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Guess Who Predicted The Failure Of QE
Janet Yellen:
"As Japan found during its quantitative easing program, increasing the size of the monetary base above levels needed to provide ample liquidity to the banking system had no discernible economic effects aside from those associated with communicating the Bank of Japan’s commitment to the zero interest rate policy.
I think my views on this mirror those that you expressed in your opening comments, Mr. Chairman."
How did that work out?
We assume principles go out the window when the orders come down from the banker-owners on high...
* * *
However, today we get more total hypocrisy from the newly found bond guru and hedge fund adviser via his blog...
Where [monetary policy] can be helpful is in supporting the return to full employment, and there the record has been reasonably good. Indeed, it seems clear that the Fed's aggressive actions are an important reason that job creation in the United States has outstripped that of other industrial countries by a wide margin.
The WSJ also argues that, because monetary policy has not been a panacea for our economic troubles, we should stop using it. I agree that monetary policy is no panacea, and as Fed chairman I frequently said so. With short-term interest rates pinned near zero, monetary policy is not as powerful or as predictable as at other times. But the right inference is not that we should stop using monetary policy, but rather that we should bring to bear other policy tools as well.
So while in 2008, QE had no discernible economic effects... in 2015 it is a powerful tool for lowering unemployment rates? What a farce!?
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No real surprise, but reality can't be allowed to stand in the way of stock options and bonuses.......
There we go!
Official confirmation that we're in the Japanese model and headed to all rates sub 0.23%.
Getchur bonds now while you can!
Now we enter a new world with negative interest rates and digital money. No more Zimbabwe dollars clogging up toilets, no wheelbarrows full of money we just move decimal points. How many zero's do you need?
Not many comments over on King Bernocchio's blog. The entry reads like a defense statement. An eye patch and earing would make a nice complement to his silver mask that he hinds behind. Yes, the psychology at play through body language (quivering, dry mouth, bushy beard) reveals this monster.
So 1 comment in the last few weeks on his blog. Clearly he is VERY unpopular, but that's not my concern. My real concern about him is the constant lies and hypocrisy. If he's not a liar, then he's horribly incompetent. So which is it?
It's not that there aren't comments - they pick and chose from among the comments which to post. Keep out the riff-raff and likes of ZH commenters who think they could know anything without a PhD.
BTW - One of my comments was posted on the Brooking site but, sadly, Ben never responded to my questions.
So while in 2008, QE had no discernible economic effects... in 2015 it is a powerful tool for lowering unemployment rates?
And I thought the most powerful tool for lowering unemployment rates was the BLS.
And I thought the most powerful tool for lowering rates was a job?
Question is why the FRB is still buy 200b of UST a month still if they admit QE doesn't work. Could it be no one wants to buy US debt ?
Hambone -> Bernanke only responds to guys with the last name Rothschild or Rockefeller.
A shocking crime was committed on the unscrupulous initiative of few individuals, with the blessing of more, and amid the passive acquiescence of all.--Tacitus
And we shall all bend over in their honor.
That was funny >Bernanke bux
Buckus erectus.
Bernanke almost certainly knows what's coming. I suspect he's trying to rewrite history and mislead the public, assuming it will hold off the pitchfork-and-torch crowd that will undoubtedly be on his doorstep after this house of cards finally collapses.
I gave up after they deleted all of my comments the first couple of days.
What am I supposed to wipe my ass with, now? Damn.
Bitcoin is the only exit from the banker clusterfuck.
aye .... negative yields are like the wife ... until death do us part.
PARADISE BY THE DASHBOARD LIGHT - Meatloaf
https://www.youtube.com/watch?v=du9MZNYbJ3I
Check out the returns in Mexico !
Do you know what they do to cows that have grown up nice and fat? That's right, they slaughter them.... Moo moo stock a roos....
More cowbell!
