I think Bernanke is just trying to keep the ship from sinking during his watch. Once his term is up (in 2014 I believe), Obama will replace him and he can wipe the sweat off his forehead. He doesn't want to be the on in charge when the ship goes down. As Ron Paul said, these QE's are becoming less and less effective. There will come a point where even printing a zillion dollars won't help and Bernanke just hopes it doesn't happen till after 2014.
Most of this electronically created money is (a) being hoarded by the large banks (b) filtered through the financial service industry. If it is ever forced into the actual economy due to some unforeseen event, it's GAME OVER instantly. So far there hasn't been a heavy velocity trend. It's been more a sustained trickle which is still playing havoc with food production prices.Originally Posted by twomp
Last edited by AuH20; 12-12-2012 at 01:19 PM.
“Our illegal population alone exceeds the all the Irish, Jewish and British immigrants who came. Each year, we catch more people breaking in at the border than all the Swedes and Norwegians who came to America in 200 years. Half a million illegal aliens succeed in breaking in every year, more than all the Greeks or Poles who came legally from the Revolution to 1960..” - Patrick J. Buchanan
they already knew QE was here to stay.
QE Infinity as Ron says.
"Integrity means having to say things that people don't want to hear & especially to say things that the regime doesn't want to hear.” -Ron Paul
“To avoid criticism say nothing, do nothing, be nothing.” ― Aristotle
I hope he gets what coming to him and it all tumbles down before his term is up.
The 'expert' on the Great Depression who stated under the oath that he would not monetize the debt. Bernanke should be waterboarded and forced to run through an active minefield, when this charade finally comes to a crashing halt. The man is literally slated to be a killer of millions, with his irresponsible actions.
Last edited by AuH20; 12-12-2012 at 01:22 PM.
“Our illegal population alone exceeds the all the Irish, Jewish and British immigrants who came. Each year, we catch more people breaking in at the border than all the Swedes and Norwegians who came to America in 200 years. Half a million illegal aliens succeed in breaking in every year, more than all the Greeks or Poles who came legally from the Revolution to 1960..” - Patrick J. Buchanan
From the TF Metals Report site...
-----------------
OK, so now we know why the metals aren't rallying sharply. There are conditions for continued QE and they are similar to the Fed Funds conditions.
However, I watched the press conference and personally listened to what The Bernank said. He clearly stated this:
The conditions for curtailing QE and raising the Fed Funds rate are only being offered for the purpose of transparency. There is no change to the actual forecast of "extraordinarily low rates through mid-2015". No change at all. The Fed does not expect a sub 6.5% unemployment rate OR a greater than 2.5% inflation rate through mid-2015 and, therefore, low rates and $85B/month in QE can be expected to continue until then.
YOU MUST UNDERSTAND THIS. The metals are trading this afternoon as if QE will only last through April. This is nonsense and that is NOT what The Fed is saying. The Bernank even went so far as to say that even if the unemployment rate fell to 6.5%, that would not mean a curtailment of QE. They'd still be looking at the labor force participation rate and other factors. He called this ongoing assessment "subjective".
And, again, this is all BS anyway! Economic conditions are only a secondary reason for QE. The primary reason the Fed is compelled to print over $1T in 2013 is deficit funding!! Without The Fed and the PDs buying $1T in treasuries next year, rates would skyrocket to the place where natural, organic buyers would materialize. Given the current state of affairs, at what rate would that be? 8%? 10%? 15%? NO WAY that can be allowed so The Fed is forced to fund almost all of the U.S. federal deficit next year and beyond.
So, the real metric as to when QE might end is this: When can The Fed exit the treasury market without causing rates to violently rise? The answer is, of course, NEVER. Can't do it. Not gonna happen.
Unsterilized QE, at a minimum of $85,000,000,000 per month is here to stay. Permanent and to infinity. BTFD.
TF
http://www.tfmetalsreport.com/blog/4373/bernank-giveth
Last edited by AmericasLastHope; 12-12-2012 at 01:35 PM.
"A free people ought not only to be armed and disciplined, but they should have sufficient arms and ammunition to maintain a status of independence from any who might attempt to abuse them, which would include their own government." George Washington
except silver.
"Like an army falling, one by one by one" - Linkin Park
https://www.youtube.com/watch?v=q6vi528gseA
Zero chance to default........lol!
They can't do it anymore even if they want to. They are nearly out of short term Treasuries to redeem for longer term ones so if they still want to aquire longer term Treasuries and keep those rates lower (which will help keep mortgage rates lower) they have to put out more money to purchase them with (unless they started using maturing mortgage backed securities but they have been rolling them over already in addition to the $40 billion a month in additional purchases they announced last time).This means even looser monetary policy, as the Fed won’t be sterilizing the $45 billion that used to be part of the Twist
The US Treasury will probably have to change their maturities as well. They have not been issuing much long term debt and becasuse of that, most of them were going to the Fed via Operation Twist. I have suggested that the Treasury SHOULD be issuing more long term debt to lock in current low interest rates and lower costs of the government borrowing in the future.
Freedom is a state of mind. Nobody can take that from you unless you let them.
Whisky Tango Foxtrot - isn't QE3 still ongoing? They are OVERLAPPING these things now??!!??
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