With The US Economy Sliding Back To Recession, Here Is What The Fed Will Do Next

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Sat, 07/30/2011 - 10:45 | 1507610 Seasmoke
Seasmoke's picture

= Stagflation

Sat, 07/30/2011 - 10:50 | 1507615 quasimodo
quasimodo's picture

How about stangnantNATION--to infinity and beyond

Sat, 07/30/2011 - 11:45 | 1507702 Thomas
Thomas's picture

As Mauldin recently stated, "Momentum has broken". (He used all caps.)

Sat, 07/30/2011 - 14:43 | 1508004 66Sexy
66Sexy's picture

Could the fed be enabling the US to sell off its gold or "transfer" it to the IMF, so they can sell at the high? TPTB covering shorts to get the price up, its all the same to the fed, w/e price the gold is at, its all freely acquired assets purchased with created debt money.

Sat, 07/30/2011 - 15:28 | 1508078 wanklord
wanklord's picture

Americans are a bunch of stupid animals easy to manipulate and subdue.The sooner the US economy collapses the better, so these brutes will finally learn NOT to live beyond their means.

Time for Barry to govern by decree: suspend the Constitution and declare Martial Law.

Sat, 07/30/2011 - 18:18 | 1508298 Raymond_K_Hessel
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For those of you who wish to be able to download this to PDF without having to pay for it via Scribd:


Pick up from page 163.

Sat, 07/30/2011 - 18:48 | 1508351 Raymond_K_Hessel
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Oops, wrong link.  This is it:

FOMC Meeting Presentation Materials June 24-25, 2003 (Appendix 1)


Sat, 07/30/2011 - 18:58 | 1508374 snowball777
snowball777's picture

So repititive; you need a new line.

Sat, 07/30/2011 - 22:34 | 1508779 Stares straight...
Stares straight ahead's picture

Cant you just abbreviate this and save us a lot of time? : AaabosaetmasTstUectbstbwflNtlbtm"


Sat, 07/30/2011 - 15:28 | 1508079 wanklord
wanklord's picture


Sat, 07/30/2011 - 15:30 | 1508084 Use of Weapons
Use of Weapons's picture

Re-evaluating the book value of IMF gold holdings is quite complicated, is opposed by many governments, and has red tape all over it. The IMF also (officially) only has 3k tonnes or so.

Thinking back to June's wedding, beautification and assassination, there's two possibilities - serious crash, or the Big O wins through, holds hands with the IMF and launches a world-wide (UN / BRIC / EU backed) economic re-evaluation and 'G20' club reworking. (Operation 'Romance'). The Big O loves the bite at the end of a joke - Trump knows that well enough.


It is a gloomy world when even the bad guys losing ends up in ruin... but I suppose that's how the game is rigged.

Sat, 07/30/2011 - 10:58 | 1507624 trav7777
trav7777's picture

yep...inflationary recession

Sat, 07/30/2011 - 11:56 | 1507721 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Inflationary depression.

Sat, 07/30/2011 - 12:38 | 1507804 Oh regional Indian
Oh regional Indian's picture

India just tightened by 50 basis points. market swooned 700-800 points. Lowest open interest in all future markets since end 2005 (India had a humungous crash in 2006).


I think you guys must have mostly missed it, but a lot of hot money sloshign around in India right now, in Fixed Income and the market through FII routes.

It's all happenign together now, tightening, one more notch, breathe in, one more, ufffffffff.........

I guess we can take it like sheep or break it like men.




Sat, 07/30/2011 - 13:15 | 1507872 A Man without Q...
A Man without Qualities's picture

Coffin Corner

Doesn't matter whether you increase money supply or reduce it, there is nothing the Fed can do to generate real growth.  They'll still reach for the printers, because it is what preserves the banking system.  The Tea Party will find that taxes have gone up, via inflation, but let's face it, "the business of America is business" - however sensible most of the ideas of the Tea Party may be, they're about 10 years too late.

Sat, 07/30/2011 - 15:04 | 1508037 HungrySeagull
HungrySeagull's picture

There is no Coffin Corner left on the edge of space above the Earth.


What you would want now is heat shielding.

