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SPOOKYTOOTH

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PRINT!!!!
« on: November 05, 2010, 03:36:00 AM »

Some history and DEFINITIONS...

The Problem with “Policy Measures” and “Quantitative Easing”

http://dailyreckoning.com/the-problem-with-policy-measures-and-quantitative-easing/

By Eric Fry

09/23/10 Laguna Beach, California – The Federal Open Market Committee (FOMC) is worried. Very worried. It is worried that it is not destroying the dollar fast enough.

“Measures of underlying inflation are currently at levels somewhat below those the Committee judges most consistent, over the longer run, with its mandate to promote maximum employment and price stability,” the FOMC declared Tuesday. “Inflation is likely to remain subdued for some time before rising to levels the Committee considers consistent with its mandate.” In other words, as every Ivy-League-educated economist understands very well, the Fed must nourish inflation if it is to have any hope of reviving the economy.

Possessing merely a bachelor’s degree from UCLA, your California editor naively maintains his low-brow economic ideas. He still suspects – poor, brutish lad – that debasing the currency is an ill-advised means toward a dubious end. Rather than debasing the dollar to repel the natural forces of creative destruction, as Chairman Bernanke and his colleagues advocate, your editor suspects that the best means toward sustainable economic growth is to allow failing enterprises to fail, so that stronger enterprises may take their place. (And leave the poor greenback alone, please).

But the Ivy League intelligentsia sees it differently. The intelligentsia embraces an agenda of mere expedience, dressed in the eloquent vernacular of financial euphemisms. To wit: “Money-printing” is now “quantitative easing,” while “throwing spaghetti against the wall and seeing what sticks” is now a “policy measure.”

Harvard grad, Ben Bernanke, insists that the Federal Reserve’s most important near-term mission is to combat deflationary pressures by any and all “policy measures” available. The mission, in other words, is to produce inflation. (We’re not making this up). In the FOMC’s own words, “The Committee will continue to monitor the economic outlook and financial developments and is prepared to provide additional accommodation if needed to support the economic recovery and to return inflation, over time, to levels consistent with its mandate.”

And so it goes....if its unstable... PRINT by jove PRINT !!!

Credit and the Bernanke Code
Just don't call it quantitative easing. It's credit easing
!

http://www.businessweek.com/magazine/content/10_46/b4203012812548.htm

By Peter Coy

To understand the Federal Reserve's latest attempt to jump-start the U.S. economy, consider what the central bank did not say. In its Nov. 3 announcement, the Fed never used the phrase "quantitative easing" to describe its program of buying another $600 billion worth of long-term Treasury bonds between now and the middle of 2011.

The Fed weighs its words carefully, so it's no accident that Fed Chairman Ben Bernanke and fellow members of the Federal Open Market Committee have resisted the label put on the plan by economists and journalists. Bernanke in past speeches described the Fed's strategy as "credit easing," although the FOMC stuck to the bland "asset-purchase program" on Nov. 3. Whatever it's called, Bernanke thinks it has a better chance of boosting the economy than what he calls quantitative easing.

The Fed has a lot riding on the success of its bond-buying strategy, which comes on top of the nearly $1.5 trillion in assets it has added to its balance sheet since 2008. The interest rate it directly controls is already as low as it can go. More government spending might juice growth, but that's even less likely now that Republicans have won control of the House on an anti-deficit-spending platform.

What gives the Fed's plan at least a chance of success is the bank's almost magical ability to create money out of thin air. When the Fed buys a Treasury bond, it pays by simply marking up the balance in the seller's account at the Fed. It's the electronic equivalent of printing money.
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John Kopke

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Re: PRINT!!!!
« Reply #1 on: November 07, 2010, 07:33:14 PM »

Some history and DEFINITIONS...

The Problem with “Policy Measures” and “Quantitative Easing”

http://dailyreckoning.com/the-problem-with-policy-measures-and-quantitative-easing/

By Eric Fry

09/23/10 Laguna Beach, California – The Federal Open Market Committee (FOMC) is worried. Very worried. It is worried that it is not destroying the dollar fast enough.

