And That's Checkmate Bernanke

Phoenix Capital Research's picture


Today the US Federal Reserve announced that it would be implementing QE 4: a policy of spending $45 billion per month buying Treasuries on the long-end of the yield curve until employment falls to 6.5%.


So between this and QE 3 which was announced just two and a half months ago, the Fed will be printing $85 billion per month.


First and foremost there is no evidence that QE creates jobs. Consider the case of the UK.


Since the crisis began, the Bank of England (BoE) has announced QE efforts equal to $598 billion in the UK. The UK’s GDP is $2.43 trillion. So the BoE has engaged in QE equal to over 20% of the UK’s GDP.


Despite this massive amount of QE, 2.53 million people are out of work today in the UK, up from 2 million at the start of the Great Crisis in 2007. Similarly, the UK’s GDP remains well below its peak.


In simple terms, QE fails to generate economic growth or jobs. End of story. The BoE spent 20% of the UK’s GDP on QE (a truly staggering amount) and more people are unemployed now than when it started. And GDP has yet to get even close to its pre-Crisis highs.


The same can be said of Japan which has implemented QE over 20% of its GDP. There, as has been the case in the UK, there is no evidence that QE has created jobs or even economic growth.


So the Fed is flat out lying in its claim that QE will create jobs. There is no evidence that this QE does this. So the Fed is announcing this new program for a different reason.


Regardless of the reasons, Ben’s got a major problem on his hands. That problem is the fact that Treasuries are on the verge of breaking their upward sloping trendline. If Treasuries begin to collapse at a time when the Fed is buying up over 70% of debt issuance, then the Great Treasury Bubble is finally about the burst:


If we take out this line when the Fed is buying as much Treasuries as it is, then it’s game set and match for the Fed. Take out this line and you’re on your way to ending the 30+ year bull market in bonds.


Which means:


  1. Interest rates will be soaring
  2. The $700 trillion derivatives market most of which is based on interest rates will suffer some systemic events
  3. The Fed’s interventions are finished


We’ll have to wait to see how this plays out, but we’re getting dangerously close to a US debt crisis that will make 2008 look small in comparison.


On that note, we’ve recently prepared a Free Special Report outlining how to prepare for this as well as the coming economic collapse. It’s called: Preparing Your Portfolio For Obama’s Economic Nightmare and it outlines several investments that will profit from Obama’s misguided economic policies, including one targeted at potentially huge returns when the US Debt bubble bursts.


You can pick up your FREE copy here:


Best Regards


Graham Summers

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GCT's picture

What baffles me is people actually believe QE and buying MBS is helping them.  Even when presented with facts, talking to people and small business, jobs are not being created.  Yet TPTB are not helping anyone except financial entities that made bad bets.  I am not that smart and yet I see this daily.  As long as people think they are being saved because they are employed and do not live in some government program, everything will be ok.

If you look at most of the financial site people look at daily we are now in a recovery.  It just boggles my mind that people believe this crap.  Why oh why would the fed be printing if there was a recovery?  Why oh why do most people believe this shit to be honest.  Reality is going to bite all of us in the ass sooner or later.  I have firends that think the fed is doing this to create jobs and they will save our country.  At the same time they are bitching about the new regulations, Obamacare and the lack of customers.  They continue to bitch about the same thing and have for almost five years now.  I tell them it is not coming back and you get that look some of you know that look, it is the shut up you do not know what your talking about look.  There is hope and faith in the same government that allowed the financial sector to screw you to begin with. 

Maybe we are indeed the crazy ones.  But I do stack my shiny gold. Silver scares me and at my age, silver risk sucks for me. 

uncle_vito's picture

Seriously doubt intrest rates will be soaring anytime soon.  US is headed for Japan like deflation.   Gold and equities in toilet.   High joblessness.   Terrible retail buying.



LongBalls's picture

Your discounting the fractional reserve lending of the Primary Dealer banks. Deflation will cause massive debt defaults which in turn will effect the liquidity of the Primary Dealers and thier ability to purchase T Bills for the Fed and US Gov. The Fed will never stop printing! It can't. This is why they engaged in the monthly MBS purchases via QE3. To free up defaulting loans on bank balance sheets so the banks can use the cash to purchase UST Bills via their Primary Dealer status.

WhiteNight123129's picture

The to profit from teh current increase in yield is to understand the difference between Japan which had income (and exports) and flows from outward to inwards due to those exports. Then teh low unemployment and hte income instead of being spent go into JGBs, that is what the Japanese had, at a time when the rest of the world was consuming their exports.

