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Guest Post: More Monetary Quackery

Tyler Durden's picture





 

Submitted by Pater Tenebrarum of Acting Man blog,

Central Banks Urged to Drop their 'Fear of Inflation'

An example for the relentless pro central planning and pro inflation propaganda we are regularly confronted with nowadays is a recent editorial at Bloomberg, entitled “Central Banks Must Master Their Fear of Inflation”.  Here is an excerpt from this pro-inflation screed:

“The details get complicated, but the basic reasoning is straightforward. Although nominal interest rates can’t fall to less than nothing, real (inflation-adjusted) interest rates can. To push real short-term interest rates as low as it deems necessary, a central bank merely has to achieve a sufficiently high rate of inflation. (A nominal interest rate of 3 percent is a real rate of 3 percent if prices are expected to be stable, but a real rate of only 1 percent if inflation is expected to be 2 percent.)

 

In fact, the central bank only has to promise to raise inflation and be believed — that’s enough to change real rates. This is a promise a central bank, and only a central bank, is in a position to make.

 

Could it therefore make sense for the Federal Reserve to promise, say, three years of 4 percent inflation as a way to drive real short-term interest rates lower? Theoretically, it turns out, the answer is yes. Yet the idea fills most central bankers, raised on the consensus forged in the 1980s, with dread.

 

The dread is understandable. If higher inflation becomes entrenched, bringing it down again may require a policy-induced recession. Any central banker will tell you that anchoring inflation expectations is vital for economic stability. Few want to be suspected of even considering a controlled dose of higher inflation — in fact many would say there is no such thing.

 

This thinking is counterproductive. Modern central banks pay lip service to the idea of transparency and insist they want their actions to be better understood. When it comes to discussing the trade-off between inflation and a more rapid recovery, they prefer to look away.

 

Lately, however, this reluctance has collided with the inescapable reality that, with all the advanced economies growing so slowly, maintaining or increasing monetary stimulus through QE is necessary. At the same time, central banks know that doing QE while promising to keep inflation very low is partly self-defeating.

 

Which brings us to the important question: As part of a new monetary-policy framework, can central banks openly aim for a therapeutic spell of higher-than-target inflation while containing the danger that the treatment would go too far?

 

The answer’s unclear, and the central banks’ unwillingness to confront the issue squarely isn’t helping the discussion. Our view is that a new target, tied to nominal incomes or to the level of future prices rather than the rate of inflation, could serve this purpose. (For a more thorough examination of this idea, see this accompanying essay.) There are good reasons to fear inflation. But no one should be so afraid that the subject can’t even be discussed.”

(emphasis added)

The fact that such arguments are forwarded in editorials and by many modern-day economists is simply stunning. Even if one knew absolutely nothing about economic theory and were instead only aware of economic history, one should recoil from such ideas. The very same argument – namely that there is a 'trade-off between growth and inflation', read: inflation can somehow 'create growth' – has for instance been made the members of France's revolutionary assembly in 1789. And for a while it seemed that they were right. These men were not stupid; they thought: 'all we will do is give the economy a brief shot in the arm, until it is revived again, then we will stop'. But then it turned out that they simply could not stop.

They then proceeded to deliver a historical achievement of some distinction: they completely destroyed two currencies in a row, back-to-back (the 'assignat' and the 'mandat'). For a detailed account of that experiment, see “Fiat Money Inflation in France” (pdf) by Andrew Dickson White. This is a text everyone should read – it stands as a monument for the folly of continually trying to 'stimulate' the economy by means of inflation. It also shows how well educated men can, in spite of actually knowing better, easily fall for committing this abject error.

As Ambrose Evans-Pritchard recently remarked quite correctly, the very same fate awaits the Fed and BoE's 'QE' operations. They will never be 'reversed'. In fact, prominent academic economists are making precisely this argument, namely that 'QE' should just be continued forever!

“Columbia Professor Michael Woodford, the world's most closely followed monetary theorist, says it is time to come clean and state openly that bond purchases are forever, and the sooner people understand this the better.

 

"All this talk of exit strategies is deeply negative," he told a London Business School seminar on the merits of Helicopter money, or "overt monetary financing".

 

He said the Bank of Japan made the mistake of reversing all its money creation from 2001 to 2006 once it thought the economy was safely out of the woods. But Japan crashed back into deeper deflation as soon the Lehman crisis hit.

 

"If we are going to scare the horses, let's scare them properly. Let's go further and eliminate government debt on the bloated balance sheet of central banks," he said. This could done with a flick of the fingers. The debt would vanish.

 

Lord Turner, head of the now defunct Financial Services Authority, made the point more delicately. "We must tell people that if necessary, QE will turn out to be permanent."

(emphasis added)

That the dangerous quack quoted above is regarded as the “world's most closely followed monetary theorist” is shocking, though perhaps not surprising. We have previously discussed the question of central banks canceling the government debt they hold and what to expect from such a move. It doesn't need to be repeated, except to say that it would compound the foolishness of the current path of policy.