Sat, 07/30/2011 - 19:23 | 1508411 Michael
Michael's picture

No more construction jobs because of the Federal Reserve and Wall Street. Millions of jobs lost in the construction industry in the past few years.

Tens of millions of jobs lost to overseas outsourcing because of US government trade agreements including NAFTA, CAFTA, GATT, etc.

I couldn't have planned the destruction of the US economy better myself, although I cheerlead it's destruction. It's a good way to starve the beast by having the money cut off from it. The best part is, I didn't have to lift a finger to cause its destruction. I just let the Fed and the Federal government lay the groundwork for their own demise. Good work guys.

Sat, 07/30/2011 - 23:28 | 1508912 RockyRacoon
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Your point is well illustrated by a link that JW posted about GATT.   It is apocryphal to say the least:

Ok to skip the Laura Tyson section in the middle.
Real revelations and accurate predictions of what would occur, all the way to the end of the interview.

Charlie Rose November 15 1994

Sir James Goldsmith, Member-European Parliament/ Laura D'Andrea Tyson, Chair-President's (Clinton) Council of Economic Advisers


Sun, 07/31/2011 - 05:31 | 1509344 Michael
Michael's picture

Great Video. Thanks.

Sat, 07/30/2011 - 11:57 | 1507725 PaperBugsBurn
PaperBugsBurn's picture

Nope, not any of the above.

What afflicts America and its economy is fascism, plain and simple. Call it globalization, neoliberalism, Keynesianism, etc


Sat, 07/30/2011 - 12:12 | 1507753 Ahmeexnal
Ahmeexnal's picture

don't forget socialism and neo-marxism

Sat, 07/30/2011 - 12:24 | 1507771 ThirdCoastSurfer
ThirdCoastSurfer's picture

Which publicly traded companies have failed to meet or beat revenue expectations to independently verify these figures? Autos? Retail? Tech? Are RIMM & Goldman the sole cause of stagnant growth or is government reporting negatively biased to trap and punish the Negative Nancy, Anti-Americans who cling to lies of false data in the face of reality?!?!   

Sat, 07/30/2011 - 15:34 | 1508087 Use of Weapons
Use of Weapons's picture

UPS (ok, ok, cheap shot), but Cisco shedding 10k was fairly large.


Also - GS is cutting 1k traders but re-hiring in Singapore. Never believe the devil when he pretends things are tough for him as well... they're merely moving over (like HSBC) to Singapore Dark Pools.

Sat, 07/30/2011 - 10:48 | 1507612 SilverIsKing
SilverIsKing's picture

= wearefuckedflation

Sat, 07/30/2011 - 10:53 | 1507617 Jack Burton
Jack Burton's picture

The Fed, what a pack of wankers! They still believe that financial engineering can save a fundamentally f**ked economy!

Look at fundamentals, all of them, and then come along and tell me Bernanke can create jobs and economic growth. Sure, just like the old Soviet Union could engineer economic growth. The Fed as a collection of A-holes whose only job is to preserve the banks, the bankers and wall-street equity prices. All else is just dust in the wind to them.

Sat, 07/30/2011 - 11:02 | 1507634 trav7777
trav7777's picture

yep.  The oil peak isn't a matter that can be resolved by printing.  The FUNDAMENTAL methodology of economics is flawed in that it assumes demand creates supply by some means.

The issue here is that GD1 was a huge political shitstorm.  So was the 07/08 market and economic crash.  Look at the turnover in Congress on account.  NOBODY wants that to happen again because it means significant consequences to those trying to get rich in office.

There is no outcome here other than inflation simply because the money-as-debt cannot be repaid with future growth given the macroeconomic fundamentals.  Despite the appearance of deflation in credit, the value of the debt is eroding at the same time.  While the broader SP500 may not do particularly well, and hasn't, in a price appreciation sense, there are still dividend payers and solid companies, e.g., Coca Cola, that will continue to produce real returns even in a downturn.  It is not as if all things are crashing to zero tomorrow.  Sure there will be lots of corpses but the world is not ending and the zombies are not about to apocalypse on us.

