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Good Riddance To QE - It Was Just Plain Financial Fraud
Submitted by David Stockman via Contra Corner blog,
QE has finally come to an end, but public comprehension of the immense fraud it embodied has not even started. In round terms, this official counterfeiting spree amounted to $3.5 trillion— reflecting the difference between the Fed’s approximate $900 billion balance sheet when its “extraordinary policies” incepted at the time of the Lehman crisis and its $4.4 trillion of footings today. That’s a lot of something for nothing. It’s a grotesque amount of fraud.
The scam embedded in this monumental balance sheet expansion involved nothing so arcane as the circuitous manner by which new central bank reserves supplied to the banking system impact the private credit creation process. As is now evident, new credits issued by the Fed can result in the expansion of private credit to the extent that the money multiplier is operating or simply generate excess reserves which cycle back to the New York Fed if, as in the present instance, it is not.
But the fact that the new reserves generated during QE have cycled back to the Fed does not mitigate the fraud. The latter consists of the very act of buying these trillions of treasuries and GSE securities in the first place with fiat credits manufactured by the central bank. When the Fed does QE, its open market desk buys treasury notes and, in exchange, it simply deposits in dealer bank accounts new credits made out of thin air. As it happened, about $3.5 trillion of such fiat credits were conjured from nothing during the last 72 months.
All of these bonds had permitted Washington to command the use of real economic resources. That is, to consume goods and services it obtained directly in the form of payrolls, contractor services, military tanks and ammo etc; and, indirectly, in the form of the basket of goods and services typically acquired by recipients of government transfer payments. Stated differently, the goods and services purchased via monetizing $3.5 trillion of government debt embodied a prior act of production and supply. But the central bank exchanged them for an act of nothing.
Contrast this monetization process with honest funding of government debt in the private market. In the latter event, the public treasury taps savings from producers and income earners and re-allocates it to government purchases rather than private investments. This has the inherent effect of pushing up interest rates and, on the margin, squeezing out private investment. It is a zero sum game in which savings retained from existing production are reallocated.
To be sure, the economic effect is invariably lower investment, productivity and growth down the line, but the process is at least honest. When the public debt is financed from savings, government purchase of goods and services are funded with the fruits of prior production. There is no exchange of something for nothing; there is no financial fraud.
And it is the fraudulent finance of public deficits which is the real evil of QE because the ill effects go far beyond the standard saw that there is nothing wrong with central bank monetization of the public debt unless is causes visible inflation of consumer prices. In fact, however, it does cause enormous inflation, but of financial asset values, not the CPI.
Despite the spurious implication to the contrary, central banks have not repealed the law of supply and demand in the financial markets. Accordingly, their massive purchases of the public debt create an artificial bid and, therefore, false price. Moreover, government debt functions as the “risk free” benchmark for pricing all other fixed income assets such as home mortgages, corporate debt and junk bonds; and also numerous classes of real assets which are typically heavily leveraged such as commercial real estate and leased aircraft.
In short, massive monetization of the public debt results in the systematic repression of the “cap rate” on which the entire financial system functions. And when the cap rate gets artificially pushed down to sub-economic levels the result is systematic over-valuation of all financial assets, and the excessive accumulation of debt to finance non-value added financial engineering schemes such as stock buybacks and the overwhelming share of M&A transactions.
Needless to say, the false prices which result from massive monetization do not stay within the canyons of Wall Street or even the corporate business sector. In effect, they ride the Amtrak to Washington where they also deceive politicians about the true cost of carrying the public debt. At the present time, the weighted average cost of the $13 trillion in publicly held federal debt is at least 200 basis points below a market clearing economic level—–meaning that debt service costs are understated by upwards of $300 billion annually.
At the end of the day, the fraud of massive monetization makes the rich richer because it drastically inflates the value of financial assets—–roughly 80% of which is held by the top 5% of households; and it makes the state more bloated and profligate because its enables the politicians to spend without imposing the pain of taxation or the crowding out effects which result from honest borrowing out of society’s savings pool.
In the more wholesome times before 1914, the Federal government didn’t borrow at all. During the half-century between the battle of Gettysburg and the eve of World War I, the public debt did not rise in nominal terms, and amounted to just $1.5 billion or 4% of GDP at the time of the Fed’s creation. Even then, the Fed was established as only a “bankers bank” which could not own a dime of public debt, but instead existed for the narrow mission of liquefying the banking market by means of discounting solid commercial paper on receivables and inventory for ready cash.
