) and massive short covering (short interest on the NYSE plunged 5.5% in the second half of December, which largely explains why the stock market absolutely rocketed during the month). If you want to have a good look at the consensus view see the editorial by BlackRock’s Bob Doll on page 22 of the FT (Prepare for Another Fine Surprise from U.S. Equities). Bob and I part ways on the outlook but we are old friends and collegues and he is still worth listening to.

And even if Bernanke's QE decision is independent of bond demand considerations, the truth is that the economy continues to slug through (and outperform only exclusively due to trillions in fiscal and monetary stimuli). Here are the most notable headwinds before the economy as evident to Rosie:

It is truly difficult to understand why it is that everyone is so whipped up about U.S. growth prospects. Even the latest set of data points has been less than exciting. Retail sales, payrolls, and consumer confidence have all been below expected and all of a sudden we see that jobless claims are moving back up. The deceleration in core capex orders is quite telling and housing remains firmly in the doldrums. To be sure, we have a slate of “diffusion” surveys telling us that businesses are feeling better — the ISMs, the IBD/TIPP survey, the NFIB and the array of regional manufacturing surveys too, but over 70% of the U.S. GDP is the consumer and we did seem to close out 2010 with real spending and wages roughly flat. Is that good? Or perhaps there is now this widespread belief that the government will stop at nothing to achieve the holy grail of sustainable economic growth and revived animal spirits among the investing class. The Fed has made it quite clear that the road to prosperity lies through the equity market, and that the primary objective of quantitative easing was to generate a positive equity wealth effect on consumer and business spending. So far, the stock market is biting because the rally has been non-stop in nature for months now and whatever givebacks we see are brief affairs and widely treated as buying opportunities. Hope springs eternal, so much so, that even soft economic data like we saw last Friday are treated with little more than a shrug of the shoulder.

The S&P 500 may still be some 17% away from its prior peak, but the Wilshire 5000 just closed at a new high after last week’s 1.8% advance, and in the short span of just 22 months, has managed to double (+100%). In other words, from the March 2009 lows, $8.3 trillion of paper wealth has been created. Thanks Ben! The S&P 400 midcap index is at a new high too, as is the Wilshire small-cap index, piercing its old high set back on July 13, 2007.

The Dow has now gained ground in each of the past seven weeks. The last time it did that was back in the week ending April 23, 2010. Ahem. A month later, it was down 1,200 points. You see, nothing lasts forever, not even a speculative bounce. The Shiller cyclically-adjusted P/E ratio has expanded for six months in a row and at 23.3x in January is now at its highest level in nearly three years. Sentiment is wildly bullish. The market is seriously overbought, and it is expensive on a “normalized” earnings basis.

In any event, as we look to the months and quarters ahead, what do we see? We see that the Federal government just announced a bonanza of $858 billion of stimulus measures towards the end of last year. Of course, almost all of that just ensures that Washington will not be a source of contraction this year, but the psychological impact has been huge so far. The Fed has allowed its balance sheet to explode even further to obscene levels of $2.43 trillion or triple what it was before the financial crisis took hold. In the past three years, the Fed’s balance sheet has expanded by $1.5 trillion and nominal GDP has only managed to rise over $500 billion. Fascinating. And we had the U.S. public debt explode by $5 trillion over that same time frame — the country is 244 years old and over one-third of the national debt has been created in just the past three years. Incredible. The U.S. government now spends $1.60 in goods and services for every dollar it is taking in with respect to revenues which is unheard of — this ratio never got much above $1.20, not even during the previous severe economic setbacks in the early 1980s and early 1990s.

So we have federal fiscal support, which at the margin is subsiding. And we have massive monetary support, and on this score the Fed is going to be facing much more intense congressional scrutiny going forward.

At the same time, it should be remembered that about half of last year’s GDP growth was inventory accumulation. That is about to come to an end.

Net exports in 2010 received support from accelerating global growth and the tailwind of a roughly 5% decline in the U.S. dollar from a year earlier. Now we have half of U.S. exports being negatively affected by policy-induced decelerations in Europe and non-Japan Asia.

The slowing trend in capital goods orders suggests that business spending growth will end up being half the 15% increase we enjoyed in 2010.

Illinois just raised taxes that will drain $6.5 billion from the regional economy and California is planning $12.5 billion in spending cuts.

All told, we could easily see $65 billion of fiscal restraint from the lower levels of government this year, which is akin to a 0.5% drag from baseline GDP growth.

If the GOP in Congress gets its way, in order to get the debt ceiling passed, we will see $50 billion of federal spending restraint this year too.

