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From The Last Sane Person At The Fed: "More Easing Will Not Lead To Growth, Would Lead To Inflation"

Tyler Durden's picture




 

There are two key sentences which explain why there is now only sane voice left among the FOMC's voting members (recall that back in December 2011 we explained that more QE was only a matter of time now that the Doves have full control). From Jeffrey Lacker: "I dissented because I opposed additional asset purchases at this time. Further monetary stimulus now is unlikely to result in a discernible improvement in growth, but if it does, it’s also likely to cause an unwanted increase in inflation.... Channeling the flow of credit to particular economic sectors is an inappropriate role for the Federal Reserve. As stated in the Joint Statement of the Department of Treasury and the Federal Reserve on March 23, 2009, 'Government decisions to influence the allocation of credit are the province of the fiscal authorities.'" That, however, is no longer the case, as the only real branch of 'government', accountable and electable by nobody, going forward is that located in the Marriner Eccles building, named ironically enough, for the last Fed president who demanded Fed independence, and who was fired by the president precisely for that reason. It is in this building where the central planners of the New Normal huddle every month, and time after failed time, hope that "this time it will be different" and that wealth can finally be achieved through dilution of money.

From the Federal Reserve Bank of Richmond

Richmond Fed President Lacker Comments on FOMC Dissent

The Federal Open Market Committee (FOMC) decided on September 13, 2012, to purchase additional agency mortgage-backed securities at a pace of $40 billion per month. The Committee released a statement after the meeting saying that it expects a highly accommodative stance of monetary policy to remain appropriate for a considerable period after the economic recovery strengthens, and that it currently anticipates that exceptionally low levels for the federal funds rate are likely to be warranted at least through mid-2015.

I dissented because I opposed additional asset purchases at this time. Further monetary stimulus now is unlikely to result in a discernible improvement in growth, but if it does, it’s also likely to cause an unwanted increase in inflation.

Economic activity has been growing, on average, at a modest pace, and inflation has been fluctuating around 2 percent, which the Committee has identified as its inflation goal. Unemployment does remain high by historical standards, but improvement in labor market conditions appears to have been held back by real impediments that are beyond the capacity of monetary policy to offset. In such circumstances, further monetary stimulus runs the risk of raising inflation in a way that threatens the stability of inflation expectations.

I also dissented because I disagreed with the characterization of the time period over which the stance of monetary policy would be highly accommodative and the federal funds rate would be exceptionally low. I believe that such an implied commitment to provide stimulus beyond the point at which the recovery strengthens and growth increases would be inconsistent with a balanced approach to the FOMC’s price stability and maximum employment mandates.

Finally, I strongly opposed purchasing additional agency mortgage-backed securities. These purchases are intended to reduce borrowing rates for conforming home mortgages. Such purchases, as compared to purchases of an equivalent amount of U.S. Treasury securities, distort investment allocations and raise interest rates for other borrowers. Channeling the flow of credit to particular economic sectors is an inappropriate role for the Federal Reserve. As stated in the Joint Statement of the Department of Treasury and the Federal Reserve on March 23, 2009, “Government decisions to influence the allocation of credit are the province of the fiscal authorities.”

 

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Sat, 09/15/2012 - 13:23 | 2798776 frenzic
frenzic's picture

He is bought and paid for. Mr dove.

Sat, 09/15/2012 - 13:54 | 2798854 Atomizer
Atomizer's picture

LOL. Honey, look at that Federal Reserve endangered species bird in the back yard. He sure is singing a pretty tune.

[Chirp, chirp]

Sat, 09/15/2012 - 14:10 | 2798885 Michael
Michael's picture

Let's not forget what set off the Muslim countries revolutions.

Reason #1; Police and Government Tyranny and Torture.

Reason #2; US Federal Reserve Corporation exporting food inflation with their monetary policy all over the planet.

Tunisia

Suicide that Sparked a Revolution

http://www.youtube.com/watch?v=47d6fyaOjRM

Egypt

Justice for Khaled Said, End torture in Egypt

http://www.youtube.com/watch?v=VQfgSg1Vvlo&feature=related

Weekend Viewing; 

PROPAGANDA | FULL ENGLISH VERSION (2012)

http://www.youtube.com/watch?v=6NMr2VrhmFI&oref=http%3A%2F%2Fwww.google.com%2Furl%3Fsa%3Dt%26rct%3Dj%26q%3Dpropaganda%2520north%2520korea%2520documentary%26source%3Dweb%26cd%3D2%26ved%3D0CCYQFjAB%26url%3Dhttp%253A%252F%252Fwww.youtube.com%252Fwatch%253Fv%253D6NMr2VrhmFI%26ei%3Dc1BNUObRK4-68wTfn4H4CA%26usg%3DAFQjCNEO9kvD9fOiiYR7gbzTHN_9dVVn1w

 

Sat, 09/15/2012 - 14:11 | 2798892 eatthebanksters
eatthebanksters's picture

Perhaps somone would be so good to kick Bernanke's can down the road...

Sat, 09/15/2012 - 14:14 | 2798901 francis_sawyer
francis_sawyer's picture

Now that QE4eva is official... Expect 'TRANSITORY' to top all future word clouds...

Sat, 09/15/2012 - 18:40 | 2799390 Whoa Dammit
Whoa Dammit's picture

Perhaps somone would be so good to kick Bernanke's can down the road...

Or up his butt.

