Monday, March 21, 2011

QE is the End of America as We Know It

Each time we begin to approach the end of an announced QE period, the nervous jitters of financial markets start to set in. Will Bernanke continue with QE(n+1) or won’t he? Now it’s true that professional traders live and die by their ability to front run rumor and perception, but for long term investors who fret over such decisions, it demonstrates a fundamental lack of understanding of what QE really is. To put it succinctly, QE is an economic deal with the Devil. Once it is begun in earnest there can be no turning back. It must be played to its ultimate conclusion.
In Bernanke’s 2009 interview on 60 Minutes, he suffered a momentary lapse into honesty and stated that Quantitative Easing was effectively money printing. So why then the complicated euphemism of Quantitative Easing? Because that is what modern central banking sponsored economics is all about – the intentional obfuscation of otherwise simple economic principles to cause the eyes of normal people to glaze over. Once accomplished, the central bankers (and their financial community brethren) are able to pursue policies that greatly benefit themselves but are devastating to everyone else. .
Long term investors who worry about whether QE will continue clearly recognize the fact that everything is now correlated to the Fed’s balance sheet. What they don’t understand is how QE is related to the larger economic cycle and its mission of preventing economic recessions.
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  1. I fear for people like my brother who even though he listened to me when I told him the "bad news", he has yet to act. His 401K will one day vanish into nothing but a collection of worthless digits with no value whatsoever.

    I recall seeing plenty of faces on TV, faces of those who lost their life's savings because they put all their trust in Enron. Now the entire nation is going to suffer when the dollar collapses.

    My only question is, why is Benny B still breathing?

  2. When is The Sh!% going to hit the fan? I have been waiting for the inevitable collapse for 4 years. I am prepared. How much longer can this go on? This is like slowly pulling off a band-aid.

    What will it take for the U.S. economy to finally go over the edge? It seems like the FED can print unlimited amounts of money to make any problem go away. Hell, the 3rd largest economy in the world has been virtually destroyed and the stock market keeps going up. What will it take for the whole charade to come to an end?

  3. What the story made clear is that as long as Benny B keeps the presses rolling, there will be no collapse.

    I expected the collapse to happen before this month of March is over. Now I read just yesterday that we will not likely see hyperinflation before 2014. I am well preped, but if this shit extends till 2014, I'll be dead from starvation by then.

  4. "What the story made clear is that as long as Benny B keeps the presses rolling, there will be no collapse. "

    But that is INSANE!!!! I can't continue using credit cards to pay off other credit cards for all eternity. Why should the U.S. govt? Why should we even pay income taxes if the Ben Bernanke can just print out unlimited money?

    This country is disconnected from reality.

  5. Hey boss, I thought you should know, since the economy is really unstable and inflation is out of control, I thought I'd let you know that effective immediately, my pay rate will be increased by an additional $7.00 per hour. I do hope you can understand why this change is needed and necessary. Let me know if you have any questions. Since this is a fairy tale story, why should city, state and federal governments think it's acceptable to tax us more, just because they don't have enough money to pay their bills?

    I have been watching the Dollar Index fall all morning. It is currently 1.4 points above the crash point of 74. Silver is also rising at the same time.

  6. Banks begin to collapse in 2008

    Housing market begins to lose value

    Suddenly millions of Americans now owe more than their homes are worth

    Banks get cash infusion from the Fed

    Banks begin to foreclose on homes. Many families end up living in their cars, living with other relatives, living in tent cities, all the while, their former homes sit empty and owned by the banks.

    As the economy suffers, more and more people lose their jobs as businesses large and small go bankrupt, further adding to the economic depression.

    Millions rely on food stamps (welfare) to make ends meet. As long as their is a enough to keep from starving, the needy (slaves) will not rebel. "Remember Neo, the people are so desperately dependent on the system (mailbox money and welfare) they will fight to protect it". THEY WILL NOT REBEL!

    How could a Southern White family with perhaps 20 members have a plantation with 200 slaves? Why did the slaves simply rebel and kill their white masters?

    The "System" understands that you have to toss a bone to starving dog once in a while, just to keep him from biting you.

    The banks loaned money to unqualified buyers, knowing full well the risk of default was great. The banks being "too big to fail" were bailed out by Benny B. He just printed up a mountain of money and gave it to the banks at zero percent interest. Banks begin to sell their foreclosed properties to investors (AKA other banks) for pennies on the dollar. B of A sells a home to Wells Fargo for pennies on the dollar to get it off their books and take the tax deduction on the loss and Wells Fargo does the same for B of A. Their losses turn into assets and eventually the families of foreclosures end up moving back in to those homes as perpetual renters. The banks get rich beyond belief.

