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Just What Has QE Accomplished Since 2009?
The Federal Reserve will stage its annual Jackson Hole meeting this week. The markets are rallying into this because traders have been conditioned to buy stocks going into major Fed meetings/ announcements.
The rumors around Wall Street are that Yellen will point out how the US recovery remains weak and thus the Fed should continue to keep interest rates at zero.
The bigger picture that the financial media largely ignores is that the Fed is basically just making things up as it goes along, with little foresight. After all, the Fed suggested it would stop QE and raise interest rates when unemployment hit 6.5%. The Fed predicted this would happen in 2015.
However, it has already happened… not because QE has worked at generating growth (even the Fed admits that QE only lower
but because the BLS keeps massaging the data until unemployment falls. This of course raises the question, if the only reason unemployment is falling is because of statistical games… why even bother engaging in monetary policy?
Speaking of statistical games, even the absurdly inaccurate Consumer Price Index (CPI) has managed to put out a 2% inflation rate reading. The Fed claimed it would raise interest rates when we hit that threshold. Well, we hit it and the Fed commented that the increase in inflationary numbers was just “noise.”
It’s a good thing the BLS is working to massage that data point as low as it is too. If one were to look at the real rise in inflation, we’d be at 6%, but we couldn’t possibly argue for zero interest rate policy with inflation at those levels could we?
At the end of the day, the Fed has spent over $3.5 trillion. The Fed’s own research concludes that between this and ZIRP, it has lowered unemployment by 0.13%. Indeed, the Fed admits that without all of its policies, unemployment would be 1% higher than it is today.
That’s a truly staggering admission, particularly when you account for the fact that this is the Fed’s own research (you’re never going to hear the Fed state that unemployment would be lower without Fed intervention).
As bad as this is, it’s not exactly unique in the world of Central Bank failures. The Bank of Japan has spent an $1.4 TRILLION and Japan’s economy is only 0.8% higher today than it was when the QE program was announced.
At this point, one has to wonder, just what is the point of all the Central Banks’ activities? The QE efforts in the US and Japan (two of the biggest in history) haven’t really generated jobs or GDP growth… so just what ARE they doing?
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The purpose of QE was to bail out the FED's Primary Dealers and BoE's GEMMs a.k.a. Bust Banksters of Wall St, London, Paris and Frankfurt. Wall Street seems solvent again but RBS, Barclays, SocGen, Paribas, Deutsche and their counterparties are still getting by with a little help from their friends, the GS placemen in the BoE and ECB.
Ask where the money has gone and the FED and BoE say they don't know. They don't give a shit about jobs and inflation as long as their system is still functioning and their clients have enough to pay their fines.
Here's how the Brits do it. http://www.publications.parliament.uk/pa/cm201213/cmselect/cmtreasy/writev/qe/m18.htm
Before the "Bernanke has all the answers" era, many of us criticized Japan for failing to own its problems. Many people thought Japan should face up to the mess it had created and do the right thing. Broadly accepted was the concept that only by letting its zombie banks and industries fail could Japan clean out the system and move forward.
While they claim otherwise, in many ways Bernanke and the Fed have put America on a path that mirrors the same unsuccessful path taken by Japan. A path that avoids real reform and bails out the very people that caused many of our problems. As we measure the results of the Bernanke policy it seems they may not be much different than those achieved by Japan over the last few decades.
Bernanke endorsed and encouraged Japan to step on the gas and print more money until they lower the value of the yen and force inflation to set them on a path forward. More on the path we are going down in the article below.
http://brucewilds.blogspot.com/2013/11/we-are-on-path-to-lost-decades.ht...
It has made the rich richer, the poor poorer, and concentrated more power in the hands of banks, corporations and the federal government. Mission Accomplished.
A huge erection of US stocks.
The more and more I study derivatives it now appears the main goal of QE may have been to hold up the underlying value of assets that feed into and support the massive derivative market more than help the economy.
QE has up to now stopped an implosion of derivatives and the resulting contagion and shock that would have spread throughout the financial system. In postponing this collapse the Fed has created a whole slew of new problems. More on this subject in the article below.
http://brucewilds.blogspot.com/2014/03/derivatives-house-of-cards.html
Accomplished? At Jackson Hole they're passing around photos of their newest McMansions for one.
What is the point of all the CB efforts? Why to mask the fact that we have been in a world wide depression for over half a decade, of course. Forward!
If QE funds, used by the Fed to buy toxic assets at one hundred cents on the dollar and bonds from the banks, weren't then used by the banks to buy stocks, WHY THE FUCK IS THE DJIA AT 16,900?
Don't try this at home, but they invest ten bucks for every buck the have. Of course they'll take theirs out of the market before you.
