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Evergreen
I live not too far from a 100 year-old dam that’s part of NYC’s water supply. There’s a roadway that runs over the top. For years, the locals used the dam as the quick-way to town.
That ended a few days after 911 when some SWAT guys showed up. The thinking was that maybe the terrorists would hit the water supply next. That lasted a few months; then the SWAT guys left, and were replaced with NYS prison guards (a nasty lot). The guard guys hung out in a hut, smoked cigarettes and talked on cell phones.
Two years of guard duty (and a ton of OT) went by with no attack, so the Home Land Security folks brought in a few big rocks, and a heavy cable to keep things safe, sort of.
Things stayed like that for another five years, all the time people complaining that they had to drive miles out of the way, and the kids were stuck on buses for hours and it wasn’t safe as fire, police and ambulance had to go up the side road.
So finally push came to shove, and there was a big meeting, and the folks at the DHLS worked out a deal with the County. The dam roadway would be reopened; but only after the national threat alert went to green.
Green?
American won’t see a “Green” alert level for another fifty years. What kind of answer is that? It’s a lie.
I thought of this story after reading the comments from the Swiss National Bank’s Vice-Chair, Danthine. He set a time frame for how long the SNB would maintain the 1.2000 peg against the Euro. His words:
SNB can keep 1.20 cap as long as needed
As long as needed? That's about as open-ended as it can get. This language could be interpreted as meaning 1-2 years, it could just as easily mean ten-years (forever). Danthine is describing an inflexible policy that has no defined ending. I think of this as "Evergreen" monetary policy.
Evergreen policies are evident at all of the big CBs today. The ECB's, Mario Draghi, has used the word "Unlimited" when describing the scope of his willingness to intervene in the capital markets. He has also used the word "Forever" when describing the duration of the fixed exchange rate regime in the EU.
Forever + Unlimited = Evergreen
Japan has been Evergreen for years. Is it ten rounds of QE that the BOJ has done so far? And today, in what I find to be an extraordinary development, there is a promise that Evergreen will be taken to the next level. In less than a month, Japan will have an election, the outcome will mark the end of the concept of an "Independent Central Bank". The leading candidate, Abe, has promised that if elected, he will force the BOJ to conduct money printing monetary policies that would have no bounds.
I think of this as if the government was handing out cyanide pills. The markets disagree. The Nikkei has been on a tear ever since the national elections were called:
Why is it that the promise of more printing always brings with it a ramp up in equity prices? After ten failed attempts, one would think that investors finally "get it". QE does not work, it just distorts.
The Mother of all Central Banks is, of course, the Federal Reserve. Ben Bernanke, his cohorts at the Fed and the usual suspects in the press have been preparing the markets for the coming QE4.
Janet Yellen spoke a week ago, she talked Evergreen:
The three elements of forward guidance that were adopted by the FOMC in September 2012 would have been unthinkable in 1992 and greatly surprising in 2002, but they have, in my view, become a centerpiece of appropriate monetary policy.
Right. What was, not so long ago, "unthinkable", is now the "centerpiece". These people are actually proud of this "accomplishment".
Then Bernanke spoke, Evergreen was his message too:
we expect that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economic recovery strengthens.
In other words, there is no scenario for an end to printing.
And finally, today, the WSJ's ace reporter, Jon Hilsenrath, has an interview with Federal Reserve President John Williams. The message? More Evergreen talk.
Conceptually you could imagine some upper limit to this but I don't think we're getting anywhere near it.
On whether the Fed could stop monetizing any time soon?
Stopping or scaling back would be "counterproductive" for the economy.
The US is at a tipping point on monetary policy. Operation Twist ends in December. The mind numbing reality is that if the Fed were to allow Twist to just end, it would be contractionary.
Traditionally, monetary policy could be either Restrictive, Accommodative, or Neutral. In 2012, Neutral is equal to Contraction. There is no longer a middle ground. Either the Fed adds more to the system every month for eternity, or else.
And that is exactly what will happen in December. The Fed will do QE#4, it will result in an additional $40+B per month of Fed buys. Along with QE#3, that means the Fed will be monetizing debt to the tune of $85B a month ($2mm a minute, 24/7). When QE#3 and #4 is ending, we will have QE#s 5 and 6.
Bernanke has said many times that all of his efforts are just temporary. That the big balance sheet of the Fed can be reduced with no problems at all when ever it might be needed. Ben's lying. He's fibbing in the same way as suggesting my roadway might reopen someday soon. America is never going to have a Green Terror Alert status again. The answer to the question, "When's the shortcut gonna open again?" is, "Never". The Fed is no different. They are committed to an Evergreen approach. They have no other alternative.
