• Steve H. Hanke
    05/04/2016 - 08:00
    Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke. A few weeks ago, the Monetary Authority of Singapore (MAS) sprang a surprise. It announced that a...

Chart Of The Day: The Collapsing Half-Life Of Unsterilized Central Bank Intervention

Tyler Durden's picture


Assuming that Ben Bernanke unveils the transition from 'sterilized' Twist to 'unsterilized' QE4 today (which if he doesn't will upset more than a few long-only managers looking to make their year), then the chart below shows the incredible and insatiable demand for money printing (and the central banks' acquiescence). Looking at just outright incremental injections of excess reserves (money-printing), since the whole 'experiment' began, the Fed and ECB have embarked on more and more frequent attempts to prop up this 'fundamentally' sinking ship. Perhaps this is what the Hong Kong Monetary Authority warned of? At the current average decay period of around 40% per action, we should see the ECB or Fed enact something new by around February 4th (just as the debt-ceiling comes to a head).


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Wed, 12/12/2012 - 13:12 | 3056250 ShortTheUS
ShortTheUS's picture

Looks like it drops to zero on a long enough timeline.

Wed, 12/12/2012 - 13:11 | 3056252 SeverinSlade
SeverinSlade's picture

Until we get to a point where Bernanke is forced to announce additional unsterilized QE daily.  Weimar 2.0

Wed, 12/12/2012 - 13:14 | 3056271 TruthInSunshine
TruthInSunshine's picture

 "At the current average decay period of around 40% per action, we should see the ECB or Fed enact something new by around February 4th (just as the debt-ceiling comes to a head)."


We still have a debt ceiling? WTF!!! WHY!!!!???

Wed, 12/12/2012 - 13:19 | 3056280 idea_hamster
idea_hamster's picture

We could also add in the column for pre-QE1.

Between 12/23/1913 and 11/25/2008, we had 34,671 days.  Gives some perspective to the decay rate, no?

Wed, 12/12/2012 - 13:25 | 3056303 Ancona
Ancona's picture

Why don't we just sterilize Bernanke?

Wed, 12/12/2012 - 13:34 | 3056325 camaro68ss
camaro68ss's picture

 by my calculations and based on 1/2 lifes. QE12 will start around July 15th 2013. QE13 will then start on july 16th 2013.

We got 7 months

Wed, 12/12/2012 - 14:41 | 3056639 Popo
Popo's picture

Calculus calculus.  It's acceleration of the rate of change.  Its much sooner than you think because the rate is increasing.

At the rate of acceleration we will be at daily QE (Yes, DAILY QE!  HOLY SHIT BALLS) before the summer.

The wheels are off the car already... we just haven't felt the impact yet.

Wed, 12/12/2012 - 16:19 | 3057096 MiltonFriedmans...
MiltonFriedmansNightmare's picture

So how long before the "market" figures this out?  It seems the lights could go out, virtually any day now.

Wed, 12/12/2012 - 13:31 | 3056322 sodbuster
sodbuster's picture

I've never thought of it as a debt ceiling- it's more like a debt target.

Wed, 12/12/2012 - 13:36 | 3056353 ZeroChance
ZeroChance's picture

It's actually a big ol' fashion can of Campbell's Mmm Mmm Mmm "Soup is Good Food" Tomato Soup.  Go ahead, kick it, you know you want to!

Wed, 12/12/2012 - 13:42 | 3056394 NEOSERF
NEOSERF's picture

IT is more like a debt fantasy

Wed, 12/12/2012 - 15:04 | 3056758 This just in
This just in's picture

A debt parasol.  

Wed, 12/12/2012 - 14:38 | 3056656 viahj
viahj's picture

because the political circus of the debt limit and fiscal cliff, distract attention from the implacement of the police state around us

Wed, 12/12/2012 - 13:17 | 3056276 LawsofPhysics
LawsofPhysics's picture

Pretty much there already.  Nothing really changes until the supply lines break.  Look at history, shit only gets real when the power goes off and the food and fuel are not delivered for whatever reason.

