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A Flashing Warning On The "Unintended Consequences" Of Ultra Easy Monetary Policy From... The Fed?!

Tyler Durden's picture


The case for ultra easy monetary policies has been well enough made to convince the central banks of most Advanced Economies to follow such polices. They have succeeded thus far in avoiding a collapse of both the global economy and the financial system that supports it. Nevertheless, it is argued in this stunningly accurate paper via none other than the Dallas Fed (and BIS economist William White), that the capacity of such policies to stimulate “strong, sustainable and balanced growth” in the global economy is limited. Moreover, ultra easy monetary policies have a wide variety of undesirable medium term effects - the unintended consequences. They create malinvestments in the real economy, threaten the health of financial institutions and the functioning of financial markets, constrain the “independent“ pursuit of price stability by central banks, encourage governments to refrain from confronting sovereign debt problems in a timely way, and redistribute income and wealth in a highly regressive fashion. While each medium term effect on its own might be questioned, considered all together they support strongly the proposition that aggressive monetary easing in economic downturns is not “a free lunch”. Absolute must read!

As we noted earlier:

Hopefully instead of setting up his own irrelevant strawmen, and then knocking them down with a Fed-dictated script, [WSJ's Jon] Hilsenrath, and his profound financial journalist experience, can at least pretend to tackle the questions noted above...

...well he won't. So luckily the Dallas Fed will do it for him...


Dallas Fed QE


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Mon, 08/27/2012 - 18:38 | 2742130 jomama
jomama's picture

just keep trading your paper for metal, bitchez.

Mon, 08/27/2012 - 18:42 | 2742142 SumSUN
SumSUN's picture

Metal.  Soon to be considered Tier 1 asset.

Mon, 08/27/2012 - 18:54 | 2742170 malikai
malikai's picture

I can't read it anymore. It's giving me twitches. When the hell did the FED learn how to observe objectively?

It's too good to be true. There's a rat somewhere.

Mon, 08/27/2012 - 19:43 | 2742260 Chris Jusset
Chris Jusset's picture

Quick!  Someone copy the entire article before every known copy, and every vestige is removed from the Internet.  The Elite cannot possibly allow this truth to be revealed ... as it implicates the entire Ponzi house-of-cards.

Mon, 08/27/2012 - 19:53 | 2742279 zaphod
zaphod's picture

The scary thing is, if you look around the world the FED is relatively stable compared to most other central banks. Just look at what China is doing with their currency, their printing presses have been in overdrive the past 7 years compared to ours. In the strange dark world of central banks Bennie is the most reasonable. This is scary and shows how humanity lets itself be so easily enslaved again and again and again.

Mon, 08/27/2012 - 20:23 | 2742345 AldousHuxley
AldousHuxley's picture

fed is reserve currency....fed's action = inflation around the world not just in US.


also look at history....

US FED vowed not to tighten too much during great depression.

Europeans vowed not to loosen too much during Germany's hyperinflation.



As the great depression generation dies off in US, US is posed for above average inflation....

As WWII generation dies off in Europe, Europe is posed for austerity induced deflation....

Meanwhile in Japan, one generation is experiencing asset hyperinflation and multidecade deflation all within one generation!!


Chinese central banker a are new to this game. Remains to be seen which path they will choose during times of volatility.



Mon, 08/27/2012 - 21:33 | 2742481 Michael
Michael's picture

I'm not worried about the complete and total worldwide economic collapse because there are millions of Paulbots running around the country all over everywhere who know how to fix the problem.

Mon, 08/27/2012 - 21:45 | 2742518 3.7.77
3.7.77's picture

And their tasty also.

Mon, 08/27/2012 - 23:23 | 2742679 New_Meat
New_Meat's picture

Their tasty... what? exactly??

Mon, 08/27/2012 - 23:55 | 2742737 Michael
Michael's picture

Best news I've had all month.

At least this miserable creepy old fuck will soon no longer be roaming my planet.

Arlen Specter Hospitalized With 'Serious' Condition

Tue, 08/28/2012 - 01:07 | 2742798 BlackholeDivestment
BlackholeDivestment's picture

...but he did such great work on the Warren Court. LMAO. Looks like one of Benny and the 911 Jets lost a Wing Nut antichrist freak. Wonder if his grave stone will look like this? ...or maybe this>>>  

...and lets not forget his execellent work after they burned the kids alive, that day when the tanks came during 60 mph winds and pumped CS Gas into a building that had no electricity, just candles and gas lamps. 

I wonder if he had some of Admiral Crowe's York Rite BioPort stock too? Talk about checks in the mail.

Tue, 08/28/2012 - 03:33 | 2742895 New_Meat
New_Meat's picture

+ the magic bullet!

Mon, 08/27/2012 - 22:06 | 2742562 fourchan
fourchan's picture

qe is for making the rich on wallstreet richer by selling out the little

people, their children, and grand children.

i thought this was obvious.

who is caring about the value of the dollar or the debt being created?

nobody at the top thats a fact. buy the fuccing dip.


if qe was for "fixing" the economy it would be fixed lol what a completely evil joke the fed is.

Mon, 08/27/2012 - 23:45 | 2742725 old naughty
old naughty's picture

Children, mine, yours, and theirs :"i am mad as hell and i can't take it anymore..."

Tue, 08/28/2012 - 04:29 | 2742914 Muppet of the U...
Tue, 08/28/2012 - 09:35 | 2743265 Revert_Back_to_...
Revert_Back_to_1792_Act's picture

China encourages and allows their people to purchase gold and silver.

Pretty sure that some  banks will even sell small size bars.

You cannot print value into the system, you have to mint value into the system.


Mon, 08/27/2012 - 20:07 | 2742303 q99x2
q99x2's picture

They don't care that everyone knows. They are prepared to kill us all soon anyhow.

Mon, 08/27/2012 - 20:41 | 2742379 Whoa Dammit
Whoa Dammit's picture

William White is sooooo fired by the Fed.


