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St. Louis Fed Stunner: Admits QE May Lead To Rise Rather Than Drop In Unemployment

Tyler Durden's picture





 

It's one thing for bloggers and even various non-mainstream economists to charge the Fed with pandering exclusively to Wall Street's interests, and accuse Ben Bernanke of hypocrisy when he says that the Fed's ultimate goal is the strengthening of the economy through a decrease in unemployment (recall that one of the original two mandates of the Fed is "maximum employment"... that is until it was supplanted by the third and only one: "Russell 2000 to 2000") and caring for "lower-income households." It is something far more serious when the one doing the accusing is... the Federal Reserve. In a seminal paper which we are convinced will make the rounds the next time the puppetmaster is undergoing his periodic grilling by Congressional and Senate critters, Yi Wen of the St. Louis Fed indicates that the entire experiment in increasing the adjusted monetary base by $2 trillion in 2 years is not only not benefiting the economy, but is in fact having an adverse impact on such key economic drivers as unemployment. To wit: "permanent increases in the monetary base foreshadow eventual increases in inflation that can increase, rather than reduce, unemployment over the long term." We wonder if Bernanke knew in advance that LSAP (aka QE2) had a statistically greater chance of resulting in greater unemployment, and thus more pain for the working class, and if the only offset, a doubling in the stock market when ever more capital is diverted from organic economic growth to pursuing speculative risk, was important enough for the Fed to effective replace its employment mandate with one of stock market manipulation?

Here is how the St. Louis Fed confirms that the Chairman is nothing but a puppet in the hands of Wall Street:

The impact of LSAP programs on economic activity depends on the programs’ effects on longer-term interest rates and the responsiveness of aggregate demand to such changes. The St. Louis-based consulting and forecasting firm Macroeconomic Advisers recently estimated that the Federal Open Market Committee’s current $600 billion LSAP program likely will reduce the 10-year Treasury yield by 20 basis points, increase the eight-quarter-ahead level of real gross domestic product by 0.4 percentage points, reduce the unemployment rate by 0.2 percentage points, and increase employment by 350,000 jobs. Although analyses conducted by other institutions (such as the Boston and San Francisco Feds) have suggested slightly higher figures, the overall effect of the LSAP programs on unemployment is modest.

A less-recognized risk in LSAP programs is that permanent increases in the monetary base foreshadow eventual increases in inflation that can increase, rather than reduce, unemployment over the long term. David Ranson of Wainwright Economics has analyzed the U.S. data over the period of 1950 through 2007. Ranson divided the 57-year period into two categories: years when the monetary base grew at an above-average rate (8.1 percent) and years when it grew at a below-average rate (3.5 percent).

And the stunners:

Ironically, economic growth was higher in the years of slow money growth (3.7 percent) than it was in the years of rapid growth (3.2 percent). The same was true for industrial production. Meanwhile, the consumer price index rose 5.1 percent in years of above-average monetary growth and just 2.6 per- cent in below-average years.

It is, in fact, as we have always expected: QE not only does not result in relative economic outperformence (the opposite), it simply leads to higher inflation, and subdued economic growth. And the Chairman of the Federal Reserve was not aware of this data?

And while this too is more than obvious, anyone could have foreseen the impact QE/LSAP would have on precious metals:

The gold price showed an even bigger differential, rising 12.5 percent in above-average years and just 0.6 percent in below-average years.

Perhaps the above explains why we have been bullish on the precious metals complex since March 18, 2009 (official start of QE1). Alternatively it may just be our long-running bet that Bernanke will fail in his attempt at instituting central planning effectively, and the outcome will be the end of the monetary system in its current iteration.

And before skeptics accuse the St Louis Fed, which has sometimes been defined as hawkish (although we have yet to see James Bullard vote in the "against" column during an FOMC decision), this is a finding that has been replicated elsewhere on not just one occasion.

Other recent analyses, using different tools, have reached similar conclusions. In my current research, I have esti- mated models for the period 1948:Q1 to 2008:Q2 that sug- gest that a sustained increase of 1 percentage point in the growth rate of the monetary base has almost no impact on unemployment during the initial 20 quarters but can significantly increase the unemployment rate in the longer run (say, during the subsequent 20 quarters). Extrapolated to the very long run, my analysis suggests that a sustained 1-percent-per-year faster growth of the monetary base might increase the unemployment rate by between 1.0 and 2.2 percentage points. The reason is that expected long-term inflation is bad for growth and employment.

A recent article in the American Economic Review docu- mented a similar positive relationship between longer-term inflation and the unemployment rate (Berentsen, Menzio, and Wright, 2011). These authors use a search-and-matching model to explain why longer-term inflation can increase, rather than decrease, the unemployment rate. That is, inflation reduces the demand for money and, hence, hinders trade and the probability of matches in both the goods and labor markets.

The conclusion is obvious:

In summary, the near-term effects of LSAP programs on unemployment remain uncertain. Further, caution must be exercised such that long-term inflation does not increase. More and more economic research suggests that the long- run costs of inflation, measured in welfare terms, are likely higher than previously estimated (see Wen, 2010). Fortunately, at least one recent cross-country study (Anderson, Gascon, and Liu, 2010) suggests that this long-run lesson is well understood by policymakers.

Alas, unfortunately, the author is wrong. Policymakers, neither of the fiscal nor monetary variety have any care for what the long-term costs of inflation are for the general population. The only determinant is how far is the S&P has risen in any given electoral cycle. After all it is so much easier to manipulate the stock market than the economy. Which is why Bernanke is nothing more than an enabler of market manipulative political posturing... and Wall Street greed naturally: the one certain side effect of the R2K@2K is another year of record bonuses on Wall Street.

h/t Nolsgrad

 


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Sat, 04/30/2011 - 09:56 | Link to Comment Dick Darlington
Dick Darlington's picture

Smells like someone's gonna feel the wrath of the chaircreature very soon. In totalitarian (monetary)system there's only one "truth" and that is the chairsatan's.

Sat, 04/30/2011 - 10:02 | Link to Comment Texas Gunslinger
Texas Gunslinger's picture

What is a chairSATAN and chaircreature?

That sounds incredibly evil.  

There is so much evil around us, it is overwhelming. I know that the Lord has brought me here for a reason, and it seems like I will be very busy in the next year.  Lot's of evil to purge. 

ALERT!  

DOG FOOD PRICES AT WALMART ARE THE SAME AS LAST WEEK! WILL REPORT AGAIN NEXT SATURDAY.  

 

Sat, 04/30/2011 - 10:04 | Link to Comment redpill
redpill's picture

You're just a troll afterall?

Sat, 04/30/2011 - 10:19 | Link to Comment Subprime JD
Subprime JD's picture

I think he's harmless. Sounds like a enthusiastic christian that's recently taken the red pill.

Sat, 04/30/2011 - 10:26 | Link to Comment narapoiddyslexia
narapoiddyslexia's picture

troll, probably sovereign psyops, maybe even wholly or partially AI, intended to divert the discussion away from pms

Sat, 04/30/2011 - 22:51 | Link to Comment StychoKiller
StychoKiller's picture

Either that, or an ignorant child...

