Just when you thought QE2 was over QE3 is now coming, this system is failing on all levels, no QE is going to work, I said this since the beginning of the stimulus plan, its doing nothing yet they continue to think its creating a turn around, this entire economy is being propped up with hot air thanks to Bubble ben bernanke and friends! There is no turnaround in this economy, its all fluff. More QE and you will see inflation running through the roof with collapsing dollar, then what, QE4, how many QEs does this economy need before people wake the fuck up and realize its NOT working. IT wont work, only Bubble ben bernanke thinks its going to work because he studied the great depression, what he has no clue about is that you cannot compare this crisis to anytime in history and more money printing is not the answer.
Welcome QE3 because without it this economy is worthless!
More Fed Easing? What Could Bernanke Be Thinking?
CNBC.com | July 13, 2011 | 12:51 PM EDT
Apparently the bar has just gotten lower for Ben Bernanke.
The central bank chairman stunned financial markets Wednesday when he told Congress that the next round of stimulusâmuch like objects in the rear-view mirrorâis closer than it may appear.
While there were plenty of caveats and continued references to the slowdown being nothing more than a âsoft patchâ for those 14 million Americans without jobs, that bar for doing even more quantitative easing suddenly doesnât look so high.
âBernanke thinks the answer to everything is money-printing,â says Michael Pento, senior economist at Euro Pacific Capital in New York. âHe thinks thatâs what saved us from the Great Depression part two and thatâs what could have saved us from the Great Depression part one. Heâs doing what he said he would do, which is print money.â
âI canât fathom the logic,â Pento adds.
Pentoâs voice is a particularly important one on this issue because heâs one of the few economists of any stature who has been unrelenting in predicting a QE3 âor a third round of Fed easing.
Pento also has been one of the loudest voices warning about inflation dangers, even as the Fed has been working overtime to combat a perceived deflation threat and as most of Pentoâs colleagues brush his concerns aside.
âLook at first quarter GDP and second quarter GDP. They will have a one handle,â Pento said as he watched Bernankeâs speech. (The âone handleâ means GDP will be in the 1 percent range.) âIt clearly puts Bernanke on the spot. I think he does what he does best, which is counterfeit the US dollar.â
The central bank chairman posed two scenarios: One in which the economy improves more than expected and requires tighter monetary policy, and another in which unemployment and housing weakness persists and the Fed is wrong about inflation pressures being âtransitory.â
That would require more Fed intervention and, hence, QE3 .
You can guess which side the market took.
The Dow industrials surged as soon as Bernanke began his speech, rising about 100 points along the way as the dollar got hammered and gold and silver prices rallied.
Since Bernanke delivered his seminal remarks at Jackson Hole, Wyo., last August signaling QE2, the dollar has lost nearly 10 percent of its value against the worldâs currencies.
In the meantime, import prices have jumped about 13 percent and inflation has risen 3.6 percent, tamped down primarily by sagging housing and rent costs, which make up 40 percent of the governmentâs main price gauge.
The menu Bernanke laid out on Capitol Hill promises more of the same should the Fed come off the sidelines with the last pile of dirt only recently shoveled on QE2âs grave.
He is considering more asset purchases to lengthen their average duration, providing âmore explicit guidanceâ on how long the Fed balance sheet will remain in its current state, and, perhaps most significantly, cut the interest paid on bank reserves at the Fed, a move aimed at jumpstarting lending.
âWhat I find most disturbing is he could lower the interest paid on excess reserves, which would be a huge impetus for commercial banks to make goofy, crazy loans,â Pento says.
Pento is surprised mostly by the timingâhe figured QE3 wouldnât rear its head until late this year or early in 2012 as Bernanke had indicated âhe would be dragged kicking and screaming to QE3, but he would be dragged there.â
Most other economists who had dismissed the possibility of more easing figured Bernanke would only begin discussing it after a steep drop in the stock market, a rise to double-digit unemployment and signs that deflation again was a threat.
Thatâs not the way it went, as the Fed appears to have few concerns about inflation and more worries about trying to prop up an economy that so far has resisted the central bankâs intervention efforts.
