Grant Williams On Flushing The Impurities Of QE From The System

Tyler Durden's picture


Grant Williams "pulls no punches" in this all-encompassing presentation as the "Things That Make You Go Hmmm" author reflects on what is behind us and looks ahead at the ugly reality that we will face when "the impurities of QE are finally flushed from the system." Central bankers of today have "changed everything" he chides, "in ways that will ultimately end in disaster." Following extraordinarily easy monetary policies across all of the world's central banks, Williams explains why "we are now near the popping point of the 3rd major bubble of the last 15 years," each bigger than the last. The only way Janet Yellen avoids being at the helm when this ship goes down is to blow an even bigger bubble than Bernanke's government bond experiment, "which is highly unlikely." From how QE works, why many don't "feel" wealthy anymore, to the fact that "the geniuses that gave this thing life, don't have the guts to kill it," Williams warns, ominously, "the bills have come due on the blissful latest 30 years."

Starting at around 2:30... Williams introduces the 'extraordinary' differences with today's crop of central bankers


5:30 The bubble blowing begins (and ends)

6:45 How QE Works and "why the geniuses that gave this thing life, don't have the guts to kill it."

7:45 Investing Now and Then

9:00 "The bills have come due on the blissful latst 30 years"

9:30 The implications for markets


11:00 BoJ specifics...

11:30 Why rotating from bonds to stocks is nuts - even though bonds are in a bubble

13:00 China is flashing red... "if you thikn that doesn't mean anything, then you're wrong"

14:00 Aussie macro and micro economics

18:30 Pension Funds disaster pending - return projections are entirely wrong

22:30 Central Deviousness

23:45 Where Does That Leave Us? - "The Taper is not going to happen in any meaningful way" - The US economy is simply not strong enough.

26:00 So What Do We Do


30:00 "Be Brave - Take your money out of the markets and go to cash."

31:00 "Once the impurities of QE are flushed from the system, we can go back to investing in a world that is understandable"

31:30 We've been here before...


"Returning to a world with which we are familiar is going to require either some real magic on the parts of Draghi, Kuroda, Carney, and soon to be Yellen; or some kind of tornado that sweeps away everything in its path and allows the world to build again from more solid foundations."


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Sat, 11/30/2013 - 19:52 | 4202613 frankTHE COIN
frankTHE COIN's picture

In the 1987 crash there were specialist to buy the decline. Eventually they stopped buying it.
Today the Algo's will step aside.
It's gonna be a bidless well and it'll crash fast.

Sat, 11/30/2013 - 20:06 | 4202625 pauhana
pauhana's picture

Agreed.  When the HFTs catch a whiff, anyone owning anything will be toast.  There are no market makers any more who can stand up to the relentless probing of the algos.  Watching the bizarro fluctuations on Nanex confirms that life as we know it can change in a nanosecond.   

Sat, 11/30/2013 - 20:52 | 4202689 smlbizman
smlbizman's picture

did he say "comedy central" bankers.....

Mon, 12/02/2013 - 02:27 | 4205769 Thomas
Thomas's picture

I have been writing about the imbalances for 16 hours a day totally at least a week. I am ready to slice my wrists. Then I go to relax by listening to Grant, who I should add seems to be a soulmate. I'm gonna try to get him on BTFDtv with me someday soon.

Sat, 11/30/2013 - 23:42 | 4202963 ZH Snob
ZH Snob's picture

central banking is a poisonous web of deceit.  what will it take before the world rejects this false keynesian trickery?  the biggest problem seems to be that economics is a big turn off for the average person.  I have people telling me:

we have people alot smarter than you or me running this and it is impossible for it to fail like you say it will...

we are so used to this erratic boom and bust cycle--most young people know only that--it all seems quite normal, and the idea of complete wipe out is just ridiculous to them. 

