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Guest Post: The Wolf In Sheep's Clothing

Tyler Durden's picture


Submitted by Nicholas Bucheleres of NJBDeflator blog,

Let's call the collection of investors and traders that have been ceaselessly squabbling over the Fed's policy decisions, card players, and let's call Bernanke, the dealer.  Throughout this summer and fall, investors have been playing cards against a guarded Bernanke, until September 14's FOMC meeting wherein Uncle Ben slated the Fed to purchase an additional $40billion in agency mortgage-backed securities (MBS) per month (increasing total monthly agency MBS purchases to $85billion).  Despite all counter-arguments and despite the fact that central banking is going even beyond unchartered waters, it is now clear that the dealer is being forced to show his hand.

These days every pundit and his barber are suddenly central banking gurus and monetary transmission mechanism experts, but while some of them may have an educated guess as to the reality of the matters at hand, none can envisage that which the Fed is able to.  What is almost never considered by most wanna-bees  is that no one in the world has access to as many economic and financial data sets, metrics, and indicators, and the synthesis thereof, as the United States Federal Reserve.  Ben may make mistakes, but he is no fool.  When he acts, he either sees present reason to do so, or he is bracing for a future shock. 

A famous guy named Socrates from the 400s (BC, that is) once said,

"As for me, all I know is that I know nothing."

Although already agreed upon by the Fed, claims against the pursuance of further monetary action are numerous, and the argument that it fails to ignite the real economy has been proven correct in recent history.  The Dallas Federal Reserve President Richard Fisher, who is a non-voting member of the FOMC, has been one of the most reputable and vocal dissenters of further Fed balance sheet expansion:

  • The United States currently faces no immediate threat of deflation, which was the implicit prospectus of the post-Great Depression US central banking system.  Inflation is slightly below where Bernanke wants it, and, in fact, longer-term inflation expectations have been rising.  Oh yeah, and this summer's drought inflated corn and soybean prices by ~50% and ~35% respectively.  Inflation will undoubtedly rear its head sooner or later; deflation is far less likely.
  • Mortgage rates must be holding people back from purchasing new homes, right?  Not quite.  Mortgages are currently at their lowest rates ever.  Will a couple fewer basis points really matter?
  • "Well, I'd start a small business if..."  Sorry, pal, that's still not an excuse to live with your mom and her 12 cats.  Labor and business survey data empirically show that 9-out-of-10 small and medium sized businesses are not interested in borrowing, or have credit readily available to them.  
  • US equity indices are setting 4+ year highs and are just shy of clearing all-time highs and US corporations are flushed with cash.

There is an obvious dissonance between the above metrics and the Fed's decision to further prop up the economy but, let's get back to the card game:

That the Fed has enacted another round of easing, even though many of the economic indicators it aims to improve are either robust or have clearly not been effected by recent rounds of liquidity, should be troubling.  It means that the Fed foresees imminent headwinds that would be disastrous to our economy in its current state.  Maybe Richard Fisher can put it more eloquently than I can.  Take it away, Dick.

Nobody on the committee, nor on our staffs at the Board of Governors and the 12 [Federal Reserve] banks, really knows what is holding back the economy.  Nobody really knows what will work to get the economy back on course.

Sobering words from Richard Fisher; Bernanke has recently been speaking to the notion of helplessness, also.

If we want our questions about the economy answered, we should look Bernanke's  recent move to intuit an idea of the cards he is playing with.  There are disconnects between what is considered the common knowledge of investors, and the behavior of the Fed.  This move gave Bernanke's hand away, and it is becoming clear that negative developments around the world (some yet to come to fruition) are cornering Bernanke and forcing him to come to terms with his inability to provide the panacea again.  The god-like powers of central banking are being questioned, and maybe Bernanke's 2008 silver-bullet should have been a one-off.

Has the writing on the walls faded since 2008?  Have we not figured out that whenever the Fed acts, things are either really bad, or are on the way there?  Further than that, have we not figured out that the Fed cannot carry the entire economy on its balance-sheet?  Do I even need to sarcastically say, "This time it's different!"?  Bernanke is not a chump--he is well aware of the short-comings of recent Fed activity and their limited effects going forward.  It is quite clear at this point that Ben is pulling his nose out of the textbook and is beginning to act out of last resort.  This last resort scenario is confirmed by his preemptive strike and implies that Ben, who has it from the best data in the world, thinks that this economy needs to return to "trend" as quickly as possible in order to weather near-term storms.

An important (and I believe severely under-appreciated) tenant of Bernanke's FOMC stance was his response to a question by a journalist after his speech.  His response gave coy indication of his implicit goal to elevate the United States economy to a level of momentum which would allow it to overcome future (unspecified) headwinds.  Which headwinds might those be?

  • A ballooning $1trillion student-debt load in the United States
  • The proverbial "Fiscal Cliff"
  • Cracks in the euro zone deepening
  • Middle-East turmoil disrupting trade routes, specifically oil
  • A sudden deterioration in an already crumbling Chinese economy

...and the list goes on.  Bernanke is king-of-the-data-hill and it is more than likely that he is privy to negative developments in one or more of the risks facing the US economy that even the most savvy bank economists cannot or may not see.

Despite entropy from within its own entity, the Federal Reserve is at it once again.  This time, we have recent history to act as reference, which is not very encouraging.  For many reasons, some aforementioned, the United States economy is clearly not amenable to Fed balance-sheet expansion anymore, yet, despite dissent and all, the members of the Federal Reserve's Federal Open Markets agreed on September 14th to increase their monthly purchases.

This last resort scenario is not just isolated to the United States and the Federal Reserve.  The ECB, the Bank of Japan, and the Bank of England are of the most notable "easers" of the last couple weeks.  The cases for and against their monetary accommodation are beyond the scope of this article, but the takeaway is the same: central bankers around the world are grasping at straws.

It is a matter of time before markets lose complete faith in the recklessness of central planning Ponzi artists, and this reality is self-evident through the late-summer/early-fall hope-rally.



S&P500 (white) & Dow Jones Transportation sub-sector (blue) over two years.

One of the withstanding pillars of Dow Theory is the notion that market extremes are determined by comparing extremes in the Dow Jones Transportation sub-sector and extremes in the broader equity market.  As is clear above, the S&P is a nudge below all-time highs while the Dow Transportation sector continues to set lows of longer time horizons.  According to the century old Dow Theory, and among a plethora of other reasons, it might be time to reconsider the beta of your portfolio. 


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Mon, 09/24/2012 - 22:20 | 2826719 CPL
CPL's picture

I drank what?


Mon, 09/24/2012 - 22:35 | 2826756 Zer0head
Zer0head's picture

If you like Stern


this is classic from last week

Mon, 09/24/2012 - 22:47 | 2826775 AlaricBalth
AlaricBalth's picture

" Ben may make mistakes, but he is no fool."
The writer is correct. Ben is not a fool. He is "an errand boy, sent by grocery clerks, to collect a bill. "

Colonel Kurtz from Apocalypse Now:

Mon, 09/24/2012 - 22:50 | 2826789 SafelyGraze
SafelyGraze's picture

if the immediate goal of qe:mbs40 is to increase inflation expectations, maybe the Nank earned his paycheck

Tue, 09/25/2012 - 07:11 | 2827206 markmotive
markmotive's picture

Perhaps this is all part of a master plan.

Ben Swann's History of Bernanke's Failures:

Kind of seems too frequent to be out of sheer stupidity. Wanton disregard perhaps?

Tue, 09/25/2012 - 11:07 | 2827916 DeadFred
DeadFred's picture

Ben may say he want to raise inflation expectations but what he's really after is the things he expects to come out of those increased expectations, things like increased investment and risk taking on the hiring front. If he wiggles expectations without solving the underlying issues he's unlikely to get his desired results. He'll only get his unintended consequences, those never fail to show up.

Mon, 09/24/2012 - 23:04 | 2826820 stocktivity
stocktivity's picture

Bernanke is king-of-the-data-hill and it is more than likely that he is privy to negative developments in one or more of the risks facing the US economy that even the most savvy bank economists cannot or may not see.