    What a perfect basis for a novel.

  7. History always repeats itself

    Well;;; not quite

    We are in a very unique period in said history because for the first time; the entire globe and every damn country in it are all in the same boat. Regardless of where the leak springs
    forth; it is plugged- the country/currency doing the plugging is essentially irrelevant.

    As long as the entire globe is somewhat haphazardly on the same page; this could go on for a long, long time. Until one country breaks out - which will become increasingly difficult as we all become so intertwined and interdependant on one another.

  8. I believe the USA could become an isolationist country with little effort. Nothing we buy from China is a "life or death" purchase.

    We all require "must haves"

    We must have air to breath, food to eat and water to drink. These are absolute Must Haves. Next comes basic shelter, medical care and what to do with our bodies, once we vacate them.

    Everything else is secondary.

    We don't absolutely need:

    Cable TV
    Skate boards
    Pro Sports
    Amusement parks

    If you never attend a single day of school, it will not effect your life, it is not a must have. Is it important? Absolutely. I'm just trying to get you to focus on what really matters and what is secondary. Nothing that comes from China is a "must have".

    Our manufacturing base can return to the USA. When I was a kid in the 1960's, EVERYTHING was "Made in USA". I still have my Made in USA Buck knife and is as sharp as it was 46 years ago.

    We can return to the "old days" when American made products were the best in the world.

    My mother's $500.00+ Chinese made LCD TV died in less than 2 years. The Made in USA TV we had in the 1960's lasted more than 25 years.

    Remember back in the "old days" when you bought a TV, it had a minimum 1-year warranty? No body offered "extended warranties" because they were simply not needed. These days, you're lucky to get a "limited 90-day warranty" to cover you made in China piece of crap.

    When I shop at Sam's Club, they always ask me "did you find everything you were looking for?". If we all said "no, I was looking for Made in USA products and found none". Believe me, this would make a difference.

  9. 6.13
    Protectionism V free trade.
    Capital decides.
    America is weighed down by debts to capital Government commercial and private, Americans are a nation of Debt peons in a failed Ponzi economy unable to keep up even their interest payments on past credit.
    Debt peons cannot shout idealistic protectionist drivel at their bailed out
    bankers that are backed by an armed state and that have MSM to condition "public" opinion.
    American finance capital and manufacturing capitalists have lost even the institutional memory of how to make profits in high waged American industry.
    Therefore they support “free trade” and the bailouts for capital system . So they can continue to try and make a profit on industrial commodities produced in the cheap labor Third World and sold in the first world and pray for green shoots ,government money handouts and a recovery of the old Ponzi economy by inflationary "profit" printing.
    Your demand to return to a more simple,primitive technologically backward “golden age” era of self sufficiency and US industrial Autachy is simply fantasy, Perhaps Marxist democratic .
    As if ordinary Americans themselves had a choice ,But this talk is politically and economically meaningless after the ruling financial Elites bi-partisan supported TARP Financial coup ,for control over the US Treasury future tax revenues ,a coup by the privately owned FED money printers and their finance capital bankster partners .
    Thereby establishing a kleptomaniac Corporate State crony capitalist bailout system ,an inflationary money printing regime for socializing their past losses and guaranteeing the future profits of a TBTF “Free trade” insolvant Ponzi capitalism .

    There is then a contradiction between American peoples desire, or hope to return to their old standard of living and the opposing interest of capital.Even a protectionist dream
    But the Ponzi debts system has already imploded in a debt crisis into a sea of now unpayable levels of past debt.

    But ,Shylock demands his pound of flesh according to the laws of agreed capitalist contacts. This Rule of property law and Rights lies at the basis of the US Constitution ,even if it creates unemployment or even starves and emmiserates all Americans , Capital and contract law on debts mainly to the 1% owners of the bulk of that debt is Holy .
    Only un-americans opposed to the constitution and the American way could object to that

    In a free trade world , theoreticaly a Marxist revolution or a debt forgiveness Jubilee year would be required to wipe out the debt burdens and industrially re-develop a protectionist America either in a socialist or capitalist manner.
    Either way the armed corporate state and the owners of the National Debtand their political sock puppets would object to an end to their tax supported bailouts.

  10. I'm happy for the US.

  11. I'm so so so so so happy that China is now the next super power. The USA is going down and down and down just like Etiopia and somalia because evil country like that deseves shit like that.

  12. Every time I go to the bloody toilet. I flush the United states into the toilet.

  13. USA picking on small poor weak countries. Then know its time to see the United States of America to get bare naked. We will laugh giggle and get so much buzz out of it.

  14. I really can't wait to see America in this situatiuon. My happy days are hear.


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