This page has been archived and commenting is disabled.
Guest Post: The Fed Resumes Printing
Submitted by Bud Conrad of Casey Research
The Fed Resumes Printing
The Federal Reserve recently announced important policy changes after its Federal Open Market Committee (FOMC) meeting. Here are the three most important takeaways, in its own words:
- The Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions – including low rates of resource utilization and a subdued outlook for inflation over the medium run – are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.
- 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. In the most recent projections, FOMC participants' estimates of the longer-run normal rate of unemployment had a central tendency of 5.2 percent to 6.0 percent.
- The Fed released FOMC participants' target federal funds rate for the next few years.
Immediate Reactions
The first item is the most important as it was not expected – and it had an immediate effect on markets. As seen in the chart below, gold spiked higher on the surprise news of extending the zero-rate policy through 2014.
The news prompted a similar jump in silver services:
Keeping rates low requires the Fed to print new money to buy Treasuries, so the dollar weakened against the euro, although the reaction wasn't as big as in those in the gold and silver markets. This is partially due to the fact that the ECB is on its own campaign of printing money.
The promise to keep short-term rates low for a longer period also caused longer-term rates to fall slightly, as seen in the 10-year Treasury rate chart below, which fell from about 2.05% to 1.95 %, a relatively modest decline.
What Does This Say about the Fed's Policy?
The most important action of the three was to extend the zero Fed funds rate to the end of 2014. This is a form of easing that could affect more rates than just short-term rates. Furthermore, there is a debate as to whether the action was the result of the Fed's concern about the economy slipping back into recession. Or, this could also be a bullish sign for the economy and stock market, as the guaranteed low rates could increase investment to improve our economy. Zero rates drive investors to take on risks – such as buying stocks – to gain higher returns. As a result, this induces more investment toward riskier parts of the market, which might otherwise be underfunded. Though the Fed aims to stimulate the economy, we're more likely to see a slip back into recession rather than see an effective Fed stimulus improving the economy.
The press conference suggested that quantitative easing (QE) remains on the table. As a result, new targeted asset purchases by the Fed are likely in our future. These additional purchases with newly printed money could become inflationary. That is why gold shot higher and the dollar weakened in the short term.
Both the Fed and the ECB have decidedly less-hawkish members and leadership than just last year. Both have now moved toward more money printing to keep rates low. The chart of central bank balance sheet as a ratio to GDP shows that the central banks of the world are clearly "printing":
(Click on image to enlarge)
Longer-Term Implications
The problem with printing money and promising to do so for years ahead of time is that the negative consequences of inflation only happen after a delay. As a result, it's difficult to know if a policy has gone too far until years down the road at times. Unfortunately, if confidence in the dollar is lost, the consequences cannot be easily reversed. One problem for the Fed itself is that it holds long-term securities that will lose value if rates rise. The federal government faces an even more serious problem when interest rates rise, as higher rates on its debt mean greater interest payments to service. Due to this federal-government debt burden, the Fed has an incentive to keep rates low, even if the long-term result is higher inflation. However, for now the Fed's statement suggests it sees inflation as "subdued," so it's putting those concerns aside for now.
Along with the promise of low rates, the Fed for the first time gave an inflation target of 2%, as measured by Personal Consumption Expenditures. The actual and target inflation show that the Fed is currently not under major pressure from missing its target… not yet.
(Click on image to enlarge)
The Fed has not even tried to set a target for the unemployment rate, which is only expected to edge below 8% by 2013. The Fed says that that the longer-run unemployment range is 5% to 6%. The big difference from the current level of 8.5% indicates that the Fed faces a greater challenge with unemployment than inflation now.
(Click on image to enlarge)
My conclusion from the Fed's actions is that it doesn't care as much about its inflation target as it does about improving the unemployment rate. Thus, it will err on the side of letting inflation rise, if it would improve unemployment. But holding rates too low too long fueled the housing bubble. Repeating the same game will have consequences of malinvestment in the form of new bubbles in the economy. The Fed hopes to restore employment before the negative consequences of loose monetary policy show up.
The Fed provided the accompanying chart of the Fed funds rates expected by the seventeen members of the FOMC. Each dot indicates the value (rounded to the nearest quarter-percent) of an individual participant's judgment of the appropriate level of the target Federal funds rate at the end of the specified calendar year. Over the long run, the Fed expects the funds rate to rise to around 4.25%. Eleven of the members indicate that the rate will rise before 2015. Only six expect the rate to stay close to zero through 2014.
