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It's Time to Air Out Ben Bernanke's Dirty Laundry

Phoenix Capital Research's picture




 

 

Now that the Fed has engaged in QE 3 (which is essentially QE infinite since it’s meant to run until things get where the Fed wants them), I decided to go back and count the recap the Fed/Feds’ interventions since the Great Crisis began in 2007.

 

Here’s a recap of some of the larger moves made during the Crisis:

 

  • Cutting interest rates from 5.25-0.25% (Sept ’07-today).
  • The Bear Stearns deal/ taking on $30 billion in junk mortgages (Mar ’08).
  • Opening various lending windows to investment banks (Mar ’08).
  • Hank Paulson spends $400 billion on Fannie/ Freddie (Sept ’08).
  • The Fed takes over insurance company AIG for $85 billion (Sept ’08).
  • The Fed doles out $25 billion for the automakers (Sept ’08)
  • The Feds kick off the $700 billion TARP program (Oct ’08)
  • The Fed buys commercial paper from non-financial firms (Oct ’08)
  • The Fed offers $540 billion to backstop money market funds (Oct ’08)
  • The Fed agrees to back up to $280 billion of Citigroup’s liabilities (Oct ’08).
  • $40 billion more to AIG (Nov ’08)
  • The Fed backstops $140 billion of Bank of America’s liabilities (Jan ’09)
  • Obama’s $787 Billion Stimulus (Jan ’09)
  • QE 1 buys $1.25 trillion in Treasuries and mortgage debt (March ’09)
  • QE lite buys $200-300 billion of Treasuries and mortgage debt (Aug ’10)
  • QE 2 buys $600 billion in Treasuries (Nov ’10)
  • Operation Twist 2 (Nov ’11)
  • QE 3 buys $40 billion in Mortgage Backed Securities every month from now on (Sept. ’12)

 

That’s one heck of a list. And the worst part is I know I’ve left something out somewhere.

And yet, despite all of this…

  1. Median income today is lower than it was during at the end of 2009 (when the recession supposedly ended)
  2. The percentage of Americans on food stamps has increased from 11% to nearly 15%
  3. The average unemployment duration has increased from 30 weeks to nearly 40 weeks
  4. The civilian employment to population ratio hasn’t budged

My question to everyone, especially the political class: at what point do we start calling BS on the Fed’s claims that it has a clue how to improve the economy?

Seriously, how many trillions of Dollars are we going to let the Fed spend? The Fed balance sheet is already at $2.8 trillion… making it larger than the GDP of France, the UK, or Brazil. Indeed, if the Fed’s balance sheet were a country, it’d be the FIFTH LARGEST COUNTRY IN THE WORLD.

While the Fed has failed miserably to improve the economy in the US, it’s done a bang up job of letting the inflation genie out of the bottle. Here’s a chart showing the price movements of Oil and Agricultural commodities since the recession supposedly “ended” in June 2009.

I don’t know how Ben Bernanke would look at this chart… but it sure looks to me like the cost of living has gone UP in the US. Oil’s gone from $70 to nearly $100 per barrel. And agricultural commodities have risen more than 20%.

So, the Fed has failed to improve the economy… but it has unleashed inflation. This is called STAGFLATION folks. And the fact the Fed thinks the answer to it is printing more money tells us point blank: things are going to be getting a lot worse in the coming months.

Indeed, it is now clear, via QE 3, that the Fed has gone “all in” in its commitment to money printing. QE 2 put food prices to record highs… what to you think QE 3 (which is unlimited) will do to the cost of living?

The time to start preparing is now. The printers are running. The Great Currency Debasement has begun. Some folks will walk out of this mess winners. Most will walk out as losers.

At Phoenix Capital Research, we’re taking steps to insure our clients are among the winners. We have a host of FREE Special Reports devoted to helping readers prepare for the coming Debt Implosions in both the US and Europe.

We also feature a special report devoted to inflation as well as which investments will perform best during periods of high inflation (periods like the one we’re entering).

All of this is available 100% FREE at www.gainspainscapital.com

Best Regards,

Phoenix Capital Research

 

 

 

 

 

 

 

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Wed, 09/19/2012 - 16:02 | 2812634 Shizzmoney
Shizzmoney's picture

File under: SFOBV

Wed, 09/19/2012 - 15:42 | 2812523 BullyBearish
BullyBearish's picture

GO GALT...Hasten the DEMISE and RESET!

Wed, 09/19/2012 - 15:41 | 2812520 palmereldritch
palmereldritch's picture

Given all of Ben's sharting of the dollar there's not enough Tide in the world that'll clean his mess

We know Crap is King...give us dirty laundry....

http://www.youtube.com/watch?v=46bBWBG9r2o

Wed, 09/19/2012 - 15:35 | 2812490 endicott glacier
endicott glacier's picture

So when are you airing your dirty laundry with investment advice? You sure that smells better than Ben's?

Wed, 09/19/2012 - 15:13 | 2812380 gerryscat
gerryscat's picture

Ben knows exactly what he is doing, it is simple theft from the poor/middle classes for the benefit of the rich. The assets owned by the rich go up in value (nominally) while the poor (who own nothing) get higher prices for rent, food, gas, etc. The middle class are stuck somewhere in between, mostly on the prices going up end (since many in the so-called middle class don't have all that much in terms of assets, unless you count their TVs).

Wed, 09/19/2012 - 14:57 | 2812301 dumpster
dumpster's picture

phoenix capitol strikes  again with a message three years  late and a dollar short.