Mon, 08/27/2012 - 21:23 | 2742460 Tunga
Tunga's picture

Don't you take that tone with me!

Mon, 08/27/2012 - 21:42 | 2742504 TwoShortPlanks
TwoShortPlanks's picture

"Fired"??? LOL, nar-mate, 100% endorsed by the Puppeteers...the next White Paper will be something about the merits of using Gold to bridge the gap between Base Money and Bank Assets... so that we may bolster Banks Reserves and in doing so, allowing the FED TO SAVE THE WORLD!

The Fed, fighting for truth, justice, and the American way!

Can anyone say 'Turn-Coat'?!

The picture becoming a little clearer for everyone?

Mon, 08/27/2012 - 22:00 | 2742552 illyia
illyia's picture

Actually that is rather insightful... and I do enjoy some meat with my stupid television tricks...

Thanks, Tyler(s).

Tue, 08/28/2012 - 00:31 | 2742783 Rubbish
Rubbish's picture

Is this a don't hang me, I'm one of the good guys

Mon, 08/27/2012 - 20:10 | 2742309 slewie the pi-rat
slewie the pi-rat's picture

hey, mali_kai!

hi mom!

Mon, 08/27/2012 - 23:46 | 2742726 HardAssets
HardAssets's picture

You mistake their p.r. released 'purposes' of stable currency, reduction of unemployment, and general economic growth for their real purpose. - - - This is to provide the conditions for their private bankster owners to rob the citizenry and to cover their behinds (by making the citizenry pay) when it periodically crashes. Then using bailouts they get to buy assets on the cheap and eliminate their competition.

They don't give a damned about the American people - - - just their own wallets and power.

The central banks cause the business cycle. To have the gall to say they can't 'fix' the problems they have been causing for decades is un-freakin' believable.

Tue, 08/28/2012 - 00:22 | 2742768 Whoa Dammit
Whoa Dammit's picture

I read the whole paper. It scared the shit out of me, because of things like this :

"Short of a wholesale restructuring of the liabilities of financial institutions (linked to recognizing losses on the asset side of the balance sheet), it is not clear what central banks can do to restore the financial system to health."

I guess I shouldn't be so spooked, but I am not used to the truth coming from such an unlikely source as the Fed. 


Tue, 08/28/2012 - 02:00 | 2742838 All Risk No Reward
All Risk No Reward's picture

You've taken the bait.  The Fed is a criminal cartel and they've only playing the role of intellectual idiots in order to provide cover for their criminal operation.

The banksters own trillions in debt and trillions in cash via their front corporations.

JP Morgan is giving out 3.5% 30 year loans.

Anyone who thinks hyperinflation is imminent simply does not have a clue in regards to self interest, cost benefit and other basics of Econ 101.

They will likely hyperinflate, but not until they've traded their cash and debt ownership into REALITY by taking most of society's chit.

I hope you all have control over the NECESSITIES OF LIFE, because that's what is going to matter.

I'm not there yet and yes, I'm nervous about it.  But I'm working towards it.

It gets real fun when the brown truck of happiness stops running!

Mon, 08/27/2012 - 19:15 | 2742218 vast-dom
vast-dom's picture

this needs to be tattooed on Bernanke's face before Jackson Blackhole! Seriously! WTF kind of ponzi is a ponzi when it's this blatent and transparent! STOP BERNANKE NOW! FUCK THE FED! FUCK CENTRAL PLANNING BANKING!

Mon, 08/27/2012 - 19:48 | 2742271 Tango in the Blight
Tango in the Blight's picture

I'm trading easy credit for metal. Do I need to worry?

Mon, 08/27/2012 - 21:51 | 2742531 A Nanny Moose
A Nanny Moose's picture

Just by a "good" boat in which to store it, and you will be fine.

Mon, 08/27/2012 - 20:22 | 2742341 Silver Bug
Silver Bug's picture

Gold and Silver. The only real money. Seems like they may gradually be waking up.

Mon, 08/27/2012 - 18:39 | 2742133 pleseus
pleseus's picture

Risk Off Phase coming.  Time to sell or go short.

Mon, 08/27/2012 - 18:42 | 2742147 Xibalba
Xibalba's picture

Not until 9-11.  After all.... it is a centrally planned event. 

Mon, 08/27/2012 - 18:53 | 2742168 pleseus
pleseus's picture

Why wait for the rush towards the exits with the no QE3 announcement?  The guy who gets out first can beat the traffic.  You can always sneek back in if the movie is still playing.  If it looks like a duck and walks like a duck than it's probably a duck.  I'm sorry, but QE3 ain't gonna happen in a couple of weeks.

Mon, 08/27/2012 - 20:12 | 2742316 Haole
Haole's picture

"...but QE3 ain't gonna happen in a couple of weeks."


Overtly, perhaps not.  Covertly, you'd better believe it because global QE never stopped despite the Bernank-speak-based reality many are under the delusional spell of.   Either that or this ride circling the bowl we're on hits the pipe.

Mon, 08/27/2012 - 19:17 | 2742219 Dr. Engali
Dr. Engali's picture

Biderman has it wrong. Easing is not about driving interest rates down to help the economy .. It's about free money to the government for huge deficit spending and supporting the banks. Not necessarily in that order.

Mon, 08/27/2012 - 19:48 | 2742272 fonzannoon
fonzannoon's picture

It was really interesting exactly how much Biderman seems to be off in that vid

Mon, 08/27/2012 - 20:14 | 2742320 Haole
Haole's picture

Said it once I'll say it again.  Biderman is a perfect example of what is wrong with the U.S. and the "system" itself.

Mon, 08/27/2012 - 20:13 | 2742319 slewie the pi-rat
slewie the pi-rat's picture

not only that, but the checks are in the mail and 20% of the labor force has jobs!

Mon, 08/27/2012 - 21:27 | 2742465 Tunga
Tunga's picture

Ya! So it could be worse. Um. Right? Somebody through me a friken bone here I've been frozen for a 100 years!


