March 7, 2012, at 1:36 pm
by Jim Sinclair in the category General Editorial |
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by Jim Sinclair in the category General Editorial |
Print This Post | Email This PostDear CIGAs,
This would be a hat trick because it assumes the Fed would borrow back funds they have created by good ole debt monetization. It assumes there is no purpose to QE in the first place. It is monetary double talk beyond MOPE or maybe MOPE at a spiritual level. It is an attempt to intellectually cloud the process and to give plausible believability to PR lies.
Once you buy the bond via monetization the deed is done. It ends there. If you drain then you have done the reverse.
This is a statement that says we will step on the gas and then equally apply the brakes which means you go absolutely nowhere. It is a statement that is total gobbledegook to deflect the fact that QE is going to infinity. It is a statement that only those who do not understand monetary science might give credibility to.
This is a damned lie which belongs more out of intelligence agencies than a body claiming transparency. This is why there is no practical way out of this mess as it offers no solution to anything whatsoever.
Fed said to weigh new form of bond buying By Greg Robb, MarketWatch
WASHINGTON (MarketWatch) — Federal Reserve officials are mulling a new type of quantitative easing that will attempt to boost the economy without accelerating inflation, according to a report published Wednesday.
Analysts said the new approach would allow the Fed to move despite high oil prices.
Under the new approach, the Fed would print new money to buy long-term mortgage or Treasury bonds but effectively tie up that money by borrowing it back for short periods at low rates, according to a story in The Wall Street Journal.
This “sterilized” quantitative easing, would use reverse-repurchase agreements to keep the money from flowing to bank reserves.
Markets reacted to the report, with stocksSPX +0.70% advancing to their strongest level of the day. Commodities also rose.
Economists said that Fed Chairman Ben Bernanke seemed to back away from more quantitative easing during two days of testimony before Congress last week. Financial markets have been unsettled since Bernanke’s testimony.
Republicans in Congress have been urging the Fed not to undertake any more quantitative easing, arguing that it would lead to higher inflation eventually.
Richard Gilhooly, U.S. director of interest-rate strategy at TD Securities, said the new sterilized QE would allow the Fed to buy more assets with an eye towards keeping inflation expectations low.
“This would be dollar supportive and would be negative for risk assets such as gold,” Gilhooly noted in an email to clients.
Many analysts do not think the Fed would be able to engineer another round of asset purchases unless inflation stays low in coming months.
Most Fed watchers do not expect the central bank to announce any new program at its March 13 meeting.
More…
This would be a hat trick because it assumes the Fed would borrow back funds they have created by good ole debt monetization. It assumes there is no purpose to QE in the first place. It is monetary double talk beyond MOPE or maybe MOPE at a spiritual level. It is an attempt to intellectually cloud the process and to give plausible believability to PR lies.
Once you buy the bond via monetization the deed is done. It ends there. If you drain then you have done the reverse.
This is a statement that says we will step on the gas and then equally apply the brakes which means you go absolutely nowhere. It is a statement that is total gobbledegook to deflect the fact that QE is going to infinity. It is a statement that only those who do not understand monetary science might give credibility to.
This is a damned lie which belongs more out of intelligence agencies than a body claiming transparency. This is why there is no practical way out of this mess as it offers no solution to anything whatsoever.
Fed said to weigh new form of bond buying By Greg Robb, MarketWatch
WASHINGTON (MarketWatch) — Federal Reserve officials are mulling a new type of quantitative easing that will attempt to boost the economy without accelerating inflation, according to a report published Wednesday.
Analysts said the new approach would allow the Fed to move despite high oil prices.
Under the new approach, the Fed would print new money to buy long-term mortgage or Treasury bonds but effectively tie up that money by borrowing it back for short periods at low rates, according to a story in The Wall Street Journal.
This “sterilized” quantitative easing, would use reverse-repurchase agreements to keep the money from flowing to bank reserves.
Markets reacted to the report, with stocksSPX +0.70% advancing to their strongest level of the day. Commodities also rose.
Economists said that Fed Chairman Ben Bernanke seemed to back away from more quantitative easing during two days of testimony before Congress last week. Financial markets have been unsettled since Bernanke’s testimony.
Republicans in Congress have been urging the Fed not to undertake any more quantitative easing, arguing that it would lead to higher inflation eventually.
Richard Gilhooly, U.S. director of interest-rate strategy at TD Securities, said the new sterilized QE would allow the Fed to buy more assets with an eye towards keeping inflation expectations low.
“This would be dollar supportive and would be negative for risk assets such as gold,” Gilhooly noted in an email to clients.
Many analysts do not think the Fed would be able to engineer another round of asset purchases unless inflation stays low in coming months.
Most Fed watchers do not expect the central bank to announce any new program at its March 13 meeting.
More…
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