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Fed Slashes Growth Outlook, Six Fed Officials Do Not See Rate Hike Until 2015
This is just getting better and better:
- FOMC: 2012 GROWTH AT 2.2%-2.7% VS 2.5%-2.9% IN NOV. FORECAST
- ELEVEN OF 17 FED OFFICIALS SEE MAIN RATE ABOVE 0.25% IN 2014
- SIX OF 17 FED OFFICIALS SEE NO RATE INCREASE BEFORE 2015
- FOMC DOESN'T SET SPECIFIC LONG-RUN GOAL FOR EMPLOYMENT LEVEL
Japan is now seriously blushing. As for the reality of the Fed's forecasts, they are absolutely worthless, so no point in even spending one minute on them.
Furthermore, the Fed, contrary to some misunderstanding, is not engaging in inflation targeting with endless QE until said inflation is achieved. It is merely saying what it predicts the inflation rate should be (modest difference). Of course, at 2%, we know just where inflation will never be - this is after all the Fed.
The inflation rate over the longer run is primarily determined by monetary policy, and hence the Committee has the ability to specify a longer-run goal for inflation. The Committee judges that inflation at the rate of 2 percent, as measured by the annual change in the price index for personal consumption expenditures, is most consistent over the longer run with the Federal Reserve's statutory mandate. Communicating this inflation goal clearly to the public helps keep longer-term inflation expectations firmly anchored, thereby fostering price stability and moderate long-term interest rates and enhancing the Committee's ability to promote maximum employment in the face of significant economic disturbances.
Yet here is the funniest chart: the "longer run" fed funds rate.
Uh...if you keep ZIRP until 2015, we are going to have a 100% FF rate in 2016. Because what the Fed is doing is setting the stage for the biggest, and finally last, credit bubble in the history of the world.
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2015 we aren't going to last that long. Nobody can buy the amount of paper we need to sell.
Wow I highly doubt the US Dollar will make it until 2015 at zero percent interest rates. Hyper inflation here we come!
http://ericsprott.blogspot.com/
Bernanke understands his predecessor well. He'll retire long before 2015. Just unleash the stimulus genie, and quickly take your bows. Then run for the hills and feign age-related memory loss.
Fuck you Bernanke. The world knows you failed.
Wait one damn mintue... Obama told me last night the State of our Union was getting stronger and we had turned the corner.. didn't the Fed governors see him dance on the Lezbo Ellen show? Don't they know his speechs can heal broken markets? Man these dudes are dumb.
Glad we have Hussein in the White House to straighten all this out...
and gold is promptly apeshit
There is no demand for credit even at 0%. This should tell everyone something, but apparently economists can't get it.
I can't wait til people start openly laughing when any of them give speeches. Just like the Chinese did to Timmay!
Since when have Fed Chairman pre-announced their intentions re. monetary policy several years in advance.
This move wreaks of desperation. The Fed is subsidizing Congress by allowing them to pile on new debt through reckless deficit spending. It is a sure path to destruction.
Agreed. The Fed has failed. The government in general was never straightforward with the American public. Most likely, they listened to the people that had answers to their liking. Obama has not said anything that would shake confidence and increase consumer saving. To the contrary, consumers went balls to the wall in Q4 in a year where household income declined 3% and savings again dipped into the 3% range. No matter what the Fed does, this is a mean reverting series and tends to overshoot. There is no way to stop what is coming. A massive output gap, consumer retrenchment and deflation.
We won't and the dollar won't either. We are buying our own paper and we are seeing inflation increasing and increasing by the month, especially in food and other items that people use everyday. We will see hyperinflation, and when that happens all hell will break loose in the US, that is why they are increasing the power of the state and govt.. Because they know that our populace has been dumbed down and made complacent (most not all) as long as they get their checks. But when those checks don't come and/or they can't buy a gallon of milk, they will go insane with rage.
...and the market rockets higher on the news
I just love it when the clown circus is in town.
I thought everything was already fixed good as new?
Any chance a few more sheeple wake up when the Fed spews more nonsense?
'Uh...if you keep ZIRP until 2015, we are going to have a 100% FF rate in 2016. Its called the biggest credit bubble in the history of the wsorld.'
Scorched Earth policy.
Should have a balanced budget by 2014, right...right?
Don't forget, all the fake budget reductions were based on +6% growth every year for the next decade. O_O
"Fight Club was the beginning, now it's moved out of the basement, it's called Project Mayhem."
This is relevant to my interests. Homework ideas? Maybe leave some infected USBs marked "Celeb XXX 2012" lying around Midtown or in front of Squid HQ? Follow a few squid home and add to the growing list of d0x?
Dude you are NOT supposed to talk about fight club.
"LOLR"
I thought I was prepared but this is insanity, kukoos nest.
ZIRP till 2015 now? Easy credit FTW.
gld...180...shortly
slv... 180...shortly*
*fixed at no charge.
If this market does a Granville, the metals will tank to a degree again before parting company with equity and resuming the ascent towards the heavens.