One really wonders why people have lately sold gold. It seems to make little sense in light of the widespread mainstream views on what the 'correct' monetary policy should consist of. Monetary cranks abound wherever one looks. The ultimate outcome of all this inflationary experimentation is preordained, so people have every reason to be very concerned about preserving the value their assets. Of course we are well aware that markets can often behave in an irrational manner for extended time periods. In fact, this is what allows astute speculators and investors to make profitable trades, as there are frequently opportunities created by the markets getting it wrong. In this particular case it is still astonishing, considering how blindingly obvious it is in which direction things are currently moving. Mr. Woodford wants to 'scare the horses'. We are wondering why they are not scared yet – but we suspect they will be soon enough.

 

NA-BS269_WOODFO_DV_20120830171538

Michael Dean Woodford, a proponent of 'QE forever' who even wants central banks to cancel the government debt they hold, thus enshrining the inflation of recent years irrevocably.

(Photo via The Washington Post)

 


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Fri, 04/05/2013 - 19:07 | Link to Comment Dr. Richard Head
Dr. Richard Head's picture

I wonder how well this quack is living now and how well he will be living 10 years from now.

Fri, 04/05/2013 - 19:19 | Link to Comment Abraxas
Abraxas's picture

That doesn't matter richard. I want it all and I want it now.

Fri, 04/05/2013 - 19:45 | Link to Comment ACP
ACP's picture

Step right up, ladies and gentlemen!

With this magic bottle of QE, all your ills will be cured!

 

You mean, that kinda, snake-oilish quackery?

Edit: Due to this quackery, looks like some cities/neighborhoods are starting to go private with their police. So when does Omni Consumer Products start running Detroit PD?

Fri, 04/05/2013 - 19:48 | Link to Comment flacon
flacon's picture

Pee H. Dee from an accredited Ivy League University. Anything you say can and will be infallibly divine. 

Fri, 04/05/2013 - 20:06 | Link to Comment sunaJ
sunaJ's picture

 

 

"One really wonders why people have lately sold gold. It seems to make little sense in light of the widespread mainstream views on what the 'correct' monetary policy should consist of. Monetary cranks abound wherever one looks. The ultimate outcome of all this inflationary experimentation is preordained, so people have every reason to be very concerned about preserving the value their assets. Of course we are well aware that markets can often behave in an irrational manner for extended time periods. In fact, this is what allows astute speculators and investors to make profitable trades, as there are frequently opportunities created by the markets getting it wrong. In this particular case it is still astonishing, considering how blindingly obvious it is in which direction things are currently moving. Mr. Woodford wants to 'scare the horses'. We are wondering why they are not scared yet – but we suspect they will be soon enough."

Is Mr. Tenebrarum employing satire here?  Or is he with blissful ignorance demonstrating the discomfort one has when they fail to see the difference between the value of physical custody and paper/digital "prices"?  Bravo, either way.

Fri, 04/05/2013 - 20:07 | Link to Comment Precious
Precious's picture

Woodford looks like he just had a bowel movement in his pants.

Fri, 04/05/2013 - 20:38 | Link to Comment otto skorzeny
otto skorzeny's picture

you're right-he does look jew-y

Fri, 04/05/2013 - 20:01 | Link to Comment fourchan
fourchan's picture

the number one reason for todays pm price.

 http://www.youtube.com/watch?v=z7usCHnZ-8c

 and even worse

http://www.youtube.com/watch?v=ndshbH3qZ6Y

Fri, 04/05/2013 - 20:51 | Link to Comment MisterMousePotato
MisterMousePotato's picture

Holy shit.

You'd think that someone of Einstein's intelligence woulda been a little more certain about human stupidity.

Sat, 04/06/2013 - 10:12 | Link to Comment BobPaulson
BobPaulson's picture

I agree that most people are idiots, but you may have gotten more takers if the sale looked legit. Most people were suspicious something was up or they were being conned.

Fri, 04/05/2013 - 19:26 | Link to Comment Ignatius
Ignatius's picture

"One really wonders why people have lately sold gold."

***

"Who shorts a bull market?"  -- Paul Craig Roberts

***

A wise man once said

Some men rob you with a fountain pen

Didn't take too long to figure out

Just what he was a-talkin' about

-- Bob Dylan

Fri, 04/05/2013 - 20:10 | Link to Comment Precious
Precious's picture

"I sold that gold 'cause I needed the money..." -- Bob Dylan

Sat, 04/06/2013 - 05:31 | Link to Comment Ghordius
Ghordius's picture

Gold price? imho the ugly truth is that the paper price has it's own "logic" - meanwhile corrent physical demand is heavely influenced by the saving preferences of Indians and Chinese, followed distantly by Turkic countries, Arabs and Russians, followed by other Eurasians

Fri, 04/05/2013 - 21:44 | Link to Comment Professorlocknload
Professorlocknload's picture

Of course the debt will be burned. It was the plan from the start. Can't understand why no one can figure that out.

When TARP was passed, what little was left of the Market Economy ended. We now have a Government Command system very similar to Communist China and the old Soviet Union. I mean, complete with verbiage like "five year plan" and "social justice."

The Frogs got boiled and didn't feel a thing.

It all ended in 07, 08. What you see is a facade.

It was Habeas Corpus and Posse Comitatus, first. The Freedom of Information Act is next. Then we go back into the dark. New New Deal comes to mind.

