The Beginning Of The End
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The Financial Markets Freak Out When The Fed Hints That It May Slow Down The Injections

Panic Button By John On FlickrU.S. financial markets are exhibiting the classic behavior patterns of an addict.  Just a hint that the Fed may start slowing down the flow of the "juice" was all that it took to cause the financial markets to throw an epic temper tantrum on Wednesday.  In fact, one CNN article stated that the markets "freaked out" when Federal Reserve Chairman Ben Bernanke suggested that the Fed would eventually start tapering the bond buying program if the economy improves.  And please note that Bernanke did not announce that the money printing would actually slow down any time soon.  He just said that it may be "appropriate to moderate the pace of purchases later this year" if the economy is looking good.  For now, the Fed is going to continue wildly printing money and injecting it into the financial markets.  So nothing has actually changed yet.  But just the suggestion that this round of quantitative easing would eventually end if the economy improves was enough to severely rattle Wall Street on Wednesday.  U.S. financial markets have become completely and totally addicted to easy money, and nobody is quite sure what is going to happen when the Fed takes the "smack" away.  When that day comes, will the largest bond bubble in the history of the world burst?  Will interest rates rise dramatically?  Will it throw the U.S. economy into another deep recession?

Judging by what happened on Wednesday, the end of Fed bond buying is not going to go well.  Just check out the carnage that we witnessed...

-The Dow dropped by 206 points on Wednesday.

-The yield on 10 year U.S. Treasuries shot up substantially, and it is now the highest that it has been since March 2012.

-On Wednesday we witnessed the largest percentage rise in the yield on 5 year U.S. Treasury bonds ever.  It is now the highest that it has been in nearly two years.

-It was announced that mortgage rates are the highest that they have been in more than a year.

-We also learned that the MBS mortgage refinance applications index has fallen by 38 percent over the past six weeks.

If the markets react like this when the Fed doesn't even do anything, what are they going to do when the Fed actually starts cutting back the monetary injections?

Posted below is an excerpt from the statement that the Fed released on Wednesday.  Please note that the Fed is saying that the current quantitative easing program is going to continue at the same pace for right now...

To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee decided to continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month and longer-term Treasury securities at a pace of $45 billion per month. The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. Taken together, these actions should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.

The Committee will closely monitor incoming information on economic and financial developments in coming months. The Committee will continue its purchases of Treasury and agency mortgage-backed securities, and employ its other policy tools as appropriate, until the outlook for the labor market has improved substantially in a context of price stability. The Committee is prepared to increase or reduce the pace of its purchases to maintain appropriate policy accommodation as the outlook for the labor market or inflation changes. In determining the size, pace, and composition of its asset purchases, the Committee will continue to take appropriate account of the likely efficacy and costs of such purchases as well as the extent of progress toward its economic objectives.

To support continued progress toward maximum employment and price stability, the Committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the asset purchase program ends and the economic recovery strengthens. In particular, the Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that this exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6-1/2 percent, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee's 2 percent longer-run goal, and longer-term inflation expectations continue to be well anchored. In determining how long to maintain a highly accommodative stance of monetary policy, the Committee will also consider other information, including additional measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments. When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent.

So why doesn't the Federal Reserve just stop these emergency measures right now?

After all, we are supposed to be in the midst of an "economic recovery", right?

What is Bernanke afraid of?

That is a question that Rick Santelli of CNBC asked on Wednesday.  If you have not seen his epic rant yet, you should definitely check it out...

On days like this, it is easy to see who has the most influence over the U.S. economy.  The financial world literally hangs on every word that comes out of the mouth of Federal Reserve Chairman Ben Bernanke.  The same cannot be said about Barack Obama or anyone else.

The central planners over at the Federal Reserve are at the very heart of what is wrong with our economy and our financial system.  If you doubt this, please see this article: "11 Reasons Why The Federal Reserve Should Be Abolished".  Bernanke knows that the actions that the Fed has taken in recent years have grossly distorted our financial system, and he is concerned about what is going to happen when the Fed starts removing those emergency measures.