If home prices go down another 10-20%, as even some Fed district banks think is possible, that could end up curtailing consumer spending by a full percent via negative wealth effects on the personal savings rate. The question here is whether an overvalued stock market can serve as an antidote.

Vacancy rates are still far too high to believe that construction spending, residential or commercial, will be contributing to overall economic growth this year.

Interest rates are no longer declining and in 2010 this offered $100 billion of debt service support to the household sector.

Finally, the food and energy bill combined can be expected to drain $100 billion out of household cash flow this year too. As we saw in December, real spending looked flat and real wages are now down in three of the past four months. And the salutary effects of the payroll tax cut will only be felt incrementally this quarter. Look for air pockets thereafter.

Bottom line: Growth projections of 3-4% for 2011 look quite spurious to us even if the markets seem to have recently been buying into this supercharged consensus view.

The bottom line, to us, is that denial, and existence in a mythical world where facts absolutely don't matter can only continue for so long. As always, the best way to bet on the moment this arrangement fails is to buy the cheapest possible fat tail insurance one can find. And for that we once again refer readers to the most recent comprehensive presentation put together by SocGen on tail risk. We can only urge everyone to protect their gains, be they in gold, treasurys or Apple stock (preferably in the cheapest possible way).


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Tue, 01/18/2011 - 13:05 | 884268 JW n FL
JW n FL's picture


Got ammo?

Tue, 01/18/2011 - 13:08 | 884279 BlackSea
BlackSea's picture

Does being long cotton and gold count?

Tue, 01/18/2011 - 13:12 | 884301 JW n FL
JW n FL's picture

Only if it is your farm and in your safe...

Tue, 01/18/2011 - 13:18 | 884318 BlackSea
BlackSea's picture

Singapore ok?

Tue, 01/18/2011 - 13:26 | 884343 JW n FL
JW n FL's picture

like anywhere else... how well are you plugged in? how much security can you carry, beyond the conventional? are you worth more alive to them or dead?

Tue, 01/18/2011 - 13:27 | 884346 DoChenRollingBearing
DoChenRollingBearing's picture

JW in essence is pointing out that DIVERSIFICATION is very important.  Real diversification across all kinds of asset classes.

-- precious metals & commodities

-- guns & ammo

-- stocks, bonds, cash

-- real estate 

-- money / investment overseas

-- out of debt

Throw in some alertness and agility with the above, and you should be OK.

Tue, 01/18/2011 - 14:06 | 884458 Dapper Dan
Dapper Dan's picture

You forgot about having a rock solid group of friends and family that will cover your back,  tend to your wounds or walk point if needed. 

Attn: Government trolls,  the above is all metaphors

Tue, 01/18/2011 - 14:10 | 884471 lunaticfringe
lunaticfringe's picture

you forgot porn and motorcycle tires. FIFY

Tue, 01/18/2011 - 14:11 | 884474 bonddude
bonddude's picture

Don't forget a stash of canned food. Corned Beef Hash, dinty moore stew,

and Spam keep forever. Incidentally, here's another cartoon about local bank

fraud involving a TARP recipient bank.

Tue, 01/18/2011 - 14:14 | 884479 bonddude
bonddude's picture

error :(

Tue, 01/18/2011 - 14:54 | 884622 DoChenRollingBearing
DoChenRollingBearing's picture

Dapper, lunatic, bond,

Quite correct, not a complete list.  Add:

-- food

-- first aid kit & pharmaceuticals

-- other survival stuff

-- farm land

-- Etc.

Tue, 01/18/2011 - 16:06 | 884876 JW n FL
JW n FL's picture

Thanks! you have been here long enough to know where my family is going of the shit gets iffy... (ish)... but having a way to get what is really important, REALLY IMPORTANT!! like family, lil ones.. the women... thats where its really at... if you dont have a sucession plan, get one.


Being a Boy Scout, seriously ALL! please be prepared for any and everything... SERIOUSLY!


That does not mean quit your job and dig a bunker... it means go work, be productive... try to carry the weight of all those out of work ignorant fucks... but if the police force(s) start to suffer to, too much so will over all quality of life. Thusly protection for those who are not really of a solid awarness. the list keeps going and going and fucking going... but PLEASE EVERYONE! have a plan "B".

Tue, 01/18/2011 - 13:35 | 884349 TruthInSunshine
TruthInSunshine's picture

Harry Wanger says:

"We are all Citi, Bank of America, JP Morgues & Vampire Squids, now!