Wed, 12/12/2012 - 13:51 | 3056440 centerline
centerline's picture

Exactly.  Or the ATMs stop functioning and the banks are closed.  (word of advice - keep cash on hand).

Wed, 12/12/2012 - 13:23 | 3056290 Big Slick
Big Slick's picture

Extrapolating, QE5 will take place prior to QE4, which means Ben will be announcing that QE5 began last Friday.  Retroactive easing. 

Any day, I'm expecting to see Bruce Willis arrive from the future trying to figure out what happened to the planet.

Wed, 12/12/2012 - 13:26 | 3056310 Seer
Seer's picture

Ah!  This explains why all these folks tell us that we're not in recession!

Butt-head: I'm, like, angry at numbers.
Beavis: There's like, too many of 'em and stuff.

Expect there to be a declaration of "War on Numbers!" (get rid of them and our problems are solved!)

Wed, 12/12/2012 - 13:49 | 3056433 agent default
agent default's picture

HFQE. High Frequency QE BITCHEZ.

Wed, 12/12/2012 - 13:48 | 3056434 donsluck
donsluck's picture

Congratulations on your thinking outside the box. QE will be done on the sly, to favored banks only (hmm HSBC?) to be "revealed" after the fact, hence "retroactive QE".

Wed, 12/12/2012 - 13:14 | 3056268 slaughterer
slaughterer's picture

Looks like the chart for "days between crack fixes" for the jive doggs in East LA and the Bronx.  

Wed, 12/12/2012 - 14:53 | 3056721 Dr. Kenneth Noi...
Dr. Kenneth Noisewater's picture

They need to invent a time machine so that QE5->QE6 can cross the zero barrier.

Wed, 12/12/2012 - 18:44 | 3057607 hannah
hannah's picture

it (time) will never drop to zero, it will just take ever larger amounts of spending in smaller time periods.

Wed, 12/12/2012 - 13:13 | 3056257 centerline
centerline's picture

Looks just like the dimishing returns evidenced in the S&P.

Wed, 12/12/2012 - 13:12 | 3056261 Shash
Shash's picture

The bearded academics!

Wed, 12/12/2012 - 13:14 | 3056262 Cognitive Dissonance
Cognitive Dissonance's picture

"Chart Of The Day: The Collapsing Half-Life Of Unsterilized Fed Intervention"

Let's just give the Fed a vasectomy and reduce that prick (Ben) down in size.

<At the least he'll be shooting blanks.>

Wed, 12/12/2012 - 13:22 | 3056296 CPL
CPL's picture

Stand back everyone.


I'm gunna beat the shit out of this Bear market with my QE4 whiffle bat.


That'll teach it.

Wed, 12/12/2012 - 13:13 | 3056267 PowerzThatB
PowerzThatB's picture

I'm incredulous that people address Bernanke and his ilk with reverence. His is a giant termite eating away at the very core of our nation...

Wed, 12/12/2012 - 13:18 | 3056281 Bay of Pigs
Bay of Pigs's picture

These guys are the biggest crooks to ever walk the planet.


Wed, 12/12/2012 - 13:36 | 3056343 TruthInSunshine
TruthInSunshine's picture

How dare you sirs.

The Bernank received a perfect SAT score and attended both MIT & Harvard as the Main Stream Media loves to repeat often & thusly. His credentials are unimpeachable.


Wed, 12/12/2012 - 14:23 | 3056602 Seer
Seer's picture

Proof that the best trained monkey is no longer a monkey...

Wed, 12/12/2012 - 13:15 | 3056274 Cortez
Cortez's picture

There's always a bull market somewhere.  Guns now and rural hideways next.

Wed, 12/12/2012 - 13:16 | 3056275 atomiclown
atomiclown's picture

The system has already collapsed.  Now, it's just a matte how to allocate and crystallize the losses ...

Wed, 12/12/2012 - 13:31 | 3056324 Seer
Seer's picture

I don't believe that it has already collapsed so much as it's brain dead and in a coma.  Prognosis: death, shortly...

When the collapse does come we won't be sitting around talking about it...