The above chart should not be taken very seriously, as Fed predictions have been notoriously inaccurate. Furthermore, it's likely that rates will rise before 2014 as a result of market forces pushing them upward due to mistrust of the currency – measured by rising gold and commodity prices.
The Federal Reserve balance sheet expanded dramatically as the credit crisis became acute in 2008. The Policy Tools (shown below in black) grew by $2 trillion with the QE1 purchase of mortgage-backed securities and the QE2 purchase of long-term Treasuries. This was an unprecedented effort to support those markets, provide liquidity, and drive rates down to zero. A simple extrapolation of similar expansion policies to the end of 2014 suggests that the Fed may require an additional $2 trillion to extend its goals. The problem is that such action would surely weaken the dollar and drive gold much higher. If confidence is lost, rates could rise even as the Fed continues to print and buy securities. The Fed says that it will change its policy if conditions warrant. I think they will be forced to stop this policy well before 2014 is over. Nonetheless, in the meantime, they will plant the seeds of rising prices with ultralow rates.
(Click on image to enlarge)
The gold price is driven by Fed policies and its bias toward printing money rather than defending the dollar's purchasing power. This Fed bias was again reconfirmed by this announcement. With all the Fed's renewed vigor toward keeping rates low longer, we can once again reconfirm the ongoing downward slide for the dollar. As a result, gold remains the best investment against the damaging government deficits and central bank policies around the world.
»
- 15035 reads
- Printer-friendly version
- Send to friend
- advertisements -
"The Fed Resumes Printing" implies that they had actually stopped printing at some point. I think not.
In the meantime, the final paragraph of the article is all you really need to know:
"The gold price is driven by Fed policies and its bias toward printing money rather than defending the dollar's purchasing power. This Fed bias was again reconfirmed by this announcement. With all the Fed's renewed vigor toward keeping rates low longer, we can once again reconfirm the ongoing downward slide for the dollar. As a result, gold remains the best investment against the damaging government deficits and central bank policies around the world."
King Rahrah!!!
Twist is not going to get The Bernank and his handlers the results they want.
Twist is neutered QE.
They're going to have to crash alternative asset classes, including equity markets, and reproduce a flight to safety event, to get the bid for sovereign debt that is needed to keep discount rates low and cheap money flowing to the banking sector, unless it all falls apart. In other words, they're going to have to turn Japanese.
The only other alternative is to heat the water up on the inflation index by quite a few notches from where it is now (and it's now at least 6% and maybe as much as 10% per annum using an actual accurate metric of measuring it) by engaging in full blown QE again, but by a multiple quite larger than QE1, QE2 or QE2.5 (diminishing returns by pressing the EZ fiat button is a bitch for central banksters), which would cause commodities to skyrocket far higher than existing levels, lead to cost-push inflation of the type that brings presidents (and incumbent senators & congressmen) down, and choke the remaing life out whatever is left in the anemic corpse of the economy we now have.
He's planning on it. Hear what he said about Europe? He will protect us; he is our savior.
All hail the Fed.
Some of us have said to screw the Bernank...we're protecting ourselves.
Ron Paul: The Coming Chaos
http://www.youtube.com/watch?v=Q7ZlxvDqYJY&feature=g-all-u&context=G2d4bc13FAAAAAAAAIAA
Uploaded by americanbandwidth on Feb 7, 2012
Heed These Words!!
The Bernank knows all. Put your faith in the Bernank. The Bernank will save us. May he ease for a thousand years.
"Ease be with you my son"
lol...exactly.
"The gold price is driven by Fed policies and its bias toward printing money rather than defending the dollar's purchasing power."
Caught in the web of their own making, what delicious irony to watch.
Bernanke done be printn' s'more?
He best not ride into Texas, or it fixen' to get real ugly for 'm.
Saddle up dem horses pilgrim, this cowboy done got mad!
- Rick Perry, Feb 7, 2012.
The Bernank and Perry...Dumb and Dumber.
Inflation: Only if you buy food, and stuff you need. Sorry about your house and property.
Aloha LH...Fight the good fight
Hey, good to see you too.
