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So Much For The Republic: Plosser Admits Fed Is Now In The "Fiscal Policy" Business

Tyler Durden's picture


Philly Fed dissenter and rebel Charles Plosser, said something stunning during a Q&A session at the Zell/Lurie Real Estate Center at Wharton. When asked what he thought of Operation Twist, his response: "it is fiscal, not monetary policy, and does not have much credibility ....Treasury debt issuance could undo much of the effect of the Fed's attempt to lower borrowing costs, known as 'Operation Twist', Plosser said. "It doesn't have a whole lot of credibility attached to it." While we have no doubt that Twist has no credibility and both the Fed and the market will figure this weakest link out within a month, forcing the Fed to proceed, over the 3 dissenters pseudo-dead bodies, with much more LSAP, it is somewhat shocking to hear confirmation that the Fed itself now sees its duties as those of the legislative, or the body tasked with writing America's laws and funding required amounts of money via debt issuance. Granted, it is well known that America's congress is now in a state of perpetual impasse with no further stimulus likely to come as long as the GOP controls the Congress and Obama is president. But at least the American people (deserving as they are of their representatives and president) pick those in congress. The last time we checked, the "popular election" of the Fed chairman is not in the purvey of the US constitution, and the only capacity given to public representatives is to veto his nomination. Everything else is decided in a banker-filled conclave. Which then begs the question: has the Fed admitted the archaic concept of the US republic is now over and done with?


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Wed, 10/12/2011 - 14:54 | 1766684 Ganja Jane
Ganja Jane's picture

It's been over and done with for a while; now 'they're' just rubbing our faces in it.

Wed, 10/12/2011 - 14:57 | 1766709 gojam
gojam's picture

I thought we all lived in Oligarchies in the West ?

Wed, 10/12/2011 - 14:59 | 1766721 Ganja Jane
Ganja Jane's picture

"..and to the corporations for which it stands..."

Wed, 10/12/2011 - 15:01 | 1766728 tickhound
tickhound's picture

" nation, under skynet..."

Wed, 10/12/2011 - 15:07 | 1766761 Ganja Jane
Ganja Jane's picture

" ...with RFID chips and brown shirts for all."

Wed, 10/12/2011 - 15:11 | 1766774 Vergeltung
Vergeltung's picture

Die Fahne Hoch!


Wed, 10/12/2011 - 15:19 | 1766820 spiral_eyes
spiral_eyes's picture

America has two choices right now: default & default by debasement.

If the fiscal side wants to keep up the pretense, the monetary side will just print to hell. It's in their nature. Austerity = Less demand.

The REAL choice is a system of money not based on debt.

But with donkeys (Bernanke) and carnivores (Blankfein) like these, I don't hold out much hope.

Wed, 10/12/2011 - 15:21 | 1766831 Manthong
Manthong's picture

OK, I give up.

That Russell Napier guy said it: “one must do precisely what everyone else does.”

I’m closing all my puts now and it’s nothing but SPY calls for me from now on.

Wed, 10/12/2011 - 15:57 | 1766951 MillionDollarBonus_
MillionDollarBonus_'s picture

This is totally irresponsible. The Federal Reserve is there to conduct MONETARY policy only, not fiscal policy. Fiscal stimulus programs should be passed by congress or via executive order by the president. I thought America had better standards of decency than this.

Wed, 10/12/2011 - 16:34 | 1767052 ATM
ATM's picture

The POTUS is not supposed to have any fiscal policy powers. Those are supposed to be reserved to Congress but we get executive orders, executive killings, the unitary executive and a private Federal Reserve bank now performing fiscal policy.

Since the Supreme Law of the Land is now null and void does that also mean that we can now go about the hanging of these fuckers from street posts en masse? 

Wed, 10/12/2011 - 17:51 | 1767370 AldousHuxley
AldousHuxley's picture

POTUS has much higher job approval rating than Congress. Senators from small backward states are the worst. They want to preserve their backwardness at all costs.


But we are talking about mafia henchmen versus the don. They are all shysters who are bought and paid for by their overlords.

Wed, 10/12/2011 - 21:34 | 1768062 zorba THE GREEK
zorba THE GREEK's picture

Huxley, I think your comments about us small backward states are unfair

and so does my sister/wife.

