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So Much For QE2: The Market Indexed For Dollar Devaluation Is Now Back To Jackson Hole Levels

Tyler Durden's picture


While the notional level of the market is still modestly higher than late August 2010, when indexed for that other component which everyone always forgets, yet which is an integral part of any net purchasing power calculation, the devaluation of the dollar, the S&P is now precisely at the levels at which Bernanke let QE2 loose with his Jackson Hole speech. Which means the time for QE3 has come. Of course, the notional value at the end will be that little bit higher, offset by yet another major drop in the value of the AA+ (outlook negative) US currency.


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Sun, 08/07/2011 - 23:36 | 1535336 VisualCSharp
VisualCSharp's picture

If QE2 failed so spectacularly as you indicate, what good could QE3 possibly do? Will it be "different this time?"

Sun, 08/07/2011 - 23:37 | 1535340 CrankItTo11
CrankItTo11's picture

Failing spectacularly is the only thing central planners know how to do.

Mon, 08/08/2011 - 00:10 | 1535556 Ahmeexnal
Ahmeexnal's picture

nikkei is getting nuked too

and yet, the sheeple refuse to wake up

true story.  some dude tried to get a response from the sheeple while he informed them of the evils of industrialized food and the big corporations that profit from poisoning the sheeple.  absolutely no response. he pressed on until an old fart starts getting aggro. old fart stars spewing shit like "so you think you are better than us? leave us alone, let us be"

i watched the scene and took notes. when TSHTF, the sheeple will not rise up. they will comply. they will obey. the sheeple WILL TURN YOU IN. the sheeple WILL CONFISCATE YOUR PMs. that's how it will work. no need for the police state to send troopers to each and every home. THE SHEEPLE WILL DO IT FOR THEM. then the sheeple will trade an ounce of gold for a month of cable tv, a case of beer, an ipod, etc.

you think this is far fetched? THIS HAS HAPPENED BEFORE.

Mon, 08/08/2011 - 05:12 | 1536189 spiral_eyes
spiral_eyes's picture

QE Infinity is a Dead Issue. It was set in stone long ago. Here's the live issue:

nom nom nom nom nom delicious treasury bonds/ ipad 

Mon, 08/08/2011 - 06:02 | 1536221 JimBowie1958
JimBowie1958's picture

So how long before nations bail on the US$?

A year? A few months?

Seems we dont have much time left.

Sun, 08/07/2011 - 23:38 | 1535347 Iriestx
Iriestx's picture

Who said QE2 failed?  It moved trillions of your, your children's and your grand children's money into the hands of a few ultra-wealthy elite.  It succeeded spectacularly, and QE3 will do more of the same.

Sun, 08/07/2011 - 23:41 | 1535367 firefighter302
firefighter302's picture


Failure or success is a matter of perspective.


Sun, 08/07/2011 - 23:47 | 1535405 CrankItTo11
CrankItTo11's picture

True, true. Fundamental Transformation.

Sun, 08/07/2011 - 23:47 | 1535411 Harlequin001
Harlequin001's picture

Yes, if they don't print then the value of pension and retirement funds goes down along with bank deposits and everything else causing riots and starvation. If they print the value ultimately will not but the money won't buy anything when you get it.

It's not about giving money to the uber wealthy, it's about stopping the great unwashed from rioting...

Mon, 08/08/2011 - 00:25 | 1535634 SheHunter
SheHunter's picture

exactly right H001. 

Mon, 08/08/2011 - 01:04 | 1535830 IQ 145
IQ 145's picture

So true. It's all a matter of whose Ox is getting gored; according to the old testament.

Mon, 08/08/2011 - 00:05 | 1535530 Troll Magnet
Troll Magnet's picture

Mission Accomplished, Bitchez!  (For banksters, that is.)

Sun, 08/07/2011 - 23:39 | 1535352 VisualCSharp
VisualCSharp's picture

I wonder what happened to our green- and red-colored arrow friends...

Sun, 08/07/2011 - 23:42 | 1535370 LookingWithAmazement
LookingWithAmazement's picture

Don't ask logical questions - we're dealing here with politics and central banking.

Sun, 08/07/2011 - 23:46 | 1535390 macholatte
macholatte's picture


If QE2 failed so spectacularly as you indicate, what good could QE3 possibly do?


the can, my man, keep your eye on the can.

          QE2 was a magnificent success. It bought time.