“Measures of underlying inflation are currently at levels somewhat below those the Committee judges most consistent, over the longer run, with its mandate to promote maximum employment and price stability,” the FOMC declared Tuesday. “Inflation is likely to remain subdued for some time before rising to levels the Committee considers consistent with its mandate.” In other words, as every Ivy-League-educated economist understands very well, the Fed must nourish inflation if it is to have any hope of reviving the economy.

Possessing merely a bachelor’s degree from UCLA, your California editor naively maintains his low-brow economic ideas. He still suspects – poor, brutish lad – that debasing the currency is an ill-advised means toward a dubious end. Rather than debasing the dollar to repel the natural forces of creative destruction, as Chairman Bernanke and his colleagues advocate, your editor suspects that the best means toward sustainable economic growth is to allow failing enterprises to fail, so that stronger enterprises may take their place. (And leave the poor greenback alone, please).

But the Ivy League intelligentsia sees it differently. The intelligentsia embraces an agenda of mere expedience, dressed in the eloquent vernacular of financial euphemisms. To wit: “Money-printing” is now “quantitative easing,” while “throwing spaghetti against the wall and seeing what sticks” is now a “policy measure.”

Harvard grad, Ben Bernanke, insists that the Federal Reserve’s most important near-term mission is to combat deflationary pressures by any and all “policy measures” available. The mission, in other words, is to produce inflation. (We’re not making this up). In the FOMC’s own words, “The Committee will continue to monitor the economic outlook and financial developments and is prepared to provide additional accommodation if needed to support the economic recovery and to return inflation, over time, to levels consistent with its mandate.”

And so it goes....if its unstable... PRINT by jove PRINT !!!

Credit and the Bernanke Code
Just don't call it quantitative easing. It's credit easing
!

http://www.businessweek.com/magazine/content/10_46/b4203012812548.htm

By Peter Coy

To understand the Federal Reserve's latest attempt to jump-start the U.S. economy, consider what the central bank did not say. In its Nov. 3 announcement, the Fed never used the phrase "quantitative easing" to describe its program of buying another $600 billion worth of long-term Treasury bonds between now and the middle of 2011.

The Fed weighs its words carefully, so it's no accident that Fed Chairman Ben Bernanke and fellow members of the Federal Open Market Committee have resisted the label put on the plan by economists and journalists. Bernanke in past speeches described the Fed's strategy as "credit easing," although the FOMC stuck to the bland "asset-purchase program" on Nov. 3. Whatever it's called, Bernanke thinks it has a better chance of boosting the economy than what he calls quantitative easing.

The Fed has a lot riding on the success of its bond-buying strategy, which comes on top of the nearly $1.5 trillion in assets it has added to its balance sheet since 2008. The interest rate it directly controls is already as low as it can go. More government spending might juice growth, but that's even less likely now that Republicans have won control of the House on an anti-deficit-spending platform.

What gives the Fed's plan at least a chance of success is the bank's almost magical ability to create money out of thin air. When the Fed buys a Treasury bond, it pays by simply marking up the balance in the seller's account at the Fed. It's the electronic equivalent of printing money.


Of all the topics, along with Smash's Gold Silver.... this is one that needs very serious consideration. For me this is the most important issue.

My take is this. Bernanke isn't really worried about deflation he wants to lower the value of the dollar to allow debts to be repaid with cheaper dollars. OK for those in debt, which would obviously include the Federal Government. But it is a tax on every single person in the country.

The resulting inflation may has a short term positive effect on the economy, but it is very dangerous. With the value of the dollar dropping people will spend the dollars today to avoid the loss in dollar value. Spend spend spend. Then inflation will really kick in. As the value of the dollar drops you'll want a raise at work, more dollars, to make up what you're losing wth inflation.

