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As Predicted, Bernanke Launches QE3 to Help the Big Banks … Which Will Destroy the Economy

George Washington's picture




 

XaiUx As Predicted, Bernanke Launches QE3 ... Which Will Destroy the Economy
Image via Max Keiser

We predicted last week that Bernanke would launch QE3 this week.

Today, the Fed announced that it will buy $40 billion dollars of mortgage-backed securities per month ... indefinitely.  

This is just another bailout for the big banks. (If the government had instead given money directly to the consumer, we would be out of this economic slump by now).

Bernanke claims that the main justification for QE3 is to boost employment.  This is slightly ironic, since Bernanke's policies are largely responsible for creating high unemployment in the first place.

The real justification is to try to artificially prop up asset prices.  But that approach has been proven to be an absolute failure.

This is in addition to numerous other easing programs. As CNBC notes:

In addition, the Fed said it will continue its program of selling shorter-dated government debt and buying longer-term securities, a mechanism known as Operation Twist. It also will continue its policy of reinvesting principal payments from agency debt and mortgage-backed securities back into mortgages.

 

***

 

“These actions, which together will increase the Committee’s holdings of longer-term securities by about $85 billion each month through the end of the year, should put downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative,” the Fed statement said.

And the Fed isn’t stopping there:

“There’s strong hints that they’ll do Treasurys next,” Joe LaVorgna, chief economist at Deutsche Bank Advisors, said in a phone interview from London. “They’re pulling out all the stops to try to get this economy to gain some traction and, most important, to get unemployment down.”

This sounds nice … except that the experts say that quantitative easing destroys the economy and – despite the initial optics of it – hurts the little guy.

As we said in 2008:  welcome to .

P.S. Yes … if you’re a homeowner, you will probably want to re-fi.

 

 

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Fri, 09/14/2012 - 07:42 | 2793887 SanOvaBeach
SanOvaBeach's picture

Guess I'm un-american!  "Re-Fi if your a homeowner."  What's that?  I got the bankers out of my life long time ago.  Remember morgage burning parties?  That's right, I'm old enough and I do.  Those incoming rent checks are great as long as you have good renters and they don't bust the place up.  But that's another story..............

Fri, 09/14/2012 - 07:40 | 2793879 supermaxedout
supermaxedout's picture

Dear George,

thanks to you I got now the message.  You are spreading the message that its the Bernies of this world producing financial havoc.

As there are Bernie Madoff, Bernie Cornfiled, Bernie Bernanke ( thank you George for removing his camouflage) , Berni Lomax (know from the movie Weekend at Bernie’s, great movie I love it), Bernie ......  etc.

I'm pretty sure now,  there are lots of other Bernies terrorizing the financial wolrd, ripping off the worlds wealth with greedy and criminal thoughts

Therefore I call on the good Bernies of this world,  to unite against these Bernies which are pulling down this fine name into the dirt. Bernies, Bernards, Bernhards of this world. Your are called strong as a bear (bear hard), wake-up and defend your good name.

 

Fri, 09/14/2012 - 07:27 | 2793864 hangemhigh77
hangemhigh77's picture

They can lower employment by hiring TSA agents to start searching houses, searching people in every venue in the country.  We can have half the populace working for TSA searching the other half. That would reduce unemployment. Plus if we imprison more people then that takes a lot of unemployed off the rolls.  We need to make more things illegal, like breathing. If you get caught breathing then you go to prison.

Fri, 09/14/2012 - 07:58 | 2793919 Widowmaker
Widowmaker's picture

The TSA is fascism's security.  I welcome some poor schmuck into my home with blazes of fire.  When any sort of Federal "insecurity" comes to pat my balls in my home it is their death sentence.

You would definitely read about it on the hufaggoton post.

Fri, 09/14/2012 - 05:14 | 2793758 SAT 800
SAT 800's picture

"---which will destroy the economy, a little sooner"  There, fixed it for you.

Fri, 09/14/2012 - 04:15 | 2793729 mkhs
mkhs's picture

QEnth .  Just like a broken clock, it will eventually work.

Thu, 09/13/2012 - 23:13 | 2793372 jmk
jmk's picture

You have to have a serious plan in place in the event Obama is re-elected. Start shedding your 'stuff' converting it to cash. Buy gold and silver. Learn Spanish. Store the metal in a private storage facility in Switzerland and check out to Cuenca, Ecuador. You can live like an an Indian Prince on $2k/month. You can also store cash currency, USD, CHF, CAN, SGD, etc. in the same facility in Schwyz. You do not have to go there to withdraw funds. You do to open the account.