Well then...he's not too savvy....back in 2007, Benny said subprime was "contained".  It's all Bullshit!

Tue, 09/25/2012 - 01:52 | 2827025 Deo vindice
Deo vindice's picture

You know ... sometimes bankers just outright lie.

Just sayin'...

Tue, 09/25/2012 - 02:27 | 2827048 elementary
elementary's picture

They only lie in Europe and only when they really have to.

Tue, 09/25/2012 - 08:24 | 2827333 goldfish1
goldfish1's picture

"Bernanke is not a chump..."

Lesser minds differ.

Mon, 09/24/2012 - 22:44 | 2826777 RacerX
RacerX's picture

Sadly that is probably representative of a large part of the electorate. Funny that Stern would goof on the Dems though. Good for him for putting it out in the open.

Funny clip. Thanks for posting.

Mon, 09/24/2012 - 23:14 | 2826848 Bear
Bear's picture

Obama voters, you gota love em

Tue, 09/25/2012 - 07:17 | 2827213 Cloud9.5
Cloud9.5's picture

Anybody ever read the Bell Curve?

Tue, 09/25/2012 - 07:37 | 2827243 Offthebeach
Offthebeach's picture

I watched when it came out on DVD.

Tue, 09/25/2012 - 08:22 | 2827324 Dead Canary
Dead Canary's picture

Uh, no.

Tue, 09/25/2012 - 08:22 | 2827325 Dead Canary
Dead Canary's picture

<edit>  Double click brain fart.

Tue, 09/25/2012 - 02:33 | 2827051 The Malamute Kid
The Malamute Kid's picture

I always thought it was Sgt Schultz that said "I know nothing" circa 1964

Tue, 09/25/2012 - 02:38 | 2827053 LudwigVon
LudwigVon's picture

September 14's FOMC meeting wherein Uncle Ben slated the Fed to purchase an additional $40billion in agency mortgage-backed securities (MBS) per month (increasing total monthly agency MBS purchases to $85billion).


NEITHER pundit NOR barber.

How can none of you catch this? Since when is the Bernak buying $85b/mo in MBS??

Even with the income being reinvested, roughly $10b/a mo., and the unsterilized OT2 bond buying amounting to $26b in 2012, or roughly $3b/mo., still can't get you to the Bill-Gross-Wet-Panties scenario of $85b/mo in MBS. 

Even if we assumed the Bernak will announce that he will buy an equal amount of long-bonds as he is presently for OT2, ~$45b/mo., until labor conditions show significant improvement, after the OT2 program ends year-end 2012 (as everyone but the author knows, the Fed is out of short-term paper to sell right about then anyway), bonds are still not MBS! It would be like 53b / 45b a mo, MBS/long-bonds.

Perhaps we should be more careful to throw out: "sudden central banking guru and monetary transmission mechanism expert."

Tue, 09/25/2012 - 03:28 | 2827082 LMAOLORI
LMAOLORI's picture



There's alway's QE 4 to look forward to (sarc)

Morgan Stanley’s Parker: QE4 Could be Here by Year-End

Mon, 09/24/2012 - 22:24 | 2826726 kito
kito's picture

Let's call the collection of investors and traders that have been ceaselessly squabbling over the Fed's policy decisions, card players, and let's call Bernanke, the dealer....


yes, its gambling-not with chips-but with the lives of billions of people.........................

Mon, 09/24/2012 - 22:28 | 2826736 Go Tribe
Go Tribe's picture

Or...maybe Bernanke's just dumb. Would be a much cleaner explanation.

Mon, 09/24/2012 - 23:21 | 2826859 Dr.Engineer
Dr.Engineer's picture

Occam's razor works for science ...

Nuff said

Tue, 09/25/2012 - 07:20 | 2827216 Zwelgje
Zwelgje's picture

Bernanke dumb? Dumb folk never get far. He did.

No, just employed by criminals. Now that's simple.

Tue, 09/25/2012 - 08:42 | 2827391 CPL
CPL's picture

Seconded, sometime job inheritance sucks and you have no choice but to agree with the policies of the last loon.  Greenspan sat in the captains chair for a loooooong time.

Mon, 09/24/2012 - 22:30 | 2826751 davidsmith
davidsmith's picture

Does anyone have even the slightest clue as to why ZH keeps posting articles by ignorant clods?  I mean, is this the best this site can do?  Williams just a few hours ago contradicted this nonsense:


"Bernanke is not a chump--he is well aware of the short-comings of recent Fed activity and their limited effects going forward.  It is quite clear at this point that Ben is pulling his nose out of the textbook and is beginning to act out of last resort.  This last resort scenario is confirmed by his preemptive strike and implies that Ben, who has it from the best data in the world, thinks that this economy needs to return to "trend" as quickly as possible in order to weather near-term storms. "


What last resort is this chump talking about?  There are still trillions of dollars to be stolen from middle class people, and if there is something in the Fed's official mandate which prevents it from buying student loans and consumer debt, as well as propping up pension plans, then some new instrument will be invented to facilitate that. John Williams JUST said as much.  So this article is not only wrong, it is also dated.


And to show just what an ignorant dog this author is, check this out:


"An important (and I believe severely under-appreciated) tenant of Bernanke's FOMC stance was his response to a question by a journalist after his speech."


The word is "tenet."  This silly ass goon doesn't even know the English language.  Christ, ZH, give me a fucking break!!  This site is turning into a cartoon novel.  What a bunch of dogs! 

Mon, 09/24/2012 - 22:47 | 2826783 earleflorida
earleflorida's picture

fuck off mr purrflect!

Mon, 09/24/2012 - 23:09 | 2826837 Bear
Bear's picture

I am still trying to understand your point

Mon, 09/24/2012 - 23:32 | 2826883 kito
kito's picture

actually davidsmith, thanks to bernanke and his ilk, most of the countrys citizens are becoming tenants under his FOMC stance......................speaking of proper grammar, you do realize there is a space needed between first and last names????....for example.....david smith...............

Tue, 09/25/2012 - 01:59 | 2827028 Deo vindice
Deo vindice's picture

Or, maybe the space is in the wrong place, an apostrophe was missed and the last name spelled wrong.

Maybe it is really David's Myth.

Tue, 09/25/2012 - 10:57 | 2827843 Deo vindice
Deo vindice's picture

To the person who down arrowed my comment -

You really need to get a sense of humour. Really. It will be of great benefit in all the insanity of a mad world.

Tue, 09/25/2012 - 11:38 | 2828063 earleflorida
earleflorida's picture

You should be proud Deo,... tis but,"A Red Badge of Courage"-- to piss someone off for what you feel was a nobleman's  `Speak'!

Mon, 09/24/2012 - 23:34 | 2826888 yourfather
yourfather's picture

markets are voting mechanisms.

voting requires opinions.

therefore to function markets require opinions, buy or sell, produce, don't produce, consume don't consume.

Part of actually being involved in the market as an informed participant (as opposed to a stupid consumer) is understanding the other side of the trade.

Therefore ZH should be like a supermarket of opinions, and you just choose the one you want to support.

Do you get angry at Vons or Woolworths or whatever for selling a breakfast cereal you don't want to eat?

Then why rage against a free blog for posting an opinion you don't need to subscribe to.

Tue, 09/25/2012 - 03:09 | 2827072 LudwigVon
LudwigVon's picture


Oh no you didn't!

Tue, 09/25/2012 - 03:39 | 2827089 yourfather
yourfather's picture

o ya! I did!

Tue, 09/25/2012 - 08:06 | 2827289 Umh
Umh's picture

Now that's buy & hold!

Mon, 09/24/2012 - 23:39 | 2826903 Vint Slugs
Vint Slugs's picture


I give you a green arrow.  Functionally illiterate dorks like earleflorida fail to realize that they couldn't even log into ZH unless they spell their user names and passwords "purrflect"-ly and posters like bear with a second grade reading comprehension are forever "trying to understand" someone's point.

Tue, 09/25/2012 - 03:10 | 2827070 LudwigVon
LudwigVon's picture

Yeah a "fuckin cartoon novel." lol, agreed.