The modern form of monetization arose in the service of financing war bonds, not managing the business cycle, levitating the GDP or boosting the labor market toward the artifice of “full employment”. These latter purposes reflect a century of “mission creep” and the triumph of the statist assumption that governments can actually tame the business cycle and elevate the trend rate of economic growth.
But history refutes that conceit. In the early post-war period, central bank interventions mainly caused short term bouts of unsustainable credit growth and an inflationary spiral which eventually had to be cured by monetary stringency and recession. In the process of repetition over several decades culminating in the 2008 crisis, the household and business leverage ratios were steadily ratcheted upwards until the reached peak sustainable debt.
Now the credit channel of monetary policy transmission is broken and done. The Fed’s most recent massive monetization and “stimulus” has therefore simply inflated financial asset values—-meaning that the Fed has become a serial bubble machine.
There is a better way, and it contrasts sharply with the systematic fraud of QE. That alternative is called the free market, and at the heart of the latter is interest rates which are “discovered” by the market, not pegged and administered by the central bank. Stated differently, the free market requires that all debt and other forms of investment be funded out of society’s pool of honest savings—-that is, income that is retained out of production already made.
Under that regime there is no fraudulent bid for public debt and other existing assets based on something for nothing. Markets clear where they will, and interest rates are the mechanism by which the supply of honest savings and the demand for investment capital, including working capital, are balanced out.
Needless to say, free market interest rates are the bane of Wall Street speculators and Washington spenders alike. They can spike to sudden and dramatic heights when demand for funds to finance government deficits or financial speculation out-run the voluntary pool of savings generated by society. So doing, they bring financial bubbles and fiscal profligacy up short.
In stopping QE after a massive spree of monetization, the Fed is actually taking a tiny step toward liberating the interest rate and re-establishing honest finance. But don’t bother to inform our monetary politburo. As soon as the current massive financial bubble begins to burst, it will doubtless invent some new excuse to resume central bank balance sheet expansion and therefore fraudulent finance.
But this time may be different. Perhaps even the central banks have reached the limits of credibility—- that is, their own equivalent of peak debt.
“I think QE is quite effective,” Boston Fed President Eric Rosengren said in a recent interview with The Wall Street Journal, describing the approach as an option for dealing with an adverse shock to the economy.
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Fuck You Edward Quince!
Fraud? Ya think?
No, I think they were pretty open about it. Oh all right then, they did re-jigger the wording a bit to try and disguise what they were doing.
"Too Big To Fail" but we'll let those who made it fail continue to make it fail and give them bonuses for doing so.
"More affordable" but prices must keep going up so we'll just lend more money and call it "more affordable". We'll adopt Ponzi Finance if we have to. Then we can keep going forever.
It's a shame we didn't have some talented media people to point out all the obvious lies ...
You can't make this shit up... "Wall Street talking about QE4"...
http://www.cnbc.com/id/102132192
Of course they don't want the crack cocaine turned off, they're addicted to free liquidity...
QE is not crack cocaine. It is blood. Without QE "blood" the banks would die quickly. The banks had several years to reform and exist without QE, but they have done nothing in terms of reforming their mode of operation. Not even meaningful personnel changes.
And there have been no meaningful reform proposals from their partner in QE, the government.
So this "pause" in QE is some kind of pipe dream. "We'll just cross our fingers and hope the system can now stand on its own after several years in a financially induced coma." The evidence is that it won't. The prices for assets of all kinds will not stick.
The financially induced coma has gone on so long it has rotted the patients body and that is starting to become apparent.
off topic....no where else to put it- "how to hijack the reporting of matt taibbi for a year"... i'm gonna take this as good news regarding matt and my suspiciouns of omar and a free but gatekept press ...
http://www.blacklistednews.com/Matt_Taibbi_Leaves_Omidyar%E2%80%99s_Firs...
Is this the right chart?
