For the past year and a half we have repeatedly stated that QE has continued unabated behind the scenes, because there is simply NO REMAINING END BUYERS OF US DEBT IN SIZE OUTSIDE OF THE FED.
Our friend ‘Turd’ from TFMetalsreport has released an excellent report documenting why QE∞ is a new paradigm for the markets, as it is all about DIRECT MONETIZATION BY THE FED OF THE US SPENDING DEFICIT OF $1.5 TRILLION ANNUALLY!!
‘Last week The U.S. Federal Reserve announced a plan whereby they will be almost completely and directly monetizing the deficit spending of the U.S. government. Though the illusion of legitimate borrowing will be maintained and politicians will continue to claim that “we’re borrowing all of this from China”, you should not be fooled. We have entered a new paradigm of direct debt monetization. By doing so, The Federal Reserve has begun the process of overt currency debasement and devaluation.‘
MUST READ!!
From TF:
The Fed went so far as to state that they “stand ready” to increase the monthly amount of MBS purchases if “the labor market doesn’t improve”. OK, again, watch what they do, not what they say.
ZIRP will continue through 2015 but Operation Twist runs out of funds and ends late this year. Well, then, from where will the $45B/month in Operation Twist be replaced. That’s an easy one. The Fed has already told you the answer. Since the labor market won’t be improving anytime soon, they will simply increase their monthly purchases of MBS from $40B to $85B.
And here’s where almost everyone drops the ball. The mainstream media will tell you that The Fed is “supporting the mortgage market” and “helping to keep homes affordable” with this program. This is complete, unadulterated BS. Sure, The Fed is buying $85B in MBS every month…but…from whom??? Which institutions own these MBS and are obligingly selling them to The Fed??? I’ll wait here and let you think about that one for a few moments…
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The Primary Dealers! Goldman, The Morgue, MorganStanley, Citi, BoA…all of them. They own or purchase new the MBS which The Fed buys from them. And here’s the very important next step: The Primary Dealers turn around and use the proceeds from these sales to buy U.S. treasuries! To the tune of $85B/month. Let me do the math for you…that’s slightly more than one trillion dollars over the next year. And what does the Congressional Budget Office project the U.S. federal deficit to be in fiscal 2013? It will again be north of one trillion dollars, at a minimum. http://www.cbo.gov/publication/43539
At the end of the day…and here’s where we get down to brass tacks…last week The U.S. Federal Reserve announced a plan whereby they will be almost completely and directly monetizing the deficit spending of the U.S. government. Though the illusion of legitimate borrowing will be maintained and politicians will continue to claim that “we’re borrowing all of this from China”, you should not be fooled. We have entered a new paradigm of direct debt monetization. By doing so, The Federal Reserve has begun the process of overt currency debasement and devaluation.
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I really can’t believe the American public is allowing this!
What ever happened to this once great nation
Just an observation that the Cartel is now desperate to ‘hide’ inflation by using manipulation of futures markets to suppress currency prices of commodities, oil in particular, but also agriculture, and of course, the precious metals, with emphasis on silver.
Please be aware that the Cartel’s greatest fear now is a Hyper-Inflationary Depression over which they will have no control. This is the fear of governments all over, especially China (which is the single foreign entity that stands to lose the most in terms of Dollar hyper-inflation). Of course, in a Dollar hyper-inflation, it is the people of America that will experience a once-in-a-lifetime depression that even the grand-parents who have lived through the ‘Great Depression’ will be totally unprepared for.
From one extreme of unprecedented paper ‘wealth’ made possible by the ‘printing’ of fiat paper world reserve currency, to the other extreme of total destruction of this same paper currency brought about by design (by the very creators of this fiat debt currency system).
The American public isn’t paying attention. Let’s face it, for most of us it’s business as usual. We’re able to buy what we need when we shop, football season is in full swing (even with replacement refs) and there’s a neverending choice of reality shows to amuse us. Even with the MSM putting out the nonsense they spew, most people are too busy to watch. I have to agree with Turd’s view on QE. I do wish I could find some websites that can tell me how any of this makes sense. After visiting Turd’s website I am a little concerned about his message at times. I read his post about what’s happening in the Mideast and he was actually wondering if he would make it to the next day as if terrorists were in his yard. But he did say he went to Cabellas for ammo so I guess he is feeling better now.
When good people do nothing, who else can win?
Turd’s pegged it.
The Fed buys MBS, saving the big banks like Morgan Stanley. These bastards buy the completely unsellable recently downgraded junk bond Treasury crapola , building our toxic debt level to Uranus.
The home owners’ll be trapped forever in a state sponsored mortgage gulag.
This is nothing more that a Fed financed daisy chain circle jerk FUBAR wrapped in a gigantic moronic cluster f***, without even giving the long suffering tax payer the courtesy of a ‘reach around’
Got KY? You’se gonna need it homie.
What happened to the big sell off in gold and silver that T.F. predicted?
UglyDog, last I read I think Turd was promising a “hot, explosive summer” for PMs as he had some inside information that some event would happen by Sep 21st. He was talking about close to new highs in both gold and silver. I’m not sure if he updated that. He couldn’t give a hint or reveal his source.
Just learned our government is now stimulating the Chinese economy (solar panals made in China) with none other than stimulus funds. I thought these funds were to stimulate the American economy?
Our so called “government” is doing nothing besides filling their own pockets at the expense of the rest of us. Time to halt this corruption cycle and put laws in place that will send people to jail for life if they steal over 1 million dollars. To many bankers are getting slapped on the hand and now the fed is knee deep in the same mess.
Inflation has already hit hard, the little fresh food I buy has doubled in price or been put in a smaller box claiming new and improved for the same price. Same goes for cleaning supplies, in the last 2 months I have seen smaller packages for the old price. I have stocked up and just replace what I use and it is starting to hurt on a fixed income. Cutting into my silver buying funds!
Yet, the sheeple don’t know what it means so they don’t care about it. Now at this point, no one can’t argue with us, the physical PMs buyers, that it’s useless to buy gold and silver and people can’t tell us that the US dollar collapse will never happen.