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QE3 - The Fed, FOMC, Congress, and Election Year equals... ?
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Canada’s housing bubble is about to burst, and when it does, hundreds of billions of dollars in equity will be wiped out, unemployment will spike, and the economy will sink into a protracted slump. We know this will happen, because the same scenario unfolded in the US, Japan, Ireland and Spain. Housing bubbles always end badly.
Just to add another article - Canadian housing bubble goes into full mania mode – Canadian debt-to-personal income ratio near 145% while US at peak of the housing bubble was at 125%.
I love how many of those that deny the real estate bubble in Canada point out random facts that were being used during the pinnacle of our own housing bubble. Of course things are different but deep down underneath the hood, the Canadian real estate market is driven by massive speculation and prices that are disconnected from underlying fundamentals (i.e., a bubble). Ultimately people are buying thinking there will be another sucker a few months away. They even parade these people on nationwide television. -
Bennie and the Inkjets went all in yesterday at 12:30. This Princeton professor who has never held a real job in his entire life actually proclaimed that buying hundreds of billions of toxic mortgage backed securities from the insolvent Wall Street bankers that own the Federal Reserve, will benefit the average American.
He proudly stated that he will hold interest rates at 0% until at least 2015. This means that senior citizens can plan ahead and stock up on cat food to eat, because they will be paid nothing on their savings for at least the next three years. Ben’s claim to help home buyers is a bold faced lie. Mortgage rates were already the lowest in history. Interest rates are not the problem. Debt is the problem. Insolvency is the problem. Spending money we don’t have is the problem. Debasement of the currency is the problem.
Ben Bernanke has one purpose on earth as Federal Reserve Chairman and that is to enrich the owners of the Federal Reserve and protect them from ever accepting the consequences of their criminal, traitorous actions. The impact of his disgusting actions can already be seen:
•The 10 Year Treasury rate has increased from 1.66% to 1.82% this week. That is a 9.6% increase in a few days. Mortgage rates key off this rate. This result does not match Bernanke’s rhetoric about helping the housing market.
•The USD has declined by 2.2% against the Euro and the entire basket of worldwide currencies. The debasement continues, as it is the main goal of Bernanke.
•Oil prices broke through $100 per barrel this morning and are up 3.6% this week alone. The pundits will blame it on Middle East tensions or speculators. The truth is that Oil is priced in USD and as Bernanke debases the currency, oil prices will rise. Luckily, Bernanke’s chauffer fills up his limo with the Fed credit card. He will just recalculate the CPI and pretend energy and food prices don’t really matter.
•The Dow is up 2.2% this week as Bennie’s QE3 to Infinity makes the Wall Street crowd giddy. The net worth of the .01% is getting a real boost.
•It seems a couple of asset classes reveal the real implications of Bennie’s money printing. Silver is up 5.8% and gold is up 2.5% this week. JP Morgan and the rest of the Wall Street scum are doing their utmost to keep a lid on gold and silver prices through their use of derivatives, but the lid is about to be blown off. Anyone who can’t see that Bernanke’s latest move is a last ditch desperate attempt to keep the economic system from collapsing, doesn’t have their eyes open.
Ben Bernanke has sealed his fate as the Federal Reserve Chairman that destroyed the world. There is no way for him to ever unwind his $4 trillion balance sheet of toxic debt. His balance sheet will be levered 80 to 1 by the end of 2013. The Wall Street banks were levered 30 to 1 when they blew up. Ben has a printing press and helicopters, but he is a stupid weak man who has never seen a crisis coming, even when it was on his doorstep.
The stock market will party on, but faith in the U.S. Federal Reserve and our politicians is waning across the world. China, the Middle East oil exporters and the rest of the world can see that Bennie will debase the USD and screw them in the process. They will begin to shun the USD and our bonds.
The debate between the deflationists and the inflationists just swung in favor of inflation. Bennie has thrown down the gauntlet and told the world he will inflate to infinity and beyond. Our future awaits.
This is what I'm talking about... The BOC has had to keep rates low to compete with the US. The CAD is onw moving higher, and the BOC's hands are tied, which is going to kill the economy...
Declaring that the fed will print to infintiy and buy up every single last asset in the private economy is staggering. No less revolutionary than the declaration of independence.. Basically they are taking over... imo...
Ready or not, QE3 is here, and the long-term effects of this reckless money printing by the Federal Reserve are going to be absolutely nightmarish. The Federal Reserve is hoping that buying $40 billion worth of mortgage-backed securities per month will spur more lending and more economic activity. But that didn't happen with either QE1 or QE2. Both times the banks just sat on most of the extra money.
As I pointed out the other day, U.S. banks are already sitting on $1.6 trillion in excess reserves. So will pumping them up with more cash suddenly make them decide to start lending? Of course not. In addition, QE3 is not likely to produce many additional jobs. As I showed in a previous article, the employment level did not jump up as a result of either QE1 or QE2. So why will this time be different?...
We know that giving free taxpayer money to so called private banking corporations does not trickle down to the free man on the street or create jobs. The question for us traders may be, however, will they trade with it??? It could be good for volatility and liquidity. Best sharpen your trading skills and get ready for paradise!
Open ended inflation is exactly what destroyed Wiemar Germany, and more recently Zimbabwe. The central banks and their lackeys will claim there is no comparison. I beg to differ. When a nation expands debt spending instead of cutting it, and then monetizes that debt through fiat printing in order to allow even more debt to accumulate, that nation is not going to survive. That nation will eventually hyperinflate, then default, then collapse, either turning into something entirely alien, or fading from history altogether. This is what we have to look forward to in light of QE3, the final and infinite stimulus adventure. Something has to give, and it has to give soon. My bet is on the dollar…
We are now in an era of Globalization, corporate capitalism has swept the world, even the communists in China practice a phony version of it. I think a lot of this money is going to flow right out of the US into so called emerging economies. Inflation will be controlled with negative wage inflation until the slave classes rebel, and world war ensues. I think this is Faber's basic view, to which I definitely subscribe. I've changed my stance on the Gold Standard. I think all these corporations that have gambled away their investors money need to go under, the new world order must become the old world order. We needed Ron Paul, he was the only hope for the Republicans, for all of us. I can't understand how they chose Romney, the enemy, over Paul..... shaking my head....