What "last resort" is this chump talking about?

It is quite clear at this point that Ben is pulling his nose out of the textbook and is beginning to act out of last resort.  This last resort scenario is confirmed by his preemptive strike

You mean first resort? Isn't expanding the supply of currency and credit all an exponentially derived monetary system owner does... like, by default? Or did you mean qualitative easing, that was the first resort, you are right. Where the central bank reduces the collateral requirements - reducing the "quality." 

So the last resort, pined over for years with NGDP, price-level and employment-level targeting, and formalized in policy prescription months and months ago when Goldman explained to everybody how the stock argument would soon move to flow for gaining incremental price manipulation. I would argue that the flow rate can be turned up notably, status-quo-philia & normalcy bias leans hard on logic. So how is that his last resort?

Even if it is his last resort, as unlimited logically means the ponzi end-game is neigh, and rate of flow is simply like arguing just how dead something is, it may not mean this is a preemptive strike. A you state, "when he acts, he either sees present reason to do so, or he is bracing for a future shock." So could it be that he is not bracing, but sees present reason to do so?

Such as cash-flow needs at TBTF, clearing away stank MBS in exchange for cash? There was "only" a handful of billions in repo right around the QE3 announcement, perhaps a bridge? Lastly, why couldn't the Bernak have seen the deflationary run-rate of $50/mo, and decide that his $10b/mo max in MBS reinvestments needed another friendly $40b /mo to help offset the bleeding. Bernak likely saw that this rate of implosion in private credit could increase near winter - and he can then announce unsterilized monetization and you will get your precious 85.

85. 85. I saw the # for days in the media, sadly not at all limited to MSM... For something so important as modern-slavery, you could at least get it fucking right.

Tue, 09/25/2012 - 05:37 | 2827156 yourfather
yourfather's picture

yeah one thing that concerns me is the quality of collateral for all these assets that the CB's are purchasing.

I mean if it was like a Greek Island or residences of diplomats in London, then I wouldn't mind having that on

Tue, 09/25/2012 - 05:45 | 2827162 Peter Pan
Peter Pan's picture

You are free to make any comment you wish, but naming others "silly asses" or "ignorant dog" detracts from the points you wish to make.

My view is that Bernanke does in fact have access to many tools, facts and figures, but what eludes him is a winning recipe or perhaps the realisation that there is in fact no winning recipe.

The only recipe, bitter as it may be, is the freedom of the market to work its axe and its magic.

Tue, 09/25/2012 - 08:27 | 2827343 orangedrinkandchips
orangedrinkandchips's picture

ZH is a fair, freedom rich site so if you dont like dont have to read it or agree with it.....freedom on speech 


Not to add fuel to your grammar fire, but isnt it 'uncharted' waters not 'unchartered' waters???


It's like the common fuck up with caring less.....most say I could care less....which means they still care! when they mean to say they couldnt care less.





Tue, 09/25/2012 - 13:58 | 2828261 earleflorida
earleflorida's picture


let freedom breathe...

exhale its nascent lexicons that all tongues will cherish its naivete fragrance of simplicity...

speak as if no audience exist, and drink with all but thy earful- pressed upon a wooden chalice- sipping  crimson lips at fluxing rest...

thus, as the wind spreads its gusting wings upon the hollowed canyons below- were it but an echo of thoughts remaining unheard- the world listens too an inner voice as yet- or ever, has never knowningly known...

were it not even knowing to question ones raison d`etre- this unsung wisdom- this linguistical, music of the spheres- where the creator makes adjustments to a planet he once call'd home...

all with just a simple breath from this unambiguous language, freedom to choose- the simplicity of it all...

Noteworthy: Socrates wrote nothing himself...

                    Jesus Christ wrote nothing himself...

                    Muhammad wrote nothing himself... *[he was illiterate] 

Tue, 09/25/2012 - 08:35 | 2827358 goldfish1
goldfish1's picture

There are still trillions of dollars to be stolen from middle class people

The transfer of wealth is nearing its completion. Musical chairs is about to conclude. Party's almost over for now. The trillions have been stolen.

This last Qe bit is to keep the facade from crumbling too. Does this sound bullish to you: 


Ohio women prisoners weave mats for homeless

Inmates at Ohio's prison for women are making mats for homeless people using an all-too-familiar artifact of the modern world: plastic grocery bags.

Tue, 09/25/2012 - 09:42 | 2827600 Vooter
Vooter's picture

"The word is "tenet."  This silly ass goon doesn't even know the English language."

No, all he's saying is that his response to a question by a journalist after his speech is renting an apartment from Bernanke's FOMC stance. What's so hard to understand about that?

Mon, 09/24/2012 - 22:36 | 2826763 Mactheknife
Mactheknife's picture

He sees massive problems in the shadow banking system.  And he takes marching orders from the primary dealers some of whom are European banks...not hard to see what kind of shit storm they are looking at. This is just another bank cartel bailout and will not create one job. Of course he knows that.

Tue, 09/25/2012 - 03:13 | 2827076 Assetman
Assetman's picture

I think you are at least, in part, on the right track.

It appears most of those European banks see that there must be an endgame with Greece... and most of them are going to need adequate reserves to absorb the losses that are likely to come.

The other part of the equation is global trade.  Whether it's imports or exports, trade acvtivity worldwide is collapsing, due mainly to depressed activity in Europe, but also due to what is happening in China and to a lesser extent, Japan.  It doesn't matter if interest rates are low globally, activity is dropping off.

I think what Bernanke (and some other Fed members) see is a major deflationary wave that is globally based-- and it will not leave the US untouched.  They know that deflation isn't issue today... but they see major deflationary headwinds coming.   Otherwise, they'd be content on continuing these sterilized Treasury purchases.

Of course, buying MBS will do very little to directly help the employment situation of someone losing their job in the transport sector, for example.  The additonal liquidity from QE will be used to protect the finanical (shadow banking) system from catastrophic damage-- just as the Fed has always intended.

Mon, 09/24/2012 - 23:00 | 2826772 SafelyGraze
SafelyGraze's picture

found a dead squirrel in my back yard

experts do not yet know the cause of death

I am devastated

it was a baby squirrel

there was no sign of trauma or sickness

large-scale squirrel breeding programs are essential to the survival of the species

in other cnn headlines: Cause of panda cub death still unclear

Mon, 09/24/2012 - 23:00 | 2826816 palmereldritch
palmereldritch's picture

Apparently, these two guys were seen in the neighborhood...

Mon, 09/24/2012 - 23:30 | 2826852 SafelyGraze
SafelyGraze's picture

+1 for the "squirrles scense"

+10 for the two peace officers

+100 for the caption's veiled reference to the LBJ 1964 signing of the coinage act, thereby debasing the last form of PM specie that provided domestic support for the unit-of-account-slash-medium-of-exchange, thus making silver=squirrel and LBJ+congress = GIJoe+friend in the poster depicting the crumbling curb in the road to serfdom and/or roota.

well played, palmereld (if that is your real name)!

you can't eat asphalt

Mon, 09/24/2012 - 23:38 | 2826899 palmereldritch
palmereldritch's picture

They hate us for our acorns

Tue, 09/25/2012 - 00:06 | 2826938 SafelyGraze
SafelyGraze's picture

you're killing me.

you know that.

now behave.

Mon, 09/24/2012 - 23:12 | 2826841 Mactheknife
Mactheknife's picture

>large-scale squirrel breeding programs are essential to the survival of the species ...Don't worry about it...I've got about a million of the little tree rats in my backyard all of whom seem to have gotten that memo because last year there were only 50 thousand.

Mon, 09/24/2012 - 22:47 | 2826776 q99x2
q99x2's picture

He, ChairSatan, knows exactly what the Federal Reserve of Banksters is doing but does not and cannot know its consequences. He cannot know if one day he will be held criminally responsible for his actions. He and the rest of them are therefore, out of fear, going to unconsciously see that their worst nightmares manifest. Just the way things work in reality. Only in the case, that he knowest what he doeseth could he circumvent the natural laws. But not even the Ben Bernank is privy to that knowledge. For fiat currency is the lie and the ChairSatan the father of that lie. Get behind me ChairSatan. Let the golden light shine truth upon the Federal Reserve and cast you and your evil spirits back to the hell from whence they came.

