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What Fed Exit?
Bloomberg's Joshua Zumbrun has released a much overdue, MSM apocryphal, somewhat realistic outlook on the endspiel of Bernanke's central planning: i.e., the unwind of the Fed's balance sheet that from just under $3 trillion will reach $5 trillion by the end of 2014. We say "somewhat" because the conclusion in the article is that there is some hope still for an orderly wind down of the Fed's assets without a complete market collapse. The reality is that there is no such hope.
As we have explained previously, the market now demands roughly $85 billion in ten year equivalent "Flow" per month injected by the Fed: this was what QEternity allowed the market to price in as the basis level for the future and is why we knew with 100% certainty that Twist would be extended the day it was announced on Sept 13, only without the offsetting sale of ZIRP-umbrella securities (which are irrelevant from a 10-year duration standpoint), a forecast that has now been adopted by everyone. In plain English: the market needs the Fed to inject $85 billion each month just to stay level, never mind grow (sure enough, the market highs for 2012 were hit the day after QEternity was announced, confirming the market will need to see even more monthly flow to continue rising).
Anyway, some of Zumbrun's key highlights:
A decision by the Federal Reserve to expand its bond buying next week is likely to prompt policy makers to rewrite their 18-month-old blueprint for an exit from record monetary stimulus.
Under the exit strategy, the Fed would start selling bonds in mid-2015 in a bid to return its holdings to pre-crisis proportions in two to three years. An accelerated buildup of assets would also mean a faster pace of sales when the time comes to exit -- increasing the risk that a jump in interest rates would crush the economic recovery.
...
The bigger the balance sheet, “the riskier the exit becomes,” Richmond Fed President Jeffrey Lacker said during a Nov. 20 speech in New York. “That is something we need to think carefully about.”
Krishna Memani, director of fixed income at OppenheimerFunds Inc., said a too-rapid sale of assets risks disrupting the $5.2 trillion market for agency mortgage debt.
...
“They have to find ways of unwinding the balance sheet without dumping all of it in the marketplace,” said Memani, who oversees a bond portfolio of about $70 billion, including about $6 billion of mortgage-backed securities.
...
“The more they add to the balance sheet, the longer it will take to normalize,” said Hanson, who worked on designing tools that will be used in the Fed’s exit strategy as an economist in the monetary affairs division at the Board of Governors in 2009.
...
“The exit is going to take a long time,” said Stephen Oliner, a resident scholar at the American Enterprise Institute in Washington and former Fed Board senior adviser. He estimates the Fed’s holdings could rise to more than $4 trillion.
If the Fed were to start bringing its holdings back to their pre-crisis level today, it would have to sell almost $2 trillion over a period of two to three years under its current exit plan. Assuming holdings grow to $4 trillion, asset sales could come to $3 trillion over the same period.
...
The Fed’s other tool is to extinguish reserves by selling bonds back to dealers. Even a fully-explained plan could push up home borrowing costs as traders account for hundreds of billions of dollars of new supply flowing back into the market.
“We are deep into experimentation at this point,” Oliner said. “It’s understandable that people are worried.”
All relevant and credible insights, which however can be summarized with one simple fact and an even simpler chart courtesy of Stone McCarthy.
The fact: "The measurement of duration risk translates to an average price decrease of approximately 7.65% for each percentage point increase in all yields." In other words a DV01 of well over $2 billion. So much for that total credible Fed "capital" of $55 billion which would be wiped following rates rising by a tiny 32 bps. But where it gets fun is extrapolating, because at the current rate the Fed's balance sheet will hit a 10 Year average duration by 12/31/2014, on $5 trillion in holdings. A DV01 of $5 billion, or $500 billion for a 1% rise in rates!
As for the chart:
The chart shows, without a doubt, that the Fed is now the sole monopolist of Treasury demand expressed in mid-modified duration - i.e., the risk parameter most relevant to the Fed as it attempts to push everyone into higher risk assets (when instead all it is doing is merely allowing everyone to frontrun it). It also shows that in the past 3 years, the Private Sector has had its exposure to US Treasurys grow by virtually a non-existent amount, a simple fact that would make the head of steeped in theory and clueless of actual practice hollow pundits, such as Paul Krugman, explode.