âCan someone explain how the processes he used to combat deflationâlowering interest rates and expanding the money supplyâif those processes are going to be intensified what makes him think inflation is going to be transitory?â Pento said. âThe gentleman talking about exit strategies a little while ago is now talking about asset purchases and cutting rates on reserves. That sounds schizophrenic to me.â
Welcome QE3 because without it this economy is worthless!
More Fed Easing? What Could Bernanke Be Thinking?
CNBC.com | July 13, 2011 | 12:51 PM EDT
Apparently the bar has just gotten lower for Ben Bernanke.
The central bank chairman stunned financial markets Wednesday when he told Congress that the next round of stimulusâmuch like objects in the rear-view mirrorâis closer than it may appear.
While there were plenty of caveats and continued references to the slowdown being nothing more than a âsoft patchâ for those 14 million Americans without jobs, that bar for doing even more quantitative easing suddenly doesnât look so high.
âBernanke thinks the answer to everything is money-printing,â says Michael Pento, senior economist at Euro Pacific Capital in New York. âHe thinks thatâs what saved us from the Great Depression part two and thatâs what could have saved us from the Great Depression part one. Heâs doing what he said he would do, which is print money.â
âI canât fathom the logic,â Pento adds.
Pentoâs voice is a particularly important one on this issue because heâs one of the few economists of any stature who has been unrelenting in predicting a QE3 âor a third round of Fed easing.
Pento also has been one of the loudest voices warning about inflation dangers, even as the Fed has been working overtime to combat a perceived deflation threat and as most of Pentoâs colleagues brush his concerns aside.
âLook at first quarter GDP and second quarter GDP. They will have a one handle,â Pento said as he watched Bernankeâs speech. (The âone handleâ means GDP will be in the 1 percent range.) âIt clearly puts Bernanke on the spot. I think he does what he does best, which is counterfeit the US dollar.â
The central bank chairman posed two scenarios: One in which the economy improves more than expected and requires tighter monetary policy, and another in which unemployment and housing weakness persists and the Fed is wrong about inflation pressures being âtransitory.â
That would require more Fed intervention and, hence, QE3 .
You can guess which side the market took.
The Dow industrials surged as soon as Bernanke began his speech, rising about 100 points along the way as the dollar got hammered and gold and silver prices rallied.
Since Bernanke delivered his seminal remarks at Jackson Hole, Wyo., last August signaling QE2, the dollar has lost nearly 10 percent of its value against the worldâs currencies.
In the meantime, import prices have jumped about 13 percent and inflation has risen 3.6 percent, tamped down primarily by sagging housing and rent costs, which make up 40 percent of the governmentâs main price gauge.
The menu Bernanke laid out on Capitol Hill promises more of the same should the Fed come off the sidelines with the last pile of dirt only recently shoveled on QE2âs grave.
He is considering more asset purchases to lengthen their average duration, providing âmore explicit guidanceâ on how long the Fed balance sheet will remain in its current state, and, perhaps most significantly, cut the interest paid on bank reserves at the Fed, a move aimed at jumpstarting lending.
âWhat I find most disturbing is he could lower the interest paid on excess reserves, which would be a huge impetus for commercial banks to make goofy, crazy loans,â Pento says.
Pento is surprised mostly by the timingâhe figured QE3 wouldnât rear its head until late this year or early in 2012 as Bernanke had indicated âhe would be dragged kicking and screaming to QE3, but he would be dragged there.â
Most other economists who had dismissed the possibility of more easing figured Bernanke would only begin discussing it after a steep drop in the stock market, a rise to double-digit unemployment and signs that deflation again was a threat.
Thatâs not the way it went, as the Fed appears to have few concerns about inflation and more worries about trying to prop up an economy that so far has resisted the central bankâs intervention efforts.
âCan someone explain how the processes he used to combat deflationâlowering interest rates and expanding the money supplyâif those processes are going to be intensified what makes him think inflation is going to be transitory?â Pento said. âThe gentleman talking about exit strategies a little while ago is now talking about asset purchases and cutting rates on reserves. That sounds schizophrenic to me.â