Got a $ 100K socked away. Inflation of 10% will cost you $10K
in lost buying power. $100 essentially becomes $ 90K. It is the hidden tax the Federal Government and the FED have been inflicting on the populace for over a hundred years. The early 1900's dollar is today worth 4 cents.

« Last Edit: November 07, 2010, 08:17:05 PM by John Kopke »
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John Kopke

SMASH

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Re: PRINT!!!!
« Reply #2 on: November 07, 2010, 09:36:25 PM »

Of all the topics, along with Smash's Gold Silver.... this is one that needs very serious consideration. For me this is the most important issue.

My take is this. Bernanke isn't really worried about deflation he wants to lower the value of the dollar to allow debts to be repaid with cheaper dollars. OK for those in debt, which would obviously include the Federal Government. But it is a tax on every single person in the country.

The resulting inflation may has a short term positive effect on the economy, but it is very dangerous. With the value of the dollar dropping people will spend the dollars today to avoid the loss in dollar value. Spend spend spend. Then inflation will really kick in. As the value of the dollar drops you'll want a raise at work, more dollars, to make up what you're losing wth inflation.

Got a $ 100K socked away. Inflation of 10% will cost you $10K
in lost buying power. $100 essentially becomes $ 90K. It is the hidden tax the Federal Government and the FED have been inflicting on the populace for over a hundred years. The early 1900's dollar is today worth 4 cents.



John,

How low can they go, and how long will the Federal Reserve "Dollar" last?

You mention that the early dollar is worth 4 cents.

Which 4 cents do you refer to?

If that is the early cent as calculated by the early dollar the Federal Reserve "Dollar" is worth less than the paper it is printed on!!!

Our Cost of Goods is bankrupt and is totally based on paper Fed Notes.

Fiat currency based on NOTHING.

Magically CREATED from nothing!

What cracks me up to no end is the FACT people will totally REJECT any belief of, or, have any faith in God and readily accept what the FED calls money!!!!!

And...All of the fantasies the Fed makes up.

Hmm...So did the poor people of Germay as the Weimar Republic collapsed around them.


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T-M-T

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Re: PRINT!!!!
« Reply #3 on: November 07, 2010, 10:04:21 PM »

Metals, beads and shells may work as currencies in a caveman society, but not in our modern world.  Fiat money is here to stay.

The fact that I don't have to hand deliver gold for each financial transaction I complete makes my life much more convenient.  I'm not going back to the stone age.

The deed to your house (assuming you own one) and the titles to your vehicles are also pieces of paper.  Are you worried about the government collapsing and those pieces of paper becoming worthless also?  What are you doing about it?

I, for one would prefer not to have to guard my possessions lest someone with a bigger artillery come along and take them away.  Government agencies and their paper documentation can be very useful, even to those of you who can't help but imagine that someone is pulling your strings constantly. 
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ThePeracha

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Re: PRINT!!!!
« Reply #4 on: November 07, 2010, 10:11:51 PM »

No one wants to take away paper money and documentations. It's just that it should be based upon something solid, like gold, instead of thin air. Otherwise, it can be manipulated as needed by the officials.
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T-M-T

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Re: PRINT!!!!
« Reply #5 on: November 07, 2010, 10:23:50 PM »

No one wants to take away paper money and documentations. It's just that it should be based upon something solid, like gold, instead of thin air. Otherwise, it can be manipulated as needed by the officials.

 Who says the currency has to be based on some metal?  It works just fine being based on whatever you can purchase with it, whether that be gold, silver, automobiles, food or services.

Populations and economies will continue to grow.  Metal supplies are finite.

NEWSFLASH: Any currency can be manipulated.
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SMASH

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Re: PRINT!!!!
« Reply #6 on: November 07, 2010, 10:29:52 PM »

Metals, beads and shells may work as currencies in a caveman society, but not in our modern world.  Fiat money is here to stay.

The fact that I don't have to hand deliver gold for each financial transaction I complete makes my life much more convenient.  I'm not going back to the stone age.