An insolvent banking system is now insolvent with a 5x larger balance sheet.
u think ur the Fed newDoc10 simply printing & printing or what?
.
"This report outlines a number of strategies you can implement to prepare yourself and your loved ones from the coming market carnage."
I honestly think you may lose all your money with this firm - he's been calling for collapse for 5 years now?
QE expanded the property tax driven bond market
What did the property tax driven bond market buy with their trillions in new bonds since 2007?
Mal immigration
QE is CPR for Socialism, a firehose of cash for a limited unknown time until the mission is accomplished.
At best the central banks have propped up the reserve ratios of all the TBTF banks with future tax payer dollars.
At worst, the Banksters have propagated those reserves, or more fictional money based on them, out into the marketplace debasing every market out there (stocks, bonds, realestate, oil, financial institutions, cars, artwork, even condoms)...
By debasing Accounting the FED has created an environment where mis-allocation of resources if guaranteed to occur in the markets affected by those Accounting debasements. Therefore every risk analysis performed in those industries is at minimum suspect, and more likely just wrong.
Thank you for that. Maybe consider copy-pasting this comment beneath most articles that attempt forecasting. Weather forecasters have greater accuracy in these times.
'At the end of the day, the Fed has spent over $3.5 trillion.' Correction - the Fed created $3.5T out of thin air to buy the chains for us to pay on the debt the Fed created to bail out the bankers when their fractional reserve Ponzi scheme went bust.
That was what was accomplished.
"Just What Has QE Accomplished Since 2009?"
More theft.
An American, not US subject.
"Guillotine the Fed!"
The worst part is that they stuck with it.
The author is being far to kind to the central banksters. Fact is, they have created no new net jobs and no new economic activity. Fact is, any gains have been at the expense of savers who would have spent the extra income or the bank could have lent out any additional savings they have accumulated. The cost of higher RE, stocks and bonds will be born by current and future generations who buy from the current holders (or these values will pancake, again!). Nothing, notta, zero, zilch has been created.
"At this point, one has to wonder, just what is the point of all the Central Banks’ activities? The QE efforts in the US and Japan (two of the biggest in history) haven’t really generated jobs or GDP growth… so just what ARE they doing"
Only Jesus should he rise from the dead once again doesn't know what the REAL goal of the QE thing in the U.S. has been about.
If you don't know by now that Ben and J Yell's ONLY goal is to continue to shovel trillions, quadrillions of new money to the Tribe of Jews on Wall Street, then you should fold your newsletter and stop wasting bandwidth with these stuipid pieces.
Maybe making the American taxpayer responsible for the consequence of central bankers professional malpractice?
I repeat myself when under stress
Blogosphere equivalent of stuttering.
Would you mind repeating that a little bit slower doctor?
sorry, can you say that again?
Maybe making the American taxpayer responsible for the consequence of central bankers professional malpractice?
Maybe making the American taxpayer responsible for the consequence of central bankers professional malpractice?
Maybe making the American taxpayer responsible for the consequence of central bankers professional malpractice?
Maybe making the American taxpayer responsible for the consequence of central bankers professional malpractice?
Maybe making the American taxpayer responsible for the consequence of central bankers professional malpractice?
Maybe making the American taxpayer responsible for the consequence of central bankers professional malpractice?
Maybe making the American taxpayer responsible for the consequence of central bankers professional malpractice?
Maybe making the American taxpayer responsible for the consequence of central bankers professional malpractice?
Maybe making the American taxpayer responsible for the consequence of central bankers professional malpractice?
Maybe making the American taxpayer responsible for the consequence of central bankers professional malpractice?
Maybe making the American taxpayer responsible for the consequence of central bankers professional malpractice?
Maybe making the American taxpayer responsible for the consequence of central bankers professional malpractice?
Maybe making the American taxpayer responsible for the consequence of central bankers professional malpractice?
Maybe making the American taxpayer responsible for the consequence of central bankers professional malpractice?
Maybe making the American taxpayer responsible for the consequence of central bankers professional malpractice?
Maybe making the American taxpayer responsible for the consequence of central bankers professional malpractice?
Maybe making the American taxpayer responsible for the consequence of central bankers professional malpractice?
Maybe making the American taxpayer responsible for the consequence of central bankers professional malpractice?
Maybe making the American taxpayer responsible for the consequence of central bankers professional malpractice?
Maybe making the American taxpayer responsible for the consequence of central bankers professional malpractice?
Maybe making the American taxpayer responsible for the consequence of central bankers professional malpractice?
Maybe making the American taxpayer responsible for the consequence of central bankers professional malpractice?
Maybe making the American taxpayer responsible for the consequence of central bankers professional malpractice?
Maybe making the American taxpayer responsible for the consequence of central bankers professional malpractice?