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Why Moar QE Is Inevitable (In 2 Simple Charts)
If The Fed's dream of wealth creation by equity-levitated mandate is to be fulfilled then it is simply inevitable that QE Moar is on its way...
In the new normal post peak-debt, stocks only rise when the Fed is printing money...
And unless The Fed starts to reinflate its balance sheet soon, equity market performance is going to suffer...
And remember - The Fed balance sheet is going to rapidly decelerate next year and beyond as Treasuries mature. All The Fed needs is a good excuse... Grexit?
Source: @Not_Jim_Cramer
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Free money printed by the Fed is the easiest way to wealth.
Can we have a few trillion more?
QE is most effective when the Fed s threatening to raise interest rates at the same time. And gold is hammered
How The Fed Is Helping To Rig The Stock MarketWhy is the Fed doing something that would be a crime if anyone other than the Fed did this? It’s because wealth creation is the only policy action of this government that works. It seems that the Fed is willing to keep stock prices elevated, so the Obama administration can keep spending trillions of dollars that really don’t exist
http://www.forbes.com/sites/investor/2013/01/30/how-the-fed-is-helping-t...
The fact that most people don't understand QE or what's going on in general is more depressing than the QE itself.
BITCHEZ , Wait until the 2nd Q GDP will come out . They can not hide it for toooo long anymore, the cracks are everywhere in the system, impossible to fix/cover them all
Short sellers should retire...the market will always go up from today forward.
The Fed has repeatedly said it intends to continue reinvesting maturing securities AND profits generated from it's holdings. It's balance sheet is not going to decelerate.
"It’s because wealth creation is the only policy action of this government that works"
Sorry, thats a false statement. If it were true, why not just create enough wealth so everyone could buy anything they ever dreamed of or wanted, and we could all retire happily ever after. Government is more like a big grey woodtick on the dog.
Just ask Zimbabwe how that's working out.
4 Quadrillion Zimbabwe dollars for $5 US.
LOL!! Unfortunately, not everyone benefits from, or has access to that "free money".
Now that modern finance no longer requires real collateral or RISK (thanks to BAILOUTS), bankers and financiers are nothing but overcompensated useless middlemen between the printer/computer where "money" is created and the producer/consumer in the real economy.
Time to take their fucking heads!!! nothing changes otherwise.
Every dollar conjured by the Fed is a claim on the real economy-on the sweat and real equity of small businesses and working people. Central Banks have turned in to counterfeiters and the hot money goes to their pals- effectively robbing those who don't have long enough snouts.
Open a bag of potato chips- most of what you see is air and packaging. Naturally, none of this makes it into inflation statistics.
Yellen is the new driver whose car is up on blocks with the engine redlined, being cheered on by her pals to inject a little nitro.
The good news is its looking like China has bound its own feet (again).
But I am meandering...
K
"digital "media" is the l.s.d. of the 21st century",
or something like it;
that includes, of course, qe and modern money.
long strange trip, perhaps not, perhaps a
burnt out shell? thank goodness we have the
protective shield of derivatives to insure the
continued functioning of everything financial
on this money trip, virtual fiat acid test;
experiment in control and power by the very few.
.
Timothy Leary's Last Trip
https://www.youtube.com/watch?v=AumYTjNxRyQ
"bankers and financiers are nothing but overcompensated useless middlemen between the printer/computer where "money" is created and the producer/consumer in the real economy"
So true. Take the 2.5% credit card skim they get on EVERY SINGLE PURCHASE with a credit card. And the majority of transactions are done by CC now. They shouldn't be called bankers---they should be called skimmers (besides things like parasites or criminals...)
"Why is the Fed doing something that would be a crime if anyone other than the Fed did this? It’s because wealth creation is the only policy action of this government that works"
It is debt creation and it is not working.
Debt creation=debt slavery.
QE forever bitches!
Yellen is about to pee her pants as she wants a rate hike so bad and will make inflation/job numbers mean whatever is needed. She is much aware that what they are doing is not helping after 7+ years. She must do something as the Fed is being exposed as impotent. She has set idly by long enough.
The Fed will break the internet they will have to hold CTRL-P for so much
but Janet has said maturing Treasuries will be replaced with new purchases
Of course they will.Treasury will have to issue more debt to pay off those maturing UST's.