Sat, 09/15/2012 - 15:35 | 2799073 vft2212
vft2212's picture

Hey anti semitic bastard, has anyone told you plagiarism is not approved here. When you have something non racially biased to share and that you haven't read here before, go for it.

Sat, 09/15/2012 - 16:49 | 2799179 WhiteNight123129
WhiteNight123129's picture

There can not be inflation if nothing is bought and sold, more wages forced into the system in non productive projects = stagflation =  mortgages repaid with confettis and melting against nominal wages, = credit card debts repaid with confettis, = capital owners (debt and and equities getting fucked, buffet getting fucked, share of capital versus wages shrinking). The Fed is pointing a flame thrower at aapl, goog, msft and orcl which have combined 1.6% of GDP in net cash and is telling them, either you burn it into poor IRR projects (stagflation) or I do it for you. Go Bernanke force those fuckers to sell their bonds and stocks and convert their capital into wages. Go Bernanke point the flame throwers on the cash of corporations, Buffet and Munger will hate it, Gold bugs and commodities bulls will love it. Bernanke is finally succeeding in forcing wages up nominally in relation to consumer debt (which stays fixed).

 

 

Sat, 09/15/2012 - 13:58 | 2798860 bdc63
bdc63's picture

I've said it before and I'll say it again ... the FED only takes action for two things, and NEITHER of them are 'full employment" or "inflation".  What they care about are 1). stock market valuations and 2). keeping banks healthy/profitable. 

And, since the stock market is at 10 year highs, there was no reason to ease to help out the market.

Therefore, it has gotta be the banks.  I suspect Benny has inside information that something is about to blow in the derivatives market, and this move is all about that.

Did you hear his voice "shaking" in the news conference? ... I've never seen him nervous before ...

Sat, 09/15/2012 - 14:12 | 2798895 eatthebanksters
eatthebanksters's picture

too little too late...

Sat, 09/15/2012 - 14:13 | 2798900 holdbuysell
holdbuysell's picture

I also noticed his voice was different compared to other speeches after previous FOMC meetings. His speaking pace was quicker and had more energy behind it. It was one of those "something's different" about his timbre that is hard to quantify but was indeed noticeable.

Then listening to Warsh yesterday sealed it for me. This was well beyond a measured and incremental approach...something's afoot.

Sat, 09/15/2012 - 14:52 | 2798981 Debeachesand Je...
Debeachesand Jerseyshores's picture

I fear you may be correct in your assumptions,holdbuysell.

Sat, 09/15/2012 - 15:23 | 2799052 divedivedive
divedivedive's picture

I noticed the pace at which Bernanke was speaking as well. It was different. I attributed it to more conviction or certainty on his part.

Another thing that caught my attention, and I'm sorry I don't have his exact wording, was that I believe twice he mentioned - we are taking these steps in case the economy falters. I thought it odd that he swayed away from the jobs theme to seemingly anticipating something.

 

Sat, 09/15/2012 - 16:36 | 2799165 trebuchet
trebuchet's picture

This intervention was pre-recession: if they didnt US would dip and given the dip in EU + china, we could end up on slippery slope.

 

"Channeling the flow of credit to particular economic sectors is an inappropriate role for the Federal Reserve"

 

That is key: coz Fed just went into the housing business. banks gonna fall over themselves to write new crappy MBS to flip to the Fed.  

And the crappier ones they write, the more gets flipped. 

 

Thats why his voice was quivering, coz the fed is on thin ice with this one

 



Sat, 09/15/2012 - 14:20 | 2798916 Town Crier
Town Crier's picture

He looked very nervous a while back when Alan Grayson was questioning him about US money given to foreign banks.  The chairman answered that he didn't know what the foreign banks did with the money, and looked panicky.  Curiously, he never looks nervous when questioned by Ron Paul.

Sat, 09/15/2012 - 20:51 | 2799571 GoodMorningMr.V...
GoodMorningMr.VanRumpoy...'s picture

Alan Grayson was a lawyer and pit bull litigator before he went to congress. He knows how to get up and cross examine someone and get them to squirm.

The Good Doctor unfortunately hasn't developed that skill set. And is a bit more formal and too polite.

Sat, 09/15/2012 - 15:36 | 2799076 vft2212
vft2212's picture

You forgot to re elect Obummer & to assure Bernanke '14. I better email Fairey for a poster

Sat, 09/15/2012 - 16:20 | 2799133 luna_man
luna_man's picture

 

 

bdc63,

You confuse "nervous", for excited!

Sat, 09/15/2012 - 22:50 | 2799791 geewhiz190
geewhiz190's picture

friday's volume in BAC may be some of the money that's been trapped there using this FED move as a chance to get out.  no doubt about it. this move by the fed does more to bail out the banks thean anyone else.

Sun, 09/16/2012 - 07:26 | 2800177 GaryNeville
GaryNeville's picture

Yep he was nervous. I think he's getting nervous because he's out of ideas - the only thing he knows is money printing - as Faber put it "He's just a money printer!"

And sure enough he's been printing money for 5 years now and the economy is basically in a depression. I think deep deep down Bernanke knows there's nothing he can do to raise employment, so he thinks he'll just blow up a bubble in the stock market to create a wealth effect.

These guys all think the same - just look at what Greenspan, Bernanke and Krugman have stood for over the years - they are all in full agreement that bubble's are a good thing. Bernanke said it himself in the post FOMC press conference - "people with 401 ks etc will feel wealthier if stocks are up" etc. etc.