Sun, 05/01/2011 - 11:59 | Link to Comment Harlequin001
Harlequin001's picture

No one is that fucking stupid. To even contemplate trading in pm's with this little understanding of anything belies belief.

Who is it, Math man, Spalding or Dangertwat?

Do us a favour for Christ's sake, stop hiding behind religion and trying to ingratiate yourself and say what you mean.

Does he really expect us to believe he intends to trade pm's having never even heard of Sprott? I couldn't care less if he's a bear or a troll because it all adds to the flavour, it's the downright intent to mislead that really pisses me off.

Sat, 04/30/2011 - 10:17 | Link to Comment Pool Shark
Pool Shark's picture

 

And a bipolar troll at that...

 

Sat, 04/30/2011 - 19:08 | Link to Comment contagiousNY
contagiousNY's picture

but not smart enough to be a troll, just a waster of time/space. starve the fool, feed the fever.

Sat, 04/30/2011 - 10:20 | Link to Comment Texas Gunslinger
Texas Gunslinger's picture

NO!

Being proud of my Christian faith is not the same as being a troll.  Perhaps if you weren't an atheist, you would understand the overwhelming desire to spread the happiness of the Word of Christ, too. 

Jesus brought me to this website for a reason.  Everything happens for a reason.  And given the hostility displayed to me the other night regarding Christianity, and given the overall tone of hostility that I see in the comments section, it has become obvious why Jesus sent me here. Yesterday, I spent most of the day researching this website, and all the comments in the comments section.  SO MUCH HOSTILITY!  SO MUCH ANGER!  The devil has overwhelmed this place. 

Does that explain it?  

Jesus loves you, and if you open the Bible and open your heart, you won't be filled with such hostility and cynicism.  So much hostility here, and not just at me.  It is everywhere.  Jesus wants this changed, and I will try to do my best. 

 

Sat, 04/30/2011 - 10:22 | Link to Comment Spastica Rex
Spastica Rex's picture

5/10

Sat, 04/30/2011 - 10:48 | Link to Comment tmosley
tmosley's picture

This guy's trolling is true art.

He's GOT to be from 4chan.

Hey Texas:  if you think THIS place is bad, go to 4chan.org and their "random" board /b/.

 

Sat, 04/30/2011 - 10:54 | Link to Comment Spastica Rex
Spastica Rex's picture

I don't think he's that good. Maybe it's just a style thing. I like trolls that slowly work you up and then >>>BAM!<< This one is all BAM at the very beginning; no build up. I do like the over-the top mental illness flavor, but I just don't buy the whole package. Again, probably just a difference in taste.

Sat, 04/30/2011 - 11:28 | Link to Comment tmosley
tmosley's picture

His is more artistic.  He starts out by making you think he's an obvious troll, then he made ME doubt it, and kept switching between the two, creating a state of utter confusion.

THAT is MIXIMUM TROLLING: http://i640.photobucket.com/albums/uu122/Zanshou/1270163965597.png

Sat, 04/30/2011 - 11:44 | Link to Comment Spastica Rex
Spastica Rex's picture

Yes! I see now; the subtlety exists at a meta level! Thanks!

And people claim that art-appreciation has no real value.

Sat, 04/30/2011 - 11:43 | Link to Comment Texas Gunslinger
Texas Gunslinger's picture

From reading your posts in the past few days, you seem to be one of the most evil and hostile people here.  Full of hatred. 

Don't you want to change your life for the better?  

Libtard.  

 

Sat, 04/30/2011 - 12:26 | Link to Comment tmosley
tmosley's picture

Now now now.  You were doing so well.  Your words were sweet eligance, but now you shove in a hamfisted insult ("Libtard"--the others were pretty good)?

Bad form.

Sat, 04/30/2011 - 14:33 | Link to Comment Chuck Walla
Chuck Walla's picture

Judge not there, Tex. Or didn't your religion take you that far just yet?

Sat, 04/30/2011 - 19:14 | Link to Comment contagiousNY
contagiousNY's picture

and now to liar we can add... hypocrite! keep spewing, tex.

Sat, 04/30/2011 - 21:58 | Link to Comment dugorama
dugorama's picture

christian = gunslinger?

Sat, 04/30/2011 - 13:07 | Link to Comment ColonelCooper
ColonelCooper's picture

Mosley - I think we're dealing with someone more like this:

http://www.fakeposters.com/posters/cybersex/

Sun, 05/01/2011 - 12:04 | Link to Comment Harlequin001
Harlequin001's picture

That is one ugly mutha who should be shot on sight...

just for being ugly...

Sat, 04/30/2011 - 11:44 | Link to Comment High Plains Drifter
High Plains Drifter's picture

4chan?  naw..........

ebaumsworld.......for sure..........ha ha ha

 

Sat, 04/30/2011 - 12:27 | Link to Comment tmosley
tmosley's picture

Exactly.

Sat, 04/30/2011 - 10:28 | Link to Comment duncecap rack
duncecap rack's picture

The anger and hostility are directed at the PTB who have allowed a vibrant society to devolve into a collection of hapless victims. If you purposefully denigrate the righteous anger of the people who understand that their security and wellbeing are disolving in front their eyes of course you will be attacked.

Sat, 04/30/2011 - 10:31 | Link to Comment Texas Gunslinger
Texas Gunslinger's picture

I can understand the anger displayed at thieves on Wall Street, but I cannot understand all the anger and hostility that is directed toward each other here, at this site. 

If one just takes a moment to read the comments section of any article, it seems to always devolve into a tirade of vulgarities directed at EACH OTHER.  This is so sad.  This makes me feel like the devil has fully permeated this place, and somehow I must do my part to stop it. 

We are all in this fight together.  Why are we fighting ourselves?

Sat, 04/30/2011 - 10:42 | Link to Comment duncecap rack
duncecap rack's picture

I think you were out of line with the dog food remark. Inflation is real. I do however agree with the personal attack thing. I prefer to think of Bernanke as someone who is chasing his losses out of panic rather than someone who operates with malice aforethought. I have made a mess of my personal finances by chasing losses and other miscalculations. I certainly didn't mean to do it. It just was the panic of trying to defend my original thinking that made me lose.

Sat, 04/30/2011 - 10:43 | Link to Comment Spastica Rex
Spastica Rex's picture

This makes me feel like the devil has fully permeated this place, and somehow I must do my part to stop it. 

This doesn't work. It's like a too-big clown nose; not funny, just distracting. You have to learn to pull your punches a little bit. Subtlety, brother. Sometimes less is more. Go watch some old Buster Keaton and come back and try again.

5/10

Sat, 04/30/2011 - 11:08 | Link to Comment fuu
fuu's picture

http://www.zerohedge.com/article/bernanke-starts-talking-gold-surges-pas...