And FYI there is sarcasm intended below. I like to play an asshole once and awhile, it keeps my heart going.
Keep the beats comin'
Since food and fuel aren't in the core CPI I'm sure you're just being alarmist.
/sarc
No argument from this port. Physical the way to go. Miners just cannot get out of bed.
The Working Groups are not supporting miners the way they are the rest of the sock puppet equity market.
The Fed Funds Rate was 5% back in 2007!...Seems like a thousand centuries ago...
And we have all been happy with our miserable lives since then, so quit bitchin' while I'm trying to watch the New Planet of the Apes.
Jimi: You are all over this thread! I hope you are well, my friend. Peace and a prosperous 2012.
Good seeing you Turdman. I have enjoyed your podcasts!
I am doing fine.
And may the force be with you as well.
Cheers!
Turd,
Thanks for all you do, man..!!
Keep the good info flowing.
Nice to see you here.
Why don't you 3 guys get a room.
It was a thousand centuries ago, in HFT-years. (They're like dog-years, only shorter.)
+1
Have you tried the new snack-size iPads? They're delish!
Hopefully they will have the 42" Apple iTV in time for christmas. I can feed the whole family.
... and 18% in 1981. (how hard to imagine so high rate... But soon it may not be that hard.)
Businesses were swamped at 18%, so now they have pushed interest rates and the tide back; there are folks playing on the beach, some wandering on newly exposed sea bed, while a few mad fools run for the hills. A tsunami coming with higher sovereign interest rates, but where is safe ?
It's disingenuous to claim inflation is near 2%. That chart is BS. Use Shadowstats.com or take a look in your local shop. To even use these figures in a somewhat sensible article only helps disguise the horrific, near-genocidal actions of the Fed and ZIRP.
Bernanke lies?! Naw!
The author lies, not just Bernanke.
I'm always astonished when I see the Fed or anyone for that matter suggest that inflation has been "contained" or is "minimal". Only by using some disingenuous economic voodoo that only the Fed, economists, alchemists and liars can make sense of can one arrive at such a preposterous assertion. Anyone who actually lives in the real world, anyone that buys their own groceries and puts gas in their own car, would laugh at the statement that there is no inflation.
Rule of 72*, bitchez.
* use it to get a rough idea of time needed to double or halve.
A sinking dollar in reality is inflation, our savings decrease in value and prices are really higher no matter what the Fed says. they change the inflation calculation to suit their needs. A recent ZH article indicated inflation is really 10% based on the way they used to calculate it. That is why it costs so much more to fill our cars and buy BASIC groceries. Lower dollar = higher oil and food prices. I am afraid WE ARE DOOMED.
And the supply of oil is decreasing, which douples the price increase. You are right, the Fiat Ponzi is doomed. We, however, are not. We can choose to walk away from this piece of shit house of cards and decide our own fate; build our own house, if you will. It is time.
I just got the new Economist. It has affirmed what I have been saying about facebook. It calls facebook "The Book of Face" which translates to, get ready....
Ba pho met
Yes, where the book and faces meet.
Get ready folks, hell is only a minute away.
it's the longest godamn minute ever.......
Don't hold your breath either. But then again, time is relative.
seriously, can they ever raise rates again.......EVER ?
nope
No, they can't. Any uptick in rates at this point accelerates the demise of The Great Ponzi.
$454B in debt service last year at 3.5% or so and average maturity of around 4 years. Do the math on $16T or $20T in debt at 5% or 7%. Pretty soon, debt service alone would soak up all available "revenue".
It's The Fiat Ponzi, nothing great about it. You can use that if you want to; you can pay me later.
;)
A World War III combined with defaulting on all debt to combatant nations or outright default combined with 6% rates (including War bonds) would eliminate the debt and absolutely crush Precious Metals investors.
I know, sounds crazy, but look at the crap they've done so far (?).
This is the scenario I worry about as I buy PM's.
Or...they could simply raise rates to "reward" savers and retirees while dealing a blow to PM investors and force stock buying and instant deleveraging of households.
Worry not ebworthen...If gold goes back to $300...The S&P would be 100 or so...It's way too late for all that...
I like 'your thinking outside the box'...Always a good thing...
Yes...The total US debt has doubled in 4 years...Mortgage debt back in the 00's doubled in 6 years...Bug meet windshield!!! Rates have a snowball's chance of rising...It's as simple as that...LMAO....Believe me...I'm doing it!!! Those bastards!!!