To put it simply, the Fed's QE can not stop as there is no real market, or demand for TSYs expressed in duration terms, a fact the Fed's 4 year meddling in the market has been able to conceal quite effectively. Alas, the Fed knows this. The Fed also knows that in a country which will continue piling up $1 trillion + deficits forever, there will always have to be a backstop funder of the US deficit. Since China is long gone as a buyer of US paper, this only leaves the Fed.
In other words, the simplest reason why the Fed will never exit is because the US will never again run a budget surplus, meaningless discussions over what a token $80 billion a year tax increase (which will fund the US deficit for 2-3 weeks) will do notwithstanding, and the Fed will need to monetize ever more US-sourced paper until Bernanke and his successor after 2014 are the only "market" for bonds left standing.
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There's only 3 ways out
Default
Inflate (which is a default)
Deflate. Let the economy sink back to 1/20th of what it is now, everything losing 95% of it's price and bankrupt all debtors, beggar all creditors. I doubt it would go as far as 95%, 50-60% seems to be enough most times.
Wiping the debt off doesn't wipe the credit created at the same time as the debt. It's the inflate option.
What if a new 'commonwealth' was formed and those countries all bought up each others debt and cancelled it? (Obv. this would need to occur in conjunction with balanced budget amendments or what is the point)
Furthermore government should become a clearinghouse for competitively bid contracts and we would get far more for our money. There is no competition in .gov (no profit motive) which is why it is so inefficient. Government employees could go to work for the private side doing the same work with presumably better pay but would need to be productive. Productive people are happy people imo.
Those banks would be wiped off clean. For sure they will resist tooth and nail.
You will never get anyone to lend to a sovereign from that point forward.
A Fed exit assumes there will be buyers. Who the hell would buy all the crap they hold?...well wait, maybe Jim Cramer would :) Unwind? Never will happen in my lifetime.
Sell it all to Krugman maybe? He doesn't have enough cash, but that's ok, just add enough leverage.
In ten years a 5 trillion Fed balance sheet will look small. This problem is not solved by making it go away. It is solved by making it bigger! You must learn to think like you run room 101, not like you got put into it against your will.
Do not worry. There is still time to make you perfect.
White Night's carry trade above, you have to admit, seems really appealing. Fight them with their own ponzi. Beautiful.
Ludwig von Mises showed that the process of central-bank credit expansion ends in one of two ways:
Yet, “in truth,” said Murray Rothbard nearly 40 years ago, “taking back our money would be relatively simple and straightforward."
In an article originally appearing in the November 1995 issue of The Freeman, entitled To Save Our Economy From Destruction, Rothbard concludes with this paragraph on Restoring the Old Republic:
“The restoration of American liberty and of the Old Republic is a multi-faceted task. It requires excising the cancer of the Leviathan State from our midst. It requires removing Washington, D.C., as the power center of the country. It requires restoring the ethics and virtues of the nineteenth century, the taking back of our culture from nihilism and victimology, and restoring that culture to health and sanity. In the long run, politics, culture, and the economy are indivisible. The restoration of the Old Republic requires an economic system built solidly on the inviolable rights of private property, on the right of every person to keep what he earns, and to exchange the products of his labor. To accomplish that task, we must once again have money that is produced on the market, that is gold rather than paper, with the monetary unit a weight of gold rather than the name of a paper ticket issued ad lib by the government. We must have investment determined by voluntary savings on the market, and not by counterfeit money and credit issued by a knavish and State-privileged banking system. In short, we must abolish central banking, and force the banks to meet their obligations as promptly as anyone else. Money and banking have been made to appear as mysterious and arcane processes that must be guided and operated by a technocratic elite. They are nothing of the sort. In money, even more than the rest of our affairs, we have been tricked by a malignant Wizard of Oz. In money, as in other areas of our lives, restoring common sense and the Old Republic go hand in hand.”
