Fed to print

[Mega]

Details coming in............
Mike

[Mega]

Re: Fed to print

http://www.zerohedge.com/news/fed-fo...peration-twist

I wonder if EJ will coment on this?
Mike

[jk]

Re: Fed to print

mega, this isn't NEWS. NEWS would be "fed NOT to print." ;-)

[metalman]

Re: Fed to print

mega, this isn't NEWS. NEWS would be "fed NOT to print." ;-)

chinese slang... 'you can't stop a dog from eating his own sh*t".

[Mega]

Re: Fed to print

I had a rather trying day, the vet rang with the news that my 15 year old German shepard has Cancer & there is very little we can do for her. Tara been sick for a year or so & i made the decesion tonight to have her put to sleep on Monday......

As for keeping up with events, its differcult to do so has Itulip doesn't run to any time table........its an event driven site.

Mike

[shiny!]

Re: Fed to print

Sincere condolences, Mike. I once had a German Shepherd... best dog in the world. My prayers for you and your dear pup. Good for you for not letting her suffer.

[BadJuju]

Re: Fed to print

Sorry about your pet, Mega.

[Mega]

Re: Fed to print

She gone.

I hoped to keep her going over the weekend but i awoke this morning to find she suffered a stroke of some sort.....she was unable to eat & couldn't breath normaly.........i rang the vet stright away.......may God rest her soul.
Mike

[BadJuju]

Re: Fed to print

That's unfortunate. I am sure she had many great years of life with you, though.

[shiny!]

Re: Fed to print

I'm sorry you lost your friend, and glad you had the blessing of sharing your life with her. Sending you a long distance pat on the back.

[don]

Re: Fed to print

how is this not another bank bailout?

resurrect the wealth effect to encourage more personal debt

what's changed . . .

[globaleconomicollaps]

Re: Fed to print

I really want to make a separate post about this, but I am unable to find an article that contains this important information. Today we hit a new all time high in the gold price. Maybe you have become inured to this as it has happened so often during the last 11 years. Don't take this for granted. It is a big deal. Someday the explosive rise in gold price will stop.

Today's LBMA AM gold fix: 1359.696 Euros/ troy oz
previous high: 1359.395 Euros/troy oz ( sept 9, 2011 )

[gwynedd1]

Re: Fed to print

She gone.

I hoped to keep her going over the weekend but i awoke this morning to find she suffered a stroke of some sort.....she was unable to eat & couldn't breath normaly.........i rang the vet stright away.......may God rest her soul.
Mike

When my pet died, my government responded by giving an oligarch a pony.

Sorry Mega.

The memories are never gone.

[Mega]

Re: Fed to print

Agreed............but if its used to back a currency then it will not collaspe over night (like when Volker killed it).
What do "we" think on Gold over the next 6-12 months?
Mike

[don]

Re: Fed to print

Doug Nolan on Bernanke's complete capitulation . . .



"Congratulations Mr Bernanke. I'm happy, my assets' values go up. But as a responsible citizen I have to say the monetary policies of the US will destroy the world." - Marc Faber, investor, analyst and writer extraordinaire, September 14, 2012, Bloomberg Television

a Twitter "Bernanke" imposter tweeted these lines: "I put my pants on in the morning just like anyone else, one leg at a time. And when I have my pants on - I print money!"


If I can chuckle perhaps it will hold back the tears. It's difficult not to be reflective - to ponder how things could ever have come to this.

Thursday was another historic day for policymaking, for markets and for the perpetuation of history's most spectacular financial mania. In the past I've noted that, in comparable circumstances, I have viewed my 14-year weekly chronicle of history's greatest credit bubble as pretty much a great waste of effort. I have tried to warn of the dangers of an unanchored global financial "system". I've done my best to illuminate the dangerous interplay between an unwieldy global pool of speculative finance and aggressive "activist" central bankers. I have forewarned of the perils of discretionary (as opposed to rules-based) policymaking - in particular highlighting the (long ago appreciated) fear that too much discretion ensures that monetary policy mistakes will only be followed by yet greater mistakes. I took strong objection to Bernanke's doctrine and framework when he arrived at the Federal Reserve in 2002 and protested in vane when he was appointed its chairman in early-2006.

In my initial Credit Bubble Bulletin back in 1999, I tried to explain how an unfettered explosion of non-bank liabilities was fueling a dangerous credit bubble. Back then, the consensus view held that "only banks created credit". What little bubble analysis that existed at the time focused chiefly on Internet stocks. I was arguing that a radically changing financial landscape called for a new "Contemporary Theory of Money and Credit". I also warned that new finance beckoned for judicious monetary management. Some years later (2007) Pimco's Paul McCulley introduced the world to the phrase "shadow banking".

I've never been fond of the term "shadow banking", believing that the entire line of analysis was missing (avoiding) the most critical aspects of contemporary finance. From my analytical perspective, the issue was not so much that there were financial entities and institutions operating outside traditional banking channels and regulation. Rather, the momentous transformation of financial sector liabilities from ("staid") bank loans/deposits to ("dynamic") marketable debt instruments/obligations was altering traditional relationship between finance, the financial markets, asset prices and real economies.