Saturday Night Live Transcripts
Season 21: Episode 10
http://snltranscripts.jt.org/95/95jstinson.phtml
95j: Christopher Walken / Joan Osborne
Connie Stinson Talks
Connie Stinson.....Christopher Walken
Jodie.....Will Ferrell
Crystal.....Nancy Walls
Darnell.....Tim Meadows
Cheryl.....Cheri Oteri
Tom.....Fred Wolf
Tiffany.....Molly Shannon
Young Man in Audience.....Jim Breuer
Man in Audience.....David Koechner
Connie Stinson: Hello, and welcome to "Connie Stinson Talks". Today I talk with men who are considering dumping their lovers, because they've gained weight. Okay? [ camera focuses on Jodie ] Jodie says, "My girlfriend gained 75 pounds, and I ain't gonna take it any more." Let's meet him. Jodie, tell us about your girlfriend.
Jodie: Well, when I met her, she was already a little overweight..
Connie Stinson: She was fat! But she got fatter. And you said, "Uh-uh, no way. Hasta la vista, fat hog!" Right?
Jodie: I just thought she should go on a diet.
Connie Stinson: You wanted that fat hog to lose weight, and one way to achieve this would be to sew the fat hog's mouth shut. Is that what you thought?
Jodie: Good God, no! I just thought she should limit her intake of sugars, or something.
Connie Stinson: Okay, so you said, "Hey, Hog, stay away from the Chunky Chews."
Jodie: [ confused ] I guess.. sure..
Connie Stinson: I'm sure she has something to say about that. Let's meet her. [ Jodie's overweight girlfriend struts onto the stage and sits next to him ] Her name is Crystal.. and I think she looks pretty good. [ audience members whistle ]
Crystal: I weight 179 pounds, and I've never looked better, and no man can tell me otherwise!
Connie Stinson: Jodie says you're a fat hog! He says, "I don't want to sew the fat hog's mouth shut. I just want you to eat less sugar." Crystal, let me ask you this: Shouldn't love be less superficial?
Crystal: Yeah. It should. I don't need no man who can't see past the surface to the girl within!
Connie Stinson: Go, girl! You're saying, "I may be a huge, steaming hunk of fat hog, but that's me, take it or leave it, buddy!" Right?
Crystal: Uh.. sorta.. [ audience claps ]
Connie Stinson: Okay. Let's meet Darnell. [ camera focuses on Darnell ] Now, you told us earlier.. "I like a woman with a little meat on her bones, but lately it's been getting ridiculous." Right?
Darnell: Yeah! I like something to hold onto, not drive around the damn golf course! [ audience boos him ]
Connie Stinson: Uh-oh! I see fireworks coming! Let's meet her. Cheryl, come on out. [ Darnell's overweight girlfriend struts onto the stage and sits next to him ] Hey, Cheryl? Welcome to the show! So, tell us, how do you think you look?
Cheryl: Well, I eat a lot, I'm not denying it.. But, hell, you don't see me complaining about his gut, man! [ points to Darnell's stomach ] Looks to me like he should wear a t-shirt that says "Baby on Board"! What about it! [ lavishes the audience's support ]
Connie Stinson: Darnell, what do you say?
Darnell: Well, you know.. I married a girl, not a planet. You know, when I roll over on top of her, I feel like I'm Neil damn Armstrong! [ audience boos him ]
Connie Stinson: Darnell, it sounds like the audience does not agree with you. They're saying, "Hey, sure, we're mindless hyenas, worthless white trash, no-account colored people.. but we still know when a guy's got his head up his ass." Right? [ audience is stunned and silent ]
Cheryl: [ interrupting ] Hey. Hey. Hey. If Darnell don't like me, he can put his tired ass on the next bus out! Go Greyhound, baby! Go Greyhound! [ audience cheers her ]
Connie Stinson: More power to you, girl! Love yourself the way you are. Just look in the mirror and say to yourself, "Fat, stinking hog, I like you!" Would you do for me, honey, huh?
Cheryl: [ speechless ] Uh.. I.. I.. suppose I could..
Connie Stinson: How about a hand for her, folks? [ audience claps ] That's one brave hog! Okay, let's meet Tom. He's different from other men.. [ camera focuses on Tom ] ..aren't you? He says, "Although my wife is fat now, I'd like her to be even fatter." Tom, explain that.