Unfortunately, we can't send the U.S. financial system off to rehab at a clinic somewhere.  The entire world is going to watch as our financial markets go through withdrawal.

The Fed has purposely inflated a massive financial bubble, and now it is trying to figure out what to do about it.  Can the Fed fix this mess without it totally blowing up?

Unfortunately, most severe addictions never end well.  In a recent article, Charles Hugh Smith described the predicament that the Fed is currently facing quite eloquently...

One of the enduring analogies of the Federal Reserve's quantitative easing (QE) program is that the stock market is now addicted to this constant injection of free money. The aptness of this analogy has never been more apparent than now, as the market plummets on the mere rumor that the Fed will cut back its monthly injection of financial smack. (The analogy typically refers to crack cocaine, due to the state of delusional euphoria QE induces in the stock market. But the zombified state of the heroin addict is arguably the more accurate analogy of the U.S. stock market.)

You know the key self-delusion of all addiction: "I can stop any time I want." This eerily echoes the language of Fed Chairman Ben Bernanke, who routinely declares he can stop QE any time he chooses.

But Ben, the pusher of QE money, knows his addict--the stock market--will die if the smack is cut back too abruptly. Like all pushers, Ben has his own delusion: that he can actually control the addiction he has nurtured.

You're dreaming, Ben--your pushing QE has backed you into a corner. The addict (the stock market) is now so dependent and fragile that the slightest decrease in QE smack will send it to the emergency room, and quite possibly the morgue.

We are rapidly approaching a turning point.  We have a massively inflated stock market bubble, a massively inflated bond bubble, and a financial system that is absolutely addicted to easy money.

The Fed is desperately hoping that it can find a way to engineer some sort of a soft landing.

The Fed is desperately hoping to avoid a repeat of the financial crisis of 2008.

Federal Reserve Chairman Ben Bernanke insists that he knows how to handle things this time.

Do you believe him?

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  • Syrin

    So, does anyone have any predictions, or read anyone with any credibility who has predicted, when exactly the SHTF ?

    • Anthony Burgestz

      It already has for me..Can’t find back a full-time job since 2008 and forced to rent again paying over 50% of my earnings to the landlord. I have a family to raise and my wife does part time seasonal work to pay most of the bills. I have a Bachelors of Education degree and yet I still find difficulty in even finding teaching jobs because schools are starting to be sold out to land developers or the Asian investors to be more specific.

      • Syrin

        Is that a regional thing? Have you looked to re-locate?

      • Ralfine

        Teachers are paid well in Hong Kong and China. And expats’ kids need schooling, too.

      • BonusGift

        I have written this before, but I’ll do it again: as mentioned by others, “economic ‘collapse’ is a process not an event.” Many expect that there will be some kind of dramatic signaling event like the bombing of Pearl Harbor. There can be, but typically it is the accumulation of mispricings and their associated ‘malinvestments’ that need to be unwound. It roughly takes as long to unwind such things as it takes to wind them up. Therefore, to the extent that the economic decline really began in say the 1970s or 1980s (I think it began with roughly our decoupling from the gold standard) it will take decades to economically unwind (and this ignores the 3rd world invasion demographic part which will only unwind if the parasites ever go home, otherwise there is no unwinding it short of civil war). In short, the ‘economic crash’ has already begun, but things like interest rates ‘normalizing’, for example, may have just begun to happen in the U.S. and places like Japan but that will unlikely happen in one day. Wars can turn on a single battle, economic suffering tends to happen one person and day at a time until enough people over a long enough time are impacted to notice. For example, it wasn’t even called the “Great Depression” until after the WWII. If we survive this one, most economists and historians probably won’t even label this one a depression for a decade or two after it is over (i.e., again ignoring the demographic angle).