Importantly, unfettered credit expansion was being driven by an explosion of securities and instruments changing hands - at, I might add, ever higher prices - in increasingly over-liquefied and ebullient markets. Certainly not coincidentally, this was unfolding concurrently with the unprecedented proliferation of hedge funds, proprietary trading operations, derivatives and so forth. Our central bank was oblivious.

The confluence of proliferations in marketable debt and leveraged speculation profoundly altered the financial landscape. Fundamentally, there were no longer any restraints on Credit expansion. The old "fractional reserve banking" "deposit multiplier" was supplanted by the "infinite multiplier" associated with contemporary marketable credit.

Essentially, speculative financial leveraging created an unlimited supply of credit/marketplace liquidity. Unlimited supply, then, led to a wholesale mispricing (under-pricing) of finance. This was particularly problematic for asset markets, where the over-abundance of cheap credit fueled asset price inflation. Higher asset prices, then, created heightened demand for additional credit, which was satisfied at ongoing low borrowing costs.

As credit will do if not restrained, it all became self-reinforcing - or "recursive". And as the quantity of unlimited, mispriced and asset-centric credit exploded, resources throughout the entire economy were badly misallocated. A decade or so ago I explained the dangers of "financial arbitrage capitalism". Somehow, the notion that our system needs only greater quantities of mispriced and misallocated finance has yet to be discredited.

It was apparent by 1999 that the Alan Greenspan Federal Reserve needed to respond aggressively to the changed financial landscape. The non-bank lenders, especially the government-sponsored enterprises (such as Fannie Mae and Freddie Mac), Wall Street firms and hedge funds, needed to come under more intensive regulation. Either that or Fed monetary management had to tighten significantly as part of a policy of "leaning against the wind" of rampant credit expansion and associated asset inflation and bubbles.

Mounting systemic excesses were beckoning for tough love - but the Fed became comfortable doling out candy. It was always my hope that the Federal Reserve would eventually appreciate and respond to the increasingly obvious dangers associated with contemporary unfettered credit and financial leveraging. As of approximately 12:30 pm Thursday, the little sliver of remaining hope was officially pronounced dead.

Instead of moving prudently to rein in egregious credit and speculative excess, the Greenspan/Bernanke Fed's went in the opposite direction and repeatedly provided extraordinary accommodation. Amazingly, each bursting bubble led to only more aggressive monetary largess and more power for dysfunctional (bubble-prone) markets. Thursday's policy move by the Bernanke Fed essentially indicates full capitulation to what has become a highly speculative global marketplace. There is at this point no doubt in my mind that we are witnessing the greatest monetary fiasco in history.


In early-2009 I pleaded, "While I understand the necessity of stemming financial collapse, please don't go down the policy path of fueling a Treasury and government finance bubble - one at the very heart of our credit system." Never at the time could I have imagined the extent to which the Bernanke Fed would be willing to inflate history's greatest bubble.

Chairman Bernanke has gone from resorting to radical policies during a period of acute financial crisis to one of imposing only more radical policymaking three years into recovery. He has gone from trying to stem credit contraction to aggressively promoting rapid (non-productive) credit expansion. Bernanke has evolved from radical liquidity injections meant to reverse marketplace illiquidity, to pre-committing to years of open-ended money printing in the midst of heightened inflationary pressures and dangerously speculative financial markets. Of course, justification and rationalization are everywhere. History will be unkind.

Regrettably, it will require a terrible crisis for the establishment to change policy doctrine, along with economic analysis in general.

There's no reasonable justification for Bernanke taking such extreme risks with financial and economic stability. And I struggle to understand how he doesn't see the likely consequences. After the cult of Greenspan, I thought we had learned a lesson from having one individual exert such power and influence. Indeed, the Federal Reserve has now grossly overstepped its role.


Never was it anticipated that the Fed would resort to massive purchases of Treasury bonds and mortgage-backed securities in a non-crisis environment. Never was it contemplated that our central bank would resort to pre-committing to massive ongoing money printing in the name of reducing the unemployment rate.

I'll state what others hesitate to admit: last week our central bank took a giant leap from radical to virtual rogue central banking. If Bernanke's plan was to leapfrog the audacious Mario Draghi European Central Bank, our sinking currency - even against the euro - is confirmation of his success. If his goal was to provide markets a Benjamin Strong-like "coup de whiskey" - he should instead fear the dangerous instability central bankers have wrought on global markets and economies.

And I am all too familiar to the adversities of being a naysayer in the midst of bubble mania. I've read about it, I've lived it and I'm ok with it - and actually am motivated by it. I highlighted last week the ominous divergence between world fundamentals and the markets. And this week, well, global markets enjoyed just a spectacular time of it. Away from the Bloomberg screen, it sure seemed like a less than comforting week for the world at large.

As an analyst of bubbles, I often quip that they tend to "go to incredible extremes - and then double." Timing the bursting of a bubble is a very challenging - if not nearly impossible - proposition. Yet this in no way should cloud the harsh reality that the longer a bubble is accommodated the more devastating the unavoidable consequences. It is, as well, the nature of speculative manias for things to turn crazy in the destabilizing terminal-phase. The past few weeks - with more than ample bubble accommodation and craziness - makes me fear that eventual day of reckoning.

http://www.atimes.com/atimes/Global_.../NI18Dj02.html