Wed, 12/12/2012 - 13:50 | 3056439 CrimsonAvenger
CrimsonAvenger's picture

The analogy I use with people is that of a cavity - on the outside the country may look mostly good, but internally it's been completely hollowed out - one small tap and the whole thing is going to shatter.

Okay, that's probably not how cavities work. I learned everything I know about teeth from Monty Python's Crelm Toothpaste skit.

Wed, 12/12/2012 - 14:29 | 3056618 Seer
Seer's picture

Mentioning Monty Python gets an automatic up-arrow!

It's internal cancer is what it is.  And, well, it's a perfect match being that perpetual growth IS the function (exponential function) of the cancer cell.  The origins go back much further than folks want to admit: "go forth and multiply" is kind of a problematic instruction on a finite planet.

Good news- the cancer will cease.

Bad news- the patient dies.

Wed, 12/12/2012 - 13:19 | 3056292 whoopsing
whoopsing's picture

That ramp should have an ADA approved slope, seeing as your crippling the whole fucking economy !

Wed, 12/12/2012 - 13:24 | 3056302 fonzannoon
fonzannoon's picture

gold selling off lol

Wed, 12/12/2012 - 13:25 | 3056304 edb5s
edb5s's picture

Turning Japanese

Wed, 12/12/2012 - 13:28 | 3056314 Element
Element's picture

Dunno what everyone's worried about ... feckin world ends next week anyway.

Wed, 12/12/2012 - 13:30 | 3056318 fonzannoon
fonzannoon's picture

bill gross is such a pussbag when he is on tv.

Wed, 12/12/2012 - 13:31 | 3056319 scatterbrains
scatterbrains's picture

wouldn't it be cheaper to just have Isreal re-double it's purchases of AAPL via swap lines from the fed to prop this shit show up?

Wed, 12/12/2012 - 13:34 | 3056327 Quinvarius
Quinvarius's picture

They might as well make QE4 endless as well.  We already know it has to be.

Wed, 12/12/2012 - 13:40 | 3056375 Miramanee
Miramanee's picture

Star Date 22453.454 From the FOMC,,,,QE3546 right on track....purchase of $31.4 Quadrillion in MBS seen as panacea to economic woes. Meanwhile, a record 530 million members of the American SSR (out of a total population of 532 million citizens) live at or below the poverty level.

Wed, 12/12/2012 - 13:45 | 3056410 NEOSERF
NEOSERF's picture

Behold the advent of "Sisyphusian Economics".

Wed, 12/12/2012 - 13:50 | 3056436 BrigstockBoy
BrigstockBoy's picture

I'm turning Japanese, I think I'm turning Japanese, I really think so...

Wed, 12/12/2012 - 13:51 | 3056445 Gamma735
Gamma735's picture

Bullish on bullets and band aids.

Wed, 12/12/2012 - 13:52 | 3056454 Gamma735
Gamma735's picture

I forsee a new growth industry.  Sales will double each year for the foreseeable future.  It is time to hop on the RIOT GEAR bandwagon.

Wed, 12/12/2012 - 14:03 | 3056507 q99x2
q99x2's picture

If it doesn't do anything then they should quit doing it or go to Banksters Anonymous. They'll end up in a divorce if they continue.

Wed, 12/12/2012 - 15:53 | 3056975 Venerability
Venerability's picture

I think seeing the Fed's moves in isolation is now an extreme mistake, because what we are really experiencing is the birth pangs of a Coordinated Worldwide Stimulus and Growth-oriented Agenda for the first time in several decades.

If the SPD gets Germany back in 2013, it is literally all over but the shouting.

I would not be surprised if we once again started hearing about "closing the gap between North and South" again soon. Or if every analyst around started "taking hard looks" at first Latin America, then Africa. The erstwhile South Asian "Tigers" are already looking pretty rosy in most cases and will look a lot rosier, if some sort of Grand Deal can be worked out on Energy in the South China Sea.


Wed, 12/12/2012 - 16:31 | 3057142 lakecity55
lakecity55's picture

We are like those poor souls  on Columbia, routinely re-entering the atmosphere, unaware a small hole in the wing would blast them to bits until it was too late.

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