By David DeGraw
QE2—Good or Bad? Ryan Chittum notes that The Wall Street Journal and the Financial Times have two very different page-one angles on the Fed’s new round of money-printing. WSJ: Stocks soar. FT: Foreign capitals ponder retaliation. The FT wins the substance race.
QE2—Winners and Losers: New Peterson Fellow Felix Salmon looks at a Huffington Post story that lays out with great clarity just who’s benefiting (big banks, corporations, and the U.S. Treasury) and who’s losing (the public at large, and especially retired savers and the unemployed) from the Fed’s monetary policy.
QE2:—Ben, Let’s Talk: Salmon welcomes Fed chief Ben Bernanke trying to explain his actions in the form of a Washington Post op-ed. But he’d be much happier if he did so in the form of a press conference.
From Zero Hedge:
Submitted by Phoenix Capital Research on 11/04/2010 19:52 -0500
Well, it’s official, Ben Bernanke has officially gone “all in” regarding currency devaluation in the name of pumping the stock market. I have to admit, even though I knew this was going to happen, I’m still in shock. After all, it’s not every day that you see a superpower collapse and lose its reserve currency status courtesy of a deranged mad man.
Regardless of your feelings on the matter, these are the cards the Fed has dealt us, so rather than devote space to critiquing our insane and corrupt Fed Chairman, I thought it better to devote today’s article to detailing what is to come as a result of the Fed’s policies.
1) QE 1 Failed, so Will QE 2= The Fed Doesn’t Have a Clue
Submitted by Tyler Durden on 11/04/2010 14:08 -0500
Yesterday’s Ben Bernanke penned an Op-Ed in which he essentially said: “I am doing whatever I interpret my mandate to be, which right now means only thing: Dow 36,000. I am only accountable to the private bank that is the Federal Reserve, a few Wall Street CEOs, and no one else. Congress has no power over me. Try to stop me.” And while the stock market is so far in love with this exhibition of outright hubris which promises record bonuses even as a record number of Americans subsist on foodstamps and real, not BLS, unemployment is over 20%, putting the Chairman in a long-overdue strait jacket will ultimately require an outright clash between those who still believe in that piece paper called the constitution and the kleptocratic cartel to whom the trade-off between a senior bond impairment and their first born is never all that clear. And while more and more try to educate a hypnotized, strategically defaulting US society what QE2 means to their future, the rest of the world is already rising in a tidal wave of disapproval aimed at the Federal Reserve. As the FT reports, Brazil, China, German, and Thailand, and soon everyone else, have already voiced highest criticism and their condemnation of this escalation in FX wars.
Mutually Assured Destruction (MAD).
That was the actual military policy of the United States of America and the rest of the World for about 30 years. We had Presidents and Kings and thousands of bureaucrats – the top minds of 2 generations – all getting together on a regular basis and coming up with or buying into insanity like the system on the right. We look back at it now and say “Gee, what were we thinking” but the whole World went down this path for a while.
There is a scene from Doctor Strangelove where Major Kong, the bomb commander, is so focused on completing his mission that he loses sight of the bigger picture but he doesn’t regret his actions – he goes down in a blaze of glory that ultimately dooms the World but his sense of personal triumph at achieving his wrong-headed goal is the punctuation for the film. Watch this scene and think of Bernanke, tinkering with this or that but so focused on “fixing” the economy with the one tool at his disposal that he ends up destroying it instead.
After putting over $2Tn into our Dead Parrot Economy since the crash and getting no response, Bernanke is upping the ante with another $600Bn round of Quantitative Easing ON TOP OF the ongoing $250-$300Bn round of POMO commitments for a total of about $110Bn per month dumped into the economy between now and the end of Q2. This represents a 10% increase in the money supply over 8 months and, therefore, a planned 10% decrease in the purchasing power of your dollar-denominated assets or, to put it bluntly – a 10% tax on everything you own.
That is the joke of this country. People sit there arguing about whether or not to extend a tax cut that will cost 3% of a year’s salary while the Fed, with no electoral oversight, is simply taking 10% of your LIFETIME savings – AGAIN! They did it last year, they did it this year and now they promise to do it next year too. That’s 30% folks!