You can't be a real country unless you have a beer and an airline. It helps if you have some kind of a football team, or some nuclear weapons, but at the very least you need a beer.
Frank Zappa

Sun, 08/07/2011 - 23:49 | 1535426 Harlequin001
Harlequin001's picture

absolutely, old stick...

Mon, 08/08/2011 - 00:01 | 1535501 IQ 145
IQ 145's picture

Do the French have a National Beer? I can't remember; and I've been suspicious about them for awhile now. It sounds to me like a made up language, too; like they just make sounds, youi know and then guess?

Mon, 08/08/2011 - 00:02 | 1535508 mnevins2
mnevins2's picture

Hey guys, aren't we looking past all of the "green shoots" out there?  Where?  Ask Harry Wanger!  Leo, Leo - opinion?

Mon, 08/08/2011 - 00:18 | 1535599 High Plains Drifter
High Plains Drifter's picture

leo is out of the office this evening. he went out drinking beer and chasing skirt............

Sun, 08/07/2011 - 23:38 | 1535345 Spitzer
Sun, 08/07/2011 - 23:38 | 1535346 PaperBugsBurn
Mon, 08/08/2011 - 00:04 | 1535525 Terra-Firma
Terra-Firma's picture

...and so the class war begins. The fuse is lit.

Sun, 08/07/2011 - 23:39 | 1535348 AustrianEconomist
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The whole fiat system of only 40 years age does not stand a chance when it comes to a store a value as gold, which has been around for thousands of years and represents sound money rather than worthless paper.

Check out the latest from the Capital Research Institute (CRI)

It’s Time for Sound Money

Sun, 08/07/2011 - 23:44 | 1535381 Yen Cross
Yen Cross's picture

 Give that Red Head a KISS

Sun, 08/07/2011 - 23:40 | 1535356 gorillaonyourback
gorillaonyourback's picture

race is on and here comes pride(dollar) in the backstretch, heartache(euro) comin to the inside.  WHO CAN PRINT THE MOSTUS AND FASTEST

Mon, 08/08/2011 - 00:04 | 1535523 IQ 145
IQ 145's picture

And here comes Gold! Carrying weight, but she's a good mudder; pounding down the home straight; and yes, it's a win ! Against the odds !.

Sun, 08/07/2011 - 23:40 | 1535357 silvertrain
silvertrain's picture

401k statments will be arriving in the mail shortly..I wonder if people FEEL more wealthy?

Sun, 08/07/2011 - 23:40 | 1535359 natty
natty's picture

The Texans have taken a big step towards improving their 32nd-ranked pass defense, agreeing to terms on a five-year deal with free agent cornerback Johnathan Joseph, Sports TV’s Adam Schefter reports. Johnathan Joseph will wear Albert Haynesworth Patriots Jersey and play for Houston Texans next five seasons. Joseph’s contract is worth $48.5 million, with 23.5 million guaranteed, and a $12.5 million signing bonus, complimentary of John McClain from the Houston Chronicle. A 2006 first-round pick out of South Carolina, Joseph has 272 tackles and 14 interceptions during his 67-game career. Joseph has returned three of those interceptions for touchdowns. Joseph will likely be paired with 2010 first-round pick Kareem Jackson to form the Texans’ starting cornerback duo. The Texans are moving Glover Quin from cornerback to free safety. Despite having plenty of cap under the salary cap, the Bengals declined to use the franchise tag on Joseph in February, clearing his path to unrestricted free agency. You can log on our Online NFL Shop and select our best quality Albert Haynesworth Patriots Jersey and Cheap Donovan McNabb Vikings jersey if you are true fans of Houston Texans.

Sun, 08/07/2011 - 23:47 | 1535407 macholatte
macholatte's picture

not that funny this time, Natty.

Mon, 08/08/2011 - 00:11 | 1535566 IQ 145
IQ 145's picture

Let me get this straight; the team is named "The Houston Texans", right? That's really original, and thought provoking. Is that in case the little darlings forget where they live on the way to the stadium?

Mon, 08/08/2011 - 06:00 | 1536219 JimBowie1958
JimBowie1958's picture

No, it is a reflection of how Texans think of themselves. Teams usually pick some predator as a mascot like bears, eagles, falcons and raiders, though in some places like California some have made a joke of their mascots.

Some though choose their own members as mascots, like the Notre Dame 'Fighting Irish' or the Texas A&M Aggies (an Aggie being a student of the school).