If the FED bought UST during QE (and they did), and those Treasuries are maturing... then shouldn't they retire that debt??
I know that isn't Keynesian or MMT Economics since they believe in more spending to stimulate.
But IF WE COULD Force the Federal Reserve to take the USTs off their Books, thereby reducing US Federal Debt... it might be considered a true "Conservative" Practice.
Otherwise, we are just China & Greece.
I'm sure our QE & S&P Chart above looks just like China just at a different Rate of Growth.
Letting those treasuries mature and fall off of the Treasury's balance sheet would not reduce the debt. It would just reduce Treasury's balance sheet.
It would also lower the money supply and increase interest rates because they would have to increase the rates to attract buyers in the market to purchase that debt which is still on the books... just rolled over into new Treasuries... to go along with the newly issued ones.
and we would have the pin to pop the bubble of all bubbles.
Obviously I have a lot to learn about the FED and Central Banking.
I was thinking Federal Debt held by the Public = $13.1 Trillion.
That leaves like $5 Trillion held by Federal Trust Funds and maybe the FED?
Anyway the alternative to the FED holding Treasuries and earning the Interest is not to sell them back into Public in new issues... I thought we could just use an accounting function to Write off the Debt/Take it off the Federal Reserve Balance Sheet which only deprives the FED of it's money back.
Now what would the Accounting be to do this. Not Accounts over due or Accounts not paid... Simply an Account UST Retired.
Or so I thought in my mind... Double Entry Accounting.
"All The Fed needs is a good excuse... Grexit?"
A good old fashion inventory correction recession will do
see todays wholesale report with elevated I/S 1.29
http://www.census.gov/wholesale/pdf/mwts/currentwhl.pdf
Because there are tens of trillions of government and private toxic bonds at a low yield and high price that must be bought or else the banks lose equity and would be under capitalized.
https://en.wikipedia.org/wiki/Zorbing
https://www.google.com/search?q=zorbing&client=firefox-a&hs=zze&rls=org....
^^^
we're all running around in bubbles now
How does inflation create wealth again? How does making things unaffordable create wealth again? I do not understand.
If you owned a major US bank today ... you would understand.
Easy. Boobus Americanus can get a bigger loan to buy more useless junk. Just ask anyone up the their eyeballs in debt. They think they're rich and will tell you so, if you give them a chance. That's the state of stupidity these days. Slavery is Freedom! When TSHTF(deflation for longer than a house fly's life span), most will be moaning they can't get a refi. Just wait, that'll be what the MSM reports. This whole disaster could'a been avoided if John Q. Debtslave could'a gotten that refi.
Debt is not wealth, as Greece has found out.
The way it is shaping up is that liquidity is becoming a problem. the CB's don't have enough paper outstanding to print, buy and give the banks a free profit. Also the CBs are losing credibility as Everyone including the illegal hispanic immigrants and H1B Indian visa holders know that interst rates cannot be at zero forever...
So ... to gain cred Yellen will raise interest rates .25 %, but QE ^ stays in place. Thats fair right..? That is social Justice. The Pope be cool with that.
Illegal Imigrants and Indian H1Bs have a better sense about inflation and poor Fiscal Management that US citizens do. That is one reason why the FED has been able to kill the Middle Class and give it all to a few thousand Banksters and their buddies.
Of course they do. They cannot believe their luck. That is why they will run with the White Privelege meme all day long.
All the while Yellen says : America you've never had it sooo good!
And, its gonna get better!
So I'll have to raise the Fed rates!
Honey! Isn't life just swell????
On Capitol Hill...like Blueberry hill, my worrrld stood still.
I think there should be a lot moar QE because this much QE has been good for me and I would like to have moar please.
the QE bubble...
will the Fed's be able to stem the market-bubbles from hemorrhaging ?
fundamentals point to failure to do so -
Check how desperate China has become to stem the QE bubble from bursting.
what's fundamentals I hear you say ?
fundamentals: a central or primary rule or principle on which something is based.
example: margin calls are fundamentally based events.
(as opposed to QE hopeum fixes that the markets are now largely immune and resistant to,
due to an overuse of QE, Zirp, Currency devaluations and other Fed global market manipulations.-
WR;)
Because we cannot keep up with the minimum interest payments on global debt?
That was an easy question.