Posted on 08/04/2011 6:55:32 AM PDT by Halfmanhalfamazing
On Twitter, Nouriel Roubini declares that the latest currency interventions from Switzerland and Japan represent the start of QE3, ultimately ending in more Fed easing.
(Excerpt) Read more at businessinsider.com ...
Yes, that can be said about more than Germany.
Greece is on that verge.
Zimbabwe went that route.
Numerous other countries have done the same: facing overwhelming debts and insufficient revenue, inflate the currency, confiscate wealth, and kill creditors.
Please show me how I’m wrong here.
Please. I don’t want to go down that path, but don’t see any other way, as the most mundane sufficient tax-and-cut will instigate revolt from all corners, and short of that the growing interest will soon overwhelm all possible revenue.
weimar’s been done already. think progressive! AntiChrist?
Most folk do not realize that the debacle is already accelerating; and from a point where the present dollar is worth only a tad more than a 1930 penny. (See Gold & Money In America, II.)
William Flax
I think you’re confusing your “FED’s”.
“Obamageddon is upon us.”
Yes, it’s a global economic Barackolypse.
Soros has gotta be lovin’ this
When ever millions of American citizens are losing millions of $ with the stock market, he is making billions.
QE has never worked, as has been predicted.
Correct-a-mundo!
“Hey, bartender, another round of QE for everyone in the joint!”
It will be done on a much larger scale, and much more nuanced, than Weimar.
This is why I’ve been suggesting the Obama might sell (*cough*) Taiwan to China in lieu of debt repayment. Maybe the Korean peninsula too. We’ll have to make massive cuts to Defense, you see, so the Navy will be scaled back and herded into the Pacific, and the world’s most heavily guarded border won’t be...and what’s a few trillion dollars between friends...
Actually, both you guys are slightly wrong. The Federal government (fed.gov) and Fed (Federal Reserve) are two separate entities.
(Notice how the private Fed has both 'federal' and 'reserve' in its name, sort of like Federal Express? Funny, that no? You'd think they might want to create a little confusion, or something.)
Anyway, the Fed is supposed to manage auctions for fed.gov debt aka 'Treasuries' conveniently handled by, you guessed, the Treasury Dept. The executive branch (Obama) cannot direct Treasury (Geithner) to issue Treasuries unless Congress first approves the debt -> ceiling.
In theory, the buyers @ these auctions are the 'primary dealers' aka TBTF banks like JP Morgan, Goldman, et al. However, as things got interesting last year, the Fed started kiting money between these players by **first** advancing the PDs the cash (actually, crediting their reserves, but in real actuality, **printing money**) so that they could purchase the bonds.
Now that the cat is out of the bag, it appears the Fed is simply buying bonds (ie **printing money**) directly from Treasury and bypassing the niceties of appearances of going through the PDs.
When things really start to heat up soon, my guess is the Fed will simply begin to print money without any corresponding asset (ie Treasuries).
One final note: one I say 'printing money' (a) that is actually done by Treasury [Bureau of Engraving] on behalf of the Fed. Weird how it all functions appear to be co-mingled, no? And (b), actually, no money is actually being printed; rather, it's just a couple of keystrokes and some zeros added to the various players accounts.
It's all just an illusion, a magic show, to keep the sheep from bolting. And if any get anxious, well there are all sorts of fed.gov police agencies ready to enforce the iron fist.
Obsessively focusing on the Fed operations makes no sense for both financial (monetary and fiscal) and political reasons:
1. Private and public debt creates the money that the Fed "prints" / monetizes. In the last 3 years the amount of public debt has exploded (about $5T added and accelerating) so the problem clearly lies with the irresponsible profligate government spending and minting ("printing") huge amounts of debt, not with the Fed's "printing" / monetizing the public debt. The Fed should not be accountable and be made a political scapegoat for the irresponsible insane fiscal policies and economically harmful legislations and regulations. The Fed is not negatively contributing to the public debt, in fact it occasionally returns "excess" profits to the Treasury thereby reducing the public debt / deficits.
2. USDollar fell 40% under Bush-43 - with all-Republican Congress, Greenspan as the Fed Chairman, before anybody ever heard of TARP or QE (unless they studied Japan's economic policies of two "lost decades"). Oil prices and corn prices went higher since 2007-2008 without any QEx, but because of stupid fiscal policies, regulations and laws.
Greece, Portugal, Spain, Italy etc. do not have their own independent central banks (the "Fed") able to "print" their own drachmas, liras, pesetas (Europe's central bank ECB does the "printing") yet they are in horrible economic malaise and debt spirals - because of their socialist governments and/or spend-thrift fiscal policies. Just because the U.S. has independent central banks and its currency is the world's reserve currency and the de facto currency of several countries who peg their currency to USD$ doesn't mean that the Fed should be a scapegoat for politicos who spend the public treasure with abandon.
3. Politically, by focusing on the Fed "printing" money or "quantitative easing" only distracts from the politicians spending public money and creating insane economically counterproductive laws, bureaucracies and regulations (GSEs Fannie-Freddie, HUD, Community Reinvestment Act, Sarbanes-Oxley, Dodd-Frank, just to name a few). By blaming the Fed for all the financial / economic problems we are absolving and give a pass and blank checks to politicians who are only happy to point the finger at the Fed as the source of all evil - we are actually helping Bernie Sanders, Sander Levine, Barney Frank, Nancy Pelosi, Obama et al to divert the blame from themselves and their policies for current economic problems, unemployment or debasement of the currency.
It also serves to confuse the GOP office candidates who feel obligated to toe the line on bashing the Fed. Bernanke is not the enemy. We have met the enemy and he is us.
In other words, focusing on the Fed and obsessing with its operations only puts on display our financial and political naïveté and only works to let off the hook and help our enemies... which they keep exploiting in their campaigns and legislative process.
One day, they'll be worth more than US billion dollar bills.
Yeah, and this republic is about of as much worth as Weimar.
Huh? They do it by simply making accounting entries in the ledgers of the Federal Reserve System member banks. Voila. Money is created. It's a little trick they do. Like that trick where a woman goes out the door and she's broke and comes back 30 minutes later and she's got money.
“I’d say government and Fed Reserve actions are certainly pointing us toward that ultimate outcome. Of course they will swear that they can prevent it.......just like all those other governments said in countries that suffered the results.”
Hans Sennholz (Economist) used to say “In inflation all debtors gain and all creditors lose.” That’s because the creditors get paid with legal-tender dollars of decreased value and debtors get the advantage of paying their bills with those depreciated dollars.
So, who are the debtors and who are the creditors? The biggest debtor of all is the federal government. That is why inflation will continue—that is the way the government will pay off its debt.
War? By whom against whom? I’m still waiting for a few thousand folks to start camping out in front of the Hut demanding that he-who-must-not-be-named be anointed king and then that b*sterd saying the will of the people must be obeyed, just like in Egypt.
I’ve been expecting China to make their move on Taiwan for some time. When it happens, you can expect us to “soundly condemn” the “Chinese aggression” and do f’kall about it.
Only thing holding them back is that both Taiwan and SK know this is a possibility, so they have their own defense plans, including some, I’m quite sure, that they haven’t made us privvy to.
That’s bullshite. The Fed is a puppet of whatever administration is in power, despite any and all pretensions to the contrary, and ESPECIALLY in the current circumstances. The Treasury can’t create money without the willing partnership of the Federal Reserve. The Federal Reserve hasn’t been legit since at least Volckers time, and may not have been so long before him.
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