Fed Dove Evans Open Mouth, Demands More QE, Sends Gold Soaring

Who would think that all it takes for gold to surge by $40 in under an hour is for the Fed to resume the old song and dance. Yet that is precisely what happened: ever since Chicago Fed president Evans sat down with Steve Liesman to discuss that he would be in favor of more easing, and saying he believes in "room for accommodation" and that we "still need to do more on monetary policy", gold soared from under $1790 to over $1830. And confirming that gold will go far higher is his statement that "Fed policy was not a driver of the commodity price surge." In other words, these buffoons have not learned anything, and the commodity price shock is coming. However, as usual, it will be blamed on speculators. Luckily the CME can hold them in their tracks with a relentless series of margin hikes. Or not. When will the CME finally hike margins on printer toner cartridges?

Comments

[Turd Ferguson]

QE to infinity

[achmachat]

you're right, sure looks like it.

so the guys on CNBC who kept telling us to buy all those cheap stocks feel vindicated now?

in total honesty now, realistically speaking, how long do they have until the whole thing comes falling down?

[MsCreant]

We need to see shortages of things you actually need before we get to a place I am willing to define as "falling down." We still have a little bit.

If you mean something else, friend, it is falling down now. Giants have further to fall so there is a slow motion effect to the whole thing.

[PY-129-20]

This Interview is just remarkable. Swiss Banker Hummler is blaming Alan Greenspan in this interview for destroying the credibility of the fiat system.

http://www.handelsblatt.com/finanzen/boerse-maerkte/anlagestrategie/note...

[MadMonkIvan]

Amazing interview indeed - thankyou!

[TruthInSunshine]

Dear Ben, Please Print Us More Money

by Wolf Richter

Dear Ben,

Please print us more money. We want you to prop up the stock market. Everybody knows it's a Ponzi scheme that will collapse without your support. You don't want us to end up like Bernie Madoff's clients. No, Ben, we love Ponzi schemes. We get in early and get out before they collapse. That's why we're rich. The bad thing is that they sometimes collapse before we can get out. But you already bailed us out twice in the last couple of years through printing trillions of dollars. Why not a third time?

That will also keep the bond-market bubble inflated. We have to admit that you've done an excellent job there, hands down. Negative real yields all the way up the yield curve! Awesome. Now if you could just print a few trillions and buy up the sovereigns from the PIIGS. Euro crisis over. End of story. And we'd get richer because we'd sell them to you at face value though we bought them at fifty cents on the dollar.

And why not forever? Just keep printing. Because as soon as you stop, stock markets will crash again, and credit markets will seize, and then we're back on this awful ride to hell.

Of course, it'll cause inflation, which is good. You yourself said that. You stated many times that you want inflation. In fact, you said that one of the goals of the Fed, after propping up the markets, is to create inflation. So stick to it, Ben. Don't slack off suddenly just because some cowboy threatened you.

Inflation, in conjunction with your near-zero yields, has all sorts of benefits. For example, it will eat up the Social Security trust fund, whose $2 trillion balance is invested in treasuries. Fixed-income investors, retirees, and everybody who has any savings will also be demolished. And homeowners. But don't worry. They won't figure it out. They don't get a statement every month that shows how much inflation cost them. It's a quiet way of stealing from them, and it'll impoverish them over time, but it'll make us, the recipients of the money you print, richer.

You see, Ben, we can charge higher prices for our goods and services. And even if we have to pay more for raw materials, we look good. Our inventories increase in value, and we can claim sales jumped 10% because we raised prices by 10%. Analysts dig that.

Recently, Ben, you've done a decent job on inflation. In July, we were running at an annual rate of 6%. Not bad. But you need to preempt any cooling off. So keep printing.

Now, we're not talking about wage inflation. Oh no. We have to keep wages down. We need cheap labor, or else we'd have to send these jobs to China—which we're doing anyway. And not just to assemble iPhones...

Read the rest:

Link: Dear Ben, Please Print Us More Money

[whstlblwr]

This post that Fed Evans whisper monetary easing then sends up commodity prices is why we want to vote for Ron Paul.

Also this is kind of thing to post on social sites because it clearly shows it's not speculators, no, it's Fed policy driving up costs of goods.

[tiger7905]

Gall poll:34% of Americans see gold as the best investment.

http://goldandsilverlinings.com/?p=1594

[Libertarian777]

however I bet you less than 1% of those 34% own a single oz of gold.

[Flakmeister]

A lot of people have jewellery.... if you said 4 oz, I'd believe you. 

[Crisismode]

Wouldn't it be just great if all bankers/politicians dropped the BS and talked straight like this guy?

Maybe in your next lifetime.

Thanks for the link.

[IQ 145]

Gonna have to keep an eye on you, you may be a person who's paying attention. Ol Alan sure didn't help it any, did he?

