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This Wasn't Supposed To Happen: Crashing Inflation Expectations Suggest Imminent Launch Of QE4
The wind up for the most telegraphed rate hike in history was supposed to achieve one thing: generate benign inflation in the form of a rising short end and a broadly steeper yield curve, or in short: boost inflation expectations without crashing the market (recall after 7 years of ZIRP and QE all the media is blasting is that "rate hikes are good for stocks") - after all why else would the Fed be hiking rates if not to offset the market's inflationary expectations and to have "dry policy powder" ahead of the next recession, even if said powder was a meager 25 basis points.
It was most certainly not supposed to achieve this:
This is how Nomura summarizes the chart above:
"with deflation fears in the air and oil getting floored, inflation products have already become an unloved asset class. If the Fed surprises the market with a September hike, we expect all BEIs to fall under pressure but likely led by the <5yr sector as risk markets also crater. Just like currently, BEIs are held hostage to commodities and credit markets even as the Fed probabilities are being revised down."
Here is a better way of summarizing it: the last three times inflation expectations tumbled this low, the Fed was about to launch QE1, QE2, Operation Twist and QE3.
And the Fed is now expected to hike rates in less than a month even as inflation expectations are the lowest since Lehman?
Good luck. The Fed - which is damned if it hikes rates (and crushes financial conditions by tightening, sending deflationary signals surging even higher and undoing 7 years of stock market levitation), and damned if it launches QE4 (as it loses all verbal jawboning credibility it worked so hard to establish in the past year ) - is now truly boxed in.
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QE4 should be announced Tuesday before market open.
Might happen.
But I think they'll try and go ahead with this whole easing-into-QE4 thing like they are currently doing. Raise rates, watch the world implode, appear to debate long and hard about priorities, and then reluctantly drop rates again and maybe go negative.
This talk about The Fed having no dry policy powder is dumb.
For example, they could do when Ben said he could do if deflation ever hit, and that would be to drop money from helicopters. They don't want to do that because that would give bankers headaches. But going into elections I think they would anyway.
So watch out for falling bales of fiat. And if any of you think you are above taking the money, we'll see about that. Everyone takes the money, every time.
When ur always wrong, but never in doubt, ur gonna get boxed in.
I agree they are about to do something but it’s going to be something new. Many think that QE is up next but they just came out with a paper saying it was ineffective. The fed gives signals and the signals are clear; even though the market if falling and inflation is low they are going to raise rates. Why would they do this, well it’s to scare the pants off of the politicians who might stand in the way of the really crazy policies they want to try. I think with the St. Louis Fed paper stating that there was no evidence QE boosted the economy, they were signaling they want to try something new. I think they are going to use the upcoming crisis to ban cash and push rates significantly negative, or implement the E Dollar, but hey who knows.
Time will tell.
I think that if they do QE as they have done in the past, it will break the banking system. I haven't looked at the Fed's reverse repos lately and the website that has them listed is down ATM, but they are doing a reverse repo program for a reason.
They are trying to fix a flat tire with a jackhammer. Throwing more money at the problem won't fix it, but it;ll make the bankers happy.....
Throwing money at anything is further debasement, which means all hands on deck to really supress gold and silver.
I believe we are going to get an overnight revaluation. There is room to do it, with oil dropping some 65%, as well as almost every other commodity falling except the things we need, like food, gas, utilities, and civic taxes.
One thing is certain: This will get very interesting.
One last time for the duel citizens to fuck over America.
Said it before
They will raise rates (not normalizie rates) AND do QE at same time.......... or try to
Doubtful. QE4 is more likely than a rate hike at this point.
THERE'S NO QE-4 YOU MOOKS!
Here's one reason:
http://www.zerohedge.com/news/2015-08-19/after-6-years-qe-and-45-trillio...
FUCKING DUHHHH!
HERE'S ANOTHER LA LA LAND ONE FOR YOU IDIOTS:
http://www.zerohedge.com/news/2015-08-16/goldmans-4-reasons-why-sp-will-...
I agree, I think from a credability standpoint more QE would be a disaster, they've spent too long talking about a rate rise and issuing papers stating QE hasn't been effective. Conspiracy theory or no, they need to wait till everyones REALLY panicking before they can unleash their next hairbrained scheme. If they hold or raise rates they can blame China for the deflationary consequences/crash, claim no body could have known the figures coming out of their state organs were wrong, and then say they "have a cunning plan...", markets surge on optimism it'll work.
Any Fed tightening will bring rising prices, not further "deflation."
They should actually just shut down.
Don't tighten, don't loosen.
Just leave.
There's nothing China would love more than the U.S. announcing QE4...it would really start the ball rolling
To QE or To Stealth QE?
I'd say more of both.
