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Here Is The Complete Scenario In Which The Fed Hikes Rates, Starts A Recession, And Launches QE4
Seven years after the Fed unleashed ZIRP and QE to "fix the economy", it has finally admitted that ZIRP and QE failed to do that (although they certainly succeeded in blowing the biggest asset bubble ever), and for the past 6 months the Fed has engaged in what may be the most ridiculous case of revisionist history, as the narrative has been flipped on its head, and now the all too wise career economists of the Fed (with the help of a few good ex-Goldman bankers) are pitching the first rate hike in nearly a decade as the solution to all the economy's problems.
For now the equity market has played along with this grotesque flip-flop in monetary policy, first by rising two months ago on terrible job numbers which made the December rate hike less realistic, and then rising some more in the aftermath of the October "hawkish" Fed announcement and minutes, which in no uncertain terms warned a December rate hike is coming after all, poor economic data be damned.
To be sure, while stocks as usual remain stuck in their imaginary ivory tower where good news is great, and bad news is even greater, other assets have been far less enthusiastic. In fact, as we have shown repeatedly, the dramatic flattening of the yield curve (via the 2s30s) is now screaming policy error.
Yet if bonds foresee a major monetary policy "error" why do stocks remain oblivious? One attempt at an answer was provided by Goldman late last week when the firm suggested that the natural rate of the economy (to which the Fed will hike rates before re-easing) has declined and will remain lower for longer: in other words, the Fed's experiment has weakened the economy so much, its potential growth rate has been cut in half in the past decade.
To Goldman this was, as can be expected, bullish for stocks and bearish for bonds (ironically even as another part of Goldman is saying that the "Bernanke put" is now gone and has been replaced with the "Yellen call", which is why Goldman's 2016 year end target is an unchanged market).
Another, far more credible interpretation, comes from Deutsche Bank's Dominic Konstam.
According to the DB strategist, what the Fed is likely ignoring is that after decades of bubbles, the monetary excess aftermath of the great financial crisis has still not cleared, and that not only is the equilibrium real rate "lower for longer", it is in fact negative.
What this means is that the Fed, in its reflexive attempt to boost confidence in the economy - and the logic goes as follows: "look, we are raising rates, and we wouldn't be raising rates unless we thought the economy could handle it" (just please ignore the whole "subprime is contained" thing) - is not only engaging in massive policy error, but is about to unleash a recession which will promptly force it to cut rates again (to negative) and start another episode of QE.
Here is Deutsche, first laying out what the Fed economists think:
The real case for policy error - equilibrium short real rates may be below zero
There are two interpretations of the macroeconomic data that have vastly different implications for the effect of imminent rate hikes. The first is the “conventional” view, which the Fed subscribes to. This view posits that the short-term real equilibrium rate is around zero. Since the nominal Funds rate is at the zero lower bound, policy is accommodative, and this is why the labor market has improved rapidly. Inflation has not picked up because it as a lagging indicator. However, some form of a Phillips Curve relationship does exist, and so inflation will eventually reach the Fed’s 2 percent target. As per this view, if inflation rises and nominal growth also rises then the equilibrium nominal rate will rise. Even if the equilibrium real rate does not change, the Fed might at least be able to get to the market’s view of the terminal rate – slightly below 2 ½ percent – without inflicting serious damage on the economy. If the equilibrium real rate does rise, all the better – the markets would move to the Fed’s dots, and the terminal rate would be around the Fed’s target of 3 ½ percent.
How to determine if the equilibrium rate is negative? Just look at the debt, stupid:
The alternative view is more worrying. In this view, the equilibrium nominal rate is at present much lower than the Fed thinks and the equilibrium real rate is meaningfully negative. Policy at present is not very accommodative, and to the extent that it is, inflation is actually running above its equilibrium level, which is close to 1 percent. One might argue for low “implied” equilibrium short rates via debt ratios. For example, if nominal growth is 3 percent and the debt GDP ratio is 300 percent, the implied equilibrium nominal rates is around 1 percent. This is because at 1% rates, 100% of GDP growth is necessary to service interest costs.
Which goes back to our fundamental thesis from day 1: there is simply too much debt, and while unconventional policy merely increases the debt, the interest rate shock from a rate hike will crash the economy: hence, the Fed is trapped.
In this case, real growth would slow in response to rate hikes because productivity would stay weak at full employment and companies would be profit/price constrained around paying higher wages. Moreover, nominal growth would then slow even more than real growth does because inflation would fall to 1 percent or below.
But... a 25 bps rate hike is tiny: surely the economy can handle it? Actually, if the equilibrium rate is negative, it can't.
This is the important policy error scenario because even a very shallow path of rate hikes might drive the real Funds rate well above the short-term equilibrium real rate, further depressing demand. It is then plausible that the economy would be driven into recession, and the Fed would quickly be forced to abort the hiking cycle. As an aside, such a policy error could reinforce itself by causing structural damage that puts additional downward pressure on the equilibrium real rate. In this case the yield curve would flatten meaningfully, at least until the Fed actually reversed course by cutting rates.
Finally, this is critical because just like Japan in 2000, and all other central banks during the New Normal, who raised rates only to lower them immediately after, the Fed is about to unleash not only a policy mistake, but to do precisely the one thing that will force it to not only cut rates, perhaps to negative, while doing even more QE.
This scenario is also bullish for rates because the Fed would, at the very least, stop rolling down its SOMA portfolio. More likely it would restart asset purchases in an attempt to stimulate the economy once more, pushing yields further down. We have argued in the past that unconventional forms of monetary accommodation are here to stay. The minutes of the October meeting confirm this view, noting that some policymakers felt it would be “prudent to have additional policy tools” because a lower long-run equilibrium real rate makes it more likely that reductions in the Funds rate alone would not be sufficient to stimulate the economy in the event of a downturn in the future.
Whether this error will crush what little credibility the Fed has and be its final error, either policy or communication, will be revealed in the very near future.
Good luck Janet.
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The Hobbit won't raise in December and the whole kabuki dance with the media will start all over.
Think about how many times they were going to raise and didn't. And if the Hobbit does raise...watch out below...
