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When Doves Laugh: 4 Weeks Until The Quiet Coup In The Fed Gives QE3 A Green Light

Tyler Durden's picture


While the world continues to be hypnotically captivated with every word out of Europe, the ongoing fiasco in the insolvent socialist continent is a welcome diversion from our own issues here in the US, which as we noted yesterday, has not "decoupled" from the rest of the world's woes but merely is "lagging." After all the European recession is now guaranteed, and no matter how it is spun it will never amount to a positive GDP event for the US, even more when considering that the PBoC's recent resumption of monetary loosening will take at least several quarters to be felt globally. But a lag to what? Why 2012 of course, and specifically the January 24-25, 2012 Fed statement when as SocGen pointed out the Fed is most likely to announce yet another $600 billion episode of quantitative easing. But why then? Why not at the December 13 meeting, the topic of Fed telegraph Jon Hilsenrath's latest piece, according to which the Fed will soon emphasize that it will never hike rates and as a result collapse all refi activity because who wants to go into a 30-year fixed at 4% when it will be available at 2% 3 months later, and at 0% 6 months after that? Simple: the Fed's balance of power is about to shift substantially. With under 30 days left in 2011, the current roster of 4 rotating voting Fed governors is about to be swept out, only to be replaced with 4 new ones. Yet as the chart below from SocGen shows, the rotation will probably be the most dramatic in Fed history as 3 die hard Hawks (and 1 dove) are eliminated only to be replaced with a panel which is almost exclusively Dovish. In fact, at the end of the day the only modest Hawk on the Fed's voting committee will be Richmond Fed's Jeffrey Lacker (the only member to vote against the drop in FX swap line rates), and even he in the past has shown his dovish wings. Which means that for all intents and purposes, the major delay in global events, and market uncertainty, merely has to last until the end of the year when the doves take over. Furthermore to anyone who will point out that in 2012 virtually every single Hawk will be mysteriously out of the voting rotation, all we can say is: "you are correct." And if Europe or Iran or China or any other event serves as a welcome distraction for a few more weeks until the Fed once again does what it does best (and only), so be it.


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Sun, 12/04/2011 - 20:36 | 1945256 Corn1945
Corn1945's picture

Zero Hedge has been pushing the QE angle for months and it hasn't happened. Every article somehow suggests more QE is around the corner, especially articles fron notable investment banks that I wouldn't trust with two nickels. 

Sun, 12/04/2011 - 20:39 | 1945265 Tyler Durden
Tyler Durden's picture

Perhaps you missed this and this.

Sun, 12/04/2011 - 20:40 | 1945268 Corn1945
Corn1945's picture

That's moving the goal posts.

Sun, 12/04/2011 - 20:44 | 1945277 brew
brew's picture

let the junking commense...

Sun, 12/04/2011 - 20:49 | 1945288 Corn1945
Corn1945's picture

I surrender. Please junk me to oblivion. 

I'm just pointing out the divergences on Zero Hedge. Half the articles (justifiably) bash the fraud factories on Wall Street (Goldman Sachs, etc) and the other half publish "analysis" from those same institutions that somehow is meaningful. 

Some articles talk about perpetual QE (good for stocks at least nominally) while others say the S&P is going below 1000. 

Just make up your mind. That's all I ask. 

Sun, 12/04/2011 - 20:53 | 1945299 Tyler Durden
Tyler Durden's picture

Re-read the Dylan Grice piece earlier (yes, of evil SocGen), which explains perfectly the difference between what will happen and what should happen.

Sun, 12/04/2011 - 20:59 | 1945302 GetZeeGold
GetZeeGold's picture



What should happen = CNBC.


What will happen = ZH.


Sun, 12/04/2011 - 21:09 | 1945336 Corn1945
Corn1945's picture

I read the piece (unlike most of your audience who I highly suspect doesn't actually read anything you put out, at best they skim the headlines).

I commented at the time:

This is a poor quality article and lacks any real original thought or insights. This is typical of "analyists" that work for large financial institutions so I'm not surprised. 

This is exactly what I'm talking about. On one hand we have continous bashing of these thieves and on the other we have articles that bend and twist history by large financial institutions. For example, Hitler's rise *began* during the hyper-inflation of the Weimar Republic. He didn't come out of nowhere during the deflationary period like the "article" suggests. He became well established in the minds of the German people during the hyper-inflation. 

Sun, 12/04/2011 - 21:24 | 1945347 GetZeeGold
GetZeeGold's picture


Dude.....maybe you should get a new hobby.....I don't think this stuff is for you.


The market is a snakepit......expect snakes.


Sun, 12/04/2011 - 21:30 | 1945361 living on the edge
living on the edge's picture

Corn 1945, crawl back into your hole = corn hole

Sun, 12/04/2011 - 22:05 | 1945482 chump666
chump666's picture

Everyone should read When money does by Adam Fergusson, also social/historic analysis (non economists) about the Weimar period.  In short, inflation stole wealth from the middle class in Germany and basically decimated them, thanks to Germany's brutal hyper-inflation.  The property/land owners did fine, as did any holders of company stocks.  But  that was a tiny minority.  Hitler saw this and used it as a reason to create a power base eg creating a scapegoat minority group.  That SoGen idiot who is probably running a bet on a super rally via the ECB/FED is looking at deflation as the cause for a new Hitler to be reborn.  

