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Sorry Folks, QE 3 Ain't Coming...

Phoenix Capital Research's picture





 

 

… Unless we get a major bank going under or a 2008-type event.

I’ve been reading that several pundits believe QE 3 is just around the corner. I’m sorry to say that this view is both misguided and has proven to be extremely dangerous to investors’ portfolios over the six months.

Indeed, we’ve heard this argument virtually non-stop since last June. Every time the Fed had another FOMC coming up, the argument was made that QE 3 would be announced. Every single time the Fed disappointed and the markets cratered (only to then be ramped higher by the PPT).

The madness would then start all over again a few weeks later. Whether it was some Dovish Fed President hinting the Fed was ready to act… or some economic data point missing expectations… EVERY TIME the pundits spun this to argue that QE 3 was just around the corner.

However, for those who actually read what Bernanke was saying, it was clear as day that QE 3 was NOT coming… at least not without some kind of Crisis hitting first: such as a major bank collapsing or another 2008 episode.

Take a look at the following:

Q. Since both housing and unemployment have not recovered sufficiently, why are you not instantly embarking on QE3? — Michael A. Kamperman, Waco, Tex.

Mr. Bernanke: “Going forward, we’ll have to continue to make judgments about whether additional steps are warranted, but as we do so, we have to keep in mind that we do have a dual mandate, that we do have to worry about both the rate of growth but also the inflation rate…

The trade-offs are getting — are getting less attractive at this point. Inflation has gotten higher. Inflation expectations are a bit higher. It’s not clear that we can get substantial improvements in payrolls without some additional inflation risk. And in my view, if we’re going to have success in creating a long-run, sustainable recovery with lots of job growth, we’ve got to keep inflation under control. So we’ve got to look at both of those — both parts of the mandate as we — as we choose policy”

http://economix.blogs.nytimes.com/2011/04/28/how-bernanke-answered-your-questions/

Pessimistic Bernanke Fed Admits QE Has Failed In FOMC Statement

In its latest FOMC statement, the Bernanke Fed has admitted the economy continues to remain depressed, essentially admitting that both programs of long-term asset purchases, or quantitative easing, have failed to prop up output after what has been the worst recession since the Great Depression.

http://www.forbes.com/sites/afontevecchia/2011/08/09/pessimistic-bernanke-and-fomc-practically-admit-qe-has-failed/

“Monetary policy can do a lot, but monetary policy is not a panacea.” -- Ben Bernanke 9/29/11

U.S. "close to faltering," Fed ready to act: Bernanke

Asked whether another round of bond purchases, known as quantitative easing, was in store, Bernanke was noncommittal.

"We never take anything off the table because we don't know where the economy is going to go. We have no immediate plans to do anything like that," he said.

http://www.reuters.com/article/2011/10/04/us-usa-fed-bernanke-idUSTRE79337C20111004

Central banks may need to burst bubbles: Bernanke

Federal Reserve Chairman Ben Bernanke said on Tuesday that central banks may need to resort to monetary policy to combat asset bubbles, although regulation should be a first line of defense.

http://www.reuters.com/article/2011/10/18/us-usa-fed-bernanke-idUSTRE79H5IR20111018

 

Look at the progression there. As far back as May 2011, Bernanke admitted the benefits of QE were less attractive. He’s since not only admitted that asset bubbles exist (something Greenspan never admitted) but that Central Banks may even need to “burst” them!?!?

In what way do ANY of these indicate QE 3 is coming any time soon… if at all.

Which brings us to today. Once again the economy is weakening and once again the markets are under duress. And the pundits are out in full force saying QE 3 is coming in early 2012.

My question is: How exactly is the Fed going to sell that one?

The Fed can’t possibly claim it’s trying to lower interest rates with the short end of the curve essentially offering 0% and Operation Twist 2 focusing on getting the long-end even lower (at a time when the 30-year is already under 3% and the 10-year under 2%)?