Krugman thinks exactly the same - he even implied last year that he often thinks that if mankind was in danger of some kind of alien invasion the economy would boom as the goverment would be forced to pump money into ET defense programmes - see here -  http://www.huffingtonpost.com/2012/06/21/paul-krugman-alien-invasion_n_1... - In effect - a military bubble would save us all..

Greenspan's contribution to bubble effect needs no introduction - whilst Bernanke will blow up a bubble in stocks, Greenspan managed to blow up multiple bubbles at the same time - .com and housing being 2 of note.

Hence the common theme, all these central planners have the same line of thought, bubbles are a good thing and we need them to provide the wealth effect. Prudence and sustainability is out - bubble's/ boom & bust is in with a bang. Get used to it!

 

 

 

 

Sat, 09/15/2012 - 13:23 | 2798778 Oh regional Indian
Oh regional Indian's picture

Hah, funny. Good cop bad cop.

FED book of MEANings and DEAF-i-Nations:

Inflation : Good (managable)

Deflation: Bad (hard to rip off down and outers)

+, FRBNY is the power. the rest are just minor voices.

Or so I hear/read.

ori

Sat, 09/15/2012 - 13:27 | 2798790 LMAOLORI
LMAOLORI's picture

 

 

If only he were in charge

Sat, 09/15/2012 - 13:35 | 2798824 frenzic
frenzic's picture

I went to check out what meaning the part following lmao has and damn I am impressed. Keep it up.

Sat, 09/15/2012 - 13:44 | 2798839 LULZBank
LULZBank's picture

What does it mean? Cant seem to find it.

I am surrounded by this AnastasiaDate.com ads all around. "Get together with Top Russian women" even though I like to be on top myself and "Share your life with a Russian lady," what part of "I am only interested in sex" they dont get?!

And with the kind of pictures on those baners, except for Marina 26, Russia who seems to be an alcoholic, its difficult for a young man like me to focus on anything intelligible.

They say, men have 2 heads but not enough blood for both of them to work at the same time.

P.S. Before the Einsteins jump on it, NO, I have not been surfing any dating sites lately and this is what is getting me even more puzzled... How do they know Im horny?!!

Sat, 09/15/2012 - 13:46 | 2798842 frenzic
frenzic's picture

What they say is true.

Sat, 09/15/2012 - 19:41 | 2799472 blindman
blindman's picture

your age and your gender. that is all.
and they, whoever, get paid good money for
that simple insight.

Sat, 09/15/2012 - 13:32 | 2798812 q99x2
q99x2's picture

Arrest him too. He's guilty by association.

Sat, 09/15/2012 - 13:35 | 2798822 loveyajimbo
loveyajimbo's picture

Wait a minute!!!  You mean that buying LOADS of toxic MBS CRAP from the crooked bankers will do nothing to create jobs or spur the economy?!?!?  Give this Brainiac a Nobel!!  It is not about stimulating the economy anyway, it is about facilitating one more big round of banker bonuses... and this WILL work for THAT.  I guess Blankfein will have to give bernanke another couple of "specials".

Sat, 09/15/2012 - 16:36 | 2799167 lotsoffun
lotsoffun's picture

mr. gupta took the dive.  lloyd is certainly doing god's work as any saint or angel would - but he learned to keep a low profile.

anybody seen jonnie corzine lately??  i wanted to wish him a happy birthday.  can't find him anywhere.  no more speed traps on the way to the troopers balls?

 

 

Sat, 09/15/2012 - 13:35 | 2798825 A Lunatic
A Lunatic's picture

"this time it will be different"

 

As in, "this time we will conquer the whole fucking world"

Sat, 09/15/2012 - 13:43 | 2798837 solgundy
solgundy's picture

blah,blah,blah......the Brenank is backing Barry.....Mitt said he'd fire the Bernank.....oops....crank up the bubble machine to full speed....

Sun, 09/16/2012 - 01:25 | 2799976 RECISION
RECISION's picture

To infinity... and beyond...!!!

(just coz no one else has said it recently)

Sat, 09/15/2012 - 13:52 | 2798851 ejmoosa
ejmoosa's picture

There exists two types of price increases.  The first is due to monetary policy.  The second is due to demand.

The academic wizards at the Fed cannot tell the difference.

When wages rise due to demand for more employees, they decided that was inflationary and put the brakes on it by raising rates.

They should have left things alone.  The higher wages would have brought more supply of workers into the workplace.

 

They haven't a clue as to what they are doing.  And they are not going to figure it out any time soon.

 

 

Sat, 09/15/2012 - 14:53 | 2798922 Cult_of_Reason
Cult_of_Reason's picture

There is another component, credit.

Banks can create ("print") trillions of dollars out of thin air by extending credit. But the problem is structural. After decades of credit expansion, everyone is deleveraging now, and nobody (of cause the ones that have net positive cash flow and can qualify for credit) wants additional credit.

You can lead a horse to water, but you can't make it drink.

http://img180.imageshack.us/img180/7520/youcanleadahorsetowateran2.jpg

Sat, 09/15/2012 - 16:52 | 2799200 FreedomGuy
FreedomGuy's picture

"improvement in labor market conditions appears to have been held back by real impediments that are beyond the capacity of monetary policy to offset."

I at least appreciate the honesty and insight of this part of his statement. There are limits to what monetary policy can do.  I am not sure Bernanke believes this. Ben is willing to go all-in with the American and even world economy on his academic bet on what monetary policy can do. We will go with him whether or not we like it.