Here' Ben "the Ber-nank" on the topic:
"At least one guest left a New York restaurant with the impression Bernanke, 60, does not expect the federal funds rate, the Fed's main benchmark interest rate, to rise back to its long-term average of around 4 percent in Bernanke's lifetime. "Shocking when he said this," the guest scribbled in his notes. "Is that really true?" he scribbled at another point, according to the notes reviewed by Reuters."
Oh yeah and here is the maestro...
"Gold Is Currency; No Fiat Currency, Including the Dollar, Can Match It"Keep Stackin'...it won't end well either way.
OBC.......Operation Batshit Crazy.
Okay folks, I'm totally confused.
I'm fairly new to all this stuff and I keep reading about Greenspan and Bernanke making some sort of putt. The thing is, I don't see what golf has to do with any of this. Who fucking cares if they made the best putt ever!??!?! This obsession with sports is weird.
Is there a video or something that someone could provide a link?
Golfing is important, because that's where Obama spends most of his time. Get it? Especially when on the "Green"span, who's putting was bad, but not as bad as Bernake's. Yellen doesn't play as much golf (too short and squat), so she vacillates between putting and calling (whatever the bankers - who own the golf course - tell her to call). Does that make it clearer?
"The Hobbit won't raise in December and the whole kabuki dance with the media will start all over."
I agree, believing we will have neg rates long before they go up.
Except in one scenario,
That being, that these pucks are more viscous then suspected and raise the rates to purposefully create a crash,
that would immediately result in Neg rates, to "save the economy", and destroy the savings of millions.
Thus, a cashless system is born and the NWO Beast becomes the world's mother.
This is merely to destroy the European people and their will to survive.
The Cancer of Human History
"The truth is that Mozart, Pascal, Boolean Algebra, Shakespeare, parliamentary government, baroque churches, Newton, the emancipation of women, Kant, Marx, and Ballanchine ballets don't redeem what this particular civilization has wrought upon the world. The white race is the cancer of human history."
Jewish author Susan Sontag, Partisan Review, Winter 1967, p. 57.
--Irmin
Cultural Genocide
"Something is happening: we are becoming the first universal nation in
history ... If you believe, as the author does, that the American drama is being played out toward a purpose, then the non-Europeanization of America is heartening news of an almost transcendental quality."
Jewish neo-conservative Ben Wattenberg, The Good News Is The Bad News Is Wrong (New York: Simon & Schuster, 1984), p. 84.
--Irmin
Given that neo-Nazi's such as yourself continue to manifest as a virulent and chronic human disease in this world, one should not be surprised that the most radical elements of Jewish society will begin to adopt parts of the rhetoric of your vile ideology, and in response make it their own.
All opposing forces begin to resemble each other over time. But either way one looks at it, the root cause of that cycle of hatred lies squarely with individuals like you. What pains me most about the whole sordid affair is that innocent bystanders in the form of the Palestinians are made to suffer.
"This is merely to destroy the European people and their will to survive."
i don't often find myself agreeing with nidstyles but that seems pretty convincing. i'm barely hanging on myself (cue v.f.)
why are the palestinians less fashionable than the south african blacks?
not everyone gets a nelson mandela.
The Fed will repeat the Bank of England capitulation of the 1930’s if they do QE IV. In the 1930’s the parasites could move to the USA. Today they would have to move to China.
Paul Volker could get a conference call.
Probably best to getchur long bonds and gold while the bonds still have a positive interest rate and gold is still purchasable pre-panic time.
Just sayin'
Just make sure it's not callable.
Probably should have mentioned that caveat Mr. Bond trader.
Janet might be another dove. But you can't blame her for being trapped in a box. Raising interest rates will bring on a deflationary hell. And keeping them at zero means an endless Japanese-style recession. All she can do is pray that she gets hit by a truck.
LOL! @ me being a Neo-NAZI!!! OH THE HORROR!!!
I'm not even a National-Socialist, but I must be a Neo-NAZI!!! AN EVIL NAO-NAZI!!! MUAHAHAHAHA!!!
If you gaze beyond your back yard every now and then, you'll find that this sentiment has grown almost universal since the Great Financial Crisis:
https://medium.com/@koertdebeuf/tribalization-d6446b5301ed#.itavog68q
Europe isn't dying. It's in the process of undergoing radical changes (again), with the outcome of that change being uncertain at this juncture. It's not the first time this continent has went through such an epsiode. It won't be the last, either.
Personally, I welcome it. Change is how adaptation happens.
Yeah. I welcome it over in Europe also.
This is how Muslim people handle fags...They hang them by the neck until they are dead.
Here is a photo of them executing a Fourteen Year old...with the Noose.
http://www.newnownext.com/14-year-old-reportedly-hanged-for-being-gay-at...
Enjoy your new Muslim friends Eirik.
And let me know how that Sharia Law works out for you.
Women are chattel, not allowed to do shit, including going out in public w/o a male supervisor. Must cover up. If raped, they get stoned to death.
Very very tolerant bunch.
Fuck the muzzies
I think that's only in SA. The fact that we've killed 4 million muslims (mosly civilians) since the fabricated war on terror began and our govn't support to that regime doesn't help.
Never saw a photo of Hemmingway without a beard before...
Eirik Magnus Larssen said: "Personally, I welcome it. Change is how adaptation happens."
Woo, hoo!!! Shira law here we come. Homosexuals launched off the tops of 10 story buildings until the splat on the concrete. Women not allowed drive or vote. Women covered except for their eyes. Raped women put to death for having sex with someone other than their husband.
Change is good, huh? Change and adapt - or be killed.
Voting for what? What is this ongoing fascination with voting? It obviously does not do a damned thing. Voting is pointing your gun, by proxy.
You kiss the niggers and I'll kiss the Jews, and together we'll stay in the White House as long as we choose.
... and that would make them self-loathing Khazars?
No, clearly the Fed wouldn't raise rates becuase that would be an obvious policy error. And the Fed has no history of making policy errors.
All of you who are so certain there will be no rate increase should at least look at their track record. I don't get this widespread belief that the Fed is fully awake and aware of their surroundings. Up until the last handfull of years they were the people you could DEPEND ON to do the wrong thing at the wrong time and effectively end up being pro-cyclical instead of counter-cyclical.
Suddenly NOW they're going to realize they missed their window, grit their teeth, swallow their pride and do the right thing for today's circumstances?
