10 Shocking Quotes About What QE3 Is Going To Do To America - The End of the American Dream - MichaelSnyder - September 14th, 2012 - Ready or not, QE3 is here, and the long-term effects of this reckless money printing by the Federal Reserve are going to be absolutely nightmarish. The Federal Reserve is hoping that buying $40 billion worth of mortgage-backed securities per month will spur more lending and more economic activity. But that didn't happen with either QE1 or QE2. Both times the banks just sat on most of the extra money. As I pointed out the other day, U.S. banks are already sitting on $1.6 trillion in excess reserves. So will pumping them up with more cash suddenly make them decide to start lending? Of course not. In addition, QE3 is not likely to produce many additional jobs. As I showed in a previous article, the employment level did not jump up as a result of either QE1 or QE2. So why will this time be different? But what did happen under both QE1 and QE2 is that a lot of the money ended up pumping up the financial markets. So once again we should see stock prices go up (at least in the short-term) and commodities such as gold, silver, food and oil should also rise. But that also means that average American families will be paying more for the basic necessities that they buy on a regular basis. The most dangerous aspect of QE3, however, is what it is going to do to the U.S. dollar. Most of the rest of the world uses the U.S. dollar to conduct international trade, and by choosing to recklessly print money Ben Bernanke is severely damaging international confidence in our currency. If at some point the rest of the world rejects the dollar and no longer wants to use it as a reserve currency we are going to be facing a crisis unlike anything we have ever seen before. The real debate about QE3 should not be about whether or not it will help the economy a little bit in the short-term. Rather, everyone should be talking about the long-term implications and about how QE3 is going to accelerate the destruction of the dollar. The following are 10 shocking quotes about what QE3 is going to do to America....
QE3: Helicopter Ben Bernanke Unleashes An All-Out Attack On The U.S. Dollar - The Economic Collapse Blog - You can't accuse Federal Reserve Chairman Ben Bernanke of not living up to his nickname. Back in 2002, Bernanke delivered a speech entitled "Deflation: Making Sure 'It' Doesn’t Happen Here" in which he referenced a statement by economist Milton Friedman about fighting deflation by dropping money from a helicopter. Well, it might be time for a new nickname for Bernanke because what he did today was a lot more than drop money from a helicopter. Today the Federal Reserve announced that QE3 will begin on Friday, but it is going to be much different from QE1 and QE2. Both of those rounds of quantitative easing were of limited duration. This time, the quantitative easing is going to be open-ended. The Fed is going to buy 40 billion dollars worth of mortgage-backed securities per month until they have decided that the economy is in good enough shape to stop. For those that get confused by terms like "quantitative easing" and "mortgage-backed securities", what the Federal Reserve is essentially saying is this: "We're going to print a bunch of money and buy stuff for as long as we feel it is necessary." In addition, the Federal Reserve has promised to keep interest rates at ultra-low levels all the way through mid-2015. The course that the Federal Reserve has set us on is utter insanity. Ben Bernanke can rain money down on us all he wants, but it is not going to do much at all to help the real economy. However, it will definitely hasten the destruction of the U.S. dollar. And the Federal Reserve is apparently very eager to get QE3 going. Purchases of mortgage-backed securities are going to start on Friday. In the coming months, hundreds of billions of dollars that the Federal Reserve has zapped into existence out of nothing will be injected into our financial system. So what will happen to all of this new money? If banks and financial institutions use that money to make loans then it could have somewhat of a positive impact on the economy in the short-term. However, the truth is that it isn't as if banks are hurting for cash to loan out. In fact, right now banks are already sitting on $1.6 trillion in excess reserves. Just like with the first two rounds of quantitative easing, a lot of the money from QE3 will likely end up being put on the shelf. But the stock market loved the news because they know that the previous two rounds of quantitative easing have been great for the financial markets. On Thursday, the stock market soared to levels not seen since December 2007. There is much rejoicing on Wall Street right now. And this stock market bounce is great for Bernanke's good buddy Barack Obama. Obama nominated Bernanke to a second term as Fed Chairman, and this might be Bernanke's way of paying him back. But of course the Fed is supposed to be "above politics" so that would never happen, right? The Federal Reserve essentially "crossed the Rubicon" today. No longer will quantitative easing be considered an "emergency measure". Rather, it will now be considered just another "tool" that the Fed uses in the normal course of business. Considering how vulnerable the U.S. dollar already is, announcing an "open-ended" round of quantitative easing is utter foolishness. According to the Fed, when you add the 40 billion dollars of new mortgage-backed security purchases per month to all of the other "easing" measures the Fed is continuing to do, the grand total is going to come to about 85 billion dollars a month. The following is from the statement that the Fed released earlier today....
As Predicted, Bernanke Launches QE3 to Help the Big Banks … Which Will Destroy the Economy - Washington's Blog - September 13, 2012 - QE ∞ - We predicted last week that Bernanke would launch QE3 this week. Today, the Fed announced that it will buy $40 billion dollars of mortgage-backed securities per month … indefinitely. This is just another bailout for the big banks. (If the government had instead given money directly to the consumer, we would be out of this economic slump by now). Bernanke claims that the main justification for QE3 is to boost employment. This is slightly ironic, since Bernanke’s policies are largely responsible for creating high unemployment in the first place.
The real justification is to try to artificially prop up asset prices. But that approach has been proven to be an absolute failure.