Sat, 09/15/2012 - 16:54 | 2799205 trebuchet
trebuchet's picture

even hardline monetarists and austrian school believe that a sustained employment deficit could be helped with monetary policy. 

To prevent the sustained defict from becoming structural unemployment. 

 

Sat, 09/15/2012 - 22:19 | 2799731 FreedomGuy
FreedomGuy's picture

Yes, and the Chicago School of economics believes the same. I don't think any school of thought doesn't believe that monetary policy has an effect. The disagreements are in the type and goals and limits of monetary policy. Sound money is generally at the root of any libertarian or free market policies and letting losers lose.

Sun, 09/16/2012 - 01:01 | 2799953 trebuchet
trebuchet's picture

Letting losers lose is the key. I agree.

 

 

Sat, 09/15/2012 - 13:56 | 2798858 kito
kito's picture

Right, because qe is really about bens concern for growth.....

Sat, 09/15/2012 - 13:56 | 2798859 mewenz
mewenz's picture

I got to give the guy some credit, at the very least some empathy  Imagine working for a guy following a mixture of possibly the 3 worst economic policies of the last century...

...Greenspanian bubble blowing mixed in w/ Japanese ZIRPmania, and topped off with good ole Soviet style centralized price fixing and control

Sat, 09/15/2012 - 15:33 | 2798864 blindman
blindman's picture

@.."Channeling the flow of credit to particular economic sectors is an inappropriate role for the Federal Reserve. " ..
.
this is the domain of the government, the sovereign
and the people. (same thing)
they will be the one, ones, that suffer or profit
from the value out of thin air scheme we call
currency so they are the rightful authority,
and need pay no interest for the privilege.
so yes, it involves trust and faith and vision
and work and when it goes bad there is a price to pay.
.
in the current system when the price for failure
comes due the crooks and con artists get bailed
out on the undeveloped backs of the unborn and the
retired who spend much of their resources and time
trying to make life better for the next generation
and the ones after that. there a double hit on the
seniors. it is a good thing that that most have
lived long lives and developed a high degree of
tolerance or there would be blood in the streets
from monday to friday. these wankers would have
trouble getting from point a to point b in public.
yea, the tolerance thing and alzheimer's and medications.
these three saved a generation of wankers fuck wits.
but for how much longer?
.
... "channeling the flow of credit" is just a
polite way of saying "distributing money".
or as they used to say, "robbing the bank". see
how easy it is ?

Sat, 09/15/2012 - 14:06 | 2798880 iamtheBernank
iamtheBernank's picture

hee hee hee...you FOOLS still don't understand the superiority of my intellect. I actually started the latest QE right under your noses and none of you noticed...

http://www.newyorkfed.org/markets/ambs/

Sat, 09/15/2012 - 14:18 | 2798910 Bartanist
Bartanist's picture

Yes, in fact it was noted several times on Zerohedge. a couple of weeks before Thursday's announcement.

Sat, 09/15/2012 - 14:59 | 2799001 razorthin
razorthin's picture

Starting would imply you at some point stopped.  Who are you fooling.

Sat, 09/15/2012 - 15:20 | 2799043 ebworthen
ebworthen's picture

Is this the reason for the mustache and beard?

Then again, if you shaved it would be frightening.

Just once leave some egg yolk in your beard at one of your speeches?

And make that Steve Leashman go last for once, will 'ya?

Say hello to your banker buddies at the Champagne and Caviar meetings in the basement of the Eccles Marriner.

Sat, 09/15/2012 - 15:59 | 2799103 Heyoka Bianco
Heyoka Bianco's picture

That substance around his mouth would not be egg yolk, not after he's "finished" with his bankster buddies.

Sat, 09/15/2012 - 14:17 | 2798905 Bartanist
Bartanist's picture

I firmly believe that everyone at the Fed knows exactly what they are doing, why they are doing it and the expected results. The way they let us know it is by having the one dessenting voice to provide us "hope" as a control mechanism. This is the sign telling us they know and are intentionally not doing what the people want and need. "They" are in control and rub it in our face.

If people believe that the Fed, the government, the wars, the media, the education system, religeions, the money systems and markets are not all part of a massive control system used to keep people in check and unable to mount a rebellion against the rulers of earth then they are delusional.

The entire system is divisive and controlling.... WAKE F'n UP! It is intentional. The Fed has no plans to work for the benefit of the people because that is counter to its primary function as a means of control. People MUST be kept weak and battling each other. To do otherwise would invite another Tower of Babel situation ... and while we do not remember it, I am sure they do.

Sat, 09/15/2012 - 14:43 | 2798973 LULZBank
LULZBank's picture

Not enough people who think that way. BTW I will buy the new iDrone 5 before you do and anything you say that I dont like will be called a conspiracy theory.

Fuck the Sheeple. Thats the only way they will listen.

Sat, 09/15/2012 - 17:22 | 2799266 odatruf
odatruf's picture

So far, the people have been fucked five ways to Sunday.  When are they going to get it?

  1. QE = DP
  2. Bernanke = Bukkake

What other sick twist will they need before they listen and does listening mean they won't still iGobble?

 

Sat, 09/15/2012 - 14:18 | 2798907 Atomizer
Atomizer's picture


Bernanke is the conduit to this global transition. His job is to feed the lions in the cage. His daily panic, if they break out.. I could be attacked.