        • Syrin

          Not necessarily. Look at Zimbawe and the Weimar Republic. if the dollar loses its value, things can go sour almost over night.

          • BonusGift

            Those are good examples of what I am referring to. Hyperinflation in both was not something you just woke up one morning and experienced and then it was gone the next day, nor is it that way here. Each case is different, but each has similarities like the time it takes to dig out of the economic ‘event’ which turns out to be much, much more like a process even if mentally humans somehow need to identify it as an ‘event’ after the fact. We are in a depression as well as the foundation for substantial inflation, if not ‘hyperinflation’, is already largely laid out, but it took time to do so.

        • Louise in MO

          I liked your post. Made sense and was informative.

  • GKJohn

    All the Compcontroler at the FED has to do is push the delete button on the last 9 zeros. And erase the debt that THEY created now is that so hard .

    • Syrin

      OR, they could raise the minimum wage to $15,000,000,000,000/hour, and tax us at 75% like they really want to do. See, problems all fixed !!

    • Gay Veteran

      Someone’s debt is another person’s asset. You think the pension funds and insurance companies own U.S. Treasuries?

  • Mondobeyondo

    The idea that an addict “can stop at any time” they wish, is ludicrous. If an addict could do that, well, they wouldn’t be an addict anymore!

    America’s economy is addicted. Money is the drug of choice, and the Fed is the drug pusher. Can the U.S. economy stop “shooting up” dollars in its veins long enough to go to “rehab”? Nope.

  • MeMadMax

    The world economy on life support. Pull the plug and let it die and rise up like the phoenix already… or not… Whatever… Beats living in this miserable existence we are in now… Anyways, this is all for the banks anyways… It seems like they are signalling that they are done gobbling up money by the ton and are ready to pull the plug…

    • Syrin

      If I didn’t have kids, I’d agree with you 100%

      • MeMadMax

        I have 3 kids… At this time, I suspect that they will never see what us 90′s babies enjoyed before this ugly, ugly, situation developed… Since 2008 I have had a rude awakening on all things economics, politics, social crap, etc etc… I have come to the conclusion that everything that we are experiencing now has been building for a long, long time… And if our kids want to have some semblance of a good life, this needs to go away soon and fast in order for it to get rebuilt sooner… Dragging it out is like getting your teeth slowly pulled out instead of fast so that you can get on with the healing process, ya know what I mean vern?

        • Syrin

          Again, I agree with you, but what I don’t think you understand is that the bubble is so big, there will be NO chance at a peaceful transition. When the collapse comes, I bet 50+% of the US pop’l dies, and frankly, from what I have read from other authors, I might be overly optimistic. I am one who believes our kids will not have a chance at a good life here in the US. Look at post Katrina New Orleans. Those idiots knew a WEEK in advance what was coming, and they STILL couldn’t take care of themselves. Imagine post Katrina NO without help from other citizens, gov’t agencies etc., and that will be the US. Fend for yourself, looting, raping, pillaging, etc. No, I do not want that for my kids. Hopefully I will be long gone before then.

        • BonusGift

          I agree with you, the sooner and faster the better.

    • markthetruth

      Remember it’s not just the economy that’s the problem. It’s what we decided to do with what we where giving . Land, food , water , air, and the Bible of Life to guide us. We are Destroying All of Them.

      the end…

  • markthetruth

    a Logic And Gate has 3 outcome

    0 Growth 1 Ben Free Money = 1 False Reality

    1.5 GDP 1 Ben Free Money = 1 False Growth
    0 Growth 0 Ben Free Money = 0 Disaster

    the end…

  • JailBanksters

    Great shades of 2008….

    Give us some more money or we’re going to crash to whole frick’n system! This is the new norm. You don’t make money by making stuff, you make money by betting on how much money another company can make. As long as the Entire Planet is on Life Support, it’s not a problem, it’s only a problem when one decides not to play Planet Ponzi.