Fri, 09/14/2012 - 05:16 | 2793762 SAT 800
SAT 800's picture

THEY'RE COUNTING ON YOUR STUPIDITY AND APATHY; PROVE THEM WRONG; GET OUT AND VOTE. DELIVER A SLAP IN THE FACE TO THE PUPPET MASTERS WHO THINK THEIR SHOESHINE BOY WILL BE THERE FOR ANOTHER FOUR YEARS FOLLOWING THEIR ORDERS. JUST DO IT!

Fri, 09/14/2012 - 07:59 | 2793926 Vooter
Vooter's picture

Their shoeshine boy will be there for another four years following their orders no matter WHO'S elected. What don't you get?

Thu, 09/13/2012 - 22:50 | 2793298 Banksters
Banksters's picture

The fed has not made one stipulation on the banks to increase lending. Instead they will chase commodities and cause food riots. Fortunately, corn ethanol is still being made as grain prices skyrocket. Starvation™

Thu, 09/13/2012 - 22:31 | 2793251 ListLincolnBism...
ListLincolnBismarkRoosevelt's picture

Funny how China's US debt is not even mentionned and consider as part of the game.

Otherwise I prefer to refer to time an space where a succes are book than ideologie like communsime or free market. List ("free market is take de scale off after I climb) or Bismark is a good start. Ron Paul is not bad but he is not an enginer like Maurice Allais.

Thu, 09/13/2012 - 22:29 | 2793246 dexter_morgan
dexter_morgan's picture

The fed didn't get us out of the 'great depression' which lasted twelve years until we got in to WWII......so why do we think they will get us out of this one by creating money?

Thu, 09/13/2012 - 22:37 | 2793266 ListLincolnBism...
ListLincolnBismarkRoosevelt's picture

I suspected hate of Roosevelt (just like in Europe, we NEVER talk about but here all good is for Keynes: Lord, eugeniste en malthusianist). But to answer, did the fed not create 29  ?

Thu, 09/13/2012 - 22:30 | 2793241 ebworthen
ebworthen's picture

I'm telling you, they are going to push this all the way; crush the value of the dollar while stoking inflation, then make precious metal transactions illegal and get rid of paper and coin currency while raising taxes on everything imaginable, creating new taxes, confiscating assets, and imposing martial law eventually.

They have painted themselves into a corner whether by design, arrogance, or stupidity.

Fri, 09/14/2012 - 00:53 | 2793561 Clashfan
Clashfan's picture

I'll take design for 500, Alex.

One of the goals: cashless society with implants.

TSA=prepping the public for total loss of rights and privacy.

Thu, 09/13/2012 - 22:32 | 2793253 dexter_morgan
dexter_morgan's picture

don't forget gun registration/confiscation also which will occur , or at least be heavily pushed for, during Obama's second term. They are not going to waste all these recent shootings and when they get beyond the election many things will get pushed through that are unspoken now. If they get both houses again, fasten ur seatbelts, it'll be a wild ride.

Fri, 09/14/2012 - 07:19 | 2793852 SAT 800
SAT 800's picture

PUshed For? Pushed for? Wake up please Obama is going to sign the UN small arms control act in July next year. GET OUT AND VOTE; ORGANIZE; YOU HAVE ONE CHANCE; ROMNEY. THAT'S IT' IF YOU BLOW IT; YOU'LL KNOW IT.

Thu, 09/13/2012 - 22:56 | 2793335 ListLincolnBism...
ListLincolnBismarkRoosevelt's picture

I assumed that only when China and Russia are going down, de bancor will get his chance. Then suppringly growth will come back and US gaz + oil will be sell at rocket high price. Ah, UE will be merged with the US by this time (they wil try as soon as 2015)

If nobody interfer, they will let your guns free and even promote individualisme to the hedge. I doubt that someone care of China or Russia in the US (not to mentionned all the rest of the world). Be patient, the end of the growth in the other superpower will be your happy time with the decision maded.

Thu, 09/13/2012 - 21:54 | 2793126 boiltherich
boiltherich's picture

Buy a house?  Refi?  Ahem, I see a problem with that.  Those without houses probably will not qualify for a mortgage no matter how cheap you make the loan, and at 3.5-4% current rates I really do not expect them to go much lower no matter what Bernanke says, he is talking out his ass when he says it will lower mortgage rates.  Even if it did the fees to refi will swamp the savings of one to two percent lower rates.  Anyway the 10 year jumped today to 1.73 at closing bell and the 30 year mortgage is based upon the 10 year.  As I recall he siad  something the same about interest rates on QE 1 and 2 and right about then my credit cards, all three within a month went from 14% to 29%.  Thanks a lot asshole. 