/sarc

Sat, 09/15/2012 - 14:19 | 2798911 pauhana
pauhana's picture

So buying the mark-to-unicorn MBS on the bank's books will create jobs?  Per Ben, it will increase home prices, encourage people to buy or refinance at lower rates, and make people THINK they are wealthier so they will spend more.  It will also spur new home construction and the jobs that come with that.  But, who will it hurt?  The government will increasingly own greatly devalued assets which when unwound will increase the deficit which accrues to the taxpayer.  So what's in it for Joe Sixpack?  He gets nothing.  Worse than that, he probably already rents so he has no gain there.  He probably doesn't own any stock in a 401k or otherwise.  But he does have a truck and filling that tank is going to get a whole lot more expensive because the value of the dollar is headed down.  And his groceries are going to cost more.  So who wins?  As usual, the bankers and maybe a couple of guys who swing hammers for a living.  We are so screwed. 

Sat, 09/15/2012 - 15:07 | 2799016 razorthin
razorthin's picture

Because increasing prices is a sure-fire way to create demand.  He's either a moron or thoroughly evil.

Sat, 09/15/2012 - 14:29 | 2798936 peekcrackers
peekcrackers's picture

QB ..makes fresh bonds monthly ! r

Sat, 09/15/2012 - 14:31 | 2798942 booboo
booboo's picture

Ben: "Nice play their Jeff, as long as they think there is an independent voice in the Fed they will keep playing our game."

As an aside: http://blogs.wsj.com/deals/2011/01/31/rothschilds-buy-majority-stake-in-weather-central/

You don't need to control the weather, just what people think the weather will bring.

 

Sat, 09/15/2012 - 14:34 | 2798947 kalum
kalum's picture

So while we get a few more construction jobs, I no longer have income on my savings and am forced to deplete saved capital for basic necessities. In turn my other discretionary spending has gone to zero and is no doubt causing job losses at Clubs, restaurants, clothing stores. sports events, vacation sites, etc. and there are millions like me. Then when the capital runs out its on to Food Stamps, Medicaid and the supplemental income plan

 

Bernanke is nuts. May he RIH

Sat, 09/15/2012 - 14:36 | 2798954 Cursive
Cursive's picture

At least Jeffrey Lacker can claim not to have this blood on his hands.  Good for him, but the innocent are often tarnished by association with the guilty.  He should publicly announce that BernanQE be removed from the position.  Better yet, he should call for an end to the Fed and our centrally planned economy.

Sat, 09/15/2012 - 14:36 | 2798955 blindman
blindman's picture

the minute the pension and mutual funds
are reduced by 60% of their values in federal
reserve notes or the federal reserve notes are
reduced by 60% of their value, or both,
the
crime and price of the fraud of the last decades
will become crystal clear and there will be a
actionable and discernible cry from the peanut
gallery of a population, so the aim is to make
it happen very slowly and as imperceptible as
possible.
let it all blend in under the title
" ways of the world ".
Dana & Susan Robinson-Ways of the World-Lime Tree Gallery-Fort William-Lochaber-Scotland
http://www.youtube.com/watch?v=EgZFinpOLtQ&feature=related
.
"entertain the people ya' understand "

Sat, 09/15/2012 - 14:38 | 2798961 vote_libertaria...
vote_libertarian_party's picture

This has nothing to do with stimulating the economy.

 

MBS buying is to delay/prevent a banking collapse.

 

Treasury buying is to delay a bond collapse.  Eventually, it will collapse though.

Sat, 09/15/2012 - 14:55 | 2798990 Winston Churchill
Winston Churchill's picture

It approaches fast now.

Maybe, just maybe, they can keep the can moving until the end of 2014.

Enjoy life while you can ,and prepare.

Sat, 09/15/2012 - 14:41 | 2798966 Phillycheesesteak
Phillycheesesteak's picture

I don't get why the Tylers keep tooting their horn that they predicted more QE. They specifically said, time and again, that there will be no more QE until the stock market drops 30%.

Sat, 09/15/2012 - 16:58 | 2799217 css1971
css1971's picture

Good point. Exactly why is he kicking off QE3 at this point in time?

Sat, 09/15/2012 - 14:45 | 2798975 Atomizer
Atomizer's picture

Debt Saturation is no different than receiving a Government STD redeemable voucher in the mail.

Sat, 09/15/2012 - 14:54 | 2798987 Quinvarius
Quinvarius's picture

The whole premise that QE is anything other than a bank bailout is laughable.  The whole premise that it will stop once the banks are solvent is also laughable.  Now the only way banks make a profit selling garbage to the Fed.

Sat, 09/15/2012 - 16:16 | 2799127 lotsoffun
lotsoffun's picture

correct.  the bailout this time was for mbs and that means #1 bank of america.  gimme all you worst stuff at whatever price.  the sociopaths can justify the 'employment' mandate because - if bac and citi and jpm go under - then alot of people out of work, besides the collateral damage of maids and private schools, etc.

for lack of courage, at best (in terms of what i would like to say, i hope bernake spends the rest of his life trying to make a living like most humans do.  working.

 

Sat, 09/15/2012 - 14:56 | 2798993 SMFStreetTrader
SMFStreetTrader's picture

If Israel Attacks Iran How Will Stocks & Stock Markets React? http://www.youtube.com/watch?v=4n69DlEwup4

Sat, 09/15/2012 - 15:07 | 2799019 Kimo
Kimo's picture

The last obligation of a central banker is to tell the truth.  In the Fed's attempt to cover every base, sLacker has been assigned the fat tail out in left field.... Fed policy fails spectacularly.  sLacker probably hates his "assignment", but he'll take this career killer position for the team.  Won't he be surprised, when policy does fail, and he is in the enviable position of taking over the Fed as failure Ben is forced out, Jan 2014.