With detailed discussions on “Privatizing Federal Gold,” “Definitions and Debasements” and “Abolishing the Fed,” Rothbard explains that “to save our economy from destruction and from the eventual holocaust of runaway inflation, we the people must take the money-supply function back from the government. Money is far too important to be left in the hands of bankers and of Establishment economists and financiers.
“Our goal,” he said, “may be summed up simply as the privatization of our monetary system, the separation of government from money and banking. The central means to accomplish this task is also straightforward: the abolition, the liquidation of the Federal Reserve System – the abolition of central banking.
http://www.lewrockwell.com/rothbard/rothbard200.html
good luck getting that done with Obama.
You don't understand. The problem is not the politicians or the banks or the fed. The problem is the people.
JR, your sources merely reinforce how silly and superficial such views are, since they are restricted to a shallow level of logical analysis. The two other comments replying to yours are about the first level of political reality: we have puppet politicians, in power because enough people are mainstream morons, who do not understand, and do not want to understand anything you or your authorities are talking about.
There are deeper reasons for that! Money is backed by murder. The reasons WHY the best organized gangs of criminals, the biggest gangsters, the banksters, DO control were that there was a history of them running the real death controls, which built the real debt controls. We have puppet politicians, and muppet masses, BECAUSE of the historical triumphs of lies, backed by violence.
There are NO genuine solutions that do not include human ecology, as the context in which the political economy exists, and moreover, there are no more solutions that work just within talking about human beings, since we now need an industrial ecology, to account for the FACTS that there are new entities on the revolving cycle of life!
The market now demands roughly $85 billion in ten year equivalent "Flow" per month injected by the Fed: The magnitude of that amount of spending is mind numbing •
This is a list of companies by annual revenue/ ANNUAL REVENUE> http://en.wikipedia.org/wiki/List_of_companies_by_revenue
Like everyone above this says, there will be no exit, those "assets" will be on Fed's balance sheet from now on, and way more will be added, don't be surprised when it passes 5 trillion then 10 trillion then 15 trillion, and goes right on.
It's not free of course, the cost is hyperinflation followed by currency collapse if enough printing is done, and it likely will be, because it's the only thing they can do now, print currency to fund ever growing govt debt and keep bailing out banks that keep going insolvent, because nobody has fixed any structural problem at all.
If you view it as a grand looting scheme, as I do, done purposely, it's the plan, steal all the wealth possible from the people via currency debasement, giving it to the govt and big banks, then you won't be surprised at the enormous amount of "assets" piling up on Fed's balance sheet going forward, dwarfing what's there now.
There will be no exit because this is the end game for the present American monetary system, and financial system by extension, and economy by extension.
They know it. It's why they're doing this huge looting spree now, grabbing everything they can.
Why don't you know it?
The present US govt won't survive this. They'll just be the last ones to drown as the ship goes down.
Bankers took all the lifeboats ...filled with loot of course.
It's very clear that there's not a person of power left in the world who knows what the fuck their doing.
WW III BITCHEZ
The sale of Red pills are way down!
The Fed has consistently linked its easing policies to unemployment levels. With the recent report showing a slight improvement in the employment situation, it seems to me this gives the Fed a good excuse to throttle back on the easing, in terms of just letting Twist expire and not replacing it with anything new.
This is not to say that the employment numbers are valid, but it does give the Fed an out and allows them to dump the ensuing market decline on Congress and their inability to solve the so-called 'fiscal cliff' issue.
Anybody see anything wrong with this reasoning?
Nothing.
But what gave you hope that we are dealing with reasonable people?
I had a chance to speak to the Chief Economist of one of the largest Broker/Dealers in the Nation and this person said for every 1% rise in rates bonds will lose 14% of their value. So if we get back to an yield of 4% then bonds will fall by 30% from where they are now.
I just wanted to throw that out there because the math appears to be different from the article's.
Depends on the leverage utilized.
That was a brilliant post Mr.L/H... Thanks to you and your friend. Imagine the stag/hyper>inflation that would ensue...
