Posted on 09/19/2013 8:17:02 AM PDT by SatinDoll
This much has been determined yesterday -- The Fed could not handle a 2.8% 10 year Treasury rate.
Nor could it handle any further increases.
But consideration of the impact of this policy on the common man, along with the destruction of purchasing power and outright theft from the people who produce the services (and few goods remaining) in this nation was damned -- exactly as has been the case for the last three decades.
What Bernanke did yesterday was guarantee a crash. He guaranteed it because he took what was a clear opportunity to take what had been priced into the market and execute on that and squandered it, effectively turning the crack ***** into the person in charge of the crack supply.
The econometric model predicated on simple credit growth allowed this move in stock prices to where we are now. However, since the 1990s we left the world were this expansion can take place in a stable format as credit -- that is, the amount of money in the system -- rose precipitously.
Instead we now have a positive feedback system established, and Bernanke is extending that into the part of the market where it has never been before -- US Treasuries.
Simply having it occur in MBS blew up the world in 2008. This is worse as now it's in MBS and Treasuries and zero-earning companies.
What's worse is that all Bernanke got out of this is a 10 year Treasury that moved back to where it was a month ago. He did not get back any of the slide in the bond price from May to August -- nor is he likely to.
The impact of yesterday's decision on middle class America is likely to be catastrophic, but not immediate. If you're a trader and were long yesterday you were probably high-fiving your pals in the bar last night, but beware that the bartender likely has none of those stocks and when he figures out what you did to him, along with your maid and nanny, don't be surprised if your morning coffee, evening drink, or kid's lunch is discovered to be spiked with something far worse than a bit of rum.
This is like watching a train wreck in very, very slow motion.
I do not generally add other's comments here, but this was the first one by AZtrader, and pretty much sums up what has happened thanks to Ben Bermanke's actions yesterday.
"Watching yesterdays announcement made me sick to my stomach. Didn't sleep much last night. I am in utter disbelief on what this fed and the banksters are getting away with. Several more large companies announced major layoffs into Obamacare this week. These idiots just don't care. Nothing but part-time crap jobs being generated with low wages, while they inflate the crap out of the things that people need the most."
"The middle class is getting wiped out by low wages and inflation. This must be intentional with a fed vote of 9-1. No one can be this stupid without intent. By the time the Nov election gets here, over 60% of the country will be on the govt dole. This will mean that the left will win the house and we know what they will do with it. Anyone with real assets needs to protect them. The left will take the house and Senate and then this country becomes France or the UK. There will be cameras everywhere, guns will be confiscated and taxes will explode. Be prepared for the worst, because the constitution will mean nothing to these people. The left loves what is happening because they will get more people on the govt roles with this last action and will own them by the time the election comes around. Most of us love our country and are sickened by what we are seeing. How could we believe that our own govt would intentionally impoverish people in order to take over. This will not end well..........."
I think many of us have seen the pending crash with clarity. It goes far beyond the recklessness of the Fed to the very heart and soul of our nation. Few are willing to own our economic problems and even fewer are willing to share the pain we have created with our children and grandchildren.
The real question we should be asking is how long will the world tolerate a worthless dollar before they find another reserve currency?
So, it has been going on for over three years now. Benanke printing up worthless paper (not really, just a journal entry in a set of heretofore unaudited accounting books held most secret by the Federal Reserve) to buy up Treasury Bills and stock equities to the tune of $85 billion dollars per month - a Trillion Dollars a year. This is ON TOP of the extra $1 Trillion dollars he’s pissing away on EBT (SNAP, EITC, WICs, Section 8, TANF, Obamaphones, etc.)
Given his reticence to stop or slow down this mad-dog pace of binge credit buying, it is unlikely we’d see a halt during the remainder of Obama’s term - at least until midway through 2014 IF the House goes back to the Democrats.