Wed, 10/12/2011 - 22:47 | 1768229 jeff montanye
jeff montanye's picture

and for someone as prescient or at least paying attention as tyler d. :

Wed, 10/12/2011 - 17:25 | 1767257 UBIGDummy
UBIGDummy's picture

Bravo,  A non satiracal sarcastic and intelligent remark,  Must have been hard.  Greenie 4 u

Wed, 10/12/2011 - 15:58 | 1766956 CIABS
CIABS's picture

Manthong: looks like you might have picked the top.

Wed, 10/12/2011 - 18:07 | 1767411 Manthong
Manthong's picture

I was kind of hoping a public proclamation of capitulation would help things along.  

At least the SPY P104's I picked up at 1:00 pm are green. 

Wed, 10/12/2011 - 22:48 | 1768231 jeff montanye
jeff montanye's picture

at least.

Wed, 10/12/2011 - 15:28 | 1766854 MarketTruth
MarketTruth's picture

We're all living in Amerika
Amerika ist wunderbar
We're all living in Amerika
Amerika ist wunderbar

Wenn getanzt wird will ich führen
(Where there's dancing, I want to lead)
Auch wenn ihr euch alleine dreht
(Even if you turn [dance] alone,)
Lasst euch ein wenig kontrollieren
(Let yourself be controlled a little)
Ich zeige euch wie's richtig geht
(I show you how it's done right)

Wir bilden einen lieben Reigen
(We're lining up nicely)
Die Freiheit spielt auf allen Geigen
(Freedom plays on all violins)
Musik kommt aus dem Weißen Haus
(Music comes from the White House)
Und vor Paris steht Mickey Maus
(And before Paris stands Mickey Maus)
(We're all living in Amerika)

This is not a love song
This is not a love song
---> I don't sing my (mother's) tongue
No, this is not a love song

We're all living in Amerika
Coca-Cola, sometimes war
We're all living in Amerika

Wed, 10/12/2011 - 16:22 | 1767018 pods
pods's picture

Love it!  I only wish I could go play pinball on the moon with those guys!


Wed, 10/12/2011 - 18:02 | 1767417 JayParamedic
JayParamedic's picture

Great, just I've gotta listen to that whole album. Thanks.

Wed, 10/12/2011 - 16:14 | 1767002 prains
prains's picture

I thought we all lived in Oligarchies in the West ?



Oligarkistan is the place i believe you are mentioning

Wed, 10/12/2011 - 22:12 | 1768127 covert
covert's picture

nothing new here


Wed, 10/12/2011 - 14:53 | 1766687 jarboejl
jarboejl's picture

HAHAHAHAHA!!! Just heard the idiot on Fox Business state, "From Last Monday to today, the Dow Jones is up 1000 points, and that's the greatest gain in seven trading days in nearly three years!"

Okay, this proves that these people simply parrot what they're told to say. Hmmmm...what happen almost 3 years ago...this is a tough one!!! OH YEAH, THE FINANCIAL MARKETS WERE IMPLODING!!! 

The only difference this time is that the financial cheerleaders, uh I mean "media", isn't going to make the same mistake of letting the silly little public know how bad it is this time around.

Wed, 10/12/2011 - 14:56 | 1766700 buzzsaw99
buzzsaw99's picture

next it will be we haven't seen bullish action like this since the 1930s.


Wed, 10/12/2011 - 15:04 | 1766743 topcallingtroll
topcallingtroll's picture

Well.....that run after the first crash was pretty good, before it went kerplop.

Wed, 10/12/2011 - 15:14 | 1766795 firstdivision
firstdivision's picture

Need shirts that say, "Banks got $2T and all I got was a lousy 600 points".

Wed, 10/12/2011 - 16:03 | 1766967 DB Cooper
DB Cooper's picture

How about "... and all I got was this lousy t-shirt."

Wed, 10/12/2011 - 14:56 | 1766701 tickhound
tickhound's picture

Nominally even for the year... and for the decade.

Cramer releases new book... "How to get back to even III"

Wed, 10/12/2011 - 15:02 | 1766734 topcallingtroll
topcallingtroll's picture

Who cares if it is good or bad?
EWZ is up about nine percent from where i got in a couple of weeks ago and as usual i announce my trades at the time of the trade ( 53.74 or 73...hey I was stoned give me a break).

It should hit 70 before the year is out.
Santa is coming early!

Wed, 10/12/2011 - 17:55 | 1767385 AldousHuxley
AldousHuxley's picture

don't get too excited. what you are seeing is just inflation thanks to UK QE3.


remember QE is just to save banksters' asses from their mistakes of not doing their risk analysis job properly and getting out of bankruptcy.

