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Bernanke and the Central Bankers's Worst Nightmare
Two big events have occurred/ are occurring.
- Charles Evans who is one of the biggest pushers for QE, stated that the Fed has “the appropriate monetary policy in place” and that the economy is “improving quite a lot.”
- The Bank of Japan is beginning a two-day policy meeting today.
Regarding #1, Evans has been one of the biggest pushers for more QE. Throughout 2011 and 2012, every time he appeared on TV he stated that the Fed should do more.
So for Evans to suddenly change his tune and state that the Fed’s current policy is “appropriate,” indicates a significant shift in tone. This goes along with the Fed’s recent hint at tapering QE, which we’ve noted before on these pages. It’s now becoming more and more clear that the Fed is planning on tapering QE in the coming months and is trying to manage down investor expectations.
Which means that stocks are going to be losing some (not all) of their life support.
Regarding #2, Japan is beginning a two-day monetary policy today. As noted yesterday, Japan is Ground Zero for the great QE experiment. For decades now, Bernanke and his pals have claimed that the biggest problem with the Fed’s actions during the Great Depression was that it didn’t do enough.
Japan, which has now engaged in NINE QE efforts, has finally hit the “enough” stage by announcing a record $1.2 trillion QE plan. To put this in perspective, Japan’s economy is $5.86 trillion, so this single QE effort is equal to 20% of their GDP.
If this plan fails to bring about economic growth in Japan, or worse still fails to bring about growth and unleashes inflation, then it’s GAME OVER for Central Bankers. Their one great claim “we’re not doing enough QE” will have been proven to be total bunk.
At that point there is literally nothing they can do.
We’re keeping an eye on the meeting in Japan for hints that QE isn’t working or that the Bank of Japan may attempt to taper it. If this proves to be the case, then we’re in for a truly rough time in the markets.
For more market insights and updates, visit us at: www.gainspainscapital.com
Best Regards,
Graham Summers
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'a record $1.2 trillion' until they hand out $2.4 trillion.
precisely what is a stream of electrons into the coffers of pea-brained politicians and bankrupt gambling junkie bankers supposed to do for the private (productive) economy and society in general?
All it does is shuffle monopoly money into the unproductive sewer rats pockets and least capable of bringing about recovery at the expense of devaluing the money in productive businesses and peoples pockets
which is why printing paper, cotton and electrons has never worked before in 2,000 years of history of debasing and debauching your currency
all central bwankers are worthless corrupt scum ...there i said it, feelin much better now
QE is like a medical leech letting out economic blood and replacing it with saline. If the economic patent does not improve add more QE leeches or currency swaps until the patent has all their ecconomic blood replaced with salt water, then ask him to stand up and say thank you.
Japan has taken a turn down a one-way street, and is hitting the accelerator. This can only end badly (default or hyper-inflation), but it might take a very long time for it to finally happen.
See this for more on Japan's public finances, QE, JGB market, and economic outlook:
http://nipponmarketblog.wordpress.com/2013/04/25/japan-is-insolvent-but-...
Maybe if some of the QE money was put into the real economy instead of just being given to banksters to gamble with, it would have more of an impact?
The Fed's QE has to taper off in the next 4 months anyway because the Treasury hits the debt limit and new issuance stops. Japan and the ECB picks up the slack. Nothing to see here. Move along.
LOL...the debt limit?!? Yeah, that's always been a real hindrance in the past...
Why don't we just have a nice big war between Japan and China? It would destroy all the excess housing in Japan left over from the shrinking population, solve the excess/migrant labor problem in China, and all around boost demand both during the war and the rebuilding. It would be somewhat improved if North and South Korea and Taiwan also joined in, and maybe Vietnam, India and Pakistan, too.
And if we can stay out of it, we can sell weapons and re-building materials to both sides, during which time we re-build the Army, Navy, and Air Force to WWII dimensions and beyond, and jump in after both sides are devastated and exhausted. Hey, it was a winning strategy before.
Nope, I see no down side to this at all. OK, so it's not an alien invasion, a la Krugman's desires, but I am not sure we have the means to provoke an alien invasion at the moment (talking space aliens here, not Mexicans, Ukrainians, or French Tax Refugees.) But certainly, we could provoke a general war between China and Japan. Is there anyone in the CIA on these boards with details for execution of this idea?
Only if we send Japan all our nukes to use. Then our economy can be stimulated when we build more and not have all that Chinese crap in Sam Walton's stores. Buy American....
And we can move more of that opium out of Afghanistan.
I'm just a dude at the Diner bro...nothing more...nothing less. Have a past...nothing more nor less there either. The only thing I can say is I used to be called LKofEnglish but got taken off the boards because just the words...nothing more...nothing less...."freaked them out." so they tapped out and that was the end of that Dude at SA. IMHO ZH thought that was pretty cool and let me back to be "the guy who does that freaky thing and got booted for it." methinks rare indeed.
"Sell in May, and go away."
Japan has been doing QE for 20+ fucking years asshole, when the fuck will it end? This post is verbatum from a 2010 post. Go away, you are contributing nothing new.
Exactly - phoenix capital is a scam. They simply repost anything that supports the selling of their newsletters. They never have any real analysis. They never give concrete dates or predictions because they have been burned when they did that in the past ie "Europe is falling apart this summer"...
In fairness, I do not know anyone who consitantly gives accurate timing for major events and market movements. It's a fool's game to try.
If only the FED would put out a newsletter. The masthead could read, "The News before we make it happen". Priceless.
The Bank of Japan needs to detail and target a specific date their 20 year long "Plan for Recovery via QE" will hit pay-dirt
If the roses haven't come up smelling of, er, roses, in 2 f'n decades what are they expecting with this latest, "We Only Have Plan A... if it doesn't work we repeat ..coz we're central bwankers and like all others, absolutely fucking clueless"
Dunno what was more crap this or pivotfarm
"Which means that stocks are going to be losing some (not all) of their life support."
Which means that the stupid retail investor's finally been herded into the market.
Or the twitchy hedge and mutual fund managers have finally jumped for the bait.
The rise since March 2009 has been 100% Fed air pump, so how is pulling out the hose not going to let it deflate to previous levels?