Most Texans put themselves into the same kind of category as creatures of prey. For example, more Texans own more guns than the citizens of any other nation/state in the world.

Hope that helps you grasp the nature of this thing.


Sun, 08/07/2011 - 23:40 | 1535362 alexwest
alexwest's picture

true,, only +2 trln more gov debt..

Sun, 08/07/2011 - 23:42 | 1535365 AustrianEconomist
AustrianEconomist's picture

The whole fiat system of only 40 years age does not stand a chance when it comes to a store a value as gold, which has been around for thousands of years and represents sound money rather than worthless paper.

Check out the latest from the Capital Research Institute (CRI)

It’s Time for Sound Money

Sun, 08/07/2011 - 23:48 | 1535416 Cursive
Cursive's picture

He who owns the gold, makes the rules.  You can make it gold, silver or fiat.  As long as you let the government or a government-sancitioned monopoly control the currency, it will always end badly.

Sun, 08/07/2011 - 23:43 | 1535375 AustrianEconomist
AustrianEconomist's picture

The whole fiat system of only 40 years age does not stand a chance when it comes to a store a value as gold, which has been around for thousands of years and represents sound money rather than worthless paper.

Check out the latest from the Capital Research Institute (CRI)

It’s Time for Sound Money

Sun, 08/07/2011 - 23:47 | 1535404 Midwest Prepper
Midwest Prepper's picture


Sun, 08/07/2011 - 23:43 | 1535376 Prometheus418
Prometheus418's picture

And Gold just broke $1700/oz.

Sun, 08/07/2011 - 23:44 | 1535379 PhattyBuoy
PhattyBuoy's picture

Zerohedge on fire tonight ... !!

Sun, 08/07/2011 - 23:45 | 1535383 Re-Discovery
Re-Discovery's picture

Dont.  Please stop.  I'm having too much fun with the downgrade. 

Let's do QE3 next week so I can savor it.  I know, I know, you have to tell us in real time, but let's just pretend it's happening next week. 

I am about to overdose on "I'm right" with all my fiat holding friends


We are a frog's hair away from 1700 on gold

Mon, 08/08/2011 - 00:14 | 1535577 IQ 145
IQ 145's picture

Zero Hedge; "Rarely in the affairs of men, have so few been so right about so much".  Harrumph.

Sun, 08/07/2011 - 23:44 | 1535384 Irrational Exub...
Irrational Exuberance's picture

The HP's are warmed up and the Credit Swap lines are open to the ECB.  The Fed is open for business!

Sun, 08/07/2011 - 23:49 | 1535427 macholatte
macholatte's picture


Grab a barf bag before opening......


Mon, 08/08/2011 - 00:06 | 1535538 Irrational Exub...
Irrational Exuberance's picture

I need one just to watch cnbc!

Mon, 08/08/2011 - 00:16 | 1535593 IQ 145
IQ 145's picture

I need one just to see your Avatar. It's making me all woozy.

Mon, 08/08/2011 - 00:42 | 1535729 Irrational Exub...
Irrational Exuberance's picture

Ain't it great!

Sun, 08/07/2011 - 23:45 | 1535394 Yen Cross
Yen Cross's picture

 23 Kangaroos! and still hopping!

Sun, 08/07/2011 - 23:45 | 1535396 digalert
digalert's picture

Holy smokin fiat fritters, ZH is pumpin em out!

Riding on the edge of the global financial tsunami.

Sun, 08/07/2011 - 23:50 | 1535425 Yen Cross
Yen Cross's picture

  You KICK ass!  Fruit bats are on the menu!

Sun, 08/07/2011 - 23:47 | 1535409 Irrational Exub...
Irrational Exuberance's picture

I'm smelling a margin hike in gold futures!

Mon, 08/08/2011 - 00:19 | 1535608 IQ 145
IQ 145's picture

Dr. Greenspan, we've had quite enough of your portentious pontificating. You can go back to room now.

Sun, 08/07/2011 - 23:48 | 1535412 legal eagle
legal eagle's picture

I think it is tellIng that the only way to get real news is to come here to ZH and on Chinese news (CCTV news). No US television news anymore.

Sun, 08/07/2011 - 23:52 | 1535438 Cursive
Cursive's picture

@legal eagle

No US television news anymore.

Congratulations.  It's mind control.  Only time I ever see it is when I cross the channel or the internet is down.