Oh wow. I got the camel toe on that one.

Mon, 09/24/2012 - 23:03 | 2826824 kalum
kalum's picture

Bernanke. May he RIH

Mon, 09/24/2012 - 23:27 | 2826870 RSBriggs
RSBriggs's picture

Damn.  I get Gas=X Gas relief and Obama Tee Shirts.

Mon, 09/24/2012 - 22:47 | 2826780 beastie
beastie's picture

Close to 50 Million on food stamps and maybe another 50 Million in denial that they need them. Nearly 50% underwater financially whether by credit card, mortgage or student loans. The jig is up. Most people are becoming somewhat aware of the reality of what the dollar is and how it's created. Hence the small army of armchair economists.

You are right; something wicked this way comes. Ben knows it and now we all know it. What it is exactly we can only guess at.

The economy sucks and will continue to suck until we believe it doesn't suck or we resubmit ourselves to the Matrix with no memory of what has happened.

Mon, 09/24/2012 - 22:50 | 2826788 Cabreado
Cabreado's picture

"It is a matter of time before markets lose complete faith in the recklessness of central planning Ponzi artists"

That the markets remain elevated indicates quite clearly the markets have nothing to do with faith of any kind.


Mon, 09/24/2012 - 23:28 | 2826873 jimmyjames
jimmyjames's picture

That the markets remain elevated indicates quite clearly the markets have nothing to do with faith of any kind.


Like when it took the equity markets 3 years to clue into the fact that the credit/housing bubble popped in 05-

Tue, 09/25/2012 - 08:43 | 2827395 goldfish1
goldfish1's picture

Like Diebold results in an election year,  the market indicators respond to the wishes of the programmer and behold, Bush wins Ohio.

Mon, 09/24/2012 - 22:50 | 2826791 luna_man
luna_man's picture


Face it, You just don't know an good article when you read one!!

Keep um comin... MY MAIN MAN!!!

Mon, 09/24/2012 - 22:52 | 2826796 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

The QEternity Program will begin on October 10th, the eighth business day of the month.  The bulk of MBS purchases will be on the eighth day of every month, but purchases will continue until the end of the month.  The size of purchases will focus on $40B but may be as large as needed.

This is what I deduced from reading the white paper anyway.  This white paper by the way was one of the most vauge I have ever read.

Agency MBS Purchases:

Mon, 09/24/2012 - 22:55 | 2826807 nah
nah's picture

bernanke should participate from a 3rd podium in the presidential debate bitchez

Mon, 09/24/2012 - 23:06 | 2826809 kevinearick
kevinearick's picture

The fed is as blinded by false assumptions as everyone else operating within the system. it just sees the positive feedback sooner.

Volcker, greenspan and bernanke all told you so. they are dis illusioned, running a blind experiment now, which js why you are going to see just how incompetent the us navy has become.

if you don't know what you are going to do next, because you do not know what nature is going to do next, and the empire margin is collapsing, the fed cannot know what the margin is going to do next.

Mon, 09/24/2012 - 23:08 | 2826832 mendigo
mendigo's picture

It seems the chances of some turbulence in Europe are not small.
If Europe falters badly it probably kicks the legs out from under China.
China takes out us and Latin American.
Maybe Ben is waking-up to the fact that the China data is bullshit and China may not weather a strong blow.

Mon, 09/24/2012 - 23:34 | 2826889 booboo
booboo's picture

"China may not weather a strong blow"

strong blow=Devine Wind=Kamikaze. 


Mon, 09/24/2012 - 23:12 | 2826845 A Lunatic
A Lunatic's picture

WTF does everyone expect? It's hard to do much good with the last four cents of the original value of the dollar.....

Mon, 09/24/2012 - 23:20 | 2826856 jmeyer
jmeyer's picture

Hey people; I'm just like you all, I'm frustrated and angry with the stuff that's happening. BUT, somehow you all have to make a difference; your knowledge and frustration have got to be directed to a positive goal. You can rant all you want and make cute and funny remarks but LET"S MAKE A DIFFERENCE !! You guys aren't Joe Sixpackers, you all know what's going on but Joe hasn't a clue. So what do you do ? Do you write about things ? No, because ZH does it all. How are you really going to help ?? There really IS a problem. It's not a fantasy. Things ARE actually going to crash unless we can save it. You may think that the banksters and their cronies are going to get what they want BUT WE CAN MAKE A DIFFERENCE because WE HAVE AN INTERNET !!!


Stop bitching and try to come up with a PLAN.


John  Meyer MD


Mon, 09/24/2012 - 23:34 | 2826874 CompassionateFascist
CompassionateFascist's picture

ZOGplan is global gulag. My plan is Civil War II. Weaponize. 6 November is National Buy-a-Gun Day.

Mon, 09/24/2012 - 23:34 | 2826887 RSBriggs
RSBriggs's picture

The SOLUTION is turning a few selected individuals into lamp-post decorations.  On live TV - especially ESPN.  As far as a plan to get there?   Dunno....

Tue, 09/25/2012 - 00:10 | 2826945 New American Re...
New American Revolution's picture

You are right John, and here's the answer to your request, check out, its a plan that can work to bring all Americans together to Elect A New Congress, but it needs money to run.   Maybe you would consider a donation, we'll have our Elect 50/468 program up soon, but we need to get the word out.  We have a press release contract, but everything costs money, does it not?  Serfs Up America!

Tue, 09/25/2012 - 05:38 | 2827157 Offthebeach
Offthebeach's picture

Planning is what got us here.
People are getting paralyzed. They know local/state/fed gov lie, except when they blather. The clowns are driving the skool bus and us muppets can't get off. So do we plan to sit up front and smell good and strong fear and choom smoke mixed with floor vomit and plastic bottle vodka, or do we sit in the back of the fiat bus and plan to punch the cripple girl in the braces in our fight for the big emergency door after the hit on the bridge abutment at QE 100? Or sit in the middle, listening to mp3 and feeling up the single mom section 8 girl whose sleeping with her moms paroled boyfriend?
On The Beach.

Tue, 09/25/2012 - 08:56 | 2827439 goldfish1
goldfish1's picture

John Meyer -

We are merely having a very pleasant card game here on ZH.

There is no plan.


The only thing to do, imho, is to allow the the fire to burn, the titanic to sink, the rotten apple to return to the bowels of mother earth. All is well...unplug from the matrix that has made you a slave, get yourself out of the way of the avalanche, the freight train collision.

Turn to yourself, cultivate that which is pure and powerful and right in your own spirit. Realize your own creative principle. Pay no attention to the overlords and they will fall away from your lack of energy. Be what you want to see in the world and it will be reflected back to you.

All is well.

Tue, 09/25/2012 - 09:37 | 2827585 Vooter
Vooter's picture

Why not just let it crash?

Mon, 09/24/2012 - 23:30 | 2826862 Coldfire
Coldfire's picture

Bermonkey may be king of the data hill but he is the supreme ruler of the fatal conceit hill.

Mon, 09/24/2012 - 23:31 | 2826882 RiverRoad
RiverRoad's picture

Nobody at the Fed knows what's holding back the economy?!  Oh pleeez, how disingenuous can you get?  Considering the fact that the Fed themselves royally trashed the world economies notwithstanding,(and all we thought they controlled was interest rates), it just so happens that Boomers all over the world are going out with a bang.  Rapidly moving past their peak earning/spending years, they are now snapping their wallets shut and refusing to retire and/or die.  Hence no growth, no attrition, no jobs.  We will have QE squared until the banks are made whole and the Boomers are kaput and Ben knows it.  If the Fed really cared about creating jobs, we'd be building roads and dams in every state.  QE Whatever will NOT create jobs or dropkick the Boomers into retirement; they've already got ol' Ben's number as far as that goes.

