Putting It Into Perspective: One Week Of QE 3 In Minimum Wage Job Terms

Tyler Durden's picture




 

By now everyone knows that as part of QEternity, Uncle Ben is currently monetizing $40 billion in MBS per month, a number which as we first forecast hours after its announcement and which everyone is now piling on to reaffirm, will rise to $85 billion in outright, unsterilized monetization beginning January 1, 2013 (as anything less would be seen as impllicit tightening in a market which now needs $85 billion in Fed Flow monthly simply not to collapse). This is fungible money which is going solely to benefit the banks, whose reserves with the Fed swell, and which proceeds can be used for virtually any purpose - from buying MBS (which they are doing) to 300x P/E stocks like AMZN - but not to be lent out to those desperately seeking loans? Why: one simple reason - the banks are already mired in legacy litigation from loans made during the last housing bubble (just see the hundreds of mortgage-related lawsuits Bank of Countrywide Lynch is a defendant in, and the just announced $1 billion lawsuit against Bank of America by the US and you will get a sense of how bad it is) and the last thing they need is a repeat of that. And while the Fed has only one monetary easing pathway, which always goes through the banks, we wish to demonstrate to our readers what, in a thought experiment ignoring all the obvious practical considerations, the equivalent benefit to the general population would be if instead of being held by the banks and used to make the rich even richer, this money would bypass the banking syndicate and go straight to the US job seeker...

For perspective purposes, below is a crate supporting $100MM in cash.

The graphic below then shows how many minimum wage jobs this $100 million could fund (labor supply and demand and other "practical" stuff aside). In short, it takes 3500 minimum wage American workers one year to make $100 million.

So how many minimum wage jobs could one week, forget one month, of the current $40 billion in QE 3, prefund?

This much.

And this is just one WEEK of QE 3.

To visualize how many jobs the Fed could fund in one year starting with its outright monetization of $85 billion/month in January, in one full year, take all the groups of people shown above, and multiply by 100!

And this is why America is not enamored with the Fed or with its bankers...

graphic courtesy of Demonocracy

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Wed, 10/24/2012 - 12:14 | 2915928 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

King Dollar!

Wed, 10/24/2012 - 12:17 | 2915937 LawsofPhysics
LawsofPhysics's picture

Well, there sure is a lot of them out there.  Gonna be fun when they all come rushing back eh Mr. Hendrix?

Hedge accordingly.

Wed, 10/24/2012 - 12:29 | 2915972 DoChenRollingBearing
DoChenRollingBearing's picture

+ 1

Time's a coming that gold will jump astronomically.  Maybe the US$ will be King for a while, and all else will go down (deflation, as people slam the brakes on spending and the banks fon't lend), but the deficit spending and Ctrl-P will ensure that GOLD will prevail.

As LawsofPhysics just above says: Hedge accordingly.

Wed, 10/24/2012 - 13:17 | 2916087 MillionDollarBogus_
MillionDollarBogus_'s picture

When Bernanke says he wants to create jobs, is he referring to the banking sector, and nothing else..??

Bush sent all taxpayers a treasury check to help goose the economy. 

Bernanke should start doing the same. 

Wed, 10/24/2012 - 13:22 | 2916098 SilverDOG
SilverDOG's picture

MillionDollarBogus_

 

I'll take silver, you can have more paper.

Wed, 10/24/2012 - 14:08 | 2916220 Arcturus
Arcturus's picture

you need the paper to get the silver. Unless of course you are both a miner and a refiner.

Wed, 10/24/2012 - 14:15 | 2916242 Dalago
Dalago's picture

lock and load baby!

Wed, 10/24/2012 - 19:15 | 2917089 3rdgrader
3rdgrader's picture

Bernanke is God. I love him for stealing all of my money and giving it to those rich cock suckers. I hope he starts printing $1,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000 every minute and starts giving it to all his rich friends to play with. God bless Bernanke, oops, I mean God bless God.

Instead of saying that he is creating jobs, why doesn't he just tell the truth, that he's stealing $10,000 per month from every man, woman and child on the planet?

The guy is more fucked up than Charles Manson

Wed, 10/24/2012 - 18:39 | 2917029 dhengineer
dhengineer's picture

I remember when they sent those checks, they implored people to spend it, not to save it, not to buy PM with it.  What did I do?  I immediately deposited it in my savings account.  A week later, I wired the money out of that account to a silver dealer, and bought silver with the full amount...

