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Guest Post: Larry Summers Admits The Fed Is In A Liquidity Trap

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Submitted by Lance Roberts of STA Wealth Management,



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Wed, 10/30/2013 - 15:37 | 4105972 FieldingMellish
FieldingMellish's picture

Well, duh?

Wed, 10/30/2013 - 15:48 | 4105995 FL_Conservative
FL_Conservative's picture

Big man, pig man, ha ha, charade you are

You well heeled big wheel, ha ha, charade you are

And when your hand is on your heart

You're nearly a good laugh

Almost a joker

With your head down in the pig bin

Saying 'keep on digging'

Pig stain on your fat chin

What do you hope to find?

When you're down in the pig mine

You're nearly a laugh

You're nearly a laugh

But you're really a cry.

Wed, 10/30/2013 - 15:49 | 4106020 THX 1178
THX 1178's picture

So THAAAATS why Summers turned down the FED job. At least he's smarter than Yellen... Whatever that means.

Wed, 10/30/2013 - 15:51 | 4106026 Keyser
Keyser's picture

Whenever I see larry Summers, over $600 trillion in derivatives comes to mind. 


Wed, 10/30/2013 - 16:05 | 4106114 zaphod
zaphod's picture

The fact that Larry turned down the job is the #1 indicator that things will fall apart in the next several years.

The FED job is the top aspirational goal of all finance types, it is equivalent to being president in those circles and forever enshrines them in history (as they see it).

The only reason someone like Larry would turn down the top spot is if they worry that the risk of holding the position during the wipeout outweighs the benefit of holding the role. The benefit of holding the role is high, so the risk in Larry's view must be higher.

Larry is privy to more real economic data then Yellen is, this is why he turned down and she accepted...

Wed, 10/30/2013 - 16:06 | 4106143 outamyeffinway
outamyeffinway's picture

And that is why Yellen got the job. Is Larry pissed?

Wed, 10/30/2013 - 16:15 | 4106181 knukles
knukles's picture

Oh shit.
This is probably the last guy I ever wanted to concede the point I been making for years now.  You all are my witnesses.  I been stating over and over again, that we're caught in a Liquidity Trap.  A monetary phenomenon brought about by non-monetary factors, those being a Credibility Trap.

Thanks a lot, Larry.

Why not somebody in whom I've a great deal of respect.

Then again, better late than never.

Nice of you to hang Janet out to dry under this circumstance.

PS... I'm not sure Larry turned down the job "voluntarily"
Just watch Paul defer on Yellen's approval without a complete Fed Audit

Wed, 10/30/2013 - 16:16 | 4106201 kaiserhoff
kaiserhoff's picture

But he looks so good eating crow:)

Wed, 10/30/2013 - 19:38 | 4106905 eatthebanksters
eatthebanksters's picture

Now we know why Summers was not nominated to head the Fed...he basically is telling the world that the Obama administration has failed to create an enviroment conducive to jobs and growth because their has been no adjustment in fiscal policy from the legislative and executive branches.  God knows the Repugs have tried to push some plans through only to be ki-boshed by the Destructocrats.  Unfuckingbelievable the amount of damage the lying asshat in the white house has done to our economy, yet his entitled sheeple lap up is bullshit like it was ice cream.

Wed, 10/30/2013 - 21:10 | 4107171 TwoShortPlanks
TwoShortPlanks's picture

Oh fuck me!

Yeah, Liquidity Trap one way, and Golden Valleys the other. The Fed is DISPOSABLE!!!!

US Gold Treason

Wed, 10/30/2013 - 19:37 | 4106907 lotsoffun
lotsoffun's picture

knuckles - you are the only guy that gets it.  i like watching the rookies, but they will learn saying he turned it down.  summers didn't turn down anything.  he wanted it bad, and infact, what's he got to do at the moment?  fuck all.  he wanted that acceptance to the club real bad, even if he knows the truth.  now he tells the truth, sour grapes.  he's just that kind of guy.  what did we call it as kids?  'sore loser'?  i promise you one thing, he's totally out of the club now.

Thu, 10/31/2013 - 04:00 | 4107824 daemon
daemon's picture

"... things will fall apart in the next several years."

Several ?


Wed, 10/30/2013 - 16:03 | 4106118 LawsofPhysics
LawsofPhysics's picture

"Insufficient demand" - For what Larry?  There are 7+ billion (and growing) people all competing for a better standard of living.  There is plenty of fucking demand you corrupt piece of shit.