Initially the U.S.D. will go "pop off top" for the carry yield, but then it will get really ugly as people literally starve in the streets/
Gold bugs you can press on the button that hurts the Fed. Short the treasuries, trying to push down the treasuries is forcing hte Fed to print even more. You borrow at 2.7% locked and buy inflation equities, inflation assets ect... The more you press, the more they print, easy. If the yield go even more negative, it will become untenable to repress the precious and that is, we END THE FED that way. Short treasuries and do the carry people, let us box the FEd! Calculate your maximum loss but realize that if treasuries go negative against ILBE inflation PMs shoot to the moon and help shoot the Bubble bankrupt teh US gov and the Fed.
Love the sentiment, but they have infinite dollars at their disposal with the click of a mouse.
The FED will crush us.
What happens when the world stops accepting dollars?
That's broken. If you're short on treasuries then you're also long on USD, and both are Fed-denominated assets.
What really hurts them is: long on hard asset (gold, whatever), short on USD.
I thought Sept 13th was QE-infinity.
What's coming next week then?
QE-extra-special-double-infinity???
Absurd.
Sounds like a skateboard trick.
1/2 pipe economics... Fixed it for ya :-)
Double Secretive Blind Nillo, bitchez.
LOL, if you do not want to cry you can laugh....
and beyond .............
Circus & Bread temperament….. Let’s have a look at highlighted media anal fuck fest words.
http://www.cnbc.com/id/16108894
The Vortex Elevator: Economic Mobility & Growth
Economic mobility, growth, is a function of effective labor, what it chooses to do or not to do. The empire robots have not been programmed to understand that they are efficient multiplier effects, in one direction or the other. They simply get paid in empire credit to serve as points of control.
Attempting to explain economics to a robot only increases its fear threshold, which is counterproductive to your purpose. Global pain is being ratcheted up for you, as the Fed attempts to monetize the tax base in lieu of economic growth. Just time your entry, when the proprietor just realizes he/she is going to lose the business to corporate recycling.
Then maintain the appropriate equilibrium, return on labor, however you choose to define quality of life, to return to capital, however the proprietor chooses to define risk for income versus reward to assets. Unfortunately, given the craven nature of capital, you must become a benevolent dictator, implicitly allowing authority, by choosing to share, in a feedback loop. Always be prepared to drop the subsystem load back onto the proprietor's shoulders.
If you understand the example of Jesus, you will recognize the signs to your path. If you seek God, the unknown, you will be ready when you arrive at your destination. Let your spirit guide you, in an evolving state of resonance over time, as a negative feedback signal. You were granted resonance at birth. If you have not yet given it up, guard it with your life, because getting it back will take a lifetime.
Unfortunately, parents have also been saying yes to their government-controlled children for a few generations now, upon penalty of losing them, so you will receive an overwhelming amount of no in the resulting economic collapse. Get used to it. Have a friend scream no in your face repeatedly if that is what it takes. I can maximize the probability of placing you in a position to receive a yes, but I cannot change the percentage of no. Only you can do that, as you find your way.
Relearn faith. We will place the bridge when you need it. Take what is offered and move on immediately. Only an empire whore will encourage you to sit and consume from the tree of knowledge, which is poison to your spirit. If I see you coming, and I will see you long before you see me, I may drop a cigarette and disappear, if that is what you need, or I may offer an encouraging word as you pass. Don't judge a book by its cover; I will not be the one looking at you in judgment and I may be dressed as a tramp or in a $1000 suit, whatever is not expected.
In the center of the queues, you will find others revolving around the main vortex, each with its own vortex. From the perspective of each building, you are the elevator in its center. From your perspective, as a tangent gap to each, all the buildings are revolving around you. The buildings revolve around the elevator because they are simply perceptions of gravity in your mind's time, which you may learn to adjust.
In the beginning, it may take you years to find your own sweat spot. Once you understand the implicit algorithm, you will require only two points to obtain the third. Only you can find your own. It's been a week here and already all the event horizons are spinning around me. By the end of next week, I will have established a connection to the kernel of each. I recognize my charges because they are prepared to make their connections. Drop your baggage. You are not going to need it where you are going.
i'm not big on fairy tales.
i'll stick with reality, thanks.