That anyone could be so unshakably confident in that belief is a testament that we should all take greater risks in life. I accept that I may be wrong. You should at least consider that I might be right before slamming the down-arrow buton.
The hike will be announced tomorrow. The question is whether they send out the helicopters at the same time. Maybe. They are desperate
Sorry Fred, but I'm with NoDebt on this one here. I say that the Fed CANNOT raise rates. Doing so will signal the end of the game. Once you let the cat out of the bag the jig is up and there is no way to contain the damage of runaway inflation. They certainly will go negative interest rates and Cypriot bail-ins before they raise rates. I seriously do not see them doing anything right up until the time when Congress or a new president orders a public audit of the Fed or the country's gold reserves. Then they will be forced to act and it will signal the death of the US$. Everything up until then will be Kabuki and unicorn farts.
If they raise rates and concurrently offset the effects by initiating QE stimulus then they save face and the Kabuki Theater can be extended for a little while longer.
(Of course the FED's Balance Sheet will explode....as the National Debt concurrently soars, while the FED buys up the Lower Yielding Treasuries to stifle the likely Bond Market collapse as a result of the Higher Rates...)
The muppets will look at them like geniuses as we continue our path down stagflation lane.
But the cat is already out of the bag and there is no way out....no possible solution
You'd have to be asleep to believe anything that they say.
Now you, I, and many in this community know better.
Most of our motley crew over here on ZH know it is a lie.
There are many others who haven't yet stumbled onto this website...that knows that we are fucked.
Of course we are just speculating as we do not know what happens yet.
But be assured and go long K-Y Jelly as we are going to take it up the arse...once again.
Something is comming tomorrow. I could see either a quarter OR easing something is on behind the scenes. Either the bond market has em scared, commodities or terrorism. Two out of three are cuts.....
The problem is that you people still think they have been working for you or the betterment of the nation. Not sure why you guys keep giving them a free pass after how many presidents have turned out to be stooges, and how much money the Fed has been giving aware without recourse..
It's like you guys just can't seem to get it through your heads. These people don't care about you. You are a slave to them. This is all intentional...
Almost a snikker from me.
Keep up the good work.ald
The American SITREP by Auslander Sevastopol,Crimea RFr, the author of a book about the Russian Spetsnaz
It has been two seeks since I returned to our bucolic little valley. In that time the war in Syria has dramatically increased in tempo, the war in Novorossiya is slowly increasing in violence, the war in Yemen is just as brutal and violent as when I left on my journey, Africa is Africa, war there will never end. European Union is reaping what they have so diligently sown for the last 4 decades and economically EU is in the toilet and someone is reaching for the chain.
http://thesaker.is/usa-sitrep-november-21-by-auslander/
The gentleman from Sevastopol, Auslander, recently returned from a short stay in Florida. His excellent reportage shows the current mood very well in the United States. I understand that he is temporarily replacing The Saker, who is now in Europe due to a death in his family.
http://www.pornhub.com/view_video.php?viewkey=879808122
JASMINE DE LEON FUCKS A GOLF CLUB...not exactly explanatory, but quite analagous to the current situation.
Perhaps they will increase rates at the emergency meeting tomorrow to get it out of the way before the incoming economic data gets even worse?
If the FED does unleash a "controlled" recession only to justify more QE, my question is what will they buy??? One of the reasons QE infinity was cancelled is because there was little debt left for the FED to monetize. Mortgage origination were and still are at decade lows and the deficit had actually decreased.
I can think of two targets for FED monetization. The first would be mortgages post Housing Bubble 2.0. Assuming housing gives up all the gains since 2011 affordability would un-sieze the market right when the FED would be monetizing mortgage debt and .gov would likely be reinstating tax credits.
The second spending binge could be to fund some form of single payer health care. As Obama care implodes on schedule, Medicare for all seems the next logical step. That's gonna carry a big bill.
I'm not making a value judgement, but if they are going to do more QE monetiIng single payer and mortgages post Housing Bust at least means that some of that Ctrl-P cash will make it to main street this time. Lower housing costs and a break from soaring health care premiums vis-a-vis inflated rents and $1000 a month health insurance bills will be welcomed by many.
The can will be kicked.
I'm still thinking CTRL-P helicopter drop on the sheeple but instead of cash it will be stawks.
Also the bad student loan paper will get CTRL-P'ed at par.
If everything is over-priced the Fed will ultimately be the only buyer of everything. Ask the BOJ.
Wall Street pin-stripers have sought constant growth for a long time and they got it; but in doing so it created all this "slack". Everything got overpriced through fraud and the best examples of that are MBS, student debt backed securities, auto loan securities. All of those things went up crazy in price for no damn valid reason.
I overuse my little theory that Wall Street's most lucrative "innovation" has been this: How does one steal money from people that don't have any?
Answer: just give it to them...steal it back later...then blame them.
That's why I think QE helicopter drop won't be cash, but various certificates of fraudulently valued debt money securities. That way the black hats can offload the debt on the sheeple and skim on it "again" while claiming to help JSP that missed out on the "wealth effect".
The perpetrators of this scheme just pay themselves when all is said and done by CTRL-P and they know this going in.
LOL!
I like your theory. Wanna bet on if there is some sort of "vesting" or other special requirement involved?
The Fed will be the buyer of last resort for ALL things. Student loans, CC debt, auto debt...
If Wall St. can package it, the Fed will buy it.
One thing though, the idea that this cash will hit Main St. in any significant way is a non-starter, as the destruction wrought by monetary policy will always outweigh any side-effect benefits some individuals will receive. Besides, the parasites on Wall St. will make sure and capture most of that flow.
First, the idea that the FED would raise rates in order to lower them is assinine to begin with. If the economy sucks here at 0%, then crashes at say .5%, what the fuck do they think will happen when they lower them back to 0% after crashing the economy? They think that all of a sudden the consumer is going to recognize that 0% is fucking swell and everyone goes out and starts buying shit again? Why aren't they doing that now if that is the solution? The problem is that people are out of money to spend and either can't or don't want to borrow anymore.
If the FED or .gov starts buying mortgages, I don't think that takes the payment obligation away from the homeowner. So, unless they do that, they don't do anything for the economy, just the banks (as usual).
Same goes for Obamacare, I don't see how they could implement a change to the system that all of a sudden results in insurance companies not being paid by the recipients of the health care.