This is just retarded 'party speak'.
The fact is that the fed seeks to destroy the USD as a means of fulfilling it's real mandate of ending the dollar reserve system ( fucked up from the git go). The 'solution' will be the introduction of a new fiat currency.
You might think these fucks are light years ahead of you and need to be trusted. ( the Leftist model).
No, they are not. In fact they are merely more sick, sadistic. and narcissistic than you as a decent person would ever naturally navigate to believe.
We are being set up to fail. That IS THE plan. This shit is not by accident.. It is not stupidity. It is not incompetence.
It IS evil and I would just beg you to consider withdrawing support in any way that you can?
yep
@ ISEEIT,
Exactly, and that's when all the fun (Revolution) starts. Hence, the NDAA/FEMA Camps and their Police State bulild up to protect the Criminal Cabal.
So you think Mitt Romney or Newt will save you?
man,... these guys are walking a tightwire without the knowledge that their incestuous latent genes of meniere's decease are metastasizing - only to be impaled by their equilibrium cue at the bottom of "The Debt Abyss"
Santorum is kicking some ass tonight!
Funniest thing I've heard all day.
And Paul over Romney in Minnesota. At least there is an alternate to all of us moving to Texas...
Make sure you have lots of warm clothing! (Brrr!)
http://www.americanthinker.com/2012/02/turning_towards_santorum.html
That article is really something - it managed to completely avoid, as in not mention anywhere at all - a single policy or stance of Sick Rantorum AND THEN endorse him as presidential nominee simply because he's "not Obama or Romney."
The shotgun is cocked and loaded, pointed squarely at the nation's left temple at point-blank range, on the trigger are the words "Presidential Election", in the cartridge each pellet has "Obama", "Newt", "Romney", or "Santorum" written on it. Pull the trigger.
Yeah! He's also a typical corrupt politician! Like his buddy Newt!
http://www.citizensforethics.org/press/entry/crew-releases-second-annual-most-corrupt-members-of-congress-report
http://www.judicialwatch.org/corrupt-politicians-lists/washingtons-ten-most-wanted-corrupt-politicians-for-2011/
Ah, and that sentence encompasses so much. The reason there are parts of the market that are underfunded is because they are risky, kinda like buying 5 houses in 2007 wasn't the most prudent investment descision. Such is life in a world of centralized planning where in an effort to control the behavior of capital, and by extension, human behavior, the central planners du jour (whoever they may be that day) force money precisely where it shouldn't be.
The question isn't when is the next crash, or crisis, but a question of when. The occurences of financial emergencies are happening at an increasing rate, where now it almost feels like we are stuck in a perpetual state of fiscal emergencies. The wanton spending of the government(s) and freedom of printing money has wreaked so much havoc it's almost hard to grasp.
You can't play god. The attemps as shown by history always have dreadful conseqences. This time will be no different.
Print to infinity!
Lie about REAL inflation
Lie more about unemployment
End the FED!
Eat the Rich!
Vote for Ron Paul!
http://www.veteranstoday.com2012/02/04/why-i-have-backed-ron-paul-for-more-than-20-years
Waste of time. Rates will never rise.
They could at least print this kind of money (make it edible?):
http://www.angelbodywear.com/Images/Products/Reversible-Money-Print-Halt...
Why would anyone have confidence in the dollar? 95 to 98% devalued over the last 100 years.
The Fed promises to only take 50% over the next 30 years.
Because people get paid in dollars and 99% of what everyone buys is sold to them by a billion dollar+ publicly traded company. The massive corporations depend on the dollar for wage slavery to keep people tied to it. If Obama is re-elected the EPA and FDA will pass regulations putting every last farmer's market and individual non publicly traded farm out of business. The giant billion dollar beaurocratic nightmare corporations will be the only things left. Even though they will no longer be able to generate profit, the government will keep them solvent by printing dollars, if you do not wish to starve you will need to take them. Only dollars will be accepted for commerce, and you will not be allowed to produce anything for your own consumption. That is what's coming, that's the plan. That is until the Gloros (Global-Soros) goes into circulation and fiat slavery is complete.
Look out below ----- grab your balls & hold on.