Tom: Well, I'm kind of skinny, you know? So, psychologically, it's weird.. but if my wife would add a few more pounds, I'd love her even more. [ audience coos ]
Connie Stinson: Whoa, whoa, whoa! Wait a minute! So, you say, "Hey, I'm a skinny puke. So, I'm glad my wife's a fat slice of hog meat. But, because I'm half-a-fag, I'd like her to be even more of a stinking hog." Is that it?
Tom: I don't know.. it sounds different when you say it.
Tiffany: Let's meet her. Tiffany? Honey, come on out. [ Tom's overweight wife struts onto the stage and sits next to him ] Ouch! Look at you! You're a mountain! Even so, Tom says he wants you to be an even bigger stinking fat hog!
Tiffany: Yeah? Well, any food that I eat is less food than makes it to his skinny ass!
Connie Stinson: Go, girl! Say it loud: "I'm a hog married to a fruit, and I'm proud!" Okay, audience, any questions? [ pulls a young man out of the audience ]
Young Man in Audience: Yeah, this is for Cheryl - I just want to say that if your man dumps you, he's stupid, because I think that you're beautiful! [ audience cheers ]
Connie Stinson: Darnell, let me just say something here. It sounds like other men don't have a problem with your greasy hog wife. Now, why should you? [ gives a man in the audience a chance to speak ]
Man in Audience: Yeah, I got something I want to say. The guys up there, they must be crazy.. 'cause any one of these beautiful girls can come to my house anytime, and I'll make them feel like a woman! [ relishes the audience's cheers ]
Connie Stinson: Wait a minute. Ladies. Okay, this is the point. Did you hear that? He just said, "Hey, big fat, gross hogs.. my face is leaving town in five minutes. Be on it!" Isn't that right?
Man in Audience: [ appalled ] No.. I've changed my mind.. never mind. [ bumper reads: "Changed his mind. No longer wants big gross ho on face." ]
Connie Stinson: Guys, guys.. wait a minute.. wait, wait.. We're at the end of the show. I think this audience is trying to tell you, "Look past the mounds of gross, fat hog flesh, and see the beauty within." Folks, that's our show. As Baudelaire said, "Beauty is for those who only see. Real beauty is for those who feel." Now.. if you're a fat piece of stinking hog, you should like that one. Join me tomorrow for more idiots and freaks.
[ fade ]
KnuckleDragger-X said: "...reality can't be allowed to stand in the way of stock options and bonuses..."
Precisely - the FED is the banker's bank, using taxpayer debt and destroying the future for Elite's profits today.
That was a good one Billy.
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Shocking...almost like they knew it wouldn't save the economy and had alteterior motives.
http://econimica.blogspot.com/2015/04/so-simple-even-economist-or-fed-can-get.html
and here...
http://econimica.blogspot.com/2015/04/fed-makes-renters-pay-americas-billsand.html
Someone Email that to psycho POS Krugman, thanks
They needed to buy time, that is all time
They colluded so givernments can stay afloat. That is the only thing this was about. Wall St, and the Financial Media were willing accomplices
They all crowned themselves King, threw out the old law book, and started writing their own.
The Head Jew In Charge?
Well, they have to do what the Richchilds say or else they'd be sacrificed in some Belgian castle.
is everybidy's "o" key broken? I can understand if it is, but just sayin.
head cheese?
Head is head.
head cheese(pope)
egad the bernank is full of crap
stocks down 1%. HURRY MR YELLEN, WE NEED MOAR QE!!!
bullard or evans in 3, 2, 1...
he-she doesn't get to make that call
Where in Hell is Beeks? [/Randolph]
Qe is a failure therefore we must have moar. That's how we roll in the U.S.S.A! Failure is rewarded and success is penalized. Digital ink and iJunk bithcez! It's what's for dinner!
I think it's pretty well established this wasn't done for an economic benefit, but for a a few specific short-term ones, namely preventing immediate systemic collapse and letting TPTB get out of the current financial system with most assets intact. Of course it does this by creating a worse situation down the road, but they're not really too concerned about that.
Sell out whore. Put her head on a pike.
She did not sell out. She protected the interest of the FED shareholders as intended.
Hey Bennie, there's never been a nationwide housing bubble either, right?
Fuck you and the printing press you rode in on...
