Tag Archives: Quantitative easing

GE Christenson ~ This Crazy Extend & Pretend Economic World

Posted on by
Reply

Deviant Investor June 4 2013

world

In no particular order the following is a list of what many people think are contemporary insanities. Since most of these have been widely discussed, links have not been provided. The information is easily available via Internet searches.

Paper Pushers & Money

Nixon temporarily closed the “gold window” in 1971. It is still closed. How long is “temporarily”?

The Japanese government spends 24% of its annual revenues on interest expense, but only because the average interest rate is quite low. If interest rates rise to 2.2%, their interest expense will consume 80% of the government revenues. Japan has been described as “a bug in search of a windshield.” Since their economy has a huge impact on the rest of the world, the inevitable disaster that results from crazy economics will not be pleasant for Japan or the rest of the world.

Abenomics (Japan) wants a 2% inflation rate but expects long-term (JGB) government bonds to yield only 1%. This seems like a disconnect in thinking that happens in a crazy world.

Unbacked paper money has always, throughout history, failed to maintain its value and eventually failed as a currency. Yet all modern countries use unbacked paper money. That is indeed crazy for all except bankers and politicians!

The Federal Reserve is annually creating “out of thin air” about $1,000,000,000,000 to purchase US Treasury debt and to buy toxic assets from bankers. If it sounds crazy, it probably is crazy.

Continue reading →

GE Christenson ~ Scandals & Economic Disasters!

Posted on by
Reply

Deviant Investor May 23 2013

There is no shortage of scandals in Washington DC, New York, and London; and, there is an excess of monetary heroin, Quantitative Easing, in Europe, the UK, Japan, the USA, and elsewhere. (When will they ever learn?)

The S&P 500 is hitting new highs, and gold and silver are sitting roughly at two-year lows. Strange and stranger every day…

What should we make of it? Let’s ask the really intelligent old guys who have seen it all.

Richard Russell on May 17, 2013:

“The CPI is manipulated, and I believe gold is being manipulated as well. The Fed’s QE4ever is inflating everything — school tuition, haircuts, food, gas, insurance, medicine. They’ve already “rearranged” the CPI, so what’s left for them to do to keep us from knowing about inflation? Oh yes, it’s gold, so c’mon, Bernanke, keep the lid on gold. Slam it in after-market trading in the thin paper-gold markets of the night.

I promise you, when the true forces of inflation finally break loose, the Fed won’t be able to disguise what they’ve wrought. When the true forces break out — it will be a national disgrace and an emergency. ‘Then you will know the truth, and the truth will set you free.’ The rest of this year should be something to behold.”

Paul Craig Roberts ~ Washington Signals Dollar Deep Concerns

Posted on by
1

Paul Craig Roberts May 18 2013

Over the past month there has been a statistically improbable concurrence of events that can only be explained as a conspiracy to protect the dollar from the Federal Reserve’s policy of Quantitative Easing (QE).

Quantitative Easing is the term given to the Federal Reserve’s policy of printing 1,000 billion new dollars annually in order to finance the US budget deficit by purchasing US Treasury bonds and to keep the prices high of debt-related derivatives on the “banks too big to fail” (BTBF) balance sheets by purchasing mortgage-backed derivatives. Without QE, interest rates would be much higher, and values on the banks’ balance sheets would be much lower.

Quantitative Easing has been underway since December 2008. During these 54 months, the Federal Reserve has created several trillion new dollars with which the Fed has monetized the same amount of debt.

One result of this policy is that most real US interest rates are negative. Another result is that the supply of dollars has outstripped the world’s demand for dollars.

These two results are the reason that the Federal Reserve’s policy of printing money with which to purchase Treasury bonds and mortgage backed derivatives threatens the dollar’s exchange value and, thus, the dollar’s role as world reserve currency.

To be the world reserve currency means that the dollar can be used to pay any and every country’s oil bills and trade deficit. The dollar is the medium of international payment.

This is very helpful to the US and is the main source of US power. Because the dollar is the reserve currency, the US can cover its import costs and pay for its cost of operation simply by creating its own paper money.