What used to cost $8 to feed a family at dinner time now costs $15. There are some specials on meat but plain old hamburger averages $5.99 lb now. Before the Bernakamadness 80/20 ground meat averaged $1.75lb. Milk was $1.99 all day long, bread could be had for $.59 a loaf. Thanks to the CFMA oil and other base commodities went vertical. Anything that still costs the same is half the size it was before. A CAN OF CAMBELL'S CONDENSED SOUP IS $2.49 A CAN!!! GARBAGE WATER, THIN NOODLES, AND A COUPLE MINCED CUBES OF CHICKEN PARTS IS NOW $2.49!!! A few years ago it was $.79 and then $.99, but over the past year the price has nearly tripled. Even though nat gas wholesale is at decade lows, Dominion and the other suppliers aren't passing the savings on. They still charge an average of $5.38 per mcf, MORE THAN LAST YEAR!!! But no there is only 2% inflation. MAYBE 2% A WEEK, yep that is actually about right.
You think it's the same size a lot of the time and it's not.
You know what I caught my peanut butter manufacturer doing? I save old jars of stuff for nails, or coins, or whatnot. I had a jar of peanut butter that I had cleaned out from last year and compared it to the one I had this year. Can you believe the motherfuckin' bottom of the jar was hallowed out but the jar was the same size? It turned out to be 30% less peanut butter that they were selling for the same price.
-Guy who hordes shit and occasionally pays too much attention to detail.
Exactly.
Look at ice cream.
Used to be 1/2 gallon (2 quarts), now sold in 1.5 quart containers rounded at the edges with a wide top and narrowing sides to give the illusion of volume (hmm...sounds familiar).
A lot of grocery stores used to have cost per ounce displayed with the price. Most have stopped that now as the needed to change the tabs almost once a week. Cereal boxes have been shrinking massively. The average Kellogg's small box is now 9oz, it used to be 14. The best place to buy cereal is Big Lots and dollar stores. The big grocery chains aren't allowed to stock the old larger boxes so the inventory was sold off to discount retailers. The average use by date is up to one year and as long as it isn't opened, cereal stays good for a long time past that. OJ is no longer a half gallon. Most are now a little over a pint. When I saw a jug of Tropicana "fresh squeezed" for $9.00 I almost busted up laughing in the middle of the store. I wonder if the Germans started laughing towards the end of their hyperinflationary period. At some point it just becomes comedy, like a $5.85 McDonalds meal that cost $3.65 in 2007.
Stare & compare the new rolls of toilet paper. The role has been shaved down about 5/8". B4 long it's going to look like a roll of postage stamps at triple the price. Might as well go back to corn cobs.
I hear ya'.
The milk price is the worst as you can't really duplicate it.
I've substituted chicken and pork when beef gets out of hand, add more egg and bread crumbs to the meatloaf.
I made a great pork and liver pate, like 3 lbs of deliciousness, for $9, substituted chicken and beef liver for pork liver (which I could not find locally).
The flippin' food, which we have to eat, has gone up 25%-50% easily, along with gas, but I forgot; Bernanke and the BLS muckety-mucks get chauffered to work and don't buy groceries or cook (unless they go to Whole Foods and pay $5 a lb. for range-fed lullabied young hens).
I told people before. $5 gas and $10lb beef doesn't matter to the Wall St set if they can get Fed money to "invest" and see multi million dollar returns. What would go from eating up 50% of a middle class household budget, is only going to increase a hedge fund manager's budget by a fraction of a percent. The stock market gains will always surpass the inflation regular people must endure. Unless we go Weimar, then we're all fucked.
Guys, it's a liquidity trap. Keeping rates low isn't generating any lending, except to the government which is the borrower of last resort.
I agree the system is evil. But the current crop of managers didn't design it, they're just playing the hand that has been dealt, with the proviso that they can't really change anything systemically.
We're at debt saturation. Since the whole system is debt based, it has come to its natural end and there's nothing the Fed can do about it.
The debt will have to be canceled. Reset. It's going to happen eventually, one way or the other.
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/
Sad fact is THIS is the max that the economy is capable of producing. Welcome to the shitty economy. TPTB are happy that at least the pitchforks are put away and the loans they made won't be allowed to default. But small business is taking a huge hit here (the former growth engine of the economy). Since the Xmas season ended I'm seeing a wave of retail closures in NYC. The last hope came and went. Only big box stores and chains can make it. And the lost jobs are not coming back. America has been downsized.