Mon, 08/27/2012 - 21:33 | 2742482 Tunga
Tunga's picture

You will pay me 1 MILLION DOLLARS or I will destroy the entire world wide economy! 

Mon, 08/27/2012 - 21:36 | 2742491 Tunga
Tunga's picture

Oops, I just threw up on myself a little bit. 

Mon, 08/27/2012 - 18:42 | 2742140 Xibalba
Xibalba's picture


Mon, 08/27/2012 - 18:42 | 2742145 Rainman
Rainman's picture

Bernank is wiping his ass with this working paper as we speak

Mon, 08/27/2012 - 18:53 | 2742162 intric8
intric8's picture

Is this the feds idea of a disclaimer? Nobody is twisting their arm, in regards to implementing policy.

Mon, 08/27/2012 - 21:29 | 2742472 Tunga
Tunga's picture

"Two words Mr. President; Plausible deniability." - Independence Day 

Mon, 08/27/2012 - 18:55 | 2742175 Blubaba
Blubaba's picture

"We are now all AUSTRIANS"

Mon, 08/27/2012 - 18:56 | 2742178 LongSoupLine
LongSoupLine's picture



just another fine example of the Fed not knowing what the fuck it's doing.  There's so much conflict within it, I doubt they even know which hand to wipe their ass with after a shit.

Mon, 08/27/2012 - 18:56 | 2742179 Cognitive Dissonance
Cognitive Dissonance's picture

The Fed just wants to be able to say that they warned us about pushing the red button.......just before pushing the red button.


Mon, 08/27/2012 - 19:06 | 2742197 centerline
centerline's picture

They want the fingerprint of the politicians on that big, fat button.  All five digits, no partials.

All the "end the Fed" stuff is playing right according to plan it seems!   

Mon, 08/27/2012 - 19:12 | 2742212 nmewn
nmewn's picture

Its not surprising but it is "a good thing". The Fed is a creation of the political class.

I don't think the "Dr.Frankenstein created me so don't kill me for drowning your daughter" defense is gonna work at this point though.

Mon, 08/27/2012 - 21:37 | 2742495 BoNeSxxx
BoNeSxxx's picture

"Dr. Jekyll created me..."


Fixed it fer ya.  ;-)

Mon, 08/27/2012 - 22:12 | 2742575 nmewn
nmewn's picture

lol...time to crawl in my coffin for de effnining ;-)

Mon, 08/27/2012 - 19:06 | 2742200 Dr. Engali
Dr. Engali's picture

They will always tell you what they are going to do to you before they do it.

Fisher better shift out of that fake paper gold and into real gold before they hit the destruct button.

Mon, 08/27/2012 - 21:22 | 2742458 r00t61
r00t61's picture

Richard Fisher at the Dallas Fed is token contrarian/controlled opposition.  He's one of the deficit/easing "hawks" and Janet Yellen at the SF Fed is one of the "doves." 

They play their parts in the Hegelian dialectic that's been constructed.  Bernanke is the one who "officially" pulls the monetary lever on the Fed's economic wonk-box after he listens to his "council of elders," which include Fisher and Yellen, who are ostensibly tugging at him in opposite directions.

But it's all just CYA for the Fed.  Suppose if and when sometime in the future, Bernanke is out as Fed Chairsatan, and some "other guy" is finally put in charge of the Fed.  Let's call this fella "Hugh Banks."  The political climate has changed, and people are suspicious of loose monetary policy - it's lost credibility in the public mind because of widespread economic contagion. 

This same thing happened to classical Keynesians in the '70s - their policies fell out of political favor when their models failed to predict that era's stagflation.  In fact, Keynesian theory asserted that stagflation - high unemployment occurring simultaneously with high inflation - was IMPOSSIBLE.  Politicians jettisoned Keynesianism (even though Keynes' economic theories are a big statist's dream), and this gave Monetarism an opportunity to become the new favored economic "son."

So, in this future climate, people are asking, "What is the Fed good for?  You're supposed to prevent recessions, and price inflation, and ensure employment, and yet, during Bernanke's term, you, the Fed, got it all wrong."  Some politicians might talk about changing the structure of the Fed, or "ending" its "independence."  Some others might even talk about (gasp!) ending the Fed altogether.

But Mr. Hugh Banks can reply, "Well, not all of us got it wrong.  You can see that Richard Fisher at the Dallas Fed argued for less easing, less monetization.  We unfortunately didn't listen to him.  But we've learned our lesson since then.  Now, the Fed is prepared to deal with future economic problems, based on lessons learned."

Pure CYA.

Mon, 08/27/2012 - 21:43 | 2742508 honestann
honestann's picture

I assume everyone knows who the next chairman of the federal reserve will be.  Clue: Not Hugh Banks.  Try Paul Krugman, because Bernanke is a wimp and his helicopter is much too small.

Mon, 08/27/2012 - 18:57 | 2742181 q99x2
q99x2's picture

What it took 4 years of raping nations to realize that...arrest them.

Mon, 08/27/2012 - 19:03 | 2742192 gjp
gjp's picture

Try 99 years, plus several hundred more by their fractional reserve banking predecessors.

And don't think this paper will make it stop. It will only stop when the host is bled dry. That may be pretty soon, but the kleptocrats will never stop of their own volition.

Mon, 08/27/2012 - 19:04 | 2742194 Turin Turambar
Turin Turambar's picture

Austrian Business Cycle Theory FTW Bitchez!!!!

Mon, 08/27/2012 - 19:07 | 2742202 centerline
centerline's picture

Minsky.   FWIW.

Mon, 08/27/2012 - 19:06 | 2742198 nmewn
nmewn's picture

Wait, no more debt binky?...waaahhhhhhhhhhhhhhh!!!

Mon, 08/27/2012 - 19:08 | 2742204 centerline
centerline's picture

lol (and +1)

Mon, 08/27/2012 - 19:08 | 2742205 Dr. Engali
Dr. Engali's picture

We all know at this stage of the game that's impossible. We are in print or die mode.... Well more like print and die later mode.

