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The hawks have made some noise, now the doves get their say: QE is providing the economy a "much...

The hawks have made some noise, now the doves get their say: QE is providing the economy a "much needed boost" and will be required deep into 2013 H2, says the San Francisco Fed's John Williams. "Unemployment is far too high and inflation is too low ... We need powerful and continuing monetary accommodation." Stocks are bouncing, but just a hair.
Comments (33)
  • tunaman4u2
    , contributor
    Comments (2765) | Send Message
     
    print print print, forever, we promise!
    21 Feb 2013, 01:04 PM Reply Like
  • Macro Investor
    , contributor
    Comments (8783) | Send Message
     
    This is nonsense! Guys, STOP, JUST STOP. Save it for next week. I don't want to hurry into buying calls on UPRO. I want a little bit more crash.

     

    I will be royally upset if I cannot make money on the sequester nonsense.

     

    I may have been wrong on this one. But discipline requires that I do NOT make a move before Wednesday. If the opportunity goes by then, fine.

     

    But I will be very sore if that happens.
    21 Feb 2013, 01:06 PM Reply Like
  • CaladesiKid2
    , contributor
    Comments (271) | Send Message
     
    As predicted on this site, the Fed has trotted out a spokesperson to temper yesterday's 'leaked' comments. Even so, the market reaction underscores how much the equity markets are reliant on QE. Slow but steady economic recovery? Perhaps not so much.
    21 Feb 2013, 01:11 PM Reply Like
  • pierrebonbon
    , contributor
    Comments (92) | Send Message
     
    Saint Louis says: "The Fed’s balance sheet relative to GDP is not as large as some other key central banks", "Current readings on inflation are rather low", "The Committee has stated that it seeks “substantial
    improvement in labor markets” as a condition for ending the current asset purchase program", although “substantial labor market improvement” does not arrive suddenly". Forget the stock selloff.
    21 Feb 2013, 01:12 PM Reply Like
  • minecanary
    , contributor
    Comments (413) | Send Message
     
    Bennie will probably want to double the printing so there are no ill effects from the sequester
    21 Feb 2013, 01:46 PM Reply Like
  • Joe Springer
    , contributor
    Comments (2214) | Send Message
     
    Don't want to be a conspiracy theorist but the $SPY is looking held up at $150 on the dot, somebody is stepping in. Over $100 billion in market cap, shoe fits. Seemingly anyway.
    21 Feb 2013, 02:30 PM Reply Like
  • winningtrader
    , contributor
    Comments (2476) | Send Message
     
    The FED is likely to increase QE, not cut it. This good cop / bad cop strategy works very well for now. I suspect that in FEB 2015 there will be a big debate on whether the FED minutes will show a likely slowdown of their $125 billion monthly purchases ...
    21 Feb 2013, 04:44 PM Reply Like
  • Macro Investor
    , contributor
    Comments (8783) | Send Message
     
    I would love $125B in monthly purchases. LOVE IT!
    21 Feb 2013, 04:46 PM Reply Like
  • wigit5
    , contributor
    Comments (3982) | Send Message
     
    wouldn't we all....
    21 Feb 2013, 04:47 PM Reply Like
  • Macro Investor
    , contributor
    Comments (8783) | Send Message
     
    Come on Helicopter Ben!
    21 Feb 2013, 04:48 PM Reply Like
  • RS055
    , contributor
    Comments (2126) | Send Message
     
    Completely concur - only $125 B? there is no way for them to stop the process they have started. They are just sinking in the quicksand they made. How it all ends will be for the history books - our current feeble terms like "inflation", "hyperinflation" etc were coined in more innocent times. This will be historical - and new terminology will be needed to describe it.
    21 Feb 2013, 06:54 PM Reply Like
  • Macro Investor
    , contributor
    Comments (8783) | Send Message
     
    Hydrogen inflation? Neutron inflation?
    21 Feb 2013, 07:48 PM Reply Like
  • pierrebonbon
    , contributor
    Comments (92) | Send Message
     
    Hyperinflation? Highly improbable given growing unemployment and underemployment numbers.
    21 Feb 2013, 08:00 PM Reply Like
  • Macro Investor
    , contributor
    Comments (8783) | Send Message
     
    But what about Zimbabwe?
    21 Feb 2013, 08:01 PM Reply Like
  • pierrebonbon
    , contributor
    Comments (92) | Send Message
     
    It seems to be a very nice country with nice people in it.
    21 Feb 2013, 08:05 PM Reply Like
  • Macro Investor
    , contributor
    Comments (8783) | Send Message
     
    But when is USA going to become Zimbabwe?
    21 Feb 2013, 08:10 PM Reply Like
  • pierrebonbon
    , contributor
    Comments (92) | Send Message
     
    Not sure what you mean, could you please explain?
    21 Feb 2013, 09:41 PM Reply Like
  • Macro Investor
    , contributor
    Comments (8783) | Send Message
     
    I was promised that USA would become like Zimbabwe unless we impose austerity and get unemployment to 50%.
    21 Feb 2013, 09:54 PM Reply Like
  • pierrebonbon
    , contributor
    Comments (92) | Send Message
     