Mon, 09/24/2012 - 23:38 | 2826901 RSBriggs
RSBriggs's picture

Nice try, but you're full of shit....

Tue, 09/25/2012 - 08:27 | 2827345 Colonial Intent
Colonial Intent's picture

Roads and dams have no dollar value so why build em?

Tue, 09/25/2012 - 09:16 | 2827507 GeezerGeek
GeezerGeek's picture

How thoughtless and selfish of boomers to refuse to retire and/or die! I, at least, prefer not to die just yet, since I really want to hang around long enough to see the system become rational - that is, crash and burn. You don't have to worry about me refusing to retire, since my job was moved to a different state just before I turned 65. I wasn't given the option of moving to Wisconsin, nor would I have wanted to. My days of shoveling snow are long past.

Fortunately, I was frugal while I worked, saving as much as I could. Bought a new car once every twelve years whether I needed one or not, except for the last one that lasted nearly fifteen years. If every boomer had been as frugal as I was the US economy would have tanked years ago. I sometimes wonder if saving so assiduously was the right thing to do. The purchasing power of my savings has been steadily shrinking every year thanks to the Federal Reserve and the spendthrifts in the Federal government.

You also need to understand this: the Federal Reserve has nothing to do with building roads or dams, and little or nothing to do with directly creating jobs. The roads and dams are mostly a government function, although I hear that beavers occassionally build dams.

People should stop trying to blame every economic ill on boomers, at least the ones who keep working (and, incidentally, funding my Social Security) rather than becoming dependent on someone else. Boomers as a whole may just be the most spoiled generation yet to appear (that's my generation I'm talking about, too), but they have every bit as much right to work as anyone else.

Tue, 09/25/2012 - 09:34 | 2827574 Vooter
Vooter's picture

"If the Fed really cared about creating jobs, we'd be building roads and dams in every state."

LOL...I agree with most of your post, but once you've built more dams (and destroyed more ecosystem) and built more roads (and destroyed more ecosystem), then what? Do the new career road- and dam-builders then take their new wages and buy new cars for the new roads and new jet-skis for the newly dammed rivers? Is that it? What sort of society are you trying to build here?

Mon, 09/24/2012 - 23:35 | 2826891 earleflorida
earleflorida's picture

ya know Nicholas... when you mentioned $1tn student loans I began to think- as your excellent article states- suppose iApple goes bust[?] because of China shutting down Foxconn? there goes the $1tn target for iApple`sauce... and ~ +/+0.5 % GDP lopped off... gone in a 'Big iApple Second ! and there goes bambi's reelection bid?

keep-on-keepin  :-)) 


Mon, 09/24/2012 - 23:38 | 2826900 MrBoompi
MrBoompi's picture

"Nobody on the committee, nor on our staffs at the Board of Governors and the 12 banks, really knows what is holding back the economy".----

How about prosecuting financial fraud?  Who trusts these motherfuckers with our money?

Mon, 09/24/2012 - 23:41 | 2826908 RSBriggs
RSBriggs's picture

Sure, let's start by having the DOJ prosecute some of the top crooks, like Eric Holder.  Oh wait....

Tue, 09/25/2012 - 00:02 | 2826932 newengland
newengland's picture


The headline suggests that Bernanke and Co. are deceptive Fabians, crypto-communists, wolves in sheep's clothing. You have been warned. Fabians like to hide in plain sight.

Tue, 09/25/2012 - 09:22 | 2827531 GeezerGeek
GeezerGeek's picture

The concept of Bernanke as (a) Fabian led me to envision him, in the months leading to QE3, singing "Turn Me Loose".

Tue, 09/25/2012 - 03:25 | 2827081 Urban Redneck
Urban Redneck's picture

So despite thier mountains of data points, there is not a single person in the Fed's employ who spens any time in the real world?

Tue, 09/25/2012 - 00:00 | 2826927 newengland
newengland's picture

The author is confused by his own words and fails to write plainly. Is he saying that Bernanke is a crypto-communist? Playing all sides against each other is an arch tactic of the Fabian Society whose emblem is a woolf in sheep's clothing.

Tony Blair revealed their stain glass window at the London School of Economics in 2006. It was designed by George Bernard Shaw who said Lenin was the greatest Fabian, and declares a 'new world order'.

The project continues...

Tue, 09/25/2012 - 00:17 | 2826956 jimmyjames
jimmyjames's picture

Nobody really knows what will work to get the economy back on course.


The market knows-

Tue, 09/25/2012 - 00:27 | 2826968 jimmyjames
jimmyjames's picture

The United States currently faces no immediate threat of deflation,


Then why have they been inflating like crazy and not gaining any ground-

I would say not only the US-but almost every country in the world is and has been under the threat of deflation since the credit bubble burst-

Tue, 09/25/2012 - 00:48 | 2826987 RSBriggs
RSBriggs's picture

Why is it you consider deflation a threat, exactly?

Tue, 09/25/2012 - 03:29 | 2827083 LudwigVon
LudwigVon's picture

He must be a banker.


Tue, 09/25/2012 - 09:25 | 2827542 Vooter
Vooter's picture

Yeah, seriously. Lower prices are fine by me. Of course, I don't have a lot of debt....

Tue, 09/25/2012 - 10:19 | 2827712 jimmyjames
jimmyjames's picture

Why is it you consider deflation a threat, exactly?


Try this-

Tue, 09/25/2012 - 18:40 | 2829936 akak
akak's picture

Instead of cowering in mindless fear of imaginary deflationary monsters under your bed, why not try looking at the REAL world, where the cost of living is inexorably rising and NOT falling (and outstripping any putative real wage increases in the process as well)?

You'll see Elvis return on the back of a unicorn from the belly of a UFO before we ever see an appreciating fiat currency, as you deflationary flat-earthers keep maliciously and disingenuously trying to "warn" us.

Tue, 09/25/2012 - 01:18 | 2827009 verum quod lies
verum quod lies's picture

The "threat of deflation" will turn out to be the lamest red herring/non-threat (if not outright suppressed benefit) the U.S. has encountered since breaking away from any link to gold in 1971. As the last four or so cents of the dollar is finally trashed toward its intrinsic value of zero will "deflation" fools shut up or more than likely transform their deflation watch blogs into unicorn sighting blogs? One more time, the Bernank represents the TBTF banks and related TBTF financial institutions (i.e., even if the Fed charter is only for bank holding companies), and we know that because repeatedly its actions speak louder than its words. Its actions are simple: regardless of what the economy needs or what the data demands, save the large banks and to hell with anything else; ergo print mention deflation, print, mention deflation, print ...



Tue, 09/25/2012 - 01:58 | 2827029 Radical Marijuana
Radical Marijuana's picture

I agree with the assertion that the FED has more information than any other player. I agree that Benanke can not possibly be as stupid as the history of his total failure in predictions indicates that he could be.

My conclusions are based on the idea that the real global government, that acts in the shadows, covertly, INTENDS to destroy the American republic, and is systematically working through all of its various tools to accomplish those ends.

The FED exists because the past triumphs of the best organized criminals, using all the methods of organized crime, being able to take over the Federal Government of the USA, and then, deliberately steer it through one false flag attack, after another, and one business cycle after another, so that the overall program of wars based on deceits, plus debt slavery yo-yoing, could destroy the rights and freedom of Americans, and enslave them to the global elites.

Given that the FED, and the corporations that grew up around that CENTRAL banking, such as the vast mass media companies, that were systematically bought up, and used to direct all subsequent political developments, ARE the result of the past triumphs of the application of the principles of organized crime, which have been perfected during at least 10,000 years of Neolithic civilization, the only sane conclusion is that the FED indeed has abundant insider information, and indeed, has very intelligent and well-educated people working within in, BUT, the end goals are being decided upon and directed by people who want to destroy the sovereignty of the USA, and so, have been, and continue to be, using wars based on deceits, and debt slavery, (and probably every other means, like deliberately caused environmental disasters) to break the USA down, so that it can be assimilated.