Terrible self interest based article.

I hate dishonest a-holes in finance, it's a dirty game 

Sun, 12/04/2011 - 22:22 | 1945542 stacking12321
stacking12321's picture

a correction, the title is "when money dies", not "when money does".

pdf download here:


Mon, 12/05/2011 - 00:50 | 1945797 chump666
chump666's picture

just did a line of coke when i wrote that...

Sun, 12/04/2011 - 23:37 | 1945691 Fred Hayek
Fred Hayek's picture

It was such a meteoric rise during the period of hyperinflation that essentially ended in 1923 that in German elections of December 1924, the nazis got . . 3% of the vote.

In May 1928 they got . . 2.8% of the vote.

Then you have CreditAnstalt (sp?) collapse in Austria, the market crash in the U.S. and deflation worldwide.

In elections of 1930, the nazis jump to winning 18.3% of the vote.

From there, they jumped up to being the largest party in the Reichstag.

So, there actually is a good case to make that Hitler was nothing without the deflation of the great depression.

Mon, 12/05/2011 - 01:07 | 1945812 chump666
chump666's picture

Jeez even Wikipedia gets it right, I 'll tell ya, the paranoid deflationists are nut jobs. Bank economists have plays to get that end yr bonus, probably they want that hooker who asks for $1000 a f*ck.  Again, inflation causes the problems, deflation is good medicine.  The best for an overcooked economy.  The Krugmans and the other lame asses are going to get us all up sh*t creek.  So if they print, we are ALL done.  Oil, which if goes to the break point of 120 140, will guarantee China will take dump on the US. Overnight.  
Germany will toss Merkel across to France and the world will enter a inflation/stagflation nightmare.


Although the inflation ended with the introduction of the Rentenmark and the Weimar Republic continued for a decade afterwards, hyperinflation is widely believed to have contributed to the Nazi takeover of Germany and Adolf Hitler's rise to power. Adolf Hitler himself in his book, Mein Kampf, makes many references to the German debt and the negative consequences that brought about the inevitability of "National Socialism". The inflation also raised doubts about the competence of liberal institutions, especially amongst a middle class who had held cash savings and bonds. It also produced resentment of bankers and speculators, whom the government and press blamed for the inflation.[5] Many of them were Jews, and some Germans called the hyperinflated Weimar banknotes Jew Confetti.[6]

Mon, 12/05/2011 - 00:54 | 1945802 Jack Napier
Jack Napier's picture

Corn1945, how presumptuous of you to stereotype the membership an entire web site where anybody can join if they are patient enough to wait for a moderator to approve their account. I suspect you are more ignorant than your seemingly intelligent sentence structures let on, based on your inability to identify a group of folks (Bush throwback) beyond a broad, and more importantly unfounded generalization. I not only skimmed the headline and read the entire article, but I also read your whining comments.

Sun, 12/04/2011 - 21:14 | 1945345 Deep
Deep's picture

I agree, I love ZH, but come on guys, you cant have it both ways. You guys have been banging the QE drums since June, and nothing. Operation twist is not QE, and you know it. Each QE has diminishing effetcs, so the next one will probably last 4-6 months, then the next one 2-4 months and so on. QE cant fix our problems, only makes it worse as we pile more and more debt.

Sun, 12/04/2011 - 21:17 | 1945353 fonzanoon
fonzanoon's picture

Operation twist may not have expanded the balance sheet but it is inflationary. Also while they may be calling for QE3 on this site it is not because they think it is a good thing, they just think it is inevitable. IMHO.

Sun, 12/04/2011 - 21:45 | 1945417 TheSilverJournal
TheSilverJournal's picture

Rates don't just stay at 0% autimatically, QE is needed in order to keeps rates ultra low.

Sun, 12/04/2011 - 21:49 | 1945430 fonzanoon
fonzanoon's picture

If QE is perpetual as you say to keep rates at 0% why does gold not perpetually go up? I am not saying you are wrong. I am just askin....

Sun, 12/04/2011 - 22:57 | 1945617 marsdefIAnCe
marsdefIAnCe's picture

Gold prices, like any other asset, have a large dependency on the mindset of the buyers.  When these buyers are in the "fuck, the fed is retarded" mode, gold goes up.  When these buyers are noticing a suspension of US citizens right to trial and possibility of indefinite detainment, Russia and China gearing up for WW3, Bibi acting like a crazied looney, Pakistan shutting down supply routes to Afghanistan and Russia threatening the same, and so on ... there is a transition into "OOOHHH FUUUCCCK!!!" mode where your buying tastes shift towards assets like guns, ammo, water purification systems, non-hybrid seeds, and methods of transport to as middle of fucking nowhere as possible.