The POTUS candidate who "wins" (probably already decided) 2016 will be a Populist Fascist Tyrant, riding in on a White Horse, disguised as a Champion of the Little People. Then, it's finished.

If we even make it that far.

Other than that, how was the play, Mrs. Lincoln?

Galt/Rearden 2012

 

Sat, 04/06/2013 - 10:57 | Link to Comment HardAssets
HardAssets's picture

Yes, its really quite remarkable. 'America' became the worlds premier New Rome/fascist Nazi police state while her purposely dumbed down citizens believe themselves Free and spreading freedom around the world. The next prez elected may be a former military man. (Americans have been taught to pay homage to the military. Afterall, thats what "supporting the troops" is all about.)  In the name of 'national security' the country will become an obvious police state. - - After the last world war, Germans were asked how they let it happen. How did they put a madman in power which lead to so many innocent people killed & their nation destroyed ?   Ask 'conservatives' how they allowed government to get so big. Ask 'liberals' how they allowed so many wars to be fought.   . . . . this is how it happens

Sat, 04/06/2013 - 11:39 | Link to Comment Diogenes
Diogenes's picture

Herr Goering how did you get the people to go along with starting WW2?

What have the people got to say about it? Why should some poor rube want a war when the best he can hope to get out of it is to come home in one piece?

If you want a war you start one. Then you say anyone who opposes it is unpatriotic. It's the same in every country.

Sat, 04/06/2013 - 11:50 | Link to Comment Diogenes
Diogenes's picture

The German people never put Hitler in power. In the 1932 election they chose Hindenberg as president, rejecting Hitler. Hitler then finagled the appointment of  Chancellor.

2 years later Hindenberg died and Hitler succeeded him.  Hitler abolished the office of president entirely, and replaced it with the new position of Führer und Reichskanzler ("Leader and Reich Chancellor"), cementing his dictatorship.

He then faked up an arson attack on the Reichstag and used it as an excuse to impose martial law. This put Germany under the control of the military with Hitler as its head. Civil law was suspended during the emergency which lasted for 11 years. During this time there were no elections and Hitler was absolute dictator, maintained in power by the Gestapo, SS, and the full weight of civil and military authority. The people never had anything to say about it if they knew what was good for them. If they spoke out anyway it was too bad for them.

Sun, 04/07/2013 - 09:07 | Link to Comment HardAssets
HardAssets's picture

The point is that it always comes down to the people. As Etienne de La Boetie wrote about in various works including 'The Politics of Obedience: The Discourse of Voluntary Servitude', one man or a small minority of men cannot make an entire population do what they do not want to do. These authorities are always vastly outnumbered. People are their own prison guards. It is from the population that the police, military, and other enforcers come. Some of these enforcers are psychopath predators, but most must be indoctrinated into actually believing they are working for a greater good. If each individual person in Germany had somehow been able to magically see their own personal fate and that of all they loved in 1945, back in 1933 . . . they never would have allowed Hitler to remain in power. And those individuals making up 'the full weight of civil and military authority' would have been at the forefront in deposing him. People are in prisons of their own minds, and they provide the hands that physically cage themselves.

Lesson for us today:   We better get through to the dumb jocks in the military and police how they are being shafted like the rest of us. (As one coming from a military family and having served myself, I can use the 'dumb jocks' term. USMC General and two time Medal of Honor winner Smedley Butler said he didnt figure out how he had been used as muscle for the banker boys until after he retired from the Marine Corps. Ask most military officers, much less non-coms and enlisted people, to give you an explanation of what the Federal Reserve is and the true nature of money . . and I highly doubt they could do so. Like in other professions, such knowledge is outside their scope of training & experience.)

Sat, 04/06/2013 - 14:38 | Link to Comment JR
JR's picture

Germans were asked how they let it happen? As Lew Rockwell says, it's "The Murderous Fed…" Central banking and militarism are intimately linked.

It was greed and lust for world power cemented into the Treaty of Versailles that led to Germany’s 1923 hyperinflation and forced the impoverishment that led, ultimately, to WWII, as Lord John Maynard  Keynes said it would.

If you could ask Keynes if the U.S. (the Fed banking cartel that funds unended war) could be blamed for the Third Reich, he would say, “Yes.” Keynes warned that the heavy reparations Germany would be forced to pay until 1988 by the "Allied Powers" in the Treaty of Versailles after WWI, were excessive and counterproductive, and would force Germany, out of starvation and desperation, to war.

Excessive greed by nations run by market insiders is destructive.

And, still, the German people endured, and it was only through emergency laws that suppressed the opposition, and that outright hunted it down through NSDAP special laws, that Hitler technically got “elected” as Diogenes explains – i.e., after he already had “near dictatorship powers via nondemocratic means.”

As for the innocence of FDR and Winston Churchill, Sandmann (ZH blogger) exposes the real FDR: “If Roosevelt hadn't worked overtime to engineer war with Japan and thereby activate Germany's Treaty with Japan the US would have been stuck in Depression until Joe Stalin came to offer Franklin a New Deal - after all with Harry Dexter White (assistant secretary of the treasury actively involved in the Communist Party) and Morgenthau Jr.  (FDR’s Jewish secretary of the treasury whose Morganthau Plan implemented the postwar genocide of million of Germans to  prevent Germany from ever again being a military threat" and whose father was an advisor at the Paris Peace Conference on Eastern Europe and the Middle East) Uncle Joe had the Treasury sewn up - he even got US Dollar printing plates for the NKVD to use in Occupied Germany and make a fortune out of US taxpayers.”