The deed to your house (assuming you own one) and the titles to your vehicles are also pieces of paper.  Are you worried about the government collapsing and those pieces of paper becoming worthless also?  What are you doing about it?

I, for one would prefer not to have to guard my possessions lest someone with a bigger artillery come along and take them away.  Government agencies and their paper documentation can be very useful, even to those of you who can't help but imagine that someone is pulling your strings constantly. 

Fiat money is here to stay.

Oh no it ain't!

It can't.
It is unsustainable.
Like the Bible, and God, it relies solely on FAITH!
The faith in paper is quickly going away. Seen the metals prices lately?
GOVERMENTS are running from paper, and the little guy gets F'd! Cause the generators of the paper get it FIRST!

Remember Weimar????

I'm not going back to the stone age.

Really? You might not have a choice. You don't "create" money, or do you?
Well, "They" do.

The deed to your house (assuming you own one) and the titles to your vehicles are also pieces of paper.  Are you worried about the government collapsing and those pieces of paper becoming worthless also?  What are you doing about it?

Umm, the bank holds the deed to a house I will most likely NEVER "own". The Titles to my vehicles are perpetually OWNED by the State.
Am I worried?
No.
I already accept the fact all of my "property" is already owned by some other entity and I will NEVER own them.
If the government should some how fail to collapse that mey be the closest to owning them I'll ever come? And...I will own them only until the government comes to collect THEIR property!

You see, I some how "bought" some pieces of material "property" with "money" crated out of thin air that is "owned"(notes, debt) by a private entity. Since I can't possibly pay back what is "owed" to "them" since "they" keep driving the "value" of the "dollar" "they" created down...they will eventually get what they already own.

What am I doing about it?

Just trying, with limited sucess, to show people the "shell game" that is being foisted upon them.

I, for one would prefer not to have to guard my possessions lest someone with a bigger artillery come along and take them away.

Who is guarding all your stuff now?
The FDIC?
Good luck with that.

even to those of you who can't help but imagine that someone is pulling your strings constantly.

Imagine?

OBEY
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SMASH

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Re: PRINT!!!!
« Reply #7 on: November 07, 2010, 10:51:04 PM »

Who says the currency has to be based on some metal?  It works just fine being based on whatever you can purchase with it, whether that be gold, silver, automobiles, food or services.

Populations and economies will continue to grow.  Metal supplies are finite.

NEWSFLASH: Any currency can be manipulated.
Populations and economies will continue to grow.  Metal supplies are finite.

Pay particular attention to this:

To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures.
That is Article 1, Section 8, of the US Constitution.
Which "Duty" OUR Congress ABANDONED in 1913!

OK, let's break it down, shall we?

To coin Money.

NOT print, Coin. And, you have a BIG problem with Robert Kahre PAYING his folks with LAWFULLY COINED "Money" from the US Mint.
WHY?

regulate the Value thereof

Ah Ha, so metals are NOT finite in their "value" are they?

Look here:

We further find in the Coinage Act of 1792 that the money of account of the United States shall be denominated in dollars or units of the value of a Spanish Silver Dollar, as was current at the time (1792).
http://www.financialsensearchive.com/fsu/editorials/gnazzo/2005/silver1.html

NEWSFLASH: Any currency can be manipulated.

Only when the Rule of Law is cast to the wind.
When your Republic has been reduced to a simple Democracy the ruling class will eventually dominate and tyranny will prevail.

OBEY
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SPOOKYTOOTH

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Re: PRINT!!!!
« Reply #8 on: November 07, 2010, 10:58:53 PM »

Of all the topics, along with Smash's Gold Silver.... this is one that needs very serious consideration. For me this is the most important issue.

My take is this. Bernanke isn't really worried about deflation he wants to lower the value of the dollar to allow debts to be repaid with cheaper dollars. OK for those in debt, which would obviously include the Federal Government. But it is a tax on every single person in the country.