  • qe will never end

    qe will never end (ever)with virtually no growth anytime soon, wallstreet off the grid and on their own trajectory and the politicians in dc just riding the clock, bernanke is testing the limits of futility, his bluff ain’t foolin no one

  • Dr. G

    Don’t they do this sort of “warning” in order to get the markets to begin unwinding early, rather than waiting and dropping a bomb all of sudden? I don’t support any of this funny money mass printing. I’m a gold standard guy all around, but I know enough that Ben is trying to let the air out of this balloon slowly. Just pray that all those pins floating around the world don’t get there first.

  • Anthony Burgestz

    Americans need jobs. Jobs. Full time jobs. No more communist public sector leeching old heads crying out for more money. Full time jobs for the people. Less useless degrees and less debt. Jobs, jobs, and more jobs are being offshored and the sheeple are busy watching reality TV or their children are being taught sickening offensive and ungodly material in schools. Even the teachers have no hope for their profession the female teachers are busy getting it busy with their students, but I, a hardworking white male teacher was the first in line to be laid off at the school I was teaching before the Winter-Spring semester of 2008-2009.

    • Ralfine

      Well, develop a product, open a business, make that product, employ people.

      Don’t always blame others for not doing what you could do as well, or even better.

      If something needs fixing, fix it.

      • No Satan

        The feminists whine about them not having managerial positions with their women studies degree and the government actually makes laws forcing businesses to hire women in affirmative action policies.
        It is extremely hard to start up a business in America with all of those regulations.

      • Donald Wilson

        Starting a business sounds great but over 100 million unemployed or under employed who do you think will buy your new product. Furthermore, with corporations shipping millions more good paying jobs to countries like China what types of new jobs are being created? That’s right wal-mar, McDonald’s and other low paying jobs.

        Good luck and Good night.

        • markthetruth

          Try and compete with walmart or McDonald’s without

        • Ralfine

          You’d have the same problem, if those jobs were created by the government – who’d buy the products?
          Which leads us to two causes of the current crisis: over-production and under-payment.

          So, just calling for more jobs to be created by the governments doesn’t help much.

      • MeMadMax

        There’s very little startup capital out there for a new business venture(I know, i’ve tried to start a business) DESPITE the complete flooding of the financial system with fake money. ^.^

        • Ralfine

          Yes, one important feature of imperialism is the concentration of capital in very few hands.

  • ResilientNews

    Hey folks there is a new search engine out there that cares about privacy its called duckduckgo dot com its well worth the time to check it out

    • Syrin

      Is it any good?

      • ResilientNews

        I like it, anonymous searching how it should be. check out their about page duckduckgo dot com/about

        • Ralfine

          It still doesn’t explain who is behind duckduckgo, or who finances it.

          It could be hosted directly from a FBI server.

          • ResilientNews

            all you need to do is a little research… en.wikipedia dot org/wiki/Duckduckgo

            DuckDuckGo was founded by Gabriel Weinberg, an entrepreneur whose last venture, The Names Database, was acquired by United Online in 2006 for $10 million.[5] Initially self-funded by Weinberg, DuckDuckGo is now occasionally advertising-supported.[6] The search engine is written in Perl and runs on nginx, FreeBSD and Linux.[2][7][8]

          • Chris

            There is no technology available to the market that isn’t able to be exploited by the authorities for data gathering and surveillance. If there was they wouldn’t allow it to be sold.

    • Herman

      Hi,

      Here in South Africa we are told, by the economists, that the US economy is improving. We hear this everyday. I have been following this and other blogs and it is quite the opposite. Most of the people in SA believe these liars. However our currency is the most volatile in the world depreciating with up to 30cents in one day. It seems that there are a lot of sheeple around the world believing these false prophets(Economists)

  • Dr. G

    you’re right about QE never ending. The FED has mastered the art of manipulating markets with verbal threats and sound bites. If they get what they want with a press release, why actually stop the printing presses? Europe is on the ropes and no one is reporting it. Larry Edelson, big name in commodities, is warning his clients to buy gold now, wait a little longer of silver, and that Europe and the Euro are going to implode this summer. And the US isn’t far behind.