It was Churchill and FDR at Yalta sitting alongside the man, Marshall Stalin (FDR’s Uncle Joe), who delivered a major chunk of Eastern Europe into despotic slavery.

As a result, the Polish boundary was moved westward, the remaining Polish government contained two-thirds Communists and the people of Eastern Europe were relegated to slavery and death (62 million of them) behind the Iron Curtain.

Sat, 04/06/2013 - 10:32 | Link to Comment BobPaulson
BobPaulson's picture

Those are some serious prognostications there. I agree something like that will happen but I actually think the mind controllers have way way more finesse now. The frog boiling analogy is best. There will be no sudden unveiling of swastikas on the stars and stripes. The continuous immersion into the matrix will proceed according to plans. At this stage in our downward spiral I think the only bumps will come from unpredictable derailing of the process.

For the record, I don't think there is a conspiracy executing this. I think there is decentralized school of thought that believes humans are too stupid to make decisions for themselves and need a grand master/parent to run the show. The size and complexity of the human system now seems to drive people to take shelter from reality and willingly forfeit their autonomy in favour of simplicity and comfort. The minority who are willing and able to avoid or reject subservience are either puppet masters or independents like some ZH readers. I know this sounds way too much like the Matrix movie, but I admit that for me that movie and Fight Club are excellent analogues to what is going on here.

IMHO the odds are in favour of the puppet masters, but the John Connors of the world have to keep on striving to "emancipate themselves from mental slavery". (mixed metaphor with Bob Marley and The Terminator but hey, that's postmodernism for ya...)

Sat, 04/06/2013 - 11:43 | Link to Comment Tuffmug
Tuffmug's picture

To call central bankers and these "economic theorists" who advocate for inflation and QE as quacks or cranks is to mislabel them. These people are thieves and conterfeiters who, hiding behind bogus economic theories, are plotting and stealing the accumulated wealth of the present and the future. Time we started calling a spade a spade. Bernanke's a thief! Draghi's a thief!, Woodford's a thief! Krugman's a thief!

Fri, 04/05/2013 - 19:08 | Link to Comment jimmytorpedo
jimmytorpedo's picture

I can't wait to be a trillionaire!

Fri, 04/05/2013 - 19:49 | Link to Comment Jendrzejczyk
Jendrzejczyk's picture

Let's get crazy tonight and blow it all on a whole loaf of bread!

Fri, 04/05/2013 - 20:25 | Link to Comment BigJim
BigJim's picture

Or we could wait 'til tomorrow when it'll only buy half a loaf

Fri, 04/05/2013 - 19:09 | Link to Comment ebworthen
ebworthen's picture

If the recovery is here, cut all QE and raise rates to 6%.

If money printing is good, send every taxpayer $1 Million each year for the next five years.

I mean, do they want the 70% consumer economy to recover or not? 

Why are they wasting the money buying derivatives (MBS's) and Treasuries to keep rates low?

Why give free money to the banks and bankers at 0.5% for them to lend out at 3.5%-29%?

Unless of course, the real goal is to crush the middle class while growing dependency serfdom and the elite's wealth.  I can't see any other effect from $6+ Trillion of FED gravy slathered on Wall Street.

Fri, 04/05/2013 - 19:22 | Link to Comment Abraxas
Abraxas's picture

Indeed!!!

Fri, 04/05/2013 - 21:02 | Link to Comment Van Halen
Van Halen's picture

Ebworthen, absoultely fantastic point! If the recovery is good as we're being told by the driveby media, then why QE? wouldn't you like to see at least one of these Obamabots ask that question? Just once?

Fri, 04/05/2013 - 21:31 | Link to Comment YHC-FTSE
YHC-FTSE's picture

Spot on.

Just look at the Sole traders and small businesses who are killing themselves to feed the gaping mouth of the taxman, on the knife edge of juggling credit cards, then going bankrupt to join the entitlement brigade. Now we have the spectre of capital controls and confiscation, things can only get worse for anyone hasn't woken up to the fact that there is no middle in the class system. Just the top and the bottom. The most productive people are being bled dry to feed the multinationals in the markets and the bent gamblers sitting at the prop desks of banks. If this was fiction, you wouldn't be able to sell it because it is too implausible and surreal, yet we are living in it. 

You would think this constipated cretin and many others of his ilk would spend 60 seconds of their time to read about the abject failure of Japan's struggle with QE and no less than 8 stimulus plans between 1992 & 1999 totalling $850 billion+ in today's money, but no, the lesson they got was mooooaaaar. You couldn't make this up.

Fri, 04/05/2013 - 22:00 | Link to Comment Prisoners_dilemna
Prisoners_dilemna's picture

Isnt the intent and the reason for continued QE to create the wealth effect, to try to juice the 70% consumer economy by making "us" FEEL wealthy, which is accompanied by the secondary consequence of destorying the middle class, since the MCs nominal paper wealth isn't keeping up with 1980s john williams style CPI/inflation?