Mon, 12/05/2011 - 09:02 | 1946187 foofoojin
foofoojin's picture

I just got a internship at a multi billion $ oil company that paying me 5k a month for 3 months. there a good chance i'll get a job offer at the end of the internship. i'm five weeks away from doubling my position on physical  silver.  I have no kids. no credit card debt. no house payment. and im 5k in school debt. my mind set is that i need plan for the best, prepair for the worst.

the two largest mine in the world for gold have less then 10 years left. it doesn't really matter what the public thinks of gold . it's going up.

Sun, 12/04/2011 - 21:37 | 1945392 tmosley
tmosley's picture

Funny, I heard "take a break, and start QE later" ie force the market and politicians to beg for it.

Which was probably wrong, since the money supply has continued to explode upwards.  QE never stopped.  They just stopped reporting it.

Sun, 12/04/2011 - 21:55 | 1945443 LongBalls
LongBalls's picture

Exactly. As Marc Faber stated. You can't have interest rate reductions without some kind of Fed easing. QE has never stopped. The money supply continues to increase. The Fed's policy will never work. We are in the midst of a solvency issue not a liquidity issue. Therefore you can not solve the problem by creating more debt.

Sun, 12/04/2011 - 21:57 | 1945452 Tyler Durden
Tyler Durden's picture

Operation Twist is QE and everyone knows it - as by definition it is an act of Fed intervention to modify the Treasury curve shape. It is not an LSAP: that comes next. What nobody contests is that neither Twist nor QE x will achieve anything, and yes half lives will be shorter and shorter. And yes, it will only make it worse.

The issue, as Grice pointed out in the context of the ECB, is that none of the above matters:

it is what the Fed does, it is the only thing the Fed knows how to do, and it is what will happen.

Sun, 12/04/2011 - 22:09 | 1945504 fonzanoon
fonzanoon's picture

So if any Republican other than RP were to unseat Obama, would they have the balls to put a stop to the fed? If they did, or if RP were elected and put a stop to the fed, what would happen?

Sun, 12/04/2011 - 22:19 | 1945534 stacking12321
stacking12321's picture

JFK ring a bell?

there's too much vested interest in the status quo, they have to stop him at any price.

Sun, 12/04/2011 - 22:32 | 1945564 fonzanoon
fonzanoon's picture

I don't buy that. So if Romney/Bachman won. Romney would get hit by a bus and the next day Bachman would get eaten by a Lion? It is inconceivable that what I am suggesting plays out?

Sun, 12/04/2011 - 22:38 | 1945580 stacking12321
stacking12321's picture


are you suggesting romney or bachman are anything but tools of the establishment?

think about it.

why is it the MSM has a blackout on RP but give romney and bachman full coverage?

Sun, 12/04/2011 - 22:43 | 1945593 fonzanoon
fonzanoon's picture

I picked two people...and to your credit those two are not the right ones to illustrate my point, especially Romney. All I am suggesting is...were a republican to unseat Obama, and replace Bernak with say Richard Fisher...or Jim Grant or whoever and they put an end to what the fed is doing now, what would be the result?

Mon, 12/05/2011 - 01:02 | 1945815 Scalaris
Scalaris's picture

prominent jaw lines?

Wed, 12/28/2011 - 23:38 | 2018141 Clockwork Orange
Clockwork Orange's picture

This is getting crazy - you can't think everything is a conspiracy.  JFK? C'mon.


Sun, 12/04/2011 - 22:28 | 1945554 slewie the pi-rat
slewie the pi-rat's picture


who tf is talking about ron paul?

am i the only person to notice that tyler had just contradicted himself? 

there is no coup, and no green light for QE3 from the FED

Mon, 12/05/2011 - 00:29 | 1945769 YBNguy
YBNguy's picture

OMG TD speaks, its like the messiah coming to Noah on Mt Ararat!!!


J/K TD, I really respect you (but am convinced there is more than one of you who use that moniker to post articles...)


Anyways, thanks for doing what you do. Ill probably get myslef a ZH tshirt for Christmas. Just because Id love to be stopped in public by a fellow ZH fan and have a great conversation.

Mon, 12/05/2011 - 07:07 | 1946076 TheSheepWolf
TheSheepWolf's picture

Is it important how many TDs are out there? More interesting question is why they run the site... Just to sell some zh-shirts or to spread the truth? Oh come on... 


Anyways... I really like ZH :-)

Sun, 12/04/2011 - 21:03 | 1945324 I think I need ...
I think I need to buy a gun's picture

"we won't have inflation until 2012" John Bogle Vanguard CEO (former) jan 2010

Sun, 12/04/2011 - 21:09 | 1945335 fonzanoon
fonzanoon's picture

I am not putting this on ZH at all because I found found the most informative articles on this site but I totally agree with this statement: Half the articles (justifiably) bash the fraud factories on Wall Street (Goldman Sachs, etc) and the other half publish "analysis" from those same institutions that somehow is meaningful. This goes for almost any site.

I have no understanding why analysis from the same institutions that are regarded as evil can be worth any consideration at all.

Sun, 12/04/2011 - 21:21 | 1945360 traderjoe
traderjoe's picture

If you consider the banks to be the enemy (and I do), don't you think it's worth knowing what they say/think/propose?