  • mj007

    Michael I enjoy reading your articles for the info, stats, and of course entertainment value. I like the fact that your articles expose the banking elite, federal reserve, and monetary system, but do you have any solutions -or- want to post articles about solutions to our economic problems?

    • Sarah Greenfeld

      The solution is to get rid of Capitalism. Any system which is explicitly based on the concept of the rich exploiting everyone else is inhumane and unfair.

      • Ralfine

        Did you ever read Marx? He said, capitalism is necessary.

        What do you say to that?

      • orsobubu

        Sarah is right in her critics to capitalism. She is wrong saying that Russia was a better place than western countries. In Soviet Union there was a state capitalism, not communism, because in communism will not exist banks, money, wage work, market, as in Russia and in every other part of the world today. In the same way, there is not a free market economy today in US or europe: it is a state capitalism too, because without state interventions capitalism would be dead long time ago. “Liberalism” and “socialism” are both false bourgeoise ideologies made up to control the proletarian exploited class. Communism is a revolutionary program for the future so, Sarah, please start to organize yourself inside a leninistic, materialistic and scientific revolutionary party.

        • Syrin

          Can you split that hair ANY finer. It’s not commuinism but state capitlaism? Give me a break. You don’t think the state controlled the banks and monetary supply in Soviet Russia. Are you REALLY THAT DAFT ?!?!?!

          • orsobubu

            Sorry, I didn’t understand you

      • Syrin

        Wow, you have no idea what capitalism is, none, whatsoever. Your understanding of what an economy is is 100% based on what Chris Matthews and Jon Stewart tell you it is on Comedy PMSNABC.

      • BonusGift

        It seems to me they got rid of it. This isn’t capitalism; and it sure isn’t a republic as intended by the Founders. Do you really think government involvement is too small? For example, do you like that a quasi-private Federal Reserve has been setting or at least trying to set bond prices, and by extension interest rates, with government approval? Finance, real estate, defense related, healthcare, etc. have become largely wards of the government, is that the ‘capitalism’ you write of? Is the government telling a business they should or shouldn’t hire someone because of the color of their skin too little government and too much capitalism? …

      • El Pollo de Oro

        “People are belly-aching
        that capitalism has run amok. This is not capitalism. The merger of state and corporate powers, by definition, is called fascism. And four words can prove it: too big to fail.” —Gerald Celente

  • Sarah Greenfeld

    Well, let’s hope socialism takes over, I have had it with this crapitalistc economy. In Soviet Russia, there was NO unemployment, NO student debt and NO housing crisis. I just want to live and raise my kids, have had it with this crapitalistic financial system up to here.

    • Syrin

      You’re kidding,right? Soviet Russia where people disappeared to Siberia forever for saying ANYTHING contrary to the gov’t? Soviet Russia run by organized crime for over a decade? Soviet Russia where people routinely starve to death? Give me a break. We’ve haven’t had capitalism in the US since 1913 when the Federal Reserve was formed. Yet again the problem IS gov’t intervention. The answer is NOT the most intrusive form of gov’t ever created.

      • Sarah Greenfeld

        Soviet Russia during 1950-1990 was a paradise compared to the U.S.A of today. NOT modern Russia which is another FAILED CAPITALIST MAFIA STATE.

        And WE DO have capitalism here in America, I have crushing student debt (Thanks, Capitalism!) and so does my husband (We are both Law graduates with no jobs in sight). In soviet Russia any student who graduated was given a job in their field of study, ANY. The best students got to pick their assignments, the worst were given assignments, but EVERYBODY made use of their education. In the USA, if you want to be a specialist then forget about it, you get a USELESS education (the worst quality at the highest price, thanks capitalism!) and are never to be employed in your field of study. Yeah, Soviet Russia is looking pretty good to me and to my family right now.

