Now that is funny.
"unless something drastic happens (war, quake, meteor, Bankers telling the truth, etc."
haha. Nailed it!
Going to be an exciting retirement party for Mr. Bernanke.
If you're in for 1 trillion a year, why would not be in for 4 trillion? After all, it's printed money.I believe their mindset is the same always, print money, channel it appropriately, control market prices, cross fingers and pray some fundamental growth kicks in. They don't ever seem to get the idea that they are counteracting fundamental growth by not allowing markets to naturally clear (however painful in the short run).
I still have a feeling, due to the Fed's attention to psychology and "optics", that at this level of printing, though, it will be very undercover, via a tunnel of some type that I can't describe. Didn't Bloomberg uncover that the Fed send trillions to the EU in currency swaps that no one knew about? You give these guys far too much credit (pun not intended) for ethics and transparency.
[quote=Hrunner]If you're in for 1 trillion a year, why would not be in for 4 trillion? After all, it's printed money.
[/quote]
From the tone of what I've heard (from the other FED media/comentary) which was designed for discenimation right on the Bernake's coattails…I'm feeling that this is a serious head fake by TPTB.
This "seeming debacle" is custom made for mass media consumption: as…"the Bernake really wanted so much to "seriously taper," and then all hell started breaking loose after he began his course of "righting the ship"…so please bring back the Bernake!.. please government, further all his sage-like wisdom, which has obviously, to date, pulled us back up into this sort of healthy place…and, we all want it to continue on for as long as it takes! And who, in their right mind will now seriously argue against the FED's authority…and with their more than half-way reflated the housing bubble?
Please, Mr. Obama, let Ben's magic meastro-ness reign forever and ever!..and let his endless digital currency turn the very water of our debt into the ever-sweet nectar of the god's…
…(btw honey, please now go and secretively hide both yourself and our kids, pronto!!!)
Do you ever laugh out loud when you experience a punch in the stomach?
Here is a bit of an infomersial about the state of our pension funds in Australia, especially for Blind Freddy.
Dont watch it all, the first few miniutes will give you the drift.
Grover -
I'm not as convinced with the dead-catness of the bounce for SPX. When you see a very high volume day coupled with no price movement, that's a sign of an incipient reversal. It must be confirmed the following day by a move in the opposite direction, but in looking at the daily chart, I see Friday's trading day as the single highest volume day on the entire (8 month) price chart.
The theory behind this is, "somebody" stood ready to buy all the sellers could throw at them all day long. Large volume adds emphasis to this and makes the conclusion more likely. Conversely, when the move down is large and the volume is large too, there were no steady buyers - price had to drop for the buyers to appear. That was Thursday.
Conclusion: odds are, Monday we bounce higher. My scenario: futures open higher in asia, and cause a gap up by NY open, perhaps 10 points; this scares the new shorts who cover, prodded by steady buying from the guys who bought Friday, and then a flatline in the afternoon at around SPX +20-25 or so.
I'm not saying we eventually make new highs, just that today's price action coupled with high volume suggests possible (temporary) reversal of the downtrend. I can't emphasize enough just how important volume is for this analysis. Perhaps - volume could be seen to represent the number of bodies on the ground after the battle is over. Today the battle was very, very large. The buyers really weren't kidding, they went in to buy with full strength absorbing everything the shorts could throw at them. This is exactly what we want to see in gold, but haven't seen for months and months.
If you want to see a bounce with a lot lower volume, look at gold & silver. Anemic volume - gold below average, silver slightly above, but pathetic when compared with SPX. Then look at $PLAT. That's more like a bounce with volume that I want to see. Not perfect, but certainly better than gold & silver.
If SPX rebounds, I do wonder what happens to the long bond. Ordinarily I'd say it goes down further (money flowing from bonds to stocks), but these days who knows.
Despite USD suppression and HilsenRamps, the WILE E COYOTE equity descent commences.
https://peakprosperity.com/node/81162/154320#comment-154320
…a few weeks ago, which looped around into the ol' brain this past week (as the markets developed a rather pronounced stutter) – and I'm hoping it's the idle and incorrect thought of a guy who has more desire to make sense of the nonsense than he has understanding with which to do so:
The Fed (and CBs the world over) have been buying up dodgy items such as MBS and the bonds of insolvent countries and so forth. If the hunch of many commentators is correct – that CBs are stepping into markets and buying securities and bonds (and whatever other class of asset that's wobbly at a given moment), and if the commentators are further correct that the CBs will not/cannot unwind these positions in any meaningful way (without blowing up the markets [so-called {grin}]), then as time goes on they will accumulate more and more of…well, everything.
