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Cashin's Cliff Notes Of Bernanke's Playbook

Tyler Durden's picture




 

Earlier in the week, UBS' Art Cashin noted that some traders were re-reading Bernanke’s speech of November 21, 2002 on countering inflation. Prior re-readings had given clues on things like QE1 and even Operation Twist.

The primary theme of the speech was - what can the Fed do to fight deflation (and stimulate the economy) if the Fed Funds rate fell to zero (aah, those simple golden years). Here’s how Mr. B. set that phase up in 2002:

So what then might the Fed do if its target interest rate, the overnight federal funds rate, fell to zero? One relatively straightforward extension of current procedures would be to try to stimulate spending by lowering rates further out along the Treasury term structure--that is, rates on government bonds of longer maturities.

 

There are at least two ways of bringing down longer-term rates, which are complementary and could be employed separately or in combination. One approach, similar to an action taken in the past couple of years by the Bank of Japan, would be for the Fed to commit to holding the overnight rate at zero for some specified period. Because long-term interest rates represent averages of current and expected future short-term rates, plus a term premium, a commitment to keep short-term rates at zero for some time--if it were credible--would induce a decline in longer-term rates. A more direct method, which I personally prefer, would be for the Fed to begin announcing explicit ceilings for yields on longer-maturity Treasury debt (say, bonds maturing within the next two years). The Fed could enforce these interest-rate ceilings by committing to make unlimited purchases of securities up to two years from maturity at prices consistent with the targeted yields. If this program were successful, not only would yields on medium-term Treasury securities fall, but (because of links operating through expectations of future interest rates) yields on longer-term public and private debt (such as mortgages) would likely fall as well.

So, here we see the precursors of at least two subsequent Fed operations. Remember the pledge to hold rates flat into 2014? And, the other suggests quantitative easing with a slight hint of “Operation Twist”. But, hold it, let’s look at the next paragraph:

Lower rates over the maturity spectrum of public and private securities should strengthen aggregate demand in the usual ways and thus help to end deflation. Of course, if operating in relatively short-dated Treasury debt proved insufficient, the Fed could also attempt to cap yields of Treasury securities at still longer maturities, say three to six years. Yet another option would be for the Fed to use its existing authority to operate in the markets for agency debt (for example, mortgage-backed securities issued by Ginnie Mae, the Government National Mortgage Association).

That’s a real Operation Twist and a hint of mortgage buying.

But these weren’t the only arrows in Bernanke quiver. He talked of pegging rates to a specific rate in longer years, citing Fed success before Fed-Treasury Accord of 1951. He suggested that the Fed might get money to private companies (currently barred) by changing acceptable or qualified collateral from the banks. Mr. B. noted that the Fed might influence the currency, though that is not its normal venue. There is even the possibility that the Fed could widen its tolerance bands for inflation.

Most of the operations, however, tend to be means to make money available or easy. With nearly $2 trillion in excess free reserves that doesn’t seem to be the problem. Inducing spending is the problem. Of all the suggestions, the wider inflation tolerance may be the only one that may do that.

 

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Fri, 06/15/2012 - 09:49 | 2529042 mayhem_korner
mayhem_korner's picture

The Fed could enforce these interest-rate ceilings by committing to make unlimited purchases of securities up to two years from maturity at prices consistent with the targeted yields.

 

I for one don't see any ambiguity here.  Et tu?

Fri, 06/15/2012 - 10:01 | 2529100 vast-dom
vast-dom's picture

total insanity! how are these even called financial markets? they are coordinated ponizi schemes under the guise of legalized theivery and corrupt commisions. 

buying up toxic mortgages from banks at this stage won't help either. they have their IV of infinite liquidity. they will sit on said mortgages nested into shadow books if need be.

the only way QE will work at this stage is by DIRECTLY INJECTING POPULACE and not banks. and that will not happen.

Fri, 06/15/2012 - 10:04 | 2529115 Manthong
Manthong's picture

A time to be born, a time to die, a time to sow, a time to reap..

Americans know it’s time to be austere, Bennie Boy.

They will bring their own close and their cash closer.

It will confound you that your “policy” isn’t getting the behavior that your precious equations predict.

-Long resale shops.

  

PS. Maybe  you need a new “stall” variable in one of your velocity models.

Better put a hundred or two FRB PhD’s that never had to live in the real world on it.