I have tried to explain this concept to those who believe that because they have no debt personally they are in some way exempt from this very real SLAVERY.  Apparently there exists
TWO parallel AMERICAS... one for those who have debt and therefore will be held responsible to the national debt, currency, inflation, etc., issues and one for those who have no personal debt and are therefore absconded from all implications of the preceding.

                                               ???


The resulting inflation may has a short term positive effect on the economy, but it is very dangerous. With the value of the dollar dropping people will spend the dollars today to avoid the loss in dollar value. Spend spend spend. Then inflation will really kick in. As the value of the dollar drops you'll want a raise at work, more dollars, to make up what you're losing wth inflation.

but the funds to do so aren't there... now you call a STRIKE!

Got a $ 100K socked away. Inflation of 10% will cost you $10K
in lost buying power. $100 essentially becomes $ 90K. It is the hidden tax the Federal Government and the FED have been inflicting on the populace for over a hundred years. The early 1900's dollar is today worth 4 cents.


I like monopoly money....   just wish it was LEGAL  for ME to create it as it IS for the gov't / fed to do so.
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SMASH

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Re: PRINT!!!!
« Reply #9 on: November 07, 2010, 11:17:09 PM »


I like monopoly money....   just wish it was LEGAL  for ME to create it as it IS for the gov't / fed to do so.

Hear, hear!!!
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John Kopke

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Re: PRINT!!!!
« Reply #10 on: November 09, 2010, 07:46:17 PM »

Gas prices up 20 plus cents in the last fews days. My take it is directly due to FED monetizing the debt. Other commodities also rising. Corn, rice etc. Food prices? Might we see some pols start bashing speculators and oil companies for gouging?
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John Kopke

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Re: PRINT!!!!
« Reply #11 on: November 09, 2010, 08:08:24 PM »

Gas prices up 20 plus cents in the last fews days. My take it is directly due to FED monetizing the debt. Other commodities also rising. Corn, rice etc. Food prices? Might we see some pols start bashing speculators and oil companies for gouging?

Sometimes it's hard to tell.

That gas may have been bought 30, 60, or even 90 days ago?
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John Kopke

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Re: PRINT!!!!
« Reply #12 on: November 09, 2010, 08:17:30 PM »

Sometimes it's hard to tell.

That gas may have been bought 30, 60, or even 90 days ago?

Smash:
Expect gas probably was bought 30 to 60 days ago. But there was a spike in the price of oil. Increase is retail gas prices always react quickly to higher oil prices. Not so much in reverse. Yet I think what we're seeing in the Market is response to the FED policy. Gold up.
« Last Edit: November 09, 2010, 08:21:56 PM by John Kopke »
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LetsGoWings

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Re: PRINT!!!!
« Reply #13 on: November 09, 2010, 08:33:57 PM »

Are you forgetting about oil futures? Just because it was bought 30-90 days ago doesn't mean they bought it at the price that day. They could have exercised options. In fact oil options are one of the reasons that Southwestern has been able to avoid the hit of oil costs that the rest of the industry went through in the mid 2000's. The options are a great way to hedge against the potential spikes in oil prices.
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Great advice from another poster on this forum, we should all live by this:

"I'd advise against anyone contemplating sullying the reputation of any of the candidates without solid proof. "

SMASH

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Re: PRINT!!!!
« Reply #14 on: November 09, 2010, 08:35:38 PM »

Smash:
Expect gas probably was bought 30 to 60 days ago. But there was a spike in the price of oil. Increase is retail gas prices always react quickly to higher oil prices. Not so much in reverse. Yet I think what we're seeing in the Market is response to the FED policy. Gold up.
Market response to the Fed?

Yes, I agree.

Not to mention this is just the first of potentially 3 attempts at QE to come!

Man I would FREAKING LOVE to go to Vegas and be FREE to bet all I wanted knowing I could just print the F out of money to cover the bets and put the results of my losses on someone elses balance sheet to PAY the losses.

YEEEE HAAAA!!!!
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