QE∞ is now QE∞er, and QE4 is official as the Fed announces $45 billion in NEW unsterilized monthly treasury bond purchases, exactly as expected by the market.

  • FED INCREASES QE WITH $45 BILLION IN NEW MONTHLY TREASURY PURCHASES
  • FED TO CONTINUE MORTGAGE BONDS PURCHASES AT $40 BILLION PER MONTH
  • OPERATION TWIST EXPANDED INTO UNSTERILIZED BOND MONETIZATION
  • MONTHLY PURCHASES TO TOTAL $85 BILLION
  • FED: RATES TO STAY EXCEPTIONALLY LOW WITH JOBLESS ABOVE 6.5%
  • Gold and silver popping

Full FOMC statement below:  and Click here to watch Bernanke’s Press Conference on QE4 LIVE at 2:15pm EST:

 

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Press Release

Release Date: December 12, 2012

For immediate release

Information received since the Federal Open Market Committee met in October suggests that economic activity and employment have continued to expand at a moderate pace in recent months, apart from weather-related disruptions. Although the unemployment rate has declined somewhat since the summer, it remains elevated. Household spending has continued to advance, and the housing sector has shown further signs of improvement, but growth in business fixed investment has slowed. Inflation has been running somewhat below the Committee’s longer-run objective, apart from temporary variations that largely reflect fluctuations in energy prices. Longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee remains concerned that, without sufficient policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor market conditions. Furthermore, strains in global financial markets continue to pose significant downside risks to the economic outlook. The Committee also anticipates that inflation over the medium term likely will run at or below its 2 percent objective.

To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee will continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month. The Committee also will purchase longer-term Treasury securities after its program to extend the average maturity of its holdings of Treasury securities is completed at the end of the year, initially at a pace of $45 billion per month. The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and, in January, will resume rolling over maturing Treasury securities at auction. Taken together, these actions should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.

The Committee will closely monitor incoming information on economic and financial developments in coming months. If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of Treasury and agency mortgage-backed securities, and employ its other policy tools as appropriate, until such improvement is achieved in a context of price stability. In determining the size, pace, and composition of its asset purchases, the Committee will, as always, take appropriate account of the likely efficacy and costs of such purchases.

To support continued progress toward maximum employment and price stability, the Committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the asset purchase program ends and the economic recovery strengthens. In particular, the Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that this exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6-1/2 percent, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee’s 2 percent longer-run goal, and longer-term inflation expectations continue to be well anchored. The Committee views these thresholds as consistent with its earlier date-based guidance. In determining how long to maintain a highly accommodative stance of monetary policy, the Committee will also consider other information, including additional measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments. When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Dennis P. Lockhart; Sandra Pianalto; Jerome H. Powell; Sarah Bloom Raskin; Jeremy C. Stein; Daniel K. Tarullo; John C. Williams; and Janet L. Yellen. Voting against the action was Jeffrey M. Lacker, who opposed the asset purchase program and the characterization of the conditions under which an exceptionally low range for the federal funds rate will be appropriate.

  1. looks like those adorable bankers are in a corner and are acting predictably, despite all their sophistication and mystique. Peculiar they chose 12.12.12 for this announcement – ? significance. This is me having an evil smile anyway.
     

  2. Spore, if you were given the task of protecting the multi-trillion dollar bond market, wouldn’t you spend a few million or ten millions ensuring it’s safety? The Feds and U.S. Treasury will control the commodity market to mask the printing of money at all cost. Take that in consideration when watching the paper price of the metals and commodities market. WTI crude benchmark is a joke btw.

    • What’s the point of protecting the multi-trillion dollar bond market when you simply create more bonds out of thin air if the older bonds are gone or stolen? QEs are perfect to add more junk bonds into the markets!

  3. I cant wait to see all the sell orders ( naked shorts of course ) to keep Silver in check. There is no reason why silver should not be selling at traditional ratio not to mention parity considering its industrial worth but you know this and im venting. I for one am waiting to see just how badly the ruling class is going to beat up the price before i place my next order. Waiting patiently for the new bottom and for the huddled masses to wake from willfull stupor and safe haven demand and price appreciation is realized. peace

    • On the other hand, it is likely that TPTB KNOW that they cannot hold gold and silver low forever and are just managing prices in a slow stair-step climb to buy as much time as possible.