Also how is Bernanke, who is now so politically toxic that he’s complaining to Congress that the media is treating him unfairly (and having his leaks at the Wall Street Journal write “Bernanke’s just like the rest of us… with a kindle and everything” articles) going to be able to unveil QE 3 without major consequences to his career?

Folks, this is the same man who used to lie openly to Congress about his intentions… who acted however he saw fit and was beholden to no one… NOW WRITING TO CONGRESS DEFENDING HIS ACTIONS AND COMPLAINING THAT HE’S BEING UNFAIRLY TREATED.

Do you really think Bernanke can launch another MAJOR monetary policy in this environment? Heck, EVERY GOP candidate is talking about firing him or calls his actions borderline treasonous. And with Obama’s rating at new lows… do you really think he’s going to be defending Bernanke when it’s already obvious that both the GOP and the general populace are outraged at the Fed?

Not. A. Chance.

The simple fact is that QE 3 is not coming… at least not without a 2008-type event or one of the TBTFs going under first. And even then, Bernanke may find that the political environment won’t tolerate it (after all, the simple argument to counter the need for QE 3 would be: “We’re in a Crisis again… so QE 1, QE Lite, QE 2, and Operation Twist 2 failed to solve the problem… so why should you launch QE 3?”).

If you’re looking for specific ideas to profit from this mess, my Surviving a Crisis Four Times Worse Than 2008 report can show you how to turn the unfolding disaster into a time of gains and profits for any investor.

 Within its nine pages I explain precisely how the Second Round of the Crisis will unfold, where it will hit hardest, and the best means of profiting from it (the very investments my clients used to make triple digit returns in 2008.

Best of all, this report is 100% FREE. To pick up your copy today simply go to:  http://www.gainspainscapital.com and click on the OUR FREE REPORTS tab.

 Good Investing!

Graham Summers

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Wed, 12/21/2011 - 23:15 | Link to Comment TheObsoleteMan
TheObsoleteMan's picture

It is always good to hear/read differant perpectives, even from the deflationist from Pheonix Capital. However I still be they are dead wrong. The opening sentance was the tell::There will be no QE3 unless there is a major bank going under or a 2008 type event." My God you idiots, what do you think we are stareing down right now? All Ben can do now is to deny any QE, while all the time he is doing it out the back door.

Wed, 12/21/2011 - 20:56 | Link to Comment AlmostEven
AlmostEven's picture

Yes, we won't have any more QE, just like we stopped bailing out the banks after the one and only official bailout bill. [Sarc off, sucker Summers]

Wed, 12/21/2011 - 20:33 | Link to Comment ChasVoice
ChasVoice's picture
Paul R. Krugman of the NY Times and His Ties to the Unsound Money Counterfeiting Ring Muckety metrics: Connections: Paul R. Krugman has direct or once-removed relationships with 1,176 people, organizations or other entities in our database of the most influential people in America. Under a scoring system that gives more weight to direct links, this score is higher than 98% of all entries.>Influence: Krugman has a Muckety influence index of 76 out of 100. This is a measure of power and reach compared with others in the U.S. leadership elite.
0 100 Muckety influence score: 76  
Read full article>>
Wed, 12/21/2011 - 20:41 | Link to Comment Zero Govt
Zero Govt's picture

Muckety hasn't factored in the Equation of Socialism which basically shows as socialists grasp for something it first deteriotes and then crumbles like dust between their fingers

so we need to ascertain wether Krugmans 79 rating is a peak or is already in decline to its ultimate destination for all worthless socialists in going to 0.00

 

Wed, 12/21/2011 - 20:31 | Link to Comment steve from virginia
steve from virginia's picture

 

The word 'inflation' coming from Bernanke is code language for 'high oil prices'. Re-read FOMC minutes from 2003 onward and the Fed is obsessed with high oil prices and "inflation". Ergo, the rise in discount rate starting in 2004 from 1.0% to what became 5.5%.

This was in response to oil price increases from $12/bbl to (then) $60. On a dollar-for-dollar basis, peak oil took place in 1998, the reason for the current economic meltdown around the world.