I now buy NOTHING and I mean not anything I do not have to cash OR credit.

Thu, 09/13/2012 - 22:54 | 2793325 barroter
barroter's picture

"I now buy NOTHING and I mean not anything I do not have to cash OR credit."

That seems the only way to beat the bastads, refuse to play in their sandbox.  I had a friend mention one day about a fabulous way to save on airline costs..."Don't Fly."

 

Thu, 09/13/2012 - 22:35 | 2793261 ebworthen
ebworthen's picture

Could not believe Bernanke trumpeted lower rates to get people to refi or buy as the key element in restoring the economy.

It's employment you FOOL!

The last bubble was housing, and he thinks buying MBS's from Fannie/Freddie to get people to buy or refi is going to revive an economy destroyed by speculation and debt on the very same things!?!?!

OMFG!

Thu, 09/13/2012 - 21:48 | 2793110 Spastica Rex
Spastica Rex's picture

That picture of Spanky is priceless. Brings back fond memories of my childhood and channel 11 in Seattle.

Excuse me, I have something in my eye.

 

Thu, 09/13/2012 - 21:49 | 2793097 newengland
newengland's picture

Bernanke bails out the biggest banks, and the political class who bribe their voters with unfunded promises; the whining classes.

There. Fixed it for you.

Meanwhile, the rest of the world has no hope for it is ruled by Russian oligarchs, Chinese communists,  desert despots, European monarchists and Islamists.

Fix that for yourself.

Thu, 09/13/2012 - 21:39 | 2793074 TLT
TLT's picture

GW, thanks for all this time that you have been providing great information, in a easy way to understanding.

From the BP disaster until today, I follow your info - one of the best available on the internet.

Thanks again!

Thu, 09/13/2012 - 21:35 | 2793060 blue
blue's picture

Ilike Spanky in his younger days,The fed can only buy (implied) guranteed debt..ie Freddie and Fannie..they have $5 trillion to buy so buy it..thanks Hank

Thu, 09/13/2012 - 21:27 | 2793042 TheObsoleteMan
TheObsoleteMan's picture

"If the Fed had simply given that money to the consumer we would have been in recovery by now". No, we would have hyperinflation by now. This piece is a fraud, written by someone with little understanding of how things work.

Fri, 09/14/2012 - 05:44 | 2793774 AnAnonymous
AnAnonymous's picture

Inflation would have gotten worse.

By freezing salaries and wages, 'americans' are cleaning ranks.

The current situation is all about determining who is solidly entrenched 'american' middle class and who is not.

The first one has enough grip to go through the induced by resources extraction plateauing price increase while the other is surely descending into lower class status.

Contrary to what 'americans' claim on this site, the 'american' upper elite works for the 'american' middle class. And the situation is that to ensure the permanency of the 'american' middle class, some have to be pushed under the train...

Thu, 09/13/2012 - 21:39 | 2793075 George Washington
George Washington's picture

Do you work for a big bank/ government institution??

Thu, 09/13/2012 - 21:25 | 2793036 blindman
blindman's picture

Bob Dylan - Not Dark Yet
http://www.youtube.com/watch?v=RZgBhyU4IvQ
.
13 September 2012
Gold Chart: The 'Cup' Has Formed As Confidence Continues to Erode
.
http://jessescrossroadscafe.blogspot.com/2012/09/gold-chart-cup-has-form...
.
"A moment guessed-- then back behind the Fold
Immersed in Darkness, round the Drama rolled
Which, for the pleasure of Eternity,
He doth Himself contrive, enact, behold.

But if in vain, down on the stubborn floor
Of Earth, and up to Heaven's unopening Door,
You gaze Today, while You are You-- what of
Tomorrow, when You will be You, no more?

Omar Khayyám, Rubaiyat

Thu, 09/13/2012 - 21:47 | 2793109 blindman
blindman's picture

HOWLIN' WOLF ~ Killing Floor
http://www.youtube.com/watch?v=yvwVuOM7aFQ
.

Thu, 09/13/2012 - 20:45 | 2792910 blindman
blindman's picture

stealing.
keyword: stealing.
.
it is a monetary system structural necessity.
keywords: stealing, fraud.
.
these are the keywords and there will be many
op eds, analysis, discussions, white papers, etc..
.
the keywords will remain: stealing and fraud.
p does not equal p + I. so the keywords are ...
stealing and fraud. please try to remember that.
it is by design and structurally required, all functions
in service of said demented and poisoned structure.
unto death of the system or individual, whichever
comes first.