They will do something. Give it a new shiny name but not the same as previous QE. CNBC will be convinved all is well. Maybe something direct to the folk my guess. The only guarentee of it is that it won't work as they have no idea what they are doing. Wonder what chapter in the textbook covers this?
They will raise rates , and after the bottom, the Dow , the dalla and gold will rise as Capitol flees to the us
I like how you think.
Yeah time will tell.
They are trying to keep a 100 trillion dollar battleship with half the bow missing from sinking with a 50 cent sack of party baloons. Blow harder Janet.
I think they would like to go negative with interest rates but they would need political cover and likely legislation to do that. You cannot go negative without doing away with cash and you probably can't do away with cash without congress and it is an election year. Congress signing off ain't going to happen in an election year. Fed has themselves in a box so if forced to do something it will be QE4. First comes announcement of indefinite delay of any rate hikes. That might be enough to stop this panic.
Cougar - well said. +1
Absolutely I would take the FRNs. Then I'd do my best to immediatly convert them to tangible and useful goods.
What about moral hazard, and socialism and slippery slope?
4.5 trillion divided by 320 million = how much? It would have been better to do this in the first place and let TBTF go down the tube instead of main st.Up next is gonna be "operation grift" subprime tuition and auto loan $$$.
None of which is real.
Oh and on the topic here is what I posted yesterday regarding my part of your $4.5T:
============ snip
There is no structural or functional difference between me owing that $1,720,000, and the exact same me owing $1,720,000,000.
No difference at all of any kind, not even with 3 more zeros. Add 6 more if you want. Makes no difference.
You all do realize that at some point this isn't "money" anymore that we are talking about, right? And the idea of anyone "owing" it is just as ludicrous as the idea that it will any of it ever be "paid back".
There is a reason why we say that the entire system has gone down the rabbit hole, and here is where I seriously recommend you all take a few hours this week (this weekend in particular, I will add) and actually read "Alice's Adventures in Wonderland". It is in no way a children's tale. It is all about what happens when you allow your everyday shit to come unhinged from reality.
What happens when your shit comes unhinged from reality is -- you never again experience reality. You just don't. It's just gone, beotches. Even if you work really hard at it and after a struggle think you have gone back -- you haven't. Oh no no no I'm sorry but there just is no going back now, mo'fo.
None of you should be pretending you know where all this is at or where it is headed. We are off the edge of the map now. Humans have never been in this land. Ever. And no I'm sorry but Weimar wasn't even close. Nothing comes close. Nothing touches this shit. This shit is radioactive crazy ass fucked up off-the-map-and-down-the-rabbit-hole-on-greased-skids shit.
Off. The. Map.
Krugman can say anything he wants, it's madness. You can think anything you want about Krugman, that's madness too. You are in a strange land and everything you think and do is now officially and irrevocably incorrect, inappropriate, immaterial, and crazy.
Okay? Are we all clear on that part now?
I hope to fuck we are clear on that part now. Because what comes next is going to be so God-forsaken fucking insane you each of you risk being pulled into the vortex of collective madness exactly as you are all of you being sucked into this vortex of thinking that Krugman is talking about actual money anymore.
No. He's not. Nobody is. It's all gone.
Bravo.....simply bravo !! +1000 imaginary points.
No! One Millieeeon points. Like he said, what's the practical difference between a few extra added zeros?
For me, the weirdness is that people keep exchanging this paper for real items. Whether it be countries, businesses or individuals. You head explodes when you contemplate this ending. When someone says, no more.
Cougar, that was awesome!
Maybe they didn't! Dry Baltic Index 2008 anyone. Gold from Japan Tsunami and Ukraine.
The talk of the taxpayers having to pay this back is crazy. The amount stolen from the future is too much to ever, ever, pay. What really pisses me off is the people creating this fantasy are using it to their benefit now, not later.
Even though I know it's not real, if helicopters drop conjured money on me I'll buy something tangible with it ASAP like EV says. Everthing is fake and fraud these days, trying to find your way with a moral compass is gonna get you nowhere.
Somebody else said banning cash could be up their sleeves. In the (near) future, I can envision having to have a permit for possessing or using cash that expires because we'll be told it's incorrect use is hurting the little guy and the economy in general.
Yes, but when turning it into something tangible, you must remember that he who panics first panics best. You want to be the first in line buying shit, not the last.
First in line seems a bit shortsighted to me.
Take the helicopter cash and convert it to easily stored and traded commodities that will always be in demand. My picks are alcohol, tobacco, and firearms. The Fed has itself boxed in and until it realizes that it cannot create demand for real goods and services simply by creating more money they will keep digging in the hole that is so deep they can't get out of it. We are all hemmed in by the tools of our trade, the ones we know and use every day. For a carpenter all problems require a hammer and saw to fix. For a surgeon a scalpel. For the Fed it is money creation and ineterst rates.