This rise in rates torpedoed the mortgage market as the whole kaboodle depended on ultra-cheap short rates in the money markets.

High(est) oil prices and +$100/barrel for 8 months amplified the recession. Peeps could afford the $4 gas but couldn't buy a new car or pay for their house.

What the Fed would really like to see is higher rates around the world without defaults. USA is nothing but 'carry trade nation'. We have nothing left to export other than 'inflation'.

 

Wed, 12/21/2011 - 21:02 | Link to Comment HungrySeagull
HungrySeagull's picture

If Carry trade puts food on the table, sure.

As far as that 100 dollar oil, we should be past 300 by now. Hell Ink was 600+ 10 years ago.

 

That 5 dollar quart of bottled water you drink at work with the silly name equals 1100 a barrel.

Think on that.

Wed, 12/21/2011 - 20:17 | Link to Comment High Plains Drifter
High Plains Drifter's picture

ZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZ

Wed, 12/21/2011 - 19:51 | Link to Comment ActionFive
ActionFive's picture

QE is ongoing, applied so well you think the world is running without QE.

Wed, 12/21/2011 - 20:27 | Link to Comment walküre
walküre's picture

The point is that there's no official QE announcement. Just magically the ECB increased their balance sheet by 500 billion Euros to lend out to banks. Where the fuck is that money coming from? Inquiring minds would like to know. Is the Fed putting liquidity into the slush fund of shadow banking?

It's not good. People are wondering and starting to ask questions and nobody fucking cares about a falling or rising stock market because more people are looking at their $100 bills and wondering what they're really holding there...

Those that are paying attention (Bill Gross & Co.) know that this is a SHIT SHOW and that no CB can simply increase their balance sheet and produce money from nothing to support a fucking FARCE of a market and economy only so that a few privileged bankers, elite people and legions of government employees can continue to collect bonuses and paycheques.

Eventually the dam will break and that $100 bill is worthless across the globe.

Wed, 12/21/2011 - 21:31 | Link to Comment midtowng
midtowng's picture

At the very least we are seeing massive QE in Europe. Considering how interconnected the markets are, this is nearly the same as the Fed doing QE.

Wed, 12/21/2011 - 20:44 | Link to Comment Imminent Crucible
Imminent Crucible's picture

Yes, and there's one more thing that people aren't paying any attention to: growth of the "shadow banking system" is accelerating. The BIS tells us that $107 Trillion with a T was added to the global derivatives bomb just over the past year.

It could be considerably more, as the BIS is a weasel org. They pretended that global derivatives declined by taking 2008's $1.144 Quadrillion in notional value and applying a new metric that reduced the valuation to about $600 trillion, but total derivatives never declined.

It's Inflate Or Die, beeches.

Wed, 12/21/2011 - 21:14 | Link to Comment walküre
walküre's picture

If they don't print, there will be war. Same as what you're saying.

At this time, I am not convinced that they will print.

Wed, 12/21/2011 - 19:55 | Link to Comment Assetman
Assetman's picture

The simple fact is that QE 3 is not coming… at least not without a 2008-type event or one of the TBTFs going under first. And even then, Bernanke may find that the political environment won’t tolerate it (after all, the simple argument to counter the need for QE 3 would be: “We’re in a Crisis again… so QE 1, QE Lite, QE 2, and Operation Twist 2 failed to solve the problem… so why should you launch QE 3?”).

While Q2 (and other various forms of credit printing) did not achieve the output results that Bernanke expected, I don't think he actually sees these QE rounds as abject failures, either.

If anything, in these instances, these operations have managed to keep the stock markets here in the U.S. elevated-- and has bought those in government and the banking system invent a viable set of solutions.

Just becuase there really isn't a viable solution to resolve this massive Ponzi scheme, I wouldn't underestimate Bernanke's resolve to implrement QE 3.  He may be more inclined to implement it just before the onset of the next banking crisis that do it after... if he is able to do so.

Bernanke and the rest of these political jokers are extending and pretending just long enough to finish their jobs and bug out.  It's about as simple as that.