Given another three years of this, we are looking at 6 Trillion Dollars of additional debt (UNSECURED) that isn’t on the books anywhere....just devaluation of all our goods and services that end up in that $6/lb mediocre hamburger, that $4/gallon of milk, that $3-4/gallon of gas, that $3/dz eggs, that butter, that $6/lb bacon, that steak (you know when you want to splurge $15 for a steak you could have gotten for half that under Bush?)
Obama doesn’t give a shit about what stuff costs you. His voters get that shit for free anyway when you look at their disposable EBT total income. You probably didn’t vote for him anyway - screw you.
It’s payback for Trayvon and 400 years of slavery....
Actually, the stock market could not be happier...sharks and computers bilking honest people who think they can play the market. This infusion each months is what suckers the gullible into thinking it is okay to get back in the market (and get sheared in the process).
How long will the world tolerate a worthless dollar?
Good question. If you look around the world there aren’t many places as stable as the U.S. The American rich seem to be bailing, but foreigners are still buying here: land, farms, and other real property, plus parking their families here.
Frankly, I believe the ‘Reserve Currency’ issue is over-hyped.
It’s tied to OPEC, you know, ‘petrodollars’. Once this terrible Presidential administration, locked at the hip with the Saudi Royals, is either gone or neutered and the restraints are off of our home-based energy developments, look out! The U.S.A. will be back on its game and our economy will come leaping out of the box like a tiger on steroids!!
I am so screwed.
I’m screwed.
But I thought you like that?
“The creation of money from thin air...”
The first time I heard about the above I was totally disbelieving of the activity.
How can one create money out of thin air? Well, you can if you’re a bankster!
The Federal Reserve, which is neither a part of the Federal Government nor a Reserve of any kind, prints our money as debt instruments labeled Reserve Notes.
What must be done is eliminated the Federal Reserve and return to “greebacks” generated by our own government.
I want a robot made out of bacon.
Of course there will be a day of reckoning.
Bernanke is delaying it as long as possible.
This recent move got him exactly what he wanted.
The FED follows rates, the idea that it sets them is what the FED wants you to think.
Bernanke wanted slightly higher rates without officially raising them. So he jawboned and rates went up. Now he back off since he has the level he wants for now.
This has nothing to do with the underlying problem. When bondholders get worried enough to run yields up high enough, Bernanke will have to follow, he has no choice.
He tested the market and it worked, this time.
He’s been walking a monetary tightrope for years and he and his follower at the FED will try to continue walking it for about 10 more years.
Pray that they succeed, for the alternative is very ugly. If they succeed, you have the collapse and are now in an extended deleveraging adjustment. If they fail the adjustment will happen much quicker and we will be in a deflationary depression much worse than what we have now.
The seeds of all this started with the baby boom and the Great Society, not Bernanke.
You and everyone else except the Bankers. The rich get richer and the poor stay poor. Major gap between since the middle class is converted to Poor.
Nothing will change until the clown has left the WH.
Would you settle for a can of Spam? It's metallic. It's baconish. Sort of.
Haven’t you paid off most of your debts, secured a safe place to live out the coming storm, and prepped your supplies?
Saying you’re screwed is dramatic but not necessarily true unless you’re still in the markets.
What’s poor?
I don’t have a cell phone and am not interested in television.
My car is nearly 20-years old and I only drive it 2 or 3 times a month. If the big oil companies had to rely on me for income, there wouldn’t be much for them.
I shop at estate and garage sales, then sell stuff on eBay or craigslist.
Literally, I am living on less than $350 dollars per month and my roommate (my young nephew) is only earning $10 an hour.
We are surviving but not prospering, and that’s OK. He’s quite able to trade his marketable skills for items we need and I am creating designs to sell on eBay. Creativity can create happiness, and we have that.
If I have a room, toilet, food and internet I am happy.
lol
Yes.
Yes. Kinda.
Meh.
I need more MRE’s. More ammu. More medicines. More books on how to fashion a jetliner from animal skins and rocks.
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