[MillionDollarBonus_]

This is the right decision. I trusted our federal reserve officials and congessmen to do the right thing, despite the childish and cowardly attacks from the zero hedge readership, and my equity portfolio is now turning around. I have been rewarded for my patience and trust in our top quality leaders to do what is necessary.

[espirit]

Sarc or no, you're an idiot. Blog (or troll) somewhere else.

[Ausperity]

Million Dollar Bonus has been trolling here for months.  He is my favorite troll; he makes me laugh.  He actually turned down 2 jobs at think tanks to troll here.  You should be grateful.  I am.  Who doesn't like a Million Dollar Bonus?

[MsCreant]

Bone-us.

[IQ 145]

Ah, the female point of view. You mean, Bone-us, please, pretty please; do it again.

[Crisismode]

And what think tanks are those?

The Marionettes Group, and

The Sphincter Osculators Group?

[Flakmeister]

Actually, it was the Cato and Heartland Institutes....

[Flakmeister]

I seem to have ruffled a few feathers.... wonder why? The two tanks I mentioned are merely fronts for fascist corporate interests. I will grant Cato a little slack, they have had a number of good pieces over the years. Heartland is just a bunch of Kochsuckers though.

[Upswaller]

Um, yeah.

[SilverDOG]

Portfolio is turning around... and bending over. 

[IQ 145]

You can have my turn; I don't want any.

[dwdollar]

Haha...  thanks for the laugh.

[PaperBear]

Oh boy, are you going to get burned.

How will your portfolio look when petrol/diesel costs $15 a galoon ? And a loaf of bread costs $5 ?

[LongBalls]

Million Dollar Bonus is an idiot. Sadly, her/his post deserves no more response than that.

[Hulk]

You need a sense of humor injection...

[sullymandias]

A loaf of bread already costs >$5!

Oh, maybe you mean some kind of so-called "bread" such as Wonder or Globo.

[PrinceDraxx]

Hell, a loaf of bread is almost $5 now. I hope petrol isn't going up $11 overnight to match it. That would suck.

[Raymond Reason]

Obvious sarcasm. 

[Esso]

"Obvious sarcasm."

Which would be all good & fine if there was a point to it. Some educational value, or something.

Rather, MillionDollarFuckwad comes off like the typical, pathetic, government-loving Retard-O-Merikkan that sits at home all day reporting his neighbors to the goobermunt tattle-tale hotlines as terrorists.

I can't speak for anyone else here, but I come to ZeroHedge to get away from stupidity. If I wanted that shit, I'd watch CNBS and become a charter member of the Steve Liesman Fanboy Club.

[MsCreant]

For all I know, it is Tyler! Sometimes floating an effigy to stab and burn can be a healthy and cathartic move. There was a poster Benjamin Dover, and a commenter Phil Grahm in the early days of this blog, they did the party line with a straight face and they were a scream. People loved to hate them.

I say do what you like with Million Dollar Bone-us. It's all good.

[tmosley]

There are plenty of "effagies" that need a good stabbing and burning around here already.

Seems more likely that this is the new "William the Bastard", or a new incarnation of Spaliding Smailes.

[ceilidh_trail]

Whatever happened to Harry Wanger?

[Robslob]

Funny a man makes a statement about his portfolio "turning around" right after the worst month in the last 2 years...lmao

[Crisismode]

Of course his portfolio has turned around.

He's been an avid follower of RoboTrader's every recommendation.

[RSloane]

This has to be sarcasm. No one could be that stupid and manage typing.

[WTFisThat]

WOW that was really funny

[IQ 145]

All this is true enough; but you have to realize that it's a party, and then it comes to an end, and everyone has a hangover. I'm glad you're making back some of your losses; but you need to get the idea that this rally will end and at that time you need to cancel your participation in the Stock Market; There is no buy and hold anymore; if there ever was; probably there never was. It's just not that easy. If the friggin thing gets back to 12,000 on the DOW you really should cash out. The higher the price goes the more unstable it is and the more likely to reverse. There will be no new highs this year in the major indices; this is a rally in a bear process. Cheers.

[caerus]

hilarious!

[Snidley Whipsnae]

MsCreant... "We need to see shortages of things you actually need"

Action usually heats up when it takes 40% of wages to provide food...

Right now, Americans are spending about 12% on food...

If the social (food providing) programs are eliminated or cut back we will see some 'falling down' as far as social unrest...

Definitely slow motion... slow motion train wreck.

[ATG]

Speaking of falling down, the DOJ not only went after the Liberty Dollar guy to put him in prison and confiscated all of his Liberty Dollars, now they are going after other Liberty Dollars, Gibson Guitars, Lemonade Stands and Raw Milk as "domestic terrorism."

How long before other gold and silver coins and bars not issued by the US Mint are unfair game? 

http://www.coinworld.com/articles/liberty-dollars-may-be-subject-to-seiz...

