If Ben Bernanke was “Helicopter Ben” for his plans to try and “out-print” pernicious deflation, as I’ve been forecasting for months now, Fed boss Janet Yellen may be about to surpass Bernanke and play out the role of Schoolhouse Rock’s Interplanet Janet.
I’ve been telling you for months that in lieu of the Quantitative Easing (QE) scam, the Fed would quietly turn on mass money printing as an alternative to ending up with another few trillion on their balance sheet.
And thus, we arrive at this morning’s rantings of Ure local economic madman.
Suppose the market is doing a huge pump and dump ahead of tomorrow’s Federal Reserve announcement? Here’s how Janet Yellen’s week could turn ugly:
The Federal Reserve’s QE Program (which I can the ‘sacks of shit loans at par’ program) has puffed the Federal Reserve’s ownership of American to somewhere north of $4-trillion now. Considering we’ll be going well to hit $16-trillion in GDP this year that’d be about 25% of a whole year’s economic output from….everyone!
But, said a recent data is putting pressure on Yellen to do more than print up money at a nearly 19% annualized rate to fight inflation and create jobs.
For one thing, Yellen and the Fed will have to reconcile the report that 20 percent of American households don’t have a single person with a job in there. In fairness, that count includes retired persons, but the fact is they are consuming resources because the corpgov didn’t put the money paid Social Security in a dusty vault somewhere: It went out to Federal Agencies which simply spent the money as the government itself “made up money” (secured by income tax revenues) to pay it back.
Except of course that at least $2-trillion of tax revenues high-tailed it out of town and went overseas where the ObamaRS has not gone after it hard because a lot of it is Big Money which means the kind that bundlers clean up on closer to election time. And the likes of whoever in 2016 will be working because this is how offshore money become “protection money” paid by tax cheats who figure they are deserving of a lower tax rate than us working class scum.
But I digress.
So the Fed is also looking at the jobs data – we can safely assume that they will get an advance projection.
And so here’s what it will come down to:
Choice #1: Kill off further phase out of QE (and slow the rate of increase in M1 print) because the housing market is on the verge of another slide based on recent figures. If THAT happens, it would signify that a certain cynic in the East Texas Outback who’s been expecting a second leg down in the housing market might just be right.
Problem is: If the Fed doesn’t phase out the QE madness, their balance sheet with grow further and it would signify to the whole world that things are not as rosy as painted.
And that could start a panic. If the Fed can’t ease, maybe the Emperor really doesn’t have clothes and there go the markets.
Choice #2: Continue with QE phase out, counterbalanced by upping the M1 print rate to 20-22% and hope that no one but crazy people (Ure, et alia) figure out that if M1 if going up 20% and consumer prices are going nowhere, it means deflation is…gulp…accelerating.
The problem (in a nutshell) is that pernicious deflation is here and has not been banished and a second housing collapse will come along any old time.
When it does (and check back in a half hour for this morning’s Case-Shiller/S&P Housing data) that will drive even more money into backs, further depressing interest rates and THAT in turn will force more printing of money and THAT will set the stage for the hyperinflation that has me looking at my lone gold coin and drooling with prospects of future wealth.
What’s more – since the Fed will not listen to me, I may buy up armloads of additional gold when it gets down to my $1,000 target zone if the Fed doesn’t wise up quickly.
Don’t listen to me though: I’m just an old nutter in the woods. Look at the 10-year bond over the past 30-years which has been in the longest decline since the one leading into the Great Depression.
Honorable Ms Chair Janet better be thinking Interplanet because Ben left and took the keys to the helicopter with him. So she’s got to do one better to push on a wet noodle and with the divisions on Capitol Hill, a political solution isn’t gong to happen until there’s change on the tenant lease over on Pennsylvania Avenue.
In the meantime, she better get ready to be left holding the bag if the market is setting up for a massive pump and dump going into May options expiration or the war this weekend..
While we await housing data, we notice the Dry Ship Baltic index is down to 961 which ain’t good. And when the market runs counter that, well, shorting does come to mind.
If you follow Dow Theory, the transports have been coming down from what’s looking more like a failed bit to break higher…
I think the Fed ought to raise rates, jam the markets down, clean out the dead wood and scare that wussy money in banks back out into circulation. But that would hurt for a while and no one likes the financial equivalent of chemo…so for now, the cancer of dead money is malignantly continuing to grow. Aided and abetted by who?
More after this…
Now, About That War…
When’s it going to be?
The mayor of the second largest city in Ukraine was shot in a murder attempt overnight, and while the Russians were blamed by some, others are saying it’s the work of anti-Semitic right wing extremists. The mayor fellow was flown to Israel for treatment…
All of which argues for “sooner than later” because if Russia waits too long, NATO will get really “in their face” at the Ukraine / Russian border, plus with elections coming…
I can heard the fuse sizzling on that firecracker strapped to Putin’s ass from here…go soon or forever hold his borders?
And the “Israeli Mistake?”
This one may be “it” in terms of looking for something that could fire off all kinds of warfare in the Middle East: Reports that “Israeli force demolish West Bank mosque as peak talks deadline passes.”
I don’t know about you (I mean you could be more devious than me) but I can’t think of a way to enrage an entire Muslim population than by destroying a place of worship.
So even if “the war” in Ukraine doesn’t blow up this weekend, keep eyes on Israel because things could turn terribly ugly there in a hurry.
And Just for Good Measure…
Mortar shells are falling in central Damascus, Syria this morning and that has us wondering if this might become yet another incentive for the Russians to make some major moves, quickly.
Remember, our longer-term outlook is for Russia to encircle Turkey, change out government there, and then move south down the Med. Prize being the Leviathan field.
OMG aren’t Energy Wars fun?
Remember the term “going postal” and where it came from? Wikipedia:
The expression derives from a series of incidents from 1983 onward in which United States Postal Service (USPS) workers shot and killed managers, fellow workers, and members of the police or general public in acts of mass murder. Between 1986 and 1997, more than 40 people were gunned down by spree killers in at least 20 incidents of workplace rage.
The report of a multiple shooting at a FedEx facility in Georgia has us wondering there’s something about moving other people’s stuff around all day that…what?…has some kind of karmic rub off effect? At least six people shot with word of injuries coming later today.
Our 146-day “murder cycle” theory suggests 4, or less, will die in today’s outrage..
I’m seeing stories than are trying to link weather with Fukushima and “global warming.”
Ding, ding, ding. Wrong answer. We’re in Ure’s Minimum – an historically cold part of the 11 year solar cycle and this is hardly unexpected.
Hey! Speaking of predictions and weather: Did you see where Toyota is pulling up stakes in the Golden State and is headed for the ‘burbs of Dallas?.
No, they don’t mention drought. But I have to wonder, you know, if there might be someone in the back room doing long term studies like we have that conclude California is unsustainable?