I hope to fuck we are clear on that part now. Because what comes next is going to be so God-forsaken fucking insane you each of you risk being pulled into the vortex of collective madness exactly as you are all of you being sucked into this vortex of thinking that Krugman is talking about actual money anymore.
That's a wee bit over the top. People are living longer / healthier lives than at any point in human history. Not so many generations ago you were lucky to progress past your thirties. So many amazing things are coming, I just wish I could've been born later.
The > human made and regulated < financial markets will be sorted out over time. A couple billion people don't have access to clean water today - keep perspective people.
The vortex of collective madness is very real, my friend. Once in motion it can cut through a lot of perfectly healthy people in the prime of life and do it very quickly. We are off the map now and will remain so for a long time, and in that strange land I will not pretend to predict how people will behave, except that they will as usual in such times behave poorly.
vortex of collective madness is very real
Middle ages was a pretty fucked up time...hard to compete with that one. Compared to most of recorded human history things are pretty great right now.
There's no question we are in an age of major transition and many unknowns & serious existential questions face all of humanity like never in the past. But none of that is necessarily negative.
What current tech advancements in your life would you be willing to give up to go to an earlier time? Medicine? Transport? Internet? And then which period would you want to travel to? 1900? 1850? 1776?
If you can't answer those questions sufficiently then you're probably worrying too much about current days. Yeah, lots of shit is fucked up, but that's transition.
Who said anything about going back into madness? Going back in and of itself would be truly heroic; to just grab the horns of the dilemma and in an unlikely spasm of mutual aid and brotherly love to go back to a simpler and more sustainable time, taking our losses in a stoic way.
I don't think we are going back. Certainly not all together, certainly not in a stoic way. We are going forward like it or not because we already set fire to the past and those bridges are burnt. I won't say forward into what. I won't be the one to speak the name of calamity and so doing, to summon it.
We are off the edge of the map of human experience. Beyond here there be monsters.
The only real comparison we have is the past, everything else is imagination.
I think people tend to pine for those 'simpler times' not because they were better (they quantifiably weren't) but because the outcomes are known.
"I don't think we are going back. Certainly not all together, certainly not in a stoic way. We are going forward like it or not because we already set fire to the past and those bridges are burnt. I won't say forward into what. I won't be the one to speak the name of calamity and so doing, to summon it.
We are off the edge of the map of human experience. Beyond here there be monsters. "
+1
Yes.
We are all inside the not-reality now. Matrix. Mass hysteria. Ghost story. Zombie apocalypse. Whatever you want to call it.
I call it Vron.
For each of us it is different, unique, personal, private.
Welcome to your's.
Now: accept it, embrace it. -It's all most of you really have...
Some of us can never take the money.
I didn't hop on the home ownership bandwagon because I couldn't afford maintaining a $500K consumable. I was never tempted by the home equity ATM scheme, the student debt scheme, or e-trade BTFD wealth "creation" call. When I was financially insecure, I lowered my expenses and saved to create the possibillity to take a risk on starting a small business. I did it with very little start up capital and grew it to $1.5Million in sales from early profits. I self-educated based on my specific educational needs, saved and avoided debt. I went against all the incentivised behaviors, took my licks and left with my integriity.
This entire system is designed to punish savers & producers. Most of who will be left are those who think stealing is OK and will vote to have it done for them. They will be hungry and ready for the fascism they will get and deserve. I wonder what the rest of us will get?
The Cheshire Cat always was my favorite character in fiction.
Bulls Eye Cougar! Knew there was historical significance to this movie, I helped produce in the late 70s... https://www.youtube.com/watch?v=t-UpwWauZ50
No we're not. You're just not looking in the right places for information.
It makes complete sense to me.
Stock market goes down, Cabal get increasingly nasty and 'bail ins'. People get angry. Some stuff happens including wikileaks style document dumps. 'Illuminati tribunals' started by off the scene figures. Disclosure about the space program and Satanic paedophile rituals etc. And then we're all telepathic and stuff.
Sounds to me as sensible as a dictionary.
And Dorothy had silver slippers - not ruby slippers. And they walked to Oz on the gold brick road - not the yellow brick road. Oh well. Off for a game of croquet with the Queen of Hearts....
Talk to the Fed about moral hazard. If it is doing a helicopter drop to the masses, you should assume that the dollar is about to go the way of the dodo, supply chains will get spotty at best, and get what you can to help ride out the storm as a matter of keeping yourself fed and safe. If the Fed were to offer me $10k in physical FRNs, I would unapolagetically and immediatly go to places like Tractor Supply, the big box stores like Lowe's, gun stores, etc... and turn it into useful stuff under the assumption that I am going to find those tools useful. I'd probably also go get a couple of 55 gallon drums and fill them up with gasoline. More food is always a good idea too.
