• 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...

Exit Strategy… What Exit Strategy?

Tyler Durden's picture


Crash Course creator Chris Martenson explains why it's easier to start than to stop quantitative easing: "A lot of what we hear is the Fed's exit strategy … what most people don't know is that this thing doesn't work in reverse very well at all." In this excellent interview with RT, Martenson explains why Bernanke & Co. found it relatively simple to start their money printing, but why they will have a hell of a time getting off the runaway QE train.

This interview was conducted at the Casey Research Summit held in October (more here).

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Wed, 11/06/2013 - 15:35 | 4128004 HedgeAccordingly
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i guess the strategy is.. slow and long.. going to be a long road i would presume.. rates will creep and home prices will plateau 


Wed, 11/06/2013 - 15:37 | 4128008 Pladizow
Pladizow's picture

Who will buy when the Fed is selling!

What Hedge fund wont front run?

Wed, 11/06/2013 - 15:48 | 4128043 rubiconsolutions
rubiconsolutions's picture

"You tell the man, Blue Horseshoe loves Bernanke Steal."

Wed, 11/06/2013 - 16:01 | 4128095 knukles
knukles's picture

Exit Strategy?
Here's AmeriKa's New and Improved Anal Cavity Search Exit Strategy!



Jesus H Fucking Christ!

Wed, 11/06/2013 - 16:04 | 4128106 Headbanger
Headbanger's picture

By aliens, no doubt!

Wed, 11/06/2013 - 16:22 | 4128174 Colonel Klink
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By Pigs!

Wed, 11/06/2013 - 16:26 | 4128191 SWRichmond
SWRichmond's picture

this thing doesn't work in reverse very well at all

Well of course not.  The real economy was (and still is) having numerous, serious very real structural problems.  These problems were responded to with wishful thinking, propaganda and imaginary money, created from nothing. 

What could possibly go wrong?

Wed, 11/06/2013 - 17:16 | 4128366 OutLookingIn
OutLookingIn's picture

Empiracle fact;

Once printing to pay obligations has begun,


To end it? Is to immediately crash the currency being printed, by way of default on the obligations.

How does it end? With so much of the currency being printed, as to render it worthless.

The end result is the same. Question being, bring the end quickly? Or drag out slowly?

Wed, 11/06/2013 - 18:11 | 4128492 Son of Captain Nemo
Son of Captain Nemo's picture

"Question being, bring the end quickly? Or drag out slowly?"...

Ah yes the dilemma for the last curtain call?...

Well if I had to hazard a guess as to what is going through the mind of the Chairman and the board of governors right about now is how do we crash "it" and get on our "private charter flights" without anybody noticing that we've left the Country?

Wed, 11/06/2013 - 18:25 | 4128533 prodigious_idea
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Could I please get some feedback on the theory that a roll-up or spike in interest rates will drive down the price of PM's as "investors" rotate into higher yielding investments, thereby creating a buying opportunity for the PM faithful?

Wed, 11/06/2013 - 18:35 | 4128567 akak
akak's picture

It would also increase interest payments on federal debt, hence raise the federal budget deficit, hence put pressure on the US dollar, hence increase the pressure of the Federal Reserve to increasingly monetize that debt, hence further depreciating the US dollar, hence cause a further increase in interest rates ....

At what point does the fiat snake fully swallow his tail?

Wed, 11/06/2013 - 19:36 | 4128806 Seer
Seer's picture

Appearing in another country might be as difficults as disappearing from the US.  As I (and others here) have noted, I wouldn't place any bets on there being any safe-haven out there.

Wed, 11/06/2013 - 22:06 | 4129402 acetinker
acetinker's picture

None of that matters until a critical mass of "average joes" realizes that their medium of exchange has been corrupted. That moment, Nemo, is impossible to predict. Physical location is also irrelevant in this day and age.

Money knows no Motherland, it is without patriotism, it knows no boundary and will always seek (through its administrators) to perpetuate itself by any means possible.

Come to think of it, you could quite nearly say the same of "government".

Is this a coincidence?

Wed, 11/06/2013 - 18:40 | 4128585 sleigher
sleigher's picture

It could never work anyways.  It was always going to fail eventually.  All money created in the US was made from nothing and is debt.  Then there was the interest that accumulated so more money would have to be printed and borrowed into the system to cover that interest.  So on and so forth.  It was designed to fail and all the while extract the wealth (labor and time) from the people for the owners of the Fed.  Can we burn it down now?

