Tag Archives: Quantitative Easing

QE Is Not Money Printing, It Is Betrayal

I don’t agree with every single point made, but the attached is a very interesting essay. The core point is dead on. “Quantitative easing” is a trick. It is fundamentally about deception. And people want to be deceived especially considering the economic chickens waiting to come home to roost.

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Dishonesty and Candor in Monetary Policy

In the July 26, 2013 edition of the Bank Credit Analyst,  editor Jim Grant notes that when Ben Bernanke was beginning the second round of “quantitative easing,”  he described it in February 2011 Congressional testimony as equivalent to an interest rate cut. In recent Congressional testimony explaining what might be (or might not be)   a forthcoming “taper” in “quantitative easing,” he suggested that it would not be equivalent to a rate hike.

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Bond maven Bill Gross says Bernanke’s easing is destructive

I know this comes as a newsflash to most of our readers, but pouring at least $85 billion/month (probably a good deal more) into the economy isn’t a smart thing to do. Bill Gross, manager of more bonds than probably any other private individual in the world believes Bernanke’s grand experiment is holding back “recovery.”

And right now we have a very complicated situation, with some parts of the economy rapidly becoming overheated, while others languish. None of it however constitutes “recovery.”

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Bernanke’s Cures Are the Economy’s Disease

So the Fed is going to “taper” away the quantitative easing, the printing of money, in which it is currently engaged. Bernanke (or Larry Summers—shudder) will one day allow interest rates to rise back to normal levels. Don’t worry, the economy will emerge from this radical economic experiment and all will be well. You’ll see. Ben promises.

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The Federal Reserve Has Printed Over $1 Trillion for Foreign Banks

Since the dollar continues to be the world reserve currency, and since the mega banks float like clouds over the entire planet paying little attention to borders, we shouldn’t be surprised. But that the Fed has essentially given away $1 trillion to non-American banks is pretty amazing . (Not that American banks are any better than the foreign ones of course.)

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Schiff: Quantitative Easing is Killing the Recovery

Quantitative easing is not so much an “easing“ of anything. It‘s more like a semi-focused explosion of fiat money. The economy dips, the Fed blasts more money into the system with a keystroke. It lowers the Fed Funds Rate, sometimes buys assets banks want off of their books (through the Treasury), but most importantly the Fed buys back the Treasury bills banks buy when they get flush from selling assets to the Treasury, which the banks then sell at a “profit” to the Fed and at basically no risk. The Fed even tells the banks how much they are going to buy and when, making sure the Fed gets the absolute worst price possible. Then, in essence the banks get to play with the nearly free money in the world markets making billions while the rest of us exist in the world of mortals where gravity still works and the sun rises in the east.

QE “works” for the rich and the connected. But for those of us in the real economy it’s a raw deal. Grandma’s CD is earning 1%. Not going to be much left at that rate when she’s gone. But hey your 401k is almost back to even, so I guess that’s something.

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