In other words, we are too close to the implosion and unless the FED gets money into the pockets of the population ASAP, it's lights out for the economy (which will happen regardless since doing the above will eventually render the currency useless).
Ask yourself is the Fed out for bankers or people ?
Easing will continue the destruction of capital, and further depressing productive income, but will keep bankers happy.
Rate hike will not help bankers, although it may be priced in, also puts the .gov in a bind and gets them on the Feds ass.
I would bet on more easing at the Wall Street level.
The recession is coming either way. It's about the perception and narrative they want in place when it does come. The groundwork they're laying for a "policy mistake" is surely to justify whatever actions they want to take after the recession/elections. The economy id going to tank because of the FED's Monetary Meth policies, not because they're about to raise. But by blaming it on the raise they'll get all the justification they need for the next round of QE. Now you are correct in saying that people need money to spend and incentive to borrow. Once again that's where the recession comes in. 2016/2017 is going to be the next BTFD opportunity. Once asset prices, especially RE correct they can get the muppets back into the game and QE the next round of debt generation.
If the FED or .gov starts buying mortgages, I don't think that takes the payment obligation away from the homeowner.
No it doesn't. That's why I said they'll do it POST Housing Bust 2.0 as a way to keep mortgage rates at rock bottom and increase the pool of buyers, just like they did last time. The crash is coming either way, the idea is to put a floor under the drop like Congress/The FED did with the home buyer credits in 2008. Legislation and monetization working hand in hand.
Same goes for Obamacare, I don't see how they could implement a change to the system that all of a sudden results in insurance companies not being paid by the recipients of the health care.
You obviously didn't read my post very carefully. Obamacare is about to render the insurance companies irrelevant. Witness United Health Care's withdrawal. This implosion of the (admittedly rotten) private insurance system was by design. Once there are not enough insurers to support those in need of insurance, Medicare for all is the inevitable solution.
With all due respect to your reasoning the "recession" is actually a concealed depression. It already arrived, has not yet left us, and therefore cannot be "coming" as you asserted in your comment. For the record I believe that this depression is not yet of the "Great" variety, but that status may be what is coming.
No Shit Sherlock...
The conversation was regarding the narrative and how it will be twisted to suit whatever policy the FED desires.
If you wanna talk reality and not FED speak we've been in a Great Recession for working class people for over 15 years.
You took the words out of my mouth. There's ho recession on the way because we've been and still are in a depression. The bread lines of the 30's have been replaced by EBT cards. Shadowstats still has unemployment, at best, around 10%, and possibly as high as 20% depending on the methodology used. Of those employed, more and more are less than 32 hour workers (to get around the need to provide OCare) and/or are minimum wage. Food stamps continue at or near record levels.
We're in a depression and due to both ridiculously bad fiscal and monetary policy choices over the last 40 years (from the Great Society on), we have absolutely no ammunition against this depression except policies that will ultimately make it worse.
Yes, Bay Area Guy, you have said it better than I did.
PS. I have interpreted John Williams' chart as pegging current unemployment as high as 23%--as of this post. 2% more makes this depression Great.
The only thing keeping employment numbers up are Temp Agencies and low wage jobs.
I've been in the printing business for over 30 years. It's never been so bad. Medium and small shops are dying off and the big guys snapping up the leftover work haven't given raises in over 10 years.
At the shop I work for, those of us who have been with the company for 15 years or more took a %7.5 pay cut in 2006, our last raise was in 2004. We watched as over 200 of our fellow employees were laid off between 2004 and 2008.
Since then we only hire temps and we work them like dogs. We put them in positions they have not been trained for, they're not skilled workers and those of us who know what we're doing spend most of our time fixing their mistakes.
Two of these Temps in my department have not had a day off in 4 weeks. I am not exaggerating! They get no benefits, other then 7 payed holidays, and work the hours because they're desperate for the money.
When our bosses ask the long time hourly employees to work overtime we refuse! We're fed up and they know it. They rarely ask anymore. We work the 40 hours to keep the 32 payed days off we earned after 15 years employment and that incentive to stay is quickly evaporating.... They can't fire us because there are no skilled workers available to replace us and we can't leave because we're not willing to be the next temp at the shop down the road.
So we, like John Galt, are just going through the motions biding our time waiting on the next shoe to drop, hoping to be laid off, with a weeks pay for each year we've worked, like the hundreds who went before us.....
Sorry Nihilistic, but you are wrong. The terminology of "Great Recession" is popular for weak minds because, "well, it's still just a recession."
You buy into the popular terminology and you feed into the delusion. Don't do that. Re-think your "narrative" analysis. Your thinking is well-intended, but you have stepped off the beam. Get back on it. Get in touch with where we really are. Drop the damnable "Great Recession" terminology. Face reality; we are in a depression, and have been since 2008.
And before you go all ballistic on me let me introduce you to the heretofore historical concept of "double dip". Look it up, bubba. You are an intelligent guy--I get that.
This is a classic case of the Fed knowing what it wants to do (print moar) therefore they are seeking out the proper narrative that enables them to do what they want to do.
The key is to create a situation where "We the People" beg them to destroy 'our' own currency.
That seems to be the Oligarchy's modus operandi in so many areas.
1. Create problem 2. Get the masses clamoring for a 'solution.' 3. Implement solution that further enslaves the masses. 4. Repeat process spaced over enough time as to not create civil unrest.
While the ISIS boogie man waits in the wings. Imagine a false flag in the "Homeland" that gives the populace somebody to blame and hate, leaving the FED to unleash a veritable nuke campaign of patriotic QE "so the terrorists don't win." The Fed heroically attempts to save our economy while the sheeple, goobermint and media focus upon the Moooslim Menace in our midst.
The sheeple would regard their decreased living standards as a badge of courage. U-S-A!
We've always been at war with . . . uhhhh . . .
Lord Acton
Interesting, btw, that this quote has been swept from Lord Acton's wiki page in the recent past.
I agree with your scenario except the part about the "...focus upon the muslim menace in our midst."
They would use said menace once again as an excuse to turn the screws on all of us, which appears to be a primary objective.
Sure, people At War must expect to make sacrifices of all kinds--celebrate them, even. Woe to he or she who objects in that scenario. The sheeple will be like North Koreans on the Great Leader's birthday with their precious sacrifices.