Whether lean or fat, flush or busted, we Unite for Truth, Justice & The New Amerikan Way! 

Strength through Unity! Unity through faith!

War is Peace! Ignorance is Strength!"

Tue, 01/18/2011 - 17:56 | 885292 the rookie cynic
the rookie cynic's picture

And, and...Freedom from Harry is slavery. (Wait, did I just say that.)

Tue, 01/18/2011 - 13:42 | 884379 Eally Ucked
Eally Ucked's picture

Just look what is going on around you, they're showing that they are ready for you with your ammo and guns. Maybe they're not really ready that's why all those displays of power.

Just look at at Toronto today, thousands of police marching, millions of dollars spent and for what? One policeman died on duty, killed by plough, and I know that police job is not the easiest one but at the same time half of them are so corrupt. So what is the purpose of that display?

Tue, 01/18/2011 - 13:06 | 884274 Dr. Porkchop
Dr. Porkchop's picture

You hear that? That's the sound of inevitability.

Tue, 01/18/2011 - 13:07 | 884278 Dr. Porkchop
Dr. Porkchop's picture

So we should buy the Apple dip?

Tue, 01/18/2011 - 13:10 | 884288 HarryWanger
HarryWanger's picture

Already 10 pts. off its low today. It was an easy BTD. My guess is, they put out the Jobs news yesterday for several reasons but one was they knew the earnings would be a blowout so any drop in stock price would be recovered AH. So yes, BTD!

Tue, 01/18/2011 - 13:26 | 884339 shushup
shushup's picture

Yes - They knew last qtr was going to be a blowout also. Guess what? Dropped 20 points after earnings announcement. You'd deserve it if it happens again.

Tue, 01/18/2011 - 13:34 | 884360 HarryWanger
HarryWanger's picture

You missed the point. They manufactured the "sell off" before earnings. They would not have made the Jobs announcement yesterday if they weren't going to announce blow out earnings. That's why the stock rallied hard off of its low today.

Tue, 01/18/2011 - 14:13 | 884481 Dr. Porkchop
Dr. Porkchop's picture

I refuse to buy if it ain't a Heluva Good dip.

Tue, 01/18/2011 - 13:19 | 884293 BlackSea
BlackSea's picture

removed duplicate.

Tue, 01/18/2011 - 13:17 | 884294 BlackSea
BlackSea's picture

Yes, BTFD. It is rumored that unlike gold, which every shill knows is not collectible, you CAN actually eat IPads.

Tue, 01/18/2011 - 13:08 | 884281 HarryWanger
HarryWanger's picture

No doubt in my mind there will be a QE3 and beyond until we are firmly generating self-sustaining growth. While we are seeing hints of that in the data now, it's going to take more stimulus to create an organic growth cycle. Whether that takes QE3, 4 or 5, it will happen. It's just a matter of time and patience.

Tue, 01/18/2011 - 13:16 | 884312 Spitzer
Spitzer's picture

They are still waiting in Japan and Zimbabwe. Show me one time in history that a central bank created self sustaining growth by buying government debt.

Tue, 01/18/2011 - 13:30 | 884350 DoChenRollingBearing
DoChenRollingBearing's picture

+ $1365 Spitzer

I ain't buying what the Fed and .gov are selling.  Neither should anyone else here.

Tue, 01/18/2011 - 13:53 | 884397 Spalding_Smailes
Spalding_Smailes's picture

Because .... 

World reserve currency status - ( They did not have this honor ).

International Finance - ( Derivatives ) How will they swap out our/global dollar positions/Forex - Dollars.

International pricing currency for products traded on a global market ( letters of credit ) and commodities ( oil, gold, ect, ect ... )

We borrow at a better rate because of this.

Network externalities.

2/3 of foreign exchange reserves in dollars over last 10 years.

Dollar denominated debt forces host countries to continue purchasing treasuries because if they do not, the currency will soar' crushing the manufactures and banks.

Global businesses continue borrowing in dollars 24/7/360.

Tue, 01/18/2011 - 14:58 | 884637 Spitzer
Spitzer's picture

The British had the world reserve currency status so ^ all of that muttering doesn't wash.


Tue, 01/18/2011 - 15:14 | 884681 Prof Gulliver
Prof Gulliver's picture

If you QE forever -- which is the plan -- there's your sustaining. No need for organic growth, ever. Free money for the monied class. As for the middle class and below, well, the ones we are forced to see around 33 Liberty seem to be doing just fine selling us pretzels and delivering our lunches.

