Experts: Fed’s QE Unlimited Will Lead to “Total Collapse”

[Rebelitarian]

Experts: Fed’s QE Unlimited Will Lead to “Total Collapse”


Americans to suffer through higher food, gas & energy prices

Paul Joseph Watson
Infowars.com
September 19, 2013

Financial experts have slammed the Federal Reserve’s decision to proceed with “QE unlimited” by refusing to taper its money printing madness, with famed investor Mark Faber predicting the move will lead to a “total collapse” of the economic system.




Despite expectations amongst many that the Fed would scale back its $85 billion a month bond purchase plan, the central bank announced yesterday that it would prolong the policy.

Investment guru Mark Faber reacted by telling Bloomberg that the decision not to taper was all about protecting the financial interests of the elite while ordinary Americans will suffer the consequences through higher gas, food and energy prices.

“My view was that they would taper by about $10 billion to $15 billion, but I’m not surprised that they don’t do it for the simple reason that I think we are in QE unlimited. The people at the Fed are professors, academics. They never worked a single life in the business of ordinary people. And they don’t understand that if you print money, it benefits basically a handful of people maybe–not even 5% of the population, 3% of the population,” he said.

“And when you look today at the market action, OK, stocks are up 1%. Silver is up more than 6%, gold up more than 4%, copper 2.9%, crude oil 2.68%, and so forth. Crude oil, gasoline are things people need, ordinary people buy everyday. Thank you very much, the Fed boosts these items that people need to go to their work, to heat their homes, and so forth and at the same time, asset prices go up, but the majority of people do not own stocks. Only 11% of Americans own directly shares,” added Faber.

Asked what the endgame was, Faber responded, “The endgame is a total collapse, but from a higher diving board. The Fed will continue to print and if the stock market goes down 10%, they will print even more. And they don’t know anything else to do. And quite frankly, they have boxed themselves into a corner where they are now kind of desperate.”

Veteran investor Jim Rogers also slammed the Fed’s excessive money printing, warning, “The world will suffer very badly when this comes to an end. It’s an artificial sea of liquidity.”

The chairman of Rogers Holdings added that the only factor that may stop central banks around the world from printing money is if markets say, “we’re not going to take your garbage paper anymore.”

Rogers also emphasized how it doesn’t really matter who gets the top job at the Fed because the same policies would still be pursued.

“This is all a farce. They’re both of the same ilk,” he said, adding, “As long as the regular people are running things, it’s going to be the same thing…. This is not good for the world. It’s good for them and their friends.”

With Larry Summers out of the picture, Janet Yellen is firmly in the frame to be the first woman ever to chair the Federal Reserve. As Michael Snyder documents, Yellen, the architect of many of Ben Bernanke’s monetary policies, represents “Bernanke on steroids,” and is a firm believer in regular government intervention in financial markets.

Despite the media claiming Yellen has a “good track record,” in February 2007 she dismissed the notion of a housing market collapse and completely failed to anticipate the 2008 financial crisis.

“She will make Mr. Bernanke look like a hawk,” said Faber, noting that Yellen is so obsessed with artificially low inflation rates that she once advocated negative interest rates.

“She, in 2010, said if could vote for negative interest rates, in other words, you would have a deposit with the bank of $100,000 at the beginning of the year and at the end, you would only get $95,000 back, that she would be voting for that,” said Faber, adding that the Fed has no clue about the real rise in the cost of living and that the consequences of such policies inevitably lead to bigger government and less freedom.

Both Rogers and Faber said they continue to buy gold, even thought it may currently be in a “rest” period, as a protection against the ludicrous policies of the Fed and general global instability.

Meanwhile, in a bizarre Orwellian twist of logic, President Obama gave a speech in which he argued that raising the debt limit did not raise the debt of the United States.

Prison Planet.com » Experts: Fed?s QE Unlimited Will Lead to ?Total Collapse?

 

[Kimura]

Experts: Fed’s QE Unlimited Will Lead to “Total Collapse”


Americans to suffer through higher food, gas & energy prices

Paul Joseph Watson
Infowars.com
September 19, 2013

Financial experts have slammed the Federal Reserve’s decision to proceed with “QE unlimited” by refusing to taper its money printing madness, with famed investor Mark Faber predicting the move will lead to a “total collapse” of the economic system.




Despite expectations amongst many that the Fed would scale back its $85 billion a month bond purchase plan, the central bank announced yesterday that it would prolong the policy.

Investment guru Mark Faber reacted by telling Bloomberg that the decision not to taper was all about protecting the financial interests of the elite while ordinary Americans will suffer the consequences through higher gas, food and energy prices.

“My view was that they would taper by about $10 billion to $15 billion, but I’m not surprised that they don’t do it for the simple reason that I think we are in QE unlimited. The people at the Fed are professors, academics. They never worked a single life in the business of ordinary people. And they don’t understand that if you print money, it benefits basically a handful of people maybe–not even 5% of the population, 3% of the population,” he said.

“And when you look today at the market action, OK, stocks are up 1%. Silver is up more than 6%, gold up more than 4%, copper 2.9%, crude oil 2.68%, and so forth. Crude oil, gasoline are things people need, ordinary people buy everyday. Thank you very much, the Fed boosts these items that people need to go to their work, to heat their homes, and so forth and at the same time, asset prices go up, but the majority of people do not own stocks. Only 11% of Americans own directly shares,” added Faber.

Asked what the endgame was, Faber responded, “The endgame is a total collapse, but from a higher diving board. The Fed will continue to print and if the stock market goes down 10%, they will print even more. And they don’t know anything else to do. And quite frankly, they have boxed themselves into a corner where they are now kind of desperate.”