QE CHARTs---
U.S. Treasury securities held by the Federal Reserve: All Maturities
2014-10-22: 2,459,197 Millions of Dollars (+ see more)
Weekly, As of Wednesday, Not Seasonally Adjusted, TREAST, Updated: 2014-10-23
http://research.stlouisfed.org/fred2/series/TREAST
St. Louis Adjusted Monetary Base
2014-09: 4,072.016 Billions of Dollars (+ see more)
Monthly, Seasonally Adjusted, AMBSL, Updated: 2014-10-10
http://research.stlouisfed.org/fred2/series/AMBSL
No,
This looks better:
All Federal Reserve Banks - Total Assets, Eliminations from Consolidation
2014-10-22: 4,481,616 Millions of Dollars (+ see more)
Weekly, As of Wednesday, Not Seasonally Adjusted, WALCL, Updated: 2014-10-23
http://research.stlouisfed.org/fred2/series/WALCL
There are some surprising charts too:
U.S. Treasury securities held by the Federal Reserve: Maturing in over 10 years
2014-10-22: 662,928 Millions of Dollars (Surprise, looks exponential, trend growth)
Weekly, As of Wednesday, Not Seasonally Adjusted, TREAS10Y, Updated: 2014-10-23
http://research.stlouisfed.org/fred2/series/TREAS10Y
Mortgage-backed securities held by the Federal Reserve: All Maturities
2014-10-22: 1,715,445 Millions of Dollars (Surprise, there is a trough so the must move assets off the balance sheet)
Weekly, As of Wednesday, Not Seasonally Adjusted, MBST, Updated: 2014-10-23
http://research.stlouisfed.org/fred2/series/MBST
And this one might be the correct one for QE:
Reserve Bank Credit
2014-10-22: 4,436.686 Billions of Dollars (+ see more)
Weekly, Ending Wednesday, Not Seasonally Adjusted, WRESCRT, Updated: 2014-10-24
http://research.stlouisfed.org/fred2/series/WRESCRT
QE:
The people have no money. We should lend them some.
The people cannot afford to buy houses. We should lend them more money.
House prices are going down. We should lend the people more money.
People cannot afford repayments. We should lend them more money.
... and the rest ...
The banksters lent money to idiots who cannot repay. We must "lend" more money to the banks.
The banks are too big to fail. We must "lend" more money to the banks.
The people who ran the banks into the ground are too big to prosecute.
The banksters must get their bonuses because they need incentives for all that risk they never took because we keep bailing them out. Risk must be rewarded, no matter how stupid the risk.
... cos that's why I'm richer than you.
... and the rest ...
The FED does not print money, it creates credit which is exchanged for debt. The debt, in theory, will be paid back, which in theory, will be used as new credit for new debt. Of course that's not what's really happening but it sounds good, in theory.
Step one is to recognize that idiots do exist and to stop lending money to them.
Part of step one is to recognize that loans need to be based on ability to make repayments, which is directly related to income.
But that would be "telling".
Commonsense has been outlawed....
They are probably covering ass ahead of a republican congress
fake R = fake L
meaningless which monkeys run the circus
Not to the monkeys.
good riddance??? Who are you kiddin'
FROM THE WIRE
"Stanley Fischer of the FRB just announced their intention of launching several new tools called commesurate ataraxia and assessable inertia. In a memorandum from Tarullo, first, within the week, they intend to enact operation torsion."
Hook Line and Economy Fat Bags
All clear now?
A bit wordy, almost computer like. Got to work on the programming.
Slightly different than stoicism, this ataraxia. Author says that the mono-theistic religions (all 3!) find these classical ideas of virtue to be offensive...since religion is justified by emotional impulse. However, if we want a clear-thinking, cold rationality we first have to have a scheme for defining the objective of all that focused thought and precise action. Can't wait for Stan to tell us how he arrives at "the good." Somehow I don't think it includes Russians or Persians. I wonder if it includes Americans.
They are Fritz the Cat? https://www.youtube.com/watch?v=PADIloikkhg
These are not my monkeys, this is not my circus.
Whenever the right is poised to assume power, the left says something like, "They're both the same".
Umm boss, the Republicans are not the right. They are the same tired crony statists as the Democrats. GWB gave us the Department of Homeland Security, Medicare Part D, TSA, trillions blown on two wars, No Child Left Behind, No Bank Left Behind, etc., etc. He did that all with the help of the Republicans in Congress. The real guys on the right, the Ron Paul types were kicked to the curb by Rove, Boehner, and Romney. Those guys still want no part of a move to pare down the government.
False choices my friend.