Tue, 01/18/2011 - 18:11 | 885376 the rookie cynic
the rookie cynic's picture

Do bubbles count?

Tue, 01/18/2011 - 13:17 | 884314 alexwest
alexwest's picture


#. Whether that takes QE3, 4 or 5, it will happen. It's just a matter of time and patience.

are you mentally challenged? then you 'are at the wrong place..

in 2 years US national debt gonna be at least 18 trln $ and debt servicing is 50% of federal revenues..

only exit is WEIMAR HYPER IFLAITON WAY... there's no any cases in history of countries who prints 1$ for each 1$ in revenues to dig out and survive...

and i'd say 50/50 USA is going to be same country ,, or bunch of (3..5) different countries...

its clear North-West is going to be part of Canada..


Tue, 01/18/2011 - 16:10 | 884885 JW n FL
JW n FL's picture

sure the population of california is going to walk into montana and tell those boys anything... thats fucking funny!!!!!

Tue, 01/18/2011 - 13:20 | 884320 Cognitive Dissonance
Cognitive Dissonance's picture

While we are seeing hints of that in the data now, it's going to take more stimulus to create an organic growth cycle.

Considering all the shit that's being shoveled I suspect something organic will eventually grow.

Tue, 01/18/2011 - 16:11 | 884890 JW n FL
JW n FL's picture

becuase you said it... rolling laughter... you should be able to hear me all the way to your house... Thanks!!!!!!!!

Tue, 01/18/2011 - 13:21 | 884326 Bay of Pigs
Bay of Pigs's picture



Tue, 01/18/2011 - 13:37 | 884370 LawsofPhysics
LawsofPhysics's picture

Yes, like most self-serving retards that live in a fantasy world where people don't need any real commodities or real energy to create real value, Harry just wants to die rich, after that he could care less.


Tue, 01/18/2011 - 13:34 | 884362 LawsofPhysics
LawsofPhysics's picture

Using the current economic model, inexpensive energy and labor drive economies, NOT cheap fiat paper.  History has shown this over and over and over...

Tue, 01/18/2011 - 13:59 | 884437 Rogerwilco
Rogerwilco's picture

"No doubt in my mind there will be a QE3 and beyond until we are firmly generating self-sustaining growth."


Perhaps the most amazing comment ever to grace ZH. The laws of Nature have been repealed.

Tue, 01/18/2011 - 14:38 | 884564 ForWhomTheTollBuilds
ForWhomTheTollBuilds's picture

Sometimes, I think you make remarks like this just to see how we will react.  Why is our state of mind important to you?

Tue, 01/18/2011 - 14:40 | 884571 ElvisDog
ElvisDog's picture

Every cycle of QE weakens the private economy further because the overall economy becomes more and more dependent on government deficit spending to continue. Government spending has never created "an organic growth cycle". A good example is in the 1930's. As soon as Roosevelt cut back on the stimulus in 1937, the economy slipped right back into recession.

Tue, 01/18/2011 - 16:29 | 884942 Bay of Pigs
Bay of Pigs's picture


That sums it up quite nicely. Why people like Harry can't/won't see this is remarkable.

The increasingly US style (Soviet) system is going to implode. 100% certain.

Tue, 01/18/2011 - 18:19 | 885405 the rookie cynic
the rookie cynic's picture

Over the years, the USA has refused to let recessions clear out the rot.

So instead of 7-8 corrections, we're going to have a huge bust.

None of the PTB want a recession on their watch, let alone one of the biggest (if not the biggest) busts in history.

It's a colossal game of kick the can down the road while playing chicken with oil and nukes.


Tue, 01/18/2011 - 13:09 | 884283 JW n FL
JW n FL's picture

"So we have federal fiscal support, which at the margin is subsiding. And we have massive monetary support, and on this score the Fed is going to be facing much more intense congressional scrutiny going forward."







Tue, 01/18/2011 - 13:18 | 884317 topcallingtroll
topcallingtroll's picture

Praise be to st vincent. It is all part of his grand plan. The demon midget GG cannot prevail against our dumb drunk irish fuck who will save us. Just watch.

Tue, 01/18/2011 - 13:09 | 884284 alexwest
alexwest's picture

fat Rosie probably gonna have heart attack

#which coupled with another $3 trillion in deficit funding #needed over the next two years

really ,, no Q3..Qnnn???? I hope somebody is gonna ask Rosie -fatasshole how USA federal goverment is gonna balance HUGE GIANT BLACK HOLE .. it's at least 1.5 $ trln this year ..
and next year..

