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Guest Post: Stop The (Printing) Press!.... If Only We Could
Submitted by Clive Hale from View from the Bridge
Stop The (Printing) Press!.... If Only We Could
Hands up anyone who is surprised that the Bank of England has added another £50 billion to the quantitative easing pot? The same hands will also believe that the Greeks have agreed terms for the next bail out tranche with the Troika (the European Union, the IMF and the European Central Bank). This ongoing epic odyssey of the voyage to nowhere has grabbed the headlines, but the BoE’s quiet announcement is equally significant to us Brits.
Central banks never utter the words quantitative easing, so the Bank calls it an addition to its “asset purchase programme”, which was only hiked to £275 billion back in October. The accompanying rhetoric states that inflation is on the way back down and may fall below their target of 2%, mainly as a result of the VAT increase last January falling out of the equation and lower energy prices, (despite Brent crude being over 10% higher Y-o-Y in sterling terms..); a convenient excuse perhaps.
The ECB has been shovelling money out to the European banks with indecent haste and their cunning plan is that those banks will then use that cash to buy junk bonds (Club Med sovereign debt) at much higher yields than the cost of borrowing. So far it hasn’t worked that way as the banks have just parked the money back with the ECB, but it has put a floor under the short end of the bond market.
This makes the likelihood of successful bond issuances by the PIGS marginally more likely, but left the BoE wondering when the markets will wake up to the fact that our “emperor” is wearing little else than a very ragged pair of shorts. If they can keep up the illusion that the flight to safety “wings” he has tattooed on his chest will keep us airborne, they may postpone the inevitable for a time whilst attention is focussed on the rest of Europe. Technically the UK is part of Europe but then politics has rarely had any truck with mere geography…
And so to Greece. Like many European nations the Greek government is a coalition party, but with a minority, making national unity on the issue next to impossible. Already a two day strike has been called and frankly the projections for GDP “growth” and debt repayment are utter nonsense; a point not missed by the IMF and the German Finance ministry who, let’s face it, are running the show.
The markets meanwhile are in a sanguine mood, but why wouldn’t they be with all this central bank money sloshing around the system? If Greece wasthe only problem in Europe a solution would have been found ages ago, but it isn’t and we are back again to moral hazard, which I banged away about yesterday. If the Greeks get a deal then Portugal et al will be in the queue faster than the central banks can electronically print the money to pay them.
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My penis is thicker than Kim Kardashian's waist, which is larger than all aggregated central bank credibility.
WHich can be proven as follows:
if 2+2=4
and 2+4+2=8
Estimeate the mass of the sun in Knukle penis units.
3?
Friends, Romans, countrymen, lend me your ears:
I'd argue it's EASILY a more realistic 3.7 to 4 trillion USD, given what are real FMV of much of the toxic sludge Bernank & Gang have bought from the very best friends of the New York City Branch of the esteemed Federal Reserve, but I'm cynical that way.
Good going, Bernank!
At this rate, 4 trillion (or a more realistic 5 trillion) is easily within reach by July 4th, aka Independence Day.
The delicious irony.
I searched the Bank of England website for "quantitative easing", all I got was "A server error has occured". Three times.
No worries, Clarke and Dawe explain it quite well:
http://www.youtube.com/watch?v=j2AvU2cfXRk&feature=relmfu
"Quantitative easing"
First, you are going to have to figure out how to convert from inches to kilograms...
Wolfram Alpha Overload.
I think if we throw in a speed of light squared term, we ought to be ok. At what percentage of the speed of light has your penis moved ???
Looking for a re-match?
Bwahahaha!
Is not.
Love my bullion.
But you may have to wait twenty years to confirm
+you are smarter then the others.
Can you wait that long?
I don't know that I agree with that last statement. I think the central banks have no problem electronically printing Euro at near light-speed. Using multiple "presses" I bet they can exceed the speed of light. That's a lot of Euro's real fast. Kind of in line with the growth curve of the ECB's balance sheet.
It will be fascinating to see if the ECB really is a different kind of animal than the Fed. We are certain the Fed will monetize the debt of the government. The ECB's very purpose was to be independent of nation states. Will they really ignore the death rattle of the imprudent and preserve the STABILITY of the Euro or will they prove the genes of central bankers are immutable? Germany, with its experience during the Weimar years, will certainly insist they behave and preserve the currency. The pressure will be on the ECB from many sources to print print print and save the system and the banks and countries that comprise a significant portion of the European population.