Yeah, i think everyone does "takes the money" - heli drops haven't happened yet, so we can't say every time.. Its what you would do with it that counts anyhow- The PTB would want you to spend it on more assenine bullshit to "stimulate" the economy... Anyone with half a brain would use it to pay off any debt they might have. Or wait, maybe that would make you a terrorist according to .gov? Dunno.
The minute a helicopter starts dropping cash on the markets, as opposed to debt paper, Treasuries would drop faster than a kettlebell on Jupiter. It is probably not going to happen.
Yes in the beginning it will have to be debt paper. I'm think war on debt sort of thing. Businesses would lap it up, some consumers would benefit. The Fed takes it in the balance sheet which is already a running fiction. Oh and maybe a little something extra in the tax return, like Bush did, maybe a couple thousand.
All that by Christmas would place the timing about right.
They need to give the money to hard working folks who make between $35,000 to $75,000 annually
and don't suck on the govt. teat. Whats that about 5000 people?
I'm against free money even for those who need it the most. The value would plummet if they did.
And another QE will destroy the value of my gold and silver even more. I worked for that moeny, I saved money.
If you want money you work for it and save it.
But these days everybody wants the fun first and hates to pay back their loans.
We all live like kings compaired to tye 18th century but everybody still wants more.
Look at those refugees from Syria that are trying to get into Europe. If you make 50.000 a year and if you send 5000 dollars of it to help those people, then I say you deserve 50.000 more. If you didn't you don't. And if you would send 5000 expecting 50000 in return that wouldn't count either.
It's greed, everybody wants free money.
"I'm against free money even for those who need it the most. The value would plummet if they did.
And another QE will destroy the value of my gold and silver even more. I worked for that moeny, I saved money.
If you want money you work for it and save it.
...
It's greed, everybody wants free money. "
The problem is: we have all figured out that 'money' is generated out of thin air for the benefit of those that generate it.
NOT EVERYONE'S BENEFIT. ONLY A FEW.
'Money' as it exists presently is not only free to those who generate it -it designed to steal productivity from those who are prohibited from generating it.
We are sick of having our goddamned productivity stolen by counterfeiters while we are lectured and oppressed over 'debt' that never really existed but for our acceptance of it.
IF the Oligarchs and Bankers had not been bailed out the matter might have been settled for another iteration.
As it is people are not interested in paying for shit that they have come to realize was basically counterfeited on a fucking computer screen, and lost, and then got bailed out of the losses; -but still demand payment of the bailout satisfied loans.
I'm not responsible for YOUR creditors.
CEASE socializing losses and privatizing profits and we can have a conversation on equal terms like two adults.
How many hundreds of billions will this one be? Remember when Hank was running around and gulping with his sheet of paper? It took $1.4 Trillion just to offset those losses and get us back to the starting line. ZIRP, QE2, QE3, nothing. The current QE is all about pumping FRN's without copping to it - talk up the bad news as good and finally to shuffle the numbers and the goalposts all over the place. There is no intention or possibility for the FED to ever unwind their balance sheet. Can you imagine what that would even look like? $5+Trillion? Right.
They can only buy time at the ever increasing detrement of the future.
They can't raise rates, stop manipulating metals or let dependent asset classes deflate. The chance for a healthy "hands-off" correction is dead. It will have to go full-zombie or full-stop.
Full-zombie it is.
Now tell me how that looks from 40,000 feet? I really have not a clue.
It might look like everyone standing in line.
Isn't that what we learned to do in public shcool?
Full-Zombie means death of the dollar and .gov stepping in to protect the .1% from the proles and FSA. They will then print and buy from the ever shinking middle class goods and services with the dollars that only the proles will then want.
Keep buying time until they can arrange their escape - or worse.
Okay that sounds about right. Every man for his own economic self. Being about what we had for the 8,000 years prior to the exploitation of fossil energy.
I'll take the money and run. QE me, baby.
Giving money directly to people is better than giving it to the banksters.
But I think they'll try and go ahead with this whole easing-into-QE4 thing like they are currently doing. Raise rates, watch the world implode, appear to debate long and hard about priorities, and then reluctantly drop rates again and maybe go negative.
+1,000,000
QE4 will be "our idea", and not the Fed's. The final destruction will be by popular demand, "someone has to do something!" The programs are ready, the plans made, the facilities primed and ready, but they will act like they didn't want to do it but "they had to".
Bernanke said he'd do a lot more than helicopter drops.