Rosie knows by summer 10yy gonna be 4 /4.5 % and his nice fat job of peddling buying 10yy USA bonds w/ yield 2-3% in world where real life inflation (aka cost of life) at least 7% is OVER...

say bye bye Rosie.. seems he out of words so more and more BS charts in daily stuff


Tue, 01/18/2011 - 13:10 | 884287 Mudflap
Mudflap's picture

"vending machines selling bullion are starting to be installed in Japan"

Oh my!

Has to contain more real value than your average ATM by far.  Drop in $1,500 in change please...

Tue, 01/18/2011 - 13:18 | 884319 Spitzer
Spitzer's picture


Rosy has shown again that he is not on the same level as the Fabers and the Schiffs of the world, not even close.

Tue, 01/18/2011 - 14:06 | 884452 Spalding_Smailes
Spalding_Smailes's picture

Ya schiff ....

He had another video out on friday. Hes been dead wrong for 24 months now but hey maybe his flock will buy LuLu or NVDA and try recouping some cash ...

The dollar iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiis about almost, hold it, hold it .........hyperinfla........ 

Now he travels the globe living off " 2005 call " ...... ( Big deal EJ gave me the heads up in 2002 ) 

Schiff = Dustbin........... " When they stop buying dollars ...... " bla, bla, bla ....

Tue, 01/18/2011 - 14:12 | 884477 Spalding_Smailes
Spalding_Smailes's picture

Now I get it ..... He's a fucking gold salesman............. A gold whore/pimp/shill !!!

Video ( 2008 ) Pimping his gold sales, more wrong calls !!!

The fraud is uncovered.



Peter Schiff - Gold At $5000.00 By 2012? - Dollar Never Recovers? - Game Over?

Tue, 01/18/2011 - 16:04 | 884867 Spitzer
Spitzer's picture

Video ( 2008 ) Pimping his gold sales, more wrong calls !!!

did i read that right ? Pimping gold sales in 2008 is a wrong call ?

Checked the price of gold lately ?

Tue, 01/18/2011 - 15:35 | 884749 Spitzer
Spitzer's picture

Schiff has been dead right about everything. He has never been bearish on stocks for fuck sakes.

Schiff was "wrong" for a few years before the housing and investment banking bubble collapsed but how does those calls look now ?

Schiff has been "wrong" about the treasury and dollar collapse for a few months but how will those calls look in the next 3 to 5 years ?

You are vying for a spot on the next Peter Schiff was right video, just like before, all we need is more time, nothing else.

Ill bet you a penny on this

Tue, 01/18/2011 - 13:11 | 884292 JW n FL
JW n FL's picture

"If the GOP in Congress gets its way, in order to get the debt ceiling passed, we will see $50 billion of federal spending restraint this year too."


$50b v. $3T

We are saved thanks gop!

Tue, 01/18/2011 - 14:26 | 884515 JW n FL
JW n FL's picture

how many $50b's are there in $3T? ='s (60)

Tue, 01/18/2011 - 14:27 | 884517 JW n FL
JW n FL's picture

curtailing of 1/60th...

Tue, 01/18/2011 - 13:11 | 884295 Cognitive Dissonance
Cognitive Dissonance's picture

The Tyler take away commentary line of the week. And it's only Tuesday.

Then again, Ben does not see it and thus it must not exist.

In a leverage fiat world of faith and belief, we make our own reality one FRN at a time.

Tue, 01/18/2011 - 13:11 | 884297 irishgurl4
irishgurl4's picture

The Bernank is having an identity crisis, he thinks he's Buzz Lightyear.

To Infinity ... and Beyond!!!

Tue, 01/18/2011 - 13:11 | 884298 alter ego
alter ego's picture

The Fed is printing money in a way that looks that there is no tomorrow.

Pherhaps they know something that we the un-elite don't know.


 maybe, just maybe,  there is no tomorrow

Tue, 01/18/2011 - 13:13 | 884307 topcallingtroll
topcallingtroll's picture

China will slowly kill us with their peg if we stop now. It is better to force the issue now even at risk of The Great Reset. We must flood the world with dollars until mercantilist economies die. They do die first, strangely in the great resets of the past. Go Timmah Go! Choke those chinese on dollars! Being the worlds reserve currency pegged to a cheater is not so great after all. We will all ultimately be better off with a despised dollar no one wants. No more foreign adventurism as a bonus.

Tue, 01/18/2011 - 13:34 | 884361 DoChenRollingBearing
DoChenRollingBearing's picture

top, that is an interesting take.  Worth while for me to think about it.