If the pimp hand of the ECB is strong and the ECB resists the calls for 'liquidity' the Euro will survive and perhaps become the worlds future reserve currency. It will allow gold to take its rightful place as a wealth asset. If it folds to political demands it will prove to the world forever that fiat currencies are flimsy paper promises and never to be trusted for longer than one must hold them (long enough to buy what you need and not a day longer). (hmmm either way gold comes out looking good).
This will be a show worth watching. It will be the spectacle of the eon and will for centuries to come answer man's questions about the ability of central bankers to perform as promised. Analysis at 11. Now back to our regularly scheduled inflationary debacle.
I agree with your analysis but the Euro will never take the role the Dollar has today. The Dollar dominance as we see it still now is a sole event which is never going to be repeated, Except for the case all mayor nations agree on a new neutral fiat currency, which is based on the principles of the Euro thus, the future "WCBs" ; World Central Bank sole task is to hold inflation down below 2.% p.a. . In other words such a WCB has only to maintain the trust in the fiat currency simply by practising an extreme tight monetary policy. Just the opposite what is happening today around the world.
Only a world currency can replace the Dollar since the Dollar was/is the currency of this world representing more than 60% of the worlds fiat money. The Euro can have a role as a stable currency of Europe thus having an important role within the financial world but to replace the Dollar Europe simply has not the necessary hard power when compared to the US.
We might have one day a world currency called the "Uno" with the WCBs headquarter residing on some kind of neutral territory. Singapure would be a good choice in my opinion.
We might have one day a world currency called the "Uno" with the WCBs headquarter residing on some kind of neutral territory. Singapure (sic) would be a good choice in my opinion.
Put it in Jerusalem, why let all that hate go to waste?
How about "The Rubble" as was posted a few days ago?
Dont overburden poor Jerusalem. Its to busy already sorting out the realities of the three mayor doomsday religions. Dont put on top of that the problems of the money changers of this world. That would be simply to much to deal with. Even as I think longer about it the Chinese are my first choice. Pragmatic people trying to find practical solutions having learned their lessons from history well. Preferably Singapore since it is not pure Chinese but also a part India and Europe a bit.
Other banks around the world are also Printing. That's may be the reason this fraud is going on for so long. some thing like rising tide lift all boats.
Sorry, but i have to repeat this message cause insanity and hard manipulation of this crazy market
Something moved at half hour.
The major US volatility index closed with downtrendlines broken.
VIX, VXX and VXD closed with your downtrendlines broken !
And take a look at the intraday of VXX......TAKE A LOOK at the running of last half hour with strong volume and hard candle.
See here: http://pracompraroupravender.blogspot.com/2012/02/correria-nos-indices-de-volatilidade-na.html
I think that your first mistake was thinking that there is a market.
pods
Federal Reserve adopts monopoly money colors. You could not make this stuff up. http://bit.ly/y8K2qf
Why let a lifetime of indoctrination go to waste?
I found all Westerners are pussies.
They don't have the nerves to bomb the central bank buildings if they feel hopeless. Just do it! Like muzzies did
LOL
So, I'm assuming that you've just bombed yours?
*runs off to Google news*
Nope, hasn't hit the wire yet, I guess?
Besides, banking is a digital operation these days. You're not going to hurt them by destoying their offices. You'll just take out some old lady's lifetime savings of newspaper clippings.
And then what will she do?
So tell me how to make a ''HARD STATEMENT'' towards to the bankers?
why form a revolution guard aiming to assasinate all the evil bankers on blacklist. Make them feel sorry to murdering the economy.
moskov....you can't (make a significant HARD STATEMENT) to the bankers. The ones you could get to are just cogs like the rest of us. At this moment you can only take care of yourself. Prepare for what you see coming (for me that means gold and hard assets that I can personally touch.) Try to tell your friends (good luck, they think you're crazy already don't they?) Wait and watch the show of the eon. popcorn?
Stop using your credit cards. The loss of interest as well as commisions from the retailers will gut them.
At this point, all we can do is hope the Mayans were right.
Capitalism is gone. ECB is effectively lending to corporations. Banks just collect the vig
Most large corporations have a banking license, they are banks themselves.