Continue reading →

GE Christenson ~ A Tipping Point In The Financial System (Part 2 of 2)

Posted on by
Reply

Deviant Investor April 11 2013

Cyprus and So Much More Happened. So What?

  • Insiders moved billions of Euros out of Cyprus banks before the bank holiday and after the banks closed, via branches in London and Russia.
  • Confiscating depositor money is planned for future European bank failures, and Canada, the United States, and New Zealand have similar plans. Those plans may, or may not, be executed.
  • Confidence in the safety of banks has been drastically reduced because people realized that deposits in a bank are liabilities, NOT as safe as expected, and easily confiscated.
  • The Bank of Japan announced a very aggressive “money printing” strategy that is likely to end badly.

Why Might This Be a Tipping Point?

Desperation, TBTF bank fears, dollar weakness, a banking catastrophe, “extend and pretend,” panic, derivatives, and greed are high on the list.

Dr. Paul Craig Roberts: “The fact that the Federal Reserve is short selling bullion means that there is something desperate going on, and I assume it’s related to the US dollar. If the dollar drops sharply in exchange value the Fed can’t control the interest rate and the bond price and so all of the bubbles would blow up.

“All of the recent reports of countries moving away from the dollar to settle their international payments have most likely caused a great many countries to look at getting out of dollars. We not only have the BRICs moving away from the use of the dollar, but also China, Japan, and all of the East Asians.

“Recently we have even seen reports out of Australia that they are going to deal directly with China in their own currency. So this drop in demand for dollars when the Fed is creating one trillion new dollars every year means the exchange value of the US dollar is untenable.” Link.

Dangerous Scare Tactic?

Continue reading →

Tim Price ~ A Central Banker’s Checklist For Prosperity

Posted on by
Reply

Sovereign Man March 24 2013

If there was ever a policy manual on how to deal with recession, the Fed and ECB’s copies have fallen out of the ugly tree and managed to hit every single branch on the way down.

cartoon_money

Indeed, if the world’s central bankers had wanted to perpetuate this recession until hell froze over, they couldn’t have done a better job:

  • Set interest rates to levels flatter than ten-day old beer? Check.
  • Stimulate consumption? Check. At the expense of savers? Check.
  • Push stock markets to all-time nominal highs at shaky valuations? Check.
  • Prevent widespread liquidation of financial assets? Check.
  • Keep lending money to shaky businesses? Check.
  • Keep that QE liquor flowing to ensure that banks never have to face their hangover whilst sober ? Check.
  • Ensure that bad banks– and let’s face it, they’re all bad– gorge on lousy government debt instead of lending to small and medium sized businesses? Check.
  • Keep on inflating base money? Check.
  • Interfere with the market to ensure that bad assets never reach a clearing price? Check.
  • Inflate retail prices? Check.
  • Seize funds directly from savers’ accounts? Check.

Continue reading →

Michael Snyder ~ Federal Reserve Money Printing Is The Reason Why The Stock Market Is Soaring

Posted on by
5

Govt Slaves | January 28 2013

You can thank the reckless money printing that the Federal Reserve has been doing for the incredible bull market that we have seen in recent months.

When the Federal Reserve does more “quantitative easing”, it is the financial markets that benefit the most.

The Dow and the S&P 500 have both hit levels not seen since 2007 this month, and many analysts are projecting that 2013 will be a banner year for stocks.  But is a rising stock market really a sign that the overall economy is rapidly improving as many are suggesting?  Of course not.

Just because the Federal Reserve has inflated another false stock market bubble with a bunch of funny money does not mean that the U.S. economy is in great shape.  In fact, the truth is that things just keep getting worse for average Americans.  The percentage of working age Americans with a job has fallen from 60.6% to 58.6% while Barack Obama has been president, 40 percent of all American workers are making $20,000 a year or less, median household income has declined for four years in a row, and poverty in the United States is absolutely exploding.