I quite agree that foreign adventurism must go.

Tue, 01/18/2011 - 18:26 | 885442 the rookie cynic
the rookie cynic's picture

Please expand on this thesis.

Tue, 01/18/2011 - 13:15 | 884310 johngerard
johngerard's picture

there does not need to be a debate as to whether or not QE3 will happen. it's already nailed on. 

Tue, 01/18/2011 - 13:15 | 884311 flaunt
flaunt's picture

I agree with those who say China is going to be the catalyst for painful levels in inflation in the U.S.  It's shaping up like a slow-mo slingshot effect.  Right now our QE is causing China to print money and cause inflation in their borders, but as they slowly depeg and eventually monetize their gold and silver, the joke will be on the U.S.  Eventually our rotten gov't will be faced with exchanging the gold they supposedly have for Yuan to pay the bills, or they will be forced to remonetize the gold.  However, it may be too late at that point because China and the Yuan will have established cred.  Either way, gold and silver are real money and everything else is just fiat paper promises of pain and death.

The ultimate solution IMO is to unleash the free markets on currency.  There is absolutely no reason we should accept any sort of monopoly on currency, especially one backed with force.  Force is not required when people are willing use something as a medium of exchange.

Tue, 01/18/2011 - 13:24 | 884332 AnAnonymous
AnAnonymous's picture

There is absolutely no reason we should accept any sort of monopoly on currency, especially one backed with force.  Force is not required when people are willing use something as a medium of exchange.


Have you factored in guns, starvation and the  likes in your absolutely no reason?

Tue, 01/18/2011 - 13:53 | 884419 flaunt
flaunt's picture

What I meant to say was there is no legitimate reason.  Remove the violence used to enforce the currency monopoly and we have sound money, whatever forms it takes.

Tue, 01/18/2011 - 13:18 | 884315 Henry Chinaski
Henry Chinaski's picture

Shortly after QE1, wasn't there talk of plans at the FED about how they might "unwind" the emergency QE measures?  I think they were even trying some test run early last year?  IDK, maybe I just imagined it.  Anyway, it is telling that there is no talk of recovering QEN+1 down the road.

This would be a good time to re-run Marla's farcist post. 

Tue, 01/18/2011 - 13:23 | 884328 uno
uno's picture

QE will stop when retail buys into the stock market ponzi

Tue, 01/18/2011 - 13:23 | 884331 Sudden Debt
Sudden Debt's picture

Just break down all the foreclosed houses.

The gov. should use their money for that.

Suddenly, real estate would rise.

Unemployment would drop as every Mexican would be hired to do the demolitions.




Tue, 01/18/2011 - 14:17 | 884492 Dapper Dan
Dapper Dan's picture

The military/industrial complex already has that gig.

The only good jobs in the USA are the ones making the finest military products then they send them around the globe to be destroyed.

Tue, 01/18/2011 - 18:46 | 885499 Mudflap
Mudflap's picture

The underground drug economy would implode if you did that.  We needs them empty houses to grow our shit in man!

Tue, 01/18/2011 - 19:54 | 885693 andybev01
andybev01's picture

+1, and pass the nachos.

Tue, 01/18/2011 - 13:24 | 884334 PenchantForHoarding
PenchantForHoarding's picture

Despite deflationist dronings of the TAE gang et al, inflation is inevitable, and the fiat fall is already well under way.  The real question is how we're supposed to get change after paying for morning coffee & donuts with 1oz gold bars.

Tue, 01/18/2011 - 13:38 | 884374 DoChenRollingBearing
DoChenRollingBearing's picture

You will buy the coffee & donut SHOP with your 1 oz of gold...

Tue, 01/18/2011 - 14:05 | 884456 Rogerwilco
Rogerwilco's picture

"You will buy the coffee & donut SHOP with your 1 oz of gold..."

Or just pay for the coffee and some donuts. In a fascist-Ponzi economy, what makes you think they will let the little people keep their windfall gains? Together we thrive, and that together part includes all your assets, citizen.

Tue, 01/18/2011 - 18:53 | 885457 the rookie cynic
the rookie cynic's picture

Is there any reason why you can't have deflation (assets) in real terms and inflation in nominal terms (monetary)? Seems to me that's the course we're on.

Tue, 01/18/2011 - 13:25 | 884335 alter ego
alter ego's picture

QE 1,2 and potentially Q3 are a modern version of a Neutron Bomb.

This will only destroy soft tissue, living the infrastructure.