What in this situation is similar to the US? can you tell me? Is the US exports? Or the income part? Or the high savings rate? Or the creditor status of Japan at the time which is similar?

Everything is diffrent from teh Japanese case, everything except the excess debt.

Bastiat009's picture

Bernanke's job is to give money to bankers and he is succeeding in doing so. So what's the problem? Bernanke is very good at his job whether you like it or not.

dcb's picture

I have found that bond line to be a good market top indicator.

I don't like it, because they are way too high considering where the market is.

willwork4food's picture

This post is kind of funny. I tend to think it was checkmate when Greenspan said "we do not forsee any housing bubbles in the near future."

flyonmywall's picture

SAT 800, I do remember that interview with Peter Schiff on CNBC. The shill anchors looked at him like he was nuts, the other interviewee (nameless TPTB shill) basically told him he was nuts and "way off base".

You can still find it on youtube if you search. Schiff wasn't right about everything, but he was more right that people give him credit for. He may be right about a lot of other things, just way early.

Time will tell.

devo's picture

(nameless TPTB shill)

Wasn't it Art Laffer? Definitely a shill, but hardly nameless.


MisterMousePotato's picture

Ben Stein, whom I generally have great respect for otherwise, was one, if I remember correctly. Can't recall the others.

tony bonn's picture

the point of qe is not to generate jobs - it is wholly and competely dedicated to transferring national and personal wealth to the plutocrats and enslaving the debtor and consumer.....the only pupose of americans is to consume until they lie prostrate from debt....

blathering about the fact that qe doesn't "work" is is working for the plutocrat scum very nicely....

All Risk No Reward's picture

People, please pay attention to the insight of tony bonn.  tony is spot on.

Bernanke wasn't wrong when he made all his wrong comments, Bernanke was deceiving those who he could.

Read Art of War, people.  The military complex understands Sun Tzu principles very, very well - and the international banking cartel funds the military complex.

You know - the hand that GIVETH (international banking cartel - actually, the Big Finance Capital OWNERS/CONTROLLERS of the cartel) is GREATER than the hand that taketh (military complex).

Sun Tzu stated...

1. Pretend inferiority and encourage his arrogance (Bernanke thinks anyone that believes his schtick is a useless eater that deserves what they will get for being so naive/unable to think clearly).
2. All war is DECEPTION
3. The best warriors NEVER HAVE TO FIGHT
4. If you have to fight, end the war quickly or you will bankrupt the nation.  The corollary being, "If anyone is selling you a never ending war, one of their primary objectives IS TO BANKRUPT YOU.
5. In the practical art of war, the best thing of all is to take the enemy's country whole and intact; to shatter and destroy it is not so good. So, too, it is better to recapture an army entire than to destroy it, to capture a regiment, a detachment or a company entire than to destroy them.

Guess who has captured and controls the US military?  Guess who funds it - and they wouldn't do that if it didn't serve their interests, now would they?  Oh, and Muslims don't allow usury - until they are bombed by the international banking cartel controlled Western military, that is.  Then that central bank gets set up.


The highest form of Art of War is being waged upoon America and the world and NOT ONE IN 1000 PEOPLE EVEN KNOW IT!

So where did this narrative about Bernanke being an out of touch academic come from?

Bernanke's Big Finance Capital handlers. 

The Rockefeller Foundation funded Mises...  and his crowd tends to play up the "Bernanke's dumb" angle.  Money well spent, no?  Big Finance Capital finances and controls the media as well, so they ONLY put on people that fit into their false narrative construct... which includes the whole "out of touch academic" line of crap.

As Vladimir Lenin said, "The best way to control the opposition is to lead it."

The people enslaving the world to fraudulent debt have studied history and learned well.

This is something that so many serfs haven't done, so they have no idea that they can actually refuse to accept the Big Finance Capital sanctioned narrative AND THINK FOR THEMSELVES OUTSIDE THE FALSE MEDIA BOX.

Still some naysayers who can't get out the box?

Her comes the anvil...

Bernanke is a black letter law criminal.  The Fed's mandate is to keep monetary and credit aggregates commensurate with GDP output and to keep prices stable (that is ZERO INFLATION, PEOPLE).

Don't believe me?  Have you taken the time to read the actual mandate or were you suckered by the Big Finance Capital false dual mandate narrative? search "Section 2a Federal Reserve Act" and read the actual law!  Stop trustiing the criminal propaganda networks that have no legal responsibility to tell the serfs the truth!

Who's dumb now?  The population that doesn't understand that Bernanke's legal mandate is to keep prices flat and eliminate inflation or the suckahs who believed Bernanke's lies?

But Mike, there's more...

Check out this chart of the Fed taking credit and monetary aggregates exponential to GDP...