Mon, 08/27/2012 - 19:10 | 2742209 centerline
centerline's picture

print and say it is ok mode.  then print and say we can stop any time mode.  print and say it will be okay tomorrow mode.  etc.  etc.  lol.

Tue, 08/28/2012 - 02:05 | 2742842 All Risk No Reward
All Risk No Reward's picture

You assume "die" is not what they want.

Take a look at their policy towards sub-Saharan Africa.

They own trillions in debt and they own trillions in cash.

Society owns the debt.

They buy up the world for pennies on the dollar - and you think they won't?


They've ripped off our faces every step of the way until now...  but now they'll stop because they are, what?  Stupid?

Hook, line and sinker.

They aren't stupid - and their plan is running very well.

Mon, 08/27/2012 - 19:09 | 2742207 Cone of Uncertainty
Cone of Uncertainty's picture

Fuck this financial, ivory tower, mental masturbation horseshit about the Fed...WHERE THE FUCK IS CORZINE?

Mon, 08/27/2012 - 19:13 | 2742215 centerline
centerline's picture

You don't want to know.  It would only piss you off even more.

Mon, 08/27/2012 - 19:52 | 2742278 nmewn
nmewn's picture


And Holder. But we already know don't we?

The law is for the little people...trying to board an airplane or trying to get a state drivers license. Why do individual states need to have my FEDERAL SOCIAL SECURITY NUMBER in order to get a STATE drivers license now so that I can conduct commerce in the usual manner WITHIN my state?

Fucking gestapo.

Mon, 08/27/2012 - 19:12 | 2742213 insanelysane
insanelysane's picture

The objective is to extend and pretend until a black swan emerges to take the blame.  It isn't the FED that caused the collapse, QEx was working fine right up until the black swan took us down.

Mon, 08/27/2012 - 21:16 | 2742444 bobert
bobert's picture


Tue, 08/28/2012 - 02:13 | 2742847 All Risk No Reward
All Risk No Reward's picture

Exactly.  That's where Iran and the Straight of Hormuz or similar comes in.

The criminals know that the average consumer doesn't stand a chance at figuring out that correlation is not causation when the captured media tells them it is causation in an orgy of appeal to authority logical fallacy.

Hone those Trivium skills, ladies and gentlemen...

Mon, 08/27/2012 - 19:13 | 2742216 blueridgeviews
blueridgeviews's picture

Weimar Germanmy was able to print money for 4 years before inflation really took off.

Mon, 08/27/2012 - 19:17 | 2742224 magpie
magpie's picture

Define 'take off' 20, 50 or 100 % inflation ?

Mon, 08/27/2012 - 20:41 | 2742382 mick68
mick68's picture

It's been 4 years at the very least.

Mon, 08/27/2012 - 23:10 | 2742658 yogibear
yogibear's picture

Time is running out.

Mon, 08/27/2012 - 19:17 | 2742221 Meesohaawnee
Meesohaawnee's picture

my bet is they wont do QE but quite honestly i wish there were a mandate on ZH to not discuss it. Were only playing into the silly game and they want us to discuss it for their own benefit. . That being said they could let this puppy lie over and die after the election. Like its gonna matters and besides, if you have a black swan they know the sheeple have short memories. Nobody will remember by 2016. Cone, dead on. I cant wait till day i dont hear QE anymore. Im so fucking sick of it.

Mon, 08/27/2012 - 19:20 | 2742227 insanelysane
insanelysane's picture

They have to do QE or peoples' 401Ks go down 50-75%.  Add that to peoples' homes losing 30-50% of value, wages remaining flat, and the cost of food and fuel rising 10% and you start to see discontent.

Mon, 08/27/2012 - 20:25 | 2742351 Mr. Fix
Mr. Fix's picture

They don't care about any of that.

Mon, 08/27/2012 - 21:18 | 2742448 bobert
bobert's picture

+ 1 again.

Mon, 08/27/2012 - 20:20 | 2742334 Haole
Haole's picture

"I cant wait till day i dont hear QE anymore."


One should be careful what one wishes for but I agree, the sooner we move on to whatever is next the better... Maybe.

Mon, 08/27/2012 - 19:16 | 2742223 sschu
sschu's picture

Sorry Bennie, you are 4+ years too late, maybe even 12 years.  Now that you have handed trillions to the bankers and government union workers you want to say it was all a mistake?  Sorry, you cannot get off this easy.

The seeds of this crisis were sown in 2001 when the Maestro decided to drive interest rates down so we could all keep going to the mall.  Bennie turned a blind eye to the sub-prime mess and then decided to hand mega bucks to his buddies on Wall Street to keep their bonuses flowing.  

What is the point anyway?  That we should let the same incompetent thieves fix the problems they created?  It will probably be so, but it would sure be nice to see some integrity for a change.  

How about let's start with Bennie and Timmy submitting their resignations at Jackson Hole?  It would be easier than a noose.  


Mon, 08/27/2012 - 19:22 | 2742231 disabledvet
disabledvet's picture

Texas tea BITCHEZ!

Mon, 08/27/2012 - 19:23 | 2742234 surf0766
surf0766's picture

Looks like a pre-election paper in case the Audit the Fed actually gathers steam.

Mon, 08/27/2012 - 19:24 | 2742238 A_MacLaren
A_MacLaren's picture

Gracious, between this modicum of rationality and the prior work suggesting that TBTF or SDFI should be broken up, sound like The Dallas Fed are bucking for a FRBS coup, or at least an insurrection. 

Or maybe they just don't want to be hung by the Lone Star State Militia when the rev0|uti0n finally gets initiated by some good ole boyz.

Mon, 08/27/2012 - 19:32 | 2742251 Juan Wild
Juan Wild's picture

The Dallas Fed and the other Feds don't have any power. They are always challenging Bernanke to make it appear as if there is actually some open discussion. In the end its all about Bernanke. And he didn't write this. But he did write a book about The Great Depression.