Sun, 12/04/2011 - 21:24 | 1945367 Corn1945
Corn1945's picture

I already know what they are going to say.

The formula is pretty straight-forward: If it's against the financial interest of a middle class family, then it will be done. I don't need some always-wrong analyst to re-write history while telling me that. 

These institutions are so totally disecredited that I don't trust anything they write. 

Sun, 12/04/2011 - 21:46 | 1945421 Ned Zeppelin
Ned Zeppelin's picture

You make good points. You do not deserve to be so brutally junked, but if you go seem to go up against TD (and I think you were not, only questioning) that is what you get sometimes here. However, TD responded to your questions and if you were totally off the reservation I think he/they would not have bothered to educate you on his/their thinking. 

By the way, TD never has predicted the onset of QE at a particular time, only that it is coming. And I agree, it is.  Just as surely as the ECB will print. 

But I agree with you in mistrusting the statements out of these jokers at the TBTFs.  They are useful only for parsing through, like a pile of chicken entrails, to figure out what they really think, often the opposite of what they say, or even more often, subjects they do not discuss or ignore.  

Sun, 12/04/2011 - 23:40 | 1945699 Troll Magnet
Troll Magnet's picture

i'm with you there. corn deserves props for raising his questions. whoever junked him are living in their own little fucking bubbles. this is fight club, bitches! think for yourself!

Sun, 12/04/2011 - 22:34 | 1945566 Freebird
Freebird's picture

Well Corn, as you know you need to separate the wheat from the chaff. The PDs & others put out retail punter "intelligence" & also produce obviously, internal intell foe their prop desk. If you think ZH or any poster will provide you with a 100% accurate roadmap for the next 12 months, man you must be either in denial or delusional.

Sun, 12/04/2011 - 21:24 | 1945368 fonzanoon
fonzanoon's picture

not if what they say/think/propose in writing to the public does not correlate to what they actually believe and do. Then they are just trying to sucker the public. 

Sun, 12/04/2011 - 21:39 | 1945397 Jason T
Jason T's picture

Keep your friends close and your enemies closer?

Sun, 12/04/2011 - 21:50 | 1945428 FeetOnTheGround
FeetOnTheGround's picture

They are worth consideration, since these are their 'playbooks.'

Sun, 12/04/2011 - 21:46 | 1945420 slewie the pi-rat
slewie the pi-rat's picture

don't be such a wussy, corn!


trust me!

Sun, 12/04/2011 - 21:47 | 1945425 willien1derland
willien1derland's picture

Corn1945 - I do not want to see anyone junked - it is vital that diverse opinions & thoughts be posted - that is one of the core value of America (well not Levin/McCain, but you get the point) - I think the fact that Zero Hedge publishes the diversity of articles is because its readership is left to consider the information, evaluate & analyze the content & MAKE UP THEIR OWN MINDS rather than abdicating their thought process to another - That is how it works you can lead, follow, or stand on the sidelines - the choice is yours & it is simply the most respectful manner anyone can expect - I would encourage you to make up your mind -if you think S&P will go to 1,000 then act upon it, if you think otherwise then act on it - DEFEND your thesis & screw the concerns about being junked - sometimes one's positions are unpopular - that doesn't make them any less valid - stand your ground and let the chips fall where they may - I am grateful beyond measure for this site & its participants as I have learned more here - from posts & commentary - than from any other resource - sometimes I disagree & I junk a comment - sometimes I disagree with an author & publish my commentary & other times I agree or ask questions of authors & commenters - but it is all in the spirit of respect - NOW EVERYONE CAN JUNK MY POST ACCORDINGLY! Vive ZH!

Mon, 12/05/2011 - 00:58 | 1945811 HCSKnight
HCSKnight's picture

Corn, ZH is becoming what they despised. Though Tyler does better than the MSM & most other aggregating blogs, you'd be a fool to expect anything other than self-serving bias. Something proven repeatedly in the past through his mis representation of verifiable information.

What is most interesting is that it sometimes is contained in the very piece he links to.

Sun, 12/04/2011 - 20:45 | 1945279 Motley Fool
Sun, 12/04/2011 - 20:46 | 1945281 GetZeeGold
GetZeeGold's picture



Well the rulez keep getting changed.....don't you know that by now?


....and Charlie Brown trusts Lucy to hold the football.

Sun, 12/04/2011 - 20:44 | 1945272 knukles
knukles's picture

Or the Swap Lines.  Ain't like its reversed out of the domestic system and injected into the/a foreign banking system.... as if there's any foreign or domestic banking system disconnect anymore at all, anyway.


Without overt domestic sterilization, the swaps are

Sun, 12/04/2011 - 20:49 | 1945287 Revolution_star...
Revolution_starts_now's picture

swaps, pivot man, twist or QE to infinity and beyond. Seems like they don't have the bang they used to. One of these days Alice, We sell it instead, who knows if this is the one.

I support torture and waterboarding but only in the case of fed board members.

The federal reserve is a terroist organization and should be held in gitmo.

If you can give them 7 trillion, then screw the debt let the fed buy it. Let's break them.