Reference the second chart here:

Wow, so Bernanke CRIMINALLY broke Section 2A of the Federal Reserve Act TWICE - exponential debt growth AND inflation targets, lies about his true mandate iin pure Orwellian fashion and then convinces the population he's an "academic" with "failed models."


***** Ben Bernanke is a black letter law criminal *****

But Mike, it gets even better!  For those not so enslaved that they actually went and read THE SOURCE DOCUMENT of Section 2A, did you notice THEIR IS NO PENALTY?  THEY CAN BREAK THE LAW, BLOW UP THE WORLD'S LARGEST CREDIT BUBBLE IN HUMAN HSITORY ***AND THERE IS NO PENALTY FOR DOING SO***!

And Benis the b* in this scenario?  Uh, no.  Anyone who doesn't understand Ben Bernanke is a cold blooded, psychopathic, role playing, Big Finance Capital front man has been owned by the Big Finance Capital propaganda system.

But that's OK - now you know.  Now you have the data and the logic to understand the truth and see Bernanke and his handlers (that's basically every establishment anything, BTW - unlimited money will give you the ability to control anytihng worth your while with a "free market" veneer).

Stop enabling this criminal, people.  STOP IT!

ZeroHedge posters have to play along - they can't tell you or their Big Finance Capital gigs on the MSM will dry up faster than the Sahara Desert after a light rain.

Debt Money Tyranny is their financial battle plan to Art of War our *sses if we don't get our heads out of our *sses - and quick-like.

Debt Money Tyranny

As an aside - note that there is not even a dent in the exponential debt growth when Clinton allegedly "balanced the budget"...  2nd chart.

Do you now know why?  The Central Banksters targeted that criminal exponential debt growth curve so that, as the private sector leveraged up into the stock market bubble in 1999, they noted the private debt growth and eased off on the public debt TO ACHIEVE THEIR ENGINEERED EXPONENTIAL DEBT GROWTH PLAN.

Remember Gore talking about eradicating all public debt by 2010?  He knew it was a lie...  Gore isn't stupid, but he's made a lot of money on the general public being stupid.  Gore is a criminal as well - serving his Big Finance Capital criminal masters like a good little slave boy.  It's enough that he's a well payed house slave who lives better than the rest of us serf slaves...

Gore isn't the only one who thinks we are all stupid.  Sheila Bair says she believes in the "rule of law."

Man, that criminal thinks eveyone is beyond ignorant.  Based on what I've highlighted here, she's exposed as lying piece of trash.  But throw in fraudclosure, banks laundering $100s of billions in drug money (only whistle blowers get fired), Corzine, etc...  these psychopathic criminals think we are beyond dumb.

But the funniest thing in the world to them must be the fact that some of us think they are the dumb ones.  That's an expression of the height of ignorance regarding the system in which we live. 

And it needs to come to an end.

"Pretend inferiority and encourage his arrogance"
~Sun Tzu, Art of War

PS - Check out the first chart...

The public debt is going exponential and the finance sector debt is dropping by about an equal amount.  Big Finance Capital debts are being offloaded onto the tax payer for 100 cents on the dollar B*es.  And we think they are stupid?  WTF?  They are ripping off our faces in a game they never lose and we never win.

As for them "losing control" - come on people...  think it through.  The collapse IS IN THEIR BEST INTEREST AFTER THEY'VE MAXIMIZED THEIR CURRENT DEBT OFFLOADING OPERATION.  Their front corporations are sitting on trillions in ill gotten gains (because we are stupid, not them!) AND THEY WILL BUY UP THE PLANET FOR PENNIES ON THE DOLLAR.

The remaining question will be...  As you live in a dorm room in a facility with nets around it and subsist as you work 12 hours days, 7 days a week, WILL YOU STILL WONDER IF THESE PEOPLE ARE STUPID AS THEY LIVE IN THEIR CASTLES, TAX FREE?

Wake Up!  This is serious business here.

Terp's picture

Awesome rant.


Mind if I borrow that?

All Risk No Reward's picture

Terp, don't borrow it - steal it and put your name on it!

Some other red pill activities:

1. Watch The Ultimate History Lesson on Youtube - all 5 hours.

2. Listen to the School Sucks Podcast (Education good, schooling / conditioning bad)

3. Study the Trivium Method (1st three of the classical liberal arts that Big Finance Capital removed from their schooling / conditioning program).

4. Go through the Resource section of the Debt Money Tyranny - page 2.

Spread the word...  We are the resistance.