        • Ralfine

          Again I need to ask – why study law in the first place?

          Because everybody studies law or because there was a shortage of lawyers?

        • MeMadMax

          Dude, you have no idea what you are talking about. Russia currently has more MILLIONARES than anywhere else in the world. And russian gangs? What? You are gonna focus on gangs? We have a ton here in los angeles… But everyone wants to be here cause its cool.

          • Shmeggle Marxist

            like wow dude, please continue to lick obama’s balls you useless commie dumbfuck

          • MeMadMax

            OOOOO….. I mention a world fact and all of a sudden I’m a obamatard… wow…

        • Donald Wilson

          You are joking right?

        • Shmeggle Marxist

          LMAO at commies who dream of sucking obama’s weiner.

      • Ralfine

        So? Why would you need to say anything against the government?

        Tell you what – of you walk on rail tracks you might get killed by a train. You can either blame the railway company, the train driver, or the prison for not having enough prisoners building more roads, or not walk on tracks.

        • Shmeggle Marxist

          ralfine=sarah greenfield= liberal pieces of garbage who dream of fellating obama

    • Donald Wilson

      Hey Sarah wake up and smell the coffee we’ve been living in a socialist environment for the last 30 plus years in fact we’ve moved from socialism to a facist state. Capitalism ha been dead for years.

      Good luck and Good night.

    • MeMadMax

      China is over there, have fun with the chinese death trucks…

    • Shmeggle Marxist

      LMAO at clueless liberal shmucks

  • Economytrap

    Wow…there are some twisted and naive comments on here. For the gal upset about her student loan deb…I have news for you, you borrowed the money and choose to go to an expensive college for a useless degree, So blame yourself!!! Had you studied engineering you would be working, but surely you can’t handle the Calculus like most others who shouldn’t be going to college in the first place to begin with either! Not everyone needs to go to school, you should have learned a tangible skill, instead of wasting your time becoming another useless eater (meaning you don’t produce jack crap for society) as a lawyer. Also, tuition is high due to: inflation, lack of competition, and the systematic structure these professors and staff are paid on. If free markets were allowed in the education sector, the tuition cost would drop drastically. Next, if you can’t find a job, go make a job! You expect society to produce for you a job, but you can’t produce for society? Are you too incompetent? That goes for the poeple complaining at the bottom about being a teacher and finding work as a teacher…Go make yourself a job too, invent something, produce something, hustle, make things happen for yourself instead of blaming others for your own self-idiocracy and incompetence. As for solutions…there are none, it is checkmate, it is not if, but when the “Great Correction” happens. So take care of your own, your family, and your loved ones…prepare, prepare, prepare…and enjoy life and the simpler things in life as much as you can (like taking a son to go play catch). Get off your smart phones, off your TVs, off your magazines, and read, do some critical thinking, go hiking in the forest, be alone and meditate, talk to God, etc. I can’t believe the “new” society this nation is turning into!

    • No Satan

      Sorry pal this ain’t the good times. Read Michael’s article about small businesses in America. It costs more and over regulated that no one really wants to spend $1,000s of dollars in fees to sell 0.50 cents lemonade in front of their lawn.

    • Bill H

      Amen Brother!

    • Louise in MO

      I agree with your post! You cannot expect a job to come to you, you must go get the job. Quit believing statistics and get out there!

  • seth datta

    So much for the antichrist coming from the East; I’m more inclined to believe the most dangerous people are an extremely small minority of wealthy psychopaths that live in the West.

  • Ralfine

    What good is a market that doesn’t survive without state intervention?

  • chilller

    We live in a self destructive society. Any hint of an improving economy raises gas and real estate prices and will now prompt the Fed to pull back on stimulus, again sending our economy into a tail spin. Any questions as to whether we’re painted into an ever shrinking corner? The rein of the United States of Greed is coming to an end, hence their daily preparations for unavoidable civil unrest coming to a city near you. The silver lining to all this is most of the wrath of gubermint control will be directed at the city dwelling Ovomit supporters who will also be like a herd of crack addicts denied their daily dose.