Mon, 08/27/2012 - 20:27 | 2742343 slewie the pi-rat
slewie the pi-rat's picture

well he signs slewie's check too!

he works for me!

and he may make USMint-produced gold and silver coinage lgal tender or mikeTyson will bite his fuking ear off

Mon, 08/27/2012 - 19:41 | 2742259 Fedophile
Fedophile's picture

The unexpected beginning of the financial and economic crisis50, and its unexpected resistance to policy measures taken to date, leads to a simple conclusion. The variety of economic models used by modern academics and by policymakers give few insights as to how the economy really works. - William White pg 14

At least one of them gets it...

Mon, 08/27/2012 - 20:30 | 2742358 slewie the pi-rat
slewie the pi-rat's picture

it works b/c of turbo-hydromatic nukuler-powered printerz!

the FED is so happy that one person understands them that they are purring!

Mon, 08/27/2012 - 19:42 | 2742261 atomicwasted
atomicwasted's picture

Meet Team B.

Mon, 08/27/2012 - 19:55 | 2742274 TomGa
TomGa's picture

Jeez, only about 80 years late learning these lessons.  These central bankers really aren't all that smart, are they?

Mon, 08/27/2012 - 20:10 | 2742310 adr
adr's picture

But the question is: Does Barrack hate black people?

The answer is: No, he loves black people.

He will turn Isaac into a mild tropical storm from a hurricane to save the black people in New Orleans. Unlike Bush who strengthened Katrina into a Cat 5 just to kill black people.

Mon, 08/27/2012 - 20:37 | 2742370 slewie the pi-rat
slewie the pi-rat's picture

michelle thinks tyler is h.o.t.

i kid her that we think she is related to thomas jefferson

Mon, 08/27/2012 - 20:43 | 2742387 nmewn
nmewn's picture

lol...but he's also merciful...he spared his enemies at the convention in Tampa.

(Sigh)...truly the One.

Mon, 08/27/2012 - 21:21 | 2742456 bobert
bobert's picture

Yeah...people faint around him.

Mon, 08/27/2012 - 20:29 | 2742356 GlomarHabu
GlomarHabu's picture



Long paper..took me three naps to get through it.

Impressions:  We are way,way beyond this papers observations. Why?  Several answer are reasonable but allow me to focus on just two.

Those runniing advanced economies have now been exposed as being totally dishonest. The extra billion Goldman Sachs received that we we never to know about, the Libor cover up by what can only becalled criminal behavior by Bernanke and Geithner in allowing it to go on for four years is prima facia evidence of a cover up. They should both be in jail.

The resuly of just these two (and untold number) of other criminal activity on WS and in our goverment has destroyed the confidence of the consumer to invest in anything. The rich are now hoarding appproximately 32% of their wealth because of their fear of the next giant fraud we will hear about.

This leads to the second point. Jobs. Years of outsourcing prior to the easy money approach has created a situation whereby the US worker can no longer find jobs in their fields. New graduates are not "learning at the knee" of the experienced workers because most of the boomers are retiring and going inot lockdown. We are losing the skills a society needs to have in order to grow. Once everyone thought we didn't need skilled machinists anymore, that we would become the worlds financial manager ...we all see how well that has gone. Were it not for fraud and criminal activity AT THE TOP of WS and US Government we would have loong ago collasped ..we still will it's just death by a quadrillion valueless dollars.

So no industry and no honesty where it counts the most.  Yeah, we're way beyond the paper presented. We're finished.


Mon, 08/27/2012 - 20:50 | 2742391 slewie the pi-rat
slewie the pi-rat's picture

well they're our banksters and criminals and they are the best in the world (except for 41 other places) so we bailed the asswipes out

now they take care of us or they don't

so they owe us but it would be gauche to mention it

besides we may have this all taken care of inother 5 years comrade BiCheZ*

and they have promised me that they will be more careful which is fuking hilarious isnt it?

Mon, 08/27/2012 - 20:58 | 2742417 slewie the pi-rat
slewie the pi-rat's picture

*this is why it is imperative for the political horses to pledge to get the fiscal situ under control

if they say that, consider voting for the fascist SOB

i would hope they could cut down the subsidies to their freaking cronies for a few months;  i was born at night, but not last night

we went thru the corpo-fascist bullshit parade last summer and it cost our our c.r.e.d. rating

get the budget under more reasonable control

and i expect my check; i am not a farmer or a doctor ya know! just stop the fukaround.  now

we hafta eat our peas

think about what is best for the markets and for our children and don't take no for an answer.  this is our neighborhood, not theirs

Mon, 08/27/2012 - 21:00 | 2742362 khakuda
khakuda's picture

Hell yeah! That's it NYC, we're done. Keep your liberal wackos, million dollar one bedrooms and your 12% combined state and city tax rate, I'm moving to Texas, the land of no state income taxes, peroxide blondes with enorgreat liters, great weather and sane free market economists! I'm going to put some SRV on the stereo right now in tribute.

Mon, 08/27/2012 - 20:37 | 2742372 mick68
mick68's picture

Always get  a kick out of the educated types having to write a 10,000 word thesis to prove a fact any pig farmer knows due to common sense.

Mon, 08/27/2012 - 22:19 | 2742586 LMAOLORI
LMAOLORI's picture


Indeed if you put lipstick on a pig it's still a pig

Mon, 08/27/2012 - 20:52 | 2742403 buzzsaw99
buzzsaw99's picture

the fed are crooks, counterfeiters, insider traders, frauds, thieves, chiselers, illegitimate sons of swine. that was a lot shorter.

Mon, 08/27/2012 - 21:11 | 2742436 slewie the pi-rat
slewie the pi-rat's picture

hey buzz_99!

don't ferget timmah

"executive" material;  he signs the checks too!  it's on the FRN bills

we have the best banksters

Mon, 08/27/2012 - 22:46 | 2742625 buzzsaw99
buzzsaw99's picture

They have so thoroughly effed up the economic ecosystem that I spit on their clownbux.