Wed, 10/30/2013 - 16:24 | 4106241 vxpatel
vxpatel's picture

americans are the number one consumer, and we're already obese, living in homes that are too big, filled with too many things, driving cars that are too big, taking out 2nd mortgages for student other words the sheeple are fully fleeced...there is no more macro demand....and the population curve is changing....

Wed, 10/30/2013 - 16:48 | 4106378 LawsofPhysics
LawsofPhysics's picture

"..and the population curve is changing...."  - bullshit.   Especially not with all the "fucking" going on...

Wed, 10/30/2013 - 16:55 | 4106400 Stormtower
Stormtower's picture

Billions a chinese, latin amercia, mexico, india....there's plenty of demand. Only problem is you'd have to actually apy people wages. can't have that, where the hell would we get slave labor from??

Wed, 10/30/2013 - 23:25 | 4107516 StychoKiller
StychoKiller's picture

Um, for-profit prisons?

Wed, 10/30/2013 - 16:54 | 4106166 greatbeard
greatbeard's picture

>> Summers turned down the FED job.

I'm pretty sure Larry turned down the Fed job for the same reason I wouldn't charge a machine gun nest naked and unarmed, there wasn't a chance in hell he was going to make it.  Larry didn't turn down the job because of some intellectual brilliance.



Wed, 10/30/2013 - 16:27 | 4106271 safe as milk
safe as milk's picture

let's see. first, timmy disappears, then ben says bye and then larry begs off. then they give the job to a woman while a black guy is in the white house. as a topper, larry makes sure to be on the record as predicting failure because the politicians won't do their job and the bankers don't have the right tools. you can't make this stuff up. the only question left is when does the sh*t hit the fan.

Wed, 10/30/2013 - 21:44 | 4107286 BigJim
BigJim's picture

 My belief all along has been and remains that a well thought out combination of both fiscal and monetary policy is the correct remedy for what ails the U.S. economy currently.

Er, yeah, that's right, the central planners in the Fed are insufficient, we need the combined wisdom of them and gubment to save us!

Give me a fucking break. The correct remedy for waht ails the US economy is to allow asset prices - ie, capital - to reflect real-life yields.

Wed, 10/30/2013 - 15:44 | 4106000 kliguy38
kliguy38's picture

Another banker trying to cover his tracks in history......BWAAAAAA......too funny

Wed, 10/30/2013 - 15:54 | 4106044 bob_stl
bob_stl's picture

That's why he didn't take the chairmanship position. He knows this is about to fall apart.

Wed, 10/30/2013 - 15:58 | 4106088 NoDebt
NoDebt's picture

Bob, you may be right.  Never thought I'd hear a Fed guy actually utter the phrase "liquidity trap".  That's supposed to be done by keyboard jockeys like me (having said this since the first day I showed up at ZH).

Wed, 10/30/2013 - 16:41 | 4106346 Crash Overide
Crash Overide's picture

Larry that prick was smart enough to not take the FED job, he didn't want to fall on the sword. At this point how can anyone defend what the FED and the USG is doing concerning monetary policy?

Wed, 10/30/2013 - 19:33 | 4106893 bubblemania
bubblemania's picture


Wed, 10/30/2013 - 15:38 | 4105982 falak pema
falak pema's picture

So Summer turns to autumn leaves, falling in Indian summer blaze, and soon to winter. 

That says it all!

Wed, 10/30/2013 - 15:39 | 4105985 CharliePrince
CharliePrince's picture

see im a good guy 

give  me a big  important position

i wont fuck it up--signed  larry  dummers

Wed, 10/30/2013 - 17:32 | 4106537 Everybodys All ...
Everybodys All American's picture

Politics at it's finest. Throws soon to be Fed chair Yellen and the money plunderers under the bus and elevates himself above the fray at the same time. For a dumb ass fuck up like Summers I got to hand it to him on this one.

Wed, 10/30/2013 - 15:39 | 4105986 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

And that is why they cut out Larry's legs from under him and went with yellow stain. I still don't like Larry but we don't need moar of the same when it isn't working as is.

Wed, 10/30/2013 - 15:55 | 4106059 11b40
11b40's picture

Can't help but wonder if old Larry is busy poisoning the well for Janet.