Sun, 12/01/2013 - 19:58 | 4204695 Pegasus Muse
Pegasus Muse's picture

“It is well enough that people of the nation do not understand our banking and money system, for if they did, I believe there would be a revolution before tomorrow morning.” --Henry Ford


"If you want to know when a society money. Whenever destroyers appear among men, they start by destroying money, for money is men's protection and the base of moral existence. Destroyers seize gold and leave to its owner a counterfeit pile of papers." --Ayn Rand


"Support your country always. Support your politicians when they deserve it." --Mark Twain

Sat, 11/30/2013 - 19:55 | 4202615 Trimmed Hedge
Sat, 11/30/2013 - 20:02 | 4202617 gonetogalt
gonetogalt's picture

2015---miners up?

2015---miners down?

Will money rotate from todays best loved equities to todays most hated?

Sat, 11/30/2013 - 20:41 | 4202673 Skateboarder
Skateboarder's picture

Fuck bitcoin for hijacking the word 'mining.'

Sat, 11/30/2013 - 20:57 | 4202686 carlin401
carlin401's picture

Yep I agree,

Like when I was a kid and granny used to say "Fuck the queers for co-opting the word 'GAY'"

When granny was a kid in the 20's 'GAY' meant to fuck and drink and have fun, ... then in the 60's it meant something different.

Long ago 'mining' meant a hard days work, digging for gold or panning, but at the end of the day 'real men' got drunk and laid.

Today 'MINING' means server farms in ASIA running BTC asic server's that are doing 500 Giga-Hashs a second, per server.

The joke about 'mining' is that anybody in the USA sitting on a PC, or a gpu card or even a 300 Mega-Hash USB-ASIC has as much chance of 'mining a btc ' as they do winning the power-ball lottery.

Now BTC 'mining' just means that a few rich guys that built the server farms in ASIA get email every few days telling them how many 'btcs' they have,...

In the mean time whore BTC pimps on ZH keep talking about "mining btc's" like it was ever real?

The only time it was real was when SATOSHI(NSA) pulled the first 50,000 out their ass, after that geeks got a few, and created urban myths about buying pizza for 500 btc's, ...

Who would have guessed that running a stupid fucking software program would be called 'mining'??

Just goes to show you how fucking stupid people are.

Sat, 11/30/2013 - 22:00 | 4202803 Skateboarder
Skateboarder's picture

+ fucking 1, carlin401. Great post. ZH already pointed out the top BTCers. Little detail to some, but I certainly didn't look past the fact that most of them haven't 'mined' since the beginning of this year (some this summer).

How anyone buys into a currency pulled entirely out of someone's ass, calling it 'real' all the while, escapes me. Ride it for the gayass wave it is, but don't call it real.

/applying a modern definition of 'gay'

Sat, 11/30/2013 - 23:53 | 4202985 ZH Snob
ZH Snob's picture

I envision a new Discovery TV show called Gay Miners of The Klondike.  they would work on rainbow colored buldozers and wear the most fabulous outfits north of Seattle. 


Sat, 11/30/2013 - 20:03 | 4202622 kaiserhoff
kaiserhoff's picture

Right after the Rape of Cypress, I began a serious effort to stay out of cash, except for minimal floating balances.  My liquid assets are mostly silver and inventory of various sorts.  It's been easier than I expected, helped lock in some costs, and I sleep better.

I would encourage one and all to find small ways to starve the beast.

Sat, 11/30/2013 - 20:33 | 4202663 Harbanger
Harbanger's picture

After prepping yourself, hold some additional cash on hand for the unforeseen opportunities during the unwind.

Sat, 11/30/2013 - 21:03 | 4202707 carlin401
carlin401's picture

Cypress was a small country, that offered money laundry to Russians,

A country that had all the bell-weather signals to get out early,... who exactly got caught holding the fucking bag??

There are still 'AAA' paper money, like NOK, CHF, SGD,

Cypress was running in the RED and owed the IMF, but 'AAA' country's are 'AAA' for a reason.

Besides there is a history, of certain places being a refuge to the super-rich, ... I suspect that history does repeat.

