vlogolution network » quantitative easing

Bernanke says no QE3? So why didn’t markets tank??

Alexander P Morris — Sun, 04 Mar 2012 01:27:41 +0000

(Robert Sinn) “When the economic data and financial markets soften the Fed strikes a more dovish tone, and as we saw yesterday when things improve the Fed Chairman does not mention the idea of additional stimulus and acknowledges the potential for a short term spike in inflation due to higher gasoline prices.”

Bernanke says, “Since these projections were made, gasoline prices have moved up, primarily reflecting higher global oil prices – a development that is likely to push up inflation temporarily while reducing consumers’ purchasing power.” And despite the fact that Bernanke didn’t mention “quantitative” once — here or anywhere else in his testimony — the media was quick to hype the Fed’s mere acknowledgement of “potential inflation” as a change in stance.

Full Story: Bernanke’s Poker Game (RobertSinn)

However, the majority of the mass media conveniently overlooked the real story of the day…

(WSJ) “The European Central Bank handed out €529.5 billion ($712.81 billion) in cheap, three-year loans to 800 lenders, the central bank’s latest effort to arrest a financial crisis now entering its third year.

Wednesday’s loans were on top of the €489.2 billion of similar loans the ECB dispensed to 523 banks in late December. The ECB’s goal is to help struggling banks pay off maturing debts and to coax them to lend to strained governments and customers. The takeup of this week’s loans was roughly consistent with what bankers, investors and analysts had expected.”

Full Story: ECB Gives Banks Big Dollop of Cash (WSJ)

WOW! So the same day Bernanke is noticing some possible inflation, most news sources completely overlooked one of the greatest liquidity injections ever on the very same day… And in hyping up the wrong story to “help” cover it all up, the media also gave these same banks the opportunity to park their free cash right back into the stock markets at a short-lived “NO QE3″ discount.

(Jim Sinclair) “Because of the volatility you experienced in gold today, and the absolute fact that it was an MSM cover operation of today’s covert operation, which was one of the largest injections of QE liquidity into the Euro banking system ever, you must know the facts.”

“If, in fact, what Bernanke attempted to tell the investment world today, that QE may not be necessary because of a modest improvement in the statistics of unemployment, if that was truly to be believed, then the stock market should have been off 800 points while gold was gold was down $100. Because the same thing moving the stock market is what’s moving the metals and that is pure liquidity.”

Full Story: Today was a Cover-Up By the Fed & Mainstream Media (JimSinclair)

So for those of you worried about an end to quantitative easing, alleviate your fears. QE and cheap easy money for the well-connected kleptocrats is alive and well and not likely to end all that soon…

Goldman Advises the Fed to go Nuclear, and set a Target for Nominal GDP

Alexander P Morris — Wed, 26 Oct 2011 18:57:00 +0000

Best summed up by this comment by black swan on the BusinessInsider post:

“@Tom Hunter: ‘indicating that they will use additional asset purchases to help bring actual nominal GDP back to trend over time’

translation: this ship is sinking and we want to stick the taxpayers with trillions of dollars more of our impaired financial sewage, like we did with QE1, AIG and the GSEs, before we get stuck with it and go down with the ship. Allow us to sail away in our own ship, loaded down with looted treasure and flying the Jolly Roger, to the land of offshore accounts.”

In his latest US Economics Analyst note, Goldman’s Jan Hatzius offers up his suggestion for the next phase of Fed policy:

“With short-term interest rates near zero and the economy still weak, we believe that the best way for Fed officials to ease policy significantly further would be to target a nominal GDP path such as the one shown in the chart on the right, indicating that they will use additional asset purchases to help bring actual nominal GDP back to trend over time. The case would strengthen further if deflation risks reappeared clearly on the radar screen.”

Full Story: Goldman Advises The Fed To Go Nuclear, And Set A Target For Nominal GDP (BusinessInsider)

Why People Don’t Buy Gold, and Why it’s Stupid to Think for Yourself

Alexander P Morris — Sat, 26 Mar 2011 20:50:14 +0000

Why people don’t buy gold, and why it would have been smart to buy a house at the top of the market, so long as everyone else was doing it, and famous well-known economists like Alan Greenspan, Ben Bernanke, and others said real-estate would never go down. Learn why it’s stupid to think for yourself. Very funny video, and with our current state of affairs, sadly quite true…

On the other hand, it also helps explain why there is so much opportunity in the markets, as people make the same mistakes over and over again, as they try to avoid “feeling stupid”, or being called “strange and weird”.

Note: Posting this video wasn’t meant to suggest that NOW is the best time to buy gold (alas, it is already up over 6 fold over 10 years), and in fact in the past I’ve suggested that silver would likely be an even better investment longer term (as does seem to be the case so far). However, perhaps for the real point… don’t be one of the lemmings running out to buy it when everyone’s finally talking about what a great investment it is and how it too can’t ever go down. There is a time and cycle for everything. In the meantime, study, research, make up your own mind, and possibly consider picking some up when it’s unfavorable or unfashionable to do so. (You can also check out some of the related links I posted below).

As Benjamin Graham once said, “You are neither right nor wrong because the crowd disagrees with you. You are right because your data and reasoning are right.”

“Fear the Boom and Bust” a Hayek vs. Keynes Rap Anthem

Alexander P Morris — Fri, 19 Nov 2010 01:25:22 +0000

I had posted this awesome rap video on my facebook page earlier this year, but never got around to making a blog post about it. Another great video that lays out the craziness of the “boom and bust” cycle in modern economies. What’s more crazy is that the twisted version of Keynesian economics pursued by governments today would have Keynes himself rolling in his grave in disgust. Somehow politicians conveniently forgot that key little detail that governments are supposed to SAVE when times are good. Instead, politicians spend like nuts in good times, and SPEND LIKE MANIACS when times are bad. Why let such key details interfere with the opportunity for politicians to promote their own agendas… Enjoy the show!

ps. If you enjoyed this video, be sure to check out the links below for the sequel!

Quantitative Easing Video Explains Q.E.2 in terms everyone can understand – with Transcript

Alexander P Morris — Mon, 15 Nov 2010 19:48:37 +0000

This awesome and quick video explains quantitative easing in a simple and easy way for everyone to understand, and it’ll keep you laughing (or crying) the whole way through…

One note, granted this video hits heavily on Ben Bernanke, it’s certainly not all his fault – not by a long shot. Living beyond our means can only go on so far, and politicians are more than happy to take advantage of public sentiment to fulfill their own agendas and help their “friends” through gargantuan spending programs and greater controls enacted under the guise of serving the “greater good”.