IF The FED isn't buying Netflix and Tesla yet:
https://en.wikipedia.org/wiki/Bernanke_doctrine
The Fed - which is damned if it hikes rates (and crushes financial conditions by tightening, sending deflationary signals surging even higher and undoing 7 years of stock market levitation), and damned if it launches QE4 (as it loses all verbal jawboning credibility it worked so hard to establish in the past year )
Talk is cheap. Unexpected china, unexpected greece, unexpected weather... qe4eva.
Sunday Night works better...not like that would help us all either.
It will make it worse, since it demonstrates that the fed is out of bullets. They need to do some really new, something like real helicopter money for the rich.
The QEs were already helicopter money for the rich, meaning Wall Street. What we need now is helicopter money for Main Street.
I give it maybe 6 months. We're seeing signs of it coming. Student loan forgiveness comes to mind. I bet we see tax code overhauls to make credit card interest (and maybe, payments) tax deductible. How about everyone with a mortgage gets a one-time $400K write-off? These kinds of things are easy, the middle-class will love it, and it's all non-inflationary QE for Main Street.
Except the government is going to have problems if its tax revenue drops. I don't see tax breaks in the cards unless they don't really provide any relief, or the government is no longer functioning.
Yeah. Lost revenue is probably the only thing holding them back. The bankster QE thing at least didn't cost any real money. But if they wanted to put the nation on a war footing -- say, a war against debt -- then they would do it and take the loss. I don't know what would be the motivation. No actually I do know what would be motivating and it's deflation. Deflation kills governance and devours nations, so they would uncork the tax codes and flood Main Street with money if they had to, so they could survive. Also I think their corporate masters have a say in this; as the US consumer falls on his sword and the multi-national corporations see their great hope China imploding, they'll go to Washington with a plan to uncork the tax codes for great justice.
But what do any of us know? I do know who is pulling the strings, and they have more skin in this game than I do. I think they will do the needful, and Washington will sit up and bark when told to.
Any war on debt would be kabuki theater, at least so long as the current players calling the shots are in a position to call the shots. The bankers wouldn't tolerate a real war on debt. Everybody wants theirs, and at the end of this, not everybody is going to get it. There isn't enough to go around, and that is a large part of the cause of the madness we're experiencing.
Try and imagine what was going through peoples' minds on the decks of the Titanic, as the ship was sinking and the lifeboats were being lowered. And people began to realize that there were not enough boats.
Of course, on the Titanic you had your own family and loved ones to look after, so that would be calming. And if not, then you would see children and terrified mothers at hand, that would channel one's thoughts into the realms of the infinite where individuals matter for nothing but all life is precious. Get them to the boat. Take my place on the boat. Take my small sliver of an uncertain future and get on the boat. I'll be fine just get on the boat.
It works that way because in such situation we sense the people around us. See their faces, see their terror, compair their life against our own. In the face of a great and present human tragedy to make our peace with God whoever or whatever that might be and please just get on the boat.
But it's not like that when those people are over there, or not like us, or won't appreciate it properly.
The 1% are thinking that way about you and I right now. And the .01% are thinking that way about the 1%. That they are not worthy and wouldn't appreciate the gesture anyway.
This is the sharp, thin edge of the massive wedge of the madness I perceive.
I must be alone in that perception because I see all others counting the lifeboats, and making bets, or buying a seat or several on speculation, and then buying insurance on which lifeboats will sink killing all aboard. And so on.
Maybe I don't get that part because I'm just a stupid animal. I will admit to that, because it is true.
But you people. Some of you anyway. Many of you maybe most of you.
Are mad.
The 1% are thinking that way about you and I right now. And the .01% are thinking that way about the 1%. That they are not worthy and wouldn't appreciate the gesture anyway.
This is the sharp, thin edge of the massive wedge of the madness I perceive.
I agree there is a definite class-structured process in play, and visibly so; this is in large part based on "it can't happen to me, but oh how those below me are going to suffer".
Radically skewing the Tax Code would have done more than bailing out the Blankfeins and Corzines did.
Corporations are people too last I heard. IF Corporations were paying the same tax rates as people do...
Student loan forgiveness isn't helicoptering money to main street, it's giving more to the bankers who otherwise can't recover these debts that would otherwise never get paid.
Think about it. Student loan forgiveness puts money in the hands of people 20-30. Prime consumers, not savers or investors. They go out right away and spend that money on cars, sneakers and iPhones, not financial derivatives.
And that's how you get QE for Main Street.
And while we're on the subject, EBT cards are QE for Main Street. Have you noticed how fast-food chains are taking EBT now? That's right, getting some of that sweet government free money largess.
Except they're aren't paying their loans anyway, so it puts nothing in their hands - just the bankers.
Credit card interest, even interest on new car loans, were tax deductible until the tax code was changed in 1986.
That is what led to the rise of the HELOC.
That worked out so very well.
WHAT THE FUCK ARE THEY GONNA BUY WITH A QE4???