"My personal projection for gold is $3200, so long term I'm very bearish about it - as long as Bernanke keeps printing, gold and silver will probably rise. I've done a lot of research on this, and my coin dealer has confirmed all my research, to."

http://www.zerohedge.com/article/more-americans-think-america-depression...

"Why would you post the planks of the Communist Manifesto? YOU COMMUNIST! WHAT IS WRONG WITH YOU PEOPLE? THIS IS AMERICA! DAMNIT! I WILL NOT ALLOW YOU TO PERVERT MY COUNTRY WITH YOUR SOCIALIST PROGRESSIVE AGENDAS! GO BACK TO RUSSIA!"

http://www.zerohedge.com/article/more-americans-think-america-depression...

"Another communist libtard! Are you a homosexual, too? "

http://www.zerohedge.com/article/more-americans-think-america-depression...

"Obviously, none of you know nothing about history - America was founded on, and continues to be a CHRISTIAN NATION! That ain't something you gonna change, you devil worshipping lost soul!"

http://www.zerohedge.com/article/more-americans-think-america-depression...

"And I firmly believe the fact that Christianity is openly mocked and ridiculed in America plays a role in our economic collapse. When you lose Christ in your life, you lose your rudder. And, speaking in metaphors, America has lost her rudder. "

http://www.zerohedge.com/article/another-day-another-all-time-high-gold-...

"You say the gold bubble is going to pop? That makes me worried! Should I sell my gold, and buy it back when it goes for the dip?"

http://www.zerohedge.com/article/another-day-another-all-time-high-gold-...

"My coin dealer (who is a god of knowledge!) told me to keep the gold forever. But I see gold making new higher prices all the time, and I read lots of comments about gold being in a bubble, so it makes me feel like maybe I should sell and buy it back when it does a dip. "

http://www.zerohedge.com/article/another-day-another-all-time-high-gold-...

"The more these libtards get cross with me, the more I want to stay. I've always been a fighter, and I ain't backing down to a bunch of rude internet libtards who are probably homosexuals in disguise. If your heart is not in the right place, people do irrational things and act in an irrational manner. It's always so easy to see who is a libtard, and who isn't. "

http://www.zerohedge.com/article/second-silver-margin-hike-one-week-now-...

"Can someone explain to me what a margin hike is, and why this is relevant to the silver eagles I bought last month? Can I assume that margin means "profit margin" and those people who sell silver are now allowed to make more money?"

http://www.zerohedge.com/article/how-comex-lost-20-its-registered-silver...

"I'm just a simple man trying to learn what happened to my country, and what I can do to get her back to the days before Obummer and his socialist agenda. I'm mad. I'm armed, and ain't no one going to take my country, especially an African. "

http://www.zerohedge.com/article/cool-itooldid-south-park-just-hack-appl...

"This video is PURE EVIL, and has nothing to do with Wall Street or precious metals. DO NOT WATCH! So much evil here....."

http://www.zerohedge.com/article/letter-congress#comment-1223139

"I'M NOT A TROLL."

Bullshit.

Sat, 04/30/2011 - 11:18 | Link to Comment Texas Gunslinger
Texas Gunslinger's picture

That was a huge effort for nothing. 

Just because you read the operations manual for MS Windows, and have mastered the copy/paste function does not mean I'm a troll. 

 

Sat, 04/30/2011 - 11:22 | Link to Comment fuu
fuu's picture

It's no effort really, the script does all the work.

Sat, 04/30/2011 - 13:25 | Link to Comment Raynja
Raynja's picture

Thank you fuu for highlighting the ignorant hate texas shits out.

Sat, 04/30/2011 - 12:54 | Link to Comment ColonelCooper
ColonelCooper's picture

Two choices:

1). - You are a troll, and we will get hours of entertainment from your satire, then you will get tiresome and we will stop responding to you.  You, like all the others, will get bored and leave.  If you are good enough, (and I think you are), you will leave a legacy we will refer to until TPTB hit the internet kill switch.

2). - You really are the overzealous asshole you pretend to be, we will get hours of entertainment from your efforts to save us from ourselves, then you will get tiresome and we will stop responding to you.  When you can no longer elicit reaction from the crowd, you will get bored and leave.  We will continue to refer to your past participation whenever referencing the, "ZH Douchebag Hall of Fame".

Either way, your time here is short lived. 

Sat, 04/30/2011 - 11:19 | Link to Comment Strike Back
Strike Back's picture

Excellent outing.  These types (or agents) troll here for one reason: to paint the entire comment section as an extreme right wing, racist and violent.  "Texas" goes one step further and encourages the ignorant to sell their PMs now, talking up a top.  I think that white nationalist Holomodor is one too.

Sat, 04/30/2011 - 12:22 | Link to Comment Hephasteus
Hephasteus's picture

He's just so bad at it. I mean it couldn't have been this easy before people started fracturing off the collective conciousness. You couldn't just go make some stupid calls and say you own a ferrari and get people to follow you like a duckling who imprinted on you. Could you?

Or get people to start stupid fights over religion or tv personalities.

Sat, 04/30/2011 - 12:35 | Link to Comment tmosley
tmosley's picture

I think he is different from the anti-PM trolls.  This guy doesn't really have an objective--no real agenda.  He's just doing it for the lulz, as it were.

He might be trying to paint the community in the way you say, but I'm not sure about that.  Too over the top at times, while at others he sounds just like anyone else here.

Sat, 04/30/2011 - 12:55 | Link to Comment fuu
fuu's picture

Pretty sure he is also BillyTheBlade.

Sat, 04/30/2011 - 19:18 | Link to Comment contagiousNY
contagiousNY's picture

Impressive collection of dumbass remarks. What a laff, thanks. Keep up the good works!

Sat, 04/30/2011 - 22:28 | Link to Comment Bolweevil
Bolweevil's picture

wow.

thanks fuu

Sat, 04/30/2011 - 11:17 | Link to Comment schizo321437
schizo321437's picture

Friendship is transitory.

Sat, 04/30/2011 - 13:32 | Link to Comment Hulk
Hulk's picture

i hate you 
you love me 
I'm going to kill your family 
with a great big gun
and a 168 grain slug from me 2 you 
wont you say you hate me 2 
i hate you ...

Sat, 04/30/2011 - 13:35 | Link to Comment ColonelCooper
ColonelCooper's picture

Wow, Hulk.  I seldom see you display such vehemence.  Just blew your shirt off didn't you, Big Guy?

Good one, BTW.

Sat, 04/30/2011 - 13:55 | Link to Comment Hulk
Hulk's picture

Beware of happy christians wearing phony smiles Colonel!

 

Sat, 04/30/2011 - 14:02 | Link to Comment ColonelCooper
ColonelCooper's picture

++++.  Sage advice.

Sat, 04/30/2011 - 22:59 | Link to Comment StychoKiller
StychoKiller's picture

"Have you heard about the Lord?  Before I heard about the Lord, I was all messed up on drugs; but since I found the Lord, now I'm all messed up on the Lord!" -- Cheech&Chong, "Bic-Bambu"

Sat, 04/30/2011 - 19:23 | Link to Comment contagiousNY
contagiousNY's picture

B-B-Baarnnney? You OK?