Sun, 12/04/2011 - 21:37 | 1945391 scatterbrains
scatterbrains's picture

I'm waiting for the day the fed has to conduct QE for the sole purpose of supressing the paper gold price never mind interest rates.

Sun, 12/04/2011 - 21:02 | 1945319 jekyll island
jekyll island's picture

WTF?  The Fed Gov's are a dog and pony show, it's the chairman and Goldman Sachs, errr,  the NY Fed that call the shots.  QE has never stopped, they just aren't announcing it.  The Bernank knows he has to get Obummer reelected or it's the end for him, so there will be MORE QE in 2012, wouldn't matter if Ron Paul and Andrew Jackson were on the board of governors.  

Sun, 12/04/2011 - 23:55 | 1945720 I am a Man I am...
I am a Man I am Forty's picture

Operation twist is in a gray area, not necessarily QE3.  It isn't money printing, no expansion of balance sheet. 

Sun, 12/04/2011 - 21:35 | 1945389 Wixard
Wixard's picture

Many here trade, whether in paper or physical commodities/stocks/whatever. 


The analysis of a bank like sachs is for perspective, the information of potential fed moves could be considered information. 


Yes banks are blood suckers. But that doesn't always mean they're always wrong in their opinion. 

Yes the fed continues to mix and match numbers. 

Yes the information given by the guv. is often fudged. 


However even given all these things QE3 MUST happen. Whether tomorrow, or 10 months from now. Whether they call is QE3, or come up with a new name. Monetization must happen at some point.

Everyone knows it's coming, it's not a matter of if. The question is how well can the fed control inflation, and how well they balance the confidence in the USD. The problem is as time has gone on the FED has less and less power to influence the market without resorting to simply pumping everything up. 



When it comes to finances if a government says a recession is a 6, it's actually an 8. 


If a bank says "We're AAA!" They're probably a B-something. So we can take their info with a grain of salt. (Or a pound of it)

Sun, 12/04/2011 - 20:38 | 1945264 etudiant
etudiant's picture

Well, if the recent performance was the peak of Fed hawkishness, it does not impress.

Are we sure these labels are reflective of reality?

Sun, 12/04/2011 - 20:41 | 1945270 Haole
Haole's picture

Confetti bitchez...


Sun, 12/04/2011 - 20:52 | 1945296 Mentaliusanything
Mentaliusanything's picture

Are those benny bucks from a helicopter?

Sun, 12/04/2011 - 20:56 | 1945307 Haole
Haole's picture

Physical keystrokes, real wealth man.

Sun, 12/04/2011 - 20:47 | 1945280 Racer
Racer's picture

Gold shining is ever brighter with more evil deeds of the  ChairSATAN and his genocidal co-devils

Sun, 12/04/2011 - 20:47 | 1945284 nmewn
nmewn's picture


The smartest idiots in the room always give confidence of purpose.

Sun, 12/04/2011 - 20:48 | 1945285 knukles
knukles's picture

Set coordiantes, for where no modern central bank has gone before.
Ludicrous Speed, Mr. Sack.

Sun, 12/04/2011 - 20:50 | 1945291 Mentaliusanything
Mentaliusanything's picture

QE is like leading a horse to cool clean but poisoned water.

Now to get him to drink it is a different proposition.

The Horse knows better

Sun, 12/04/2011 - 20:57 | 1945309 GetZeeGold
GetZeeGold's picture


Thaz giving the dumbassed horses a lot of credit.

Sun, 12/04/2011 - 21:16 | 1945352 Teamtc321
Teamtc321's picture

You would be surprised just how smart a horse is............

Sun, 12/04/2011 - 21:20 | 1945358 GetZeeGold
GetZeeGold's picture


Bout as smart as the typical CNBC viewer one would presume.

Sun, 12/04/2011 - 22:55 | 1945615 i-dog
i-dog's picture

You can lead a horse to CNBC, but you can't make him watch it.

Mon, 12/05/2011 - 02:10 | 1945665 akak
akak's picture

You can lead an ass to CNBC, but the on-air position has already been filled by Steve LIESman.

Sun, 12/04/2011 - 20:51 | 1945292 alphabrew
alphabrew's picture

This shows that the Fed is, afterall, a public body.  The Board of Governors of the Fed are permanent voters (and appointed by the teleprompter-in-chief).  The 12 private bankers (heads of the Federal Reserve Banks) rotate turns voting, so only 5 vote at a time.  Thus, the Fed is controlled by Government since the Board of Governerors always have the majority vote, with a smokescreen of private control from the 5 reserve bank votes.  That said, Ron Paul is absolutely correct.  End the Fed, bitchez!

Sun, 12/04/2011 - 21:29 | 1945377 traderjoe
traderjoe's picture

Are you serious? The public aspects of the fed are simply a ruse to make it appear at least partly public in nature. Watch the left hand while the right hand f*ucks the people.

Sun, 12/04/2011 - 21:35 | 1945388 Bansters-in-my-...
Bansters-in-my- feces's picture

@ alphabrew.