Fri, 06/15/2012 - 10:36 | 2529255 Precious
Precious's picture

Greenspan killed capitalism.  Bernanke buried it.   Saul Alinski thanks you all for your cooperation.

Fri, 06/15/2012 - 10:44 | 2529276 HoofHearted
HoofHearted's picture

"Dont forget me, I'm Dr. B!"

http://www.youtube.com/watch?v=xSaNHLC2eiA

Fri, 06/15/2012 - 11:08 | 2529359 jekyll island
jekyll island's picture

I'm tired of this.  End the Fed.

Fri, 06/15/2012 - 12:33 | 2529659 Bananamerican
Bananamerican's picture

"Greenspan killed capitalism.  Bernanke buried it.   Saul Alinski thanks you all"

 Saul?

Forget that nigga!

No bitches.... HERMAN GOTTLIEB is the muthafucka who took us all down with his uh, incredible COMMUNIST Power!!

Remember that name....

America was just humming along until HERMAN GOTTLIEB put his shit into it....uh yee-uh

 

Fri, 06/15/2012 - 12:05 | 2529576 XitSam
XitSam's picture

A time to tar, a time to feather, ...

Fri, 06/15/2012 - 13:05 | 2529768 newworldorder
newworldorder's picture

I want to give you an up arrow but your PS: statement is preventing me from doing so.

Most Americans do not know that its time to be austere. Only those who have experienced prolonged job loss and inability to pay their mortgages or Are so far underwater they will never catch up are experiencing these major economic problems

Those with dual incomes/retirement accounts who have not experienced job loss or have not worked and are on public assistance/disability/SNAP benefits are not fully financially implacted.

My definition of of fully financially impacted is - no long term job, no unemployment benefits, cant pay your mortgage, have not paid your mortgage for 6+ months, savings are depleted, have health care problems that impact your ability to work. These are the people whose numbers have been growing steadily for the last 3 years. They used to be the unfortunate few - They are now the unfortunate many, without real solutions to their real problems.

Fri, 06/15/2012 - 13:41 | 2529924 boogerbently
boogerbently's picture

EVERYONE knows it's time for austerity.

We're just at odds about WHO needs to give up WHAT.

Heaven knows we wouldn't want to cut into anyones welfare, food stamps, free school food.....

OR

Enforcing regulations regarding responsible investment practices, increasing taxes that were lowered in 'better times".

Compromise ! Forget it, that's like giving in ! LOL

Fri, 06/15/2012 - 10:18 | 2529186 eclectic syncretist
eclectic syncretist's picture

Well there has been some talk of cutting individuals free checks ala baby Bush, which would certainly be (at least temporarily) inflationary.  I think if we're just patient here it's all going to come out in the wash.  The Fed isn't going to boost employment or even stabilize prices, because it can't, and that is beginning to become obvious.  They are only going to save the banks, which is about all they've ever done.  Someone is going to have to take the blame for what's coming down the road very shortly, and the Fed, banks, and politicians will have a hard time finding a scapegoat and saving themselves. 

Fri, 06/15/2012 - 11:14 | 2529385 LowProfile
LowProfile's picture

I love it when you talk dirty.

Fri, 06/15/2012 - 09:54 | 2529050 Pool Shark
Pool Shark's picture

 

 

We've all seen this movie before... it's called "Japan: 1989-present."

 As Koo correctly observed; in a balance-sheet recession, ZIRP will only be used by companies and households to deleverage. You can't jumpstart the engine by flooding the carburetor... 

 

Fri, 06/15/2012 - 10:00 | 2529090 Cognitive Dissonance
Cognitive Dissonance's picture

The only way they are going to jump start this engine is to push it (and the car it's in) off a cliff and start over. And when the inevitable comes about those who have transitioned their money/currency/colored beads from the old paradigm to the new will have once in a century opportunities to become very very wealthy.

Fri, 06/15/2012 - 11:00 | 2529335 ATM
ATM's picture

The lesson from history. 

Fri, 06/15/2012 - 13:11 | 2529790 HAhyperion
HAhyperion's picture

And what exactly is the transition or path? Have they not corrupted everything? What'sleft that has not been manipulated? 

Fri, 06/15/2012 - 10:05 | 2529108 vast-dom
vast-dom's picture

it's quite amazing that BB would cite Japan as any model of any policy. and it shows how twisted he really is.