So quantitative easing has definitely not made things better for the middle class.  But all of the money printing that the Fed has been doing has worked out wonderfully for Wall Street.  Profits are soaring at Goldman Sachs and luxury estates in the Hamptons are selling briskly.  Unfortunately, this is how things work in America these days.  Our “leaders” seem far more concerned with the welfare of Wall Street than they do about the welfare of the American people.  When things get rocky, their first priority always seems to be to do whatever it takes to pump up the financial markets.

Continue reading →

GE Christenson ~ Non-Predictions For 2013 & 2014

Posted on by
1

 Deviant Investor | January 14 2013

More of the Same

  • More money printing by central banks. A trillion here and a trillion there, printed money everywhere.
  • More deficit spending. $3 Billion per day, but who cares?
  • More useless commentary about controlling spending, but the result will be increased spending and more useless commentary.
  • More and higher taxes. More consumer price inflation.
  • More QE. Printing money props up the stock market, but for how long?
  • More debt. More student loans, more credit card debt, more mortgages, more sovereign debt, and eventually some nasty defaults.

Less of the Same

  • Less Congressional credibility – low and going lower.
  • Less belief in a better future. It is difficult to believe in a brighter future when the food stamps and welfare payments just don’t buy what they used to.
  • Less employment. People continue to drop out of the employment statistics because they have given up hope of finding work. This is called “structural unemployment.”
  • Less purchasing power for the dollar. The more the central banks print, the higher the cost of food, fuel, beer, and wine.
  • Lower standard of living. With much higher costs, the standard of living for most Americans will continue to decline.

Continue reading →

Greg Hunter ~ Weekly News Wrap Up January 11 2013 [Video]

Posted on by
Reply

USA Watchdog

Looks like the gun control debate is taking precedence over the severe financial problems the country is facing.  We have a debt ceiling issue that could call into question the “full faith and credit” clause of the Constitution.  In other words, we might default on our debt.  We have these automatic cuts that have been postponed, and we still don’t have a deal to cut government spending.  So, why is the Obama Administration pushing gun control now?  Does the government want to start disarming the public just in time for the next financial meltdown?

Continue reading →

GE Christenson ~ QE4 Is The Drug Of Choice

Posted on by
Reply

Deviant Investor | December 20 2012

cartoon_draghiGoldman Sachs recently announced regarding gold, “We see growing downside risks.” Their (GS) forecast for 2014 is only $1,750 per ounce. With their history of lies and deception and their reputation as insiders who front run markets, this looks like a contrary indicator. Perhaps they are preparing to buy at lower prices.

Should we believe Goldman Sachs? My answer is definitely not!

Chris Martenson wrote regarding the announcement of QE4:

“Instead stocks initially climbed but then closed red. Gold was mysteriously sold in the thinly-traded overnight markets and again right after the announcement in large, rapid, HFT blocks that swamped the bids. U.S. Treasury bonds actually sold off on the news. The dollar hardly budged. Commodities were mixed across the board but more or less flat on the day, with the exception of the metals, and especially the precious metals, which were sold vigorously.

The markets are now well and truly broken. Not because they don’t conform to my predictions, but because they are no longer sending useful price signals. Instead, my hypothesis here is that the markets are now just a giant and rigged casino, where a relative handful of big firms and other tightly coupled players are gaming their orders to take advantage of this flood of money.”

Michael Pento wrote:

“The plain truth is this is a balance sheet recession and not one due to onerous interest rates. More of the Fed’s monetization may be able to bring down debt service payments a little bit further on consumer’s debt. However, it will also cause food and energy prices to be much higher than they would otherwise be.

The damage done to the middle class will be much greater than any small benefit received from lower interest rates. Therefore, the net reduction in consumer’s purchasing power will serve to elevate the unemployment rate instead of bringing it lower.