This is the type of  regurgatation that closes the door after the cows get out  

 

$250 please

 

Wed, 09/19/2012 - 14:31 | 2812155 Grand Supercycle
Grand Supercycle's picture

Due to QE3 and short covering spikes, all these daily charts are extremely overextended & significant correction expected very soon ~ SPX, NZDUSD, GBPUSD, AUDUSD, COPPER, CRUDE, GOLD, SILVER.

http://www.zerohedge.com/news/2012-12-24/market-analysis
http://trader618.com

Wed, 09/19/2012 - 14:25 | 2812112 divide_by_zero
divide_by_zero's picture

The Obama stimulus was more on the order of $825B -$860B rather than the inital $787B according to the CBO after the fact, due to hidden items in the bill that were not scored. This number also got baked into the baseline continuing resolution since there are no more budgets (thank you Harry Reid) permanently raising our budget deficit to over $1T/yr

Wed, 09/19/2012 - 14:20 | 2812077 WhiteNight123129
WhiteNight123129's picture

Fed has probably managed to unleashed a bit of stagflation in the last few days, before that it unleashed a bit of a slow motion crack-up boom.

The difference between slow motion crack-up boom is that people with money by-pass the spending phase and go directly in hte inflation asset part. That is very dangerous.

Stagflation would be good, because it means corporations invest their cash and spend it and that creates wages.

 

The Congress should do the following. Confiscate a portion of hte net cash of corporations and the rich unless they invest it.

If you spend your money we do not tax you, if do not spend it we tax you. I bet they would start to spend.

THat woudl force dis hoarding and get the real stagflation genie out of the bottle. So far we have more scary genie, a slow motion crack-up boom. But recently inflation expectation have surged in hte bond market have risen, that is the good stagflation, the one which forces wages up along with price of commodities.

Price of commodities up alone without wages increase is the most scary thing of all. So guys be nice push down teh 30 years treasuries with me!!! Get the corporations and the rich to dis hoard their cash.

 

Wed, 09/19/2012 - 13:20 | 2811775 Zero Govt
Zero Govt's picture

what a lot of bullet points

shows you how hard bubble Ben has worked on failing

someone please hang this f**ker

Wed, 09/19/2012 - 14:13 | 2812045 covert
covert's picture

you just explained why we bought oil futures and rare earth metals early.

http://covert.ias3.com/expose/

Wed, 09/19/2012 - 13:52 | 2811911 RMolineaux
RMolineaux's picture

Comparing current conditions to the stagflation of the 70's is not very useful.  At that time unions were successful in raising wages beyond productivity increases, aided by the Fed's delink to gold.  Currently, unions are struggling for survival.  Ironically, Paul Volker advised Nixon to sever all ties to gold, when later he had to raise interest rates very high to counteract the resulting inflation.

Wed, 09/19/2012 - 12:57 | 2811670 Metalredneck
Metalredneck's picture

Wow.  This guy is tired of getting beat up here, I get that.  So, the mantra is: Fuck you, Bernanke!"  Right?

Wed, 09/19/2012 - 12:43 | 2811602 Waterfallsparkles
Waterfallsparkles's picture

Bernanke is a Hoarder.  He needs intervention.

Wed, 09/19/2012 - 13:28 | 2811796 Zero Govt
Zero Govt's picture

you mean colonic irrigation he's so full of crap

Wed, 09/19/2012 - 12:25 | 2811523 Shizzmoney
Shizzmoney's picture

Peter Schiff: "The Dollar is going to Tank"

"The banking system is so levered up, if we contiue to print and then raise the Interest Rates, the government will go bankrupt."

https://www.youtube.com/watch?v=YcczbYvCajk&feature=player_embedded

Wed, 09/19/2012 - 13:59 | 2811956 LMAOLORI
LMAOLORI's picture

 

 

Schiff isn't the only one sounding the alarm what we have to remember is the NWO plan to bring American's down to the level of third world countries so it's working as designed

QE3 Will Devalue Dollar, Do Little Else

Dollar Index Headed for Rapid Collapse: Chart

snip

Quantitative easing is really another word for currency wars. A weak U.S. currency puts continued pressure on the Japanese Yen, the Chinese Yuan, the South Korean Won, the Australian dollar and other currencies.

 Cheap money also fuels speculation and this money quickly drifts into commodity markets and the ETFs that help propel commodity market speculation. This is inflationary for food prices.

 The lower the U.S. dollar the greater the intensity of currency wars. The break below the key uptrend line on the Dollar Index chart was an early warning of the third round of quantitative easing (QE3). 

Wed, 09/19/2012 - 14:35 | 2812176 optimator
optimator's picture

It'll insure the money the Banksters took over a thirty year period is replaced.

Wed, 09/19/2012 - 13:06 | 2811714 Chief KnocAHoma
Chief KnocAHoma's picture

Rates can never go up... not ever. A spike in interest rates would bankrupt the country, so market forces have been sidelined. We have abandonded the free market, in order to preserve the status quo.

Me thinks something really big and smelly is flying through the air in the general direction of a really big fan. Go long ammo.

Wed, 09/19/2012 - 11:00 | 2811118 Precious
Precious's picture

Like most of these people in positions of "importance", Bernanke is simply a functional sociopath.

Wed, 09/19/2012 - 11:31 | 2811290 WALLST8MY8BALL
WALLST8MY8BALL's picture

MANBERNCROOK!

Wed, 09/19/2012 - 12:46 | 2811620 economics9698
economics9698's picture

Good work, well done.

Wed, 09/19/2012 - 12:54 | 2811655 NewThor
NewThor's picture

Nice recap.

Wed, 09/19/2012 - 16:45 | 2812800 Spastica Rex
Spastica Rex's picture

You're editorializing.

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