Sat, 09/15/2012 - 15:17 | 2799038 r00t61
r00t61's picture

Jean-Claude Juncker:

"When it becomes serious, you have to lie."

May 2011

Sat, 09/15/2012 - 15:16 | 2799035 ekm
ekm's picture

How many times do I have to try to explain that the Federal Reserve is the most USELESS and IRRELEVANT institution of the USA government structure. This article proves my point further.

Didn't anybody notice poor Bernanke shaking and trembling his voice and his face? That was clearly FEAR, he was lying and crapping in his pants.

 

Do you know what Romney means that 'he will replace Bernanke'? He means that he will appoint somebody that does only what Romney orders him to do.

 

People, wake up. Federal Reserve is an irrelevant instittuion. Right now, Obama and Boehner are the only ones who can give orders to Bernanke, and of course the orders are opposing ones. I do not think he is even allowed to resign, at this point. He is strictly under WH immense pressure and has got absolutely no choice. Period.

Saying so much bullshit to a world audience was a clear sign that he has lost total control of the Fed. Timothy Geithner is in charge.

Move on.........

Sat, 09/15/2012 - 15:20 | 2799042 dwdollar
dwdollar's picture

The chain of command is something like this:

Elite families > Member banks > Federal Reserve > Government

Sat, 09/15/2012 - 15:22 | 2799049 ekm
ekm's picture

Based on my observation, I'd say my understanding of the chain of command is as follows:

 

Elite families > Government (military) > Member banks > Federal Reserve

Sat, 09/15/2012 - 15:52 | 2799093 dwdollar
dwdollar's picture

It's open to interpretation, but the Federal Reserve definitely isn't irrelevant. It's an important mechanism in monopolizing the money supply by creating a single point of issuance. Otherwise, there could be competing fiat systems and the elite families don't like competition.

Sat, 09/15/2012 - 16:18 | 2799129 ekm
ekm's picture

That's exactly what I meant by 'irrelevant'.

Sat, 09/15/2012 - 16:24 | 2799141 LawsofPhysics
LawsofPhysics's picture

So a PRIVATE entity that has the most powerfully military in the world under it's thumb is now "irrelevant". Now that is funny.

Sat, 09/15/2012 - 16:25 | 2799144 ekm
ekm's picture

Again. Please define "private".

You assume that there is rule of law. That is incorrect.

Sat, 09/15/2012 - 16:38 | 2799176 LawsofPhysics
LawsofPhysics's picture

Do some research on who the owners and shareholders of The Federal Reserve Bank are. After you have identified those families, then ask yourself, why do countries find themselves being "liberated" when they decide they don't want to use the dollar anymore?

Sat, 09/15/2012 - 16:55 | 2799206 ekm
ekm's picture

I'm not really sure about this.

Last one who refused to use the dollar was called Sadam Hussein.

Sat, 09/15/2012 - 17:33 | 2799298 Winston Churchill
Winston Churchill's picture

Gaddafi was proposing Gold for oil.

So technically, he committed suicide.

Sat, 09/15/2012 - 17:41 | 2799307 ekm
ekm's picture

Correct.

I am not judging whether it's a good or bad system.

All I'm saying that this is what it is. The rest is philosphising. 

I do not think there are solutions in life, there are only tradeoffs. Solutions do not exist.

Sat, 09/15/2012 - 16:20 | 2799134 LawsofPhysics
LawsofPhysics's picture

The fact that you don't realize that the Fed is a PRIVATE bank tells me all I need to know.

Sat, 09/15/2012 - 16:24 | 2799142 ekm
ekm's picture

Define "private bank".

It's been few years already that the word "private" doesn't mean much.

Sat, 09/15/2012 - 16:43 | 2799183 LawsofPhysics
LawsofPhysics's picture

If it isn't private, why don't you enlighten everyone and tell us where all that interest is going then? Let me guess, another paperpusher? Why is the taxpayer paying the Fed interest to coin our money when the treasury has the power to do so?

Sat, 09/15/2012 - 16:49 | 2799197 ekm
ekm's picture

I have asked that question one million times to myself, also.

My conclusion is that the politicians do not want to be blamed for anything, they want to blame the Weather, the Fed, Monika Lewinsky etc, but not themselves.

Keeping the Fed as "independent", makes it quite easy for them to blame the Fed for everything.

 

Sat, 09/15/2012 - 15:31 | 2799065 ekm
ekm's picture

He looked so clearly depressed and sick that I even suspect he may have offered his resignation and was refused.

I strongly think that even if Romney or Obama offer him the position again, he would be phychologically UNSTABLE to accept the position.

The man is clearly under antidepressants.

Sat, 09/15/2012 - 17:53 | 2799325 LULZBank
LULZBank's picture

He was just holding his pee.

Sat, 09/15/2012 - 15:47 | 2799085 Haager
Haager's picture

It's member banks first, then government.

Elite families? I know of at least 2 of those that they're not pleased with QEinfinity, and at least one of them expects SHF in 2013.

Sat, 09/15/2012 - 16:21 | 2799123 dwdollar
dwdollar's picture

I'm guessing your friends aren't elite enough.