Wed, 11/06/2013 - 19:37 | 4128813 Seer
Seer's picture

And when you consider that it all rides on top of the totally improbability of perpetual growth on a finite planet...

Wed, 11/06/2013 - 16:56 | 4128287 Cruel Aid
Cruel Aid's picture


Year ago, cops here dual cavity searched two women without changing gloves... for throwing a ciggy but out the window.

They got justice, but whatever. Upstanding nondescript ladies. Thought they smelled weed.

Don't do anything wrong ever again or you get raped by the man.

Edit, the cops were women btw

Wed, 11/06/2013 - 15:48 | 4128044 disabledvet
disabledvet's picture

I think it's called "the Treasury Department" actually. Hence making "Government Exit" problematical actually. Patton never had the chance to "seal the deal" at the Falaise Gap but these equity traders look like they mean business to me. Some of these trades are indeed "un-exit able." But hey...go ahead and laugh away record low interest rates as "a bubble" and "no biggie."

Wed, 11/06/2013 - 16:02 | 4128096 Headbanger
Headbanger's picture

Dig the yellow power tie dude!  It's sooo Gekko! 

Wed, 11/06/2013 - 16:46 | 4128271 Groundhog Day
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It's easy to drive a car 70 miles an hour but try driving at the same speed in reverse looking in the rear view mirror, not so easy.

Wed, 11/06/2013 - 19:18 | 4128730 booboo
booboo's picture

Everyone is assuming they don't know what they are doing, they know the math, they have run the numbers, they have computers and have war gamed this shit out. See the trick is making everyone believe they are clueless and obviously have done a pretty good job. Trust me, they know exactly what is coming sans the human response and for that they have the DHS, a billion bullets and pimps with badges. Donut pussy's will be on high anal probing alert come 3rd quarter 2015.

Wed, 11/06/2013 - 22:36 | 4129477 acetinker
acetinker's picture

booboo, I dunno how you came to have forecasting qualities, but the donut pussies are on alert right now.  You ain't lived until you've had a group of donut pussies slam you face-down to the pavement.  Just sayin'.

Wed, 11/06/2013 - 19:39 | 4128822 Seer
Seer's picture

with flat tires

and an inability to see the cliff...

[wondering whether this is going to be caught on video...]

Wed, 11/06/2013 - 15:44 | 4128028 SheepDog-One
SheepDog-One's picture

I believe the actual 'exit strategy plan' will just be 1 morning everyone will have been MF Globalled, everything gone, with a 'try back sometime later' on your trading account login.

Wed, 11/06/2013 - 15:49 | 4128046 Dr. No
Dr. No's picture

We should call it "Exit tactic".  The strategy is to steal everyone's money.  If putting it into reverese accelerates the strategy, its a tactic.

Wed, 11/06/2013 - 16:19 | 4128100 knukles
knukles's picture

Oh, kinda like the ObieDontGiveAFuck healthcare sites?

"Don't work for me!"

Yeah, same as GE closing it's US plant to shift all the X-Ray stuff to China.
Hey, ain't Imelt in charge of Obies jobs team?


Wed, 11/06/2013 - 19:40 | 4128831 Seer
Seer's picture

Can conterfeit really be stolen?

I think of it more along the lines of a big recall... you know, a defective product.

Wed, 11/06/2013 - 16:43 | 4128259 SWRichmond
SWRichmond's picture

I believe the actual 'exit strategy plan' will just be 1 morning everyone will have been MF Globalled, everything gone, with a 'try back sometime later' on your trading account login.

And it will all be the Tea Party's fault.

Wed, 11/06/2013 - 19:43 | 4128843 Seer
Seer's picture

Why does everyone have to set themselves up as martyrs?

When the Big Bang comes people will be way too busy trying to survive than in being engaged in political/ideological stuff.  Will there be scapegoating?  Do humans shit?


Wed, 11/06/2013 - 15:38 | 4128011 jballz
jballz's picture

fuckin brilliant.

Wed, 11/06/2013 - 15:40 | 4128016 Dr. Engali
Dr. Engali's picture

We knew from the beginning there was never an exit strategy. All talk of exiting is pure b.s. The fed has no choice but to print moar.

Wed, 11/06/2013 - 15:41 | 4128021 fonzannoon
fonzannoon's picture

It drives me crazy that we still discuss an exit strategy. 

Wed, 11/06/2013 - 16:10 | 4128125 Dr. Engali
Dr. Engali's picture

It makes me wonder if they are really that stupid where they believe the fed can exit or if they are just in on the game trying to lend the fed some legitimacy.