Wed, 10/30/2013 - 16:07 | 4106150 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

Possible. I still think they threatened to drop some dirt on him if he didn't voluntarily drop out of the race since if nothing else he seems to come off like someone who will go against the script once he gets his position and the powers that be wanted the safest choice possible with no competition.

Wed, 10/30/2013 - 19:28 | 4106873 lotsoffun
lotsoffun's picture

you would seem to be correct.  because he was really close.  and if he was that close, he was connected enough to know what the playbook was, even

at the time that he screwed up the harvard endowment, which means, he knew which way the ball was going to be tossed, but thought he could still end run and prove smarter.  loose cannon.  tough to get ahead.


Wed, 10/30/2013 - 15:42 | 4105992 Tinky
Tinky's picture

" this late stage of the current economic recovery cycle."

Really? We're nearing the end of the recovery cycle? of us really must be an idiot.

Wed, 10/30/2013 - 15:49 | 4106019 B.J. Worthy
B.J. Worthy's picture

Maybe he meant "late" as in "deceased."

Wed, 10/30/2013 - 15:42 | 4105996 carbonmutant
carbonmutant's picture

Janet got the job because she didn't talk like this...

Wed, 10/30/2013 - 15:47 | 4106008 fooshorter
fooshorter's picture

Janet is TWICE the man summers is...... 

Wed, 10/30/2013 - 15:49 | 4106018 carbonmutant
carbonmutant's picture

She's gonna need some cojones....

Wed, 10/30/2013 - 15:52 | 4106034 101 years and c...
101 years and counting's picture

Janet is at least 3x the man Larry is.  My god, will someone harpoon that beast???

Wed, 10/30/2013 - 15:55 | 4106056 bob_stl
bob_stl's picture

Janet got the job because, she's dumb enough to take it.

Wed, 10/30/2013 - 16:44 | 4106358 quasimodo
quasimodo's picture

She certainly looks the part. She's got a face for radio, no doubt about that.

Wed, 10/30/2013 - 15:43 | 4105998 slotmouth
slotmouth's picture

I heard a rumor that Larry Summers and Alan Greenspan are starting a hedgefund.  

Wed, 10/30/2013 - 15:49 | 4106014 Tinky
Tinky's picture

They are, and it is rumored to be called Homina Homina and Homina

Wed, 10/30/2013 - 16:01 | 4106104 Hilts The Coole...
Hilts The Cooler King's picture

Hava Nagila


Wed, 10/30/2013 - 18:57 | 4106681 Debt-Is-Not-Money
Debt-Is-Not-Money's picture

"Homina Homina and Homina"

Thats good.

How about Short Term Capital Management (very short term).

Wed, 10/30/2013 - 16:33 | 4106308 Thebandplayson
Thebandplayson's picture

Funny, I heard a rumor that Larry and Alan take turns shoving their heads up each other's asses...

Wed, 10/30/2013 - 15:45 | 4106006 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

QE can be summed up like this old drug commercial.

I do coke so I can work longer,

So I can earn more,

So I can do more coke........

Wash, Rinse, Repeat

and the best part is someone starts singing I am chasing rainbows at the end of it. They forgot the unicorn part though

Wed, 10/30/2013 - 15:47 | 4106009 Kreditanstalt
Kreditanstalt's picture

"people hoard cash because they expect an adverse event such as...insufficient aggregate demand"

"Insufficient aggregate demand" merely means business conditions are crummy and there's no reason to invest. 

Makes sense - would YOU start a business now?

Yet the Keynesians HATE this, calling it "criminal", "theft"., "stealing from the state" and such nonsense.

Wed, 10/30/2013 - 15:52 | 4106033 Keyser
Keyser's picture

What do you expect from liberals? 


Wed, 10/30/2013 - 15:54 | 4106046 falak pema
falak pema's picture

I expect truth and justice; but I'm an oxymoron.

Wed, 10/30/2013 - 22:16 | 4107319 mjcOH1
mjcOH1's picture

"people hoard cash because they expect an adverse event such as...insufficient aggregate demand" "Insufficient aggregate demand" merely means business conditions are crummy and there's no reason to invest."

I thought it meant they expect the government to steal any asset they buy and leave within the custody of a business subject to federal regulation, as the entitled vote themselves one final 2 year all expense paid orgy of Ripple and Obamaphones on the tab of the dwindling number of workers left to fund the free shit army.

My bad.

Wed, 10/30/2013 - 15:59 | 4106078 NOTaREALmerican
NOTaREALmerican's picture

Re:  What do you expect from liberals? 