And yet the Muslim menace exists. I find it interesting that so many want to break this down to a single enemy. Yes, there are those who are seeding discontent and war for various purposes, power always being the primary end, BUT, it still does not dismiss the real and potentially imminent threat that they have created. Yes, it is good and proper to focus on the ultimate cause, but it is foolishness to use that as an excuse to ignore what is in our face.
What really sucks for all of us is that we have a multi-front attack on our hands, physical, financial and political.
Honestly, are the masses clamoring, or is it the media?? The PTB had the Patriot Act ready to go almost instantly after 911. The Hart-Rudman Commission, 99-2000 had worked out every detail of the ""plan""to fight ""terrorism"" fromc creating DHS to turning National Guard into an enhanced federal tool for doing their dirty jobs overseas...Africom was planned in the 90s, 911 provided an excuse to expand USSA banking empire, asset grab all in the name of ""war on terror""...I do not think anyone is clamoring for a federal leviathan fix...its simply shoved down our throats, prepackaged, designed, mostly in secret....like TARP.....congress caved, the people had no desire to save the vampire bankers. We live in an occupied country, run by plutocrats and oligarchs, and they do not give a damn what we want or believe. Short of an asteroud hit on DC and NYC Wall Street ..,we, the sheeple just hunker down and live our sheeple lives...at least many do, others are locked, loaded, waiting
"But we had to do something!" -- Every tool in DC, ever (sans Ron Paul, et al.)
The assholes representing "We the People" destroyed OUR OWN currency in 1913
Cog, I'm begging them to destroy FRNs. But then again, I think they're evil.
The great con continues.
All Tarp, QE, and Zirp were intended to do was to financially restore all of the insolvent and bankrupt member banks. That is all this was ever about. Any talk of dual mandates, unemployment, the economy....that's what they tell the dumb fuck muppets.
The FED continues to repair member banks' balance sheets. The rest is just bullshit in extremis.
The Hobbit raises on Monday. That's what the unscheduled FOMC meeting is about. They will announce the rate hike for a specified time in the near future then use every tool they have to jack the market up. Expect jawboning, and massive PPT interventions. They figure if the market doesn't tank on the announcement they can change expectations and maybe, just maybe pull a rabbit out of the hat. Maybe they will add a recommendation for a helicopter drop as well. They don't have many options left.
Dup
#1.) They will keep interest rates exactly where they are at until the dollar weakens to say 73 or lower.
#2.) They all allready do QE4. They're called currency swaps. Duh.
The driver of the Fed is the facade of the Treasury selling bonds. Forget what they call it, QE or ?? and forget rates, those are facde also, however real they may seem to the market.
The flow of $ through the government is the real driver here. Everything else is facade. The Fed has to make that $ flow, and delay as long as possible, the time when it buys all of Treasury's bonds.
The facade of people buying bonds as though they will be paid back will soon end. The government's requirement for $ wlll not. What then? is the only question that counts. It is nice to have the stock market doing well, but if they have to make a choice, $ through the gov is bottom line, of course. Bankers get thrown under the bus at that point.
https://thinkpatriot.wordpress.com/2015/07/28/lebowski-enlightenment-3/
https://thinkpatriot.wordpress.com/2015/10/27/ignoring-the-absolutely-in...
https://thinkpatriot.wordpress.com/2015/10/24/lebowski-enlightenment-9/
Hobbit? Look at her hair, she is clearly a Romulan spy!
http://beforeitsnews.com/banksters/2015/11/us-fed-emergency-meeting-mond...
Her expression does not strike me as confused, but tortured.
You feel his pain - good.
Empathy. An increasingly rare commodity in our times.
There is an abundance of pompous jack asses. So, there is that.
I don't feel empathy for cold blooded lizards like Yellen.
Look at the vaccousness in the eyes. They are hollowed out as if she were a zombie.
There is no life there.
The photo is absolutely REPULSIVE and deservedly so. It demonstrates the monster that she has transformed into.
Can you believe that at one time that she was somebdy's daughter? However she has turned into a Darth Vader of sorts, more machine than human.
She is a walking Ivory League calculator, the numbers inside do not represent anythng real. She has not the capacitity to feel any pain that she has wrought upon the prople that she represses financially.
It is difficult to be empathic toward those who have none. I haven't any clue what it is like to walk in a psychopath's shoes.
But Erik does. That is why he easily can express his empty and pretentious empathy upon such a vicious criminal.
Yellen needs to be put down as one would do with a rabid dog.
Moar empathy for psychopaths!??
And Rattlesnakes too...
And terrorists...
And child molesters...
They...they...they just had it so bad and are just...just...just (sniff)...so misunderstood.
You just don't have any feelings.
Nope...trust me on this one. That's a dumbshit look. I've got a weimaraner puppy who gets that exact same look on his face when you tell him he's not supposed to shit in the house. Next time you see Janet out and about, throw a ball in front of her and see if she chases it. Then we'll know for sure.
Fate the Magnificent
"Push the Buton, Max"
her face is one of a well fed elite. no matter the outcome of her moves at the FED, she knows she is alright Jack. She got her's and that's better than a stick in the eye. remorse is for the weak.
Her face says, "I'm one of the untouchables. And, you are?"
+1 yeah it is.
don't worry she swallowed a wasp
Actually, the "look", on "her" face, is one of trying extremely hard, to take a shit, but can't. In my humble opinion.
A rate increase will be like pushing a small domino onto a bigger domino and so forth and fairly quickly cascades in all directions.
The problem being I think is that all strings are connected and there are so many strings that nobody can be sure whats connected to what. The orgamism is complex, an ecosystem, where killing the small creatures destroys all the food chains, to mix metaphors.
A change to even a point 0.0000001% increase in rates is all it will take to bring fear and loathing, as it Indicates a Fed reverse in thinking and that the past is closed.
Here we have an image of the Feds policies and ultimate inevitable outcome.
http://photos4.meetupstatic.com/photos/event/5/1/8/8/600_284780872.jpeg
let's lure everybody to put their savings in a myira which they can give to the current retirees and promise a return in the future when all those Syrian refugees will have good enough jobs and enough savings to confiscate that maybe the current savers will get their money back...
I love it when a plan could maybe probably possibly come together...
myira, syria ... am I in the middle of a nightmare or something?