Good luck making it in "The App Economy" (new meme MSM is pushing since last week)
Most of the big box is on the brink as well. They just have the power to be able to borrow the money needed to keep floating. The directors keep authorizing stock buybacks to inflate share prices, while granting themselves stock to cash out. ZIRP makes it possible and the stock market con keeps the directors fat. Meanwhile the Big Box overloads itself with inventory that will never be sold, inflating the shares of the mega corps like Apple. Then they write the inventory off as a loss so the business doesn't need to pay taxes. THE GREAT CIRCLE JERK CON.
"Keeping rates low requires the Fed to print new money to buy Treasuries"
By announcing that the interest rates will be near zero for the next 2 years, hasn't the Fed worked around the printing problem? It has eliminated the risk of interest rates movements for next 2 years, so wouldn't it effect the yield curve and get long term interest rates to stay low too?
Put another way, does the Fed need to print new money? Can't it just do what it did last year, as detailed here -- http://www.freakonomics.com/2011/08/10/interpreting-the-fed-how-did-it-lower-rates-this-time/
This is a MUST READ article in order to understand what is Global Debt Crisis!
The greatest private fraud of human history.
Who are the great fraudsters who are becoming the murderers of the human kind? How does the economy "illness" threaten Democracy and the freedom of people?
http://eamb-ydrohoos.blogspot.com/2012/01/global-debt-crisis.html
---------------------------------
By knowing what happened in indebted Greece, where loan sharks created “bubbles” and the current inhuman debt, one can understand the inhuman plan in total ...understand where this plan started just to bring all states at the same end ...understand how this type of plans are established...
And here's the problem with doctoring the inflation statistics so as to discount things that are actually inflating in price... when you remove items from the "basket", or "unweight" them so as to hide the true inflation, what's left in the basket is stuff that's not inflating as rapidly as everything else. So, to reach an inflation target based on the slow-moving prices requires that someone step on the accelerator a little harder than usual to reach the target. Meanwhile, the stuff that's been discounted or removed from the basket is spinning out of control from the "pedal to the metal" kick on the accelerator. The prices of some things inflate rapidly while the prices of things they're using to reach their "target rate" slowly inflate to the target. So, you get food and energy prices doubling and tripling in a matter of months or years while the "core" inflation rate slowly creeps from 3% to 4%.
There isn't enough investment money to buy US Government bonds. If you issue $2 Trillion worth of bonds every year, there aren't enough private savings and overseas central bank money to fund it. So how does the government manage to fund it and keep interest rates this low? The Fed is lending money for nothing to the banks who are in turn buying US government bonds with that money in the market and making a huge profit on each trade (0 percent versus 1 percent on $2 Trillion is still a lot of money).
That is going in the direction of Zimbabwe.
You are right..soon it will be 0% for 200 trillion.....and we here will still be talking about our debt burdon...gold and silver will be up some...but not as much as it should be....as it will have new government restrictions on its ownerships...among other things
"My conclusion from the Fed's actions is that it doesn't care as much about its inflation target as it does about improving the unemployment rate. Thus, it will err on the side of letting inflation rise, if it would improve unemployment. But holding rates too low too long fueled the housing bubble. Repeating the same game will have consequences of malinvestment in the form of new bubbles in the economy. The Fed hopes to restore employment before the negative consequences of loose monetary policy show up."
His conclusion is incorrect. TPTB don't care about the how many people are employed, they can always doctor the numbers if they believe it is not enough to keep the public confidence up. The real reason for QE is to make sure that the investments the wealthy people invested in before the 2008 downturn don't devalue to the point where they should be (without government/Fed interference). QE is propping up the economy so that the richest citizens in this country stay the richest. If the price of food and other necessities increase along the way all the more glorious for the wealthy (the less money you and I get to keep in our pockets). It's almost like this guy has never heard of "crony capitalism." He acts as if the Fed's mandates are actually their goals. The Fed's mandates are to keep the Con going. End the Fed already.
I could see some sense in doing what they're doing IF it was paying down debt, but it's not, it's just increasing the amount of debt. It CANNOT end well.