Sat, 04/30/2011 - 21:27 | Link to Comment Hulk
Hulk's picture

Its been my life's ambition to use the Barney song in a threatening manner! 

Sat, 04/30/2011 - 23:02 | Link to Comment StychoKiller
StychoKiller's picture

"I shove you, you shove me...you get Georgy's special knee!" -- Georgy, "The Dinosaurs"

Sat, 04/30/2011 - 10:38 | Link to Comment High Plains Drifter
High Plains Drifter's picture

do you believe the present state of israel has a right to exist?

 

also

 

do you believe the jews of today are God's chosen people?

 

 

a simple answer is suffice.

 

then we can sort you out real fast......

Sat, 04/30/2011 - 10:48 | Link to Comment Texas Gunslinger
Texas Gunslinger's picture

Everyone has a RIGHT to exist.  What sort of question is that?  Everyone has a RIGHT to live their life however they wish.  Some paths lead to community, happiness virtue and harmony, while other paths lead to hostility, conflict, immorality and violence.  Ultimately the choice is ours.  

And NO.  The Jews are NOT God's chosen people, especially those unethical Jews who nickel and dime this ponzi economy they helped create. Just look where so much of the evil and violence exists in this world, and that should give you some idea if God thinks the Jews are His chosen people.   

Sat, 04/30/2011 - 10:59 | Link to Comment High Plains Drifter
High Plains Drifter's picture

what church do you go to?

Sat, 04/30/2011 - 14:39 | Link to Comment Chuck Walla
Chuck Walla's picture

I'm guessing Westboro Baptist by the bat shit nuttiness flowing forth.

Sat, 04/30/2011 - 10:48 | Link to Comment Hearst
Hearst's picture

Texas,  as a Christian also I like seeing you write about Jesus.  But remember forcing it down other people's throats is just as easy to do by typing it than saying it.  Christianity is a faith.  We live by faith.  I have found it is counter productive to push it on people and groups who have different faiths.  We believe we are correct.  We believe the Bible to be correct.  But like all other religions we have no proof.  Therefore I recommend you take a humble approach toward your witnessing and be respectful of others who may have been born and raised in a culture and belief system much different from yours.

Sat, 04/30/2011 - 11:06 | Link to Comment Texas Gunslinger
Texas Gunslinger's picture

I humbly respect your response. 

Normally, I'm much more subtle in my approach.  But there is nothing subtle about this place. I'm not sure if you read the comments under these articles, but they are riddled with over-the-top hostility and evil.  The way people treat each other here is straight from the devil's playbook.  This place is infested with evil, and I doubt that subtlety would do much of anything here. 

Sat, 04/30/2011 - 11:20 | Link to Comment Hearst
Hearst's picture

Tex, come on.. we're all infested with some evil.  That's the point.  Take it like a man, try and change your ways, and be respectful of other people.  This isn't a church forum and from the few months I've been here I've noticed a diverse crowd that joins in the discussion that I appreciate reading.  There's always going to be trolls and cocksuckers but just ignore them and enjoy this kick ass blog that Tyler's put together for our edification.   

Sat, 04/30/2011 - 11:36 | Link to Comment i-dog
i-dog's picture

It's Fight Club, dickhead! Go to the Ladies Guild to spread your message of love and understanding. Here we go for the junk if you post off-topic nonsense.

Sat, 04/30/2011 - 11:39 | Link to Comment Texas Gunslinger
Texas Gunslinger's picture

edit out, since you just changed your post. 

Sat, 04/30/2011 - 13:00 | Link to Comment ColonelCooper
ColonelCooper's picture

Pot, meet Kettle.

Sat, 04/30/2011 - 14:05 | Link to Comment I only kill chi...
I only kill chickens and wheat's picture

Is this a stain on Texans, and Gunslingers. What kind of weapon do you sling. Know the difference between your gun, and a weapon. Repeat after me Tex, this is my weapon, this is for fighting, this is my gun, this is for fun.

Sat, 04/30/2011 - 11:39 | Link to Comment High Plains Drifter
High Plains Drifter's picture

its fight club numbnutts.  take a chill pill.

 

have you met travis yet????

 

Sat, 04/30/2011 - 13:09 | Link to Comment Flakmeister
Flakmeister's picture

We might just be able to charge admission for that one....

Sat, 04/30/2011 - 18:52 | Link to Comment sherryw
sherryw's picture

hahahaha!

Sat, 04/30/2011 - 22:34 | Link to Comment Bolweevil
Bolweevil's picture

lol. "travis is gonna shit, then he's gonna kill him."

Sat, 04/30/2011 - 23:15 | Link to Comment StychoKiller
StychoKiller's picture

"[to the police chief] Hi.  You're going to call off your rigorous investigation.  You're going to publicly state that there is no underground group.  Or... these guys are going to take your balls.  They're going to send one to the New York Times, one to the LA Times press-release style.  Look, the people you are after are the people you depend on.  We cook your meals, we haul your trash, we connect your calls, we drive your ambulances.  We guard you while you sleep.  Do not... fuck with us" -- Tyler Durden

Sat, 04/30/2011 - 11:32 | Link to Comment Green Leader
Green Leader's picture

The ones you are referring to are just plain feeble minded, hostile materialistic losers skilled at stocks trading.

Only those receiving direct revelation from the Holy Spirit will be able to face what's just begun to unfold.

Like Vivek (ORI) says, "The meek shall inherit the earth while the geek die trying."

Shalom Shabat

 

Sat, 04/30/2011 - 11:44 | Link to Comment High Plains Drifter
High Plains Drifter's picture

what does   shalom    mean?

Sun, 05/01/2011 - 15:39 | Link to Comment Green Leader
Green Leader's picture

You are intelligent, therefore this should help see the light and then the distinction: 

Shalom (???????) (Sephardic Hebrew/Israeli Hebrew: Shalom; Ashkenazi Hebrew/Yiddish: Sholem, Shoilem, Shulem) is a Hebrew word meaning peace, completeness, and welfare and can be used idiomatically to mean both hello and goodbye.[1][2][3] As it does in English, it can refer to either peace between two entities (especially between man and God or between two countries), or to the well-being, welfare or safety of an individual or a group of individuals. The word is also found in many other expressions and names. Its equivalent cognate in Arabic is salaam, sliem in Maltese, Shlama (????) in Syriac-Assyrian and sälam in Ethiopian Semitic languages from the Proto-Semitic root S-L-M.

Sat, 04/30/2011 - 11:52 | Link to Comment vxpatel
vxpatel's picture

dude...get your father issues in check....jesus is not the answer....