Remeber these guys "never saw it coming".
Do they really believe their false models and hocus pocus? And truly don't understand austrian economics? Or are they evil and out to destroy the middle class? I think theyre believers.

They really believe they know how to centrally plan an economy. I believe this about them because I used to be a flaming liberal like them. Its not my fault! I was raised in a state worshipping society, went to public school, son of a prison guard in New York. My point is I was taught wrong but I believed.

Until one magical day when a friend put "end the fed" by the Venerable Dr. Ron Paul into my hands. Now 6 years later at the ripe age of 31, and multiple boating accidents later, I'm as gold bugging, libertarian, state hating as they come. My point is I had to unlearn the state worshipping bull shit I was spoon fed, had to get rid of cable tv, and had to read, read more, then some more etc.

Now I have zerohedge in my daily life, I'm a self certified armchair austrian economist, and Im still prone to inexplicable fits of treading water as my floating vessel slips to the bottom beneath me.

Is bernanke evil and out to destoy the MC? Nah. He's just as clueless as I once was. He's as delusional as I was was. I think he just needs to be saved. Someone invite him to fightclub. We'll beat some liberty, homest money philosophy into him. He'll come around just like I did.

Fri, 04/05/2013 - 23:05 | Link to Comment MilleniumJane
MilleniumJane's picture

Bernanke is an evil motherfucker.  He knows.

Sat, 04/06/2013 - 10:39 | Link to Comment HardAssets
HardAssets's picture

Prisoners_dilemna - -  Do any research and its obvious that those that constructed the current system back in 1913 knew exactly what they were doing.

Do some research on the communist revolutions in Europe in 1848. Check out the stories of how many of those communists fled to America and became prominent in the Republican party (from Germany, Hungary, France, and other countries to a lesser extent). They were essential to getting Lincoln elected. Several union generals and an assistant Secretary of War were '48ers' from Europe. There were many of them with newspapers.  Then research the basic platform of communism including the establishment of a central bank, destruction of private property rights, establishment of mandatory public 'schools' of indoctrination, and destruction of local units of government so that an all powerful central government would reign supreme.  They were collectivists and thats the path they wanted to take the country down.

Is Bernanke clueless or evil ?  I don't know.  Many people in our day-to-day lives are just clueless. Afterall, they were subjected to those mind control 'schools'. But IMO we must not think that those with evil intent do not exist.  

Like you, it took me many years to 'see the light'. Though, I came at it from the right side of the political spectrum instead of the left.   Now I know 'left' and 'right' are illusions used to keep people divided and conquered. So my outlook is libertarian now.

P.S. - - - the 'communist' idea of a Workers Paradise after the State withered away is another con game.  Its always been about a small group of psychopath criminals living off the rest of humanity and spinning all sorts of stories to get people to enslave themselves. Those at the top in the USSR had limos and any Western goods they wanted. The rest of the people were in poverty. The various 'isms' are cons.

Sat, 04/06/2013 - 15:42 | Link to Comment Hive Raid
Hive Raid's picture

That's great, you understand Austrian economics.

You don't understand The Jew.

Sat, 04/06/2013 - 07:02 | Link to Comment Ghordius
Ghordius's picture

+1 imho "real goal is to crush the middle class while growing dependency serfdom and the elite's wealth" is more like

1. keep the juice coming for the financial interests - particularly for megabank management

2. keep the laws and regulations and anti-regulations coming that favour "Big Biz" interests over "Small Biz" interests - megacorporations don't want a level field with SMEs, and both Wall Street & the City agree on this

3. keep key pressure groups appeased - see campaign money

4. Pay Lip Service ToThe Rest

the middle class - that still has some of it's former "privileges", btw - falls under "Regretfully Unavoidable Collateral Damage" in the above considerations

Sat, 04/06/2013 - 09:55 | Link to Comment HardAssets
HardAssets's picture

IMO if you do any research on UN Agenda 21, the idea that the current plight of the middle class is an 'accident' or an 'unintended consequence' . . . is blown away.

Yeah, might sound 'kooky' to some here.   But just do the research first before making your mind up.

Fri, 04/05/2013 - 19:08 | Link to Comment nmewn
nmewn's picture

He looks like he just smelled a fart ;-)

Fri, 04/05/2013 - 19:13 | Link to Comment Major Major Major
Major Major Major's picture

... and he is trying to figure out what the odor reminds him of.

Fri, 04/05/2013 - 19:32 | Link to Comment Temporalist
Temporalist's picture

Smells like victory!

Fri, 04/05/2013 - 19:41 | Link to Comment Jendrzejczyk
Jendrzejczyk's picture

"What did I eat last evening?

Fri, 04/05/2013 - 19:14 | Link to Comment McMolotov
McMolotov's picture

He's quite the dandy. Looks like he could have been in one of the old Grey Poupon commercials (or rather Grey Poop-on).

Fri, 04/05/2013 - 19:11 | Link to Comment McMolotov
McMolotov's picture

It should be obvious by now that the belief in centralized planning isn't monetary quackery at all; it's a well-orchestrated plan designed to enrich the few at the expense of the many.

