Everything The Fed Does Is Scripted


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    John Collier Street Corner, Monday after Pearl Harbor, San Francisco Dec 8 1941 Janet Yellen today solemnly stated that the Fed has killed QE because
    [See the full post at: Everything The Fed Does Is Scripted]


    Of course everything is scripted in politics. And yes, the Fed is a Political animal.

    “Management Of Perception Economics.”

    But, what of the comment the Maestro made on gold?


    The Fed ended QE because it has finally become widely known that the only effect of it is to inflate financial asset prices. In the inexact parlance of the chattering classes it caused ‘income inequality’. The idea that it did was the view of a few insane nut jobs 5 years ago. Then it slowly was accepted by all financial insiders and in 2 years everyone will know that it did. Which has made it politically impossible for the Fed to carry on. They do have to maintain some fig leafs worth of cover for themselves politically. Well they don’t really but they think they do.

    They can and do whatever they need to do to keep those asset prices high. To wit 3 weeks ago during the little stock market swoon an erstwhile haw Open Market Committee member was gabbing about continuing with QE. So we know they will if the next little swoon is much over a 10% fall in stocks. Which will make the purpose as plain as day and to do so will be a humiliation but they will do it anyway.

    That will be the moment I think when a bit of anarchy will begin to take hold in the US.

    Formerly T-Bear

    Paraphrasing a well known observation concerning insanity:

    Believing repeated deceptions to be true, expecting truth each time, is a form of insanity

    How long will it take for people to immediately react to such deceptions as being just another lie not worth the air it arrived on, or the bog-paper it was written on.

    V. Arnold

    @ Formerly T-Bear;
    “How long will it take for people to immediately react to such deceptions as being just another lie not worth the air it arrived on, or the bog-paper it was written on.”
    This doth come to mind…
    A Little Boy Blue come blow your horn,
    The sheep’s in the meadow the cow’s in the corn.
    But where’s the boy who looks after the sheep?
    He’s under a haystack fast asleep.
    Will you wake him? No, not I – for if I do, he’s sure to cry



    World energy demand is to increase 50% by mid-century when fossil fuels should decrease close to 80% by then to stave off run-away climate heating. To increase green energy 40% by 2050, we would need 200% more copper with current ore concentrations as low as 0.4%. We would need 150% more aluminum and 90% more iron at the same time it starts to cost too much money to send the trucks that far down into the pits.

    Ugo Bardi explains why mining ore grades below energy break even costs screws green energy up.

    We can’t have hi-tech green energy without producing thorium as a costly radioactive waste usually discharged into tailings (lake sized) ponds. China is planning to get carbon free energy from thorium to pay for the minerals we need to produce our information green energy dreams.

    China has produced over 6 gigatons of cement in the last 3 years.
    U.S. has produced over 4 gigatons of cement in the last 100 years.
    China’s banks have produced $15 trillion of debt in the last 5 years.
    U.S. commercial banks have produced $15 trillion of debt in the last 100 years.
    China plans to build 500 nuclear plants in 35 years.
    China and India are in a crash course program to produce thorium energy forever to sell us computers, solar panels and wind turbines which wear out in 25 years.

    Golden Oxen

    But, what of the comment the Maestro made on gold?

    Hi Professor, It is the same comment made by Gold Bugs for generations.

    “Buy the only world’s currency that the governments can’t print more of.”

    Who knows better than Sir Alan about currency debauching?


    Yeah, why not trust Greenspan on gold?

    Golden Oxen

    Yeah, why not trust Greenspan on gold?

    In Gold we trust.

    It’s four thousand year history of outlasting all fiats is testimony to it’s worthiness in this regard.

    Greenspan is just another witness to history.


    You ain’t got 4000 years.

    Ken Barrows

    Fed has been buying up collateral. The banks aren’t loaning extravagantly with the credit received from the Fed. So why keep doing QE? As long as the system knows the Fed has its back if necessary, it’s all good. The private sector can create its own money/credit (for stock purchases) in the meantime.

    Golden Oxen

    You ain’t got 4000 years.
    What’s my lifespan got to do with Gold’s historic role as money?
    Waiting for another deflationary bust in a fiat currency can be quite time consuming as well, can’t it?
    We would all be right for a while if we could be around for four thousand years. “Just A Bit Early in my Predictions” as they like to say.

    Formerly T-Bear

    @ Raúl Ilargi Meijer #16237

    In Thomas Piketty’s “Capital … Twenty First Century” (Chapter 10)he reports the growth rates (estimated) from antiquity (A.D.). Nowhere until the establishment of manufacturing did that growth rate exceed about 0.1% or 0.2%, manufacturing increased economic growth to about 0.5 % and the further development of industrialization to about 1.5 to about 2.0 %. At the higher growth rate, gold had become incapable of providing the resources needed then, fiat currency was developed in parallel to supply the required liquidity for commerce. Beginning with the buildup that led to WW 1, gold lost its utility other than an accounting device, even the British Empire abandoned gold in about 1931 after severe problems crippled that economy, leaving France and the U.S. as the sole major hoarders of gold as supporting their currencies. Breton Woods (as written by Washington) established the U.S. dollar as the reserve currency as a substitute for the direct hoarding of gold. Nixon, faced with growing debts from Viet Nam and Chas. de Gaulle’s willful conversion of dollars to gold put an end to the gold connection of the dollar. It also fully liberated the American economy from monetary constraints imposed by the gold standard. Only the imposition of the OPEC embargoes upon the economy put a serious constraint upon economic growth but that was blowback from the slight of hand policies that freedom from gold allowed. The effects of those days are still reverberating in the world markets today. Had gold remained standard, the economic instability that would cause would be incalculable, just the rate of growth needed to recover from the world wars and great depression would assure that. Listen to the gold buggers at your existential peril.

    Golden Oxen

    Given the excitement that Thomas Piketty’s new book, Capital in the Twenty-First Century, has stirred up within the political left, the French economist probably should have titled it Fifty Shades of Inequality.

    In Capital, Piketty presents a painstakingly researched case for doing what progressives ranging from Paul Krugman to Barack Obama want to do anyway, which is to raise taxes and expand the power and reach of government. Unfortunately for liberals, Piketty gets almost everything wrong, starting with the numbers.

    Piketty claims that capitalism is in crisis, because the importance of capital in our economy is growing, the “Top 10%” owns most (70%) of it, and the “Bottom 50%” owns almost none (5%) of it. However Piketty’s numbers ignore the capitalized value of Social Security, Medicare, and our other welfare state programs. These programs are huge, and they disproportionately benefit the “Bottom 50%.”


    Formerly T-Bear

    @ Golden …

    Your § 1: That certainly states an opinion, where did you find it?

    Your’s again § 2: Sounds like the beginning of another conspiracy theory with the universal bad-guys, the progressives taking over the lead from the liberals – Oh! wait, you did get in a shot at those evil liberals at the end. How very Libertarian can you ever get. I don’t know Piketty gets almost everything wrong; I do know you do.

    Finally your § 3: Not so sure what Piketty’s claims are, most references seem to be making claims for or about the author as you are. Certainly the inequality in an economy is nothing new and at present is only beginning to resemble that of the opening of the 20th century. Wasn’t that a glorious time to be working class? Not everybody had the resources to put together a railroad and rape the benefits as is your dimensionless imagination.

    What your comment provides is a collection of opinion, nothing more, none of which is original, nary a hint of useful, but linked to another opinion (Forbes! Really!) that reflects your own – how nice you were able to find such in the vastness of the internet. Have you ever had an original thought of your own? However it did refresh an old opinion as well. Nothing has changed with The Golden Bollix.

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