Wed, 10/12/2011 - 15:06 | 1766753 kito
kito's picture

im buying DOG and SH hand over fist as this market rises

Wed, 10/12/2011 - 15:12 | 1766788 HelluvaEngineer
HelluvaEngineer's picture

Might want to throw in some IT (Gartner Inc.) to balance out that portfolio.


Wed, 10/12/2011 - 15:17 | 1766815 kito
kito's picture

there is nothing balanced about the market, nothing i need to balance....

Wed, 10/12/2011 - 15:20 | 1766827 HelluvaEngineer
HelluvaEngineer's picture

Christ.  DOG.SH.IT.  Tough crowd.

Wed, 10/12/2011 - 15:27 | 1766850 kito
kito's picture

very nice...wayyyyy over my head

Wed, 10/12/2011 - 17:57 | 1767393 AldousHuxley
AldousHuxley's picture

Shit ain't free no more....literally. FAKE Dog shit costs $8 + shipping + tax these days.

Wed, 10/12/2011 - 21:40 | 1768074 zorba THE GREEK
zorba THE GREEK's picture

Real dog shit is free. You can take all you want from my front lawn,

and I don't even have a dog.

Wed, 10/12/2011 - 15:19 | 1766822 twotraps
twotraps's picture

agree, its not a great low, but without much interest under 42.75 don't need to risk much to know you are wrong.  This thing trades like shit anyway, what the hell am I talkin about?  Maybe some options as well, upside calls don't seem to rich, if there is some extreme lockdown situation, you wont be able to trade it outright anyway!

Wed, 10/12/2011 - 15:17 | 1766813 SheepDog-One
SheepDog-One's picture

WOW yea and its so normal having markets swing + - 10% in a few days! Real stable lookin! 

Lindsay Williams warned we'd be seeing this in the fall in a speech last Feb., right before the big rug pull-out.

Wed, 10/12/2011 - 15:37 | 1766887 kito
kito's picture

load up sheepie, keep the whiskey and bourbon comin.........

Wed, 10/12/2011 - 14:54 | 1766689 Hondo
Hondo's picture

The time is getting closer

Wed, 10/12/2011 - 14:58 | 1766711 Ganja Jane
Ganja Jane's picture

Our time is now.

Wed, 10/12/2011 - 14:57 | 1766690 BrocilyBeef
BrocilyBeef's picture

Sounds like we need to End the Fed.

When your patient has a tumor, you don't fix the tumor, you cut it out.

Wed, 10/12/2011 - 15:01 | 1766731 Deadpool
Deadpool's picture

no, the new normal is you pay it's hospital bills, pump it with steroids, support it's family, put it's kids thru college, replace his heart and liver, give the nurses a raise, tax the doctor and medical device maker and when he dies blame Bush.

Wed, 10/12/2011 - 15:03 | 1766742 BrocilyBeef
BrocilyBeef's picture

I blame Tree.

Wed, 10/12/2011 - 15:12 | 1766784 MrBinkeyWhat
MrBinkeyWhat's picture

2 good!  Personally I am blaming everybody. Ctrl/Sarc

Wed, 10/12/2011 - 14:57 | 1766702 Cynical Sidney
Cynical Sidney's picture

the FED is telling congress that the richest 1% of fat cats gotta pay up

Wed, 10/12/2011 - 15:05 | 1766751 Ganja Jane
Ganja Jane's picture

I am sorry but I strongly disagree: FUCK. THAT. SHIT. Everyone should STOP paying their taxes. STOP FUNDING THIS SHIT!

Wed, 10/12/2011 - 15:09 | 1766769 Cynical Sidney
Cynical Sidney's picture

the FED is demanding fiscal responsibility, what you suggest isn't sound fiscal policy, is it?

Wed, 10/12/2011 - 15:40 | 1766896 Ganja Jane
Ganja Jane's picture

It worked for what? 130 years? Andrew Jackson?

Wed, 10/12/2011 - 15:42 | 1766902 fuu
fuu's picture

I doubt a lack of funding would stop it. There are already not enough funds it just keeps going.

Wed, 10/12/2011 - 15:35 | 1766878 buzzsaw99
buzzsaw99's picture

the fed is free to say that shit because they know there's no way in hell it will happen. the joo bankers are practiced liars, deceivers, chiselers.