What a fucking disaster. The FED doesn't think things will improve until at LEAST 2015. And the market rallies in response??? This is hell.
What they really wanted to say was we have no clue when things will get better or if they ever will but that wouldn't play well in the media or for Obama's re-election.
Welcome to hell
Lost your "Hope & Change" button? So sorry. Here's the new 2012 version.
Oh, I pinned it thru your skin? I meant to do that.
Essentially it means depression until 2022/2024. The FED can only 'see' until 2015 and sees nothing improving until then.
Extrapolate how many new jobs need to be created to employ the jobless and the newly graduating and multiply by current job creation rates. Full (5%) employment won't occur until the late teens, 2017 perhaps and that would be based on a increasing employment trend with no intermixed recessions/depressions appearing in the meantime.
The international oil agencies feel there will be a progression of the downside of the peak oil plateau around 2014-2016 according to their data. That means higher oil prices and higher food prices, less disposable income and more unemployment.
Demographics say more baby-boomers retiring and spending less, since many will be living on social security alone. That won't cause an increase in spending and may not help unemployment since they will need to supplement their income because of inflation and higher oil prices.
Unless we get some breakthrough technology in the next few years that causes massive growth in some sectors and reduces the cost of oil, we are stuck in park and the emergency brake doesn't work as we continue to drift sideways and downhill with no one at the steering wheel.
The future remains a place of great caution where it is easier to lose a fortune than make one.
I'm less pessimistic. 2018/2019 is my prediction before they're making real moves. There will be war between now and then as well. The stage is being set.
I agree on the war/police action. I'm being optimistic, worst case ain't pretty.
I think there are 4 major factors at work in controlling our destinies.
1.debt/financial fraud - global problem
2.peak oil - global problem
3.demographics - u.s, western europe,china,japan problem
4.technology - no quantum leap, must have technologies to drive growth and secondary markets- u.s, canada,western europe problem.
We might get lucky and crack one or two of these, but that still leaves 2 major problems that are irresolvable.
of course there could be many more problems should our aging nuclear reactors flake out ala fukushima, or any of a host of terrible problems like earthquakes, tsunamis and power grid failures. I work with the problems I can see, and I wish the view were better.
At some point these guys will realize we don't give a shit what they say anymore.
When they destroy the currency, the FED will end itself. Today was the final nail in the dollar's coffin. All credability will be lost when the dollar quits working.
$ quit working long ago.
Not for the zombie banksters.
Have I just been smoking too many banana peels, or does the Mayan calander reset AND the Federal Reserve's charter both expire on 12/21/12?
"One in a million, doc!!" /Frank Castanza
I've brought this up on ZH before and the consensus on here seems that somehow the Federal Reserve Act was modified sometime in the 1970s that removed the language containing the expiration date of the charter. If that is indeed true, the FED became an arm of the government overnight without a whimper nor vote from the people... never mind the Constitution (law of the land) that has no authority for a private central bank. They got away with it when they removed the dollar's last link from gold in 1971, from that date they knew they would need the FED in place to print to infinity.
That explains the birth of electronic commerce, otherwise we'd have to cut down all the trees just to make paper.
The Federal Reserve saving the planet from global deforestation, one tree at a time. - a future FED commercial perhaps?
HYPERINFLATION WILL DRIVE GOLD TO UNTHINKABLE HEIGHTS
We now live in a world where governments print worthless pieces of paper to buy other worthless pieces of paper that combined with worthless derivatives, finance assets whose values are totally dependent on all these worthless debt instruments. Thus most of these assets are also worth-less.
So the world financial system is a house of cards where each instrument’s false value is artificially supported by another instrument’s false value. The fuse of the world financial market time bomb has been lit. There is no longer a question of IF it will happen but only WHEN and HOW. The world lives in blissful ignorance of this. Stockmarkets remain strong and investors worldwide have piled into government bonds in a perceived flight to safety. Due to a century of money creation (and in particular since the 1970s) by governments and by the fractal banking system, investors believe that stocks, bonds and property can only go up. Understanding risk and sound investment principles has not been necessary in these casino markets with guaranteed payouts for anyone who plays the game. Maximum leverage and derivatives have in the last 10-15 years driven markets to unfathomable risk levels, with massive rewards for the participants.
More:
http://www.mmnews.de/index.php/english-news/7063-hyperinflation-will-drive-gold-to-unthinkable-heights
ZIRP has been extended to the year 2525.
If man is still alive.
Now you did it...
http://www.youtube.com/watch?v=1FgSmdfRUus
It will take all freakin' day to get that out of my head.
Does ZIRP stand for Zero In on Ron Paul by any chance?
This is a death sentence if you are a fixed income trader. My fixed income trader support meeting is going to be packed tonight.
No kidding...
Easy to solve....lever up 500x and that 1% yield means something. I'm maxing out my CC to buy them treasuries.
Curious to see what the reaction in the BDIY will be overnight. If it keeps plummeting, I'd stay out of equities despite ZIRP4EVA. If it catches a few bids and comes back above $1000 we might live to see another day.
