Posts Tagged ‘QE3’

Matthew Boesler
Business Insider
June 20, 2012

Societe Generale is “enthusiastic on gold” — so much so that in their latest cross-asset strategy report, they call “buy gold ahead of QE3″ their number one strategy, saying it’s “the perfect asset to benefit” from additional loose monetary policy.

In the report, SocGen discusses the historical relationship between the price of gold and the U.S. monetary base. The SocGen team writes that “if gold catches up with the increase in the monetary base since 1920 (as it did in the early 80s), its price would rise to USD 8500/Oz,” adding that just “to close the gap with the monetary base increase since July 2007, gold would have to rise to $1,900/oz, assuming full transmission from the monetary base increase to the gold price.”

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Kurt Nimmo
March 28, 2012

Federal Reserve boss Ben Bernanke told ABC’s Diane Swayer on Tuesday that gas prices will continue to skyrocket through the summer.

Bernanke told Sawyer gas prices “are a major problem” and he admitted they are “a hardship for lots of people.”

During the interview, he tried to pawn off the fallacy that gas prices are responsible for inflation, which he said will escalate over the next few months.

By inflation Bernanke means price increases. As Ron Paul notes, blame for this can be placed at the doorstep of the Federal Reserve.

“Most economists fail to understand that inflation is at its root a monetary phenomenon,” Paul wrote last March. “There may be other factors that contribute to price increases, such as famine, flooding, or global unrest, but those effects are transient. Consistently citing only these factors, while never acknowledging the effects of monetary policy, is a cop-out.”

Bernanke also claimed the rise in gas prices can be attributed to Iran and troubles in the Middle East. “The Middle East is very unpredictable — lots of things happening with respect to Iran and so on, so you know, we obviously — need to be — very attentive to that,” he told Sawyer.

Bernanke did not bother to explain how the Federal Reserve creates monetary inflation. It is really quite simple. More money equals less value.

The Federal Reserve is currently doing this through quantitative easing – increasing the money supply and flooding financial institutions with capital. Economists note that the problem with this is that although there is more money in the economic system, there is still a fixed amount of goods for sale.

Bernanke “admits he doesn’t understand why the economy is the way it is. Reality doesn’t fit his theory,” writes Zero Hedge. “So, what do you do when you are the head of the world’s biggest printing press, and don’t know what else to do? Why QE3 of course.”

On Tuesday, Bernanke hinted that QE3 may be right around the corner. He said more dilution of the money supply will be required due to vexatious unemployment.

High unemployment is directly related the the Federal Reserve and its engineering of boom and bust cycles through monetary policy. The Fed – as Bernanke has sheepishly admitted – was responsible for the so-called Great Depression and its staggering unemployment. It’s the same today.

Ben Bernanke is simply reading his bankster script, as instructed. If he was sincere, he would admit that rising oil prices do not create inflation. Oil prices are a reflection of a devalued dollar.

In an interview last year, ShadowStats editor John Williams said “the dollar’s weakness is doubly inflationary. It is the biggest factor behind the ongoing rise in oil prices.”

It’s not greedy oil baron in the Middle East or Iran threatening to close down the Strait of Hormuz in response to an attack.

It’s the Federal Reserve and the central banks.


August 23, 2011

Alex welcomes back Gerald Celente of the Trends Research Institute to discuss the economy and related global developments. Alex takes your calls and gives his unique insight into the latest breaking news.

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Zero Hedge
July 14, 2011

When in doubt, baffle them with male cow manure: Bernanke Says Fed Not Prepared to Take Action at This Point, but, Bernanke Says Recovery ‘Still Rather Fragile’. Is Bernanke finally channelling his inner Greenspan. Oh, and just in case the Moody’s threat was missed, Bernanke adds that a US default would trigger a crisis and would lead to “chaos.” Will someone just give the president a three-page termsheet already.


Kurt Nimmo
March 8, 2011

On Monday, Atlanta Fed boss Dennis Lockhart said that if oil prices continue to climb the Fed will make a new round of asset purchases, in other words it will kick off QE3.

“If [the rising price of oil] plays through to the broad economy in a way that portends a recession, I would take a position we would respond with more accommodation,” Lockhart said at the National Association of Business Economics in Arlington, Virginia.

Lockhart said the magic number for the price of oil is in the range of $150 per barrel. “I think at the $120 range … it’s a manageable level,” he said. “Around $150 it becomes a much more serious concern.”

Lockhart “echoed widespread concerns that surging oil prices would put the brakes on a recovery that only just seems to be taking hold,” reports the Wall Street Journal. “With Brent crude hovering at around $115 a barrel, having made at stab at $120 over recent sessions, investors are looking back to the summer of 2008 when oil made a run at $150 a barrel.”

In response to the unfolding economic depression last November, the private Fed announced plans to buy $600 billion in long-term Treasuries, known as quantitative easing. QE2 – and now possibly QE3 – do nothing for the broader economy, however.

The provided excuse for cranking up the funny machines and printing a ton of fresh new fiat dough is that it boosts the economy. In fact, the scheme does nothing for the larger economy or the nation as a whole – infrastructure projects, education, health care, business development, etc. – as you might expect (if you follow the Fed’s reasoning). Instead, it is a gift for the financial industry and the banksters. The excess paper money flows into the stock market and creates dangerous asset bubbles around the world.

Even establishment economists like former Clintonite Robert Reich warn that the rapid in-flow of funny money will simply create another stock market bubble. It is a classic Ponzi scheme designed to reach dizzying heights and then crash.

Some financial experts say QE2 was not designed to terminate. It was engineered to go on forever, or at least until the entire economy explodes. According to these experts, there was no QE1 and there is now no QE2 – there is simply one long “accommodation” that will eventually spell disaster.

“The Fed never said that QE2 would end,” notes finance expert James Rickards, “that’s a popular misconception but they never said it. What they said was that they would buy $600 billion of intermediate term Treasury securities by June 2011. They never said that was all they would buy. They never said they would stop. The comments were carefully worded so that $600 billion by June was a targeted minimum but they never said anything about a maximum; technically there is no maximum. The first QE program ended in 2010 and the economy immediately began to fall into a double dip.”

Bernanke and the Fed are not finished attacking the dollar. They are determined to kick off another round of debilitating inflation, the ultimate result whenever the money supply is artificially expanded. It is a scientific process, as Congressman Charles Lindbergh said after the Federal Reserve was created in 1913.

QE is forever.