Syrian refugees will have good enough jobs ...
Haha, what makes you think they came here to work? What skills do they have? What language do they speak? What is their educational background?
Give them a gun, send them home and let them know as long as they are fighting for a stable country, we will give them more bullets. Enough of this enabling cowardice already.
sschu
Steve Jobs was the child of a Syrian immigrant in America. But what are the odds of that happening again, so it's better to keep them all out.
Mathematically, the likelihood of success of this Steve Jobs II plan is infinitely greater than that of the Yellen Put & Putsch plan (or whatever the Halls of Infamy will call it...)
Starts recession? I thought we were still in a depression!
Is a recession during a depression a "repression"? Sure feels like it more and more daily.
Definitely "repression"
a financial repression?
An all out full-court repression.
It's just an expression.
If things are bad for you now, they'll get worse.
If things are good for you now, they'll become bad.
And there's to many people who don't know a good thing from a bad thing anymore. I know people who are getting depressed because they didn't go twice on vacation this year. And all they care about is complaining to everybody over and over again that they didn't go twice on vacation and that their lives are so bad because they didn't go... and all the rest, they don't care. They didn't go twice on vacation... the horror... everybody should feel pitty with them... but yet they have 2 cars, live in a giant house, eat out 4 times a week and spend money like they did when the economy was at it's hay days.
If you want to know what bad looks like, you should travel to south America, Africa and parts of Azia. People who believe we've got it bad now are in for a asskicking and a slap in the face as they are the weak kind of people who simply can't handle bad times. And that's also the problem of our society and culture as there's to many weak and simple minds out there.
EVERYBODY who is complaining now, is weak. And they will be the once who will suffer because they are to dumb to face reality when it will hit them in the face.
And they mostly lack the social circles that will help them if they ever need help because in their entire lives, all they cared about was their own lives who are so hollow that they don't have caracter worth helping.
So to answer your post: We're living in a wonderfull time right now. If things are badings for you now it's because you personally fucked it up. And you'll be going through a shitstorm when things go bad. And all you can blame is yourself. If things are bad now it's because you didn't prepare and where willing to work. Get ready to get the worst of time because you didn't give a fuck to get your shit togehter. You just say things are bad because you expected that every good thing should have happened by itself.
By saying things are bad right now is a very selfish and hollow answer.
What is a "vacation"? Is that a EU term?
It's that short 2 month period every year where you're paid to do what you want to do. Mostly sitting on your ass in the sun and getting pissed ass drunk and post pictures of their ass on facebook telling everybody how happy they're are while they're so depressed because somebody has more money then they do.
No Diferent in the US except Disney World and Disney Land is where sheeples head to to indoctrinate their kids and then get divorced and say it is for the children.
We went to Dollywood instead and are still happily married.
Wise choice, Grasshopper! Err, um Philo!
Dollywood is a jewel among theme parks, situated In an environment that is wholesome and overtly Christian.
In Europe, guys of working age, on permanent welfare, take vacations in Thailand.
I went to Azia, the capital city of Tokizo they were printing up yenz out of thin zir.
It will be bad for everyone, including those who were prudent and prepared as you suggest. Government agencies will 'seize' the major metropolitan areas first, and that is where people like You think it ends. It doesn't. Sub-urban areas come next. Rural areas follow, and that is where they show their fangs. Non-compliance will fairly well equal a death sentence as the luxury of anything resembling due process or fairness will have long been silenced in the name of 'national security'. The only thing You have going is that you ~may~ be able to hold out a bit longer. Remember, you still have to file a tax form every year and you (now) have to show 'proof of (health) insurance'. But it's cool, because guys like me will stand with you, for the simple reason that we would rather die on our feet than live on our knees. And death on our feet it will be, that I can guaran-damn-tee.
"debt does not matter. "dick cheney..he was right and is right very right (lol)..
remember FRN's are printed not created by sweat and labor. but sold to the fed gov with 6% interest. not money but debt..and debt does not matter.
the Central banks of the world are all committing fraud. but history moves on and a world that needs less labor and sweat for most of us, one cannot earn those FRN's so the world is moving to social welfare, the only hard decisions are
what standard of living do we give the useless eaters (non workers are just that is it not so?)(robots and AI are going to take useful jobs at faster and faster rates, internets have already impacted retail stores)
the truly able either gifted by birth or ability see this and are quick to try to get in the boat of the owners and deciders of how much the state provides the useless eaters. Politicians who go along get to know what is no what must come and they do not sound the alarm, they (clinton's and bush's as example fight to get in the boat)
The recession of 1929 was the triggerpoint for the Great Depression....which lasted from 1929-1941.
We had the Rexession of 1937-1938 during that time.
The differences between a Recession and a Depression is that in a Recession there are massive BUSINESS failures. In a Depression there are FINANCIAL INSTITUTION failures.
The USA is in a Kondratieff Winter.
The problem is that Nikolai Kondratiev was Russian and Americans are prohibited from ever acknowleding that Russians might be smarter than them. The founders of Google can be the exception since they only achieved greatness after coming to America.
If we make it to 2020 without combining a a Kondratieff Winter with a nuclear winter everything will be fine
http://www.financialsense.com/sites/default/files/users/u111/images/2015...
http://michaelsnyder.mensnewsdaily.com/2014/05/if-economic-cycle-theoris...
Would a modest hike *not* be coordinated with a few large banks? This is the US Fed, right? What wonders such coordination has done for the price of Au/Ag in the face of trillions in new frns.
Can someone explain why 'forgiving' us sov debt 'owed' to the fed would not be a good idea (for the "economy")?
And when did we leave the recession, really?
Debt forgiveness = less interest paid to the FED and it's owners. Soooo, if the fed and it's owners are under no pressure to do right, then why change course? Keep the debt high and continue to bring it interest on the money printed on behalf of the borrowers. How this ponzi has lasted a 100 years is beyond me.
Why would they ever raise. They have been able to knock Gold down $800 and just by jawboning, yapping , lying and never raising rates. Why would they ever raise them in December (of all months !!!)
They'll never raise, look at all the angst & anxiety over a measly .25% now, they're trapped by their own staggering incompetence & the progressive hubris of an additional EIGHT TRILLION in debt in just seven years.
Man the lifeboats, women & children first...lol.