No doubt that certain EURO or USA will collapse 'eventually' and no doubt that YELLEN will give her 'haircut', as its well known that YELLEN and her KRUGMAN
intellectual force "HATE SAVERS",

But don't apply the MORONITY to the entire world, there are still places where the 'banks' and 'country' are NOT led by morons.

Sat, 11/30/2013 - 21:28 | 4202746 Harbanger
Harbanger's picture

Cypress cannot be seen as an example of an independent country with poor monetary policy.  It's an EU experiment to test capital controls on a bigger scale.  It's strictly political.

Sat, 11/30/2013 - 23:25 | 4202935 disabledvet
disabledvet's picture

it was a failed policy both in approach in implementation. i think the EU has learned from that...hopefully the Americans have, certainly the Russians have. "this is not a game" but i wouldn't say literally "stealing depositor money" is in any way a rational approach to "dealing with" economic problems real or perceived. coming out saying "this is out intent and we plan on this being our template going forward" really was catastrophic. a "bail in"? really? clearly this is a different approach from "zee Americans" however and clearly established a "differentiation" from the "American archetype."

Sat, 11/30/2013 - 23:53 | 4202987 philipat
philipat's picture

If we are to discuss something, can we at least spell it correctly. It is Cyprus. Cypress is a tree.

Sun, 12/01/2013 - 03:05 | 4203129 Harbanger
Harbanger's picture


Sun, 12/01/2013 - 04:57 | 4203170 mrdenis
mrdenis's picture

So you saying a lemon cypress tree won't bare lemons ? 

Sat, 11/30/2013 - 21:16 | 4202727 sosoome
sosoome's picture

Cash was king in Cypress, and there were lines of people who couldn't get any, or very little. If there are similar bank failures in the U.S., cash will be in high demand and short supply.

Sat, 11/30/2013 - 23:27 | 4202938 disabledvet
disabledvet's picture

absolutely false. the US is facing a problem of too much cash and "speculative excess." in the USA "crash is King."

Sat, 11/30/2013 - 23:53 | 4202989 sosoome
sosoome's picture

All that cash is already being sucked into the black hole of the banking system. It's not circulating. If and when the banking system locks up, the only cash in the system will be what is in circulation (I'm talking "c-note" cash, not e-cash or account digits---they'll be frozen).

Sat, 11/30/2013 - 20:05 | 4202623 Eireann go Brach
Eireann go Brach's picture

The whole Obama presidency has been an illusion, as QE has been firing since the start of his presidency, and will stay firing until he leaves! Just imagine the state of the economy with no QE period.

If there is any justice in the world, the US markets will collapse before he leaves office!

Sat, 11/30/2013 - 20:54 | 4202693 carlin401
carlin401's picture


I will call you on that, the USD has lost 99% of its value since 1913, and certainly MOST of the value was lost long before 1972.

It is well known by all of us old farts that in 1972 the USA was bankrupt, but given their military power, they bluffed their way forward and have been printing to the moon ever since,

As much as I think that Obama is just a 'black face' to send men of colour to die in 'white man's' oil wars, obama doesn't have a fucking thing to do with the USD being worthless fucking paper backed by NUKES to the worlds head, this model goes back to bretton woods and jekyll island.

Sat, 11/30/2013 - 21:57 | 4202798 Harbanger
Harbanger's picture

"men of colour to die in 'white man's' oil wars"

That's fucked up dude, I see you have no idea who's dying in these wars.  You have no idea how he's been changing the military structure and how he has been firing all of the top Generals that oppose him.  You probably dont even know that Bill Ayres, the radical leftist revolutionary, wrote Barry's autobiography.  Use the internet, it's your friend.

Sun, 12/01/2013 - 10:08 | 4203290 logicalman
logicalman's picture

Rather than arguing about what colour the dead are in bankster-created wars for resources, END THEM!

Sat, 11/30/2013 - 23:40 | 4202962 Ned Zeppelin
Ned Zeppelin's picture

Brother, the problem here is if you think Obummer has had anything to do with the decisions made and policies pursued by the most powerful arm of the government, the one not mentioned in the Constitution: the so called "Federal Reserve, " which is neither ( think "Patriot Act" and Affordable Care Act" for similar misnomers).