The highligted paragraph sounds like the beginning scene from the porno titled "Bernanke Panky".
subtitled "ease in, ease out"
Bernanke does Dallas.
That title should yearn 40 million hits on jewtube.
And then the witch doctor
He told me what to do
He said that
Ooo eee,ooo ah ah ting tang
Walla walla, bing bang
Ooo eee ooo ah ah ting tang
Walla walla bing bang...
Ooo eee ,ooo ah ah ting tang
Walla walla ,bing bang
Ooo eee ooo ah ah ting tang
Walla walla bing bang
Doublethink is ok. There is Nothing to see here. Move along.
Tyler, it is strongly recommended you should use selfstop. We will see you where is no darkness anyway.
Isn't Milton Friedman the issue together with Anna Schwartz for pretending that the Great Depression was a monetary phenomenon rather than a Terms of Trade Problem ? That US monetary policy was extraordinarily lax until Benjamin Strong died in 1928 and then policy reversal led to withdrawal of funk money from Germany, the Young Plan tried to stabilise and created BIS in Basel and left JP Morgan guarding the hen house.
The idea that Monetary Policy can address imbalances caused by high Gini Coefficients and industrial cartellisation is BS......what is needed is Trust Busters like Teddy Roosevelt and very high taxation of supernormal wealth
Stop monopolies, yes. But high taxes are attacking the symptom rather than the cause. We see taxation today used as some remedy to what many would perceive as corruption if not downright criminality. We watch as these crooked bankers break laws and generally screw everyone and rather than being punished, they are taxed. The government gets their vig and the crook goes back to do it some more. It is a perverse incentive to create tax laws that benefit our overlords from corruption.
Our goal should be to create laws and policies that allow people to use their skills and energy to create all kinds of wealth, just through laws and policies that prevent corruption and cronyism, that ensure that no one can use their wealth as a weapon against others.
We see today that these perverse tax laws that are designed to punish "the rich" are instead crushing the skulls of people earning a couple of hundred thousand, They aren't rich but they will have to do because the really rich, the stinking rich, have bought their way out of the taxing scheme. They can create trusts and foundations to launder their money, while everyone else is taxed out the ass, with God knows how much taxes built into the cost of everything we purchase.
yes, yes, yesyesyesyesyesyesyes. This. Even money printing itself is clearly not the life-killing economic sin that Austrians pretend it to be. We can have deficit spending and funny money, if *any significant portion* of our outflows actually built social capital. If they had given QE to American families, we would be debt free right now. People would own their houses and not be indebted. How hard is an economic hard landing in those conditions?
Monetary policy is radically overhyped, especially when it ignores the fundamental question of who gets the freshly printed cash.
Why we should have a basic income.
Fed introduces new currency into the existing pool of currency.
Primary Dealers leverage currency of which a large portion is exchanged for new Treasury issues.
Government exchanges new currency for products and labor.
Government directly taxes citizens to pay the holders of the Treasury issues.
The treasure the treasury manages is government's monopoly on the currency system that steals from the economy by introducing new currency whose only source of value is represented by the government's ability to directly tax citizens.
"We" should have a basic income if we work for it and we would have more of an income if those who stole and taxed as the means of obtaining their income actually worked for it instead.
The definition of work is totally up for grabs because whoever controls the levers of money creation defines what is 'work' by simpy defining what is a paid position. Corporate lawyers, for example, they exist Because Money.
The notion that free market economics defined some authentic form of American capitalism is half truth. We had unique historical position (destroyed Europe after WWII, reserve currency status, energy supplier during oil boom), we had massive social spending (new deal + great society + war economy), and we had a government-research initiated tech boom (computer industry). The only successful economics, to quote Michael Hudson, are mixed economies, and America as a free market nation would definitely not have reached anything near the status it achieved as a mixed economy. The fact that we have a McCarthyist/Randian national psychosis is another thing. It doesn't tell us much of anything about American history as it actually was, instead it tells us that Americans have very strong beliefs about governments and individualism.