I find it ironic, kevinearick, how you put forward a half-assed mixture of more modern metaphors with old-fashioned ones. I agree with your more modern metaphors. However, I suggest you should up-date your old-fashioned ones!
Energy is Spirit. Evil is entropy. The way we understand entropy is backwards! We ARE the environment ... bla, bla, blah, yadda, yadda, yadda. There is nothing in the center of the vortex. The only things that actually exist are the infinite loops through the environment.
Relearning faith should be done by integrating ancient mysticism within postmodernizing science, with both radically transformed by that creative synthesis!
I tend to not drop my baggage, but rather exercise myself by pointlessly pumping it! Hah!
"Right. Well, I have to...I have to go now, Duane, because I...I'm due back on the planet Earth..."
http://youtu.be/BGPcSd7DDLk
watch the end of the clip...the Earth always finds a way of coming back to Duane, whether it likes it or not.
The 5(?) billion dollar reverse repo in early May 2010 was a smashing success. Then on May 6 the Dow fell a 1000 points in 5 minutes. So ,in a nutshell, removing 5 Trillion dollars from the system poses no risk at all.
Emptying the Feds balance sheet is easy. Trade all the assets (except for the T-notes) for T-notes. That extinguishes a pile of debt in an instant without drowning the country in cash.
In the end the politicians will feed the fed to the wolves; because thats what they do.
That which cannot continue, won't.
Math has a way of dealing with such things.
"That which cannot continue, won't"
Why is that simple truth so difficult for so many to grasp?
It must be denial. Just because it is ignored, won't make it go away,
and if you don't prepare, it could be catastrophic for you and those
who depend on you.
So, does this make 'papa' BIS, the central banks' bank insolvent too?
The whole system needs a good flushing reset.
It all comes down to interest rates.
We can keep the balls in the air as long as people keep buying our debt.
When they don't, the shit collapses.
But look at Japan.
There Ponzi Scheme has been in full swing for almost two decades.
Go figure.
Japan does not have the reserve currency ,and they had(until recently) a healthy
trade surplus.Add in massive foreign investment income, and you can struggle along
for twenty years.
The rest of the world will not put withe Fed monetizing US debt for too long.
The consequential exported food, and commodity inflation is going to result
in worldwide unrest a la the Arab Spring, forcing the emergance of a new reserve
currency.Which will mean WWIII.Pax Americana will not go quietly into the long goodnight.
There are no ways out, that I can see.I wish I could.
People are buying our debt? Who? JPM and the Fed and who else?
Japan does not have the reserve currency ,and they had(until recently) a healthy
trade surplus.Add in massive foreign investment income, and you can struggle along
for twenty years.
The rest of the world will not put withe Fed monetizing US debt for too long.
The consequential exported food, and commodity inflation is going to result
in worldwide unrest a la the Arab Spring, forcing the emergance of a new reserve
currency.Which will mean WWIII.Pax Americana will not go quietly into the long goodnight.
There are no ways out, that I can see.I wish I could.
Take a good long look at Japan; Japan's going bye-bye.
One problem: Who the fuck is the FED going to sell to?
We'll just do like Europe and create another acronym and sell them all the FED debt.
Just wondering... what would you ZHers do if you were in charge of the Fed? Stop all QE? Rate spike? Complete dissolution?
I've been thinking about it, and I can't see any way out of this mess that doesn't imply substantial harm.
First of all, I would sequestor the 2 houses of Governance. I would lock them in the lower Senate chambers, and hand them each a bag of ( gummy bears), with a note that says/
Watch out for Barney Frank in the dark!
You were so lucid upthread.
+10
Lucid as in "inflection on the lower mediterranean" getting ready to blow itself up?
Yen, do you ever sleep? That's not a complaint question. Keep on rock'n.
S'cuse me while I awaken myself and scratch a very itchy set of balls.
Nope/ 24/7 Human algo. Complaints are filed here>_> TMI Angus. You are sweetness/
I'll be more fun in 2 weeks. Lot's of fool traders to be learn-Ed.