Like Bush, whose minder was Cheney, Obummer is bought and paid for, an errand boy. That is all he is. That is all they ever are. We live in an Imperium now. No longer a republic.

Sat, 11/30/2013 - 20:07 | 4202628 Goldilocks
Goldilocks's picture

Flying Monkeys attack (1:19)

I'm Melting! - The Wizard of Oz (7/8) Movie CLIP (1939) HD (1:57)

If I Only Had a Brain - The Wizard of Oz (4/8) Movie CLIP (1939) HD (2:42)

We're Not in Kansas Anymore - The Wizard of Oz (2/8) Movie CLIP (1939) HD (1:20)

Somewhere Over the Rainbow - The Wizard of Oz (1/8) Movie CLIP (1939) HD (2:43)

Sat, 11/30/2013 - 23:29 | 4202942 disabledvet
disabledvet's picture

greatest movie ever made...period. i really don't like the Smurfs though...too friggin' happy all the time. one of the "bad idea's of the 80's" my generation is responsible for. I apologize.

Sat, 11/30/2013 - 20:11 | 4202633 I am Jobe
I am Jobe's picture

Check Mate is upon USSA . Time Line is ???

Sat, 11/30/2013 - 20:32 | 4202659 buzzsaw99
buzzsaw99's picture

"Once the impurities of QE are flushed from the system, we can go back to investing in a world that is understandable"


wrong. dead wrong. it was always a ponzi, it will always BE a ponzi. as long as the banksta gangstas are in charge of the money nothing will ever make sense except "they" win and everyone else loses.

Sat, 11/30/2013 - 22:27 | 4202847 Squid-puppets a...
Squid-puppets a-go-go's picture

true, but it was a ponzi with certain parameters, it wasnt all encompassing.

it still enabled the very astute to profit and shine

today's market actively seeks out and targets the astute. That video of mike burry yesterday : he said that as a result of being one of the few wall st players to foresee and profit on the crisis, no one in the establishment even called him to say 'how did you figure that out?' Instead he was audited and investigated by IRS, FBI and a bunch of other agencies.

That's why america is going down there in a nutshell. The best and brightest are considered a threat, not an asset

Sat, 11/30/2013 - 21:03 | 4202662 Goldilocks
Goldilocks's picture

Ray Charles Somewhere Over the Rainbow (4:10)

George Benson - On Broadway (5:02)

Yes we...

Can Can (5:10)

Sat, 11/30/2013 - 23:30 | 4202946 disabledvet
disabledvet's picture

we did give the world Metallica however.

Sat, 11/30/2013 - 20:39 | 4202665 Peter Pan
Peter Pan's picture

The speaker in talking about the predicament faced by the Australian Reserve Bank in having a very high currency value but being constarined by furher fuelling the property bubble misses two points:

1. The heat in the property market could be constrained by not allowing people to borrow 90% for a purchase.

2. The heat in the property market could also be constrained by curbing the use of negative gearing by investors which not only adds to the frenzy in the property market but also unfairly advantages investors over first home buyers.

3. The curbing of negative gearing will be beneficial to government coffers.

By limiting capital appreciation of property, Australia will limit further damage to its competitiveness and the pressure to raise wages to compensate workers for the damage arising from higher property values and higher rents.

Sat, 11/30/2013 - 20:55 | 4202692 logicalman
logicalman's picture

Interest is the problem.

End usury and the world will be a much better place.

Sun, 12/01/2013 - 04:15 | 4203156 TheRedScourge
TheRedScourge's picture

That was in the Bible. They didn't have economics back then. All that will happen if you outlaw it is it will turn into a black market like drugs. People will always seek to live beyond their means, you have to let them, then let them fail, that's the only way the constant wave of new people born can learn and remember a lesson. Those who can handle debt well will, those who cannot will not, unless they learn from their mistakes.