 

in other news Dimon gets all "old testament" and calls for eye for eye for TBTF banks while he's playing with essentially bail-out monies. it's beyond farce. at this stage the sheeple deserve what they get!

Fri, 06/15/2012 - 10:38 | 2529260 Precious
Precious's picture

Most people in the old testament would agree that Dimon should be stoned.

Fri, 06/15/2012 - 10:41 | 2529270 vast-dom
vast-dom's picture

locked up in a tiny cell with 24/7 live video feed would be much more modern and much more punishing. a little Foucaltian discipline and punish for Dimon.

Fri, 06/15/2012 - 14:16 | 2530066 Jack Napier
Jack Napier's picture

I4NI was Hammurabi's law in ancient Babylon. In the OT they only stoned homos. Jamie Dimon, hard to get a more unisex name really. But c'mon people, these guys are all just doing what they're told. Anyone who makes decisions will never show their face. Stop hacking at the limbs of the hydra and let's chop its head off. How to do that you say? Buy silver.

Fri, 06/15/2012 - 09:51 | 2529052 AUD
Fri, 06/15/2012 - 09:53 | 2529061 Whoa Dammit
Whoa Dammit's picture

Bernanke's cliff notes in one word: Print

Fri, 06/15/2012 - 10:01 | 2529102 Careless Whisper
Careless Whisper's picture

"wider inflation tolerance". The man's a poet.

Fri, 06/15/2012 - 10:12 | 2529159 WALLST8MY8BALL
WALLST8MY8BALL's picture

ManBernKrug!

Fri, 06/15/2012 - 09:55 | 2529065 Cognitive Dissonance
Cognitive Dissonance's picture

"Of all the suggestions, the wider inflation tolerance may be the only one that may do that."

Ummmm

Considering that "real" inflation is 2 to 3 times higher than the officially stated inflation rate I would say they have already widened their inflation tolerance.

Fri, 06/15/2012 - 12:13 | 2529607 pods
pods's picture

So you are telling me you haven't fallen for the "100 calorie" packs line of marketing?

You know, more for less?

pods

Fri, 06/15/2012 - 09:55 | 2529070 youngman
youngman's picture

I am thinking the Fed right now is more worried on the EU than the USA...all those off books casino gambling stakes might be called in here.....and the Jamie Diamonds might have to talk to the politicians again in front of the cameras

Fri, 06/15/2012 - 10:54 | 2529309 odatruf
odatruf's picture

I'd prefer he and his ilk face a panel of members from one of the other branchs of our federal government.

Fri, 06/15/2012 - 09:55 | 2529072 RobotTrader
RobotTrader's picture

All Bernanke has to do is start buying overshorted stocks and start creating some epic squeezes.

That is all it takes to get the momentum turned.

Way too much easy money to be made, the speculators will jump all over the long side.

Fri, 06/15/2012 - 10:01 | 2529089 Unprepared
Unprepared's picture

He's already doing this, bitch

Fri, 06/15/2012 - 10:15 | 2529177 adr
adr's picture

Yes because the Fed buying corporate stocks truly means the underlying fundamentals of those corproations is truly strong.

What a pathetic fucking joke.

Fri, 06/15/2012 - 12:19 | 2529624 pods
pods's picture

If they start doing that (in the open) that would spell the beginning of the end.

Three years from now the FED would own all treasuries, all the companies on the S&P, and half of Europe.

Eventually people would just not obey anymore and the FED would be able to do nothing about it.

pods

Fri, 06/15/2012 - 09:55 | 2529073 distopiandreamboy
distopiandreamboy's picture

Tl;dr:you will buy risky assets because I'm going to destroy your purchasing power

Fri, 06/15/2012 - 12:09 | 2529590 XitSam
XitSam's picture

Buy something, but it ain't going to be risky assets.

Fri, 06/15/2012 - 09:55 | 2529075 asteroids
asteroids's picture

Statisticians have been able to predict the outcome of elections with a high degree of probablility for decades. Sunday will be no different. I'm sure the FED and every other banker knows the results. This would explain their "conference calls" over the last week or so. I would be watching the FX and credit markets carefully today. That will be the tell.

Fri, 06/15/2012 - 09:56 | 2529079 AL_SWEARENGEN
AL_SWEARENGEN's picture

Basically if no one is going to spend money, the cocksuckerz over at the Fed will inflate even more thereby forcing people to spend before 'their' money devalues and purchases less.