 

Wed, 12/21/2011 - 19:40 | Link to Comment Zero Govt
Zero Govt's picture

"..Bernanke, who is now so politically toxic that he’s complaining to Congress that the media is treating him unfairly.."

I'm sure it's just "transient" that people hate your guts Benny

Chin up midget, you're going down in history as an economic moron... it was afterall your public mandate to be the pooper scooper for the shittest banking system in history, which The Fed has helped create in every way

Wed, 12/21/2011 - 19:39 | Link to Comment mogul rider
mogul rider's picture

2012 is going to be a great year cause the pumpers say it isn't

 

 

Wed, 12/21/2011 - 19:31 | Link to Comment ebworthen
ebworthen's picture

QE3 is going to Europe in shadow FED purchases.

QE4 will come shortly before the election to bail out BAC, Jefferies, and Morgan Stanley.

Wed, 12/21/2011 - 20:30 | Link to Comment walküre
walküre's picture

But the market will stay flat at best. Economies across the globe are going into recession or have been stuck in recession (truth to be told "depression") and nothing will change that fact.

Demand on everything and everywhere is DOWN DOWN DOWN.

Wed, 12/21/2011 - 19:58 | Link to Comment Zero Govt
Zero Govt's picture

Benny sure is bizzy in his helicopter around the globe but strangely never seen hovering over Main Street dropping his funny money

Bennys mandate is unemployment but has he ever been to an unemployment cue? Maybe he's happy enough with JP Morgans reports on the profits they make printing the food stamps as the cues get longer and Bennys incompetence leads to Dimons Exec Bonus pool

Wed, 12/21/2011 - 20:38 | Link to Comment Imminent Crucible
Imminent Crucible's picture

That's because Benny is for the banks, and to hell with us.

Marc Faber says "QE3 is coming for sure."  If I have to choose between Faber and this guy......heh.

Wed, 12/21/2011 - 20:44 | Link to Comment Zero Govt
Zero Govt's picture

QE3 has happened ...don't trust catfishmouth Bernanke when he questions his own policies... he's been printing and shuffling QE3 out the backdoor to bailout European banks (and by default US banks) for months

Wed, 12/21/2011 - 19:25 | Link to Comment xela2200
xela2200's picture

2012 is going to be a very scary year. Place your bets accordingly and hold on tight.

Wed, 12/21/2011 - 19:11 | Link to Comment Yen Cross
Yen Cross's picture

" Temporary" ?  Penny slots anyone?

Wed, 12/21/2011 - 19:08 | Link to Comment Parabolic
Parabolic's picture

Rickards, bitchez:

"It’s a little bit of an estimate, but to me the key level is 1.30 (on the euro).  With the euro 1.30 or higher, that is going to accomplish the Fed’s purpose of a cheap dollar, so we will not see QE3.  But now that the euro has breached 1.30 and if you see it at that level or going lower, 1.28, 1.27, trading in there, then you are going to see QE3.  That’s going to cheapen the dollar and get the euro back up again.  So, yes, it (the euro) has traded down, but I view that as a temporary phenomena and something that is going to be a trigger for QE3 from the Fed."

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/12/18_J...

Wed, 12/21/2011 - 19:04 | Link to Comment Yen Cross
Yen Cross's picture

 Was 100$ ponzi crude your reason for this BullShit " WRITE" ?

Wed, 12/21/2011 - 18:51 | Link to Comment Elmer Fudd
Elmer Fudd's picture

He's quoting Bernake, he actually believes what that guy is scripted to say to the public.

Wed, 12/21/2011 - 18:39 | Link to Comment tony bonn
tony bonn's picture

""We never take anything off the table because we don't know where the economy is going to go"

this from the same fucktard who didn't see 2008 coming.

Wed, 12/21/2011 - 18:26 | Link to Comment Bindar Dundat
Wed, 12/21/2011 - 18:25 | Link to Comment PulauHantu29
PulauHantu29's picture

WTF?!$%*

Wed, 12/21/2011 - 18:19 | Link to Comment tardball
tardball's picture

Just in case you haven't seen it enough:

 

If you’re looking for specific ideas to profit from this mess, my Surviving a Crisis Four Times Worse Than 2008 report can show you how to turn the unfolding disaster into a time of gains and profits for any investor.