"It's different this time" will always be around as a popular slogan, and once every few years, those invested under the assumption that is true will be wiped out, and the smart few who care enough to examine the world around them, if they stay solvent longer than the markets stay irrational, and who don't get cheated at the last minute by the rulers changing the rules, will become rich due to their insight. Is that not the way it should be, so long as human nature remains as it does?

Sat, 11/30/2013 - 20:58 | 4202699 I am Jobe
I am Jobe's picture

all of u chill. I am drinking 

Johnny Mathis - Wonderful Wonderful
Sat, 11/30/2013 - 21:03 | 4202708 I am Jobe
I am Jobe's picture
Gerald Celente: Total Economic Collapse in Q1 2014
Sat, 11/30/2013 - 22:05 | 4202814 ebworthen
ebworthen's picture

Old Gerald tells it like it is.

Too bad the new generations for the most part have no conception of the rampant crime and corruption right under their noses.

Slaving away and shopping and banking with abject criminals who are in control of their government and mortgaging the future.

Sun, 12/01/2013 - 04:18 | 4203158 TheRedScourge
TheRedScourge's picture

They will learn after being fooled enough times, so long as they don't buy into the Marxist crap the school system tries to teach them. The reality of the consequences of ones own actions is a good teacher, so long as the central planners will stop trying to shield everyone from it.

Sat, 11/30/2013 - 21:10 | 4202711 sosoome
sosoome's picture

"Once the impurities of QE are flushed from the system..."

LOL. The impurities of QE haven't even started yet. Wait til the war bills start piling up.

Sat, 11/30/2013 - 23:13 | 4202922 MSO
MSO's picture

What war bills? China takes over a few Japanese islands and Obama says: 'airlines, do as China requests".  Aside from arming Barney Fife, Obama defends no one from anybody.

Sat, 11/30/2013 - 23:42 | 4202972 sosoome
sosoome's picture

The U.S. is perceived as weak and degenerating; a ripe environment for boldness from China, North Korea, etal. Mix in a little help from those who stand to profit, and considering historic war cycles are on an up tick, it seems inevitable to me.

Sun, 12/01/2013 - 01:29 | 4203077 Keyser
Keyser's picture

Unfortunately, flushing QE impurities from the system will likely kill the patient. 


Sat, 11/30/2013 - 21:32 | 4202754 ebworthen
ebworthen's picture

I'm fairly certain the central bankers, or at the least those behind the central banks and bankers, know exactly what they are doing.

How better to enrich the elites, bleed the middle class dry, and keep the huddled masses quiescent than their pilfering of the public treasury?

There are some neophytes, some true believers, who spend so much time in classrooms juggling alchemical economic theorems of cotton candy "what-ifs" and living in the clouds of academia huffingh hookah smoke paid for with taxpayer labor that they believe the lies.

The average citizen is in such a stupor of vapid consumerism and symbols/iconography/fables that they have no conception that they are being fleeced and led to the slaughterhouse:

"What lovely clippers" and "My that is a glittery knife" they say as they bleat there way to Target and Macy's or the Lexus dealer.

Eat your peas kids, and pack a lunch.

Sat, 11/30/2013 - 23:36 | 4202956 disabledvet
disabledvet's picture

"eat your peas" is not a Governance directive....though it might sound like one. This however is: in other words "stop blaming Central Bankers for doing what everyone really wants." You WANT those bubbles NEED those bubbles here!

Sun, 12/01/2013 - 08:56 | 4203253 Waterfallsparkles
Waterfallsparkles's picture

Yes, I agree.  It is like the FED has taken America's Credit Card and gone on a spending binge, with all of the loot given to the Bankers and the 1%ers.  Then they leave the American public with the bill.

Can you imagine what the average American would think if someone used their Credit Card to run up a few Hundred Thousand, gave the purchases to themselves, their friends and left them to pay the bill.

Well, that is what QE is.

Sat, 11/30/2013 - 22:20 | 4202839 Steroid
Steroid's picture

Cash? In what form? It will be bailed in, nationalized and eventually devalued.

Name a single one that will be safe!

Please don't say gold as you almost can pay more of your liabilities in bitcoin than in gold.

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