Fri, 06/15/2012 - 11:16 | 2529392 LowProfile
LowProfile's picture

They should be careful what they wish for, yes?

Fri, 06/15/2012 - 09:56 | 2529082 Vincent Vega
Vincent Vega's picture

There was a story on Bloomie yesterday that one option for the Fed might be to extend the 2014 pledge out to mid 2015. As has been said many times on ZH: ZIRP 4evar!

Fri, 06/15/2012 - 09:58 | 2529092 Cursive
Cursive's picture

Reading these excerpts from Bernanke's speech leads me to the conclusion that he and his econometric brethern think that we are all just mice that can be hearded through a maze to get to the cheese.  The central bankers share a very totalitarian and dehumanizing view of the world.

Fri, 06/15/2012 - 10:12 | 2529163 john39
john39's picture

what do expect from satanic bankers who believe their special "god" selected them to rule the planet?

Fri, 06/15/2012 - 12:24 | 2529634 pods
pods's picture

And to be honest, we pretty much are just hopping on the the wheel daily to power their lifestyles, so it is not like they had a bad idea.

Inhuman, evil and sociopathic, but not ineffective.

It really is the Matrix, except the machines are fractional reserve banksters, and well, we are all their copper tops.

pods

Fri, 06/15/2012 - 13:11 | 2529792 newworldorder
newworldorder's picture

You may be just a number, but as a consumer unit, your (but -sp?) belongs to them.

Fri, 06/15/2012 - 10:00 | 2529094 AllAboutTheBenjamins
AllAboutTheBenjamins's picture

I liked that picture on the main page for this article

Fri, 06/15/2012 - 10:01 | 2529098 fonzannoon
fonzannoon's picture

This is so fkin boring already. Nice day out...

Fri, 06/15/2012 - 10:03 | 2529113 xtop23
xtop23's picture

Public delevering. QE ain't gonna do it this time. The jig is up.

Fri, 06/15/2012 - 10:06 | 2529127 Everybodys All ...
Everybodys All American's picture

Yeah wider inflation. In other words fake growth.

Fri, 06/15/2012 - 10:12 | 2529161 adr
adr's picture

The real issue is China. Chinese manufacturers are eating each other. There isn't enough business to go around and the world has actually prodced enough inventory of products to last the next three years, even if total world manufacturing stops.

Chinese suppliers are cuttng prices, reducing minimums, paying for overseas shipping. All in a desperate attempt to gain any business. They are selling products at cost just to keep factories open. Because of the Chinese stimulus programs all of the manufacturers are sitting on massive stockpiles of raw materials, bought to support far higher growth rates. Materials they need to pay for. They can't get enough business to pay fo the materials they bought. I have never seen desperation before like I have in my Chinese suppliers right now. They are begging for orders, but I can't order anything because my accounts already have too much inventory.

What happens if you lend a guy $100 and he says you'll get back $200, and you go out and spend $200 on credit expecting to get paid the $200 to pay the bill, only to have the guy leave you a message saying he doesn't have the money?

The answer is, unless you can find the guy and take something worth $200, you're fucked. Essentially that's the world economy right now.

How does more QE help this? QE doesn't lead to banks and investors buying finished products. It leads them to buy base commodities and paper stock, it allows directors to inititate more corproate stock buybacks, allowing them to cash out big. 1%ers don't buy made in china bulk inventory at Walmart.

Making commodities more expensive doesn't help the chinese manufacturers already sitting on too much raw material. Making gasoline and food more expensive doesn't help what's left of the working class buy some of that overproduced inventory sitting on shelves. Stocks going up 30% doesn't help a population with no money to invest.

QE is an economic atom bomb. The blast might not kill you if you're protected enough, but the ensuing radiation and slow agonizing death will make you wish it had.

Fri, 06/15/2012 - 10:33 | 2529242 Sockeye
Sockeye's picture

Well said.

Fri, 06/15/2012 - 10:44 | 2529277 onebir
onebir's picture

Interesting info - thanks for posting it.

I think you're basically right, but there's one way QE might help short-term: I've read Chinese manufacturers have been use some commodities as collateral. (Especially coppe.r)

So if QE delays/prevents commodity prices dropping too much, it might delay/prevent a wave of bankruptcies (&/ bank failures) there. Does that make sense?