 Within its nine pages I explain precisely how the Second Round of the Crisis will unfold, where it will hit hardest, and the best means of profiting from it (the very investments my clients used to make triple digit returns in 2008.

Best of all, this report is 100% FREE. To pick up your copy today simply go to:  http://www.gainspainscapital.com and click on the OUR FREE REPORTS tab.

Wed, 12/21/2011 - 17:59 | Link to Comment max2205
max2205's picture

??????????!!!!!!!!!!!

Wed, 12/21/2011 - 18:21 | Link to Comment I think I need ...
I think I need to buy a gun's picture

they never stopped printing, gold revaluation is next up!!!!!!!! then continue printing, gold will absorb the brunt until things turn a bit in 2015.

Wed, 12/21/2011 - 21:31 | Link to Comment agNau
agNau's picture

Bingo to "The never stopped printing".
http://www.caseyresearch.com/cdd/are-foreign-banks-losing-confidence-us-...
Wonder what this looks like now. There is no way to stop. It is merely a maintainence program now. It is building the biggest bridge to nowhere ever! Increasing doses of fiat!
ZERO rate box dead end for the worlds reserve currency. Soon, anything that isn't nailed down will be bought by the FED.
Sorry Grahmmmmmm.........
Unwinding will continue.

Contagion.
Confidence.
End Game.

Confidence is next. Like all the other controlled fronts, the smart money will be ahead of the propaganda machine. "It looks like we are going back into recession" What? Darn!

QE to Infinity and beyond!

Wed, 12/21/2011 - 16:59 | Link to Comment XitSam
XitSam's picture

The Fed is trying to influence public perception so don't count on the truth from them.

Wed, 12/21/2011 - 16:59 | Link to Comment New American Re...
New American Revolution's picture

I have news for you Dude.   We've already got QE II&I/II.   Haven't you been keeping up, it's called super-double secret probation, and it's leaking at least $30 billion a week from the FED, and more from the ECB and BoE.   Where you been bro'.   It's the dead season and the central banks are still stuffing money down a euro hole like its a Christmas goose.   We're talking a 100 billion a month from our FED alone, not to mention what the ECB, BoE, Buba, and who else feeding the dragon.   Sweet Mary, I call that global QE MAX.   What do you call it?

Wed, 12/21/2011 - 16:58 | Link to Comment Simulacra10
Simulacra10's picture

Don't appologise this is great news. Maybe we can actually let the market clear all this up and the Fed can stop messing with the market.

Wed, 12/21/2011 - 20:14 | Link to Comment surf0766
surf0766's picture

Lay off the drugs man. They are no good for ya.

Wed, 12/21/2011 - 20:35 | Link to Comment Imminent Crucible
Imminent Crucible's picture

"QE 3 is not coming… at least not without a 2008-type event or one of the TBTFs going under first."

Well, duh. Bank of America could be allowed to slip under the waves for good, at any time convenient to the Fed. As for a 2008-type event, several of them are coming, and on steroids.

The ECB just pushed its balance sheet more than a trillion bucks past the Fed's.

Wed, 12/21/2011 - 16:56 | Link to Comment louisash
louisash's picture

QE3 is coming along with QE4, 5, and 6.  It's just a matter of time.  Given the structural deficits in place it's either inflate or collapse.  History has proven that 100% of the time governments will choose to inflate.  This time is not different.

Wed, 12/21/2011 - 21:16 | Link to Comment Vampyroteuthis ...
Vampyroteuthis infernalis's picture

Banks printing money into toilet paper status comes after the economy has been fully wrecked, most debts defaulted upon and everyone is assured the economy is REALLY BAD (think of Pelosi as a porn star). Unitl these things happen, expect limited money printing. When TSHF, those printers will be running full blast non-stop! PMs will be worth their weight in gold at that point.

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