I would also suggest that that has been assisted by the situation that almost all the opposition in the USA is also controlled. The only opposition allowed to flourish is based on bullshit, that will backfire. On a deeper level, Americans are stuck in the past, or looking backwards. They need to become much more proactive and realistic ... however, there is practically zero chance of that happening, since the REALITY they are inside of IS the runaway triumph of frauds, backed by violence.

Inside of that, each individual finds that their most successful strategy is to accept the Huge Lies that dominate their society, and go along with those, to get along. In each short-term increment, the established systems have numerous carrots and sticks to use. People are rewarded for playing along, while punished for refusing to. Therefore, step by step, the triumph of Huge Lies, backed by violence, took more and more control of the USA, and drove it insane ... Now, that accumulating madness has gotten to the point of self-destruction.

The global elites were not good at anything, but being the best at being dishonest, and backing that up with violence. They were able to get the FED created, with them as the controllers of that, with them as the insiders, with all the inside information. They have deliberately used false flag attacks to start war after war after war, that Americans have been fighting, and losing, again and again and again.  Only the banksters and their corporations have been getting richer and more powerful from those endless wars based on deceits. While, of course, the endless emergencies of those wars justified the endless process of more and more debt slaveries, which has reached the point of debt insanity, due to its astronomically amplified size.

I do not believe that was accidental. But neither do I believe that there has to be one coherent super masters, who have a grand plan. The entire history of civilization has been lies, backed by violence, on a runaway exponential growth, of more and more frauds and robberies. Although there were lots of lesser planners, who did execute their plans, the bigger picture is indeed MUCH BIGGER.

Overall, I regard Americans as being deeply deluded, practically psychotic, due to the long history of the triumphs of Huge Lies, backed by violence, ending up in almost total control of their society ... with the FED as one of the most clear symbols of that situation. However, because of that, I find that most Americans appear to regress under stress, and even more want to go backwards, as their way to cope with the systematic destruction of everything that they used to believe and take for granted.

WE live inside of combined money/murder systems, and yet, mostly the solutions proposed for those problems are impossible ideals that those should not exist at all. Thus, the only significant and credible opposition to the runaway establishment is based on ideas like free markets and liberty, which have NO operation definitions, but are simply old-fashioned transcendental poetry, that enough people still like the sound of.

The FED is the manifestation of the established money/murder system. It IS the triumph of organized crime, with the USA government becoming territorial gangsters, controlled by the superior bigger gangsters, the international banksters. All that seems plainly obvious, IF one just looks at enough history. However, I find that after people do good enough historical analysis of those social facts, then, they revert to impossible ideals, and false fundamental dichotomies, to propose their bullshit "solutions."

REALITY IS ALWAYS ORGANIZED LIES, OPERATING ORGANIZED ROBBERY. Understanding the FED is merely to observe one instance of that universal situation, which has GOT to be true, BY DEFINITION. Therefore, any practical and realistic solutions should NOT be based on false fundamental dichotomies, such a liberty versus tyranny, or whatever ...

This article above appears to me to be just another of the superficial discussions of the FED, that fails to face the deeper facts that REALITY IS ALWAYS ORGANIZED LIES OPERATING ORGANIZED ROBBERIES.  Any genuinely scientific understanding of our situation should start there, and return to there! The operations of the FED only make sense from the perspective of the application of the principles of organized crime, done by the best organized criminals, who are succeeding in taking control of the government, and who have the most power and the most information.

The various reactionary revolutionaries, who perceive that, then tend to return to impossible ideals, and false fundamental dichotomies, that NOBODY should do that. I maintain that, as much as possible, EVERYBODY should do that, and that they ARE doing that. As long as Americans continue to rely upon transcendental poetry about freedom and democracy, then they will continue to fail to cope with the reality of the FED controlling their lives, and systematically destroying them. That is even more IMPERATIVE, since the FED now is the central public player in the global money/murder system of electronic fiat money frauds, backed by atomic bombs.


HOWEVER, the realistic solutions to that require that more Americans stop being brain dead sheep, and rediscover their inner wolf. The way to do that is through an intellectual revolution that overcomes the biggest bullies' bullshit social stories, promoting impossible ideals, and false fundamental dichotomies. IF SO, then Americans will stop regressing, by returning to those impossible ideals, which ALWAYS backfired in the real world, and made the opposite actually happen!

All of the progress in science, that made the electronic and atomic technologies which have been developed by the FED, in the current money/murder system, was progress due to transcending false fundamental dichotomies, and adopting deeper unitary mechanisms to understand things. We should do that in our political science. We should apply human ecology ideas to political economy. However, that is dramatically different, indeed, almost totally BACKWARDS, to all of the fake "solutions" being proposed the by vast majority of the controlled opposition groups, led by various reactionary revolutionaries.

It is NOT just that the FED is the supreme organized crime activity, which took control of Americans, it is that human reality is necessarily ALWAYS organized lies, operating organized robberies, and that the only "solutions" are the evolution of the dynamic equilibria of those phenomena!

If that was not the fringe of the fringe of fringe, or the Fringe Cubed position, then America could have a better future. There are plenty of creative alternatives, throughout every domain one examines. However, the central core, keystone or lynch pin to any system of alternatives MUST be design science applied to the money/murder systems, using unitary mechanisms to understand and do that ...

Unfortunately, for now, only the gross impedance of established social habits, by the crazy collapse of the runaway system of huge lies overshooting itself, and thus FORCING more people to begin to think more, MIGHT lead us towards those transformations ...

Tue, 09/25/2012 - 05:45 | 2827163 Shigure
Shigure's picture

Radical Marijuana - your comment should be a ZH Guest Post imo

Tue, 09/25/2012 - 07:14 | 2827208 mvsjcl
mvsjcl's picture

Yep. Give ME some of that stuff he's smokin'. Good insight (if a bit wordy).

Tue, 09/25/2012 - 18:10 | 2829910 Radical Marijuana
Radical Marijuana's picture


I have been reading Zero Hedge for a couple of years. I found the articles here to be consistently much higher quality than most other sites. Overall, the readership of Zero Hedge is way, way ahead of the general public. Therefore, a month ago, I decided to post some of my typical kinds of comments.  ... Meanwhile, I continue to post my rambling, redundant material on the Marijuana Party of Canada Web site, since I am the "leader" of that registered political party.

Although not nearly as bad, yet, as in the USA, everything important in Canada is getting worse, as the triumph of runaway LIES accelerates! Of course it is symbolic that in 2012 a new law was passed by the Canadian government which has made cannabis be even more criminal here than ever before. Canada has always followed the USA, and therefore, we too have just started imposing mandatory minimum jail sentences for cannabis crimes. ... My real life is mostly coping with things going BACKWARDS!

Everything, everywhere, is being pushed BACKWARDS, harder and harder, by the runaway triumphs the Fraud Kings controlling the world. The FED's QEternity is just the latest installment of the established systems needing exponentially more fiat money, just to keep their treadmill going.

In light of the more recent Zero Hedge article asking what could we have bought with the latest installments, of about $26 trillion that the FED has made out of nothing, let us say that the average house in Canada costs $500,000.  So, $one million would buy two houses, and $one billion would buy two thosand houses, and $one trillion would buy two million houses in Canada.

Therefore, the FED has made enough money out of nothing to buy 52 million houses in Canada ... which is far more than the number that actually exist!  Indeed, it can be argued that the FED has made enough new money out of nothing, in the last five years, to be able to buy everything that could be sold in Canada a couple of times over.

Thus, that $26 Trillion is like being able to buy up everything that Canadians could sell, with lots left to spare.  This runaway triumphant fraud could be oversimplified to state that the FED has made a couple of Canadas out of nothing, in the last five years!

Tue, 09/25/2012 - 07:04 | 2827204 A82EBA
A82EBA's picture

Could someone please summarize & translate to English please.

Tue, 09/25/2012 - 08:51 | 2827414 toomanyfakecons...
toomanyfakeconservatives's picture

Yes, it's rampant criminality, pure and simple. These super criminals can and will be arrested like common thieves. You should watch the ending scene of Boiler Room when paddy wagons and prison buses pull up to the JTMarlin headquarters to arrest all the financial crimainals. This will occur at the White House, Capitol Hill, and FED Headquarters in the very near future...