Let rates rise and then when you get to 10% and gold was at $5k have a debt jubalee and back the currency with gold and silver.
Gold at 5k eventually. Gold at 5k in 2013 and I'll be eating my leather shoe laces/
If I have to guess I would say the move up begins in earnest in late January, we move to $3500 by May, it settles over the summer at $3k, then next fall we begin another move up and are at $5k by early 2014.
Then again this whole thing has gone on longer than I thougt it would so maybe it takes until 2015 to get to $5k.
I feel we have conversed in another life. Ground Hog day/
" I can't see any way out of this mess that doesn't imply substantial harm. "
Precisely. The harm has already been done, it's just a matter of deciding who pays for the mistakes.
"what would you ZHers do if you were in charge of the Fed?"
It doesn't matter for two reasons: 1) there is no way in Hell they'd let any ZHer be in charge of the Fed, and 2) fixing this requires changing statutes, not maintaining the current Congressionally approved cabal.
".. what would you ZHers do if you were in charge of the Fed? "
I'd love to see Ron Paul at the helm. I think the system would collapse in short order, or he would assasinated, but it seems like he is a lone voice of sanity in this shitstorm of BS. It'd be really interesting to watch, wouldn't it?
I think Ron Paul proposed removing the ban on using gold as currency, thus allowing both gold and USD to co-exist (which would let the market forces gradually move to gold and dump the fiat trash).
However this only works as a long-term solution, right?
"I've been thinking about it, and I can't see any way out of this mess that doesn't imply substantial harm."
Well, substantial harm it is, then. What's the alternative?
fed exit = after the blackhole has sucked everything up and goes antimatter.
Obligatory. (And yes, you're correct: it's in German this time)
(Cliff notes: OppenheimerFunds Inc)
The best thing about ending the fed and the dollar would be that we could no longer fight wars all over the world
Mostly correct, except they could try to implement our same tax code on a new currency, even on gold. Which was the reason we were able to fight the wars between 1945 and 1971 (nixon shock)
The wars since then were the USAs part of the "deal" for not redeeming dollars in gold. The USA theorectically kept the gold, but we protected the colonal franchises of the people who were going to redeem dollars for it.
Ho hum. Easy solution:
The F3D simply burns all of the bs debt it has on its books except for actual mortgages. The other 'toxic' debt goes up in smoke, literally. Poof! Its win-win. The debt gets wiped out, no need for anyone to unwind anything and the game continues, then its back to the printing press.
Allow the FED to go bankrupt, raise interest rates sell all Fed debt to the too large to fail banks at 10 cents on the dollar.
$80b every month. What is the bond take-up? What duration? MBS takeup 38-42$b a month in the "dark pool"?
@Marla. Stupid Costumes. EveryoneLies.
Now playing: Everyone Lies.
Too many Secrets.
Just get everyone to believe Trillions and like Billions use to be and just keep building the BS, the public will never notice and as long as they keep supplying the heroin for equities and shorting gold and silver Mr. Market won't care either ... a real win/win
http://www.safehaven.com/article/27966/us-debt-crisis
With the rancorous fiscal-cliff negotiations dominating newsflow, the markets are rightfully on edge. Will a deal be reached as time relentlessly dwindles, or not? How the fiscal cliff is resolved has massive implications for the US economy and markets in 2013 and beyond. But provocatively, the fiscal cliff is a minor sideshow in the real crisis. The United States of America is drowning under federal debt.
The media, commentators, and politicians always talk about deficits. This whole fiscal-cliff debate centers around how to reduce the federal deficit. Should we cut government spending, raise taxes, or do both? But a deficit is merely the current shortfall, the government spending more in any given year than it takes in. The true problem lies in the past's accumulated deficits, which collectively add up to the national debt.
Unfortunately deficits and debt are often confused in public discourse. If you spend $1000 a month more than you make, that is your deficit. The cash for this excess spending can only come from borrowing. A year of $1k monthly deficits adds up to $12k in new debt, not including interest. Merely reducing your monthly deficit does absolutely nothing for your already-existing debt, which continues right on growing.