The major economies of the world are faced with Print or Die. So print it will be. I do wish the monetary overlords would acknowledge that what is being done is irreversible, and that the consequences will be felt for years. What was once unthinkable, is now permanent.
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"Kinda like airport security just has to be federally unionized, only in that way can they truely be called "professional" gropers & pickpockets."
TSA under fire after exposing breasts of congressman's 17yo niece during patdown
and who do we have to thank for the DHS(and TSA)?
hmmm...oh yeah it was those Patriot Actors.*
*ac·tor (k t r) n. 1. A theatrical performer.
What else needs be said...it was authored by Joe Biden...thinking how close Biden is and what he's done already and of course his debate performance....reminds me of a line in the Iggy Pop song 'watching the news'..."The president today announced that he's pushing all the buttons in a giggling fit."
Viet Dinh and Michael Chertoff have publicly taken credit as being co-authors of the Patriot Act as well.
The larger point is that it was mostly written before the events of September 11, 2001.
+1 and point well taken.
If it makes you feel any better, not all were for its creation. Its a well worn trail, a crisis (real or imagined) is perceived, a clamor is promoted among the populace by the Fourth Estate and voila!...freedom is lost.
Shovel ready jobs & ObamaCare are the latest examples.
"If it makes you feel any better, not all were for its creation."
67 dissenting votes in the US Congress, one in the Senate, sixty-six in the House. Pathetic.
So it's ok to give $$$ TRILLIONS to bankers in a minute but it's not ok to pay a guy with a shovel $20 an hour?
That is the most fucked up thing I have ever heard in my life
Nyet, my brother, it is a family show today/tonight, and you have a sense of propriety that entirely exceeds the demands of the situation.
- Ned
"Those who would sacrifice their freedom for security shall have neither." Benjamin Franklin
Those who will sacrifice their security guards for blankets shall have keys, vodka, and should pretend to look miserable in the morning if they want another night like the last one.
Well that's what homeland security is all about, him securing his beliefs and wants, while the rest of us play risk.
But playing risk with BIS money is business, its good business, for me. But not so good for Ben and his cohorts, who have run plum out o tools and nearly run out of town on a rail. They have become the fools with no tools, execpt monetary policy. And it can last folks, trust me, but only for so long, for time waits for no one, and no federal, can stop time.
Or a lot of angry pissed-off people. Doing that bullshit to the bridge doesn't make sense to me either, but tptb don't do shit like this without a reason and they've done this bullshit to us a LOT over the years.
Just as was said, you can't destroy the bridge unless you go under. If you want to poisen the water any shoreline will do for dispersal. If you want to write graffiti on the bridge telling everyone that Homeland Security sucks moose dick, now THAT might really be a problem and the solution to the answer.
Conditioning...it's what's for dinner.
As an Engineer I can tell you it would take several tons of explosives to even create an invisible crack in that dam. Also the probability of someone actually accomplishing the destruction of the dam is inversely proportionate to the amount of public use it recieves. The more it is used the higher the probability the mad dam destructionists would be seen and stopped. Homeland Security are the real terrorists folks, wake the fuck up already
Is that off Croton Falls Road?
Could also be...but, i was thinking kensico dam - right off the taconic...was just there last month in the area driving around in a Ural sidecar!
It is not about a global economy. It is about control from here on out.
""Why is it that the promise of more printing always brings with it a ramp up in equity prices? After ten failed attempts, one would think that investors finally "get it". QE does not work, it just distorts."
If a given flavor of fiat money will be worth less (because of increased availability/printing), then everything priced in that currency will cost more. So why buy 4 shares of Honda with your 4 billion yen tomorrow when you can buy 6 shares of Honda with the same amount of fiat today. Hence.....ramp.
Unfortunately its not print or die" its print AND die, there is no option.
In my home town in Bulgaria where I was raised, on a hilltop overlooking our little town sits a huge concrete communist monument. What was once unthinkable is now nothing more then a distant memory. This is how you too will remeber the the former US of A and its "Evergreen" policies.
The highest building in my wife's home village in the foothills of the mountains of Eastern Europe is a building that was once a holiday venue for the USSRs top brass. They would come to ski, hunt and enjoy all the Western luxuries that the peasants were denied. The facility perimeter was heavily guarded by foreign (Russian) soldiers with a shoot-on-entry policy. For years, the villagers could only watch from the outside at the extravagance of the invaders within.
The USSR fell and the "monument to Communism" opened to the public. Inside were fountains, waterslides gold-plated bannisters, etc, the villagers were astonished. A little while later the facility was purchased by Russian oligarchs and is now a swanky hotel effectively closed to the public once more and patronized almost exclusively by "the elite".
The perimeter guards are a little more subtle now, but effectively nothing has changed.