Sat, 04/30/2011 - 12:48 | Link to Comment Temporalist
Temporalist's picture

Of course Jesus is the answer.  Examples:

2+2=Jesus

How do I tie my shoe = Jesus

How do I get to Carnegie Hall = Jesus

Where do babies come from = Jesus

Why is the sky blue = Jesus

How do I change a flat tire = Jesus

The only other response possible is of course Satan because one can't answer questions about Jesus without his eternal enemy, who was incidentally created by an infallible omnipotent bearded man (sounds like someone you know) , being the sole other answer.

Who is Jesus the enemy of = Satan

Why was there a tsunami = Satan

Where do earthquakes come from = Satan

Where do presents come from on Christmas = Santa

Ha!  Gotcha!

Sun, 05/01/2011 - 12:17 | Link to Comment Harlequin001
Harlequin001's picture

and as General George C Custer was heard to remark at the Battle of the Little Big Horn...

'Jesus, look at all those fucking indians...

Sat, 04/30/2011 - 12:43 | Link to Comment Temporalist
Temporalist's picture

I feel the overwhelming desire to spread .45 ACP Valtentine's Day style on your proselytizing ass!

Jesus invented the internet just for you.

I have a question:

If Jeebus wanted to save humans and was able to take sins upon himself for mankind why didn't he commit genocide and bring everyone to heaven?  That way he's got all the sin and everyone else is at the seat of god; problems solved and we're all fucking angels with no war, starvation, poverty and the planet isn't getting defaced and abused.

Sat, 04/30/2011 - 16:59 | Link to Comment Seer
Seer's picture

Wow!  My head is spinning.  I'm still trying to figure out how come men have nipples...

Oh, that and how if Jesus is Lord then who is the Lord?  And, wasn't Jesus' crucifixion something predictable?  If so, then wasn't it suicide by Roman?  Noting, of course, that the Lord condemns suicide.

OK, one other thing that's really bugging me, and that's the issue of the "virgin birth."  History has come up with quite a few of these, in which case it's not all that uncommon (that would be the nice way of putting it, as otherwise it would be, you know, a completely made-up story).

All this said, if it makes you live a better life (whithout being one of those voices in your head that tells you to run out and kill others), then I'm all for it.

Lastly, let's give thanks to the creator for giving us the intelligent design of evolution.

Sat, 04/30/2011 - 23:20 | Link to Comment StychoKiller
StychoKiller's picture

I suggest you read "Paradise Lost", by John Milton

Sat, 04/30/2011 - 19:40 | Link to Comment XPolemic
XPolemic's picture

If Jeebus wanted to save humans and was able to take sins upon himself for mankind why didn't he commit genocide and bring everyone to heaven?

I guess he figured his followers would commit multiple genocides on his behalf, saving him the trouble.

 

 

Sat, 04/30/2011 - 13:32 | Link to Comment smlbizman
smlbizman's picture

your god and your money are one in the same....they both depend soley on faith, and without faith neither has any value....

Sat, 04/30/2011 - 14:57 | Link to Comment Teamtc321
Teamtc321's picture

TG, Chair=Ben Bernake.

Can I suggest something to you, do some reading here. Meaning, just spend some time reading through all post on topic's that are interesting to you. Not everyone here is an atheist at all. 

Not to be blunt or rude to you, but most people here have been following the world economic situation for a long time very very closely. I personally have built many company's from scratch. I personally have gained great knowledge from just reading what other's here on ZH have to say.  

There is a simple old saying that goes a long way, "sometimes you need to just listen to what others are saying."

Take it for what it's worth TG.

 

Sat, 04/30/2011 - 23:20 | Link to Comment StychoKiller
StychoKiller's picture

Two ears (two eyes, in this case), one mouth...'nuff said.

Sat, 04/30/2011 - 10:20 | Link to Comment narapoiddyslexia
narapoiddyslexia's picture

Correct. Sovereign psyops. Maybe even wholly or partially AI. 

Sat, 04/30/2011 - 10:24 | Link to Comment Spastica Rex
Spastica Rex's picture

It's performace art.

Really poor performace art.

Sat, 04/30/2011 - 10:15 | Link to Comment Spastica Rex
Spastica Rex's picture

4/10

Sat, 04/30/2011 - 10:17 | Link to Comment duncecap rack
duncecap rack's picture

The CEO of Walmart said they are likely to rise dickwad.

Sat, 04/30/2011 - 10:22 | Link to Comment sabra1
sabra1's picture

reason being, is dog food is not only for dogs anymore!

Sat, 04/30/2011 - 11:35 | Link to Comment DeadFred
DeadFred's picture

TG you are correct, there is a lot of evil but you will be busy for longer than a year.  Get ready for the long haul.  I doubt Bernanke is as evil as portrayed here but I don't doubt the system behind him is that diabolical.  You'll read a lot of hyperbole on this site and sometimes they get it totally wrong (last year they were calling for the stock market to crash and were blindsided at first by the way the Fed was able to buy off the market), BUT you will hear more truth here than other places if you have eyes to see and ears to hear.  Bring us the dogfood report every three months and begin to ask yourself where the truth is.

Sat, 04/30/2011 - 10:34 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

Texas Gunslinger ... member for 1 week and 8 hours ...

Draw your own conclusions ...

Sat, 04/30/2011 - 23:34 | Link to Comment OldPhart
OldPhart's picture

I gave you the benefit of doubt.  Benefit revoked.

 

Sun, 05/01/2011 - 03:23 | Link to Comment captcorona
captcorona's picture

After writing 5 paragraghs....a thumb bumb erased all my work for the last 1/2 hr..I hate my Wifes fucking laptop! BTW TEXAS GUNSLINGER is a useful idiot...IMO

Sat, 04/30/2011 - 10:02 | Link to Comment Lilguy
Lilguy's picture

Well, unlike Carville's famous, "it's the economy, stupid" remark, QE is about the stock market--which is as detached from economic reality as anything I've seen in quite some time.  So Ben is accomplishing his goal:  Preserving and expanding the wealth of the few, and screw the rest!

Sat, 04/30/2011 - 10:01 | Link to Comment Careless Whisper
Careless Whisper's picture

Now there's bigger things to worry about. Trey Parker and Matt Stone just downgraded AAPL to "not cool anymore". Southpark just destroyed Apple.

http://techcrunch.com/2011/04/28/south-park-scares-you-into-reading-appl...

 

 

Sat, 04/30/2011 - 10:20 | Link to Comment tarsubil
tarsubil's picture

Not enough for me. It didn't make Apple look as horrible as it really is.

Sat, 04/30/2011 - 10:24 | Link to Comment Pool Shark
Pool Shark's picture

 

Time to short AAPL.

aaaaand it's gone. It's gone, it's all gone...

 

Sat, 04/30/2011 - 10:01 | Link to Comment oogs66
oogs66's picture

Its obvious she is a Chinese spy and trying to trick us from abandoning our salvation of QEX

Sat, 04/30/2011 - 10:06 | Link to Comment redpill
redpill's picture

Curses! The commies strike again!

Sat, 04/30/2011 - 10:06 | Link to Comment redpill
redpill's picture

Ben called this morning and he would have gotten away with it if it wasn't for you meddling kids!