[Quintus]

I do not understand why so many people fail to appreciate this.

When the only tool you possess is a hammer, every problem tends to start looking like a nail.

When the only tool you have is QE......

[SheepDog-One]

Right! Total Bizarro World we live in where markets shoot up 2% yesterday, and yet pleas of 'More QE please sir!' are all we hear? For what reason, markets teetering and near their lows? No, markets are 15% from their ALL TIME highs! 

Completely insane world.

[Hobbleknee]

Unemployment trumps markets.

[Soul Train]

Ah, 'ye with less experience... the wonderment of youth.

Can you fathom this?

Friday and yesterday's rise is indeed the classic DEAD CAT BOUNCE. Let's see how close it comes to the supports.

Tyler has  been commenting about the low volume. Indeed.

That's a main characteristc of the DCB, besides it quick legs up to try and reach support.

Careful to you younger traders with nothing but your SMAs and hope for good fortune. You must live and learn. Hope this helps.  Buying into this morass and nonsense will be a bitter pill.

When the tide turns, it will be swift - just as it has been since Friday Noon.

And lower lows in the horizon. Shock and awe.

Then the Fed will be forced to look for some more clever ways to trick you. They have already covered their ass when Benny Boy said that they cannot do this alone.

LMAO.

[IBelieveInMagic]

This is looking all too well coordinated -- first JPM and UBS says that gold is going to the moon, then Fed Guv. says resume QE -- to me this looks like an attempt to false step precious metals. Am getting paranoid.

[kumquatsunite]

There are many other sources of gold, yet untapped. The world is a very big place....all this talk about gold being in short supply are ridiculous. 

[russki standart]

Quintus, the Fed could end monetary accommodation and we would surely enter a deeper depression. But the immediate pain will be too great so we will inflate our debts away. Ultimately, the fed reserve ponzi scheme will end, and out of the ashes something else will emerge. 

[NotApplicable]

...every problem looks like a liquidity issue.

[RSloane]

There is always the option not to use the hammer particularly when dealing with large window panes.

[Long-John-Silver]

and beyond!

[Infinite QE]

Dang straight. What happened to the gold $250 crows?

[Crisismode]

They're all having tea with Jon Nadler.

[tmosley]

Is THAT what they are calling it these days?

[MsCreant]

Tearoom traders.

[slaughterer]

In a Fed-induced commodity inflation scenario, wouldn't it be wise to invest in natural-gas fuel technologies since oil at $200 a barrel would be inaccessible to most automobilists?   Besides the usual PM plays, I mean. 

[fiddler_on_the_roof]

I looked at NG car. But then they only have a mileage of 200 miles with a full tank of NG, unlike our regular cars. So deferred for now.

[GoinFawr]

@ slaughterer

Natty; now there's a commodity nowhwere near its all time highs.

[GoinFawr]

Yen C, did you catch this one?

[Snidley Whipsnae]

Thanks Evans! Keep talking! ...and Been...as in has been... Keep printing!

[IQ 145]

Here's a different point of view on the recent price chart; yesterday we had a thrity dollar waterfall in thirty minutes that was clearly an artifact; ie. engineered, not the result of natural causes. The purpose of this "artificial low"; to offer a buying opportunity for the new york traders and their friends. Today's rally? already baked in the cake; if you never read the news item at all you could trade this event. If you insist on reading news items; you get a probably spurious explanation for what already happened. The dip that was buyable yesterday was created by people who knew the profits would be there today or tomorrow; whether there's a convenient news item or not. There's always something that makes a good excuse for a news item.

[VegasRage]

Turd Ferguson for president! 

[ATG]

As posted elsewhere, continuing to monetize the majority of Treasury auctions and ZIRP until 2013 are QE To Infinity and Beyond

[LawsofPhysics]

What else can one say but, "Keep talking stupid".

[Racer]

Buffoons is too kind a term for the Satanic gathering

[MsCreant]

Whoever junked this hysterically funny comment, come back and tell us why. Satanic and buffoon paired together is too funny. Paints a picture of an evil, incompetent, mad house.

• Do you respect the members of the Fed?
• Do you think what the Fed is doing, stealing your spending power, is okay?
• Do you love QE3?
• Do you just hate Racer?

WTF?

[LawsofPhysics]

I second this proposal.

[Pegasus Muse]

Monkeys, bankster ass-kissing, satanic gathering of Wall St sycophants …

http://www.youtube.com/watch?v=zPZLPlelmOE&feature=related

[fiddler_on_the_roof]

FED did not have much choice other than buying all those houses and doing QE. Else we would have had a 1930's depression because the credit money is so large which was trying to squeeze to T Bills. The only other option was to nationalize all the banks, then it becomes socialism.