Turns out our bullshit beliefs about how we achieved what we achieved are about as important as the bullshit Argentine and British nationalisms that were drummed up to support the Falklands conflict. Nobody gives a shit, and the free market monopolies that these belief systems have given carte blanche are going to leave this place looking ... not good. So don't count your free market chickens before they're hatched. Turns out the wisdom of Friedman and Hayek and Rand wasn't all that wise. Humans are cooperative creatures and while the word 'socialism' is still derogatory -- it only indicates we haven't yet learned all our lessons. Thats my opinion, anyway.
Definitions are never up for grabs.
Know your concepts in the form of percepts.
Work is an action exerted as the means to achieve an end. In the context here we are referring to work as the means to achieve an income. An income of what? An income of money? Why? Because money is a value to us. What is a value? Values are what we seek to obtain or keep as a means of sustaining our lives. We need food, shelter, clothing, the necessities of sustenance, and then later we desire the arts. We can't work to provide all of the values (products) that we need and desire for ourselves, by ourselves. So we produce by exerting physical and mental effort (work) the values that we can and then trade them for the values that we cannot produce on our own.
The values that some can produce versus the ones that others can produce are not always of equal quality or in equal demand, therefore an intermediate store of value is introduced in order to equalize the disproportionate exchange of values. We call this money. The money itself then represents the value produced by the traders involved in the exchange. How valuable each product traded is is determined by the amount of money exchanged. The value as symbolized by the amount of money is represented by the strength or weakness of demand by those involved in the exchange for their counterpart's product.
This illustration I have just set forth then is of a voluntary exchange of the products of one's work. We can call this productive work since the exchange is voluntary. Both traders are increasing their respective in coming of value to themselves. Productive work, voluntary business, is accretive to both parties involved. It is a win-win situation.
Your example of corporate laywers doing "work" thus needs to be qualified. Are they doing productive work? How do we know if it is productive? It is productive if all parties involved are receiving the value that they seek. Is the exchange accretive to both parties? We could find many unrelated instances where the answer to this question regarding corporate lawyers is yes, and no. The key tell as to whether the transaction was of full value to all parties involved would be to identify if the exchange was voluntary or if it was forced.
So with respect to work and how it relates to money then the term work must be qualified as whether it is productive work or not. If the exchange is not met by productive work by all parties involved then there must be an element of theft (counterfeit) or robbery (taxes/regulation) introduced as well. We then conclude that the work required to counterfeit, tax, and regulate is not of a productive nature.
lol. " But the right inference is not that we should stop using monetary policy, but rather that we should bring to bear other policy tools as well."
Other policy tools = outright confiscation(price suppression) of non-fiat assets, and capital controls. How else can you control economic policy with rates near ZERO, and bond yields at historic lows?
Ohhh---wait, there's the ~ Fiscal policy cannon/ lmfao.
Bernanke wrote in 1988, that QE doesn't work. The future Japanese result, confirmed what Bernanke wrote in 1988.
Surprise, surprise
"Other policy tools" like? Capital controls, asset seizures', arrest and confinement without recourse to trial????? What next can these dumb bell academicians come up with?
Bernanke is right, QE created a butt load of jobs. It created a job at Citadel, one at PIMCO, one at Brookings, a book deal and many speaking fee jobs at $250,000 a pop.
Not bad for a kid who used to bus tables at the South of the Border rest stop on I-95.
Ben only worked the rest stop to give blowjobs to truckers
Whether qe fails or not-is yet to be seen. The one thing that is a fact-is this guy predicted this turn April 11th. He has pretty much predicted every turn since September--exact date periods--weeks in advance. Here is his free report--he is the best!!
Ok after reading this article... it is no surprise that Bernanke is now working for PIMPCo. The friggin' whore.
William Banzai ...aka Billy B.... where are you on this ?
Regeneration Reference Voltage & College Boys/Girls
Yes, you can automate a population with bread and circuses, and cut the counterweight at will, but why would you set the reference voltage to human stupidity, arbitrary legal doctrine?
The critters began with the US Constitution, and went backwards, increasing the efficiency of natural resource exploitation, calling it GDP, the common good.
Your referenced voltage for regeneration depends upon the spacetime you want to visit. Public education doesn’t get dumber every year by accident. G is pulling way too many amps for whatever residual labor remains in its economy. The result is no spin globally and over-spin locally. Net, the timing is off and insufficient to turn the motor in any case, getting worse, priming a dead pump.