I feel so naughty...

Wed, 10/24/2012 - 12:45 | 2915998 vast-dom
vast-dom's picture

please copy paste this article and your comments directly to The Federal Reserve Consumer Help:

ConsumerHelp@federalreserve.gov 

Wed, 10/24/2012 - 19:05 | 2917097 3rdgrader
3rdgrader's picture

Nobody ever reads any of it because they don't give a flying fuck, but go ahead and send em a line or two lol

Wed, 10/24/2012 - 14:13 | 2916232 Glitterbug
Glitterbug's picture

At $85 Billion a month, the fed could print enough in just 4 months to pay Germany in genuine US$ notes for their Gold held in Fort Knox. And the same for all the other nut-jobs who have stored their Gold in the USA for "safe-keeping".  Imagine if the Fed printed money and paid off all the Gold the USA holds in escrow for other countries in one fell swoop!

OK, so the Gold may not really be there, or if it is, it has been lent out or rehypothecated. So this would be a way out of the mess.

Imagine the scramble as those countries then try to buy back their position in the Golden stakes to fortify their central bank reserves!  Is that unethical? Maybe, but no more so than what Nixon did when he reneged on the original Gold/Dollar link.

Wed, 10/24/2012 - 12:29 | 2915971 Atlasshruggedme
Atlasshruggedme's picture

I don't want a min wage job... do you? Lets do a chart of the Avg Income (50k?)

Wed, 10/24/2012 - 12:46 | 2916002 Sancho Ponzi
Sancho Ponzi's picture

50k * 1 million is $50 billion, and Bennie may be purchasing about $80 billion/month of MBS, which is an annual rate of about $1 trillion.  That $1 trillion could be used to employ 15 million people @50k/year.

Wed, 10/24/2012 - 12:47 | 2916005 LawsofPhysics
LawsofPhysics's picture

Bam!  +1000, this isn't about jobs, it is about power and control.  Always has been.

Wed, 10/24/2012 - 13:05 | 2916026 Sancho Ponzi
Sancho Ponzi's picture

 

 

I must have miscalculated somewhere. $ 1 trillion / 50k = 20 million jobs @ 50k/yr.

 

Minimum wage employees earn about $15k/year.

$1 trillion / 15k = 66.666 million jobs @ 15k/year. Chairsatan indeed...

Wed, 10/24/2012 - 13:26 | 2916107 worbsid
worbsid's picture

I was wondering how Romney was going to create 12 million good paying jobs and now I know.  His new FED chief will simply give the money to Octomom and others like her and call it jobs.  Welfare goes down as he promised and jobs go up.  Bravo ...

Wed, 10/24/2012 - 14:57 | 2916387 hwwesq3
hwwesq3's picture

The job that Octomom and others like her will have is called "a consumer."

And the money will be spent, instead of disappearing into the Cayman Islands.

Wed, 10/24/2012 - 19:09 | 2917106 3rdgrader
3rdgrader's picture

When they say they're going to create jobs, they mean the hookers are going to give the Bankers blowjobs. At least we know where our money is going. It's all going down someones...

Wed, 10/24/2012 - 16:50 | 2916773 hawks5999
hawks5999's picture

Demonocracy refers to the graphic as representing "average wage" of about $28k/yr.

Wed, 10/24/2012 - 12:48 | 2916009 Carp Flounderson
Carp Flounderson's picture

Better math there... thank you.  original article has massive fail on stock vs flow comparisons.

Wed, 10/24/2012 - 13:53 | 2916180 ydderf1950
ydderf1950's picture

15 million people doing what?

Wed, 10/24/2012 - 14:11 | 2916228 hijoepoota
hijoepoota's picture

15 million people jacking in San Diego. According to the gang also known as Bernakits, printing money will solve all our problems.

Wed, 10/24/2012 - 14:24 | 2916272 Sancho Ponzi
Sancho Ponzi's picture

That's a corrected 20 million @ 50k/year. I'm not for any such plan - just replacing the pictures with numbers. 