One could posit an end point – if such as process continues on a long enough timeline – at which the Fed/CBs (and their pawns [Primary Dealers, et al.]) own EVERYTHING. Or at least such a significant portion of everything that they are effectively in control of everything. And they've bought it with thin-air currency they "printed" into existence. On our backs…
Somebody give me a coupla reasons this is the incorrect fancy of a guy who's no expert on the subject. Because such an end result smells of a neofeudal endgame a la Frank Herbert's "Dune" (a few powerful families own more or less everything in the galaxy and everybody serves them one way or another).
In other news, it's freakin' gorgeous here in CT and I'm taking the dog for a hike to the lake…right after lunch (bay scallops pan-fried in bacon fat with garlic, onion and pine-nuts over fresh salad greens).
Viva! – Sager
3 thumbs up, otherwise crickets…This is a 4th thumb up.
It's a bit warm and muggy here is western NY and supposed to get warmer and muggier over the next few days. We're having a picnic tomorrow with everyone we have worked with in one way or another in our prepping. Not a big crowd, but an interesting one. Sort of a garden party so people can critique our nascent food forest. Our fourth year of no chemicals and first of no till and things are going remarkably well. Love that sheet composting.
I find it better to not think about money much of the time. Although I value Chris's and Adam's writings, I really haven't changed anything in the past couple years except close out IRAs and my 401k. If "the crash" comes, so be it.
Doug
[quote=SagerXX]The Fed (and CBs the world over) have been buying up dodgy items such as MBS and the bonds of insolvent countries and so forth. If the hunch of many commentators is correct – that CBs are stepping into markets and buying securities and bonds (and whatever other class of asset that's wobbly at a given moment), and if the commentators are further correct that the CBs will not/cannot unwind these positions in any meaningful way (without blowing up the markets [so-called {grin}]), then as time goes on they will accumulate more and more of…well, everything.
One could posit an end point – if such as process continues on a long enough timeline – at which the Fed/CBs (and their pawns [Primary Dealers, et al.]) own EVERYTHING. Or at least such a significant portion of everything that they are effectively in control of everything. And they've bought it with thin-air currency they "printed" into existence. On our backs…
[/quote]
TJ's thoughts on Sager's theory:
"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered…I believe that banking institutions are more dangerous to our liberties than standing armies… The issuing power should be taken from the banks and restored to the people, to whom it properly belongs." - Thomas Jefferson
The fact that only a single hint Bernanke minimized in future policy QE was enough for such a collapse, clearly shows that the prices of the market in large part are not based on economic performance, and financial bubbles. Before the big players with a dilemma: to close positions and go on a summer vacation, or take a chance and leave them until the autumn. If they choose the first option, then the next two weeks will be a sharp collapse.
Nothing unexpected happens. The policy does not solve the problems QE, postponing a decision on the future and adding to the problem. The collapse is inevitable, and it was seen years ago ( http://crisismir.com/analiticheskie-materialy/ekonomika/13-mirovoj-ekonomicheskij-krizis-prichiny-i-posledstviya-quo-vadis.html ). And the situation over the years has only worsened despite the illusion of economic recovery.
The recent whipsawing of markets and concerning drops in bonds and equities is a good motivator to issue just a friendly reminder that now is an excellent time to recommit yourself to physical fitness, good sleep and nutritional fitness.
During these times, you have three benefits:
1) You feel better and sleep better, so you can make more careful and clear-minded decisions
2) You have a reason to pull yourself away from staring at screens which fosters paralysis by analysis
3) If there are temporary disruptions, you will be better positioned to deal with stress
Apologies if this post seems out of place, but I believed it was worth mentioning
Great weekend,
Bradford,Interesting hypothesis. We can not know the answer in that we don't sit in on FOMC meetings, and do not have the ability to read Mr. Bernanke's mind. But I think there are two main possibilities:
1) You are right and this is some kind of a diabolical psychological experiment by the Fed to generate some data and plug these into their "Fed statements versus SP500 and bond price" models, for validation, refinement and for future planning of what to say, when.
2) The Fed is composed of mere mortals who, while smart, occaisionally reveal some inner concerns re what is actually on their minds and don't appreciate the magnitude of the consequences these statements engender.
Since I tend to go for simple over complex, so I'll vote for 2). But you raise an interesting hypothesis that merits consideration.
Three things will end the American Financial Civil War, before it changes our country forever!
- Demand the Fed stop the Big Banks from putting ever more of us in Financial Slavery,
- Give US access to the the same LOW rates that the Big Banks now get.
- Stop the use of naked shorts to depress the values of PM's
The real problem is the huge difference between what the banks get their money for and what the Banks then charge US for that same money! That is what is killing the middle Class.