DavidC
The article is wrong. Despite the misconception, the fed does not set the federal funds rate. The large bankers do through compoetition. The fed is paying interest on the excess reserves which keep them from lending. ANd lending is the key issue and is what drives inflation. If the fed were to charge interest on excess reserves, as opposed to providing it, it would force banks to lend overnight which would create inflation. They know this. However, the fed would be forced to sell its assets in a desperite attempt to reign in inflation which would cause another depression. Gold and silver are not the result of fed policies but of supply and demand by central bankers, bankers, and large financers who can see the writing on the wall. Of course if not enough people have physical gold to trade it doesn't really matter as distribution channels and most of the economy will collapse anyway leaving one with nothing to buy.
Ego is a bitch. It can lead to dangerous things. Learn to control it and your life will improve dramatically. If you don't, it will eventually lead to your downfall. BubbleBen realizes his mistakes but his ego won't let go. His confidence will continue until it can't. Just relax and things will take care of itself because they are 'ego-based'.
If inflation were @ 2%, prices would double every 35 years; quadruple every 70 years, etc.
There's nothing that I can think of in 1977 ticket price that is now only double (except for electronics that are getting cheaper). Everything has gone up at least 10 times, which equates to roughly 6.8% per year.
In any case, technology, efficiency, and population growth are all naturally deflationary, which is good for consumers. I believe that deflation could also be good for producers if they planned accordingly.
But how would it affect lenders (banks)? I'm not sure, but I wonder if it could be good for them too...
Luckily in this new era of "transparency" for the FED, they can change their minds at any time.
They will delever now and stick it to the people once they are done.
This season, Barber Jackets will be one of the most popular additions to the wardrobes of the most fashionable people around today. They have already been an admired feature on catwalks throughout the world, whether London, Paris, or New York, are Quilted Barbour Jackets this year's biggest fashion statement. Trendy, stylish, and sophisticated, anyone with even a passing interest in fashion would have heard of this manufacturer of outdoor jackets. To own a Barbour Quilted Jacket is to make a statement to the world: ‘I love fashion, and I know what's hot and what's not'. To wear Barbour Jacket is to imbue you with a feeling of royalty, of an impression of regal greatness; indeed, these Barbour International Jackets truly reflect a high-status in society.To be sure, the Barbour Jackets Women is an expensive way of ensuring you remain fashionable for another season. Nonetheless, the price is a reflection on quality and style, no other manufacturer of clothing has managed to convey the same messages that Cheap Barbour Sale has. The advantages of owning such a prestigious item of Barbour sale clothing far outweigh the expense of doing so.
Because of the natural classic look these Women Barbour Jackets , Barbour Jackets mens ,Childrens Barbour Jackets suggest about the wearer, they are clearly appropriate for many occasions. Whether you wear yours to the pub, or to the wedding of your closest friend, you can be sure that you will not look out of place. Moreover, these Barbour Ladies Jackets are suitable across the seasons, in winter, they Quilted Jacket keep the wearer wonderfully warm, in summer, they keep of the drizzle, a staple favourite of weather systems throughout the UK! Their specialist materials are much like silk in the qualities they provide, providing warmth during a cold spell, but equally, managing to keep you cool during a warm spell – this is no surprise, many ‘country' style devices provide these qualities, just think about the thatched house; cool in summer, warm in winter,that is Barbour Jackets sale.
Barbour jackets could prove to be an excellent gift option for your spouse, father, mother or teenage son/daughter. Vintage Barbour jackets are like a cherished heirloom and if you are getting one for your grandparent, it is sure to make him the happiest person on earth. Cheap Barbour jackets come in quilted and non-quilted variants. Whereas Barbour Quilted Jacket are more suitable for colder weather, the non-quilted jackets are apt for every day wear in all weather conditions.
Barbour jackets Womens are available in various materials and you can choose a jacket as per your liking. The designs and patterns on offer make it extremely difficult to settle for a single jacket and for those discerning patrons who like nothing but the best in outerwear; there is no dearth of options. These jackets offer full value for your hard earned money and with the name of Barbour Sale behind every product you can rest assure that the quality of material and craftsmanship will be unparalleled.
If you are searching for a jacket which is more than just a piece of outerwear, visit us at barbour-sale-outlet.net to see exclusive Barbour Outlet collection.
http://www.barbourjacketswomen.biz
http://www.barbour-sale-outlet.net