Rowkay Raggie!

Sat, 04/30/2011 - 10:09 | Link to Comment cherry picker
cherry picker's picture

This whole thing is orchestrated to prevent civil unrest and keep up appearances while making a little coin for themselves.

This will be the FED's undoing as well as the current administration for allowing it to happen.

 

Sat, 04/30/2011 - 10:11 | Link to Comment redpill
redpill's picture

I'm not so sure, I think the plan will be to stretch it out long enough so they can either find a scapegoat or pass it on to the next admin. Except for Ben. Ben really believes he can pull this one out with enough Keynesian magic money. A true believer.

Sat, 04/30/2011 - 10:15 | Link to Comment Hephasteus
Hephasteus's picture

No it's orchestrated to eliminate competition. You've noticed that many industries the dominant players have been kind of full of shit about earnings and sales or have been sucked up and nestled up to government bosoms. Then they crack the competition and put them under debt weights and allow them to exist just not take up too much market share or dominance.

Sat, 04/30/2011 - 10:07 | Link to Comment unwashedmass
unwashedmass's picture

You know, its fascinating watching this. Things are really, really bad now at the lower end. Hell, the CEO of Walmart came out and said his customers have no more money yesterday......and they are the vast majority....

so how does the media continue to conceal this as we move forward? how are they going to keep up the pretense of "recovery" with over 50M people eating courtesy of food stamps, and states going bankrupt......

its going to be a real test of the media and how deeply the public believes what it sees on TV....in other words, have they dumbed down the schools enough to pull this off?

Sat, 04/30/2011 - 14:01 | Link to Comment SME MOFO
SME MOFO's picture

good.  connect more dots. Why does JPM need sugar and copper?  Why is cargill selling mosaic?  Glencore IPO? Why don't they care about radiation or GOM pollution? arctic seed bank? depleted uranium munitions? Why is it necessary for stock prices to go up?  Why so many new IRS agents?  Why no new FBI agents for financial crimes?    If they already have everything, why are they working so hard to get something?  What is the flag they are trying to capture?

Sat, 04/30/2011 - 10:07 | Link to Comment Twindrives
Twindrives's picture

These FED monkey's, like their sponsor monkey Obama in the White House, are all having trouble keeping their lies straight.  Traitors all.  

Sat, 04/30/2011 - 10:12 | Link to Comment Misean
Misean's picture

"Ironically, economic growth was higher in the years of slow money growth (3.7 percent) than it was in the years of rapid growth (3.2 percent)."

Ironically?!?! Seriously?!?! You mean a pogrom of deliberate theft is a disincentive to work and invest in the future?!?! Really?!?! You mean the standard Keynsian LIE of robbing people by counterfeiting doesn't work even when the neandersheep don't quite understand HOW they're being robbed?!?! THE HORROR! I'm glad we have PH'ckDs like these chuckle heads to mathematistically prove such complex relationships.

Sat, 04/30/2011 - 10:11 | Link to Comment medicalstudent
medicalstudent's picture

we will take your money, take you life, and your cares will flap like a half filled nutsack in the wind.

Sat, 04/30/2011 - 10:14 | Link to Comment Dapper Dan
Dapper Dan's picture

WASHINGTON.   April 29 Kyoto.    Japanese Foreign Minister Takeakiy Matsumotoy and U.S. Secretary of State Hillary Clinton agreed Friday to cooperate to prevent helpfull information from spreading about Japan's farm produce due to the ongoing nuclear crisis in the country.

 

The two reached the accord as part of a secret public-private partnership initiative for the deconstruction of Japan, a framework that the two concealed when Clinton visited Tokyo on April 17.

 

Under the partnership, the two countries will do everything in their power prevent creditable and important information from reaching the public. No desire to restore international trust in Japan's goods supply chain to get its economy back on its feet in the wake of the March 11 earthquake and ensuing crisis at the Fukushima Daiichi nuclear power plant in northeastern Japan exist.

Hillary is preparing to occupy the entire first floor of the US consulate.  Her staff are to follow in the coming weeks.  An unknown and unreliable source stated that it will be 3-4 weeks before Mrs Clintons wardrobe of "tuff talk" clothes and shoes arrive.

 

Edited by Dapper.  

" secret public-private partnership initiative"    best quote ever!

Sat, 04/30/2011 - 10:19 | Link to Comment Minimum Clearance
Minimum Clearance's picture

Our "leaders" are a breath-taking combination of arrogance and incompetence, a bunch of dicks and fools.  Or else they really are purposefully driving this society into the abyss.....

Sat, 04/30/2011 - 10:17 | Link to Comment Dr. No
Dr. No's picture

The FED's mandate is to backstop the largest banks, not empolyment or inflation.  This is not a surprise.

Sat, 04/30/2011 - 10:21 | Link to Comment RobotTrader
RobotTrader's picture

Hands down, Bernanke will go down as the central banker who "pulled off a miracle" by being responsible for engineering one of the biggest, fastest stock market runs in history:

 

And for being responsible for causing some of the greatest individual stock rallies  of all time.  We will probably never see another opportunity like this in our lifetime to make huge amounts of money in a matter of mere months.

Unfortunately, the beneficiaries of this huge run were the fantastically rich PigMen, who now have even more cash to bribe, cajole, and pay off the Washington Plutocrats.  So the next time there is a financial "accident" or "convulsion", you can be rest assured that the money will be flowing into the pockets of the Fed Heads and the appropriate politicians.

On top of that, the Bernanke Fed is now the model for the rest of the world, and all other central bankers will be copying the QE programs any time financial markets need rescuing.

Think about it.

Who would have ever believed that back in 1980 when interest rates were 18% and the U.S. government was $1 trillion in the hole, that 30 years later, the debt would be 14x larger, we would be looking at interest rates like this??

  COUPON MATURITY
DATE
CURRENT
PRICE/YIELD
PRICE/YIELD
CHANGE
TIME 3-Month 0.000 07/28/2011 0.04
/
.04
0 / -.000 04/29 6-Month 0.000 10/27/2011 0.09
/
.09
-0.002 / -.002 04/29 12-Month 0.000 04/05/2012 0.18
/
.18
-0.008 / -.008 04/29 2-Year 0.625 04/30/2013 100-01½
/
.60
0-01 / -.016 04/29 3-Year 1.250 04/15/2014 100-24
/
.99
0-02+ / -.027 04/29 5-Year 2.000 04/30/2016 101-16+
/
1.97
0-04+ / -.030 04/29

 

And who would have thought that after the biggest financial bust in modern history, the SPX would rally over 100% with no increase in jobs, faltering GDP, an outright collapse in housing, and entire countries on the verge of default?

No doubt, there will be economics classes at the top business schools which will be documenting this financial engineering miracle.

And yes the dollar has tanked and PM prices have exploded, but who cares as long as we can still order McDoubles for $1, get $2 off on Whole Foods salad bar, buy the latest and greatest 3D LCD TV for $2,000, and still watch "Dancing With The Stars", "American Idol", and the NBA Playoffs?