I call Bull Fucking Shit,on your post/

I don't know how you snuck your comment by Zero Hedgers,without getting mega-junked.,but they must have misunderstood your comment.



Sun, 12/04/2011 - 22:05 | 1945485 alphabrew
alphabrew's picture

If you read your monetary history, surely you have come across Milton Friedman's "Money Mischief".  Page 206 clearly describes how the fed is controlled by the teleprompter-in-chief via the 7 members of the Board of Governors.  The 5 votes from the private reserve banks are the minority of the 12 total votes.  So I lay my alpha palm down on the table and call Bull Fucking Shit on you, sir.

Sun, 12/04/2011 - 23:04 | 1945629 i-dog
i-dog's picture

The 7 members of the Board of Governors are proposed by the [private cartel] owners of the Fed and approved (read: rubber-stamped) by the Teleprompter-in-Chief.

That is neither "government control" nor "control by the T-i-C". It is a sham.

Sun, 12/04/2011 - 23:14 | 1945643 akak
akak's picture

Your comment reflects a mainstream and nominal, if hopelessly naive and uninformed, Civics 101 view of how the Fed interacts with the federal government.  In truth, it is a far more complicated and nuanced relationship than the laughably simple one that you suggest, with the Fed exercising vastly more power over both the economy and the federal government than you imply.

Mon, 12/05/2011 - 01:06 | 1945817 Jack Napier
Jack Napier's picture

Public body or not, it is privately owned entity where the President hand picks the unelected board members. These members have no obligation to do what the President tells them, so to say the Fed is controlled by the President is incorrect. Besides that, it is not a government agency. It is not Constitutionally authorized. It is illegal, plain and simple, by the 10th Amendment. It is also illegal for money to be anything other than gold and silver. There's a reason that this is the 3rd central bank the US has had. The first 2 got routed by real patriots. Rest in peace, Andrew Jackson.

Sun, 12/04/2011 - 21:08 | 1945306 Everybodys All ...
Everybodys All American's picture

How do you reconcile the extraordinary amount of spending the US has undertaken trying to stimulate the economy and yet with a very limited amount of organic growth? The only hope is that at some point economic growth begins to become self sustaining. So far it hasn't happened. Quite frankly because of the enormous debt and a debt /gdp ratio of just under 100 the prospects for success are not very high. I'd like examples of where this has worked.

Bernanke and Keyensian economists have failed to recognize just how much of a negative strain is placed on the economy by unhealthy debt. Rising prices no matter how they are dismissed by CPI and PPI massaged numbers are real issues for Americans. This action can be directly attributed to the Bernanke monetization of our debt and the daily destruction of the dollar's buying power.

At some point this dance with QE (x) will hit a wall of selling fury by the bond vigilantees. How long can the AAA rating be maintained by Moody's and Fitch with this ongoing philosophy of insane monetization? Once 2 of 3 hit the AAA rating it becomes a game changer.

Sun, 12/04/2011 - 21:39 | 1945399 traderjoe
traderjoe's picture

You're missing the intentionality of it all. Ben wants to create more debt. His masters (the banks) want more debt. That's how they create debt slavery.

Sovereign nations don't have to borrow in the first place. See the United States Note.

Sun, 12/04/2011 - 20:59 | 1945314 Snakeeyes
Snakeeyes's picture

And what good would QE3 do? Money velocity, the multiplier and marginal boost per dollar borrowed are all collapsing.

The only QE will be bond buying because NO ONE ELSE WILL BUY OUR BONDS!!!!!!!!!!!!!!!

Sun, 12/04/2011 - 21:05 | 1945329 GetZeeGold
GetZeeGold's picture



So what's your point?


TARP was about giving them time to get out......guess what.....they're out.

Sun, 12/04/2011 - 21:20 | 1945357 billybobtx
billybobtx's picture

+1 All about goosing the market to get out...then the tank.

Sun, 12/04/2011 - 22:11 | 1945477 slewie the pi-rat
slewie the pi-rat's picture

So what's your point?

he is a fuking troll, you wooden-headed puppet!

WAKE UP!!!  he doesn't have a point except to advertiZe his styoooopid fuking website here and try to get shitheads like Y-O-U "interested".  the tried-&-true ORI plan to market by advertizing thousands and thouands of times, here

here's his post from the "Psychopathic Econ 101" string (paste): 

How about Macro 101? Have The Fed and Treasury Run Out of Magic Bullets? American And Eurozone Saturated With Debt And Low Growth;

Wake UP!!!

Sun, 12/04/2011 - 21:00 | 1945315 Caviar Emptor
Caviar Emptor's picture

Fed Hawks.

You call that a Hawk?

With real rates negative, and the world awash in fiat I call that a Chicken Hawk

Sun, 12/04/2011 - 21:53 | 1945434 willien1derland
willien1derland's picture

+1,000 - Chicken Hawk - Foghorn Leghorn should be added as a Fed Governor - at least he would be entertaining!

Sun, 12/04/2011 - 21:03 | 1945323 Cassandra Syndrome
Cassandra Syndrome's picture

Is this what Prince was on about when he sang "this is what it sounds like, when the doves cry"?