As a dog returns to his vomit, so a fool repeats his foolishness
-God on central banksters
Regular at $3.75/gal this morning. $0.25 to redline and red dawn.
I live in the UK... lower energy prices, WTF WTF
NO Petrol and diesel about to hit record highs again... went past a petrol station showing 135p/litre today
Electicity, water, gas.... and all the things you need have soared....WAY over the 'rate of inflation'
sorry while I puke at that 'term' it is soooo way off the reality that is for the 99%
Exactly. Biflation: the necessities will be setting record highs over and over while the things required to purchase those necessities will keep dropping: median incomes, household net worth, business margins. And we are now fully locked into this vicious cycle. So wholesale inventories soared today as business desperately tries to "make it up on volume" with razor thin margins, and worsening the cycle of rising raw material costs and falling demand and real final sales.
We will need larger denominated bills soon or all of us over 50 will get hernias carrying enough cash around to fill the tank or go to the grocery.
Most of the population already got a hernia in the last 10 years carrying credit cards let alone cash.
In Canada it is a known fact that the B.C. Bud (marijuana) industry alone supports this country in such a way that if it were completely removed from the economy (and thats CASH) it would absolutely cause the collapse of the Canadian economy. And nobody that I know of is using their Visa or Debit to purchase their stash - the Loonie is alive and well in an industry that thrives no matter what TPTB would do (or perhaps are allowing ;) -
Gold - Silver - Loonies
And dope money was the ONLY money to keep things going in 08 I have heard.
Same as it ever was, drugs make the world go round.
pods
I have a 'cunning plan' for the BoE.
I shall make the purest Green!
...that looks exactly like snot!
Great Blackadder episode.
oh god I loved Slackbladder - er Blackadder - nobody does it like the Brits Eh?
zerotohero
You are making me feel insignificant. I hate weed (but being libertarian I don't give a crap what other do with it) so now I can't do my part to support the economy?? Does booze consumption count as 'doing my part?
lasvegaspersona - yes indeed - just buy "home brew" - pay cash.
The leaders of the world are engaging in synchronised drowning. We are witnessing nothing more than alchemy and experimentation in the hope that things can be fixed without taking losses and without establishing a more sustainable growth and banking model.
Dip Shitness "MAXIMUS" The charts are easy, if you give up the Bitches! Been There done that. Ya pussies!
I was wondeinr ghwne you were going to report this....the UK will be doling out $50 every month or two for thier installment QE program as they try to print under the radar screen of detection.
As mentioned above, they prob need a few trillion pounds to 'kick start' their way out of this depression.
Banks default = Bailout
Corporations default = Bailout
Sovereign default = Bailout
State and local governments default = Bailout
Families and individuals default = War
UK Pensions have lost a third of value in three years.
"Pension payouts are almost a third lower than they were before the beginning of the Government's attempts to boost the economy through quantitative easing, figures published today reveal."
http://www.independent.co.uk/news/uk/home-news/pensions-have-lost-a-third-of-value-in-three-years-2367348.html
Can anyone explain to me why a country with a global economy showing 950% debt to GDP, the highest in first world, has a yield of 2.5% or so on its bonds, while Italy is north of 6% and Portugal 16%??
What sort of market is this and those S&P shills they have nothing to say on this! Triple A UK and print away BOE, like the blue bloods of Epsom Derby; while we cheer brolly, bowler hats and all, spick and span from our virtual kingdom of City Land; no relation to the rest of UK, now swamp-land of bleating, bleading sacrificed sheeple, hocked to banks and insurances, all living in one square mile of electronic, photonic land of Oligarchs.
The Bank of England prints money and then buys government bonds with it. They do it indirectly through the banks (who get a nice juicy cut of the action) so as not to break EU rules. Since QE now adds up to about 25% of the UK's GDP, this keeps the yields on gilts (UK treasuries) low.
Then there's the small detail that London has a lot of financial institutions whose exorbitantly paid employees are not exactly keen on pulling the rug from under their own feet and the other little detail of the Eurozone charade next door serving as a convenient distraction.
Once the Eurozone problem is solved (one way or another), with it's huge debt to GDP, high unemployment, overdependency on financials (20% of GDP), growing inequality and seriously bad management and business culture, the UK will have a very painfull day of reckoning.
Given that the current government is in the pocket of the City of London (who gave them 61% of their campaign contributions) the likellyhood of anything being done to solve this before the pain really hits is zero
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