Wed, 10/24/2012 - 14:50 | 2916367 dugorama
dugorama's picture

rebuilding the bridges in minnesota?  repaving the streets in NYC?  rebuidling all of the third world infrastructure in greater NYC, for that matter.  I don't care if you build a money losing high speed rail linke between Boston and DC or SF and LA or both - it's all better than giving it to Goldman Sachs.  We, the people, end up with something tangible and they, the unemployed, retain or gain some job skills.  Hell, just send everybody in the whole country a check for $30k, but for gawd's sake quit teh wealth transfer from me to Goldman Sachs.

Wed, 10/24/2012 - 15:29 | 2916513 LawsofPhysics
LawsofPhysics's picture

energy is the limiting factor and available energy and energy output by the current providers has flatlined.  This is the issue no one is talking about.  No energy, no eCONomy, period.

Wed, 10/24/2012 - 18:46 | 2917056 dhengineer
dhengineer's picture

There are approximately 150 million taxpayers in the country.  You could send each taxpayer a check for 5k to offset the taxes or to pay for "health insurance".  I know my personal household economy would feel one hell of a stimulus jolt when the two of us opened the mailbox and found a check for 10k sitting there...

Wed, 10/24/2012 - 12:40 | 2915990 insanelysane
insanelysane's picture

Govmint suing BOA for 1B should help.

Wed, 10/24/2012 - 13:02 | 2916046 insanelysane
insanelysane's picture

TYLER,

CNBS and Bloomsbug are stuffing this story to keep the rally going.

http://www.reuters.com/article/2012/10/24/bankofamerica-brief-idUSWEN808520121024

Wed, 10/24/2012 - 13:35 | 2916142 ebworthen
ebworthen's picture

BOA will get $2 Billion from the FED at 0.01%, pay the govmint $1 Billion, and make $250 Million lending out the first Billion at 5%-29% to their non-credit worthy customers and Fannie/Freddie, FHA, USDA borrowers.

It's like the infinity loop, just made out of manure.

Wed, 10/24/2012 - 14:48 | 2916351 NotApplicable
NotApplicable's picture

O shit!

Wed, 10/24/2012 - 12:48 | 2916010 fuu
fuu's picture

RAH RAH!

Wed, 10/24/2012 - 14:14 | 2916234 Chupacabra-322
Chupacabra-322's picture

We have a criminal government with criminal elements as part of it who do not give one fat, friggin' damn about the ordinary people of the United States. Isn't that obvious by now?

This country is being brought down. That is no accident. That is the result of plotting and scheming for MONEY, POWER and CONTROL of anything that isn't nailed down, nationally and globally.

What I'm seeing is that if this keeps up, and the people of this slumbering nation ever stop watching the insipid, untruthful television news and wake up at last because what is happening all around, including to each of us individually, can no longer be ignored, then our hearts and our minds and our bodies may have to be put on the line.

And that's the bottom line, whether we like it or not.

 

Wed, 10/24/2012 - 16:59 | 2916798 willwork4food
willwork4food's picture

Multi-national secured currency reserve credits will be the new game in town brought to you after it all goes down by those that wish to rule the world and own all its gold.

All on your favorite NFL visa debit cards. No cash allowed without federal exempt status.

Wed, 10/24/2012 - 12:17 | 2915934 swissaustrian
swissaustrian's picture

As G. Edward Griffin says frequently, the FED is a banking cartel and its purpose is to enrich its member banks.

All the rhetoric about jobs (and price stability) is just that: a bunch of hot air.

QE is designed to recapitalize the banking system and to clean bank balance sheets of toxic assets.

Wed, 10/24/2012 - 12:23 | 2915950 Rainman
Rainman's picture

Clearly the Fed mandate isn't jobs. The mandate is financial repression, but we already know that.

Wed, 10/24/2012 - 12:25 | 2915966 Tango in the Blight
Tango in the Blight's picture

And thus they stack the FED's balance sheet up with all those toxic assets. When they're done they'll let the FED crumble and die, they won't care anymore.

It's way too long since we have seen the guillotines in action, their return to service is long overdue...

Wed, 10/24/2012 - 12:40 | 2915984 Dr. Engali
Dr. Engali's picture

When it does the banks will be ready for the new global currency, and the game will start over on a grander scale.