Sat, 04/30/2011 - 10:23 | Link to Comment Spastica Rex
Spastica Rex's picture

Thanks for attaching all those images. I noticed your post this time. Hate to miss them.

Sat, 04/30/2011 - 10:31 | Link to Comment Pool Shark
Pool Shark's picture

 

Yeah, I hate to miss them too...

But, my aim is improving...

 

Sat, 04/30/2011 - 10:35 | Link to Comment Spastica Rex
Spastica Rex's picture

-- Drum Lick --

Sat, 04/30/2011 - 10:43 | Link to Comment topcallingtroll
topcallingtroll's picture

The image related to that comment is disgusting however.

Sat, 04/30/2011 - 10:44 | Link to Comment topcallingtroll
topcallingtroll's picture

Hey Bob

Has anybody else figured out that you are god yet?

Does no one recognize the great giver of slack anymore?

I could sure use some right now. Please grant me your blessing.

Sat, 04/30/2011 - 10:46 | Link to Comment Spastica Rex
Spastica Rex's picture

Hail Eris!! Praise Slack!!

Sat, 04/30/2011 - 12:13 | Link to Comment Ralphie
Ralphie's picture

All hail Discordia! "Fuck 'em if they can't take a joke."

Sat, 04/30/2011 - 10:39 | Link to Comment Rogerwilco
Rogerwilco's picture

Go ahead, rub it in Robo. I'll bet you whiled away hours as a kid burning ants with a magnifying glass.

Sat, 04/30/2011 - 10:38 | Link to Comment disabledvet
disabledvet's picture

but i like McDoubles.  No pickel.

Sat, 04/30/2011 - 10:39 | Link to Comment topcallingtroll
topcallingtroll's picture

Now this is the old robotrader of legend and yore.
Love the pics.
Leave the trolling to me.

Sat, 04/30/2011 - 11:09 | Link to Comment DeadFred
DeadFred's picture

This history is only half done.  When the text books are written what will they say?  I bet these graphs will be included in a chapter on the trailing nature of inflation in monetary expansion.  It does look pretty now but I doubt it ends well.

Sat, 04/30/2011 - 12:44 | Link to Comment Seer
Seer's picture

In the future resources will be so precious that this crap will NEVER be written.  Further, since the next glacial period is about to commence (it's overdue), ANY "records" will be thoroughly composted, and only scribblings on cave walls will provide any traces of what we have done (and these will be hopelessly misunderstood/unrecognized to avert another bout of stupidity).

Sat, 04/30/2011 - 10:55 | Link to Comment bonddude
bonddude's picture

What of constant dollar terms? Versus PMs ?

Sat, 04/30/2011 - 11:20 | Link to Comment cocoablini
cocoablini's picture

It will be copied, if it doesn't get him into a bond vigilante trap and another freefall.
I agree, the stock markets are rigged- all of them now. The stock market is as high as it was during the credit explosion and go-go years. Makes no sense and demeans the value of investing. We are seeing the end of the stock market as an investment tool for the US? Nobody trusts it and if they did, they get fleeced in nanoseconds.
Love the Bollinger curves on those pix

Sat, 04/30/2011 - 12:28 | Link to Comment Hephasteus
Hephasteus's picture

"pulled off a miracle" by being responsible for engineering one of the biggest, fastest stock market runs in history:"

You mean besides that wiemar germany thing and that zimbabwe thing.

Sat, 04/30/2011 - 14:23 | Link to Comment linrom
linrom's picture

This post should be kept for posterity sake. Future generations will not believe what has happened! This is not just like Marie Antoinette saying "let them eat cake", this like saying let them eat APPL stock certificates.

Sat, 04/30/2011 - 19:24 | Link to Comment Ham Wallet
Ham Wallet's picture

NBA playoffs; the only other thing more rigged than the markets.  Shocking that Robo watches them.

Sat, 04/30/2011 - 10:27 | Link to Comment sabra1
sabra1's picture

and, dog food has not gone up in price!

Sat, 04/30/2011 - 10:41 | Link to Comment Youri Carma
Youri Carma's picture

Even Bernanke expects weak Q1 GDP report http://www.marketwatch.com/story/even-bernanke-expects-weak-q1-gdp-report-2011-04-27

Fed hikes 2011 inflation view, cuts GDP outlook http://www.marketwatch.com/story/fed-hikes-2011-inflation-view-cuts-gdp-outlook-2011-04-27

Banks got ‘direct corporate welfare,’ study says - Fed loans never made it to economy, according to senator http://www.marketwatch.com/story/banks-got-direct-corporate-welfare-study-says-2011-04-26

Sat, 04/30/2011 - 10:38 | Link to Comment b_thunder
b_thunder's picture

"...permanent increases in the monetary base foreshadow eventual increases in inflation that can increase, rather than reduce, unemployment over the long term."  - the key part of the phrase is long-term.   While wall st. only cares about current cuarter, the Fed and the Prez only care about 2012, and making sure the country doesn't totally disintegrates until then.  So, unless the Fed's actions cause "Weimar" episode between now and November 2012 - it's all "good." And after the elections - who gives a f**k when the governement can use this:  The Active Denial System  http://en.wikipedia.org/wiki/Active_Denial_System

 

 

Sat, 04/30/2011 - 11:59 | Link to Comment A Man without Q...
A Man without Qualities's picture

This is the crucial point.  Banks seem to care only about the next quarter and the politicians only as far as the next election.  It is easy to assume it is short term greed and obsession with the voting cycle.

However, perhaps they know we are standing on the edge of an economic abyss, and we need a number of things to happen very quickly (asset prices for the pension funds, house prices for the banks, economic activity in nominal terms for the interest payments and debt ratios.)  For example, a slow recovery may not be good enough, because the debt burden is too high to allow a gradual rise in rates.

All I can see is there is a desperate attempt to get equities much higher, any negative news must be simply ignored, rates cannot rise, government cannot cut spending and everytime Bernanke speaks, gold shoots higher.  I can only assume the reality is far worse than implied by the official data and we are running out of time for a miracle to happen.  

It may turn out that this was the desperate attempt to reflate the bubble one last time, which was always doomed to failure.  This failure will not bring about the collapse of Western societies, but it will end the hegemony of the banks.

Sat, 04/30/2011 - 10:39 | Link to Comment High Plains Drifter
High Plains Drifter's picture

hey, when times get really bad, you can always get a job flipping burgers at macdonalds......

NOT!!!!!!!

Sat, 04/30/2011 - 11:00 | Link to Comment Spastica Rex
Spastica Rex's picture

I want to open a resturaunt called "Mick Donal's." I want to serve a sandwich called the "Big Mick." I wonder if I could get away with that?

Sat, 04/30/2011 - 11:22 | Link to Comment Terminus C
Terminus C's picture

If your name was Mick Donal maybe

Sat, 04/30/2011 - 23:32 | Link to Comment StychoKiller
StychoKiller's picture

+62,000/917,000 (or thereabouts!)