It's easy to think these people are idiots. It's far more scary to think they know exactly what they're doing.

Fri, 04/05/2013 - 20:51 | Link to Comment DosZap
DosZap's picture

 It's far more scary to think they know exactly what they're doing.

Anyone on this site that thinks otherwise must be new, or an idiot.This a pre-planned event dudes n dudettes.

Sat, 04/06/2013 - 01:44 | Link to Comment Poor Grogman
Poor Grogman's picture

Meticulously planned and carried out, all at your expense...

Fri, 04/05/2013 - 19:13 | Link to Comment icanhasbailout
icanhasbailout's picture

Jamie Dimon 700% stars in Bond Purchases are Forever

supporting cast

Kevin Henry * Ben Bernanke * Timothy Geithner * Jon Corzine

Fri, 04/05/2013 - 21:03 | Link to Comment Van Halen
Van Halen's picture

Rated DDD!

Fri, 04/05/2013 - 19:16 | Link to Comment OutLookingIn
OutLookingIn's picture

Unless...

They scare the ROTC horse,

with a pistol, in Dean Wormer's office!

In that case... The economy falls over dead. Now look what you did!

Fri, 04/05/2013 - 19:27 | Link to Comment Everyman
Everyman's picture

What a nice picture of a complete asshole!

Fri, 04/05/2013 - 19:34 | Link to Comment ziggy59
ziggy59's picture

Only idiots selling gold was and is, are the CBs...

Makes one wonder what deals were made with China, Russia, etc,.

Fri, 04/05/2013 - 19:34 | Link to Comment Just Ice
Just Ice's picture

"Could it therefore make sense for the Federal Reserve to promise, say, three years of 4 percent inflation as a way to drive real short-term interest rates lower?"

Since they currently claim inflation is at 2%, why would promising 4% inflation drive rates lower?

Fri, 04/05/2013 - 19:39 | Link to Comment Room 101
Room 101's picture

OT

"Obama budget to take aim at wealthy IRAs"

http://thehill.com/blogs/on-the-money/domestic-taxes/292071-obama-budget...

I'm sure this revelation will surprise ZHers. /s

(H/T Drudge)

Fri, 04/05/2013 - 20:40 | Link to Comment otto skorzeny
otto skorzeny's picture

that's just double-talk for ALL I RAs

Fri, 04/05/2013 - 20:55 | Link to Comment DosZap
DosZap's picture

Room 101

"Obama budget to take aim at wealthy IRAs"

How long before the DEFINITION of wealthy is changed?.

Sat, 04/06/2013 - 12:50 | Link to Comment Bam_Man
Bam_Man's picture

Duh...The inflation we are going to get will change it - BIG TIME.

Fri, 04/05/2013 - 19:39 | Link to Comment francis_sawyer
francis_sawyer's picture

The quackery will continue until morale improves...

Fri, 04/05/2013 - 19:42 | Link to Comment MGA_1
MGA_1's picture

Well, Martin Armstrong and the fact that gold keeps on getting killed @ 1600...

Fri, 04/05/2013 - 19:51 | Link to Comment khakuda
khakuda's picture

We are hosed. These cranks have yet to explain how money printing and inflation make people wealthier in real terms. I would be wealthier if I was earning 5% on my money the past 5 years. I'd even be spending some of the earnings, helping the economy. Instead, I am cutting expenses to the bone. I don't care if my 401k is up, I can't spend it and it may decline or be taxed away by the time I can take it out.

Fuck you Bernanke, Krugman and Abe.

Fri, 04/05/2013 - 19:53 | Link to Comment DavidC
DavidC's picture

khakuda,
Spot on, and the very reason we need deflation, not inflation. There's a reason why these things go in cycles.

DavidC

Fri, 04/05/2013 - 21:00 | Link to Comment DosZap
DosZap's picture

khakuda,

I don't care if my 401k is up, I can't spend it and it may decline or be taxed away by the time I can take it out.

Are you sure you cannot take out YOUR part?,if not, how about a low interest loan on it, and pay the interest back to yourself.There are many company 401k's that WILL allow you to remove your money YOU have put in, and you can roll it into an IRA at a bank close to you.

Fri, 04/05/2013 - 21:09 | Link to Comment Van Halen
Van Halen's picture

Khakuda has an interesting point - have any of you folks tried cashing out your 401K early or getting out of those things you can't touch until you're 65 or whatever? I have been looking at my 401 K for a long time and thinking of bailing out but of course, there's the 50% hit I'll take. My theory is that perhaps I'll take a 50% hit but 50% in my hand is better than nothing at all once the government raids it or the markets fail. Thoughts, anyone?

Sat, 04/06/2013 - 00:26 | Link to Comment Real Estate Geek
Real Estate Geek's picture

Easy decision IMO.  Wouldn't you rather have 50% of $____, if invested in PM that you held, rather than keeping 100% of your clownbux "safe" in a 401k?

Sat, 04/06/2013 - 11:18 | Link to Comment HardAssets
HardAssets's picture

+1  on that.  Retired elderly folks are particularly getting smashed. Relatives of mine have lost huge amounts of income that they needed and their assets are being eaten up in this free money to the bankster/criminals environment. Of course, the bankster paid off politicians will determine that its 'too expensive' to maintain those people when all their assets have been completely stolen from them.