Like football, the market is just another circus, with less and less bread coming in, replacing it with inflation. Pensions are pay you go, because the critters always piss away the surplus, as a means of extortion. Print, drop interest rates negative, and eliminate cash as you like.
BAS/Maglev is just elevators with dumber motors, because proprietary equipment not only doesn’t work, but also fails quicker every year, creating parabolic costs, because the critters are too stupid to turn off the lights, and carbon tax addresses the symptom, growing the problem of density by ignoring it.
If you think something is going on in that Tower that labor doesn’t know about and ignores, you are only fooling yourself. I just talked to guy the other day who wanted to talk about cranes, certification and licenses, being paid by the State not to work, collecting rents with the proceeds, and looking for commodity labor, complaining about it.
Labor isn’t a commodity protesting in the street, but the middle class is welcome to presume it is. Whether something is a motor or a generator, a weight or a counterweight, in the pendulum of time, is a matter of perspective, which is programmed in most, of their own free will, which they pledge to empire.
Drop the tool in your hand, and pick up the tool necessary to do the necessary work, or get out of the way for someone who already has. There is never a shortage of capital, printing to infinity, to be transformed. The work is building the bridge. Any automaton herd can do what it is told, by its revolving scapegoats, what it did yesterday more efficiently today, calling it progress, complaining about being a commodity, eating crap and watching Internet TV, expecting a different result than war, with itself.
Control, knowledge, is not power. It’s discharge, with inflation and nowhere to go but self-absorption, which is why it blows up, which is neither here nor there to the universe, empire psychology riding a Bell Curve in a circle. No one forced anyone to move those factories to China, buy the resulting crap, or except the money printed at a premium accordingly, to maintain control over inflated real estate as the dead weight. Europe’s welfare production isn’t any better today than it was before WWII.
The moneychangers see labor as a cost to be capitalized with technology, which is why they don’t see the exponential cost of banking, replacing work with make-work. It helps to have a counterweight ready, before blowing up the existing, with globalization, but if all you know is extortion…because the State herd couldn’t see labor’s response does not mean that labor did not respond.
Whether the critters hook up to my elevator or not, it’s going to be badness, and they throw a tantrum because I won’t show them how to do it. All grounds are not created equal, and you might want to rethink bonding, especially at the transformers.
Fed just grocery clerks delivering their bankster overlords orders.
the policy goal is to trick as many people as possible into believing in the future - so they will "invest" and the bankers can steal their money - just before the Central Plannner set fire to the place and flee the country -
...and it's gone.
Bring to bear other policy fools as well...
Failure for me, faiulure for you possibly; but considering the top .0001% have tripled their wealth, then for them and their lick spittle cronies at the fed this has been an unmitigated, wet dream of success. Them = success / Me = sucksass.
According to The Telegraph:
http://www.telegraph.co.uk/finance/comment/jeremy-warner/11569329/Jeremy-Warner-Negative-interest-rates-put-world-on-course-for-biggest-mass-default-in-history.html
What makes today’s negative interest rate environment so worrying is this; to the extent that demand is growing at all in the world economy, it seems again to be almost entirely dependent on rising levels of debt. The financial crisis was meant to have exploded the credit bubble once and for all, but there's very little sign of it. Rising public indebtedness has taken over where households and companies left off. And in terms of wider credit expansion, emerging markets have simply replaced Western ones. The wake-up call of the financial crisis has gone largely unheeded.
The combined public debt of the G7 economies alone has grown by close to 40 percentage points to around 120pc of GDP since the start of the crisis, while globally, the total debt of private non-financial sectors has risen by 30pc, far in advance of economic growth.
One by one, all the major central banks have joined the money printing party. First it was the US Federal Reserve. Then came the Bank of England and later the Bank of Japan. Just lately, it’s the European Central Bank. Now even the People’s Bank of China is considering the “unconventional” monetary support of bond buying. Anything to keep the show on the road. It’s what Chris Watling of the consultancy Longview Economics has termed the “philosophy of demand at any cost”. A crisis caused by too much debt has been fought with even more of the stuff.