Astute comment. I basically agree with you. Your recapitulation of the Compassionate Conservatism of Bush (ie, Bush represented the Progressive wing of the Republican party) was spot on. Establishment Republicans have spent more time, money, and energy trying to destroy the Tea Party than fight Obama and the Democrats.
Please understand my remark in context. It was meant as a relative one, contrasting the generic left to the generic right; ie, the left is the Democrats, but the right is not the Republicans.
However, we conservatives must have a Republican Senate, regardless of how fucked up and execrable individual Republicans are; eg, this Conservative Review scorecard. First, we must win the Senate, block Obama, and have Congress present bills embodying a positive Republican position for Obama to veto, and then try to craft a winning message for 2016.
What is wrong with printing trillions of dollars out of nothing (aka Q.E.)?
Q.E. kept the Zimbabwee stock market going up and up and up!
Q.E. did wonders for pre-Hitler Germany!
Cool how a few banker insiders can create unlimited money for themselves!
Enriching themselves and making the super rich banks more rich.
(and a little spare change eventually trickling down to us little people...maybe.)
Sure be nice if us little people to push a button on a computer and instantly add millions of dollars to our checking accounts!
Why not?
(oh wait...."counterfeiting" charges....many years in prison? Huge punitive fines? For us....but not them? Why is that?)
DK
QE ends...Belgium rejoices in opportunity to buy record high priced 'treasure'-ies.
Precisely. Funny how none of the financial `journalists' have looked into that mystery.
The new world order, this week:
USA, China, EU, and ..... Belgium
"... if more money were going to the market, then they would lose much of their value and we would lose profits because we are the ones who print money! That's why we invented inflation, to keep governments in fear and directing money back to us through the so-called Quantitative Easing Policies." http://failedevolution.blogspot.gr/2013/12/an-imaginary-dialogue-between...
maybe ..maybe the end. but not because they lost credibility.. the history proves over and over.. they expand expand expand.. then contract.. and the insiders swoop in and consume everything for pennies on the dollar. now it wont be biz, it will be actual Gov and national lands, treasures, assets...
P < P + I
each and every time.
I disagree with this statement - "And it is the fraudulent finance of public deficits which is the real evil of QE because the ill effects go far beyond the standard saw that there is nothing wrong with central bank monetization of the public debt unless is causes visible inflation of consumer prices. In fact, however, it does cause enormous inflation, but of financial asset values, not the CPI."
"Visible inflation?" I see the rise of prices in the health insurance, car insurance, home owner's insurance, property tax, local income tax, and sales tax. I see the rise in prices of my groceries, heating, eletricity, water, and gasoline. I see the rise of prices everywhere.
If a price rises and doesn't fall in the CPI, are the prices really rising? Fuch yeah they are.
Yes, but... In today's soundbite oriented zeitgeist, the ~Real~ inflation that the average person experiences everyday, as translated via rising prices for necessities, is like a 'super-stealth' bomber, raiding cities 'undetected' by officialdom because pushback from society-at-large hasn't reached a pitch where is an everyday media 'event' on the news, or a political opportunity from which a politician can successfully base his platform. No worries however, we're getting there.
I sure hope a pitch is reached by the population soon, but I don't see any signs in my circle.
What I do find amazing is that the mainstream said there is NO manipulation of the equity markets and there is no inflation, but as the clip of Peter Schiff from yesterday shows is that the MSM will indeed tout inflation and equity "support" for their argument when it suits them. Both side of the mouth these prestittutes and politicians talk.
I'm not voting for the first time in 18 years because I see no point.
Yes, good riddance to QE. I'm so glad the fraud's been removed and the systemic transfer of wealth from the many to the very few has been halted. At last the rest of us will have a chance again. Thanks for voluntarily stopping the raping and pillaging Janet.
Removed? Renamed and relocated, perhaps, but never removed. After all, fraud is ALL they've got left, as everything else has succumbed to it.
he gets it..no /s needed
The method of wealth transfer has been stopped because there is no more wealth to be transferred.
They done took it all.
Only QE3 ends. QE is a continuim.
this is just the beginning. they will eventually buy the entire stock market ala the boj
If its such a success why dont they just print $1 Septillion (1042)? They're just silly numbers, right?
Septillion is 10^24.
Perhaps he transposed the digits?
Does it really matter when THE POINT OF THE POST is that it is so ludicrous?
In Great Britian it is 1042.
What's 18 zeroes between friends...??