Wed, 10/12/2011 - 14:57 | 1766704 ArkansasAngie
ArkansasAngie's picture

End the Fed.

The Fed is inherently biased toward banks.  To expect them to act otherwise would be stupid.

We must demand that our congressional representatives do their duty and excersize control of the purse.  And by golly ... you better believe that includes not allowing the Fedury (Fed Treasury) to spend American Tax payer money.

Little Ole Fayetteville Arkansas will be having a OWS rally on Saturday.  I'll be there.


Wed, 10/12/2011 - 15:02 | 1766735 Deadpool
Deadpool's picture

not biased...the banks are branches of the Fed. The Fed is a bank (the biggest). No bias, just business.

Wed, 10/12/2011 - 14:58 | 1766712 chancee
chancee's picture

And while all the robots are pushing the stock market up, they're also pushing oil back up... just in time for Bennie boy to NOT BE ABLE to announce any kind of QE in early November because of higher commodity prices..  Suckers.  Shooting themselves in the foot once again.


Wed, 10/12/2011 - 15:03 | 1766718 HamyWanger
HamyWanger's picture

To the great despair of fringe libertarians, redneck goldbugs, nerdy anarcho-capitalists and other circus animals, the Federal Reserve Bank System will still be alive and kicking in one thousand years -- because the American people likes it and wants it. 

I suggest the "Ron Paul" worshippers to read some elementary books about monetary history and Banking Panics before accusing a system which has worked perfectly so far.

Wed, 10/12/2011 - 15:04 | 1766744 cosmictrainwreck
cosmictrainwreck's picture

whre ya been Hamy? threads lacked a certain "punch" lately... har har har

Wed, 10/12/2011 - 15:05 | 1766748 rumblefish
rumblefish's picture

The Fed ...a system thats worked perfectly? at least we know who the class clown is now. 

Wed, 10/12/2011 - 15:09 | 1766770 HamyWanger
HamyWanger's picture

Enriching a small, select intellectual elite of Professors and PhDs is a small price to pay for the tremendous stability and economic benefits brought by a unified central bank. 

I do admit that the FED owners can basically buy whatever they want in the whole world with counterfeit money. And so what? These men deserved their place.

Wed, 10/12/2011 - 15:28 | 1766853 Piranhanoia
Piranhanoia's picture

I read this comment first and almost thought old ham had gone sarc-ola on us. Then I saw the one above it. Last time I heard of any country saying they would be around for a thousand years..........   how did that work out?  We've been at war with Eurasia for longer than that Hamster. 

Wed, 10/12/2011 - 15:06 | 1766756 Cynical Sidney
Cynical Sidney's picture

"...system which has worked perfectly so far." spoken like a true hypocrite you must be part of the kleptocracy. we are suppose to be capitalists, we accumulate capital we are not 'debtists' so go screw your FED

Wed, 10/12/2011 - 15:08 | 1766764 FunkyMonkeyBoy
FunkyMonkeyBoy's picture

Doesn't the FED 100 year charter run out next year?

Wed, 10/12/2011 - 15:16 | 1766808 BrocilyBeef
BrocilyBeef's picture

crazy talk!

Wed, 10/12/2011 - 15:54 | 1766932 baby_BLYTHE
baby_BLYTHE's picture

it does indeed expire in 2012 as far as I know. Ron Paul has got the veto pen ready. I sure do worry about his safety if he does in fact get the party's nomination.

You are a den of vipers and thieves. I intend to rout you out, and by the grace of the Eternal God, will rout you out.- President Andrew Jackson

Wed, 10/12/2011 - 15:09 | 1766766 topcallingtroll
topcallingtroll's picture

Hey its hamy!

What was it you said about no greek default?

Wed, 10/12/2011 - 14:59 | 1766722 nah
nah's picture

hellz ya fed... let them crooks have it!

Wed, 10/12/2011 - 20:08 | 1767846 StychoKiller
StychoKiller's picture

[quote]Everything else is decided in a banker-filled conclave.[/quote]

When The Bernank needs to be replaced, will we be seeing white or black smoke come out of the chimney?

Wed, 10/12/2011 - 15:00 | 1766725 Ronaldo
Ronaldo's picture

Oh well, and the markets continue to move higher.

Though being knowledgeable and informed seems to be the right thing and best investing strategy, it doesnt change how the market reacts and the reality of how to make money investing in this market.  While all can say it is just time before it crashes, those are still realized gains being made out there this last week.