Whether that's worth it (especially long term) is another matter...

Fri, 06/15/2012 - 10:46 | 2529285 Matt
Matt's picture

The moral of the story? Don't spend money until you're holding it in your hot little hands. Promises of money are not money.

Fri, 06/15/2012 - 10:25 | 2529216 web bot
web bot's picture

If inflation is to be the case... then watch out for PMs. They're going higher.

Fri, 06/15/2012 - 10:59 | 2529331 Thisson
Thisson's picture

Says who?  PMs are not historically a good hedge against inflation.  The key relationship is between PMs and interest rates.  If we have inflation and interest rates rise, PMs may not provide much real return.

Fri, 06/15/2012 - 11:16 | 2529395 jekyll island
jekyll island's picture

PMs are a store of value, not a growth stock.  Their expected role is to retain purchasing power in an inflationary setting.  We understand that prior performance is not a predictor of the future, but gold performed as expected the previous fifteen times a fiat currency went pfffft, there is no reason to suspect it will change with this current iteration. 

Fri, 06/15/2012 - 11:20 | 2529409 LowProfile
LowProfile's picture

 

If we have inflation

We have that, check.

and interest rates rise

Then The Ponz implodes.  Rates can't rise.  Did you think this is the '70's all over again?

Fri, 06/15/2012 - 12:30 | 2529656 pods
pods's picture

I shudder to think of how much the Fed.gov would need to borrow to pay off the interest on what it previously borrowed.

Coffin corner now.  Can't stop borrowing or GDP dives taking revenue with it. Can't let rates rise or gov implodes.

So we will slowly waste away by borrowing and inflating while the real economy gets sucked dry from inflation like a carp with a dozen lampreys on it.

pods

Fri, 06/15/2012 - 10:33 | 2529243 onebir
onebir's picture

What about cutting the interest rate on excess reserves?

Apparently this is a bad idea. Never been able to understand why :s

Fri, 06/15/2012 - 10:43 | 2529274 Precious
Precious's picture

 

Jewish teaching prevents Jews from handing over a Jew to non-Jewish authorities. Called mesirah, the public disclosure of allegations against another Jew, is considered to be an act that desecrates God's name.

As the authoritative Torah scholar Maimonides wrote:

It is forbidden to hand over a Jew to the heathen, neither his person nor his goods, even if he is wicked and a sinner, even if he causes distress and pain to fellow-Jews. Whoever hands over a Jew to the heathen has no part in the next world. It is permitted to kill a moser [informant] wherever he is. It is even permitted to kill him before he has handed over [a fellow Jew].

 

Fri, 06/15/2012 - 11:03 | 2529336 Thisson
Thisson's picture

What fucking relevance does a 5000+ year old religious law have to the topic at hand?  Shall we start bashing all the religions here too?  Fuck off!

Edit: To add insult to injury, you've misrepresented what the law actually says.  Any idiot could double-check this on wikipedia, which reports (emphasis added): "This may not necessarily apply to reporting legitimate crimes to responsible authority, but does apply to turning over a Jew to an abusive authority, or to a legitimate one who would punish the criminal in ways seen as excessive by Jewish community, though "excessive" punishment by non-Jews may be permissible if a precept of the Torah has been violated."

Fri, 06/15/2012 - 11:22 | 2529416 LowProfile
LowProfile's picture

 

"This may not necessarily apply to reporting legitimate crimes to responsible authority, but does apply to turning over a Jew to an abusive authority, or to a legitimate one who would punish the criminal in ways seen as excessive by Jewish community,

It seems pretty fucking relevant to me.

Fri, 06/15/2012 - 12:06 | 2529580 Thisson
Thisson's picture

How is it relevant?  Bernanke would probably not even be considered a jew by those who follow the Talmud.

Fri, 06/15/2012 - 11:41 | 2529429 yogibear
yogibear's picture

All you bankers out there.... This is a money machine for you.

If you have an overseas presence... Create overseas dummy companies (with front CEO and board members) overseas to take out  loans for US funds/banks.  

Make the company bankrupt and the money disappears (into private accounts).

The bank can deem these as bad loans. Same can be done with overseas real estate (LOL, a million dollar house loan on a 10x10 plot of land).

Non performing loans can make bankers plenty of money if you work it right. Billions.

Bernanke and the government will just keep throwing bailouts at you. Rinse and repeat!! 