Should be workers first. In my view the woman and children have on a big part become the sheeple who are being taken care of by the taxpayer. I didnt say all so we should treat all fairly,the women and children first thing is old shovenistic thinking the strong will survive whats comming the sheeple are to be slaughtered in this shit storm that is brewing. So arrow down me if you are so inclined but really think about what I typed there before you do
Why raise in December, because I think it makes perfect sense.
They know that many Americans will not be spending anywhere near as much money as usual this holiday season. If they raise rates now they have their excuse for 'extremely poor' December retail data...
What the Fed does is meaningless to 99% of the public. Monitary policy is trying to push on a string.
The demand side (the string puller) is the consumer or small business CapEx, and it just isn't there.
a) businesses are experiencing sluggish growth and have excess capacity, hence no need for capEx.
b) mega corps are too busy using cheap money to buy back stock and compensate their corporate elite, to invest in any meaningful R&D.
c) the consumers' debt load relative to stagnant or declining wage growth is being exacerbated by hidden inflation (healthcare and food price increases) which has taken the wind out of their sails for .. Oh, I don't know .. maybe the next 30-50 years.
The patient has pneumonia and we are talking about whether or not another 1/4 teaspoon of Robetusin might help his cough.
Consumer debt is the real issue here - and it is a fiat currency issue. We really have two economies in the country right now - the consumer economy and the financial economy. In the consumer sector of the economy, the currency is debt saturated - and once a fiat currency is debt saturated, it is toast. Because so few consumers have collateral, and those with collateral are wary of taking on more debt, the fiat money creation mechanism is broken. Consumer spending is 70% of the economy, so this is a HUGE problem. A rate increase is largely irrelevant to this economy. In the finance economy, the money is free - glass stegall separated depository institutions from investment but with that gone banks can take free fed money and invest in financial assets. Because the entire economy has become financialized, they can basically take the free money and buy up everthing. But there is very little spillover from the financial economy to the consumer economy besides the high asset prices.
By focusing on a 0.25% rate increase the fed is controling and focusing the dialogue on something that is largely irrelevant to 70% of the economy. Our currency is debt saturated. Debt that cannot be paid needs to be defaulted on and written off so the economy can function normally again. But debt through medical costs and rising higher education prices is only making it worse. The outlook is not good until the people take back their currency from the fed, reinstate glass stegall, and make banking a utility again. Unless this happens people will gradually transition out of the broken currency to one that works for them and the dollar will get less and less relevant.
"and make banking a utility again."
Nice, Mr DW Wordsmith.
.... and people wonder why I have 100% of my money in a Credit Union. They have higher capital requirements and do not do any of the derivative crap that big banks do.
Good lord, Jack Yellen is one ugly women!
This group of Ne'er-do-wells make a gordian knot look like a straight ribon of highway.
The rate will not be raised, so what happens next.....NIRP!
A schifosa indeed.
pronounced: skifooza.
What the hell - this website is buggy.
http://iamsully.com/?p=15174
She's the Queen.
http://iamsully.com/?p=15174
Fuck you Yellen and Bernanke. Rates need to normalize. Maybe 2% or 3%
3%.....on how many trillions"
Yes.
But but but...please, no awz-stair-ity! Give us moar!!!
It's fucking sickening.
6 or 7 would be close to historical norms
Historical norms
Yeah....like the last time we owed 18 trillion.
THE AMERICAN PEOPLE AND ZH NEED TO EDUCATE THEMSELVES ABOUT THE TRUE AMOUNT OF THE FED GOV DEBT.
IT IS $100+ TRILLION FIAT DOLLARS.
WWW.USDEBTCLOCK.ORG
LOOK AT THE UNFUNDED LIABILITIES AT THE ABOVE LINK.
THE COUNTRY IS ALREADY BANKRUPT!!!!!!!!!!!!!
What would be best for Goldman?
For that is what the fedbots will do.
One hint may be here:
http://www.cnbc.com/2015/11/18/apple-shares-to-rise-43-percent-convictio...
Tyler, please start using WB7's bearded photo or masterpiece Ol' Yellen likeness for these posts about the (not really) Federal (with no) Reserves.
Recession ?
Bubbles Pop leading to Deflation and then Hyper-Inflation
trav7777
''The solution is to ABANDON the debt model and repudiate the claim tickets of shylocks like Mort. Look, what Rothschild figured out is that if he could start a money-as-debt racket, the math would inevitably bankrupt the sovereign and then he could own the whole fucking country. That is the POINT of usury! For fuck's sake, recognize that.
The whole POINT of tribe carpetbaggers in the south was to lend to blacks for the PURPOSE of acquiring their entire years' worth of sharecrop! It's a way to make your MONEY work so that you do not have to. And the con is so insidious that you can make PRETEND money turn into real things WITHOUT work. It is the way of the PARASITE.
Only the very intelligent understand the mathematical inevitability of usury. The stupid simply see the rich getting richer without working while the poor work harder and harder and go backwards. Institutional Usury lets money "make" money without work and it INEVITABLY bankrupts the poor and stupid...this is why it and its purveyors have been reviled as con artists throughout history.
Usury mathematically leads to bankruptcy and liquidation. Once the machine of geometric compounding is set into motion, there is a very short window to get out, after which it CANNOT be stopped and will proceed to its final, foredestined outcome.''
http://www.zerohedge.com/article/zuckerman-loses-it-releases-most-scathi...
I got all of what you said...except trav7777.
Are you hinting at something?
usurious, +1000. Good post.
So I guess the nation in general is screwed by usury, whenever they allow it to exist. But ending that would kill my rock & roll lifestyle, funded by the 0.00023% I'm raking in from my fat stacks...
that face look extremely porcine, doesn't it? DNA test please
Check yourself for micro-aggression, specist. That would be cruelty to animal...
This is the FED equivalent .... of Das Boot .... drifting with the tide past Gibraltar .... hoping no one will notice .... clever trick, Captain ?
I can see a 'negative' economy like they describe:
My paycheck did not rise (just like Social Security and many retirees). The interest I get on my savings won't even pay my cable bill. My real estate taxes are rising 6.2%. My healthcare is rising 10.2% (I am lucky - I guess?). Ground beef, eggs, and most of the food I eat is up 10% or more. My local MickeyD's hiked cheeseburgers from a buck to $1.19 (a 19% rise). I do have cheaper gas, but no money to go anywhere. And after years of being told that inflation doesn't include 'food and energy' - why are gasoline prices "included" now?