Do I REALLY need to repost what Cheney said about Reagan proving something about deficits?

Wed, 10/30/2013 - 16:08 | 4106156 B.J. Worthy
B.J. Worthy's picture

Liberal echo chambers are presently blaming the Obamacare debacle on the legislation not going far enough (should've gone single payer!).

And they call themselves the reality-based community.

Wed, 10/30/2013 - 16:36 | 4106316 NOTaREALmerican
NOTaREALmerican's picture

Re:   reality-based community

And entitled OldFarts living the socialist highlife off the backs of younger people is reality?  

Git yer hands off my government motorscooter, I'm ENTITLED to that 3rd hip replacement surgery.   Why don't you cut some real socialism.

The true-beleiving dumbasses of both Teams haven't been living in reality because everybody loves the socialist scam they are living off of or getting rich off of.

When the OldFart leaches cut their medicals scam tell me about Obama-care being a socialist scam.

Duplicity, ask for it by name!

Wed, 10/30/2013 - 17:17 | 4106473 Diogenes
Diogenes's picture

The old farts are off the playing field. Now let's see how you young hot shots do.

Wed, 10/30/2013 - 17:15 | 4106469 Diogenes
Diogenes's picture

How does "hoarding cash" aka "saving" hurt demand? When we put the money in the bank, the bank lends it out again don't they? The money gets spent, the banks get their rakeoff, how does that slow the velocity of money?

Wed, 10/30/2013 - 15:48 | 4106010 Devotional
Devotional's picture

<--- Maria uses a thong

<--- Maria does NOT use a thong.

Wed, 10/30/2013 - 15:52 | 4106038 conspicio
conspicio's picture

I do not think the word "use" means what you think it means. Perhaps she does indeed "use" the thong to say, balance a table properly in a restaurant. Or perhaps to clean the rear view mirror. I will upvote on the basis you mean she wears, or hypothetically would leave on my floor, this mysterious and rare thong clothing item.

Wed, 10/30/2013 - 16:25 | 4106255 Devotional
Devotional's picture

you are correct.

Wed, 10/30/2013 - 15:54 | 4106052 fooshorter
fooshorter's picture

O you didn't hear? Ever since the surgery he wears briefs now....

Wed, 10/30/2013 - 15:48 | 4106013 lunaticfringe
lunaticfringe's picture

Larry has an absolute stranglehold on the obvious. 

If I never hear the word "taper" again, it will be too soon. 

Wed, 10/30/2013 - 15:50 | 4106025 RaceToTheBottom
RaceToTheBottom's picture

I am glad that Larry S has brought up the Fiscal side of things.

Perhaps Larry would like to talk about the costs of the subsidies the US provides to corporations from small Mom and Pop farms to the largest defence contractors and WS Banksters.

You are going to improve the fiscal position of the US a hell of a lot more by hitting the big players rather than chasing some welfare cheat's Obama phone (not that it should be tolerated).

Maybe Larry can talk about Bang for Buck?

Wed, 10/30/2013 - 15:55 | 4106061 NOTaREALmerican
NOTaREALmerican's picture

Re: welfare cheat's Obama phone

WHAT?!   You mean that guy that wanted to drowned the beast in the bathtub wasn't going to drowned Big-MIC too?   

I'm sure all the REAL "Conservatives" would have wanted ALL the Big-Gov scams equally trimmed back,  don't ya think?

Wed, 10/30/2013 - 16:16 | 4106200 RaceToTheBottom
RaceToTheBottom's picture

I bet the last real conservative is the only member in that other mythical beast, the free market.

Haven't seen any of those in a coon's age....

Wed, 10/30/2013 - 15:53 | 4106027 Kirk2NCC1701
Kirk2NCC1701's picture

I have a way out of the Liquidity Trap for Summers:

It involves some 'leveraging' (depressing a lever), which then causes the excess Tapered products to be flushed out of the system.  Caution:  A manual Taper Decongester may have to be used with excessive Tapers congesting the system.

Wed, 10/30/2013 - 15:52 | 4106032 fooshorter
fooshorter's picture

OO Larry the will sick dick for coke hooker Summers. You are an utter waste of matter. You are a fraud and a bad joke of yourself. I wouldn't trust you with a single dollar you rat fink. Look how you beg and pander like a disease ridden gypsy.

Did you also not pay your illumanti dues on time on you rejected hack? There isn't a crazy enough conspiracy theory to explain the levels of your ineptitude.