 

 

Fri, 06/15/2012 - 12:10 | 2529601 slewie the pi-rat
slewie the pi-rat's picture

L0L!!! 

but what if:   inducing spending ain't really the problem, art?

then: this would just be:  gahhhr-bage...

but that is slewienomic reasoning, not pretending the new FED job decription of 2010 doesn't exist for another year or two...

mmm...is that coffee?  smells good, don't it? 

ya see, art:  it was the greenspam FED which caused the system to need moFuture to keep everything we've never worked for from turning into shit

then, theCongo wrote a new FED law, telling the benzelbub the FED was now gonna be about systemic stabilty and to stop paying attention to anything else any elected mofo wants to wring outa them;  and then prez0 signed the 2300+ -page wunderfuk of bahney&chris

to theCongo: systemic stability = financing their spending + collecting their bribes to get re-elected + zero,000,000,000,000,000

and theCongo will do the spending too, tyvm!

Fri, 06/15/2012 - 12:40 | 2529680 slackrabbit
slackrabbit's picture

Ben will save the banks by making all of us poorer, yet millionaires at the same time...

Fri, 06/15/2012 - 12:40 | 2529683 Carl Spackler
Carl Spackler's picture

And here I thought Bernanke's next trick was to be the helicopter cash drop.

Fri, 06/15/2012 - 12:55 | 2529734 Arrrr
Arrrr's picture

Krugman wrote recently about the impossibility of <0% interest rates, and suggested that instead, increasing inflation would be a good idea, since it would be essentially the same effect. Krugman wrote, 

“The shared starting point here is that we are in a situation in which the Fed would clearly cut rates if it could; based on historical relationships between unemployment, inflation, and policy rates, the Fed funds rate “should” be something like -4 percent. But the Fed can’t do that. What it could do, however, is try to reduce real interest rates by raising expected inflation. "

Also, I feel like I need to wash my hands after typing his name.

When China does it, he calls it "repression." When suggesting we do it, he calls it a "historic opportunity." 

See:

http://dollarskeptic.com/2012/06/12/repression-krugmerican-style/

Fri, 06/15/2012 - 13:24 | 2529851 Marty Rothbard
Marty Rothbard's picture

   I believe that the fed's inflation tolerance will not increase, for two reasons.  The first, and most obvious, is the coming election.  The fed seems to want Obama reelected, and why not?  He has done nothing but back the fed's decisions.  Whether this is out of the Choomsters ignorance, or he believe that the chaos the fed's policies are bringing upon us will, be good for his personal power trip.  In other words, make way for F. D, R-uh(Ebonics for the letter R), a Volt in every pot, the new new deal, and the weekly Choom Wagon Chat.

   The sudden detente between Crown Prince Willard's coronation committee(the RNC), and the Good Doctor's Desperadoes, bodes ill for the fed.  There must be some sort of agreement between the two, that explains the sudden admonition by Ron(after all the money I've sent the guy, we're on a first name basis), to treat the hypocrites, and cheat's of the party apparatus with "respect", and the heir apparent of dad's title, to endorse Rat Boy, before the convention.  What is more likely, than a written agreement to throw the fed under the bus?  Ron must get an erection, just thinking about it(he's in really good health), and what better way to curry the favor of the ascendent libertarian wing of the party.  It's never too early to start suppressing primary challenges.  Besides, with the fed funds rate at ZIRP(NRIRP really) for four years, and the fed's balance sheet the size of Baltimore, it has pretty much shot it's wad.  The display of righteous indignation, made possible by the unforeseeable discovery(no one could have foreseen it, particularly not Doug Casey, or GATA), that the 9000 ton US gold reserve, has been converted into nine ounces of receipts, signed by bankrupt counterparties, will be worth five million second term votes, at least.

   The second reason are the twin back room ultimatums made by our inflation importer of choice China, that it will hold a yard sale of US treasuries, and by the Petrodollar enforcer, Saudi Arabia, to start pricing their oil in Yen, Renminbi, and most frightening to the ChairSatan, at a discount for delivered LBMA compliant gold(no tungsten please), as well as have their own yard sale.  

   I believe that the future holds continued threats of QE infinity, and carefully hidden purchases of treasuries by fed hatchet men, around the edges, but nothing like QE1, or QE2.  Major monetization will be an absolute last resort, which will come only to avoid outright federal default, and federal reserve's dissolution.

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