Thu, 09/13/2012 - 20:51 | 2792930 Short Memories
Short Memories's picture

"As we predicted last week" ??

I seem to remember some posts a month or two ago called "why the fed will never embark on QE3" and similar.

Don't get me wrong, I love this site and what you do but this self-pat-on-the-back is a little underserved I think

Thu, 09/13/2012 - 21:10 | 2792992 blindman
blindman's picture

no need for pats. the math and system have demands.
that is all, till the system or the individual is
no more, unto death as it were. everything else
is advertising.

Thu, 09/13/2012 - 20:41 | 2792898 bankruptcylawyer
bankruptcylawyer's picture

"we had to destroy the economy in order to save it" 

 

Thu, 09/13/2012 - 20:33 | 2792882 Joebloinvestor
Joebloinvestor's picture

Bullwinkle Ben.

"Hey Rocky, watch me pulll a rabbit out of my hat."

Famous answer:

"THAT TRICK NEVER WORKS"

Fri, 09/14/2012 - 01:46 | 2793613 dark_matter
dark_matter's picture

Oops, wrong hat.

Thu, 09/13/2012 - 20:29 | 2792872 Massholio
Massholio's picture


I now realize ZH is a government plant. The goal is to make anyone with a hope for a more sensible future so discouraged they put an entry and an exit wound throught their skull.This gives the Orkin Man less work to do. If you buy gold it will be confiscated = you are fucked. If you hold on to the currency of the realm to buy food you = also fucked. Ben wil print your currency into worthlessness while making it illegal (violence against you and your family)l to hold gold. so long, thanks for all the fish!

Thu, 09/13/2012 - 21:56 | 2793137 The Beam
The Beam's picture

I don't know how to justify your comment and how to respond.... except.....

YOU ARE A FUCKING MORON!!!

If you will excuse me for a second, I have to listen to some classical music to save the brain cells I am about to lose reading your post.

Thu, 09/13/2012 - 20:28 | 2792866 Massholio
Massholio's picture


I now realize ZH is a government plant. The goal is to make anyone with a hope for a more sensible future so discouraged they put an entry and an exit wound throught their skull.This gives the Orkin Man less work to do. If you buy gold it will be confiscated = you are fucked. If you hold on to the currency of the realm to buy food you = also fucked. Ben wil print your currency into worthlessness while making it illegal (violence against you and your family)l to hold gold. so long, thanks for all the fish!

Thu, 09/13/2012 - 20:50 | 2792923 blindman
blindman's picture

speaking of fish, boating is the solution
to not only fishing but confiscation.
peace
it could be just a rented or borrowed boat
that had the terrible accident resulting
in the dear loss. know my sympathy is
with you along with my prayers.

Thu, 09/13/2012 - 20:12 | 2792795 tony bonn
tony bonn's picture

qe is all about enslaving america and destroying its sovereignty just as obmney and the rockefeller axis of evil have desired since it participated in 9/11 with the bush crime syndicate.....

qe is not a fool's game - it is by design to destroy america.....and of course the american boob thinks otherwise....

Thu, 09/13/2012 - 19:21 | 2792612 dadichris
dadichris's picture

I've read so many "experts" in the last month trying to convince us there won't be any QE before the end of the year - what a bunch of BS

Thu, 09/13/2012 - 19:56 | 2792735 Bastiat
Bastiat's picture

Then there are a few like JS Sinclair, who has been saying for years:  QE to infinity--there's nothing else they can do.

Thu, 09/13/2012 - 19:13 | 2792577 SmittyinLA
SmittyinLA's picture

The Mexican mafia owns this government

Thu, 09/13/2012 - 19:22 | 2792623 Dr. Sandi
Dr. Sandi's picture

If that's true, I hope they have the decency to perform a grisly mass execution when they're done with them.

Fri, 09/14/2012 - 07:25 | 2793862 SAT 800
SAT 800's picture

LOL! Now that;s funny. Yeah, I hope so too.

Thu, 09/13/2012 - 18:53 | 2792489 hedgehog9999
hedgehog9999's picture

Riddle me this, his program should reduce rates right?   so why TBT the short bond etf went up Today on huge huge volume?

Looks to me like the bond market disagrees with his plan and they are usually right.

Gross looks like a genius now as he was one of the sellers....

Thu, 09/13/2012 - 18:30 | 2792396 lakecity55
lakecity55's picture

Weimar USA here we come!

And, we already have the Adolf guy!

Fri, 09/14/2012 - 07:35 | 2793872 Red Heeler
Red Heeler's picture

"And, we already have the Adolf guy!"

 . . . . no matter who gets elected.

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