There's no big increase in government spending coming with a GOP congress and a Dem President. Mortgage originations are at historic lows because Housing Bubble 2.0 has made real-estate MORE UNAFFORDABLE than during Bubble 1.0. The FED is in a complete liquidity trap. They have to raise rates if only to appear to be doing anything more than pushing on a string. Unless equities continue to crash and the recession actually starts there's no way to get the government spending going to support another round of QE. And there sure as fuck aren't going to be enough MBS for them to purchase without a return to 2012 RE prices at least.
Well there is still that box of antique nails to be sold, so maybe they can buy that.
Don't really think Boehner and McConnell will stand up to anything.
They'd never do it for principal. But to prevent a revolt of the base before an election year, they'll hold the line. Relatively anyway...
what are they going to buy? is that a trick question?
stocks, bonds, real estate, currency swaps, interest rate derivatives, options, in other words, the usual.
what aren't they going to buy would be a shorter list.
Not that the rule of law means much anymore. But what you're suggesting wasn't viable in 2008 and I doubt is now. Whatever the FED is doing behind the scenes (and in front) that is beyond the official mandate is not enough to make fuck all difference to the deflationary cycle that's coming. Bernanke seemed to believe his own hype and instead of managing a series of dead cat bounce recoveries that would have stretched out the deflation, he kept the foot on the pedal until valuations exceeded the last bubble.
There is nothing the FED can do to stay relevant and project the illusion of control except tighten. Followed by the QE non save AFTER the crash.
"what aren't they going to buy would be a shorter list. "
Yup.
Ben said he'd buy it all.
IF The FED doesn't own controlling shares in Netflix and Tesla yet...
Jezzus, commodities futures are cheap and getting cheaper.
I've got a stack of old comics and nudies for sale. Cash baby cash!
Somebody is gonna be the patsy and it might as well be the Counterfeiters for a change.
what ate they gunna buy??? WW3, thats what......
Death and destruction. There will be plenty to go around after they kill off 6.5 billion folks.
"QE4 should be announced Tuesday before market open."
Doesn't matter. China has folded. The FED cannot unfold China.
GAME OVER.
Just origami.
Just folded paper.
China is as wealthy with tech and infrastructure as it was in March.
So they had a raging hardon for hours longer than the label promised and shoulda called a doctor instead of spending the night downtown.
They'll get over it.
Shit. the Party probably engineered this market rout in China so as to shake out the muppets and buy the lot cheap GS style.
"We have your back." -with an ice pick..
US Treasuries shot up when China puked? Well China is selling those at top dollar now. Who's the fool?
Way too soon
Tadja todja todja todja
If deflation is really the worry (which it is to the CB's) then one thing they'll likely do at some point to make any and all indicators of inflation look good, as in rising, will be to let Gold loose to the upside.
Be long of bonds and gold, kiddies!
Long TP, zombie repellent, and Irish whisky.
Setting The Relic loose is dangerous.
Some things you can't control once loosed.
They haven't had it down in the vault that long just to spring it for a weekend to divert attention.
IF that were the game plan I'd be looking for CDS on the Comex or even DB, optioning miners, or some such play rather than to buy paper or stack.
Panic now ?
Panic later ?
But if I panic now before everybody else panics then I wasn't panicking but was smart and prescient. Unless of course, everybody else doesn't panic, then I panicked and was panicky stoopid. So whether I panic now or later is really important as to how professional and cool I want to look to the rest of the guys, but is dependent upon them panicking or not, because if I panic right along with them then I'm one of the good olde boys and not abnormal. ....
Let's try this out with JoeBillyBob here. JoB, take these tarantulas and put them in your mouth. Yeah, we'll be careful. Don't worry.
No, it's OK. You can trust us.
Consider it like a tarantula put.
Yeah
JoB!
What happened!
You've been set up sucker, Don't worry indeed, as long as your.....well you know.
Need an option for... BOTH !
I panicked awhile ago and am prepared for damn near anything.
Dont panic.
Never let a good now later go to waste.
$5.00 on Biflation for next 36 months @ .05%/month average both lines.
Line 1 = LIfe support items = Inflate
Line 2 = Non life support = Deflate
Obviously, none of the folks they talk to about the "expectations" pay for college or health care, etc.
Pay for them with TVs and Icrap.
I crap, you crap, we all crap, for Icrap!!
Ho Li Fuk
"as it loses all verbal jawboning credibility it worked so hard to establish in the past year"
Bullshit. It should have lost credibility so many times before and didn't. Extend and pretend can easily continue but will fix nothing, of course, just delay the eventual crash as it has done so far.
The Fed has a lot of armor on its credibility because it has control of the legal tender supply. People's paychecks depend on them not understanding that the Fed shouldn't have any credibility.