Wed, 10/12/2011 - 15:03 | 1766738 SeverinSlade
SeverinSlade's picture

Bernanke for Shadow government Prez 2012

Wed, 10/12/2011 - 15:04 | 1766740 Divided States ...
Divided States of America's picture

It is sad to say but I think the only way things will be different will be the day someone takes out a banker or a politician which will slowly change the minds of the other cronies whether its worth it for them to continue this game of raping the middle class for another day or to just quit and take all they have stolen for the past few years and leave this game entirely to save their sorry asses.

Wed, 10/12/2011 - 15:13 | 1766790 SheepDog-One
SheepDog-One's picture


Wed, 10/12/2011 - 15:39 | 1766895 Jumbotron
Jumbotron's picture

Divided States says:    It is sad to say but I think the only way things will be different will be the day someone takes out a banker or a politician which will slowly change the minds of the other cronies whether its worth it for them to continue this game of raping the middle class for another day or to just quit and take all they have stolen for the past few years and leave this game entirely to save their sorry asses.


Not really.  The Banksters and their Political whores have already bought protection vis a vis the military and local and federal police forces.  Homeland Security is already drawing up a list of continental terrorists.  The Media are also at the ready to scare the populace into submission with 24/7 stories of homegrown terrorists...."IS YOUR NEIGHBOR A TERRORIST.....10 SURE SIGNS TO LOOK FOR" tonight on FOX/CNN/MSNBC/CNBC/NANCY GRACE..etc.

Welcome to Prison Planet.....welcome to Fortress Amerika.

Wed, 10/12/2011 - 15:09 | 1766768 kito
kito's picture

good cop, bad cop, plosser trying to give some "cred to the fed" in light of the political whoop-ass its receiving. hes a FED OFFICIAL. PLOSSER WORKS FOR THE FED. when he steps down and calls for the end of the fed, maybe i might start listening to him....maybe....

Wed, 10/12/2011 - 15:14 | 1766783 SheepDog-One
SheepDog-One's picture

GEE the country is actually a fascistic centrally planned Bankster Kleptocracy? NOOOOO you dont say!

Wed, 10/12/2011 - 15:13 | 1766792 YesWeKahn
YesWeKahn's picture

I knew it I knew it, Bernanke wants to be president, but he is too ugly.

Wed, 10/12/2011 - 15:14 | 1766794 MrBinkeyWhat
MrBinkeyWhat's picture

Holy Crap!!! You really mean this is NOT a republic here in the USSA anymore? Ctrl/sarc

Vodka anyone?

Wed, 10/12/2011 - 15:14 | 1766797 Everybodys All ...
Everybodys All American's picture

They might think the Republic is over and done with but a future jail term awaits those who ignore the will of the people.

Wed, 10/12/2011 - 15:50 | 1766924 sitenine
sitenine's picture

Jail? If you review your history, you will likely discover that a far more fitting end awaits the bastards.

Wed, 10/12/2011 - 15:16 | 1766807 Sandy15
Sandy15's picture

Isn't that the same as insider trading?  They have the largest checkbook, push the market in the direction they want, can digitize more money when needed, etc., etc...................  What's wrong with this scenario?

Wed, 10/12/2011 - 15:17 | 1766811 gwar5
gwar5's picture

End the Fed. We don't need no stinkin' Fed!


A shock to hear some Fed members suggest the Fed has gone beyond the pale. Many others here at ZH also agree that the unelected, unaccountable Fed is really the driver of all US policy, foreign and domestic. Hot wars? Currency wars? Global warming agenda? New Taxes? It is the shadow government in plain sight causing wars and domestic strife. Fed is a private entity of the banks, by the banks and for the banks. But then, everyone here already knows that. Not a tin foil conspiracy theory, a RICO worthy conspiracy fact.

It's become clear that the Fed is by far the biggest threat to national security.


Wed, 10/12/2011 - 15:44 | 1766911 gwar5
gwar5's picture

Oh yeah, BTW --- Bank of New York was just caught stealing billions from pension funds and accounts. They illegally charged exorbidant fees on client fund's foreign transactions over decades and it was never called out. Now it has been called out and this was no technical glitch. This was just deliberate, systematic theft.


But no one will go to jail. Nothing will happen to them. Why? Because Bank of New York is the biggest clearing house of government bonds. They will not go down because the banking system is "too fragile" and it would jeopardize the US government itself.  TBTF so they are immune. Well, good to know the firemen's pension fund situation in the US is not fragile and can take it.