Tue, 08/28/2012 - 00:27 | 2742776 RockyRacoon
RockyRacoon's picture

Looks like it's time for a shift-change in Warshenden DC.  All the bankers move to gov't jobs, and all the govvies move to jobs on Wall Street.   Merry-Go-Round, Musical Chairs, 3-Card Monty, whatever you want to call it.  Charles Ponzi pulling all the levers and twisting the dials -- again.

Tue, 08/28/2012 - 07:35 | 2743046 slewie the pi-rat
slewie the pi-rat's picture

hey R_R!

flea cricus?  BEing itself?

very highly trained fleaz :>  worst kind

Mon, 08/27/2012 - 23:14 | 2742664 yogibear
yogibear's picture

The best educated counterfeiters. PhDs in stealing wealth.

Mon, 08/27/2012 - 23:30 | 2742701 Honey Badger
Honey Badger's picture

Yes, if they had this much sudden clarity, they would put a bullet in their head, figuratively speaking.

Mon, 08/27/2012 - 21:27 | 2742407 Cabreado
Cabreado's picture

Self-absorbed leadership always leads to hell.

Skipping along the way...

When the personal fantasy gets rough,

rats jump ship.  Or mutiny.  Or whatever.
It doesn't actually matter.

It is all Self-preservation,

and spewing hastily conjured truth in whatever form at this stage is

more a pathetic continuance of cowardice than anything else.

The same cowardice that led to... where we are.

The allegiance changes at will, always too late in the game, and it is
glaringly obvious (but not to them).

These people play games -- in pathological Self-Absoption,

and they ultimately become very dangerous to any worthy organization.

ps. by "worthy organization," I don't mean the Fed.

Mon, 08/27/2012 - 21:01 | 2742412 WhiteNight123129
WhiteNight123129's picture

Is William White telegraphing a 1866 McCulloch style contraction or a 1921 rise in rates? There is a HUGE rat here....It signals a huge fight within the Fed or that Bernanke is preparing  1929 (contraction)-1932 (devaluation) in reverse order this time? That would be really wicked.



Mon, 08/27/2012 - 20:56 | 2742413 A Lunatic
A Lunatic's picture

Filed under 'appearances are everything'.

Mon, 08/27/2012 - 21:17 | 2742447 slewie the pi-rat
slewie the pi-rat's picture

yeah but it beats the hell outa more boilerplate

we do not need that crap A_L

Mon, 08/27/2012 - 21:12 | 2742437 SDRII
SDRII's picture

William White, who highlighted the risk of a credit bubble bursting in 2007 when he was chief economist at the Bank of International Settlements, called on the G20 group of rich and emerging economies to strengthen surveillance mechanisms to prevent the risk of imbalances reaching dangerous levels. White told Emerging Markets that the G20 had been “living under a dangerous misapprehension” over the past year that the recovery was on track. “Essentially all the imbalances, both internal and external, which precipitated the crisis, are still there,” he said. “In some respects, the situation is reminiscent of the late 1920s and in some respects even worse. Far from being on a path of sustainable recovery, the crisis is not over.” G20 finance and development ministers are meeting in Washington this weekend to prepare the agenda ahead of the summit of leaders in Cannes in November.

Mon, 08/27/2012 - 21:14 | 2742440 SDRII
SDRII's picture

William White predicted the approaching financial crisis years before 2007's subprime meltdown. But central bankers preferred to listen to his great rival Alan Greenspan instead, with devastating consequences for the global economy.

Mon, 08/27/2012 - 21:19 | 2742451 Tunga
Tunga's picture

Ya think?

Mon, 08/27/2012 - 21:26 | 2742464 Cult_of_Reason
Cult_of_Reason's picture

Will anyone actually present this paper to the obsessive compulsive money printing boneheads in Jackson Hole?

Mon, 08/27/2012 - 21:28 | 2742470 Slightly Insane
Slightly Insane's picture

The only thing "easy money" has done is to lengthen the fuse.  The downside is that at the same time, mal-investments are being made, so the "bomb" gets bigger.  The economy would have been better off (we would have been better off) if they let the system crash and let the a-holes take the hit, then to keep them alive, and allow them to hide these bad investments.  Now the pain will be worse.  The end of this mess is indeed near.  Let this "bomb" go off, so we can get on with "re-building" after the rubble settles.  The cancerous growth has to be cut out, or the host (you and me) will die.  I'm of the opinion that we need to address these culprits of financial malfeasance, and let them know that we will hold "them accountable".  I'm thinking that these jerks need 30-40 years on the rock pile.  No club med for these crooks.  I'ld love to be the warden, or one of the straw bosses wearing the reflective sunglasses with the scoped rifle.  "A-LA- Cool Hand Luke".  "What we have hearrrrr is a failure to communicate"!

Mon, 08/27/2012 - 21:29 | 2742474 JackT
JackT's picture

It is obvious to me that the Fed has been hacked and some rouge group has placed this document on their server. I'm dumbfounded.

Mon, 08/27/2012 - 21:41 | 2742503 akak
akak's picture

My bet is on the Khmer Rouge.

Damn, is that Pol Pot ever going to go away?

Mon, 08/27/2012 - 21:44 | 2742514 Tunga
Tunga's picture

Not at $200 an ounce.

Mon, 08/27/2012 - 21:33 | 2742483 booboo
booboo's picture

Ted Bundy, Gary Gilmore and John Wayne Gacey were very convincing too. Other then that, everyone knows that you are supposed to stomp on the gas when you reach the peak so you can really catch some air time on the way down and it gets the kids in the back seat to stop screaming for just a few seconds.

Ben (I won't cum in your mouth) burn the shorts Bernanke is going to do it again.

The great thing about sites like ZH and others is that unchecked monitizing of the debt no longer fly's under the radar. In the past it was just "one of those things" that caused inflation. It is no longer a mystery to a great many more people and that my friends is the real service that is provided by a free thinking non Government controlled medium called the internet.

 Regardless of what they do they will only open themselves up to more critical thinking and what was supposed to be a somewhat secret cabal is now exposed for the decrepit broken down society of old money elites on the verge of walking the plank.