    • All I know is that the cartel won’t be able to manipulate gold and silver’s prices forever because the cost to produce them is rising very fast. Right now, it cost about 30$ to produce an ounce of silver so silver will not go lower than that price level.

    • QEs are bad for precious metals on the short term but on the long term, they are good because it takes some time for QEs to have effects on the USA’s economy.

  4. Well the American banknote gapped down, so the monopoly industrialists are getting what they want. All the metals are gapping up in juxtaposition, which means that not everyone is asleep or brainwashed Also, Bonds bids are off.

  5. Been awhile since I posted here. For some reason this site would screw up my computer. I think it was a conspiracy to keep me from being informed. Back to topic, this move by the Fed assures all prices will go up. The problem for me with precious metals is they move fast to the upside then fall back some. If you bought in the high 20′s earlier in the year, I think you got in on the floor for silver. The mid and lower 30′s may only be around for less then 6 months before we are fully in the 40′s. Now I think at any time the price could just pop on the upside. I just do not see a reason why silver will get much lower then it is right now. All that said, it is still a gamble on what the market will do.

    • Silver will not go lower than 30$ per ounce because it costs about 30$ to mine an ounce of silver. If silver goes lower than that price level, then miners would stop producing some silver due to their losses in fiat currencies which will drive again the price of silver higher.

  6. Im no expert. But to my untrained eye something else has to be the trigger. QE announcements are not going to do it. What will do it…..I dont know. But it will probably be something very very drastic. And yes QE to infinity is drastic but not drastic enough for the sleepy masses to take notice.

  7. Right you are M45. For now, silver pop and silver drop as the Bernanke’s chrome dome shines. LOL. Let the acceleration begin. Whatever false hope the sheep have will be realized whenever the unemployment rate reaches 6.5 (real or fake) and the money pumping stops (or will it?). Derivatives will crash, the economy will go and I will be slow smoking that pork shoulder over hickory coals. Tasty!
     
     

    • “Derivatives will crash, the economy will go and I will be slow smoking that pork shoulder over hickory coals. Tasty!”

      Yum!  If invited over, I will bring the beer.  :-D 

  8. Of course news of further ‘easing’ should drive gold and silver higher.  And it would, except for a few factors we are all aware of yet seem to forget on days like this.
    Our market’s regulators are captive, they even seem to be in the bankster’s corner, having some ice cream.
    The big short doesn’t mind piling on another 100,000 shorts any day of the week because a) paper traders almost never take delivery, and b) there is no law to force delivery of real silver, and c) the Bernank will provide any liquidity required to keep the wolves at bay, since the fiat monetary scheme is a long-running government program.
    There’s hope, but it springs from you guys. Every time you buy a few ounces, you are sticking it to them good. They can’t fractionally reserve or re-hypothecate what isn’t there.  Keep on rat holing silver, we’re starting to bring the pain.  Beating these guys was never going to be easy, right?

    • “They can’t fractionally reserve or re-hypothecate what isn’t there.”

      Actually, they can and they have.  Of course, we only hear about it when they get caught with their hand in the cookie jar.  Not that this hurts them because all they have to do is 1) admit to no wrong doing; 2) pay a fine that is only a small share of their ill-gotten gains; and 3) promise not to do it again… which they will.  At least 2 of the big NY banks got into trouble with the US Gov because they took money from clients to buy gold, showed x ounces on the books for clients, and then charged those clients “storage fees”.  Problem was, they never bought the gold.  This is out and out fraud and any of us caught doing this would be jailed for several years.  We would not get the cushy deal that the banksters get, oh no, that is a SPECIAL deal that only they can get.  Grrr…

    • The silver’s manipulation is ending soon because we can see that the cartel is using more efforts to lower silver’s price lower but inflation and the demands are making for them harder to manipulate. Every ounces of silver count as taking down the corrupt fiat system!

    • No, there isn’t.  It is a criminal enterprise and those who have the power to “fix it” have no desire to do so and cut off their steady flow of substantial bribes.