This situation was brought upon by many decades of policies. Anyone remember the blowing of housing bubble by Clinton by making primary residence sale profit non taxable. Why would anyone do that unless they wanted to blow that bubble and put us all at the mercy of big banks. Everything looks pre-arranged.

[MsCreant]

So you lean towards satanic, away from buffoon. Many of the commenters agree. I will take the other side, more as a thought experiment than anything.

In defense of "incompetent:"

I am an academic. I can tell you with confidence we have a culture that, in many ways does not coincide with the real world. Things that would have consequences in the real world, do not in academia. To keep it as short as I can, the academy is a petri dish of moral hazard. This is Ben's "culture," but worse (my background is not so "elite," some of us have our feet on the ground in the "real" world).  In my world, once you have earned tenure, you can't get fired. You keep getting raises (for now) even as others are taking pay cuts and losing their jobs. Govt. sponsored funding assures that there will be money (for now) to keep the show going when all the other shows in town are closing down. Summation, if you are used to exceptions, you may really believe that is how the world works. And that mind set will guide your policy decisions (and yes, this includes cronyism). But this is different from a multi generational conspiracy.

Ben and company may merely be academics, in crisis mode, always reacting to the next crisis, never proactive because they never, ever, manage to get their footing and get far enough in front of the game to "plan" or do (gasp) prevention.

They did inherit a bag of shit. It was insolvent when they took over. In a sense, nothing they do matters. All they can do is try to land the plane as softly as possible. Keeping the banksters happy keeps the gears lubed so that when you need to respond to the next crisis, you have friends who willingly do favors for you.

[RSloane]

Gee, who could have seen that coming.

[MichaelG]

Did he say what were the drivers of the commodity surge?  Asshole.

[Dapper Dan]

Would ‘in it be nice if someone in the media would ask a question like that? And then press for an answer.

[MichaelG]

Yes, preferably whilst slowly tightening the thumbscrews.

[Irish66]

I'll say it again, that was one scary interview

[FranSix]

Wait!  Something happened. Somebody sold gold forward without first owning any, driving the price down $40/oz.  Now, they're stuck with having to buy it back! D'oh!

[Long-John-Silver]

Good for them, they deserve everything coming to them, in Spades.

[FranSix]

In London-town, I mean.

[FubarNation]

The markets are FUBAR. 

When one asshat makes a simple comment like that and the commods go apeshit sumpin' aint right.

[Cdad]

Exactly.  The toxic banks are now well engaged in the trade.  Beware and good luck.

[SheepDog-One]

Somethings going to blow up big time here. How the HELL can you have markets up 2% just yesterday, then bring on some FED assclown who is begging for more QE with markets 15% from their all time bubble highs! What the hell is this insanity....anyone talking about more money printing with markets able to pop up 2% daily should be arrested.

First its 'All is WELL!' 24/7, but with a constant side order of begging for more money...I sense panic and a FED out of gas.

[espirit]

The Fed is hoping that the sheeple "buy the rumor".

[SheepDog-One]

Exactly, more carrot on a stick technique...'we need more suckers in the markets lets see if theyll buy the pump if we yap about QE3 some more', but so far not so good.

[Cdad]

Correct...and the point I am making, here and on the previous gold thread, is that the TBTF banks are at work here...and anyone predicting this or that based on today's completely FUBAR movement in EVERTHING is just asking to have it handed to them.

And as always, my comments about gold are confined to the paper gold market, and not guys who are squirreling away the metal...as you guys will inherit the Earth.  But gold moving as it has been is rather the machinations of bankers pushing the derivatives of gold around...which is bad news, in the broadest sense.  It, for example, will raise the margin issue yet again, and some Asian guy buying two coins later on this afternoon is not going to change the point I am making.

[SheepDog-One]

The Bernank has 1 tool, a 6 pound sledge hammer.

[Raymond Reason]

This is more carrot dangling.  A cheap trick that works. 

[Snidley Whipsnae]

...But if 10 million Asian guys each buy two coins this afternoon? ...and, they did so because a margin hike caused paper gold to drop $150? ...and, because the Asian guys caused the physical market to tighten by their purchases?...and, because physical has tightened and caused paper price to rise, another margin hike is put in place?... It's all connected in a feed back loop... Paper gold and it's margin hikes are transfering physical gold from West to East. Is that a good thing? Why won't the Treasury allow an audit of physical US gold? Is it in the East now?

Sometimes the tail wags the dog...

[LongBallsShortBrains]

Or buy the TUMOR.

[Josh Randall]

Wall Street stiffs and 401K'ers are clamouring for it Bernank - go ahead and give it to them, QE3 - you know you want to, and you and I both know that my Silver and Gold will go up too. Is it the possibility of a Silver and Gold price ratio move closer that keeps you and your Masters from rubbing a QE3 out ? OR is it the commodoties markets going APe$hit, raising prices even higher so that O'Bummer really doesn't get elected ?