Sun, 12/04/2011 - 21:08 | 1945331 LouisDega
LouisDega's picture

Im gonna fucking die. Thats great. I can cancel my Amazon order now. Good luck gents. This is the world you have chosen.



Sun, 12/04/2011 - 21:08 | 1945332 kito
kito's picture

qe is coming, qe is coming!!! jesus is coming!!! jesus is coming!!!


............stilllll waiting..................

Sun, 12/04/2011 - 21:13 | 1945341 GetZeeGold
GetZeeGold's picture



Both have already been here.....both are coming back again.


You pretty much don't stay up on current events do you?


Sun, 12/04/2011 - 21:53 | 1945432 kito
kito's picture

sorry, let me elaborate, "qe3 is coming!! qe3 is coming!



Sun, 12/04/2011 - 23:17 | 1945648 akak
akak's picture

... and yet the real money supply continues to grow, and the dollar continues to depreciate.

I suggest you spend more time focusing on what is actually happening under your nose, and less time on trying to pigeonhole and label it.

Thu, 12/29/2011 - 02:53 | 2018389 qussl3
qussl3's picture

Mid 2010: Greece almost implodes - EUR~1.20

End 2011: Italy, Portugal, Maybe even Spain - EUR~1.3

Nobody wants the USD, its taking the imminent collapse of the EZ just to prop it up.


Sun, 12/04/2011 - 21:22 | 1945364 JimBobOMG
Sun, 12/04/2011 - 21:15 | 1945348 Caviar Emptor
Caviar Emptor's picture

We don't need QE3: money is free, the economy is expanding and inflation is running all by itself. 

Sun, 12/04/2011 - 23:21 | 1945654 i-dog
i-dog's picture

The economy is not expanding ... the banks' balance sheets are expanding.

Inflation is not running ... liquidity is being extracted through the banks stacking and not lending. There is some [worldwide] inflation in scarce commodities, but there is local deflation in US assets and durables.

The media has done a great job of talking up Fed Quantitative Easing, but the reality is that the "printing" has gone offshore to the banks while the local economy is being starved of liquidity. Ben is crashing the US economy.

Sun, 12/04/2011 - 21:23 | 1945365 Iliketurtles
Iliketurtles's picture

I no longer believe there will be QE or only outside shot of 1 more round. Even the typical American voter will start to see how QE effects Oil prices and politicions will get crushed for causing high Oil prices. American voters are very influenced by the state of Oil Prices and I would assume that Gas would easily get to $4 per gallon by summer (and I won't even bring up Iran which is a whole other discussion on what that will do to prices). Curious what people think I am not saying I am right but at this point it is a 51% chance at this current time , no QE.

Sun, 12/04/2011 - 21:28 | 1945374 GetZeeGold
GetZeeGold's picture QE.....and we service the debt how again?

Sun, 12/04/2011 - 21:44 | 1945414 Everybodys All ...
Everybodys All American's picture

it's a vaild point you make. Next question. What happens when the next rating's agency says enough on the US's AAA credit rating? It's the preverbial rock and a hard place the Fed finds itself in. What hapens when oil is at $120 a barrel or higher and the economy is tanking on the high oil price. I don't think there are any sure outcomes for the economy under either scenario and Bernanke knows this conundrum. He will talk QE as much as possible though because he can get the same likely outcome in the stock market(wealth effect) to a degree by touting easy money but then never delivering it when push comes to shove. It seems to me we oscilate between risk on and risk off with time being the biggest factor on Bernanke's side. Risk off you buy up the US Treasuries and Risk on you're selling them.

Sun, 12/04/2011 - 21:39 | 1945400 Caviar Emptor
Caviar Emptor's picture

Fed boxed in. Been sayin that since the spring. You can't have "austerity" on the fiscal side and  QE on the monetary side unless you want a little revolution in the middle

Sun, 12/04/2011 - 21:26 | 1945373 Ted Baker
Ted Baker's picture


Sun, 12/04/2011 - 21:31 | 1945378 luna_man
luna_man's picture



Tyler, PLEASE...don't be distracted by the few KNUCKLE HEADS!...

I know why most are here, as for myself, INFORMATION!!


Sun, 12/04/2011 - 21:33 | 1945384 Peter Pan
Peter Pan's picture

What's the difference between a wanker and a banker?

The wanker knows what he's doing.

Sun, 12/04/2011 - 21:39 | 1945395 props2009
Sun, 12/04/2011 - 21:41 | 1945407 gjp
gjp's picture

Bernanke only rates a 1 out of 5 on the dovish scale?  What a joke.

All the dissent there is only for show, it's long been decided, print until the cows come home!  (Or until global systemic collapse, whichever comes first ...)

Sun, 12/04/2011 - 21:43 | 1945413 electricgorilla
electricgorilla's picture

Ben Bernanke meets Buzz Lightyear: PRINT TO INFINITY AND BEYOND!!!!!

Sun, 12/04/2011 - 22:01 | 1945468 bill1102inf
bill1102inf's picture

There will be no  QE3 and gold will not get back to 2000.