And naturally as your debt expands, so does your interest burden. And since you are already operating at a deficit, you have to borrow even more money just to pay the interest on your existing debt. This leads to a vicious circle that spirals downwards into bankruptcy. This ironclad law of finance applies to nation states as surely as it does to families and businesses. Deficit spending ultimately leads to financial ruin.
The so-called fiscal cliff the United States now faces is an early milestone in this disastrous process. And sadly, every single major proposal on the table from both sides is a total joke. Using that $1000-a-month analogy for a family, the current ideas would only cut that by $60 to $150 at best. They leave 85%+ of the government's deficit spending intact, doing absolutely nothing to pay down its mind-boggling debt.
I used to try to explain this to people (the easiest way is to point out that while Bill Clinton ostensibly ran a budget surplus, the national debt increased by about 25% while he was in office) but now I don't even bother. Fuck 'em. I just try to be frugal, buy bullion when I can, and pay attention--three things that 99% of the U.S. population couldn't manage in a million years. FUCK 'EM. We're on our own...
Bernanke as Martyr
Is it possible that Bernanke is an insider who has decided that the FED is evil and must be destroyed, and he is resolved to do it! He is allowing the Fed masters to think he is doing their bidding when in truth he is in the process of making the Fed's foundation crumble. Poor Bernanke is getting ridcule from us when actually everything he is doing is FOR US. Looked at this way, Bernanke becomes a self-sacrificing almost Christ-like figure. Is this not possible?
The Fed "holds the note". It does not have any of its own capital tied up in bonds. All debt obligations fall on the American taxpayers, and FDR gave the Fed the power to confiscate all public and private lands in America when we can no longer service the national debt. This is a conspiracy if I have ever seen one, and Bernanke is in charge.
I was saving this screen shot for Tyler. This is not photo shopped in any way/ I'm not kidding.
http://img4.imageshack.us/img4/7669/zhfiskerkarma.png
Sweet car Yen, you just buy that? You're one happy motorist now huh?
You luck bastard! :D
Element, thanks for being part of the joke. Merry Christmas.
I deeply respect your intellect/ always have/ Don't be a stranger :-)
Please stop using the word "trillion" and instead use $1,000 Billion, which better reflects the lunacy of the Fed action.
Oh, do we have a Brit here who insists on sticking with his antiquated "milliards" and "1,000 millions"?
We'll consider your suggestion, and get back to you in a fortnight (whatever the Hell that is).
akak said:
Two weeks, three furlongs, and a thruppence.
Thanks FouthStooge-ing!
I thought that maybe it was a night spent in a fort.
Now, I'm still trying to figure out why, in Britain, ALL desserts consist of "pudding", why all trash and garbage consists of "dust", and why ALL vacations are "holidays" (nobody ever declared an official holiday when I went on vacation!). And don't even get me started on that eating-with-the-fork-upside-down thing that they illogically insist on doing, or why they happily consume the Devil's smegma, otherwise known as Marmite.
akak said:
Just tryin' to help.
No kidding. Even something as revoltingly named as Spotted Dick is a pudding.
Let's use an alternative monetary system. Chicken eggs work for me. I can grow chickens to eat and get the chickens to produce eggs before I eat the chickens and I can eat the eggs and grow more chickens from the eggs I don't eat and I can trade some of the chicken eggs I don't eat for other things too. If we convert the FED buildings and Goldman Sachs buildings and the JP Morgan buildings and all the branches of them and all the other local bank buildings into free range chicken factories we don't need no stinking Ben Bernanke and we don't need any of the rest of them either.
Works for barter but not for savings.
Not much different than what we have now though. One step further and they will make saving an illegal activity outright.
It's been fun Tyler/ I'll stay in the static, like some really smart(Z/H) old timers/
This posting
... only serves one purpose and that is to give those who still believe in the system or a fix of the system a means to wise-up and exit out.
The system has no possibility of continuing beyond its imbedded life span. What that is in terms of time is a non-sequitur question. Just realize that it does in fact have a life span (not a time span!) and a specific inherent systemic mechanism that brings that existence to an end. It's as simple as the Sun always rises in the East and the day that it doesn't ... poof it doesn't and we and it are no longer here.