My bad! LOL! Septillion, Tredecillion, fuck it just type a 1 and hold the zero key down for a few minutes, that should fix everything.
and they should give it all to me. I gotta lot of cool things I wanna try out. I promise to hire some engineers to help me ...
Somebody grab a calendar and a sharpie and start marking off the days in the new countdown, which begins today.
I'm sure Bullard is doing exactly that.
"Stated differently, the goods and services purchased via monetizing $3.5 trillion of government debt embodied a prior act of production and supply. But the central bank exchanged them for an act of nothing."
a quibble
Federal Reserve bought on OPEN market (not straight from treasury) ... The Primary Dealers (banks) bought bonds from treasury ... and pockets a profit selling to Federal Reserve (of course, banks borrowed for near 0% from the FR) ...
a very important quibble
this is not done without reason...
that's so twisted. no wonder a lot of people never bother attempting to wrap their mind around it all...
It hasn't ended.
Only the rate of increase in QE has ended. And that is only temporary.
Every single dollar created for QE is still out there, and growing with interest.
So was the NASA rocket "blow" the sell signal?
Nah - that was a counterpunch for Christophe de Margerie's plane-meets-snowplow rendezvous...
Clever thieves take their piece and enjoy it. Stupid thieves, like Yellen, infatuated with their titles, imagine their power goes on forever.
"for Gods sake, think of the children of the .01% Mr. Yellen"
"the systematic fraud of QE. That alternative is called the free market, and at the heart of the latter is interest rates which are “discovered” by the market, not pegged and administered by the central bank."
Federal Reserve follows ... not leads on interest rates
check a 30 yr chart on interest rates ... they have DECLINED (due to debt overhang)
We'll find out soon enough hoos right re interest rates.
Stockman thinks they will go up
i say DOWN
3.5 trillion dollars is 30 million $38,000 per year jobs for 3 years. That's what 3.5 TRILLION dollars could have bought, but the FED isn't set up to deal with employment. The idea that they can control anything but the stock market has been proven over the last 4 years. Instead cheap money has fueled the greatest buy back spree in modern times. Socialism for the uber wealthy, good plan indeed.
QE will be resurrected. As if it really ever stopped.
In a few months QE4 and beyond, once it's realized everything is headed down.
BTFD s&p 500 at 500
up 3.5 yrs, dn 2.5, up 4.5 yrs, dn 1.5, up 5.5 yrs, dn 0.5?
Maybe they figured out how to "hide" it?
The EU will be blamed. This time.
The "market" will throw a tantrum, drop 1000 points in a week, voila, QE4EVUH.
It's that or tanks in the streets, right Hank?
Banks will run out of money to lend so they'll call in all the good loans, repossess the assets and try to sell them in order to have money to lend. Highly indebted assets will be safe as they have nothing the banks can steal.
Jefferson. in a letter to John Taylor in 1816. writes, "And I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale."[3]
The quote often attributed to Jefferson to Treasury Albert Gallatin, in 1802, apparently is questioned
http://www.monticello.org/site/jefferson/private-banks-quotation
Bottom line is that banks and finance hold the puppet strings, and have done so for a VERY long time
Everyone knows that QE's have failed. And they know that the real economic picture is not rosy. This "recovery" notion has been pushed, hard, for the past couple of years, and THIS is where we'll see how Jr. does with the training wheels off...(too bad Jr. has no legs.)
We all wait, knowing the economy is in fact, dead, but still praying the 'holy men' can summon a miracle. The minute one of them stands and solemnly utters "QE4.", we shall all weep bitter tears, knowing we are doomed...
Actually QE has been a wild success for certain groups of people and not just the top 1%, the bottom 20% as well as the immigrant and alien population has cleaned up with the 1%, probably 15 million have moved into America on the taxpayer dime since the 2008 immigrant dirven loan fraud collapse, they've also cleaned up with consumer debt more home loan deat and school debt too.
Despite the spurious implication to the contrary, central banks have not repealed the law of supply and demand in the financial markets.Accordingly, their massive purchases of the public debt create an artificial bid and, therefore, false price. Moreover, government debt functions as the “risk free” benchmark for pricing all other fixed income assets such as home mortgages, corporate debt and junk bonds; and also numerous classes of real assets which are typically heavily leveraged such as commercial real estate and leased aircraft.