    You were ill advised I guess.
    21 Feb 2013, 10:57 PM Reply Like
  • bargor24
    , contributor
    Comments (21) | Send Message
     
    Growing un- and under- employment cannot change fundamental and basic economic laws: The more there is of something, the less it's worth.
    21 Feb 2013, 11:07 PM Reply Like
  • pierrebonbon
    , contributor
    Comments (92) | Send Message
     
    And there is more dough around really? I haven't noticed.
    21 Feb 2013, 11:33 PM Reply Like
  • pierrebonbon
    , contributor
    Comments (92) | Send Message
     
    i.e., there is a whole lot more M1, but little finds its way into Joe's pocket.
    22 Feb 2013, 01:06 AM Reply Like
  • Macro Investor
    , contributor
    Comments (8783) | Send Message
     
    Pierre, Are you telling me that the doom and gloomers lied to me?
    22 Feb 2013, 07:46 AM Reply Like
  • bargor24
    , contributor
    Comments (21) | Send Message
     
    No, I guess not. Actually, they must have burned or electronically deleted all the QE1, QE2, and QEIn cash. Much of it may be stored in Fed accounts now, but not forever.
    22 Feb 2013, 08:47 AM Reply Like
  • RS055
    , contributor
    Comments (2126) | Send Message
     
    The great "science" of economics has - dovish fed governors and hawkish ones. has the church of Saltwater ( Boston) and the Church of Freshwater( Chicago) and numerous lesser , but equally vociferous Schools of "thought".( Monetary Realism, Austrian, islamic Finance etc).
    Almost anything can be explained away and rationalized by one or the other of these . Nothing can be predicted but a plausible explanation for why the prediction failed can be easily had from one or more of the economists.
    A village shaman among the australian aborginal tribes has more credibility - with me.
    21 Feb 2013, 06:30 PM Reply Like
  • yliu54
    , contributor
    Comments (170) | Send Message
     
    Print money, manipulate data, and show stupidity.
    21 Feb 2013, 06:35 PM Reply Like
  • RS055
    , contributor
    Comments (2126) | Send Message
     
    Look - its really simple. Take the collapse of the soviet union. What happened? the elites looted and stole all the assets. The big game is always about who owns and controls assets. "money" as we know - is available in infinite quantities at zero cost ( rough paraphrasing of our whirling dervish Fed chief ). How do you get average folk to willingly relinquish their assets - by driving down the prices in a shocking and sudden way . Who has recently been buying up houses on the cheap? Private equity funds. The houses will be rented back to the formerly foreclosed homoaner.
    Who bought up shares in the great American companies in March 2009? Did you sell them your shares?
    21 Feb 2013, 06:37 PM Reply Like
  • RS055
    , contributor
    Comments (2126) | Send Message
     
    Of course I am not saying our Homeland is anything like the soviet union. Oh no. The Soviet Union had a external image of a superpower - military, intellectual and economic. But it was just a facade - the inside was all rotted out - most soviets just got by with a little help from their dear friend Stolichnaya - and pretended to work - while their bosses pretended to pay them ( old soviet black humor). Nothing like our Homeland.
    21 Feb 2013, 06:45 PM Reply Like
  • RS055
    , contributor
    Comments (2126) | Send Message
     
    Long live our beloved Homeland - and long live our Most Excellent and Beloved Leader !
    21 Feb 2013, 07:04 PM Reply Like
  • Macro Investor
    , contributor
    Comments (8783) | Send Message
     
    Do you think it is a Soviet plot? Could Obama be the Manchurian candidate? Should we be worried and buy guns and plenty of ammo?
    21 Feb 2013, 07:49 PM Reply Like
  • yliu54
    , contributor
    Comments (170) | Send Message
     
    What Jerome Powell will say today will be interesting
    22 Feb 2013, 12:59 AM Reply Like
  • bargor24
    , contributor
    Comments (21) | Send Message
     
    I've had many anti-doomsdayers / anti-inflationaries argue that inflation is not going to be an issue because the banks are putting their Fed money back into their Fed accounts. But almost all US bonds used to be bought by investors (money taken out of the economy to buy them, then back into the economy when spent by the government). Now, 80% of US bonds are bought by the Fed. (money PRINTED to buy them, then spent into the economy). This is a constant inflow of new money into the economy, like constantly adding straw to the camel's back. Is the question IF it will break, or WHEN? Has pierrebonbon noticed this?
    23 Feb 2013, 08:20 AM Reply Like
  • pierrebonbon
    , contributor
    Comments (92) | Send Message
     
    My point is, even if all this money finds its way into the economy (which I do not think will ever happen in large enough quantities), it won't end up fuelling the economy in the ways it did. Without a confident middle class there seems to be little room for inflationary scenarios. Also, I don't see people in the streets buying gold, either in the form of jewellery or coins. Money is paradoxically enough sparse these days and one has to eat first. The same goes for silver. If inventory piles up in the electronics and auto industries what do you think will happen to silver?
    23 Feb 2013, 08:58 AM Reply Like
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