Tue, 09/25/2012 - 09:05 | 2827466 goldfish1
goldfish1's picture

Really? Just who do you think is going to do that?

Tue, 09/25/2012 - 09:22 | 2827532 Vooter
Vooter's picture

Ashes to ashes, dust to dust... The United States doesn't HAVE to exist--the entire edifice could come crashing down tomorrow, and the sun would continue to rise in the east the day after tomorrow. The U.S. government has made it PERFECTLY clear that we are all on our own, so you should take them at their word and prepare yourself and your loved ones as best you can. No matter what the propagandists have said or will continue to say as long as there's money to be made, YOU are more important than any country or any government. The United States has never been anything other than a rapacious, shallow and destructive entity, so fuck it--let it collapse. The world doesn't need us...

Tue, 09/25/2012 - 02:37 | 2827056 elementary
elementary's picture

The list of reasons for Benny's actions is one and only one thing:  SAVE THE BANKSTERS' ASSES AND STEAL AS MUCH AS POSSIBLE BEFORE THE IMPLOSION.

Maybe Uncle Ben has been given an actual end date for this catastrophe. Finally Japan and the others now fully understand they better get their shit together, and fast.

There are no other reasons on the list - they do not care about anyone or anything, but themselves.

We should all play bankster pinata. Instead of using a bat to beat the candy out of a cardboard donkey, we use the bat on an upside down bankster hanging by his foot until all of his stuffing pours out.

Or better yet . . . Gladiator in every arena in America!

Tue, 09/25/2012 - 08:44 | 2827397 toomanyfakecons...
toomanyfakeconservatives's picture

It's gonna get ugly to some degree after the MASS ARRESTS take place. When the illegitimate Federal Reserve Note is replaced with the new Treasury Dollar, the little guys (meaning the people) will get a 1:1 exchange while banksters and millionaires on paper will get pennies on the dollar. After the reset, secretaries will be worth as much as CEOs.

Tue, 09/25/2012 - 03:32 | 2827086 icanhasbailout
icanhasbailout's picture

What's holding back our economy is uncertainty.


Why would anyone invest in a business without some reasonable guarantee that some unaccountable bureaucrat won't shut you down for wholly arbitrary reasons?

Why would anyone invest in a stock, knowing that stock prices are levitating on the strength of constant intervention alone?

Why would anyone buy a government bond only to get negative real interest rates?

Why would anyone make a contract, knowing it could be entirely upended in defiance of the law by the government itself?

Why would anyone invest with a broker, knowing that you could be Corzined at any moment?

Why would anyone expose any wealth anywhere only to have a flock of lawyers descend on anything that smells like money in order to strip mine it?


etc. etc. etc.


Guess what, there are consequences to abandoning the Rule of Law, and horrible business conditions are prime among them!

Tue, 09/25/2012 - 08:34 | 2827365 toomanyfakecons...
toomanyfakeconservatives's picture

Speaking of abandoning the rule of law... the Constitution and natural law will make a roaring comeback after the MASS ARRESTS take place...

Tue, 09/25/2012 - 09:07 | 2827476 goldfish1
goldfish1's picture

Don't bank on it.

Tue, 09/25/2012 - 03:55 | 2827097 Shevva
Shevva's picture

'Nobody really knows what will work to get the economy back on course.' - No one trusts banks anymore so if you can avoid dealing with them you don't.

You want sheeple to start spending again you got a long way to go before anyone I know will trust a banker, why put yourself in to debt with bankers?

Tue, 09/25/2012 - 04:00 | 2827101 Shevva
Shevva's picture

PS: 'Bernanke is not a chump', nor is Krugman and he has a nobel prize.

Tue, 09/25/2012 - 04:16 | 2827111 Zwelgje
Zwelgje's picture

The FED wants you dead.

Tue, 09/25/2012 - 05:40 | 2827158 falak pema
falak pema's picture

As someone very prescient here on ZH said : We are now in a runaway machine mechanism where 80% of our nominal assets are monetised and evaluated in terms of fiat value; said fiat value now in careening debasement orchestrated by collective CB action.

What little of our remaining assets of the real economy that are represented in hard asset terms is diminishing under the fiat tsunami before our eyes or is becoming safe haven in biflation mode. 

This second category will become the Raft of the Medusa when hyperinflation results from continuing fiat pumping hitting the wall of zero diminishing returns. Hang on to dear life as not many will be on that raft.

You can bet that the Oilgarchs have all their places already booked when the goose gets truly cooked.


Tue, 09/25/2012 - 07:51 | 2827263 CompassionateFascist
CompassionateFascist's picture

Yes, a lot of billionaire Jews have been buying private islands lately. Even the occasional shabbatz goy - e.g., Chief Justice Roberts - gets one. 

Tue, 09/25/2012 - 04:33 | 2827125 cynicalskeptic
cynicalskeptic's picture

Small businesses CANNOT get loans - know one place with a great balance sheet who's been trying to borrow to expand for years, can't get a dollar

Banks are NOT writing mortgages readily, they're making you jump through hoops - a friend making mid 6 figures had a bear of a time getting a mortgage WITH 40% down


The banks are NOT passing all that cheap money down.  They are keeping it to prop up their balance sheets - AND gambling it on stocks and commodities and .......   One JPM exec laughed at Blythe's assertion that they are neutral..... They own tanlkers of oil sitting out on the sea, warehouses of metals....   

Tue, 09/25/2012 - 05:28 | 2827148 falak pema
falak pema's picture

...These days every pundit and his barber are suddenly central banking gurus and monetary transmission mechanism experts...


...The Barber of Seville, or The Futile Precaution 

The libretto was based on Pierre Beaumarchais's comedy Le Barbier de Séville(1775), which was originally an opéra comique, or a mixture of spoken play with music.

Tue, 09/25/2012 - 07:01 | 2827202 ekm
ekm's picture

Do you guys want more proof that the Fed is just taking orders as it has no clue what to do?

The Fed became irrelevant in 2008. Period.

Tue, 09/25/2012 - 07:21 | 2827217 buzzsaw99
buzzsaw99's picture

Once the 1% own everything the fed's only job is to keep it that way.

Tue, 09/25/2012 - 07:25 | 2827223 Zwelgje
Zwelgje's picture

Flying on fumes but still dropping bombs!

Tue, 09/25/2012 - 07:31 | 2827237 shovelhead
shovelhead's picture

Benny is bailing out the shadow banking boat that's sinking in a sea of shit. A rather large ocean of shit, in fact with no land in sight.

Theory time is over and reality is rudely intruding. Benny got a look down in the bilge and I think he's a bit worried.

Just an opinion with no 'real' data to back it other than a firm belief that almost 700 trillions of obligations woven into a web around the globe may not always function with the precision of a Rolex.

Then again, I could be wrong, and Benny knows he can fix this eventually and all will be well.

It's always fun until somebody big defaults.

Tue, 09/25/2012 - 07:49 | 2827257 andrewp111
andrewp111's picture

It is not just data. The Bernank is fully aware of the internals of the system that expire or hit at the end of 2012. And there are lots of them:

-- Unlimited Congressional backing of Fannie and Freddie's obligations expires

-- Unlimited deposit insurance on non-interest bearing transactional accounts expires

-- the Bush tax breaks, especially the break on dividend and cap gain income expires

-- the payroll tax cut expires

-- sequestration hits

I think QEternity is designed to deal with the first one. By putting a bid under MBS, he assures that Fannie and Freddie can continue to operate.

Tue, 09/25/2012 - 07:55 | 2827272 Fort
Fort's picture

I did some contemplating and came up with some nice conspiracy thinking on this subject. Absolutely ridiculously farfetched, but I'll share my strain of taught anyway.

It is not impossible to get deflation. Although the thought defies all logic at this time it is not impossible. To emphasize my point bear in mind that all fiat money is credit and requires interest. Inflation ensures that money doesn't become to scarce just as negative interest rates does, but at the end of the day there is always insufficient money to pay it all back. If the sentiment continuous to deteriorate and I have very little reason to believe that it will not deteriorate, than ultimately not even time and not even all the money printing in the world can prevent deflation simply because there is not enough money in the world no matter how much you print.