As for 401Ks and other retirement accounts - - - you can kiss those good-bye. Theyll be stolen.

Hungry serfs spending all their time & energy just trying to survive . . . are much easier to control.  Welcome to the New World Order.

Fri, 04/05/2013 - 19:51 | Link to Comment DavidC
DavidC's picture

Fuckwit is the term that comes to mind.

DavidC

Fri, 04/05/2013 - 20:22 | Link to Comment Hohum
Hohum's picture

Let's assume this gent is right.  QE forever, stocks up forever.  Nothing much for the real economy.  Works fine in an infinite world.  Problem is, it is not an infinite world.  And when the holders of stocks want to liquidate to buy some needed oil down the road a few years...TSHTF.

Fri, 04/05/2013 - 20:26 | Link to Comment conspicio
conspicio's picture

Why sell gold? Because, it will be illegal. Worth something? Of course. But illegal like a 15 round Glock. Stroke of the pen, law of the land. Coming to your neighborhood courtesy of POTUS.

http://en.wikipedia.org/wiki/Executive_Order_6102

Fri, 04/05/2013 - 20:42 | Link to Comment otto skorzeny
otto skorzeny's picture

you're probably right-nothing calls bullshit on money printers like a high or rising gold price

Fri, 04/05/2013 - 21:19 | Link to Comment andrewp111
andrewp111's picture

It can be simpler than that. Leveraged players must sell in order to pay their loans. They can't hold on in a down market in hopes that the price turns around at the end of the year.

I'm sure most really big players are leveraged.

Sat, 04/06/2013 - 03:48 | Link to Comment The Abstraction...
The Abstraction of Justice's picture

Come to Europe. If you are not happy with the rules in one country you just walk across the border to another.

Fri, 04/05/2013 - 21:07 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

Fuck the bank accounts!  Use CASH, coins, barter.  Store up on:

BTFD, BTFD, BTFD, BTFD, BTFD, BTFD, BTFD, BTFD, BTFD, BTFD, BTFD, BTFD, BTFD, BTFD, BTFD, BTFD

H2O, Food, Seeds, Livestock, G+A, Tools, TP & Soap, Meds, Text books (Math, Science, Tech), Friends^3

BTFD, BTFD, BTFD, BTFD, BTFD, BTFD, BTFD, BTFD, BTFD, BTFD, BTFD, BTFD, BTFD, BTFD, BTFD, BTFD

H2O, Food, Seeds, Livestock, G+A, Tools, TP & Soap, Meds, Text books (Math, Science, Tech), Friends^3

Fri, 04/05/2013 - 21:25 | Link to Comment Billy Shears
Billy Shears's picture

I would like to apolgize for Prof. Woodford. I went to grade school with him and punched him so hard in the face at recess one day that I'm probably responsible for his "condition". But, he has always looked liked that!

Fri, 04/05/2013 - 21:44 | Link to Comment DosZap
DosZap's picture

Van,

Khakuda has an interesting point - have any of you folks tried cashing out your 401K early or getting out of those things you can't touch until you're 65 or whatever? I have been looking at my 401 K for a long time and thinking of bailing out but of course, there's the 50% hit I'll take. My theory is that perhaps I'll take a 50% hit but 50% in my hand is better than nothing at all once the government raids it or the markets fail. Thoughts, anyone?

You can take (with most employers YOUR investment out (but not any matching funds).If your under 59.5yrs old you will get hit with a 10% penalty, and pay taxes on the 100% that was not taxed when you invested it,at the end of the tax year you removed it.

Most companies care less about your 10% hit(that is IRS rules).Ask them (depending on your tenure with said company, IF you can remove your part now.

If you have been there 15-20yrs, then chances are damn good you can.

Because the PTB have been for several yrs now been in talks about IRA/401k/Pension seizures.Your left with whatever they decide you need to live on annually and likely paid by the month.(Sans SS/MC),(and if you have any left, and pass away, it goes into the Goober kitty, and not to your familiy).

Doesn't hurt to ask, I am cashing out an IRA next week, and I got my wifes part out of her 401k 3yrs ago,rolled into IRA.(and that is coming out in CASH, shortly after I close mine,also in CASH). Just try and not take so much that you get kicked into a much higher tax bracket than usual.Your defeating your purpose then.

And like you made the point, something is better than nothing.Me, I figure do not wait till your Franked,like the markets of old truism, better out a year early, than a day late.

Sat, 04/06/2013 - 11:38 | Link to Comment HardAssets
HardAssets's picture

You place your bets and take your chances.

No one knows the future, so we don't know if any action we take will work to our benefit or not.

If youre in precious metals, depending when you bought them, you may have taken a bath over the last couple of years. The ability of the banksters to hold the system together and their use of blatantly illegal tactics is remarkable.

And you can even argue that the greatest threat isnt losing your retirement accounts, but having tanks rolling in the streets with the threat to your life & liberty.

All any of us can do is research for ourselves and think for ourselves. And then make our own decisions based on that to the best of our ability.

Praying might help.

Fri, 04/05/2013 - 21:46 | Link to Comment RopeADope
RopeADope's picture

On the path to hell, quacks migrate through Columbia University.