Many would contend that it is central bank money printing itself which is the primary cause of today’s low interest rate environment. Up to a point, it’s a view that is hard to argue with, for that is indeed the whole purpose of QE – to depress the yield on government bonds to the point where investors are forced to seek higher risk alternatives.
Other contributory factors include “financial repression”, where ever more demanding solvency regulation forces banks and insurers to hold more bonds, whatever the price. Alternatively, some part of the explanation may be down to QE having starved the repo market of the bonds it needs as collateral, even if most central banks have arrangements to lend the stock back to markets for these purposes.
All this official interference has no doubt influenced negative yields. Yet it also raises a deeper question, which is whether central banks are the primary cause of the collapse in interest rates, or whether they are merely accommodating wider forces in the global economy that they are powerless to influence - persistent sluggishness in demand and productivity growth.
What’s cause, and what’s effect? In a speech last year, Ben Broadbent, deputy governor of the Bank of England, argued cogently that central banks are merely responding to these deeper forces. The natural, or equilibrium, rate of interest required to keep growth and inflation at a particular level is simply a lot lower than it used to be, he insisted. To judge by the markets, it may even have turned negative.
There is some support for this view in the way markets have responded to QE. Analysis by Longview Economics found that bond yields actually rose during periods of QE by the US Federal Reserve, and fell when it stopped, the reverse of what you might expect if you think it is the unlimited buying power of the central bank that is causing the interest rate to fall.
Rates would rise during periods of QE because investors expected it to have a positive impact on economic growth, and therefore the equilibrium rate of interest, and then fall once it stopped because the stimulus had been withdrawn. Call it “secular stagnation” - the idea popularised by former US Treasury Secretary Larry Summers - if you like, but whatever it is, it's a particularly unhappy place to be. For all kinds of reasons, advanced economies, and perhaps emerging ones too, seem to have run out of productivity-enhancing growth and therefore need constant infusions of financially destabilising debt to keep them going.
The flip side of the cheap money story is soaring asset prices. The bond market bubble is just the half of it; since most other assets are priced relative to bonds, just about everything else has been going up as well. Eventually, there will be a massive correction, in which creditors will suffer sickening losses.
Nobody can tell you when that moment will arrive. We live in an “extend and pretend” world in which economies pathetically fight between themselves for any scraps of demand. One burst of money printing is met by another in an ultimately futile, zero-sum game of competitive currency devaluation. As if on cue, along comes another soft patch in Britain’s economic recovery, with first-quarter growth quite a bit weaker than expected. Like a constantly receding horizon, the point at which UK interest rates begin to rise is pushed ever further into the future. It's like waiting for Godot. When Bank Rate was first cut to 0.5pc in response to the financial crisis, markets expected rates to start rising again in a year. Six years later, Bank Rate is still at 0.5pc and markets still expect them to rise in a year. In Europe it’s not for four years.
Both Keynsian and monetary economics seem to be in some kind of end game. What comes next is anyone’s guess.
polo007- you ask what comes next. The pattern in as follows...
CURRENCY WARS...TRADE WARS...WORLD WARS
Governments, the lapdogs of the financial sector and the military industrial complex, will lead the people into this course unless the people are made aware of this cycle. In the end it is not about what a handful of people do that will change the course of this world. Only the people can change the trajectory of this course and it begins with the man/woman in the mirror. Comment at the NYTimes, Yahoo, anywhere and everywhere about this cycle. Talk to friends, neighbors, people in line at the grocery store. Sure you may get funny looks but you may also hit a receptive ear. In the end only the people can break this cycle.
Put your Congressional Members/President contact information into your phone. Having this information at your fingertips is the key to taking action. It takes 6-8 minutes to contact them all this way. Every week call and DEMAND CAMPAIGN FINANCE REFORM. Help cut the head off the snake. By removing money from campaigns election winners will not arrive to their office already compromised.
Will your name go down in history as having made a difference- no- but you will know you tried.
The offering above is my second attempt. The first was far better-succinct and well written. Just when I was ready to hit save the internet connection was lost and so was the comment. This has been happening a lot lately. Does this happen to anyone else? It is very frustrating when a comment that you feel may speak to others is lost.