Sat, 04/30/2011 - 10:44 | Link to Comment disabledvet
disabledvet's picture

I always get to this point and forget what article was about.  Oh, yeah--"the Fed guy!"  As any politician will tell you "talking and voting are two diifferent things."

Sat, 04/30/2011 - 10:46 | Link to Comment disabledvet
disabledvet's picture

i just realized my dog here is winding up for a shot.  i wonder how and where he will strike?  he's not very well trained....

Sat, 04/30/2011 - 10:43 | Link to Comment tmosley
tmosley's picture

In other news, St. Louis Fed member Yi Wen was found dead today, after having committed suicide via multiple gunshots to the back of the head.  Child pornography and a copy of the Koran, and numerous emails to and from al Qaeda were found on his computer, so nobody cares that he is dead, and this reporter for one, is glad to be rid of this piece of human garbage.

Sat, 04/30/2011 - 10:55 | Link to Comment topcallingtroll
topcallingtroll's picture

You forgot they also found copies of those kitten stomping videos.

Sat, 04/30/2011 - 10:55 | Link to Comment Spastica Rex
Spastica Rex's picture

Coffee went out my nose.

Sat, 04/30/2011 - 12:33 | Link to Comment duncecap rack
duncecap rack's picture

You read about the Guantanamo "suicides" in Harpers? If you didn't your joke is closer to the truth than you realize.

Sat, 04/30/2011 - 12:59 | Link to Comment Temporalist
Temporalist's picture

First video of Yi Wen released dealing with Mexican underworld:

"Roll the ugliness"

http://www.youtube.com/watch?v=8qbc2J0zZr8

Sat, 04/30/2011 - 10:48 | Link to Comment gkm
gkm's picture

Yawn

Sat, 04/30/2011 - 10:54 | Link to Comment cocoablini
cocoablini's picture

QE is a bank solvency mechanism- they don't goves a rats ass about employment.
Stressed labor=. Cheap labor which makes corporate American happy.
Or they threaten to take it to India or China.
But, like deflationary events, inflating prices removes money from discretionary purchases and here we are again.
High prices= less money for discretionary purchases
Less purchasing= less revenue and margins
Less revenue= layoffs
layoffs= defaults
Defaults= less money supply and deflation as there is no competition to buy discretionary items.
And back to depressionary cycle of less purchasing.

Notice housing, clothes, autos, tech, entertainment etc are not rising in prices. Housing is particulary bad as thats the savings account for Americans.
The FED is trying to force Prices UP in these sectors by inflating the prices of base products like food, oil, metals, wood, etc. Which IS working but taking away from the first list which would normally use credit as the purchasing agent.
Firebombing the dollar has managed to drive up base prices in necessities( a rigged game- captured audience) but the economy is going
tits up again.
So, as the K-Wave theory works, inflation implodes into deflation in most sectors of the economy that were excessive or depended on credit.
I'm looking forward to the student loan system implosion, but people at that age are too stupid to understand how that credit system works.
Destroying the dollar as a political tactic to default or lower your debt costs undermines the currency system which drives up usage of barter, gold and silver and other safer currency systems.
Ben, an Ivy Grad, has been smoking his belly button lint too long and getting closer to the edge where the recoil against the FED and US Government is going to get ugly.

Sat, 04/30/2011 - 13:21 | Link to Comment linrom
linrom's picture

Thanks for a great on topic post. It sums my feelings as well on what is going on. For a real analysis of how REAL inflation and employment tend to be highly correlated, please see one of many of Steve Keen's presentations. It very obvious that the FED is not stoking demand driven inflation which in turn would create real employment growth.

 

Sat, 04/30/2011 - 13:34 | Link to Comment Seer
Seer's picture

What's "real employment growth?"

Further, how MUCH and how LONG is this "growth" to occur?

And, given that everyone's in deep dept, who is going to partake in all this added production (assuming that the earth can give out the requisite materials)?

It's nothing but one big cycle, a cycle that's coming to a close- growth.

Sat, 04/30/2011 - 13:59 | Link to Comment linrom
linrom's picture

I am not disagreeing with what you are saying. I am merley pointing out that QE1-2, were never expected to increase employment through financial and commodity assets re-pricing in relation to $US Dollars--this is not inflation.

Sat, 04/30/2011 - 14:08 | Link to Comment Seer
Seer's picture

QE was ALL about filling the black holes that the big banks were breeding (from the great housing Ponzi).

Without understanding the fundamentals all attempts to explain/comment or offer "solutions" is meaningless.  Not saying that there's no (good) intentions, just that they'll never achieve the desired results.

My beef is the flagrant use of "growth" as though it's a cure- it is not; as a matter of fact, it's a curse, the very essence of the existing failing system (who is driving, or what their aims are are of no real consequence, the trajectory is very discernible and knowable [if you question the core if things- take the red pill]).

The second half of the Fed's "dual mandate" was only tossed in their to make the masses believe that they were getting something while being fucked.

EVERYTHING built upon a Ponzi can only fail.

Sat, 04/30/2011 - 14:31 | Link to Comment ivana
ivana's picture

QE was many things.
Now it's gov piggy bank since gov lives far beyond sustainability.

Sat, 04/30/2011 - 15:33 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

@ coco:  i think you are right to focus on QE as a bank solvency mechanism. 

liquidity provided so chas the ponz can continue to pay today's redemptions with FRNs borrowed from the future.  and so on.

slewie thinks that about the time that junk bonds become more attractive than US T instruments, we shall have, for the benefit of out pet Texas troll, what noah called "the flood."

Sat, 04/30/2011 - 15:35 | Link to Comment RockyRacoon
RockyRacoon's picture

In case you haven't seen the excellent post at FOFOA

http://fofoa.blogspot.com/2011_04_01_archive.html

Some decisive inflation/deflation analysis.

Sat, 04/30/2011 - 11:02 | Link to Comment johny2
johny2's picture

The vote for QE2 has been without dissent all the time.

Sat, 04/30/2011 - 11:03 | Link to Comment Papaneuf
Papaneuf's picture

Religions are an affront to God!

How can it not be?

Sat, 04/30/2011 - 11:15 | Link to Comment Hedgetard55
Hedgetard55's picture

If Bernanke knew, he should be in jail for treason/crimes against humanity.

 

If he didn't know, he should be in jail for criminal stupidity.

Sat, 04/30/2011 - 11:29 | Link to Comment legal eagle
legal eagle's picture

Bush should have been hung instead of Saddam Hussein, more innocents died because of Bush, and contniue to die. Mr. Intellectual Obama fell into the same trap as Bush, will similarly good intensions ignoring 2000 years of history. Anyone thinking the debt was nit created by Republicans ignore the facts. When they want to kill, they set up straw evil men, Gadaffi, when they don't want to kill business as usual, e.g. Syria.

Do NOT follow this link or you will be banned from the site!