Jim Grant: We Are Now All Labrats Of Bernanke And The Fourth Branch Of Government
- Zero Hedge - Tyler Durden - September 20, 2012 - You put Jim Grant on TV and someone mentions the Fed and the result every single time is the equivalent of waving a red curtain in front of a rabid bull. This time was no different, as the Interest Rate Observer once again let Bernanke, with whom he clarified is no longer on speaking terms, have it. The ensuing central-planner bashing was in line with expectations, and just as we presented yesterday in "The Experiment Economy", so too does Grant believe that the Fed is "learning by doing" and follows up by clarifying that this is an experiment, "and we are lab rats in the financial markets." He then proceeds to lament that the credit markets, clueless NYT econopundits notwithstanding, have now lost all informational value as every rate instrument is purely in the manipulated domain of the Fed. "We are all living in a land of speculation and manipulation" is Grant's summary of the current predicament of anyone who wishes to trade these "markets" and it may as well be the best synopsis of the New (ab)normal. And aside from an odd detour into Government Motors, Grant once again hones in on the only true antidote to central planner idiocy, gold: "the best thing about gold is that it's got no P/E multiple. Gold is a speculation on an anticipated macroeconomic outcome, the systematic debasement of currencies by central banks. Why wouldn't they do QE4? What intellectual argument do they have against doing it again, and again, and again." Well...none.
QE3 & Why Gold Always Goes Up! - State of the Nation - September 16, 2012 - Obama and Bernanke collaborate to further undermine a true economic recovery … By initiating another round of Quantitative Easing. What the heck is that? In addition to being typical economic jargon designed to obfuscate and complicate the real truth of the matter, Quantitative Easing (QE) is the surest and quickest way to debase a nation’s financial integrity and devalue its currency. So why do they do it? Why have Obama and Bernanke colluded to further devalue the US Dollar? They do it whenever all else has failed, as it did in 2008 and 2010. Now here we are in 2012 and it’s time for QE3, just in time for the notorious September triple witching hour, as well as the November presidential election.
The Revolution From Above ~ Paul Craig Roberts - September 13, 2012 - ... “Consumers simply cannot make ends meet. Inflation-adjusted, or real, median household income declined for the fourth-straight year, plunging to its lowest level since 1995. Deflated by the CPI-U, the 2011 reading actually stood below levels seen in the late-1960s and early-1970s.” “At the same time, despite the ongoing nature of the economic and systemic-solvency crises, and the effects of the 2008 financial panic, income dispersion—the movement of income away from the middle towards both high- and low-level extremes—has hit a record high, instead of moderating, as might be expected during periods of financial distress. Extremes in income dispersion usually foreshadow financial-market and economic calamities. With the current circumstance at a record extreme, and well above levels estimated to have prevailed before the 1929 stock-market crash and the Great Depression, increasingly difficult times are likely for the next several years.” This chart shows where the median household income of the US Superpower, the “indispensable people,” stands at the culmination of 2011. Americans are as well off as they were in 1967-68. Most americans cannot pay for fighting multi-trillion dollar wars for 11 years, bailout trillions of dollars in uncovered casino bets by Wall Street, have their middle class jobs sent abroad by corporations, and still expect to have higher personal incomes....
Congressmen call for end to Afghan war - The Army Times - Dan Lamothe - September 20, 2012 - A bipartisan group of lawmakers called anew Thursday for the end of the Afghanistan war, citing the recent rash of incidents in which U.S. forces have been killed by Afghan troops as evidence that the war has no hope of succeeding. The comments came at a news conference organized by Rep. Walter Jones, R.-N.C. The congressmen, whose district includes Camp Lejeune, N.C., questioned why, after 11 years of U.S. military involvement in Afghanistan, the Afghan army still isn’t ready to operate without coalition support... Douglas Wissing, the author of “Funding the Enemy: How U.S. Taxpayers Bankroll the Taliban,” pushed even further, saying that “everything about our involvement in Afghanistan is wrong.” While researching the book, he found that, because of the country’s culture of corruption, development money the U.S. sends to Afghanistan goes directly into the hands of some Taliban commanders, who serve as sub-contractors to Afghan companies providing security in the region. Wissing acknowledged there could be a power vacuum if the U.S. withdraws forces from Afghanistan quickly, but said it’s important to weigh that against whether any progress made can be lasting. The U.S. now spends $4.1 billion a year to prop up the Afghan National Security Forces, he said, “and I don’t think hear anyone who says that is sustainable, economically or politically.’...
Taliban Outflank U.S. War Strategy with Insider Attacks - IPS News - Gareth Porter and Shah Noori - September 20, 2012 - Sharply increased attacks on U.S. and other NATO personnel by Afghan security forces, reflecting both infiltration of and Taliban influence on those forces, appear to have outflanked the U.S.-NATO command’s strategy for maintaining control of the insurgency. The Taliban-instigated “insider attacks”, which have already killed 51 NATO troops in 2012 – already 45 percent more than in all of 2011 – have created such distrust of the Afghan National Army (ANA) and national police that the International Security Assistance Force (ISAF) command has suspended joint operations by NATO forces with Afghan security units smaller than the 800-strong battalion of Kandak and vowed to limit them in the future. ISAF had intended to carry out intensive partnering and advising of ANA and police units below battalion level through 2012 to get them ready to take responsibility for Afghan security. Now, however, that strategy appears to have been disrupted by the insider attacks, and Afghan military and civilian officials are seriously concerned. Secretary of Defence Leon Panetta sought to minimise the crisis in U.S. war strategy Tuesday by calling the inside attacks on NATO troops the “last gasp” of a Taliban insurgency that has been “unable to regain any of the territory that they have lost.” The “last gasp” phrase recalls then Vice-President Dick Cheney’s infamous 2005 claim that the Iraqi insurgency was “in its last throes”. But Gen. Martin Dempsey, chairman of the U.S. Joint Chiefs of Staff, who has no apparent personal stake in touting the existing strategy in Afghanistan, called the attacks “a very serious threat to the campaign” in an interview on Saturday. “You can’t whitewash it,” said Dempsey. “We can’t convince ourselves that we just have to work harder to get through it. Something has to change.”...
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