Wed, 10/24/2012 - 12:55 | 2916028 rustymason
rustymason's picture

"As G. Edward Griffin says frequently, the FED is a banking cartel and its purpose is to enrich its member banks. All the rhetoric about jobs (and price stability) is just that: a bunch of hot air. QE is designed to recapitalize the banking system and to clean bank balance sheets of toxic assets."

Quote of the Day! Dankesehr, swissaustrian.

Wed, 10/24/2012 - 12:16 | 2915935 Neethgie
Neethgie's picture

Job's like cutting the grass with scissors, like in DPRK?

Wed, 10/24/2012 - 12:27 | 2915969 babylon15
babylon15's picture

We're basically already this way in the United States.  We have mailmen and garbage men making $75,000 a year with lifetime health benefits and a pension.  Meanwhile, people getting their PhD in organic chemistry and physics are doing, on average, 3 post-docs, often forced to move to other countries to do them because there aren't even enough post-doc slots for all the PhDs being awarded.

PhD in science = 40k a year, 80 hours a week, temporary job.  Oh yeah, don't forget ~$30k in student loans on average.
Garbage man = 75k a year, 30 hours a week, permanent job.

You pick the better life.      

Wed, 10/24/2012 - 12:49 | 2916007 helping_friendl...
helping_friendly_book's picture

$30k? I wish! Try $61k with $10k of that accumulated when I couldn't find a job with a chemical engineering degree. had to settle for working for a municipality, and thankful I have it, and send every extra dollar to pay that loan down. Interest is $5.90/day. 

Wish I would have stuck it out as a pipefitter because I would be making double what I am now and wouldn't have one nickel in debt.

The professors told me "there are so many engineers retiring in the next 10 years you will have your pick of job offers." HA! I took me 7 years to find a job where I live and travelled the country working in the mean time. All the engineers are working into their 70's because of the Dot.com and Great Recession. I could only find work about half the time because the only work I could find was project work.

We are fucked.

Moral:

Don't take on any student loan debt!. It is not dischargable, the loan will continue to collect interest until in is paid.

The lender can garnish YOUR SOCIAL SECURITY BENEFITS to pay your student loan.

At the rate I'm going it will take me 27 years to pay this off.

Become a drug dealer instead. It much more profitable and you don't pay taxes.

Wed, 10/24/2012 - 12:57 | 2916030 insanelysane
insanelysane's picture

I feel for you but you are correct.  I have been telling my kids to become plumbers or electricians and if they really have to, so called "public servants."

Wed, 10/24/2012 - 13:17 | 2916080 helping_friendl...
helping_friendly_book's picture

Good advice!

I did school all on my own. No help from anyone except the banks. Now I see why. If I don't pay this loan off they will collect interest until the day I die and then the taxpayers will pay the remaining balance of the original principle and accumulated interest.

If I didn't work my payment would be 15% of my earnings, %0, and be discharged after ten years.

What is the point of working? I'll never be able to retire, and there probably won't be any SS in 20 years anyway.

I have thought about borrowing against my house equity, paying the student loan, and then declaring bankruptcy.

Pipe fitting was hard work but, it kept me in shape and I would prefer soldering copper pipe to dealing with a bunch of uptight, boring, engineers that think much more of themselves than they ever will be, anyday.

I did enjoy the curriculum but, I would advise saving money to pay for classes in advance and utilizing the community college system to defray total costs. I did. If I would have gone the 4 years at University my student loan would be 100k.

What a shame. They have certainly ruined this country and the student loan jew bank scam guarantees the bankers a steady flow of taxpayer money until the day we die.

Student loan debt is, now, larger than credit card debt. The Social Security Administration will be issuing half of all benefits to banks to pay off these loans in 20 years.

The Jews are buying all of this debt they can because it is GUARANTEED BY THE TAXPYER. 

Fooled again by the dirty bastards.

Wed, 10/24/2012 - 13:45 | 2916166 Skateboarder
Skateboarder's picture

"Meet the new boss - same as the old boss."

Go back to pipefitting man. Engineers all uppity in thier own farts thinking they're gonna "change the world" etc. - they're horrible to be around. Change can be a good thing but also a bad thing too - I guess not enough people have learned that lesson even after the promises of the current adminstration four years ago.