Ben isn't printing because he's sadistic and wants to put the squeeze on everyone. He's doing it because someone is benefiting. It isn't me, it isn't you, and it isn't your friends... so who is it? Ben may be dumb (an academic stooge) for thinking this is going to fix matters, but ultimately, he's working for someone or his ass wouldn't be there.

Sat, 09/15/2012 - 16:34 | 2799160 ekm
ekm's picture

Right on.

Sat, 09/15/2012 - 16:45 | 2799185 LawsofPhysics
LawsofPhysics's picture

Right, as in a few elite families own the Fed. Thanks for pointing that out in your posts below too.

Sat, 09/15/2012 - 16:53 | 2799202 ekm
ekm's picture

I think we are saying the same things coming from different experiences and reading.

Every organized system has elite. It is inevitable.

 

Sat, 09/15/2012 - 16:20 | 2799132 ekm
ekm's picture

Every system is run by Elite. Even in Communism, there was ELITE.

There is 'elite infighting' for sure, but the Elite rules. It is inevitable.

Sat, 09/15/2012 - 16:01 | 2799105 kalum
kalum's picture

Geithner?  AAagh. Suicide time

Sat, 09/15/2012 - 16:43 | 2799156 ekm
ekm's picture

Good or bad, he's the one running the show right now, IMO.

Who's behind Timmy? Nothing I've read is clear.

 

You know, when elite gives interviews something slips off their tongue all the time. If one reads enough, one can put together a structure just by those slips of tongue.

There's a mention of Bob Rubin being behind the curtain, but just a couple of times I've seen him mentioned as the one running the show in total obscurity by Chris Whalen and Janet Tavakoli as far as I remember.

Sat, 09/15/2012 - 16:11 | 2799120 lotsoffun
lotsoffun's picture

just so wrong.  gs, jpm, bac, citi and the members of the federal reserve bank give orders.  obama has no say.  none.  wrong.  wrong.

Sat, 09/15/2012 - 16:28 | 2799150 ekm
ekm's picture

You have to read more. I've spent countless hours reading all kinds of stuff.

Sat, 09/15/2012 - 15:17 | 2799037 ebworthen
ebworthen's picture

Uh-Oh, a truth teller.

They'll be sending him to Fort Knox to oversee coring and filling with Tungsten of what gold bars are left, 'ere long.

Sat, 09/15/2012 - 15:20 | 2799045 tempo
tempo's picture

Question...Have bullets been issued to the Marine fast team? Real or rubber??

Sat, 09/15/2012 - 15:26 | 2799054 ekm
ekm's picture

Not at all.

They would need at least one to dissent. It shows "democracy".

Actually, Lacker, by speaking out, is inadvertently doing them a favor.

Sat, 09/15/2012 - 16:17 | 2799128 Bobportlandor
Bobportlandor's picture

Originally they were going to send NY City cops, but they were afraid of the carnage.

So at last moment they decided to issued Cap Guns.

No matter what throw them all out.

Sat, 09/15/2012 - 15:29 | 2799064 BrigstockBoy
BrigstockBoy's picture

And unlike Warsh's comments yesterday, no apologia for the Bernanke or the faux "Federal" reserve.

Sat, 09/15/2012 - 15:36 | 2799075 Atomizer
Atomizer's picture

 

 

Please watch this entire clip. Perhaps you’ll understand my sarcasm and informative ZH posts. BTW, I’m not Deek.

ISLAM IS VOODOO - OBAMA IS DOO DOO 

For the kooks reading this post. This is how we have diminished the United States through a selected few. I often wonder if their plan ever included provisions to handle US Military BLOWBACK? Guess we’ll find out.

Sat, 09/15/2012 - 16:08 | 2799111 shuckster
shuckster's picture

QE 3 is not inflationary, it is deflationary - $40 billion a month is just a toothpick holding up an elephant - our stock market is valued at $60 trillion, national assets somehwere around $120 trillion - $40 billion of new money per month is actually a dramatic reduction in the usual printing. And this money is going onto bank balance sheets, who will probably park it in hard assets or safe bonds, as banks like to do (as opposed to fritter it away like the middle class would if it was given a hand out)

To put matters in perspective, imagine if the Fed had decided to pump this money into the middle class via larger SSI benefits or some such - it would equate just $133 per person. Or $615 for every senior, if it was in the form of bigger SSI checks. The point is, this is not QE infinity. And it does not justify the $20,000/ounce gold everyone is talking about. 

Of course, there is obviously a giant conspiracy suppressing the price of gold and there is actually $200 quadrillion in circulation in the shadow banking industry.... or possibly, gold is getting pumped up just like every other bubble before it - by a bunch of miscreants. Thus why people get visibly angry when you don't want to pay $1700 for a piece of gold the size of two quarters stacked on top each other

I'll keep my FRN's, thanks. And if you see any lying around, be sure to let me know, I'll have those ones too...

Sat, 09/15/2012 - 17:04 | 2799232 ekm
ekm's picture

Agree. Money printing has a notable effect only after a collapse, like right after 2008. Hence, for it to have an effect, another collapse at least twice as big as Lehman is mandatory. There's not much left to buy, without affecting the depth of tradeable assets.

As to Gold, I do not think that is a conspiracy any longer. It's so obvious.

Sat, 09/15/2012 - 17:59 | 2799339 AurorusBorealus
AurorusBorealus's picture

Just bought 1.5 Liters of soda for the price I paid for 2 Liters of soda 2 years ago and my last tank-full of gas in the United States, paid $3.99 per gallon.  What is not inflationary again?