Wed, 10/30/2013 - 15:53 | 4106039 NOTaREALmerican
NOTaREALmerican's picture

I sure picked a bad day to stop believing in "Keynesians" !

Wed, 10/30/2013 - 15:57 | 4106051 buzzsaw99
buzzsaw99's picture

i guess he lerndid them complikated werds at hahvahd

liquidity trap = fuck job joo fest ponzi scheme skimming operation

Wed, 10/30/2013 - 15:57 | 4106069 TonyCoitus
TonyCoitus's picture

Yo, as long as Pinkman continues to cook, we'll be OK to BTFATH, Bitchez!

Wed, 10/30/2013 - 15:58 | 4106084 Thisson
Thisson's picture

The economy isn't going to recover until the bad debt is cleared from the system through a default mechanism.  Unfortunately, the holders of that debt don't want to see that happen, and they've got plenty of policymakers in their pockets.

Wed, 10/30/2013 - 15:59 | 4106085 John McCloy
John McCloy's picture

  No Larry is only saying this solely because he will not be the Fed Chairman. I can assure you it would have been a print-a-thon had he be chosen. He can be truthful now because THEY ARE ALL AWARE of the ponzi in place but now he can snipe but rest assured it would have been talking out of the left side of his mouth if he was installed.

Wed, 10/30/2013 - 19:20 | 4106847 lotsoffun
lotsoffun's picture

yes mr. mccloy.  sour grapes.  they all now.  and deep in the future after the crash, when one of the (greenbeans will be dead and probably yellin also), bennie will say 'but i gave you all the opportunity to be rich, you should have sold at the top.  there was nothing else i could do.

Wed, 10/30/2013 - 15:58 | 4106087 yogibear
yogibear's picture

Soon Summers, Greenspan and Bernanke can comment from afar and mock Yellen as she  fails.

Wed, 10/30/2013 - 17:08 | 4106447 RaceToTheBottom
RaceToTheBottom's picture

Committee to Save the World Reunion tour

Wed, 10/30/2013 - 16:00 | 4106097 orangedrinkandchips
orangedrinkandchips's picture

THAT is why he is not the incoming fed.


He is honest. Shame on him!

Wed, 10/30/2013 - 16:02 | 4106108 economessed
economessed's picture

I heard a lot of fancy words blown out of the mouth of that guy.  It's so much easier to visualize when we go back to what we got taught in high school economics:  the Fed is pushing on a string.

Wed, 10/30/2013 - 16:01 | 4106109 sschu
sschu's picture

Why is it the last 15 years we seem to be led by the worst possible characters during a time when we needed good leaders the most:

Clinton - definition of is, impeached, disbarred

Bush - 911, Iraq, Prescription Drug bennie, out of control spending, TARP

Pelosi/Reed - an absolute incompetent Congress

The Bamster etal - Obamacare, stimulus, Dodd-Frank

Boehner - incapable of communicating a vision, budget battles, debt ceiling

Bennie - QE to infinity

And all the rest of the recent rascals.

We have lost our way, the only option is to repent.  I do not expect that anytime soon.


Wed, 10/30/2013 - 16:05 | 4106132 NOTaREALmerican
NOTaREALmerican's picture

Re: Why is it the last 15

15 years?  The country has been hooked on the debt narcotic since Johnson's and guns-n-butter ensured the Merican dumbasses didn't mind trying to exterminate the Vietnamese.  

Johnson, Nixon, Reagan...   it's been immorality and evil for 60+ years.  

Wed, 10/30/2013 - 16:23 | 4106239 jtg
jtg's picture

You are right to have a longer historical perspective. It is a 60+ year cycle that is nearing its end in a super debt cycle collapse.

Wed, 10/30/2013 - 19:07 | 4106801 Herodotus
Herodotus's picture

The last decent president was Grover Cleveland, although some would say that Coolidge wasn't too bad.

Wed, 10/30/2013 - 16:08 | 4106157 Westcoastliberal
Westcoastliberal's picture

That's "reset" not "repent".  There, fixed it for 'ya!