  9. Stocks will be up 5-15% in next two years and that is where I am going. 30 year tea cup…shyea right. It is all about the 2014 elections now…they want the House and Senate….and you know what, they will buy it.

    • They just ordered up 100 billion plus a month to buy home and commercial mortgages, keep the chemtrail jets aloft, float the Euro for about two more years. They buy the US Government in 2014, then BLAM….derivatives, interest rates BLAM, tax hikes BLAM all the suckers in stocks get wiped out BLAM they own your mortgage and call it in BLAM and of course, PM’s have no chance to break the all time highs, no bullion coins save proofs BLAM This is our lives. You get the picture. Each and all will be in massive debt, and this is what they want. Wealth building in 18 months? Any ideas?

    • Stocks are also bad because they can totally lose all their values when the system collapses. I stay away from stocks because I want to lose my dollars and because I don’t have any access to buy some. Silver is easier to buy than stocks.

  10. I can’t help but laugh, 85 billion a month with 45 or so for treasuries were buying 90% of those. Yet we keep hearing analysts say that somehow the Fed will be able to stop buying, well I tell you when the unemployment gets 6.5 who is going to buy them, are Americans suddenly to have faith in the US treasuries when they’ve been lying about everything especially unemployment?
    I urge those who haven’t read about the petrodollar to read part 4 that is now out, you can find parts one through four here, there is no greater document about what is going on behind the scenes.
     http://ftmdaily.com/preparing-for-the-collapse-of-the-petrodollar-system/

    • Exactly! That’s why I think the USA will be hit by hyperinflation as soon as the 500$ bill or the 1000$ bill is reintroduced in my opinion. With QE infinity announced publicly by the Federal Reserve, I now don’t see the point on why I should keep all my savings in US dollar.

  11. correct me if I’m wrong but the last tranche of QE (number whatever) was $45 billion a month with a top end of $85 billion. Wasn’t it set up specifically  to buy MBS from theTBTF banks.  This sterilized the offerings, thus avoiding the offensive label of monetary printing.   But now we are seeing UN-sterilized QE.  The prior plan seemed to be pretty smart.  But CCC minus blocks of mortgages from the large banks.  They get cash in trade to buy treasuries.  How come that didn’t work out?  Why did it last less than 3 months.  Did I miss something or what
    This new QE seems to be nothing more than a reiteration of the former QE with a formalized double down on printing. That the fed will stop when unemployment hits 6.5% condemns us to ZIRP to Infinity. That day that this rate hits something as low as 6.5% will require serious BS from the BLS or never, whichever comes first.

    • Sterilized?  Unsterilized? WTF?  How does one castrate a bond?  Maybe just making it so worthless that no one wants to but them would do it.

    • Ag12k…Operation Twist is what I think you are referring to.  Fed was purchasing short term Treasuries and replacing them with long term Treasuries.  That was sterilized.  But, now they have run out of short term Treasuries so they just print up long term Treasuries and buy them.  Call it Twist 2.0 or QE4.  It’s unsterilized money printing. 

  12. …..economic activity and employment have continued to expand at a moderate pace in recent months, apart from weather-related disruptions. Although the unemployment rate has declined somewhat since the summer, it remains elevated. Household spending has continued to advance, and the housing sector has shown further signs of improvement,

    WTF? People still believe this guy?

    • I don’t believe that the unemployment rate has declined in reality and that the official rates are fake and lying. For example here in Canada, the government says that the official unemployment rate is diminishing but on the streets, I see more and more homeless people.

  13. “Inflation has been running somewhat below the Committee’s longer-run objective”
     
    What are they smoking? Food is up 6% or more this year. I am not a huge consumer so I can’t comment on other goods but shadowstats shows inflation running around 6%. What do thy want? Hyperinflation?

  14. I keep hearing rumors of beer, pork and some of those Brazilians girls.  2OZ  Don’t toy with us.  When, where, how much.  Entry Fee? Silver?  I’m game
    Now that Operation Twist is no mas I think it’s safe to go out again.

  15. QE4 already? QE3 just happened recently which was about three months ago on September 2012. It took about a year for QE3 to happen but only three months for QE4 to happen! It looks like hyperinflation will soon start in the USA if it keeps continuing like that.

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