CYA -- another reason the TBTF may decide to have their subsidiary, GOV.CO, confiscate private pensions and 401Ks to co-mingle with insolvent SS and public employee pension systems. 

Wed, 10/12/2011 - 15:21 | 1766830 Salty Dawg
Salty Dawg's picture

Off Subject: I think the group "Anonymous" is officially full of shit!!!!! How do you make these bullshit threats of shutting down facebook, or the NYSE and do nothing? I really don't care what they do, but fool me once shame on you..fool me twice then fuck you!

Wed, 10/12/2011 - 15:22 | 1766832 Johnny Lawrence
Johnny Lawrence's picture

How is Twist fiscal policy?

Wed, 10/12/2011 - 15:22 | 1766833 twotraps
twotraps's picture

I agree with everyone but who is to say we even know the whole story?  The Fed already has an unusual amount of control.....they only move their asses when they absolutely have to, and look at them running now.  Even not having all the information, to see them taking such actions ought to be very fucking telling.

Wed, 10/12/2011 - 15:22 | 1766834 Cranios
Cranios's picture

Hugo Stinnes would be proud!

Wed, 10/12/2011 - 15:23 | 1766838 Piranhanoia
Piranhanoia's picture


Wed, 10/12/2011 - 15:27 | 1766851 Salty Dawg
Salty Dawg's picture

"We are anonymous and we a are full of complete shit"...."on Nov 12 we will bring down the entire power grid (in robot voice) in all OWS cities as a reminder of who is really in charge. Pay no attention that we have never followed through on any other threat of this kind. We are Anonymous, we are legion" we are full of shit!!!

Wed, 10/12/2011 - 20:12 | 1767854 StychoKiller
StychoKiller's picture

We all have our pet peeves around here, yours is "Anonymous", apparently.

Thu, 10/13/2011 - 08:39 | 1768923 Overflow-admin
Overflow-admin's picture

Hi mister 7 weeks on zerohedge and think you can achieve anything with your useless trolling?


P.S. You might want to thank the other shameless troll that put a green on your "full of complete shit" post

Wed, 10/12/2011 - 15:32 | 1766869 AldoHux_IV
AldoHux_IV's picture

The fed has over-reached their capacities as a central bank and now it's time to put an end to this nonesensical degradation of our economy.  End the fed.

Wed, 10/12/2011 - 15:33 | 1766872 Jumbotron
Jumbotron's picture

Mark these dates....

February 3, 1913

December 23, 1913

These are the dates of the ratification of the Federal Income Tax and the Federal Reserve respectively

1913 is the year that the American Republic got double-tapped in the head.  This is the year by which crony-capitalism, corporatism and/or fascism began its inexorable march to victory.

There should be, along with Occupy Wall Street protests...if they last that long...days of mourning for the Republic, especially on these days in the year 2013.

Wed, 10/12/2011 - 15:36 | 1766883 wombats
wombats's picture

Bring out the guillotines

Wed, 10/12/2011 - 15:43 | 1766909 Ganja Jane
Ganja Jane's picture

I'm stacking silver, food, water, other necessities, pitch forks and torches.

...and an extra Guy Fawkes mask.

Wed, 10/12/2011 - 16:04 | 1766962 sitenine
Wed, 10/12/2011 - 15:57 | 1766948 gwar5
gwar5's picture

Madoff whistle blower, Harry Markopolos, catches Bank of New York Mellon and State Street Bank stealing billions from pensions.

Business insider October 7, 2011.  ZH done this yet? 


And Now We Know Why Nobody Took Madoff Whistleblower Harry Markopolos Seriously... - Business Insider


Wed, 10/12/2011 - 17:32 | 1767295 dracos_ghost
dracos_ghost's picture

Hmm, the Federal Reserve Act of 1913 was to create a private central banking system to avoid the politicizing and corruption of monetary policy of the United States. Now the Federal Reserve Banking system wants to be able to direct government policy and go nuts with corruption to maintain the Federal Reserve System.

End the Fed.

Wed, 10/12/2011 - 17:58 | 1767395 ivars
ivars's picture

I think that current irrational exuberance epxressed in buying stocks of EUR is like denial, Feast in the time of plaque. Greece will default, Eur move into inflationary recession, banks suffer, USA stok market down, confidence and wealth effect out of the window, rdeflationary recession q1 2012. Anyway, I think, this is the last time ( may be whole october or november) to get into USD cash, out of stocks. Not as good as at 12800, but 11500 is not bad either. And buy silver or whatever is related to it and can not be overtaxed or confiscated,or nationalized. Not gold, yet- silver will return 300% in 2012, while gold almost nothing. If the markets function still normally in 2012 ( recession, who knows) , the best bet is get fast profits and get them out before someone taxes them 100% or declares illegal.

