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  1. 27 Jun '10 22:02
    http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/7857595/RBS-tells-clients-to-prepare-for-monster-money-printing-by-the-Federal-Reserve.html

    RBS tells clients to prepare for "monster" money printing by the Federal Reserve
    As recovery starts to stall in the US and Europe with echoes of mid-1931, bond experts are once again dusting off a speech by Ben Bernanke given eight years ago as a freshman governor at the Federal Reserve.

    By Ambrose Evans-Pritchard
    Published: 5:11PM BST 27 Jun 2010

    Entitled "Deflation: Making Sure It Doesn’t Happen Here", it is a warfare manual for defeating economic slumps by use of extreme monetary stimulus once interest rates have dropped to zero, and implicitly once governments have spent themselves to near bankruptcy.

    The speech is best known for its irreverent one-liner: "The US government has a technology, called a printing press, that allows it to produce as many US dollars as it wishes at essentially no cost."

    Bernanke began putting the script into action after the credit system seized up in 2008, purchasing $1.75 trillion of Treasuries, mortgage securities, and agency bonds to shore up the US credit system. He stopped far short of the $5 trillion balance sheet quietly pencilled in by the Fed Board as the upper limit for quantitative easing (QE).

    Investors basking in Wall Street's V-shaped rally had assumed that this bizarre episode was over. So did the Fed, which has been shutting liquidity spigots one by one. But the latest batch of data is disturbing.

    The ECRI leading indicator produced by the Economic Cycle Research Institute plummeted yet again last week to -6.9, pointing to contraction in the US by the end of the year. It is dropping faster that at any time in the post-War era.

    ...
  2. 27 Jun '10 22:03
    we're printing money!
  3. 27 Jun '10 22:03 / 1 edit
    i thought (heard) the economy had already RECOVERED with unemployment to EASE by the end of the year!
  4. 27 Jun '10 22:04
    ...

    Andrew Roberts, credit chief at RBS, is advising clients to read the Bernanke text very closely (http://www.federalreserve.gov/BOARDDOCS/SPEECHES/2002/20021121/default.htm)

    because the Fed is soon going to have to the pull the lever on "monster" quantitative easing (QE)".

    We cannot stress enough how strongly we believe that a cliff-edge may be around the corner, for the global banking system (particularly in Europe) and for the global economy. Think the unthinkable," he said in a note to investors.

    ...
  5. 27 Jun '10 22:19
    Comments


    DavidWLincoln
    Today 08:32 PM
    Recommended by 7 people

    QE on this scale is counterfeiting enlarged. When compared to balance sheets showing values that it wants to see, instead of what the markets say they are worth; we wind up with the same conclusion - balance sheets show profound FUBAR.
  6. 27 Jun '10 23:33
    Originally posted by zeeblebot
    Comments


    DavidWLincoln
    Today 08:32 PM
    Recommended by 7 people

    QE on this scale is counterfeiting enlarged. When compared to balance sheets showing values that it wants to see, instead of what the markets say they are worth; we wind up with the same conclusion - balance sheets show profound FUBAR.
    You don't have to tell me twice. I see what is happening.
  7. 28 Jun '10 00:02
    hope you got your teepee stocked up.
  8. Standard member bill718
    Enigma
    28 Jun '10 00:18 / 1 edit
    Originally posted by zeeblebot
    http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/7857595/RBS-tells-clients-to-prepare-for-monster-money-printing-by-the-Federal-Reserve.html

    RBS tells clients to prepare for "monster" money printing by the Federal Reserve
    As recovery starts to stall in the US and Europe with echoes of mid-1931, bond experts are once again dusting off a the end of the year. It is dropping faster that at any time in the post-War era.

    ...
    Well...let's all dig ourselves a hole or two, and start squirling away some freeze dried vegetables! There has been very few times in America's history it has not faced some kind of economic "challanges". I suppose the closer we get to December 2012, the more of this kind of nonsense we'll have read.
  9. 28 Jun '10 00:30
    good luck with that. how are you going to read articles from a web infrastructure that doesn't exist?
  10. 29 Jun '10 01:25
    http://online.wsj.com/article/SB10001424052748703615104575328981319857618.html?mod=WSJ_hp_mostpop_read

    * JUNE 26, 2010

    The Keynesian Dead End
    Spending our way to prosperity is going out of style.

    ...

    Like many bad ideas, the current Keynesian revival began under George W. Bush. Larry Summers, then a private economist, told Congress that a "timely, targeted and temporary" spending program of $150 billion was urgently needed to boost consumer "demand." Democrats who had retaken Congress adopted the idea—they love an excuse to spend—and the politically tapped-out Mr. Bush went along with $168 billion in spending and one-time tax rebates.

    The cash did produce a statistical blip in GDP growth in mid-2008, but it didn't stop the financial panic and second phase of recession. So enter Stimulus II, with Mr. Summers again leading the intellectual charge, this time as President Obama's adviser and this time suggesting upwards of $500 billion. When Congress was done two months later, in February 2009, the amount was $862 billion. A pair of White House economists famously promised that this spending would keep the unemployment rate below 8%.

    View Full Image
    1keynes
    Associated Press

    President Barack Obama's top economic adviser Larry Summers
    1keynes
    1keynes

    Seventeen months later, and despite historically easy monetary policy for that entire period, the jobless rate is still 9.7%. Yesterday, the Bureau of Economic Analysis once again reduced the GDP estimate for first quarter growth, this time to 2.7%, while economic indicators in the second quarter have been mediocre. As the nearby table shows, this is a far cry from the snappy recovery that typically follows a steep recession, most recently in 1983-84 after the Reagan tax cuts.

    The response at the White House and among Congressional leaders has been . . . Stimulus III. While talking about the need for "fiscal discipline" some time in the future, President Obama wants more spending today to again boost "demand." Thirty months after Mr. Summers won his first victory, we are back at the same policy stand.

    ...
  11. 29 Jun '10 06:28
    Originally posted by zeeblebot
    http://online.wsj.com/article/SB10001424052748703615104575328981319857618.html?mod=WSJ_hp_mostpop_read

    * JUNE 26, 2010

    The Keynesian Dead End
    Spending our way to prosperity is going out of style.

    ...

    Like many bad ideas, the current Keynesian revival began under George W. Bush. Larry Summers, then a private economist, told Congress that a ...[text shortened]... fter Mr. Summers won his first victory, we are back at the same policy stand.

    ...
    Nice demonstration of ignorance.
  12. Standard member Palynka
    Upward Spiral
    29 Jun '10 08:51 / 1 edit
    Fiscal retrenchment across the G20 is bound to have negative effects on employment. If there is to be a second dip, that is, which is not yet sure. Why you blame monetary policy is beyond me.

    Ah, yes, the Fed is always the target.