The only exit strategy is what it always has been when debt is too high.... War.

Wed, 11/06/2013 - 20:00 | 4128922 Seer
Seer's picture

They're buying time to paint the bullsye.

Wed, 11/06/2013 - 15:55 | 4128073 DaveyJones
DaveyJones's picture

all the world's a stage - Shakespeare

exit, stage right - Snagglepuss

Wed, 11/06/2013 - 16:17 | 4128159 therevolutionwas
therevolutionwas's picture

"We" knew.  They (sheeple) don't.   The sheep will be shorn.

Wed, 11/06/2013 - 15:40 | 4128017 RaceToTheBottom
RaceToTheBottom's picture

Exit strategy :

Look, Squirrel!!!


That is the nuts of it....

Wed, 11/06/2013 - 15:43 | 4128025 Dr. No
Dr. No's picture

what most people don't know is that this thing doesn't work in reverse very well at all


BS!   Most people know it doesnt work well in reverse.

Wed, 11/06/2013 - 15:50 | 4128054 Dull Which
Dull Which's picture

Most people don't know it doesn't work

Wed, 11/06/2013 - 20:24 | 4129042 Not Goldman Sachs
Not Goldman Sachs's picture

What doesn't work?

Wed, 11/06/2013 - 16:06 | 4128120 therevolutionwas
therevolutionwas's picture

Most people don't know it exists.

Wed, 11/06/2013 - 15:46 | 4128030 moneybots
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"A lot of what we hear is the Fed's exit strategy … what most people don't know is that this thing doesn't work in reverse very well at all."


With 47 million on food stamps and real unemployment over 10%, it doesn't work very well in forward either.

Wed, 11/06/2013 - 16:57 | 4128309 Temporalist
Temporalist's picture

Nation's poor at 49.7M, higher than official rate

"WASHINGTON (AP) -- The number of poor people in America is 3 million higher than the official count, encompassing 1 in 6 residents due to out-of-pocket medical costs and work-related expenses, according to a revised census measure released Wednesday."


Wed, 11/06/2013 - 17:38 | 4128417 Rainman
Rainman's picture

Poor people in Murka ? ...you want po people you go visit Port-au-prince

Wed, 11/06/2013 - 17:44 | 4128434 CrashisOptimistic
CrashisOptimistic's picture

Two steps are required for the poor to matter:

1) They have to pick up rifles and snipe leadership.

2) They have to get to a microphone and tell the people that's what they did.


The recent avalanche of shooters are not quite getting there.  They aren't shooting leadership and they are all getting snuffed during the event, pre-microphone.

Note that this does differ from the past.  In the past, general strikes had power over politics.  Now, no one has a job to strike from.

Wed, 11/06/2013 - 18:28 | 4128540 Son of Captain Nemo
Son of Captain Nemo's picture

"The recent avalanche of shooters are not quite getting there."...

Since when have any of these "lone gunmen stories" been thoughtfully concluded in a court of law that didn't withhold evidence that had a jury that wasn't rigged?

Just in the last year alone: Aurora, Sandy Hook, D.C. Navy Yard, Boston Marathon...

Definitely a reason why these will never get resolved!

Wed, 11/06/2013 - 15:46 | 4128034 SheepDog-One
SheepDog-One's picture

The scary part is, everyone has been conditioned to just believe they'll keep it going, and no one suspects they'll just pull the rug out one morning. 

Wed, 11/06/2013 - 15:46 | 4128038 fonzannoon
fonzannoon's picture

"they need to get money into the hands of the people"

So send some fuckin checks out to all of us. Why is it so hard?

Wed, 11/06/2013 - 15:49 | 4128047 SheepDog-One
SheepDog-One's picture

Sure, if they really just wanted to get money in the hands of people, for fucks sake they could have just sent out checks for $1,000,000 to every american adult and that would have been a drop in the bucket compared to what they've done.

'Money into peoples hands'....nonsense.

Wed, 11/06/2013 - 15:54 | 4128068 Dr. No
Dr. No's picture

They sure as hell send out a tax invoice to every adult pretty efficiently.

Wed, 11/06/2013 - 17:48 | 4128442 CrashisOptimistic
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ZH still hasn't accepted the drain.

There is an ongoing drain of money from banks.  The mortgage defaults are destroying money from the money supply.  Ben has to replace it or face crushing deflation and ATMs that stop working.

So he is faced with more than "sending checks to the people".  Doing that won't stop the mortgages more or less already defaulted from being declared as such.  That ends the banks.  That ends the ATMs.

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