Oh, and FYI Greece will default and leave the Eurozone. Done deal. Euro is expected to come back to $1.40 by this summer.
Muddle thru.
So...More silver then?
Ha,ha they don't have goal for employment "FOMC DOESN'T SET SPECIFIC LONG-RUN GOAL FOR EMPLOYMENT LEVEL" how would they do it anyway, start their own business in printing industry?
Yeah I wonder what 4% longer rates do when we have 20 trillion in recognized debt in four years. I'm sure that will work out well.
I think this rally gets faded quick as people start realizing exactly what is being admitted today....which is that we are fked.
Don't worry, recovery is right around the corner...riiiigght after mid 2013..err, after 2014. Oh, and housing is bottoming right now..again. And that balancing the budget thingy..we'll get to that right after the rocovery occurs. / sarc (actually I don't even here them even try to lie about balancing the budget anymore)
TheSilverJournal.com
The FED people will be swinging like windchimes before 2015, which may alter their current future projections. So when is the market going to sell the news? Oh yeah, isn't Binkie Bennie going to be grilled any minute now, or are all the questions going to be slow pitch softballs.
Given that chart and the Fed's implied definition of long run, the quote at the top of this web site is appropriate.
Some awesome reporting from CNBCialis, and I quote "Stocks erased their early gains to turn higher Wednesday" Nice job guys!
Shows that they can't keep up. Don't blame them. The pre-programmed pre-packaged news outlets probably weren't anticipating the ZIRP extension today.
It's just Japan redux. Death by a thousand cuts. Drag it out for decades and hope no one will notice they're being poisoned.
Debt is the poison and we have to get rid of it. We can, but we need the political will to do it.
http://strikelawyer.wordpress.com/2011/12/27/saving-the-world-revised-ed...
http://strikelawyer.wordpress.com/2011/12/27/saving-the-world-revised-ed...
http://strikelawyer.wordpress.com/2011/12/31/brief-history-of-jubilees/
Bonus question: how can this idea fund the government AND limit or eliminate fractional reserve banking:
http://strikelawyer.wordpress.com/2012/01/03/seigniorage/
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As for the reality of the Fed's forecasts, they are absolutely worthless, so no point in even spending one minute on them.
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What's amusing about this is every single financial institution has its own economics department, paying people to create models from which to make projections of GDP.
Every goddamn one of them is worthless. It's the most worthless profession on the planet.
Apparently it is lost on the investimg community that if they are keeping the rate that low that long it is for a reason. That reason is fear of deflation.
Of course, the market reaction is: hey the Fed is concerned about deflation, so lets all run out and buy investments that are hurt by deflation. Makes perfect sense to me.
This is not about investing.
This is about dying. Why can they not see that it's not working. Non sugar based growth is NOT HAPPENING.
They are going to destroy everything, and they'll act surprised when it happens.
Would be a lot more effective if they back tested the projections in the pretty graphs in the actual report.....otherwise these are dumb
Highly deflationary for the intermediate term. More of the same. Sub-par growth. Negative interest rates. No hyperinflation anytime soon boys. Maybe in 2030.
Jawboning the market.
Yet another futile attempt to keep the monetization trap door open as long as possible...
and then we implode.
At least we now have a stable date, until we get another one.
How many maxed out with silver bullion JPM CC's is considered "normal" in 2012, anyhow?
$1707
what 2015 really means" if it doesn't crash before 2015, we'll cross our fingers.....well until the president says otherwise"
Don't you see, with all the government debt, if they can lower the interest rates into negative territory, they actually MAKE money on what they borrow????
When in doubt, just refer to my avatar.
When an anvil falls on someone's head you can expect serious injury or death.
When an anvil falls on someone's head in Cartoon Land, maybe the person scrunches up like an accordian, or maybe opens his mouth and swallows the anvil and his body buldges out to the shape of the anvil.
Point being, when an anvil falls in Cartoon Land, it has whatever effect the central planners and manipulators of the animation want it to have.
Little growth until at least 2015 is an anvil. And it did fall. But it fell in Cartoon Land.
"Little growth until at least 2015 is an anvil. And it did fall. But it fell in Cartoon Land."
Classic!
Yeah - but at some point Wile E. Coyote is going to look down.
2013 was omitted alright..
How can bubble boy ben promise ZIRP through 2014 when he will be gone very early (by Feb.) in 2014?
Faber said they would do this back in 2008. This and the ridiculous deficits. They will use dollars for their morning duties shortly.
...Why is Washington D.C. not burnt to the gound after such an offer? Oh yeah, it's only 2012, lol, just a bit early for that yet. Lol. Fear not, that hour shall come upon this generation, the numbers are in. Lol. http://www.youtube.com/watch?v=LQEgZNqa8jE
If nominal growth is 2.2%, but real inflation per Shadowstats is 6.3%, isn't real growth more like negative 4.1%? Sure feels like it is negative, and why would the FED even think about QE if real growth is positive? The Davos crowd is scared.