When it changes or gets changed there will be no extention of its life just a prolongation of the throes of death. The deadly flaw is basic and systemic.
What happens next? Well that, Ladies and Gentlemen is the $64 million Dollah question. Then we will have the throes of birth. All I can say is that there will be attempted workout after attempted workout.
Just be prepared to move deftly and quickly to the right or left depending on what is being attempted. You might just have to duck or jump too. No one can predict or envisage what will come to pass in the future. The future is a make-up of a conglomeration of thee and me residing beneath what thee and me believe we are looking at and doing.
We all live in this same soupy organic protoplasm called life. What evolves from that is simply a summed integration of all of the derivative parts.
Take it from there. The best I can hope for is that we are all successful in this endeavor for that of course portends the best possible fortune for anyone and for all.
I am going to light these markets up next week/ No more vix. no more (graphic)overlays. Real traders doing real trading/
You want liquidity. The algos are going to get burn't sizzled. I'm going to trade some yards, and blow out 2012, " ONCE and For All"... Get ready usd/jpy, get ready Cable traders. Flows are a coming, long before the New York 10am option cuts/
Bitchez
What is a yard of trade? How was that unit of trade conceived?
if the pot takes 65 years to bring to a boil, the frog doesn't give a shit when it holds free food, water, and shelter
jb
This is for you/ shaken not stirred. ? Frank Sinatra - Mack the knife - YouTube
Pink Floyd - Another Brick In The Wall(Live) - YouTube
Rise against; Rise Against: Ready to fall - YouTube
Last but not least;Fleetwood Mac - Go Your Own Way - YouTube vs Fleetwood Mac - Go your own way Live 1979 - YouTube
get ready usd/jpy traders. 84 is coming up Japanese exporters.
Tears For Fears
Shout - http://www.youtube.com/watch?v=RgqPmDpUv10
Shout
Let it all out.
Nice tune.
Real Life - Send Me An Angel - Right Now
http://www.youtube.com/watch?v=cgIw8xVd5tQ
Real Thing:
http://www.youtube.com/watch?v=0R6WIbx8ysE
can I blow you a kiss on a bright spring day?
Thanks bunny, that was sweet.
i.am.weimar
EKM get's the trade/ Primary Dealers have to fill orders...
Did anyone catch that sino/canadian deal Friday? That deal moved $15billion in the F/X markets. usd/cad
I love trading options,BUT options are dated.
Where are the Icelanders, collecting lava?
Add AAPL to "Other Assets"
Must keep the price high ... or the Central Bank of Israel will be F U C K E D
This is Amerika. welcome to Corporate and Counrty of Slaves. Enjoy the New Lords and sing Christmas songs and pay for stupid football and basketball games and be broke.
Home of the pussies- Amerika
Walmart security guard shoots 'shoplifting' mother dead in parking lot as she tries to escape with two young children
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How does hyperinflation manifest itself when wages are declining? Standard of living declines while goods / services soar in price? What am I missing?
The money supply is soaring but that is simply Bernanke / ECB / JPY printing money to keep their central banks solvent. None of that cash is making it to people who actually spend it. They have less cash than ever.
It seems to me cash in the mattress or buried in hermetically sealed mayonaisse jar is probably a better bet than GOLD at this point. Once the banks go belly up (as 100% of their mortgage holders default) and the FED gives up, if you have greenbacks in your wallet, you'll probably be better off than a few American Eagles in your pocket.
This is one important article. And the previous one with the BofA that ZH did linked above is even more important.
Whenever I worry about my Gold or Silver I read this article.
The minute the Fed even confirmed a starting date for the selloff Goldman would be so short they wouldn’t need to open the door to get out of the room (they would just slip through the crack between the door and the floor like any good squid).
In less than five years the Fed has successfully turned T-bills and bonds into a risk asset. Why? Because, after they did everything possible to bail out the banks via direct and indirect theft of assets and income, the only thing left to do is help the banks dump their risk on savers and investors too. That could be even more costly to them in the end.