Rather than aiding the economy and fixing the labor market, what the Bernanke Fed will succeed in doing is to ensure this unshrinkable balance sheet will not only destroy the economy, but also drive the rate of inflation to unprecedented levels in this country.” (Emphasis DI)

Continue reading →

Chris Martenson ~ Global Growth Will Never Return To Its Glory Days [Video]

Posted on by
Reply

USAWatchdog.com | December 17 2012

Chris Martenson of PeakProsperity.com says, “We have an economy that requires constant exponential growth . . . that won’t happen.  We’re on an unsustainable course.”  Martenson says the next 20 years will look nothing like the last 20 years.  He predicts, “The crisis really is going to belong to the people who don’t see it coming.”

Martenson believes, “Global growth will never return to its former glory days.”  The days of cheap natural resources are gone. Martenson says to go along with that phenomenon, “The risks are piling up in the financial system. . . . The Federal Reserve is printing, printing, printing . . . we’re going to have a world class currency crisis.”  Given the current situation of a broken money system and dwindling natural resources, Martenson says, “I don’t see how you avoid a hard landing at this point.”  Join Greg Hunter as he goes One-on-One with Chris Martenson from PeakProsperity.com.

Enhanced by Zemanta

G E Christenson ~ We Can Ignore Reality!

Posted on by
Reply

Deviant Investor | December 13th, 2012

“We can ignore reality, but we cannot ignore the consequences of ignoring reality.” Ayn Rand

With apologies to Ayn Rand, let’s explore some examples of ignoring reality.

We can ignore the (U.S. government) deficit, but we cannot ignore the consequences of ignoring the deficit. If the deficit increases each year, the total debt will soon be so out of control that it is unpayable. Oops, the United States is there now. The consequences that we cannot ignore are:

  • The budget deficit (expenses minus revenues) increases the total debt each year. A larger debt usually means a higher interest cost must be paid out of current taxes. If the Federal Reserve artificially reduces interest rates by purchasing most of the government debt, then the money supply is substantially increased and that eventually causes much higher consumer prices. Otherwise, the interest cost will rise so much that it consumes the entire federal government revenues. Higher inflation now and insolvency later or higher interest costs now and insolvency later?
  • If the government demonstrates that it cannot control spending, its international credit standing will deteriorate and eventually the dollar will be replaced as the world’s reserve currency.
  • If the dollar is no longer a reserve currency, the United States might need to reduce imports to match exports. Can you imagine paying for our imported oil with gold or exported corn?

We can ignore the fact that gold is real money, but we cannot ignore the consequences of ignoring real money. Prices were stable for most of the 19th century when gold was real money. But since 1971, when paper money has been backed by nothing more substantial than “full faith and credit,” prices have dramatically increased. Can you remember (even imagine) cigarettes costing $0.25 per pack or buying gasoline for $0.27 per gallon? Pretending unbacked paper money is real money has inflationary consequences.

Continue reading →

M. MacDonald & C. Whitestone ~ The Invisible Experiment With Money And Gold

Posted on by
1

 | November 8, 2012

The markets are completely bought and paid for, corrupt,  and manipulated … “a farce”. We are in a corruption bubble, the largest corruption bubble the world has ever seen in modern history and perhaps in all history. This is the first time that the world has been united within instant communication, instant information, instant deposit or receipt of funds into any bank account or financial institution. Michael says: “I believe that we are already a one world order. I actually think we are already there, electronically certainly. I also think that a lot of the debates, wars and conflicts are manufactured, very similar to the presidential debates which are also manufactured. I believe we live in a one-world system, which financially  is already completely manipulated.”

We don’t live in a free market. We haven’t lived in a free market for decades, if not since 1913. We have the most powerful agency in the world, the Federal Reserve, setting the interest rates and the value of the world’s reserve currency. Everything that stems from that is built upon deceit and fraud. This doesn’t bode well for the entire financial system as a whole and right now, we are seeing the ramifications of that deceit.

We are in the lengthening of this financial market topping. A lot of things are happening that point to any one of several large enough dominos falling over which is going to have a splash and pullover effect. Within three years we are going to see this farce imploding. Michael thinks that we will have something completely different and unrecognizable to what we currently have.

Experiments, today’s market distortions, the credit bubble

Continue reading →