Why Quantitative Easing And Fiscal Stimulus Are Unnecessary

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Thu, 12/02/2010 - 19:56 | 773695 Arkadaba
Arkadaba's picture

 

I would really love it were the world past this fiscal crisis and/or depression but I just don't buy it because it would illogical to do so. (Disclaimer: I did study formal logic at the university level and loved it).

From the beginning of the crisis and before, some were warning of the risks major banks were taking and the ramifications of those risks, which emerged in 2008. Jesse from http://jessescrossroadscafe.blogspot.com/  stated often that in order for recovery to take place, the "bezzle" would need to confronted and dealt with. Has it? In my opinion, no. All those toxic assets are out there - somewhere. I know Denniger is not popular on this site (I'm curious to know why) but he has an interesting article on the amounts of collateral the banks put up for the various Fed programs:

http://market-ticker.org/akcs-www?post=173721

I'm not an accountant but even to a layperson this looks like it invites further investigation.

Now my bullet list:

 

  • The unemployment rate has not gone down. There may have been minor upticks but it looks like we are stuck here for a while. Structural not cyclical.
  • Housing prices continue to deterioate.
  • Gold and Silver have made new highs
  • If the EU can hold it together for another year, I will be very surprised.
  • Greatest income inequality since the 1920s in North America. Yes Canada, you too. (In the past the overlords recognized that throwing a few bones to the peons and providing upward mobility to the smartest in the underclass made good economic sense - not so much now)

 

And yes I can provide links for all of the above but it really is time to start figuring this out for yourselves (as most ZHs have done).

 

Thu, 12/02/2010 - 19:30 | 773675 putbuyer
putbuyer's picture

Wrong blog bro. Rainbows and Unicorns blog over there...

Thu, 12/02/2010 - 19:15 | 773646 Withdrawn Sanction
Withdrawn Sanction's picture

Hmmm.   What all your charts say to me is the peak in the data occurred in spring 2010.  That makes a lot of sense as it would coincide roughly with the monetary and fiscal stimuli from 2008/9 having run their course.  Moreover, w/the bank lending channel effectively shut, for that time, there's no prospect of a credit multiplier (so any given stimulus is even less effective than it normally would be).  So we get the first wave down of the post-stimulus hangover in late spring/early summer 2010, followed by a natural bounce.  Now comes.....?

Thu, 12/02/2010 - 19:09 | 773625 tom
tom's picture

QE2 so far is playing out as expected, as pre-launch expectations that it would be inflationary are being confirmed by the first early post-launch signals. First is M1 growth going gangbusters. Second is foreign central banks being crowded out of the Treasury market. For the past two weeks they have collectively slightly reduced their holdings in Fed custody, in sharp contrast to their $20b/week gobbling up of Treasuries from mid-August to mid-November (perhaps hastened by attempts to frontrun QE2, which were overdone and so didn't work out well, or perhaps by desire to stock up on Treasuries before QE2 crowded them out).

Billion dollar question of the month: what are the foreign central banks buying instead of Treasuries?

Thu, 12/02/2010 - 19:06 | 773619 nathan1234
nathan1234's picture

Sounds like A Fedphile.

Acts as if he is colorblind. Cant see what's really happening with the data or just being paid off by some Wall Street crooks for the disinformation being put out.

Thu, 12/02/2010 - 18:26 | 773484 Cone of Uncertainty
Cone of Uncertainty's picture

Meanwhile, 100's of human icicles forming in Georgia:

http://www.ajc.com/news/cobb/hundreds-line-up-in-763455.html

 

Thu, 12/02/2010 - 18:21 | 773470 Mentaliusanything
Mentaliusanything's picture

If America is a consumer society, don't look outside it and you will be fine.

The real problems are showing teeth in other "supplier" lands.

The Christmas hangover will be a real and reminding headache.

Thu, 12/02/2010 - 18:19 | 773436 Bob Sponge
Bob Sponge's picture

I don't trust anything the Rockefellers put out.

Thu, 12/02/2010 - 17:56 | 773366 blindman
blindman's picture

http://maxkeiser.com/2010/12/02/smoking-gun-the-hearing-when-bernanke-told-ron-paul-that-he-wouldn%e2%80%99t-be-bailing-out-any-foreign-banks/

.

Smoking gun: the hearing when Bernanke told Ron Paul that he wouldn’t be bailing out any foreign banks December 2nd, 2010

minute 5:00

Thu, 12/02/2010 - 18:58 | 773600 jomama
jomama's picture

was ben shalom under oath? 

not like that would mean anything anyway, would it?

Thu, 12/02/2010 - 23:19 | 774144 blindman
blindman's picture

i think he was and i think it matters.  it is referred to

as "testimony".

"In law and in religion, testimony is a solemn attestation as to the truth of a matter."

wiki.

http://personalmoneystore.com/moneyblog/2010/02/25/bernanke-testimony-ron-paul/

Bernanke testimony | Helicopter Ben vs. Ron Paul Thursday, February 25th, 2010 By ....
Thu, 12/02/2010 - 18:02 | 773385 Traianus Augustus
Traianus Augustus's picture

It's only a smoking gun if there are bullets in the chamber, and the US cartel made sure there is no ammo left.

Thu, 12/02/2010 - 17:50 | 773340 treemagnet
treemagnet's picture

No POMO! - dare to dream.

Thu, 12/02/2010 - 17:44 | 773318 Busy-Body
Busy-Body's picture

3 words about this article and the previous article - ABSOLUTE FUCKING DRIVEL........

Thu, 12/02/2010 - 18:05 | 773396 taraxias
taraxias's picture

You nailed it. IT'S DRIVEL ON STEROIDS

Thu, 12/02/2010 - 18:00 | 773381 Traianus Augustus
Traianus Augustus's picture

Believe what your eyes see...as long as you are seeing what the government/bankers want you to see.  By all means don't under any circumstance use common sense or try to analyze where they got those fucking numbers from because you will either go blind or crazy!!!!

Thu, 12/02/2010 - 18:56 | 773595 blindman
blindman's picture

http://www.youtube.com/watch?v=w9U3XHaSw-Y

O.V. Wright ~ I'd Rather Be Blind, Crippled, and Crazy ?

Thu, 12/02/2010 - 16:19 | 773008 Everybodys All ...
Everybodys All American's picture

Did you consider the Fed may be the only one desiring our debt and when interest rates rise back to normal levels the debt is unsustainable overnight.

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