Wed, 10/30/2013 - 19:43 | 4106925 sschu
sschu's picture

Thanks, but the correct word is repent.  Our problems are so big, so complex, so self-induced and unsolvable by our own means the only option left is to repent and appeal to our God.  Anything less seals our doom.  FWIIW, sschu   

Wed, 10/30/2013 - 16:11 | 4106164 aerojet
aerojet's picture

I  have to blame the Boomers for this one--they have held the voting majority for that entire period of time.  It is that generation's majority preferences that we are witnessing, and those people, unfortuantely, are a bunch if drug-addled, brainless fools.  Please understand that I didn't say all Boomers are that, it's just that infantile and simplistic attitudes have a way of taking hold and so we have the worst aspects of a whole large generation of people being magified and the result is hopelessly incompetent leadership that panders to adults who behave like children.  Almost no one from that group is ready to retire or even saved for it because they are children who believe that everyone else will make accomodations for them no matter what.  It's what they have been taught over and over again--entire  cities were brought into existence because of the Boomers.  The reason we have fast food, strip malls, and the "Happy Motoring" culture that Mr. Kunstler complains about is all because of his generation!  It's what they collectively wanted, and they got it good and hard.

Wed, 10/30/2013 - 16:21 | 4106224 jtg
jtg's picture

I am of the boomer generation and I agree that the incredible social, political, and cultural screw ups can be pinned on us. After being a revolutionary generation in the 1960's we made our long march through all American institutions and proceeded to revert to authoritarianism, cronyism, malfeasance, disinformation, spinmeisterism, and marxism. We deserve the pain we are heading into.

Wed, 10/30/2013 - 16:30 | 4106253 SWCroaker
SWCroaker's picture

""It is the common fate of the indolent to see their rights become a prey to the active. The condition upon which God hath given liberty to man is eternal vigilance; which condition if he break, servitude is at once the consequence of his crime and the punishment of his guilt." – John Philpot Curran: Speech upon the Right of Election for Lord Mayor of Dublin, 1790

The vigilance required is almost entirely needed for one's own government, *not* enemies abroad.  I'm pretty sure the Founding Fathers were a lucky mistake, and the erosion of what they put in place has been going since well before the advent of the boomers.  (Lincoln completely trampling laws and rights setting the pattern of unbridled gov abuse comes to mind as a watershed moment in history).  Consider the possibility that the problem has passed well beyond the possibility of being remedied by "voting"...


Wed, 10/30/2013 - 17:22 | 4106494 Diogenes
Diogenes's picture

"I  have to blame the Boomers for this one--they have held the voting majority for that entire period of time.  It is that generation's majority preferences that we are witnessing, and those people, unfortuantely, are a bunch if drug-addled, brainless fools.  Please understand that I didn't say all Boomers are that, it's just that infantile and simplistic attitudes have a way of taking hold and so we have the worst aspects of a whole large generation of people being magified and the result is hopelessly incompetent leadership that panders to adults who behave like children.  Almost no one from that group is ready to retire or even saved for it because they are children who believe that everyone else will make accomodations for them no matter what.  It's what they have been taught over and over again--entire  cities were brought into existence because of the Boomers.  The reason we have fast food, strip malls, and the "Happy Motoring" culture that Mr. Kunstler complains about is all because of his generation!  It's what they collectively wanted, and they got it good and hard."

The boomers are shuffling off the playing field. Now we get to see what a great job your generation does.

Wed, 10/30/2013 - 16:03 | 4106112 rfaze
rfaze's picture

Hell has no fury like a woman scorned.

Wed, 10/30/2013 - 16:03 | 4106116 aerojet
aerojet's picture

If there was any more liquidity, the planet would be one big ocean with no continents.  I think Al Gore (asshole) has postulated something about that.  

Wed, 10/30/2013 - 16:07 | 4106147 Westcoastliberal
Westcoastliberal's picture

Can we just get real here for a moment?  The entire idea of "QE" is a sham.  Wall St does not pump the economy just as the tail does not wag the dog.  The entire scam was designed to transfer taxpayer money to the central banks.  This has nothing to do with curbing unemployment, which is actually now at about 30% or higher than during the Great Depression.  None of the other numbers issued by the U.S. government are believable either. And why is anything that comes out of Larry Summer's mouth or any other orifice newsworthy?

Wed, 10/30/2013 - 16:27 | 4106276 NOTaREALmerican
NOTaREALmerican's picture

Re: The entire scam was designed to transfer taxpayer money to the central banks

Yeah, it's almost like the "Liberals" and "Conservatives" weren't paying attention for the last 60+ years as long as their favorite political Team kept the debt-spice flowing to their favorite Big-Gov scams.