The only way quantitative easing will end is when a nation such as China escalate this economic warfare into an actually real one. 

US is exporting the inflation malaise around the world in order to protect the standard of living inland, there is no way that the Fed will end this practice.



Tue, 01/18/2011 - 14:11 | 884476 Rogerwilco
Rogerwilco's picture

They made a movie about this, but the Chinese government got MGM to shelve it:

The movie plot has the PRC stepping in to stabilize a chaotic, disintegrating USA.


Tue, 01/18/2011 - 17:02 | 885073 viahj
viahj's picture

This will only destroy soft tissue, living the infrastructure


yet, the infrastructure in this country is reaching it's designed life limits and is in woeful disrepair.  the joke is on them....

Tue, 01/18/2011 - 13:26 | 884341 topcallingtroll
topcallingtroll's picture

Jw you of all people i had hoped might help support st vincent if his civil judgment is greater than assets. Just five dollars a month....if in two years he loses everything will keep him from sucking a dick for a coke. They garnish your canteen funds if u have a judgment against u in federal prison. Five years without a coke.and some.cheese curls will.break any man. U r a fancy rich attorney. Give up one latte a month and the dollar tip to the temptress st vincent if we find his civil judgment exceeds assets. Peter schiffs father was a broken man after they garnished his canteen money.

Tue, 01/18/2011 - 13:30 | 884347 Salinger
Salinger's picture

Bob (Doll) and I part ways on the outlook (for equities) but we are old friends and colleagues and he is still worth listening to.


Rosie so you part ways with Bob on the equity outlook as the S&P approaches 1300.

You then say he is worth listening to well duhhh he's been equity bullish since the 666 suckers rally commenced.

Dave give it up, join weight watchers and then take a page from Doug Kass's bio  buy a little place in Florida and spend your time on the pundit circuit, who knows maybe even El Capitan Cramer would take you into the Treasure house where you could play the role of Dancing Bear.

Tue, 01/18/2011 - 13:30 | 884351 ghostfaceinvestah
ghostfaceinvestah's picture

Once again, he is wrong about the Fed: they will continue to print.  Once they see what happens to the markets and the economy when QE2 ends, they will have no choice.

Tue, 01/18/2011 - 13:36 | 884353 whatz that smell
whatz that smell's picture

david? zh blog.

goliath? pomo, ppt, hft, btfd, fed, bernanke, qe, wall street bonuses, groupthink, lemming juice, paint vapors, unicorn poop, rtrader, and hwanger.

now where the fuk did i put that slingshot?!

Tue, 01/18/2011 - 13:34 | 884357 TruthInSunshine
TruthInSunshine's picture

QEIII will set sail, come hell or high water.

The rapacious vampire squid won't stop dictating unless someone does something to stop it. There's a certainty in that equation.

Tue, 01/18/2011 - 13:37 | 884371 buzzsaw99
buzzsaw99's picture

Thanks for the comedy break.

Tue, 01/18/2011 - 13:40 | 884378 OMG
Tue, 01/18/2011 - 13:42 | 884380 OMG
Tue, 01/18/2011 - 13:43 | 884381 Savonarola
Savonarola's picture

Go into hiding Rosie !

Borgia spies and agents are everywhere.

Tue, 01/18/2011 - 14:10 | 884472 thepigman
thepigman's picture

Oh well... I'll just sit on the sidelines

while Israel is 60-90 days away from

being able to deploy their

fancy new bunker busters.

Tue, 01/18/2011 - 14:23 | 884506 Stuck on Zero
Stuck on Zero's picture

Who originated this magical: "The consumer is 70% of the U.S. GDP" figure?  Me seems to think it's the majician Ben to make the little people feel more empowered.  If you multiply the average paycheck by the  number of workers in the U.S. put in a multiplier effect and figure it out the consumer is really about 40-50% of the GDP at most.  Maybe the Feds think that when you are paying taxes you are adding to the GDP.  Anyone have an answer?

Tue, 01/18/2011 - 14:26 | 884514 UglyPatheticPauper
UglyPatheticPauper's picture

When do they run out of ink??

Tue, 01/18/2011 - 14:29 | 884525 Gimp
Gimp's picture

The QE logic is if an individual just keeps opening up new lines of credit (CC) then he will never run out of money? Great plan.

Tue, 01/18/2011 - 14:30 | 884529 Logans_Run
Logans_Run's picture

One has to wonder when the benbernank encounters his Waterloo? This can't possibly go on forever. The bad debt is not being flushed from the system. Capital is still chasing hot assets like commodities. I have to believe that sooner or later rates begin a dramatic rise and the bond vigilantes say enough.