What if the scenario is different this time? What if it looks like this? Short term there will be inflation, it might even become hyperinflation, but this time in contrary to historic events it might just lead not to the death of the fiat currency, this time it actually might lead to deflation and money scarcity. That (Hyper)-inflation in the past always lead to the end of a currency does not mean that that will always continue to be the outcome. One of the main reasons it has always been the outcome, was because the debtor could muster enough force to get the creditor to give up. If that is the outcome this time as well, great it means mankind gets another round. Who knows we might even be smarter about it this new round.

But what happens if the peg does not break, what happens if the creditors can muster enough force to control everybody and demand payment this time. Regardless of how much money is printed there is not enough of it in the world to pay everything back. This is what keeps me up at night. What happens if you loan money and you cannot pay it back? Liquidation, right this means all assets are confiscated sold and the creditors receive back the yield of the sale. If that cannot be done the creditor simply owns everything you possess and if all you possess is a body and the ability to work the creditor can put you to work until you have paid up. (I know US bankruptcy law makes this unlikely), our bankruptcy law does not make that impossible for instance. All that is needed in the US is to change the law. That is not that difficult is it?

At this point money will be worth a hell of a lot even worthless fiat money, since most people, sovereigns and corporations have more debt than assets, and everybody needs the fiat currency to get the creditors of their back and their enforcers. We will definitely have deflation at that point. We will also be in unchartered territory (Again), but this outcome is much scarier than (Hyper)-inflation which ends bad. This scenario ends in totalitarian supreme domination by a small minority with a strong force of arms. Maybe instead of being worried about to much money printing, we should be worried about the central banks stopping the printing press. It might get very ugly at that point it could be the final chapter of this card game. But what do I know; I'm definitely just speculating and following a strain of thought here. I know I'm badly informed, I have come to realise how ridiculous my entire education actually was. How the textbooks manipulated me into assuming things that at first didn't make sense to me. I now understand far better why some subjects really where difficult for me to understand. At the time I thought it was lack of intellect, I now know, it wasn't. The thing I was trying to convince myself off (teach if you like), simply didn't make sense.

Kids nowadays are being taught more and more how reliable the government is, how inadequate they are themselves without government, how they cannot make it without the guidance help and support of government, how misguided people have been historically because they didn't have a strong government to protect and serve them. They are taught things are so much better now than they were in history because this big Sheppard has their backs. They are taught that it is completely justified rational even to talk to bodies of authority if they suspect people in their surrounding do not agree with the wise teachings of the public schools.

Instead of being taught to think critically they are taught to be wary of those that disagree with this big government idea. Laws are changed and all can be terrorists now. Kids are taught who is a terrorist and that it is their duty to inform authorities of acts of terrorism. Ever taught for one second what this implies, I know most do not see it because the kids nowadays do not wear uniforms (Brown) but they are brought up with some pretty twisted views (Occupy movement anybody?). What if their future is looking bleak and they turn to those teaching them for answers? What if those teaching them tell them it is the terrorist; it is those that do not agree with public perception that prevent progress for mankind, it is those that oppose the government that are the root cause of all misery? The blame is on opposition. These kids will be the force needed to usurp the rest of the population, after all it is not likely parents and grandparents will use force against their own children. SO you US people may have stores full of guns, will you use them if it is your own kid who comes to your door? If yes, how many of your neighbours do you think will do the same?

I'm not very hopeful for my generation if this scenario starts to play out. I have also no illusions about the outcome of this experiment. After all it has been done before and it has worked (for some time yes) before, but this time could just be different. The world is global enough to repeat the experiment on a global scale. This time might just be different, and nobody knows how long it will last if the net closes and this becomes the bleak reality for mankind.

I do not think it is necessary to provide a list of experiments to this effect conducted historically, I know most of you have way more than an average understanding of history and what goes on in society. I also do not need to convince anybody that this type of brutality cannot be expected from our governments or even our own children. To counter the last argument I could also provide a list of recent events displaying mankind’s brutality and that of political leaders and even what children are capable off if manipulated or drugged properly but I know that that is not needed to emphasize my point. Deflation indeed, I’m scaring myself here.

 Indeed be wary, very wary of deflation and do ask yourself the question is it really impossible to get deflation under the current circumstances. Of course I took deflation in my strain of taught one step further. I guess this scenario is hyper deflation something the world has not experienced before. It is the one thing therefore nobody really fears or expects, mankind has the tendency to learn from past experiences, but has mankind the ability to consider the inconsiderable. What does the other side of (hyper) inflation look like and what conditions are needed to get it? Inflation first destroys everybody's net worth, followed by (hyper)deflation destroying everybody's ability to pay of their debt. Followed by One World Goverment. Quite the party no?

Tue, 09/25/2012 - 12:19 | 2827283 Bicycle Repairman
Bicycle Repairman's picture

So much talk of the FED being out of bullets.  You do realize that the USA has barely begun to repudiate it's debt.  The USA has repudiated its debt several times in its history with the consequences for the continuity of the USA being exactly nothing.

In the 19th century the USA told it foreign creditors to simply pound off.  Nixon closed the gold window and then turned inflation loose to kill off debt in the 1970s.  How many years of 5% to 10% inflation would be needed to kill off the current debt?  The answer is: as many as it takes.

So understand this:  the USA is not going anywhere.  Part of ensuring continuity is protecting the government's important constituencies.  Some debt is sacred.  Your job is to figure out how the repudiation will take place and protect your "non-sacred" assets.  Otherwise the repudiation will mean "Mad Max" for you.

Tue, 09/25/2012 - 09:01 | 2827457 Vooter
Vooter's picture

LOL...I think Bernanke should just put a revolver in his mouth and pull the trigger. Now THAT would be funny. The headlines might read: "Ben Bernanke, a miserable failure of a human being, shot himself today. Early reports indicate that no one gives a shit."

Tue, 09/25/2012 - 09:36 | 2827582 RiskAverseAlertBlog
RiskAverseAlertBlog's picture

"What is almost never considered by most wanna-bees  is that no one in the world has access to as many economic and financial data sets, metrics, and indicators, and the synthesis thereof, as the United States Federal Reserve."

Maybe so, but every wannabe plainly sees confidence is shattered, and no hyperinflationary deluge is gonna change this fact. Each new further descent central banks make into the deep end only confirms it.

"It means that the Fed foresees imminent headwinds that would be disastrous to our economy in its current state."

No, it means the Fed, along with the so-called "banking system" it euphemistically "oversees" is hopelessly trapped -- insolvent -- and has no choice but reveal this fact.

All I can say for Richard Fisher is if the thang at the Fed doesn't work out, there's a strong likelihood JPM will find him a place in their PR department. "Nobody really knows what is holding back the economy?" Puhlease.

Tue, 09/25/2012 - 09:49 | 2827625 lindaamick
lindaamick's picture

hahaha.  The global elites have cooked their own goose.  The golden egg is the proles' ability to buy the stuff the elites' make.

The elites require the masses and the elites hate this fact. They have devoured their seed corn.

We are witnessing what  happens when a small group gains too much power.  The imbalance brings the world economies to a halt. 

There is no way out given the current trajectory.  Benny B. can conjure up as much paper as he wants and it will not start the engine UNLESS he shares it with the proles.



Tue, 09/25/2012 - 09:51 | 2827632 SKY85hawk
SKY85hawk's picture

re: Nobody really knows what will work to get the economy back on course.

Take the 'lessons of history' thing and consider 1965 to 1980.

If you were there recall the politician's responses. We're guessing, we're hoping . . .

It was a time of Stagflation.   That word will be used soon, this year.

The "Bob Hope" generation entered their 'spend less-save more' life stage.  YOUR parents!

Understand that the baby-boom is in the same life-stage. YOUR Selves!

This economic contraction is a demographic reality that happens every 40 years.

Not one Politician will admit they are helpless to restart Economic Growth! 

They will wait this thing out, just like before.


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