Agreed. Winston is exactly right. If the only down side (for the Fed) to QE4 is a potential loss of credibility, then the title of the article is correct - QE4 is imminent. The Fed has no credibility. What it has is "investors" looking to follow the heard, not caring where or why.
What does credibility matter when the sheeple can't remember further back than the last commercial and will tout the wonders of the apparel of the emperor because that's what their tele tells them to do, despite their fair emperor standing right in front of them naked as the day they were born?
There is a lot of virtue in delaying the crash. Every one wants the crash delayed including you. And in this case whoever crashes last might crash best, I'm pretty sure the Chinese were betting on it anyway.
I'd rather get it over with. If I survive, it'll be like taking a giant shit after being constipated for a week. An extremely painful process that needs to be done with, and delaying it only makes it worse.
The metaphor is not a good one. Taking a shit is a normal thing.
The Crash will be more like; having a diseased limb removed with a bone saw without anesthesia, by a guy who never cut off a limb before, and who frankly doesn't like you much because you married his ex.
Yeah extremely painful but also potentially lethal, probably crippling too so that even should you survive it you'll be disfigured for the rest of your life.
We need to get our framing down here folks. And I don't think you really want your wife's ex hacking off your limbs.
With just a local nerveblock.The sound of the sawing thru' the bone is a little unnerving
while fully awake.Wasn't the wife ex,so there is that.
Oh hell and you couldn't just let it remain a metaphor could you? Damned people with their "real world" experiences.
The metaphors dilute reality.Reality is what we need to get back to.
Its just flying until you hit the ground at terminal velocity.
Hey Cougar, Have you been watching "A Young Doctor's Notebook"? Just wonderin.
Yeah, but what are the banks going to use for "high quality" collateral if the Fed hoovers it all up? The Fed is going to create a shadow banking crisis if QE4 looks anything like the past QEs.
They literally collateralized the kitchen sink with all the mortgage-backed crap. I've got some old beanie babies and pez dispensers that I'll offer up. Why not?
I've been saying this for months. You can't buy up more treasuries because 1) they aren't being sold 2) there isn't enough supply for the OTC. The 10y rate is near 2% and the Fed isn't buying now! Its dropped 20% since the end of QE3.
The UST will issue something special for the sole purpose of bankrolling Main Street in the face of a depression.
It took me 3 seconds to come up with that, I'm reasonably sure the UST and Fed working together can do better.
Yeah except they would have already done that shit if they could. Because they can't, they haven't.
"They will print until their eyes bleed"
cougar_w (Zero Hedge)
Yeah and that was like what -- four years ago I wrote that particular screed? They aren't done yet not nearly.
Wait maybe I have a copy of that here somewhere, always good for a laugh ...
Hell yeah. Enjoy.
========================
Cougar_w: Thu, 05/24/2012 - 17:18
Hope you didn't put much money on that bet, Dawg. These fuckers are going to print hard enough to wake the dead. They'll print like mo'fos, print like mad men, print like fly pimps. Print until their eyes bleed.
They will print via the swaps, via bank bailouts and mergers, via fixed Treasury yields, via real honest-to-God negative interest rates, via loans to banks on no collateral, via payroll tax reductions, and in the end via actual fiat paper instruments which they might very well drop in bails from actual mutherfucking helicopters.
They will not give two figs what anyone thinks.
Here is why.
Because this is the Goddamned end of it my friend. There is no accounting beyond this point. There will be no history of it. No one to take notes of rates of exchange, or of the graft and violence, nobody to worry about the deficit or the GDP or the national debt of any nation large or small under the blazing Goddamned sun.
End. Of. It. Does anyone bitch about how Rome totally debased their coinage at the end? Hell no. But whoever did it had enough to hand and grabbed some land with a nice vineyard and sat back and waited for the Middle Ages to start 700 years further on.
And that's what a singularity is about. Anything that passes through is striped of all meaning. Nothing we think is important now will remain so beyond the event horizon. Nobody will remember, nobody will write about it, nobody will be held to any standard. Ever for evar.
So yeah, they'll print like the mad crazed terrorists they are. Because they have nothing to lose, and maybe something to gain. Maybe a dollar. Maybe a day. Maybe a slim chance to escape with some of the loot. Whatever the fuck advantage they see in it, for themselves and their elite crap wanking buddies, they will full-on-full-time-fucking do it to advantage.
Watch for it, Dawg. It's totally on this time, on like Donkey Kong. And when the dust is settled in a generation hence it's going to have become another unbelievable episode among the ages of men.
You're wrong. They'll deflate the shit out of everything first, so they can own more power and control. Upward trajectory has less play.