Veteran investor Jim Rogers also slammed the Fed’s excessive money printing, warning, “The world will suffer very badly when this comes to an end. It’s an artificial sea of liquidity.”

The chairman of Rogers Holdings added that the only factor that may stop central banks around the world from printing money is if markets say, “we’re not going to take your garbage paper anymore.”

Rogers also emphasized how it doesn’t really matter who gets the top job at the Fed because the same policies would still be pursued.

“This is all a farce. They’re both of the same ilk,” he said, adding, “As long as the regular people are running things, it’s going to be the same thing…. This is not good for the world. It’s good for them and their friends.”

With Larry Summers out of the picture, Janet Yellen is firmly in the frame to be the first woman ever to chair the Federal Reserve. As Michael Snyder documents, Yellen, the architect of many of Ben Bernanke’s monetary policies, represents “Bernanke on steroids,” and is a firm believer in regular government intervention in financial markets.

Despite the media claiming Yellen has a “good track record,” in February 2007 she dismissed the notion of a housing market collapse and completely failed to anticipate the 2008 financial crisis.

“She will make Mr. Bernanke look like a hawk,” said Faber, noting that Yellen is so obsessed with artificially low inflation rates that she once advocated negative interest rates.

“She, in 2010, said if could vote for negative interest rates, in other words, you would have a deposit with the bank of $100,000 at the beginning of the year and at the end, you would only get $95,000 back, that she would be voting for that,” said Faber, adding that the Fed has no clue about the real rise in the cost of living and that the consequences of such policies inevitably lead to bigger government and less freedom.

Both Rogers and Faber said they continue to buy gold, even thought it may currently be in a “rest” period, as a protection against the ludicrous policies of the Fed and general global instability.

Meanwhile, in a bizarre Orwellian twist of logic, President Obama gave a speech in which he argued that raising the debt limit did not raise the debt of the United States.

Prison Planet.com » Experts: Fed?s QE Unlimited Will Lead to ?Total Collapse?

When you to refer to Mark Faber as an expert, you're really scraping the bottom of the barrel.

This article on QE is inaccurate and full of misinformation. Operationally, quantitative easing is nothing more than an asset swap. It's neither a stimulus, nor is it printing money, contrary to what Mark Faber, Perter Schiff or Jim Rogers claim. There are no additional net financial assets created as a result of QE.

When QE occurs, the FED removes an asset - for example, a US Treasury - then swaps it out with dollars (reserves) within the banking system. This actually deprives the private sector of interest it could have earned on US Treasuries, which is more than it would earn as cash balances.

The FED profited 88.9 billion last year and turned it back over to the Treasury. This profit was a direct result of its asset purchases. This is income which could have been earned in the private sector if it had the chance to purchase these securities and bonds.

Lastly, the FED actions (QE) have REMOVED a massive amount of money from our economy. The Federal Reserve has removed around $100 billion more income than the total aggregate net increases in salaries and wages since the inception of QE and other asset operations.

 

[Kimura]

As we know, QE works by the FED creating dollars and buying up various assets. They buy mostly bonds, but some other securities as well. Two things happen when these assets are purchased: yields decrease and values increase.

We can also view this as the FED LIMITING the supply of assets. For example, imagine there’s a fixed amount of assets in any given market, for example, let's say 4,000 – and the average price is also set at $4,000. The FED steps in and uses dollars to purchase half the assets which doubles the prices. The assets in the market are cut in half and the price essentially doubles. This is simply an example, not what literally a-z mechanics of operationally what transpires.

Simultaneously, as the asset prices increase, their yields decrease. In our example, imagine said assets had an average yield of 4%. After FED purchases, their yield is cut in half down to 2%.

It’s as clear as day what’s transpired: holders of these assets have seen an increase in their net worth since the asset has basically doubled, but incomes have decreased as the amount of their asset yield has decreased. In economics, we would say that their stock of wealth has increased, but flows of income have decreased. This is the actual reality of what transpires under QE.

The original idea behind QE is that it should increase employment and investments. None of this has materialized for obvious reasons. By any standard, QE is a failure. We should ALL now realize that business is demand-led and won’t magically respond to lower interest rates or an increase in the monetary base. If people don’t consume, companies won’t hire and invest.

 

[boedicca]

This is true...and the Green Agenda makes it worse.

Electricity in Germany is now a luxury item. We're on our way to that as well.

 

[Moonglow]

Bullshit, the price of natural gas(NG) is so low that companies are tossing coal and using cheap gas. By the vie, the reserve hit a new high, expect NG to only go cheaper.
Why do you think that plastic is not a high end recycle item? It cost more to change the carbon base of the old plastic compared to just producing more with cheap NG.
In my area the local electric coop increased my electric power charge because of the new NG plant and they dumped the coal fired plant. The price increase was .04 cents per kilowatt.

 

[iamwhatiseem]

Anyone who wants QE to continue is one of two people:
1) They are a devout Obamanoid who will support/defend anything he says/directs without question or concern.
2) They make their living in stocks and enjoy the rocket ride QE has provided to the markets.

That leaves the rest of us. Who are making on average 5-8% less now than 5 years ago. Who are living in an economic environment with the highest part-time to full-time job ratio in history. Abysmal employment numbers void of opportunity for most. And where the new thing is to work 2 jobs because of hour cuts.
The insanity of it is, many of the people who are suffering the most - are the Obamanoids.

 

[Moonglow]

Even the world bankers and other nations want the QE to continue.