I mean, WhoCouldaKnowed that never having to pay for anything could lead to bad results.  Surely not Krugman.

Wed, 10/30/2013 - 16:18 | 4106210 SWAG
SWAG's picture

Uh, duh.  This is exactly the argument for moar QE if you are trying to stimulate--to reduce LONG TERM interest rates.  Monetary econ 101.

Wed, 10/30/2013 - 16:23 | 4106237 moneybots
moneybots's picture

"My belief all along has been and remains that a well thought out combination of both fiscal and monetary policy is the correct remedy for what ails the U.S. economy currently."


With 17 trillion in federal debt and Obamacare, it is too late for that combo.

Wed, 10/30/2013 - 16:35 | 4106318 Calmyourself
Calmyourself's picture

I'm sure I don't get the magnificence of the Summers, but if a liquidity trap is signified by low interest rates would not exiting a liquidity trap just blow up the monetary system as .gov cannot finance itself at higher rates?

Wed, 10/30/2013 - 16:48 | 4106375 Son of Captain Nemo
Son of Captain Nemo's picture

No Shit!

And he was the guy that single handedly volunteered to start it all by removing G-S 15 years ago.

Wed, 10/30/2013 - 17:07 | 4106440 Son of Captain Nemo
Son of Captain Nemo's picture

Oh and to add to this. 

He's saying this because he got shafted as Chairman at the Fed.

Wed, 10/30/2013 - 20:03 | 4106985 Constitutional ...
Constitutional Republic's picture

Vicious little bitch, isn't he. Typical keynsian. They'll scratch each other's eyes out rather than be collegiate...just like their mentor, the Rothschild backed satyr and boy fiddler, JM Keynes.

Wed, 10/30/2013 - 16:49 | 4106379 U4 eee aaa
U4 eee aaa's picture

The Fed is a 100 year old institution. When you turn 100 incontinence is usually one of the least of your worries. We are right on schedule

Order uncle Bennie some depends!

Wed, 10/30/2013 - 16:57 | 4106409 GreatUncle
GreatUncle's picture

Response for Lance Roberts STA Wealth Management.


You mention the Keynesian liquidity trap. Run a system of creating money for decades the invevitable end game is the liquidty trap. How so? After decades of central bankers creating money the amount of money held by the majority of the population is too small in respect to the TOTAL VALUE OF THE SYSTEM. At that point you are in the liquidity trap with no way out. Do you think there is one? By defining what I have expressed it would mean the majority of the population being returned a larger portion of the total monetary system and then you are out. NOT GOING TO HAPPEN so you are stuck in this liquidity trap that is in reality another way of expressing there are too many with not enough to really change the economic outcome.

Wed, 10/30/2013 - 17:08 | 4106445 Pareto
Pareto's picture

Its not a liquidity trap:


"Its a liquidity shit abyss."  "Whats a liquidity shit abyss Mr. Lehey?"  "A liquidity shit abyss Bubbles, is when central bankers print so much money that it turns into liquified shit, where the winds of shit churn the liquified shit into a spiraling liquidity shit storm that sucks up everything into it including you Bubbles - its why they call it a liquified shit abyss because once you're in it, you can never come out the same - never come out the same Bubbles." 

Wed, 10/30/2013 - 18:28 | 4106691 Herkimer Jerkimer
Herkimer Jerkimer's picture




One of the great poets and philosophers of the late 20 and early 21 centuries.  A collection of Lahey Shitisms!



Wed, 10/30/2013 - 19:27 | 4106866 Pareto
Pareto's picture

you cant help but find yourself giggling like a little school girl at all the shitisms.  +100 for making me laugh.

Wed, 10/30/2013 - 18:02 | 4106632 NoWayJose
NoWayJose's picture

People are not hoarding cash because they fear deflation - they are hoarding cash because they fear inflation is going to make food and other necessities more expensive, and the economic collapse caused by tapering is going to collapse the economy and probably cause them to lose their jobs.

If investors are hoarding cash, its not that they fear deflation - it's because the EXPECT deflation when all the bubble level assets collapse.

Wed, 10/30/2013 - 19:58 | 4106973 Constitutional ...
Constitutional Republic's picture

Thanks, Larry. Next up: name the past Presidents and Reserve Board Chairmen, as you clearly only have hindsight vision. Schmuck.

Wed, 10/30/2013 - 20:35 | 4107060 QQQBall
QQQBall's picture

. its the politicians fault

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