Sun, 08/07/2011 - 23:49 | 1535422 ghostzapper
ghostzapper's picture

let's say hypothetically that the Bernank announces QE3 or some QE-type thingy this week.  Am I the only one that thinks the following:


- very brief (a couple days?), sharp rally in ES as the algos and cheerleaders go crazy

- after this a sharp drop below 1,000 on the S&P as the market realizes panic has really set in

- countertrend rally from 1000ish up to the declining 200DMA and then the big plunge below 600


I am not convinced QE3 ignites another big equity rally.  everyone already knows it is likely coming in some form yet the market is not melting up in anticipation. 

Mon, 08/08/2011 - 00:05 | 1535531 Irrational Exub...
Irrational Exuberance's picture

I totally agree!  EVERYONE knows QE3 is coming.  But I too think this time is different.  Looking at the longer term charts...there is still a long way for this turd to fall.   However, there is still a lot of powerful people's money still in that needs out, and when the threshold of pain is reached,  they will need to get out.  So I see the QE3 announcement as a perfect pump and dump opportunity for that money to get out before the real currency crisis begins!  I also think it's now or never to get any physical gold or silver, if there's any left!

Mon, 08/08/2011 - 00:23 | 1535626 IQ 145
IQ 145's picture

Dr. Greenspan, for shame! That is irrational pessimism. Theirs plenty of Gold and Silver left; metric tonnes available right now, only a phone call away. (Seriously). re: the market, as Marc Faber, (my daddy !) said the other day, now we get the reflex rally, or bounce. 90% chance the DJA is higher next Friday than last Friday. That's the way it usually works. Maybe it won't this time; but that's the usual story.

Mon, 08/08/2011 - 00:41 | 1535721 Irrational Exub...
Irrational Exuberance's picture

Agree on the 90% chance of a rally.  The only problem I have here is that the babes on Fox Business and CNBC are also in agreement too!  I see any rally as short lived.  Too many people kinda, sorta, see the logic of those evil Tea Partyers!  I don't see any meaningful rally until there is more pain!

Mon, 08/08/2011 - 00:51 | 1535778 IQ 145
IQ 145's picture

Oh yes, sir. short lived; thought that was understood. Just a "reflex rally". 

Sun, 08/07/2011 - 23:51 | 1535432 PhattyBuoy
PhattyBuoy's picture

How many more rabbits in that jackson hole?

Mon, 08/08/2011 - 00:25 | 1535637 IQ 145
IQ 145's picture

only one with a waistcoat and pocket watch; but reports indicate it's "unsafe" to follow him.

Sun, 08/07/2011 - 23:54 | 1535459 Yen Cross
Yen Cross's picture

gOOD POINT  Phatty!

Sun, 08/07/2011 - 23:56 | 1535471 lolmao500
lolmao500's picture

QE3, to have any effect at all, will need to be way way way way bigger than QE2.

Sun, 08/07/2011 - 23:59 | 1535490 ghostzapper
ghostzapper's picture

ok, let's say it is way, way, way, way bigger then doesn't that mean the shitstorm is way, way, way, way bigger and the so called genius experts are way, way, way, way beyond panic mode?

Sun, 08/07/2011 - 23:57 | 1535478 cacho
cacho's picture

sorry for being such a noob, what does jackson hole refers to? wikipedia shows a place, but Im sure it refers to something else. Thanks

Mon, 08/08/2011 - 00:28 | 1535652 IQ 145
IQ 145's picture

It;s the venue of an infamous economic summit; where the elite meet to beat their meat. so to speak.

Mon, 08/08/2011 - 01:01 | 1535813 PhattyBuoy
PhattyBuoy's picture

elite meet to beat their meat

elite meet to beat their meat

elite meet to beat their meat


Heeehhheeeee !


Sun, 08/07/2011 - 23:57 | 1535480 SamuelMaverick
SamuelMaverick's picture

i miss the up and down buttons esp with gold and silver going UP  !!

Mon, 08/08/2011 - 00:01 | 1535499 ghostzapper
ghostzapper's picture

i suppose my overall point is that the "Greenspan and Bernanke Put" may no longer have any gas left in the tank with respect to providing a wink, wink risk free environment for equities. 

Mon, 08/08/2011 - 00:30 | 1535670 IQ 145
IQ 145's picture

"Running on fumes". But they've got lots of airspeed and altitude; which is just as good; until you run out of both. "Coming in on a wing and prayer; would be my guess.