They might do that but so far they have not done so. Oh and by the way, owning everything didn't work out so well for the French aristocracy did it. No I think they learned that lesson, they'll let us keep our trinkets and our homes and cars and shit, they just want us in debt servitude paying interest. Turns out to be a lot easier to manage debt slaves who are bought into the system.
It doesn't matter. Sociopaths don't care about history. They want to be worshipped heroes. And unlike the French aristocracy in the 1700's, in this world, you can hide your wealth.
That sociopaths don't care about history or anything else is why sociopathology as a heritable trait is not adaptive.
They will hide their imaginary wealth, and then they will take it with them to their graves. No one left alive will miss either them or their wealth, nor their twisted thoughts on the subject of the latter.
Fiery the angels fell; deep thunder rolled around their shores; burning with the fires of Orc.
Bullshit. That post was spot on over 3 years ago and still is now.
If they let it deflate, they'll find that debt means a lot less than it used to. They can't let it deflate. It almost deflated in 2008, and look at what that brought us. This is a ponzi scheme. It must continue to grow, or banks lose their assets: Debt slaves.
The Ponzi nature of this problem is impossible for them to either ignore, or fix. They need fresh (and ever increasing) input for the scheme to continue. But there is none. It is simply the end of all that.
You know what though. I don't think the geniuses get it!
I'm a stupid animal and even I can see it, clear as day. Those guys are done. It's over. It's not even interesting anymore, it's just over. 1,000 years of building up their mighty sand castle to the heavens and beyond the heavens -- and the first wave that comes in takes it out in seconds. If I wasn't such a serious type I could just laugh my ass off.
I'm with you on that laughing part. There are some drastic and serious changes to society that must be made, yet they're pushing us in the opposite direction of those changes in a desperate attempt to keep their positions. The end result is that the crash will be worse than it should have been. It will be more painful than it should have been. It will be more chaotic than it should have been.
And I hate them for it.
Panic always!
Panic always!
<"...The Fed - which is damned if it hikes rates (and crushes financial conditions by tightening, sending deflationary signals surging even higher and undoing 7 years of stock market levitation), and damned if it launches QE4 (as it loses all verbal jawboning credibility it worked so hard to establish in the past year ) - is now truly boxed in...">
Couldn't agree more, and I think most everyone can see it now. To even hint at QE4 is to admit total failure and, most importantly, that more QE is worthless except to create another momentary algo-driven pop. Just to not go through with the tiny rate hike will be further evidence the Fed is f***ed. We are so close to the final collapse that nothing can stop it. The markets are now 98% based upon Fed worship and hope.
I will be a lonely voice that says more QE is likely impossible to do. Behind the scenes Janet may have to push back and tell the oligarchs quietly, it just won't work. Mr Market is about to exact punishment for the intervention that should never have happened. The spiral down will be self-reinforcing and very ugly...
If YELLIN! does QEIV she'll have time to resign to spend more time with her fambly, if she sticks to her guns and raises interest rates she'll follow Bernanke to Man of the year status - in the same sense that Hitler was man of the year also.
Black Monday II tomorrow.
For traders no-blow Monday.
Short squeeze Monday then back down again.
The traders will still blow for their blow.
Bull-Trap Monday
I'm already uploading my Peter Schiff Was Right youtube video. Yellen will not announce QE4 this month, but what WILL happen (I think sometime this week) is one of the Federal Reserve members will tweet a hint at needing more QE, and that's all it will take for the markets to continue its Zoloft-prescribed recovery.
yes. Get as much mileage out of jawboning first, especially if you know that QE4 itself will be a fizzle.
Killed a chicken on the Black Monday question. Chicken guts say Monday 09/21/2015.
Now that's being a proper economist right there. Do do that voodoo that you do so well...
Did my dissertation on economic esciveration and prognostication for my PHD from Chicago. Economics is a science dontcha know Vaquero?
so does this mean the USA will be BRINGING BACK THE $10,000 BILL?
Something that will be really cool. QE is so 2009ish.
Then you'd only be allowed to carry one bill through the airport..
They certainly don't want people to be able to move money around without their watchful eye. If you have enough cash to buy more than a stick of gum, you're carrying to much cash.
Just to be safe, the feds will maintain the 10K cash reporting requirement, so you'll have to wear an ankle bracelet at all times.
If the fed blinks (and they will) by announcing more QE it will be clear they are trapped and can only delay the coming crash. This will also be the time to buy the gold miners.
Fuck the miners, go for the gold itself if you're going to go that route.
Deflation is the irresistable force and Bernanke didn't beat it.
When is Dancing With the Stars on?
http://www.cnbc.com/2015/08/21/turmoil-watch-cnbc-special-report.html?tr...
a nice little lead-in till the china markets begin the death march...location,location,location.
1 Million for each fucking person in the US...no matter what....
Mark of the Beast on your arm to show you got the dough.
Crisis solved...for a week