Gimleteye's picture

Martial law will keep the thing going


LostAtSea's picture

the beatings will continue until unemployment drops

SAT 800's picture

LOL. yeah, sorry; shouldn't laugh really. I originally started out to comment on the article's statement, "Ben must be doing this for a different reason"; oh yes. yes indeed. a very different reason. Him and his banker buddies that all play handball together at the New York Athletic Club have got their collective asses in a tight corner; they see liquidity problems; amonst others, in Europe, for BIG banks; this is the kind of anouncement that govt. finance depts. make when they're really, really, seriously worried. And I don't mean about your job, either. There's no friggin way this can be indefinetely sterilized or insulated from the exterior market; what it means is; hello inflation. About the time everyone decides it was just some sort of insider mumbo-jumbo; about a year from now; the price increases will start to hit.

cynicalskeptic's picture

If enough people die from the 'injuries inflicted' a few jobs might open up.........      problem is that those getting hurt the worst are unemployed or at the very bottom of the economic ladder.

BraveSirRobin's picture

According to Paul Krugman's logic, what this country needs is a arrival of the apocolypse. Think of all the government stimulus that would be required to rebuild after the end of the world. We'd all be filthy rich, I tell you.

astoriajoe's picture

World war 1
World war 2
Global coastal event

We've still got a couple more innings to go.

Sambo's picture

This whole expansionist game has only one purpose:

To take you up the cliff and push you off the edge. Then you either live in fear after you crash or become a saint. The choice is yours.

DeadFred's picture

It will be an issue only if that trend support is taken out. Hasn't happened yet. If they want treasuries to rise they only need to trot one of the congress critters out to say how hopeless the cliff negotiations are. Boom, 30yrs are above 150. S&P is down to 1400 but the election's over so who cares?

max2205's picture

I am only reading this Crap because I am bored

AllWorkedUp's picture

 Agree with everything you say, but bonds breaking down is a huge "if". I personally don't think they will until the USD loses reserve status.

SAT 800's picture

I'm supposed to care if the bond market breaks down the month before we lose reserve status or the month after we lose reserve status? Why? What I care about is am I supposed to be in good long term multi-national stocks or in Silver Bullion; and the answer is Silver Bullion. Because we're inflating the dollar bubble and it's going to go pop; like all bubble do; and you think I should be trying to predict what the blood splatter pattern will look like on the wall? Thanks anyway, but I think I'll read about it in a local edition of a rural newspaper written in a foreign language.

orangegeek's picture

QEX is for politics - they are government and their only goal is to get re-elected.


Barry and the Dems can then say that they did whatever they could.

dexter_morgan's picture

And it'll be blamed on the repubs like it always is, so it's win/win for Frank Marshall Davis, Jr., and company.

rsnoble's picture

If the line is taken out wait till you see what bullshit efforts are tried to recapture it which is totally possible. This has already gone on longer than anyone could've imagined as this really is 'the end' if it doesn't work therefore all rules are overlooked and new rules are made up as we go.  It will work until it doesn't anymore.  This shit could blow sky high tomorrow or we could be sitting here bitching about DOW 20k in 5 years who fucking knows.  When she blows it will be pretty evident.  I personally suspect some terrible distraction such as those cave dwelling towelheads developing some nukes in a dark candle lit cave with no prior scientific knowledge and somehow delivering them and setting them off in someplace like CA.  Yes, a bunch of fucking goat herders sure are a sophisticated bunch, much more so than the ones I know here in Kansas.

mpyre's picture

The real "towelheads" are in Washington...

icm63's picture

.."It's hard for bond prices to fall when the Fed owns all the bonds.".. IN CIRCULATION..not yet, the fed does not...true that they are the largest (maybe only) BUY of LONG dated bond securities...BUt there do not own the lot yet !


franzpick's picture

Summers chose to show the possible 5 year chart break now at 150, while omitting to show the real 30 year uptrend break which, as shown on StockCharts below, won't occur until $USB drops below 125, down 25 more.  Drops of 15 to 25 have occurred 10 ten times over 30 years, on average every 3 years, so $USB 125 could happen anytime, but in the bigger picture, USB breaking 150 on a 5 year chart is another short-term noise-Graham:

SAT 800's picture

The break has occured; the top is in. You can trade ZB on the CME from the short side every time it spikes a rally. I've been reading commodity charts for longer than you've been alive, probably; and i'm sayin it's over. no more 150. over. done. stick a fork in it.

SpeakerFTD's picture

I'll take the other side.  


I look at that chart and see the need for a blow off overthrow, which would not be all the surprising at the end of a multi-decade bull market.   I have no idea what leads to that kind of steep, near vertical move, but presumably it would be a major risk off event.


Then you get collapse.