There's been a false message circulating around the globe over the last couple decades, that white collar work is better than blue collar work, and that it's more valuable because in theory it pays more. And the peeps have fallen for it. There's been a negative trend in respect, and thus want, for blue collar work, methinks, and that's absolutely not okay. Everyone thinks they can just go to fucking college, get some bullshit degree that doesn't even teach anything particularly useful, and show up for work at a $75k job because that's what should happen in theory. Jig's up folks - that job isn't there, and if it is, sure aint payin that much.

Wed, 10/24/2012 - 14:31 | 2916303 helping_friendl...
helping_friendly_book's picture

Can't go back now. All the pipe fitters are now Colombians with green cards. I know because I have managed resources on large, fixed bid projects. 

I just can't believe the scam that is twice as bad as when I fell for it. University tuition and fees, books are twice what they were when I graduated ten tears ago. 

I have bright white scars on my arms from soldering above my head with my long sleeves buttoned. Liquid silver solder drips into your sleeves and burns as it rolls down your arm. I do miss it but, no longer have the stamina nor the waistline required to do the work. 

Rednecks pipe fitters are worse than engineers 'cause they have to cut those dreaded hangover farts in the truck, elevator or any enclosed space they happen to trap you.

 

Wed, 10/24/2012 - 14:48 | 2916356 Skateboarder
Skateboarder's picture

Amen, brother. Hungover rum farts in small enclosed spaces are among the top nasty smells. You can't blame the Colombians - they came here for a better opportunity, and they got them. Their kids, however, are probably falling for the education scam.

I've posted this chart from my alma mater before, and it shows exactly what you're talking about.

Wed, 10/24/2012 - 15:43 | 2916538 helping_friendl...
helping_friendly_book's picture

Dude! The chart says it all! I suppose I can consider myself lucky I graduated when I did with the increase shown in your graph. I made it out in thwe nick of time.

I sincerely believe it is a coordinated effort by the university's board of visitors and the banking board of directors to jack up and inflate the cost for juicier loan balances. This is a serious problem and will just get worse as borrowers default on their loans, because they can't find a job, and the taxpayer picks up the tab only after a lifetime of interest accumulation.

Can you imagine what kind of bubble that will be?

It will be 50% of all social security benefits going directly to the fucking banks. The master plan.

I read about doctor's having 100k+ loan balances and getting paid squat because of cuts in Medicare and Medicaid spending.

I owned a 2100 square foot antebellum house with an English basement, a wind tunnel in the winter. I would rent out rooms and wheel and little & deal of the gank on the side for beer and book money. This was before all the BC's and high-grade started to appear. I lived there before and after college, 15 years, in the hood. The only good thing, for me, about the housing bubble was the fact that I sold that POS for 3X what I paid for it, and put a nice down payment on a house three blocks from the university. I always had my roomates pay my mortgage. I highly recommend it to any students who want to economize.

For the record:

I do respect the Colombians I met and worked with over the years. Very conscientious, smart, hard working people. The salt of the Earth and were always on time. Sober people. Never a rank fart from the Colombians.

Wed, 10/24/2012 - 14:56 | 2916383 RockyRacoon
RockyRacoon's picture

My dad had a huge scar on his chest down to his waist from spilling hot tar while hefting a steaming 5 gallon pail of it up a ladder.  That was a long time ago for him but a memory like yesterday for me when I recall seeing it.   I learned to "egg" a copper slip-joint before soldering from an old-time plumber.   It was a very helpful hint.   I've learned quite a few trades to some degree, from working in a cabinet shop to pay my way thru a couple of years of college, to end up in the remodeling trade during the 1980s.  Used to buy the VA and FHA repos to rehab and put back on the market.  There are houses all over town with our empty beer cans in the walls.  It was a great time!

Wed, 10/24/2012 - 15:49 | 2916579 helping_friendl...
helping_friendly_book's picture

I hear you Rocky. I was continually wheeling and dealing when I was in school and when I graduated to make ends meet.

I am fucking tired now and would just like a level playing field to invest some of the money I have squirreled away because a am afraid to put it in the market for fear of becoming someone's muppet.

I can't risk reverting to some of my old tricks because I am now married and I fear the man now that I have someone other than me to worry about.

I am, truly, the deer in the headlights.

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