Sun, 12/04/2011 - 22:15 | 1945522 quacker
quacker's picture

This is why the war with Iran is a MUST for tptb. They absolutely must have this cover for QEx so oil prices cannot be placed at benocide's doorstep.

Sun, 12/04/2011 - 22:26 | 1945549 willien1derland
willien1derland's picture

When the Fed entered into its HYPERSTATE of INTERVENTION back in 2008 there was significant criticism leveled at Bennie & the Feds because they lacked an EXIT STRATEGY - their 'LAME' response indicated that they would simply DRAIN the RESERVES in the near future as the economy recovered...NOW THAT THE RESERVES are analogous to the Pacific Ocean & the Fed has entered into Operation Twist one needs to ask how is this trend modified - WHAT COULD POSSIBLY OCCUR that would radically modify this direction - I cannot conceive of any set of events that eradicates this direction - We have simply turned Japanese - the Fed will engage in the IDENTICAL manner that the Bank of Japan does - The issue is structural as we all know, however, the Fed's shareholders KNOW that a structural solution would translate to their collapse & ALL that such an event would entail - so without any political resolve or legal action that would modify this trend & hold them accountable/responsible for their actions the BERNACKENSTEIN will continue to wreak havoc on the REAL ECONOMY in the same manner that Michael Jackson's doctor Conrad Murray 'treated' MJ - maintaining the sedation until the US economy enters a coma or simply passes away...

Sun, 12/04/2011 - 22:36 | 1945573 AldoHux_IV
AldoHux_IV's picture

We really need to be questioning the existence of the fed and not whether it will engage in more secret bailouts for an insolvent financial system. All previous forms of QE have failed in creating a better economy especially with regards to the 2 things the fed are supposedly responsible for: employment and price stability.


Sun, 12/04/2011 - 22:44 | 1945595 quacker
quacker's picture

If it happens, Gingrich and Paul will be outraged, Romeny will express "concerns," but truth is everything the cartel does gives him orgasms, and Rick Santorum doesn't really know what the Federal Reserve even is.

Mon, 12/05/2011 - 01:53 | 1945892 the grateful un...
the grateful unemployed's picture

gingrich reminds me of the police commissioner in Casablanca, shocked shocked to learn gambling is going on here

Sun, 12/04/2011 - 23:50 | 1945713 olo - that's th...
olo - that's the bird's picture

he who prints first prints best.  the US is creeping out of this thing a little bit faster than the rest. we are the engine that makes the world tock (e.g. 1.6 trillion market cap IT companies that have no foreign competition).  You need oil. hahaha... your companies need MSFT (us), ORCL (us), CSCO (us), INTC (us), IBM (us), GOOG (us), EMC (us), DELL (us), HPQ (us), GNU, SAP (germany) not to mention the massive high paid jobs created using the stuff they invented. we have big hearts. let the press run freely.  the money will eventually funnel back whether or not draconian measures to collect on those credits actually happen.  ten years from now when it is clear we are out of it, we'll let that debt go quietly into the night.  gold becomes paper.  vicious circle. He who sells gold first sells best.

Mon, 12/05/2011 - 00:09 | 1945742 zorba THE GREEK
zorba THE GREEK's picture

When TSHTF, the Fed will print. You can etch that in stone.

Mon, 12/05/2011 - 00:14 | 1945748 UnderDeGun
UnderDeGun's picture

Tyler --- I would like to see a ZH PLAYBOOK Section for the various contingencies. Based, of course, on and in the imaginary country of of the United Steaks of Merika. All opinions on "plays" have no relationship to any existing instrument or country, living or dead, and though the symbols are real, they really are fictitious in both the figurative, literal, and olfactory sense. Nothing included in said ZH PLAYBOOK may be construed to be investing advice - either real or imagined - or a recommendation to buy, sell, or trade any "issue", whether it exist as a relationship to any fictional vs real or real vs fictional vehicle. Any person using the information in any form, including but not limited too excluding said fictitious/real/imaginary instrument, shall be considered non corporeal for any and all instances of said utilization --- regardless of existence or non-existence on, in, or through intersections of reality containing any reference, whatsoever, to anything remotely or incompletely recognized as said ZH PLAYBOOK. Such recognition to directly include zebras, prolapsed uteri, and acetone but to completely exclude Oreo cookies.

Mon, 12/05/2011 - 00:52 | 1945804 Grand Supercycle
Grand Supercycle's picture

SP500 bull vs bear battle maintains bearish bias after Friday price action and more downside expected.

My long term indicators have continued to warn of US Dollar strength and EURO weakness and these signals have increased since 2009. The overdue dollar rally should be substantial.

Mon, 12/05/2011 - 01:50 | 1945886 the grateful un...
the grateful unemployed's picture

i vote that you stop screwing fixed income investors and savers, now when is this election you are talking about?

Mon, 12/05/2011 - 02:59 | 1945944 eurusdog
eurusdog's picture

Perhaps, Tyler wishes to provide information so YOU can make up your own mind instead of sheepishly following in other footsteps.

Do NOT follow this link or you will be banned from the site!