"They would come to ski, hunt and enjoy all the Western luxuries that the peasants were denied. The facility perimeter was heavily guarded..."
Sounds like Obama and/or his wife...
The wolves have become slightly more vulnerable due to a lapse in their pack mentality.
What was once the sole domain of ideological Iron-fistology, is now maintained through
extravagant payments from a seemingly infinite supply of money. When that runs out,
and mistakes are made, the wolves will go back to haunting the badlands. My prayer.
Beautiful. Just as I've said before to mouth breathers & glass-eyed friends: " There is no difference between true socialism & true capitalism."
Funny how I don't have a lot of friends lately...
Well I'd say that the theories of capitalism and of socialism are radically different, however the ultimately observed implementations of both end up being quite comparable.
When I criticize capitalism, the believer in the Dormeuil suit cries: "that's crony capitalism!! TRUE capitalism has never been tried!"
When I criticize communism, the believer in the Guevara shirt cries: "that's crony communism!! TRUE communism has never been tried!"
It's high time that all the believers holstered their theories and spent some time studying reailty. No matter how different two philosophies appear to be, if both endorse delivery of power into the hands of a few, then, when implemented, they will prove to be the same in all but name.
Stupid much ? What does an oligarch, propped up by government favor, have to do with capitalism? Dumbass...
Can't regulate stupid...guess it's best to let him talk, rather than drive that shit underground....
That moment can't come soon enough.
Answer to your questions:
1) the bridge cannot be opened or our overlords (cops) would loose their rightful taste (overtime)
2) "Why is it that the promise of more printing always brings with it a ramp up in equity prices? After ten failed attempts, one would think that investors finally "get it". QE does not work, it just distorts."
answer
to most folks 'nominal' is all that counts...inflation can't be real, they believe....can't happen here...not with all this unemployment...so what if there is more money...that's a good thing ..right?
http://www.amazon.com/The-Ripple-Effect-Twenty-First-Century/dp/B006LWE0RA
Read it bitchez!
As Bruce Krasting says
« ... print it will be ... what is being done is irreversible ... »
But I doubt we will have Japan's run of 22 or so years to play these games ...
Jim Sinclair says about 2 or 3 more years, that will be it before it all explodes, on his view
Although Sinclair says there is a slight chance that wise governance could do something different ... However there is almost zero political chance of that. Sinclair writes:
« The economy is a drug addict. ... You go cold turkey on money creation, you unleash the economic wrath of hell in the entire Western world. It all comes down in one great implosion. ... You have to wean a drug addict off the drug in order to not kill him in recovery ... the mishandling of any situation due to dogmatic beliefs can set off a nuclear explosion. I would walk the Western World Financial System back to sobriety, not try to blast it back which would fail miserably.
We need a new monetary system complete with a strategic plan of transitions from here and now to there. There is no politician out there that will do this ..
If I was made Chairman of the Federal Reserve in January 2013, I would wean the system slowly down while working to recreate the monetary system with required total gold value for government treasuries tied to a world index of total Western World M3. That is a simplification, but it would be the heart of my plan ... »
If Bernanke had an ounce of common sense he would have got the Dow between 10,000 and 11,000 keeping it in the upper range and the S&P high 1100s to low 1200s and maintain them there.
Instead of which, the morons have kept trying to get 'back to growth', 'recovery' and 'back to normalcy' (normalcy being the bubble period of 2006-2007).
DavidC
Has anybody noticed these "flash crashes" of Gold in NY, just before 6 PM? This has happened for the last 3 days. See http://www.goldprice.org/spot-gold.html
Any explanation? Large quantities of Phyz sold in NY and re-purchased in Sydney? What is going on here?
What, you thought controlling fiat fractional reserve currencies was their only game?
Quotes from the Foreword of:
The Babylonian Woe by David Astle
** Blankfein's "God's Work" ??
Counter intuitive though it may be, the only thing that the Fed can do to correct this ZIRP, printing, and zombie bank problem is to raise the Fed rate 1/4 of a point each and every quarter for the next three years.
Promising to rob savers indefinitely is killing capital formation. And no, printing money and leveraging it, is not capital formation.
K-man:
Don't you think that is the objective?
- Ned
New_Meat
I'm schizo on that point. The alternative is our financial and intellectual overlords actually believe that printing is savings; that more embalming fluid and makeup somehow is going to bring the corpse to life.
If I were the one printing the new money, Q.E. would be working just fine for me and all my friends.
Yes, everything will be all fine and dandy as long as we all collectively suck up to the Bernank.
Wouldn't it be great to have the printing press so everyone sucks up to you? Pfffft.
Stuff them, smother them with cranberries and EAT the Bankerticians