And as I watch small stores, large stores, and restaurants close down (the factories and manufacturing plants closed down over a decade ago) - I can believe we are in a negative economy. But the Fed making it MOAR negative is not the answer! Maybe someone else (hint - Congress) should try something else to make the real economy stronger so that a ZIRP really IS accommodative?
Do any of you guys ever have trouble logging in? This scenario has happened to me a couple of times. I go to log in. Access denied. After several attempts, I decide that I will just request a new password. When I submit my email address, it tells me that no such address is registered at ZH. So, I finally give up and decide to establish a new account, but guess what? When I type in my email address, it says that it is already in use. Huh??? Anyway, this morning I am able to log in for the first time in a while.
Maybe I was in TIME OUT for bad behavior??
Just relax and try later .... don't chase the dragon .... do you make a recurring donation ?
Just to be clear, I was not locked out for hours, or even days, it was two weeks probably. Kind of weird. Whatever....moving on.
Month after month after month....no the Fed will not raise interest rates.
Stagflation = Stealthflation ?
We're nearing the end of a century long process of allowing a criminal cartel to steal the real money and wealth, and replace it with fake money and wealth. If you can't drop it on your foot or run into it, it ain't wealth and will evaporate when the financial system implodes. The strongest form of wealth is real productive capital equipment and the ability to produce things needed by others.
When the US dollar is finally recognized as being what it is, worthless, there will be no medium of exchange left in the land currently called USA that is sufficient for the economy to continue to function. Supply chains will not survive in a barter economy Shelves and tanks will empty, the coal will stop being delivered to the power plants, that power loss will then cause the loss of the pumps that feed most of the rest of the power generation, and then we will be thrust into a real dark age. All of the misery and the loss of the vast majority of the population will be because of what the parasitic Fed/bankers, their fascist partners and the politicians they own, did to steal the real money and wealth. The massive human suffering will NOT be because of the loss of the criminal class that is central government and its owners. It will instead be caused by what the parasites did to consume society.
The biggest preppers are those criminals, because they know what they have done and what its leading to. That is why continuity of government is such a secret and high priority. They plan to rise from the ashes of this civilization to rule over whatever remains with a grinding tyranny. We must do two things. First recognize the parasitic monsters who call themselves Fed and US government for what they are and not support their return after they destroy their host society. Second is to prepare to be among the survivors of the worst human tragedy in history which they are about to cause.
Finally, here is all anyone really needs to know about central governments everywhere... Life, Liberty and the pursuit of Happiness... To SECURE these rights (not grant or limit them in any way), governments are instituted AMONG men (not over them). The instant that a government goes any further than to "secure these rights", it immediately violates them. It becomes an evil parasite, which, as history has always shown, will then want to grow until it consumes its host society. Government at the most local level, if even that, is all that's needed to "secure these rights" and is all that can exist without ultimately violating "these rights".
Spread this message and prepare to be among those who have the opportunity to prosper as was never possible with the existance of parasitic central governments.
I am thinking that it will be something like the collapse of the Soviet Union. The old will be begging in the streets and the once sucessful middle aged will off themselves. Oligarchs will take over remnants of industry and the rest will live like it was 100 years ago. What else did I miss in the narrative... oh, the police state...
One BIG difference with the collapse of the USSR. They were already used to largely broken supply chains. They had gardens for produce and knew how to fix things. They were used to going without power frequently and could cope without it. In the USSA, few farmers even have a garden. All those folks with survival seed vaults and no garden will starve the first year they try to grow their own food without any experience. When the power goes out for more than a few hours, that alone will collapse the system and chaos will soon follow.
After a month without power, most in the USSA will probably perish. A disproportionate portion of the parasites who call themselves US or state government and their fascist partners will be in their bunkers. When the dust settles, we should still greatly outnumber them. Hopefully, large enough numbers can draw upon the example of the aftermath of the USSR, and the fact that cntral governments are an unnecessary evil, to cause a different outcome. It will be a huge opportunity to prevent the return of parasitic central governments. Otherwise, we could face what you describe, or worse.
Government won't step in with more printing, take-over of vital industry and infrastructure to feed the masses? Why will power plants be down for a month?
Printing more worthless script will be nothing but a waste of paper and ink. It certainly won't repair any supply chains. As for the thieves and murders known as central government taking over anything, when has that ever improved anything? Actually, it seems more likely that the grid will be down for a lot longer than a month, after the likely scavanging of power lines and poles.
Consider this:
If the government gets a rate hike it can help.
Couple this with cheap imports and commodities, infrastructure in the United States can be mended cheaper than it would have been at any time in the last decade.
There is an upside to printing more cash, and it is possible GDP can be bolstered through spending on infrastructure.
The US as a nation can do well, it doesn't have to crash.
$20T in debt. There won't be a penny for discretionary spending once they recalculate the "new and improved" interest payments. That means your infrastructure program. They already are looking at stealing from the FED for the roads. The FED is of course balking on that one. The Progressives have spent us into OZ and there is no way out. They will print $$$ out of thin air until everything collapses. When they are forced to do something with "entitlements" there will be masssive social unrest. Of course others will go first, your EM countries, maybe Japan, maybe Chiner, Europe who knows, there is so much global uncertainty going on that just about any little push anywhere in the "system" is going to toss this "global economy" into a cocked hat. What you won't see happening is the politicos, and the TBTF banks accepting anything to do with blame on this, they will opt for "war" as the ultimate distraction of the masses.
BINGO!!!!!!!!!!!!!!!!!!!!
Except you got the debt number incorrect.
It is closer to 100T of Communist Liberal Progressive Welfare BLM Debt
WWW.USDEBTCLOCK.ORG
As soon as we elect conservatives who don't conserve anything, it will be all better.
FED must go negative to steal even more money from widows, orphans and your retirement savings to help fund the next QE so they can give it all to the criminal banks. Cue up Carlin, The American Dream.
Raise Rates you say???? ROFLMAO, the illegal FED cannot raise rates even 10 basis points without crashing the house of liberal cards....
i wonder, when are American men going to grow a backbone? sigh