Sat, 09/15/2012 - 18:06 | 2799349 AurorusBorealus
AurorusBorealus's picture

Let me put this in perspective for you Shuckster... since you seem to think $40 billion is chump-change (you must work on Wall Street or in DC).  The average social security check in the United States is about $1200 per month (minus $99.90 for Medicare Part B) or $1100 per month.  An extra $615 per senior per year would be about a 6% increase in social security.  This would make an enormous difference to many seniors in the United States who live near the poverty line.  So maybe to you $615 a year isn't much money, but to millions, nay billions of people, this is the difference between eating hamburger and hamburger helper.  Put that in perspective.

Sat, 09/15/2012 - 16:38 | 2799175 Nid
Nid's picture

Pretty serious comments from Lacker. If he truly dissents that strongly, the honorable thing to do would be to resign in disgust. Bet he doesn't.

Sat, 09/15/2012 - 17:38 | 2799304 ekm
ekm's picture

He can't. It would affect his future employment.

He's honest, but not stupid. Like everybody else, he needs a steady income.

Sat, 09/15/2012 - 16:42 | 2799182 joebren
joebren's picture

The World's Most Dangerous Man:

http://obamaelect.blogspot.com/

Sat, 09/15/2012 - 17:26 | 2799278 AurorusBorealus
AurorusBorealus's picture

Except none of this is about jobs, growth, lowering rates, or any such nonsensical bullshit.  This is about a bailout for insurance companies (to stop the lawsuits pending against the big banks), for pension funds (also to stop lawsuits against the big banks and to address the problem of underfunded pension liabilities), to boost 401Ks (ala PIMPCO), and to help the government unwind Fannie Mae and Freddie Mac.   Typical Fed doublespeak.  By giving pension funds, Pimco, and insurance funds free money, the hope is also that these agencies will invest in new bonds... i.e. municipals to prevent the coming revolt against municipal debt insurance.  So more bailouts for the financial industry, more fed covering up the government's mistakes (Fannie, Freddie), more of the same.  The guy on the street.... eat $4 a gallon gas... but don't worry because your 401K is up 10%... not old enough to retire... well then just think of it as bailing out the senior citizens, because they vote for Democrats and Republicans, not your half-crazed libertarians who don't matter.

Sat, 09/15/2012 - 17:37 | 2799303 10mm
10mm's picture

Nothing like a little "CYA".

Sat, 09/15/2012 - 17:57 | 2799336 Liberty Street
Liberty Street's picture

Great article.  Not everyone at the Fed is crazy enough to try to start another housing bubble...

Here's an outtake of Lacker discussing this same subject in an exclusive interview for our upcoming Fed film, Money for Nothing, (humorously contrasted with Bernanke's QE3 Press Conference):

www.moneyfornothingthemovie.org/latest-news/2012/9/14/lacker-dissents.html

 

Sat, 09/15/2012 - 18:38 | 2799386 Waterfallsparkles
Waterfallsparkles's picture

The biggest problem is that Peoples wages or income is not going up enough to counter the inflation.

Wages are stagnant and the FED has Social Security tied so it does not increase to meet actual inflation.  As we all know that the FEDs figures excludes Food and Energy.  Well what do Old people need most?  Heating Oil and Food.

There is also the problem that if the Money you have or earn is worth 10% less and food, energy and products cost 10% more you are losing the battle.

I really do not understand how the FED thinks that by printing Money and increasing Inflation that it will help people to spend more Money.  It really is just common sense.  If your Dollar is worth less and everything costs more, how are you going to be enticed to spend more and stimulate the economy.

In my opinion it will do the opposite.

Plus, people are paying off debt because the interest they get in the Bank is almost 0.  So why would you have a bank account paying almost 0 and pay 9% or 18% on Credit Card debt.  It pays even to pay off your Mortgage if it is 5% and you have the Money in the Bank.

0% interest rates are causing people to pay off Debt, not accumulate it.

Sat, 09/15/2012 - 18:40 | 2799388 yogibear
yogibear's picture

Bernanke's open-ended easing will cause food prices to soar and more worldwide riots.

Sat, 09/15/2012 - 19:43 | 2799475 shovelhead
shovelhead's picture

Bank bailout. Nothing more.

The MBS corpses are rising from the books and they are stinking the joint up.

Benny...fetch the quicklime.

Taxpayers are buying underwater mortgages ...again.

Glad I dont pay Fed taxes.

Sat, 09/15/2012 - 22:21 | 2799739 tony bonn
tony bonn's picture

though he may keep his life, he certainly won't keep his job at the fed.....i consider him fed ashes - to be buried somewhere and possibly alive....jimmy hoffa, can you hear us....

Sat, 09/15/2012 - 22:25 | 2799745 MeelionDollerBogus
MeelionDollerBogus's picture

WTF. I could almost swear the quotation was from Ron Paul or Bill Murphy.

This guy works in the FED?

Wow.

Sun, 09/16/2012 - 06:44 | 2800159 Freewheelin Franklin
Freewheelin Franklin's picture

Charles Plosser is a somewhat "sane" voice, but I don't think he is an FOMC voting member.

Sun, 09/16/2012 - 07:42 | 2800189 Floodmaster
Floodmaster's picture

Commodity-Rich Countries such as Canada, Autralia and Norway should give to Bernanke a man of the year award.

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