Fri, 04/05/2013 - 21:53 | Link to Comment besnook
besnook's picture

there is an easy solution to the dread of inflation. just lie about it. some .gov department of price stability can be set up to officially lie about inflation every week so everyone can say there is no inflation with official officiousness. problem solved.

c'mon, goddammit!! get your keynesian pants on and print! baby! print!. turn japanese. i really think so!

Fri, 04/05/2013 - 22:10 | Link to Comment YHC-FTSE
YHC-FTSE's picture

I may be proven wrong, but nobody is "selling gold". Demand for PMs around the world , outside the fantasy realm of the US of Fiat, is higher than ever. The price fall is just fucking stupid. "Markets behaving irrationally", my arse.

The clues should be in the stats. Low vol. Big sell off. Low ask. Immediate bid and acceptance.

I have no proof, so the following is conjecture. Hypothetically, if I wanted to drive down a commodity,  I need to corner the market with several collaborators. Each collaborator sells to another at lower and lower bids in a round robin fashion ignoring any outsiders.  There is no net loss to the collaborating group in terms of Oz of PM, but a marked downward price shift corresponding with each lowered bid and acceptance in USD. In order to negate the effects if any honest trades, I would simply have to make my collaborative trades bigger than theirs. Has anyone seen clients taking physical delivery from the CME? If not, the honest trades went out a long time ago.

Sat, 04/06/2013 - 04:26 | Link to Comment IamtheREALmario
IamtheREALmario's picture

I believe of course that you are correct. No one is selling physical gold except refiners and the central banks that need to meet the demand of other central banks and individuals. That being said, I believe the chance of the world reverting to a gold standard is near zero with the current power structure and population. The case for gold is a case for a total collapse into feudalism. It is the fear trade.

For those who do not believe that the markets in any way reflect a free market dymanic, the current lower price has simply been plugged into the computer by some gnome residing in a basement in London. The evil gnome cackles with glee as those who have purchased gold on margin scream in agony.

For those who believe that there is some market dynamic involved then it would have to do with liquidity and leverage drying up due to some market condition and not with anything fundamental. After all, gold has very little practical use (outside of reflecting deadly amounts of IR radiation) outside of hoarding. It could be used for other things, but generally there are other less expensive, if not perfect substitutes.

Sat, 04/06/2013 - 18:00 | Link to Comment Ghordius
Ghordius's picture

"The case for gold is a case for a total collapse into feudalism. It is the fear trade"

imho this is not the reason why Chinese, Indians, Turks, etc. buy the metal - and so not the relevant driver of the physical demand

Sat, 04/06/2013 - 04:33 | Link to Comment IamtheREALmario
IamtheREALmario's picture

Lord Turner? OK, so am I the only one who thinks that someone who goes by the title of "Lord" has a 6 sigma probability of being a douche?

Michael Douche Woodford? Never heard of him ... some foremost expert, eh? Guess that labels him as a banking shill.

As for eventually cancelling the Fed debt and starting over .... well, duh! The problem is though even if the Fed does cancel what it is owed, the underlying problem remains. THE US GOVERNMENT STILL SPENDS TOO MUCH and there is a systemic misallocation of capital to nonproductive financialization ... not to mention the derivative overhang ... unless the Fed believes that it can somehow become the counterparty of last resort for everything.

Sat, 04/06/2013 - 07:05 | Link to Comment Svendblaaskaeg
Svendblaaskaeg's picture

"This could done with a flick of the fingers. The debt would vanish"

Just like that?.. Sure..

I lend 5 grand to a "freind" that was in the shitter about four years ago, never seen him since

...so did he just flick his fingers?

 ...and would it make any diffenrence to me? - will I hunt him down anyway and make him pay in one way or the other? - Me think so, I love the smell of sweet sweet revenge in the morning...

 

Sat, 04/06/2013 - 08:37 | Link to Comment venturen
venturen's picture

QE-UACKERY!

Sat, 04/06/2013 - 09:12 | Link to Comment Hedgetard55
Hedgetard55's picture

Defaulting on debt owed to the FED is merely permanent monetization of that debt. It changes absolutely nothing.

Sat, 04/06/2013 - 11:13 | Link to Comment Flying Tiger Comics
Flying Tiger Comics's picture

Agatha Christie detected the international socialist conspiracy in the 1920s and wrote about it for the next fifty years. She identified Soros forty years earlier than anyone else, identified the Third Force decades before anyone went public on it, and even in one of her last ever books returned to the topic quite explicitly.

 

Nothing to do with the takeover of the world is accidental and it is beyond silly to suggest that it is.

 

Sat, 04/06/2013 - 19:26 | Link to Comment Wave-Tech
Wave-Tech's picture

 

 

Oh, what a tangled web they have weaved:

“Ron Paul’s sharp questions they must shun;

 

They struggle for truth, but there is none-

 

O what a tangled web they weave,

 

When first they practice to deceive!-

 

So bold-faced too! - no wonder why

 

They deserve rebuke beneath this lie.”-

 

http://www.elliottwavetechnology.com/2013/04/tangled-web-suppresses-gold-silver.html

 

 

Do NOT follow this link or you will be banned from the site!