Mon, 08/27/2012 - 21:36 | 2742492 aztec two step
aztec two step's picture

The problem with this blog is that you have been predicting Armageddon since your inception in 2008/09. The world may some day end and you may be correct. However, if one had taken the collective advice here over the last several years you would be in the very poor house. The object of trading is not being intellectually right or wrong. The object is generating trading profits and if one had listened to the wisdom offered by the financial equivalent of a World Wrestling Federation match gathered here one would be broke and unable to attend the wrestling match or watch it on cable. You are one note ponies and it is time for a new note.

Mon, 08/27/2012 - 21:39 | 2742499 bnbdnb
bnbdnb's picture

Hmmm...up approximately 1300 pips on EURUSD short... Maybe you should learn to read.

Mon, 08/27/2012 - 21:43 | 2742510 aztec two step
aztec two step's picture

Read the kook above me who is lamenting inflation. The Fed has tripled or quadrupled its footings since 2007 and this has not become Weimar Germany. If you bought the wheelbarrow concession you are underperforming alot of equities.

Mon, 08/27/2012 - 21:52 | 2742533 bnbdnb
bnbdnb's picture

Inflation would result in dramatically higher paper asset prices. Check. You ok?

Mon, 08/27/2012 - 21:53 | 2742536 booboo
booboo's picture

Hey dipshit (since name calling is a sport for you) My stock in trade is home building and since material prices are at a all time high it is hard to compete with bone crushing lows on existing homes, so in my line of work it may as well be Weimar. If you are in denial about the Fed created bubbles that got us here you're the "kook"

Tue, 08/28/2012 - 07:55 | 2743063 slewie the pi-rat
slewie the pi-rat's picture

hey A2_step!

you criticism are not invalid;  some trade here;  some do not;  we do discuss it differences ALL the time and most especially w/ the PMs where many are changing money :> paper & plastic to theReal;  digital noatation to the actual music of stacking silver belles

some trade around core positions (gracelandStewie and his jug band) and there are others who just roll;  these types use the paper contracts and the ETFs

hindsight is always 20-20

the zH analysis operates on the margins of time

people are always advised to read the "disclaimer"  and i frequently remind the BiCheZ (and tyler) :> manifesto

personally: tyler is sucha hot ticket i do not thing one can give him too much attn

most here give him too much authority over ideas but that is not abnormal

grist for the miller

tyler knows how to make v good "soap" and we also perpetuate the most ignored advice in the history of finance:  put a coupla rounds thru the TV and then throw it off the tallahoochiBridge, billy-joe!

Mon, 08/27/2012 - 22:13 | 2742512 Cabreado
Cabreado's picture

Watch out for step three...

You are part of the problem.
But you do not understand that.

The fact that you do not understand --

that is our downfall.

Mon, 08/27/2012 - 21:48 | 2742521 BoNeSxxx
BoNeSxxx's picture

I beg to differ... my NAV has increased by over 100% since I started reading ZH... And this shit show is just getting warmed up.

Mon, 08/27/2012 - 21:59 | 2742540 Tunga
Tunga's picture

And Silver is only up 500% since 2000. Doh!


"My biggest blunder!" - Alfred Einstein

Mon, 08/27/2012 - 21:47 | 2742520 booboo
booboo's picture

What a coincidence, the other Aztecs said the same thing as Cortez was cresting the hill in 1521

Mon, 08/27/2012 - 21:56 | 2742544 Madcow
Madcow's picture

what else are they going to say ?

we've had 100 years of growth.  we'll see how the fiat machine holds up under multi-decade deflation.


i reckon gold is going up now - not because of fears of "inflation"  - but becuase the markets are now pricing in 30 years of default - 



Tue, 08/28/2012 - 08:04 | 2743081 slewie the pi-rat
slewie the pi-rat's picture


paper money pretends to "manage" debt

PEOPLE are s'posed to manage debt and we are here to BiCh-slap the dgenerate asswipes into doing their fuking jobs instead of manipulating OURS!!!

non-financial REAL assets can also extinguish debt;  dostoevsky's characters are always giving their banksters timber tracts to get back to the cathouse-casino or the snowstorm of 'normal' life

Mon, 08/27/2012 - 22:17 | 2742581 Ted Baker
Ted Baker's picture


Mon, 08/27/2012 - 23:37 | 2742609 drexlraw
drexlraw's picture

passive/aggressive pissings of an abuser...fuk!to get paid to write such..


Mon, 08/27/2012 - 22:37 | 2742611 Slightly Insane
Slightly Insane's picture

There is "no way" that providing "easy money" to stave off a collapse will improve the outcome for the "general economy" .... but what it will do is allow the perpatraitors (criminals) to effectively shift their losses to you.  This "time" is needed to siphon money from you (via money printing) and get it to the culprits.  The wealth transfer is from you to them (via the dilution of the currency).  The only beneficiaries in such a game are the thieves, and bankers (one in the same).  Money printing is a license to steal.  Counterfeiters would get 50 to life, why do we let these guys do it every day?

The unintended consequences, of "ultra monetary easing" are not fully known in this case, as it has never been allowed on a global scale.  I suggest one of the unintended consequences is the "tightening of a hangman's knot" upon the neck for those who have used this "monetary easing" to transfer wealth from the public to the "private".

I am so pissed off that this has been allowed to happen, (debasing a currency to provide releif for the criminal banking sychopaths) that the punishment should be extreme in nature.  I would treat all as "Conterfeiter's ... starting with the Bernak .... with punishments fitting the grievous nature of the crime.  This is no different then "horse thievery"

Mon, 08/27/2012 - 22:45 | 2742622 Mr_Wonderful
Mr_Wonderful's picture

TWIST doesn´t expire until the end of the year so the probability of the FED announcing new QE any time soon is zero.

Since tax on capital gains will be going up after the new year there will be increasing incentive to sell for the rest of this year. Thus, the market has been run up lately for distributive purposes mostly.