  • K

    The market is on thin ice. Even those people still in it know that. So every moan or snap from the ice causes great fear. Why do they not get off the ice? Mostly greed. I will be stepping away from the computer, for a bit of vacation. As you watch the market, do not forget to glance at the middle east now and then. The chess pieces are starting to move over there, so far just the pawns. But that can change real fast in that area.

    • kathy k

      Have a great vacation K will miss your posts they are always infomative

  • Donald Wilson

    Just like all addicts Ben Bernanke is delusional. If he tries to stop the monthly money /drug fixes.the country will spin wildly out of control. End result a economic depression worse than what our parents and grandparents lived through.

    Good luck and Good night.

  • Stezie

    The US economy is like a meth addict: it needs injections to keep functioning.

  • 007

    This has been the economic debate of the decade.

    The FED believes that the economy is basically fine. It believes we are just going through the effects of a normal business cycle (for 5 years now). It views QE as just training wheels on the economy to help it reach “escape volocity”.

    The counter argument is that all of this QE has been absolutely counter productive. It is argued that it creates bubbles (treasury bills, government debt, stock, real estate), creates misallocation of investments and capital, creates a false Unsustainable economy based on wasteful government spending and croneyism, finally inflation.from money printing.

    Everyone does agree that these QE programs can not continue indefinitely.

    • 007

      Bernanke has just threatened that he is thinking, he might, if the economy gets better, stop the QE money printing. The market has dropped 500.00 points just by mentioning it. The market seems to be saying it believes the economy is in big trouble. I for one agree.

    • Chris

      What the FED says is for public consumption, what it knows is another matter and it must have all the info available to it to know that it’s screwed. QE has possibly stopped an immediate collapse but only to store it up for later. It has also given the insiders time to get out.

  • Cedric

    I like the point Rick S made in the video about trading before there were Fed meetings and Finance networks – they looked for the conditions of the market and traded accordingly. We have become conditioned to wait for “the almighty fed chair” to emerge from the oracle and tell us what the future holds. It’s nuts how people were glued to the tele awaiting Benny’s press conference…

  • Adrian

    No wonder the Fed’s policy has been what is has been for years. The government is pumping money in to inflate stock market prices, not to help the economy in general. That is because the government answers to the rich only, not the people in general. One cannot even fathom the astronomical amount of money pumped into the corporate sector.

  • Chris

    Well Michael you’re articles of the last few days have been pretty accurate maybe you have inside information!
    The S&P chart you produced a few days ago implied an immediate crash along with your bit about margin debt. I then said all it needed was a trigger event (deliberate or not) to burst it and yesterday Bernanke suggests perhaps tapering QE off. This looks like it.

  • VegasBob

    The explanation for the financial market meltdown is very simple. The real economy has been in a Depression for 5 long years, and there is no end in sight.

    The prospect of an end to Bernanke’s counterfeit money-printing is causing dislocations in the financial markets because all so called “assets” – stocks, bonds, commodities and housing – are grossly overvalued.

    The “assets” that Bernanke “buys” with his freshly counterfeited electronic dollars are nothing more than some other entity’s debt obligations.

    We need to face the fact that these debt obligations that Bernanke is “buying” will never actually be repaid.

    So when we strip away all of the jargon, excuses, deception, and distortion used to describe what Bernanke does, it becomes very simple. Bernanke is merely COVERING THE HOT CHECKS written by the Federal Government, Fannie Mae and Freddie Mac.

    Even a third-grader can understand that. It takes an advanced degree or incredible gullibility to actually believe any of the bullsh*t one sees in the media about what “quantitative easing” really is.

  • Shmeggle Marxist

    libs are total S H*T

  • Andrew

    Press the panic button, NOW!! This is what happened in the American financial market when the Fed Chairman hinted to moderately slow down the economic stimulus program.

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