Zion is watered with our blood, unless we water the Tree of Liberty with theirs.
Liberty is a demand. Tyranny is submission.
Fuck you Bernanke! Fuck you Yellen!
I am really enjoying these comedy pieces, keep up the laughs Tylers...
Coolio- Gangster's Paradise
http://www.youtube.com/watch?v=N6voHeEa3ig (4:08)
MrFckthemall — Banksta's Paradise
https://www.youtube.com/watch?v=D7gaNTxxRNs
Ever started a conversation with a lie, which led to another lie, which led to another lie, which led to the unintentional setting of a goal so as to make all these lies appear true? Well...
The Fed's statutory objectives for monetary policy: "maximum employment, stable prices, and moderate long-term interest rates." Nationalisation of financial assets.
Very close, HumanNature.
Your principle is correct but not applied to the fullest context.
The question is what is the original lie that makes all the others necessary?
The answer is that fractional reserve counterfeiting, the rehypothecation of money, cannot beget a monetary policy because it is a counterfeiting policy.
All the lies that follow are the deception required to hide the theft.
Only full reserve banking can expunge the first lie and thus all the rest.
Thank you OC Sure that makes sense. The reflexive relationship between the purpose of the Federal Reserve system and the implementation thereof, makes finding the original lie somewhat illusive, in my opinion. All though I am not sure what the original lie is what I do know is that in the world we live in today something must break: 1) Financial markets and/or 2) the economy and/or 3) the central banking system and/or 4) society.
Greenspan sold his soul, too. Here's what he wrote in 1996, BEFORE the Fed chairmanship.
"This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard."
Greenspan nailed it on why financial sociopaths TPTB hate gold.
If the computer model calls for NIRP, we shall manifest a NIRP ecosystem.
The alternative is jettisoning those on the dole. Mainly made up of disabled and unproductive young/aged resources.
Toss the mechanical I~V.
Give me some ideas...
My latest blog post addresses this very issue and explains why QE never had a chance of working and why it was actually initiated.
Commen Sense Economics http://quillian.net
that
Commmon Sense Economics http://quillian.net
Ecomonic Stimulus is supposed to:
-Raise bank reserves to levels allowing increased lending at lower rates
-Ecourage demand to borrow at low interst rates.
-Encourage Cap-Ex spending on large ticket items in both the domestic and the corporate levels.
-Encourage refinancing of all existing debt to the lower levels
-Encourage the purchase of assest over savings due to a lack of return on the latter and demand for the former.
Over the last 7 years, while it can be said that in fits and spurts each of these have had their moment, the final assessment to this point of what should be a 4 year economic cycle is abject failure.
So what happened to all this liquidity the central banks around the world have pumped into banks?
These banks have greedily hoarded all of it to enrich & benefit only themeselves under the excuse their imprudent leading was the sole and only cause of the downturn and that the funds are required to protect against another, even though this is oxymoronic logic.
It's like saying that the only reason I'm rich is becuase I can't trust myself to be poor.
Just because we predict it
doesn't mean we own it.
We bonded some folks...
The largest impact on unemployment has been people dropping out of the workforce...
NOT ZIRP!!
Bernanke ... yep it is easy to make things look pretty when you dump 4 Trillion into the banking system....
you dont need a degree and a beard to do that .... anyone on this website could have done it..
The real talent comes now....HOW DO YOU GET OUT OF IT?
Answer, there NEVER will be a return to normalcy in rates....so, BEN, you have failed by entering into something
from which you and Janet cannot extricate. But you have big consulting fees now and a govt pension, inflation protected..You win.
QE does have an effect, namely deficit and debt reduction. Japan just went into trade surplus.
http://katchum.blogspot.be/2015/05/richard-duncan-qe-is-debt-cancellatio...
Full employment? We're tired of the fucking lip service. Not only is labor force participation worsening, wages for the vast majority of workers are stagnant and the wealthy continue to pull away from the pack by every measure. We continue to be saddled with unpayable debt to keep TPTB afloat and in power and flush. Of course, most of us around here know these central bankers are completely full of bullshit anyway so I'm just preaching to the choir.