I have made also a correct short term ( 1 week) prediction about sharp increase in USD per EUR after October 5th, whose consequences I would like to expand upon. The area of correct short term ( 2 weeks ) prediction is encircled to make it visible in the long term graph.

Old EUR USD 2011_2017_prediction_Oct_2011_in circle.png (82.18 KB) Viewed 1244 times

So what I have predicted on October 5th is , that USD per EUR will go up from 1,325 to 1,40-1,425-1,45 till the end of the year 2011. We see the first week of this movement already (of course, it will not move up in straight line, with hiccups, the line is to thick, but the general trend is clear):

USD_per_EUR Sept14_Oct_12_2011.png (22.42 KB) Viewed 1242 times

Now, where is the logic? Eurozone debt crisis comes to its conclusion, Greece will default in November, that has negative impact on banks which has negative impact on stocks worldwide which has negative impact on business confidence and growth , leading to inflationary recession in Eurozone in q1 2012, and deflationary in the USA in q1 2012.

Why would anyone now buy EURos or Stocks?

I think here we have clear case of psychological denial of what pain is coming so soon, and irrational exuberance of short lived and temporary type impacting the investor behavior. If nothing can be done why not have some fun ( with irrational expectation that somehow things will turn out well).

I think one name for such behavior is (coming from Russian): "Feast in Time of Plague". There must be English saying with similar message.

Looking in the charts, what will happen next:

Greece will default, and from January 2012 there are less and less USD per EUR. As USDx grows, and so does quite a few PM/commodity vs USD, EURozone after dismissing Greece and who else will get inflationary, and in recession. Stocks (DJIA) will fall sharply after this last hiccup, and USA will enter recession in q1 2012, deflationary, with increasing dollar index.

1) For those with EUR, this period Oct-Dec 2011 may be the last one at least for 4-5 years either to buy USD or invest directly into PM, other commodities at good price levels given high USD per EUR ratio ( 1,38-1,45 is as high as it will go).
2) For people with investment in stock indexes, especially in USD, this is the last time to get out into cash at decent levels ( DJIA 11600 is not as good as 12800 but its only 10% below post Lehman USA stock market peak);
3) Once in USD cash, there is still time to buy Silver around 33 till April 2012;
4) For gold , there will be another opportunity window in late January 2012 for about a month to buy it at 1580-1620 USD again.That corresponds with the next dip in USD per EUR in early 2012 to 1,325.

Wed, 10/12/2011 - 18:04 | 1767427 AldousHuxley
AldousHuxley's picture

No matter how large or clean a toilet bowl you have, people shit enough in it, there comes a time to flush it.


Fed system is not perfect, but there's too much shit in it, so it is time to flush it out of banking and start a new. Otherwise the productive citizens themselves will go seek a better, newer toilet bowl.


Wed, 10/12/2011 - 18:05 | 1767431 Vlad Tepid
Vlad Tepid's picture

Pat Buchanan wrote about the end of the Republic a decade ago...Oswald Spengler saw this coming a century ago.  Looks like the predictions are finally catching up the USA.  I think the clock has stopped ticking and the alarm bell's been ringing for a minute or two.  The voting public is groping for the snooze button.

Wed, 10/12/2011 - 20:45 | 1767946 Founders Keeper
Founders Keeper's picture

The Fed is now in the "Fiscal Policy" business.

Of course.  This is what happens when a branch of the government cowardly and unlawfully delegates their constitutional responsibility to another entity. 

Inflation is taxation.  The Fed Resv creates inflation.  The Fed Resv is not elected by the people, nor is it's existence permited by the Constitution.  Hence, we're back to taxation without representation.


Wed, 10/12/2011 - 22:03 | 1768103 TrulyBelieving
TrulyBelieving's picture

July 4, 1776  The Founders signed a great document and pledged " their lives, wealth, and Honor to defend what they knew to be a great experiment in human history. Despite great odds, they fought, and won Liberty and Freedom for themselves and their posterity. And I fear if we don't defend those same principles,now, it will be us that lose what they pledged.

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