SAT 800's picture

The actual process of collapse will probably be slow and go largely un-remarked; for instance, I'm on record as saying it's already begun; just like Peter Schiff is on record saying the housing market had already started down when they were laughing at him on CNBC; the Collapse-collapse part of the collapse, of course, will not go un-noticed; but timing it is impossible at this point; it depends on the mass mind.

SAT 800's picture

ZB Z2 shows a top over 154 in the third week of July that looks spikey enough to me; sooner or later people get tired of doing the same stupid thing over and over again. the recent double top at 152 is like iron. I'll be shorting this ZB again when it sticks it's pointy little head up; already made money on it three times. if you catch the actual spike you don't even need a stop loss; you can just turn off the computer and go play golf.

SAT 800's picture

We've already had the blow off top. That chart is too long term, really. go to and look at charts of ZB whcih is the long treasury contract. The blow off occured during the panic into "financial safe haven". This is the calm in the eye of the hurricane; it's possible there could be another spike to 150; but that's why God made stop loss orders; personally, I think even major hedge fund traders are at least somewhat educatable. Are they really going to do the same stupid thing again?

franzpick's picture

Slide to right side of chart to see the 30 year support at 125.

SAT 800's picture

Come back next Dec. and you;ll be able to short them at 125. Yeah, I know you don't want to believe it, and I know why. Too bad. It's over.

SAT 800's picture

It would be difficult to over-estimate the importance of this anouncement.  This is the DEFINITIVE statement that it is time to put ALL your long term savings in Silver Bullion, and some walking around money, in Silver Coinage.  There is now nothing that is denominated in dollars, (please feel free to substitute other un-redeemable paper currencies as you wish, there will always be people who "just don't get it"); that is usable as a savings vehicle. NOthing. No safe haven. NOthing.  Only real monetary metal offers the degree of security and guarantee of liquidity necessary to qualify as savings. This means your IRA, your 401; everything; your stock market account; everything. your bond fund; especially your bond fund; it all needs to go bye-bye and get converted into Silver; NOw. 24 little months from now todays $33/oz. price for Silver will seem as quaint and impossible a historical artifact as $4.35/oz. silver does now. You have been warned. This is what the anouncements look like when the monetary authorities are tilting on the edge of panic; there will be no %6.5 un-employment; there will be inflation; there will be inflationary psychology, or inflationary expectations, followed by more inflation; followed by panic, followed by a complete implosion of the entire world wide financial system.

James's picture

@ SAT800- I feel the same way but I'm a noob to buying Silver and wonder if what you say holds in what will I redeem my Silver to/for.

I know I can trade/barter if need be but ever since I started buying its bothered me that the markets always priced in fiat.

What happens if that crashes?

Also, to date i've been lucky and bought cash & carry.

As I live by Gainesville Coins about 10% of total was bought there but they keep records (even cash purchases) of purchases and am hesitant to go too deep only to see it confiscated. I want to buy more.

What do you think?

SAT 800's picture

There's a book out in a second edition; called "Aftershock"; which is partly, yes; about why you should join our financial services company, etc.; in other words an infomercial; but it has a chapter on the dollar how and why it's position is special in the world and why it will fall. and it will fall. Your Library probably has a copy of the book, mine did. I can find no fault with their statements and analysis; they are very well informed. I'm only eddorsing their discussion of the dollar and the international market in which it exists and why and how it will fail; it's a very clear plain language explanation. I don't think you need a financial services company to figure out how to buy silver. The reason metals are protective is that when a currency crashes; the market will pay you in "new dollars" or World Credit Units, or whatever is popular at the moment; it won't be neccessary to barter silver for ordinary purchases; except possibly during a one month or so time of confusion to buy gasolene; for instance. Cheers.

devo's picture

Try Craigslist, you can find good deals with no records.

PS. I thought dealers were only required to keep records for purchases over $5,000. How much did you spend there?

SAT 800's picture

google and read the material on their website.

kliguy38's picture

Agree but one not underestimate the time they can levitate the ponzi.....maybe another year even....doubtful but possible. If they do it may give some of the sheep that haven't acted one last chance to accumulate the silver and gold bullion.....IF they do push it out that far then the fall could be fast and furious. My best guess is they push it only to May.

SAT 800's picture

with regard to fast and furious; I know a sober professional who doesn't have a day job; all he does is analysis of financial statistics and he thinks the way the modern world works; when it "goes viral" the dollar could be cut in half in a month. That's why this is no time to fool around.

kliguy38's picture

agree and the caveate only refers to the leveraged plays with timelines......I appreciate the past year they gave me to accumulate more gold and especially