Sat, 07/30/2011 - 11:31 | 1507682 cosmictrainwreck
cosmictrainwreck's picture

expose my ignorance (no pride): "GD1"? @ para 2

Sat, 07/30/2011 - 12:09 | 1507694 Bolweevil
Bolweevil's picture


Sat, 07/30/2011 - 12:06 | 1507737 emsolý
emsolý's picture

Grande Dépression I

Sat, 07/30/2011 - 19:03 | 1508380 snowball777
snowball777's picture


Sat, 07/30/2011 - 12:01 | 1507732 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

KO?  Yeah because they own all the 3rd world's aquifirs.  You want clean water in a 3rd world country, you better buy coke.  We call that a monopoly by the way, which is illigal.  And they use slave labor, like all large cap corporations (Apple, Nike, etc).

Sat, 07/30/2011 - 15:38 | 1508096 Use of Weapons
Use of Weapons's picture

Coke is known to hire local thugs, crack unions and hog the water supply, for sure.


But you're missing out on a much larger, craftier and low visibility bunch of predators. The French.



Sat, 07/30/2011 - 11:35 | 1507689 Fish Gone Bad
Fish Gone Bad's picture

Before any nation collapses, its treasury is looted.  The constant borrowing, TARP, and QE++ have all been steps toward the US's ultimate failure. 

Sat, 07/30/2011 - 12:08 | 1507743 Conrad Murray
Conrad Murray's picture

At least someone gets it. The Federal Reserve is nothing more than the TBTF banks's cartel. They are looting the nation by exchanging cotton/linen(and in ever-increasing quantity, merely numbers on a screen) for the assets of the country. They're stealing homes and land through their engineered foreclosure crisis, and they're stealing wealth in general with their cartel created debt as money scheme fueled by the exponential equation.

It's okay though; the Chinese will save the USA, Inc. through their "special economic zones".

Fuck Hamilton, Fuck Lincoln, Fuck Wilson, and Fuck everyone in D.C. Traitors, all.

Sat, 07/30/2011 - 12:23 | 1507769 Husk-Erzulie
Husk-Erzulie's picture

Fuckin A!

I do so hope that just one sheeple stumbles on this comment and says to themself "Hey, what does he mean? Lincoln? WTF?  Intertubez awakenings are started in just such ways.

BTW check out the tenor of the comments here: http://thehill.com/blogs/blog-briefing-room/news/174487-obama-house-repu...

It really does seem as if more and more people are in serious cog dis vis a vis the lamestream/military industrial talking points.  For example the talking head parade seem to be having a hard time selling the idea that higher interest rates are a tax (phhht...wow).  <--- Which is, by the way, a prime example of just how deep O' vapids' economic thinking goes.

Sat, 07/30/2011 - 15:03 | 1508036 mess nonster
mess nonster's picture

Big Q Who has the paper supply contract for currency printing?  Perhaps a solid investment, no?

Sat, 07/30/2011 - 15:05 | 1508039 HungrySeagull
HungrySeagull's picture

Actually it's Cotton shipped to Harrisburg PA and mixed with Fiber, Paper, Inks etc.

Sat, 07/30/2011 - 17:04 | 1508189 Grifter
Grifter's picture


Crane AB supplies the stock for FRN's.

Sat, 07/30/2011 - 23:42 | 1508943 RockyRacoon
RockyRacoon's picture

Which is why there will be no dollar coin, which is more economical.   Printers unions!

Sat, 07/30/2011 - 21:26 | 1508617 Franken Stein
Franken Stein's picture

But remeber. It's all for the good of the nation...

Sat, 07/30/2011 - 12:11 | 1507751 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

While giving the wealth directly from the people of the Unted States of America to the Major Corporations.

Sat, 07/30/2011 - 17:51 | 1508260 Chuck Walla
Chuck Walla's picture

Ayn beat you to this:


Whenever destroyers appear among men, they start by destroying money, for money is men's protection and the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper. This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values. Gold was an objective value, an equivalent of wealth produced. Paper is a mortgage on wealth that does not exist, backed by a gun aimed at those who are expected to produce it. Paper is a check drawn by legal looters upon an account which is not theirs: upon the virtue of the victims. Watch for the day when it bounces, marked: 'Account overdrawn'.