The Middle Class Americans are being raped by the Big Banks who are keeping interest rates too high, since they are getting their Fed money at almost zero interest…
Our Leaders are enabling the Big Banks and that needs to stop, if America is going to turn this economy around! I think of this as a paper monetary squeeze of epic proportions.
Where are the 2.5% home loans?
Where are the 1.5% refinance rates?
Where are all the homes that the Banks now own, yet are not on the market?
Why can Banks short PM with naked shorts, while we cannot?
Why are the Banks doing so well while we suffer so much?
http://bigstory.ap.org/article/us-banks-report-record-earnings-403b-q1
The FED is just waiting to see how long it will take before the American public cries FOUL.
The longer it takes the better position the FED and the Big Banks will be in after they have to “ease” their fiscal death grip on any recovery of our economy.
Soon, even Congress will be powerless to rein-in the Mighty FED and the Big Banks.
The Golden Rule is now in effect, those with the Gold rule! (Notice I said Gold, not US$)
While the Central Banks push PM's value downward by using their own paper money to "game" the very charts that investors use, they are also buying it up for themselves, because they know even the US$ will not stay "up" forever, and when it starts going downward the value of PM's will soar!
Posted earlier on another blog:
If you don't think that PM's are now being manipulated by the Central Banks, then I think that you should not be investing in buying additional PM's! BUT, if you believe that the Central Banks cannot continue to keep printing paper money forever then what is happening now is nothing but a huge buying opportunity for those that still have the ability to buy!
Consider: As the Central Banks further restrict credit and loans to us, what other options besides selling PM's (at a large discount )do small investors have, if they want to grow what is left of their portfolios? This is a move to drive a stake into the hearts of all those that are still holding PM's; while at the very same time, these same Central Banks (who are in on the deal) are scooping PM's up (using their own printed paper money) at very low prices.
My gut feeling is that when the PM "reversal" happens, it will be so extreme that most small investors will not be able to jump on-board before the prices have skyrocketed relative to where they are currently, due to the market dynamics that favor the really big investors.
Here is a great PM question for all of you:
Are the Central Banks still buying Gold, and if so why, since the US$ is so "valubable"?
I look forward to your comments!
I'd also suggest that everyone might consider some of these suggestions:
That it would be good to stock up on any Meds you require.
Consider buying a solar charger and some new high capacity rechargeable batteries
Buy a "brick" of Bic disposable lighters at Costco, makes a great barter item.
Purchase some extra ammo, which will become harder to get, another popular barter item.
Change out your flashlight bulbs for LED's which are far more durable and use less energy.
But spares for all you must have items, like pumps, alarms and tune up parts/
Get your vehicle ready for a major trip, and install the best tires you can afford.
Consider adding a second gas/fuel tank to your vehicle to increase its range.
Purchase a case of Sta-Bil, which will keep your gasoline from going bad
Purchase a case of Dry-Gas to keep water out of your gas.
Learn how to disconnect your vehicles battery(s) & buy a solar charger to keep them charged.
Buy some high tech heavy duty camping clothes, staying warm will be more important.
Buy a knife sharpener and practice using it
If you are near water, buy some fishing gear and practice using it,
Store some easy to grow seeds, like corn, tomatoes, kale that produce food you can eat!
Purchase some How-To books, and put them on a kindle for future reference.
If you are sheltering in place, fix your roof, add some solar and/or a hot water system.
I just saw pretty much the same outline of "the dash for cash" on Ranting Andy"s report of last Friday.
Bix Weir might be on this same page as well.
Here is a recent quote by Robert Weidemer. ""its (this is) a time when stock and bond markets are a bit unstable, and sometimes there is a role for cash here". "A little heavier in cash makes sense right now".
Is this the event that will put us all in the dumper?
If I had to pick the single most important global economic metric, it would not be derivative or debt, it would be energy, specifically liquid oil. The markets will go up, and they will go down, but the will to survive and succeed, I believe, overcomes any economic doomsday scenario (notwithstanding an environmental or militaristic doomsday scenario, which could happen).
While today's global monetary policy can't prevent major market declines, I do believe current policy can, and will continue to, prevent catastrophic depression-era-like end-games. Those who think we've learned nothing since 1940 are welcome to disagree here. We can throw data and theories at each other.
I believe our economies will increasingly see the inverse correlation between liquid oil demand/price and economic prosperity, with greater and more frequent oscillations. The data I've compiled shows this correlation increasing into 2040-2050, when the planet will peak with close to 1B oil-fueled vehicles, processes, and feed-stocks, and global oil demand will rise from today's 90M b/d to 120-130M b/d.
I would like to paint a rosy near-future of electric vehicles and renrewable everything, but it simply can't happen that fast. The 2030-2060 period may well be the most trying period in human history, and while oil is just one of myriad factors, it will likely be the most important factor.