Mon, 08/08/2011 - 00:06 | 1535534 ghostzapper
ghostzapper's picture

Jackson Hole, WY hosts an economic conference where the world's self proclaimed geniuses gather and you can see Steve Liesman running around smiling ear to ear like a 6 year old on Christmas morning after guzzzling a dozen 5 hour energy shots trying to perform fellatio on Bernanke and other "brilliant leaders".   Last year at this conference the Bernank announced QE2 just as the charts showed the S&P was about to go "Timberrrrrr". 

Mon, 08/08/2011 - 00:12 | 1535571 Ye Ye
Ye Ye's picture

Eventually they will devalue the dollar to the point that nominal house prices start to increase, which is their apparent goal, since that is the monetary policy transmission channel.  So we save the housing market and then nobody wants to trade with us anymore.  That is the sound of one economic hand clapping.

Mon, 08/08/2011 - 00:19 | 1535605 Die Weiße Rose
Die Weiße Rose's picture

Remember the Tiananmen Square protests of 1989 ?

saw Greenspan on good Morning America last night and he said:

No, the US economy has no Debt Problem,

because the Federal Reserve can always print more money to pay down its Debt.

Is Greenspan dreaming ? how could Frankenstein be so blatantly arrogant about the Monster he created ?

And what about the SNB and BOJ and the ECB, are they just standing by while Bernanke fucks

up their currencies and economies with the stag-flation of less income , higher costs ? Of course not !

Those sovereign nations with the lowest currency can sell and export at beggar thy Neighbour prices,

while everywhere elses costs of Food, Energy Oil and Fuel inflate to higher and higher prices,

crippling those exporters that can not deflate their currencies by printing more of their money like the US Fed does.

But as we have seen last week, the Swiss and Japan and the EURO-zone including Russia

are all starting to wake up to the Feds toxic Game of "beggar thy Neighbour." (or "beggar the World")

And China's Inflation is spiking higher all the time ! China is tightening and tightening while the Fed is printing and printing.... what a fucking joke !

China won't like it if billions of their People start an uprising...

Remember China , Walls can and  will fall ! As they did in Berlin on 9th November 1989

Remember the Tiananmen Square protests of 1989 ?  That was just the beginning...

Mon, 08/08/2011 - 00:34 | 1535692 IQ 145
IQ 145's picture

"Yes, Dr. Greenspan is dreaming". He is wealthy, and he gets the really, really, good pills. not like the ones your mother gave you, that didn't do anything at all.

Mon, 08/08/2011 - 00:20 | 1535612 gookempucky
gookempucky's picture

Time for games are over ..... 1702  at 23:20 hours.....

Mon, 08/08/2011 - 00:37 | 1535708 IQ 145
IQ 145's picture

Oh dear. Someone is getting nervous in the service, I fear. Looks like the furriners are not best pleased.

Mon, 08/08/2011 - 00:54 | 1535791 IQ 145
IQ 145's picture

Hey, Silver is having a little waterfall; New York Globex? Worth keeping an eye on, probably; except that I need to go to sleep. "perchance to dream"

Mon, 08/08/2011 - 01:23 | 1535906 YesWeKahn
YesWeKahn's picture

Is Bernanke still revelant? He should resign too, what a piece of idiot.

Mon, 08/08/2011 - 01:23 | 1535907 YesWeKahn
YesWeKahn's picture

Is Bernanke still revelant? He should resign too, what a piece of idiot.

Mon, 08/08/2011 - 01:56 | 1536004 jmc8888
jmc8888's picture

They need for the administration to ok QE3.  They can't do it alone.  They need the political cover.  I wonder what the over/under is in how many days before NerObama conceeds the cover needed to launch QE3?

Two days is a bit short, but it's possible.  But being such a dumbass, I think it takes longer Obama and the rest of the fucktards to figure it out.  I'm going to guess that QE3 is hinted in fedspeak, but not ok'ed until Nero gives him cover (and Bernanke clues the idiot in). 

Worldwide Weimar here we come, on a bullet train no less.



Mon, 08/08/2011 - 02:28 | 1536057 StychoKiller
StychoKiller's picture

The real question is:   How far does the DJIA have to fall to justify QE3?

Wed, 09/14/2011 - 05:01 | 1667482 chinawholesaler
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