~ Ayn Rand: Atlas Shrugged (1957)


Sat, 07/30/2011 - 10:55 | 1507619 CrashisOptimistic
CrashisOptimistic's picture

I would like to point out something getting zero attention.

Yes, the first look, 2nd look and 3rd look of 2.0%, 1.8% and 1.9% were ABSURDLY different from the final 0.4% for Q1 GDP and gives rise to questions about the civil servants in that office and willingness to lie, presumably on assurance that the final number will be cleaned up.

And yes, 1.3% for Q2 suggests no improvement.  And yes, Japan's earthquake was not until Q1 was almost over.

But just what caused 0.4%?  QE2 was in full force!  

Answer: And do not EVER lose sight of this . . . Brent $135.  Oil.  Oil decides everything.  The rest of these financial tweaking abouts is like bailing a lifeboat with a teaspoon.  Oil decides your future and mine.  Not the Fed.  Not Congress.  Not anything else.

And that future is very dark.

Sat, 07/30/2011 - 11:02 | 1507632 TaxSlave
TaxSlave's picture

We are on the road most travelled -- the FED has painted itself into a corner.  Print and spray, leading to a collapse, or let it collapse now.

Guess which action it will take, having only one tool in the toolbox?

Sat, 07/30/2011 - 11:07 | 1507641 CrashisOptimistic
CrashisOptimistic's picture

Heavens no.

QE2 was in full roar during this 0.4% collapse!

It has no growth value, and Bernanke now knows it.

There is no point in a QE3, and he knows that, too.  There's no lack of liquidity.

There's a lack of oil.

Sat, 07/30/2011 - 12:38 | 1507805 B9K9
B9K9's picture

I think both of you guys are ignoring what history tells us comes next. Like many who become overly focused on particular data points, it's easy to lose sight of larger macro trends.

To wit, it doesn't matter a whit that oil went to $135, or that traditional monetary/fiscal policies are now experiencing a negative multiplier effect. While you are correct that Ben knows QE didn't work, what's important to understand is that he was given a chance. After all, the next steps would be called into question if it hadn't been proven that "drastic measures" need now be taken.

Now is the time for the pointy-headed nerds to step aside. It is also, unfortunately, time to take off the velvet gloves to reveal what lies inside: the iron fist. We are in various ME theatres not to 'spread democracy', but to hold the territory. Our only real potential challenger is China. In the coming conflict, it's going to be our technological prowess vs the sheer size of their human waves.

The price of oil will not be determined by markets; rather, its net cost will be the "free" oil divided by the total economic costs of supporting and deploying our military to deliver it to these & our ally's shores.

When various commentators issue dark warnings, they are not referring to simple things like guns & gold. Rather, they are looking at historical precedent when supposedly civilized nations discover they are really only hairless apes.

Sat, 07/30/2011 - 12:49 | 1507824 TSA Thug
TSA Thug's picture

You are another suspect who should be closely watched. Every last inch of your luggage should be examined microscopically!


--You WILL Obey!

Sat, 07/30/2011 - 13:33 | 1507897 CrashisOptimistic
CrashisOptimistic's picture


You didn't understand.  The price of oil is the suggestive parameter.  Not the definitive one.  

The definitive one is barrels per day out and in.  Price is just an offshoot of that.  $135 Brent is not about $135.  It's about scarcity.  The engine can't run when it is choked for fuel.

In general, in this new world that has never existed before, history has nothing to teach you.  "Those who forget history are doomed to repeat it"?

Friend, in about 10 years you will be willing to KILL to repeat history.  

And if you have kids, you WILL kill to try to get a piece of it.  Because food will be a quaint, historical substance that could feed 1 or 2 billion historical humans, but not 7.

Sat, 07/30/2011 - 14:18 | 1507966 A Lunatic
A Lunatic's picture

A cursory glance through history will show that we ignored the lessons of the past to our own peril. An in depth review of history will reveal the great multitude of nations, peoples, and resources we were willing to burn through in order to get to this sorry state of affairs. The only thing sustainable at this point is the inconsolably harsh fucking we are giving ourselves and future generations, and as you have pointed out, it will manifest itself at the most basic levels necessary to human existence.

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