Mon, 08/27/2012 - 22:52 | 2742635 UTICA CLUB XX PURE

Rest easy doubters. It's America. No one will read it... 

Tue, 08/28/2012 - 08:06 | 2743085 slewie the pi-rat
slewie the pi-rat's picture

my mother raised me on uticaClub X^X

Mon, 08/27/2012 - 23:23 | 2742681 boiltherich
boiltherich's picture

Another unintended consequence, when the planners do things like prop up dead banks, bailout auto companies, lend trillions to financial crooks, put a support floor under equity prices, bolster commodity prices, manipulate ForEx, and run a regime of ZIRP which is really NIRP when you account for a true level of inflation....

What could go wrong? 

How about the fact that even after all that feeding the financial monster Main Street is still a zombie with incomes and household wealth dropping for 93% of Americans, real un and under employment at depression levels, yet any hint that the Treasury or Fed is going to stop the insane fire-hosing of money at the wealthy and corporate elite means the banksters will shut down what remains of productive America and run with their profits. 

If TPTB are seen as about to shut off the flow the banksters will dump debt that they see as about to drop in price, bingo, the consumer see interest rates spiraling to the moon, and the depressed housing market takes the next big leg down.  If it is percieved that equities will go south because QE is ending they will get dumped as well and there goes your value in your IRA's, 401k's, and kids college fund.  Reirement you say?  Ha!  That is so 1980.

And when the banksters pull trillions from bonds and equities where do you think it will get parked?  Did you say commodities? 

As with oil dropping but gasoline shooting through the roof, the banksters know that they can force the Obama administration to release crude from the SPR just by bidding up the price of gasoline.  Add in a refinery fire and a minor wind storm and you have $5 gas by the end of Labor Day weekend two months from elections.  Releasing crude might slow the rise of gas prices but it will not lower them, and the release itself will be attacked politically six ways from Sunday.  The banksters may actually be able to manipulate the election this way.  But the suggestion that release was being considered made release inevitable because if they talked about it and then did not do it that alone would send prices much higher forcing the release.  The only way now is for the administration to shrug shoulders and say "in for a penny in for a pound."  Announce a HUGE release that will be enough to drop gas by a buck in two weeks.  He will get a political hiding for it either way. 

Another consequence is the Greek-ization of America, a nation where one cannot support oneself via honest wages for work performed, so you cheat, under the table tax dodging, you know the whole Greek story.  And then near revolutionary anger, lots of that too.  Good old American crime, the dirty kind not the cornor office kind.  Time to serious consider escape to a better place. 

Mon, 08/27/2012 - 23:24 | 2742683 Radical Marijuana
Radical Marijuana's picture


Inside an Orwellian Bizarro Mirror World,

everything which is stated means the opposite!


That will have some "unintended consequences."

Putting that through Orwellian reversal machine:

There will be deliberately driven insane collapse.

The manifest madness is that the main "policy lever" that governments have is their ability to rob, and to kill any who resist being robbed. Governments primarily use that power by giving it away to private banks, which did not have to take any responsibility for that, nor even admit that is what happened. What an astonishing social science the triumph of organized lies becomes! But then, of course, the oldest and the best developed of social sciences was warfare, which has morphed into the money system.

The last normal year was 2007. We are never going back to anything that the guns and gold guys still day dream about. We are never going forwards to "strong, sustainable, and balanced growth," within the present systems, since endless exponential growth is absolutely impossible. The only real solutions are better militarism, doing better death controls, to back up better money systems, doing better debt controls. Of course, the last thing that the established systems are going to do is admit those basic facts. Instead, we will muddle through madness!

Mon, 08/27/2012 - 23:56 | 2742738 diesheepledie
diesheepledie's picture

Oh come on. You could just change the title and this is ever single post on ZH.Y'all need to lighten up.

Just put this on and enless loop, smoke a phatty, do the TWIST, and let the ZIRP flow .. It's going to be all right ...


Tue, 08/28/2012 - 00:20 | 2742766 catch edge ghost
catch edge ghost's picture

Unintended Consequences Say The Darndest Things

Tue, 08/28/2012 - 00:36 | 2742789 diesheepledie
diesheepledie's picture

You won't believe the mortgage rate you can get right now if you are in the 1%. It's freaky really. But my the periscope they shove up your ass is truly painful, to prove you are truly a 1%'er.

It is nice to see us get back to the normal human condition where only the wealthy are landowners. It's about time we stopped the nonsense, and put the serfs back in the fields where they belong. It's going to be hard and painful to correct, but I do have confidence.


Tue, 08/28/2012 - 02:11 | 2742844 dunce
dunce's picture

They used the words "avoid a collapse" when in time it may be revealed that the QE merely "delayed a collapse". All that debt must be paid at some time and monetizing it is more can kicking.

Tue, 08/28/2012 - 02:56 | 2742868 Monk
Monk's picture

The first sentence doesn't make sense because the current crisis was caused by "ultra easy monetary policies". Thus, there's no "case" to be made for such.


Tue, 08/28/2012 - 08:11 | 2743091 madcows
madcows's picture

this is nothing more than political posturing.  They see the writing on the wall and know that we are headed for a Eurozone-like collapse.  Those (FED) who said that "printing will save us." are now saying that "printing is not a panacea."  They're just trying to stay ahead of the curve. Political A$$clowns.

Tue, 08/28/2012 - 08:29 | 2743120 AynRandFan
AynRandFan's picture

The most interesting part of the article is the observed effects of supply and demand in the midst of a ultra-managed global economy.  Demand for bonds is low during a risk-off cycle, driving the next cycle of high yields ever higher on risky sovereign debt.  Demand for equities and other liquid assets goes down despite the withdrawal of cash from illiquid investments such as real estate and corporate capital investment.  The whole system is ratcheted up toward greater and greater risk, despite the ever-present supply/demand problem of too much fear.  The instability of a managed, as opposed to a market, economy is due to the incompatibility of a managed system with free, private decision-making that is necessary for the self correcting character of a market economy.

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