Tue, 01/18/2011 - 14:31 | 884534 Caviar Emptor
Caviar Emptor's picture

Tunisian first lady Ben Ali absconds with 1.5 Tons of Gold.

No fools, these dictators ;-)

US and France trying to hush the story

Tue, 01/18/2011 - 14:36 | 884542 PenchantForHoarding
PenchantForHoarding's picture


Tue, 01/18/2011 - 14:44 | 884588 Caviar Emptor
Caviar Emptor's picture

Every turn of the QE rack just adds to the simultaneous forces of inflation and deflation pulling the middle class apart. THe policy is now officially stuck in a vicious cycle where pride and worship of the idol gods of Friedman style Monetarism have become an obsession despite glaring evidence that the world is on the verge of a cliff of economic and political turmoil and the US is burning up what's left of wealth and credibility. 

I've pointed this out for over a year: Main Street will burn, Wall Street will turn. On main street employment, real income and housing continue to deflate. The old credit bubble can't be reflated. But cost inputs for business and cost of living inputs for consumers are beginning to sprout wings here and world wide. And CPI will never register that depth of the problem because housing related costs are over 40% of the index. 

The policy is screwing over our major allies: UK CPI came in at 3.7%, another step in progress over the red line of 3%. More alarming, there are already some records being set: Food and energy had their biggest one month rise in UK history. 

World wide revolts are only the tip of an iceberg that could collide with US economic and political interests. I will say it here: this has reached the proportion of a national emergency. There is the risk of major breaches of alliances and accords that will not only upset US political hegemony but destabilize the global economy and drag down the US economy as well. Not talking about a recession. Talking about a black period of economic chaos. 

Tue, 01/18/2011 - 15:03 | 884650 DoChenRollingBearing
DoChenRollingBearing's picture

Caviar Emptor always adds value to ZH threads.

Since Few ZH-ers are policy makers (I presume), it is up to each of us to prepare!  Even if there is only a 10% (say) risk of something really ugly, it makes sense to buy gold, etc.

Tue, 01/18/2011 - 18:22 | 885424 PhattyBuoy
PhattyBuoy's picture


Tue, 01/18/2011 - 14:59 | 884639 Hal n back
Hal n back's picture

since taxes are not included in CPI--the extra 2.25% tax in Illinois amounts to a real 2.25% inflationary increase for me and probably others.


How do the boyz figure that in?


BTW--I think GDP is suppossed to be net of inflation and if inflation (CPI in their lingo) is understated then GDP is overstated, hence why we do not see growth occuring all over the place.





Tue, 01/18/2011 - 14:59 | 884641 Hal n back
Hal n back's picture

since taxes are not included in CPI--the extra 2.25% tax in Illinois amounts to a real 2.25% inflationary increase for me and probably others.


How do the boyz figure that in?


BTW--I think GDP is suppossed to be net of inflation and if inflation (CPI in their lingo) is understated then GDP is overstated, hence why we do not see growth occuring all over the place.





Tue, 01/18/2011 - 15:19 | 884695 CrashisOptimistic
CrashisOptimistic's picture

Excellent quality analysis that makes the same error all economic analysis makes -- because they all learned from the same textbooks.

Namely, the presumption that if you increase the price of something, more of it will appear.

This is their error.  Rosenburg, like the rest, think oil is moving in price only because the dollar loses value, not because oil gets more scarce regardless of price.

Oh well.

Tue, 01/18/2011 - 20:26 | 885781 Bicycle Repairman
Bicycle Repairman's picture

Short answer: Probability of a new round of QE?  100%.  In fact it is ongoing.

Tue, 01/18/2011 - 20:29 | 885788 cosmictrainwreck
cosmictrainwreck's picture

thanks, Repairman....saved me the trouble of plowing thru all that horseshit :)

Tue, 01/18/2011 - 21:18 | 885921 Buck Johnson
Buck Johnson's picture

We will have another QE this year, just you watch.  This game is only about buying time until things get better and/or they can come up with something that will work.  It won't work, and eventually we will have to make one of two hard decisions.  We either cut everything and go into severe austerity (which won't happen) or we allow inflation to go rampant and it goes into hyperinflation.  I think our politicians will go the inflation route and try to blame it on everything but themselves.  Because they know if they make those severe cuts, it will point to them.  But if they allow inflation and almost hyperinflation, then they know most of America is dumbed down and they can find a boogeyman for them to blame.

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