In short, massive monetization of the public debt results in the systematic repression of the “cap rate” on which the entire financial system functions. And when the cap rate gets artificially pushed down to sub-economic levels the result is systematic over-valuation of all financial assets, and the excessive accumulation of debt to finance non-value added financial engineering schemes such as stock buybacks and the overwhelming share of M&A transactions.
Needless to say, the false prices which result from massive monetization do not stay within the canyons of Wall Street or even the corporate business sector. In effect, they ride the Amtrak to Washington where they also deceive politicians about the true cost of carrying the public debt. At the present time, the weighted average cost of the $13 trillion in publicly held federal debt is at least 200 basis points below a market clearing economic level—–meaning that debt service costs are understated by upwards of $300 billion annually.
At the end of the day, the fraud of massive monetization makes the rich richer because it drastically inflates the value of financial assets—–roughly 80% of which is held by the top 5% of households; and it makes the state more bloated and profligate because its enables the politicians to spend without imposing the pain of taxation or the crowding out effects which result from honest borrowing out of society’s savings pool.
You won't find a better articulated critique of QE anywhere...superb.
Maybe they are just crazy enough to think QE did work? They'll take away the free money and the whole thing will implode and they'll go right back to QE thinking it is the cure. The whole system of western society needs to completely fail before something actually worth a shit can replace it.
I will eat my tin foil hat if the real Fed balance sheet is only $4.4 trillion with $3.5 trillion added since 2009.
The Fed is at least as crooked as very successful New York restaurants which keep 3 sets of books. One for the IRS, one for the patners, and the real set for the crook running the show.
The Fed must have 3 balance sheets. One for Congress and Wall Street. One for the other Central banks. and the real one for the Chairman his or her self.
"I'm ready for my rat cage, Mr. DeMille."
Q.E. is like a bad case of athlete's feet, you may think it is gone but it always comes back.
Why don't these politicians ever make these statements while in office? The closest any of them ever came to honesty while in office was Eisenhower's farewell speech.
Well I vote for the new terminology of the QE to become FEDEX to really confuse people into thinking it is all FedEx delieveries of "assets" to the people bc we all know this QE scam is not even close to being over...
I just don't think the will ever stop printing, It's just too easy, and coupled with the irrefutable fact that those in charge are sociopaths to begin with. How could I ever believe them. Everything is touched by politics and the Fed is at the center of it. There is no way the flow of money that big could be stopped without serious consequences. That is the law of common fucking sense. period
Time to ZIRP the baby, Janet. A couple of good whacks on the back and the baby will vomit out all $4.4 trillion of the shit you've been feeding it.
"Janet, you get to clean up the mess the baby made," says a smiling Bernanke.
Count on one thing: the Fed will allow markets to deflate enough to cause severe pain, panic and more than a few bankruptcies.
When they've achieved their desired level of pain and discomfort for the American people, they will rise like a Phoenix to save the day, but, the problem with their childish theatrics is that they're becoming more and more shallow, have less and less effect because fewer and fewer people are playing along.
What we are witnessing, first-hand, is the destruction of the system, part by the Fed, part by the government, and in part, and maybe the largest part by people who are tired of running on the rat wheel.
Lots of ZHers are tired and seeking resolution, a free market, a collapse and rebuild scenario. Best bet is to take the 60s route: turn on, tune out.
For some odd reason, I woke up the other day with this song in my head, then today, Rick Santelli does a take off on it. Karma, some mysterious, irresistible force, Providence?
Kenny Rogers. Who knew?
Kenny Rogers and the First Edition: Just Dropped In (to see what condition my condition was in)
Kenny Rogers & The First Edition - Just Dropped In (To See ...
<--- Fed lets it crash just after Midterms if Republicans take the Senate.
<--- Fed props it up until after 2016 regardless of who wins the Senate.
Fraud?? No its called talmud tax!Get wit the program filthy dog goyim.
In the end, they kill the dollar. What's in the method?
The username the phallic crusader has not been activated or is blocked.
ZEROHEDGE: NO FACT-BASED CRITICISM OF ISRAEL ALLOWED.
They've sustained the chimera of an economic recovery thru Obama's 3 elections. The real question now is: Can they sustain it thru Hillary's 1 election?
Hitler won power because he predicted that Germany, hooked on cheap, American money, would suffer if America tanked. Then, the Wall Street crash of 1929 happened. Hilter was proven right. He became Chancellor. Shit happened.
All politicians in Washington must know this economy can't last. Since both Republicrats and Demolicans are complicit in the big lie, it is strange why some Hitler-like pol hasn't seized on the upcoming armageddon to position her/imself to be our next Chancellor. Perhaps from a strategic standpoint s/he figured that it would be best to get the midtern election out of the way before beginning chicken littleing. This supposition makes some sense because, in my opinion, only a little bit of chicken littleing might be enough to precipate the final correction. So now the question is, when will our precious and darling Hitlers make their appearances? Right after the election? Before Christmas? In the new year? If my supposition is correct, my take is that they've got their chicken littleing stage-managed down to a gnat's ass detail, but that their orchestration depends upon some other factor(s) occurring, this ultimate factor beyond their control; ie, they have to wait for it to happen. Wonder what that ultimate factor might be?
The Progressives are drooling. Finally, they'll get their own Hitler, not some half-assed wannabe like Obama. And, if the radical left's reaction to Hillary is any indication, most assuredly not her.
there are probably 10s, if not 100s of thousands of 'crazy people'; the type of 'crazy' which has each of them knowing in their own way, 'how things should be run'. it only takes one of them to weasel their way to 'the top'.
Very worried bout the kids&grandkiids. ... I can't help it.
In all probability QE will not stop. They may stop calling it QE but somehow, someway they will continue it if/when the stocks start their downward death spiral.
To be sure, the economic effect is invariably lower investment, productivity and growth down the line, but the process is at least honest. When the public debt is financed from savings, government purchase of goods and services are funded with the fruits of prior production. There is no exchange of something for nothing; there is no financial fraud.
What there is in this article is a complete ignorance of what money really is. Money is "a promise to complete a trade". It is an efficiency over simple barter and allows trading promises covering time and space to be executed like simple barter.
The Fed is the manager of our medium of exchange (MOE). That job is to "certify trading promises" and to monitor those promises for DEFAULT. If the promise is delivered as agreed, the certificates are returned and destroyed ... accounting entries are reversed. If the trader fails to deliver on the promise, the certificates continue to circulate as preferred items of barter, and they dilute the value of all other in-process trading promises. This is called INFLATION.
So the Fed's job, along with freely certifying trading promises, is to collect INTEREST equal to the DEFAULTs it experiences.
Now take the federal government as the trader making the promises: The promises are recorded in the form of "treasury notes". They are converted to medium of exchange (MOE) in the form of Federal Reserve Notes (FRNs ... and accounting of same) which circulate in simple barter trade along with all other in-process trading promises (e.g. the mortgage promise you made when you bought your house).
There is no problem so far. If the federal government kept their trading promises (as you do when you make payments on your mortgage and claim your deed) all those certificates (FRNs) would be returned and extinguished. All those treasuries held by the Fed would be returned to the USG treasury ... and extinguished. All is well in the kingdom.
But what really happens is the federal government "never" keeps its trading promises. Rather than collect taxes and use that to buy back their treasuries, they just make new promises rolling over the old promises. They never pay them off. This is DEFAULT, so the Fed should collect that amount of INTEREST. If they don't, all the other traders have to pay it in devalued MOE. But the Fed collects nowhere near enough INTEREST to cover the government's DEFAULTS, so INFLATION results.
The relation is: INFLATION = DEFAULT - INTEREST
INFLATION can't be measured. It can't even be closely estimated (and we are foolish to accept the government's and the Fed's estimations of it). But over a long period of time, the ratio of the MOE to gold gives a reflection of what's been going on. Historically, INFLATION has been 4% on average since the creation of the Fed. But that was without all this QE (can you say debt monitization) the Fed has been doing.
All the reporting is so badly manipulated and distored now, we have no idea how much INFLATION we are incurring ... but you can be sure, with $4 trillion being DEFAULTED through QE, it's huge.
The only right value for INFLATION (and the only guaranteeable value offered by any MOE manager) is zero.
Our MOE is hopelessly mismanaged. Katy ... bar the door.
Todd Marshall
Plantersville,TX
I look at top management in my company, and what I see are people who just want the stock price higher. They don't care how just get it higher, and they get angry at anything they perceive is getting in the way. On a macro level you have this economy-wide, hence the never-ending pressure by the elites to have the Fed continually prop up equities. In other words there will always be more QE to further enrich our rulers.