The 2008 crisis saw the Fed use some of its tools, but not all of them.
The Fed’s most powerful tools, gold revaluation and money printing, were never employed in that crisis.
QE4, if used to fund government infrastructure spending, can be inflationary, but if the next crisis is severe, only gold revaluation will work to end it.
Many of us are now predicting another round of QE, quite possibly before the leaves are finished falling off the trees this fall around the country.
The one thing the Fed really is frightened of is contracting bank credit. And this idea of collateral liquidation leading to more selling of collateral by the banks to cover loans is sort of self-feeding into nasty collapse if you like in asset prices.
Now that’s not going to happen because they are going to print money to insure it doesn’t happen.
We are very very close to that sort of tipping point and I think that people who have an understanding of this are not going to hang around and wait for the Fed to print money. They are going to go quite quickly against the dollar…
Anybody who doesn’t own physical silver or gold could miss out. I think there’s a big change coming.
- Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen further improvement in the labor market
- Even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run
(Translation: ZIRP is here to stay)
- Fed to maintain accommodative financial conditions
- Somehow no rate hike is now algo bearish for PMs as Gold & silver instantly knocked lower on the release…
Full FOMC statement is below:
In the latest Keiser Report, Max and Stacy Herbert discuss those who plow ZIRP (zero interest-rate policy) and those who sow QE (quantitative easing) reaping it as taxi cab medallion owners ask for bailouts.
In the second half, Max interviews Sandeep Jaitly about negative yielding bonds.
The more blatant the Fed becomes with its market interventions, the stronger the stench of desperation becomes…
The Fed is going to be in easing mode a year from now. They might try to raise interest rates one time, which I think would be like playing with fire. If they do try to raise rates once at this next meeting or the one that follows, I think they’ll have to reverse it out by the end of the year because the economy really does seem to be slowing down.
You can’t tolerate a slow-down when you reach a certain point of death.
John Rubino joins Rory Hall & Fund Manager Dave Kranzler below in a discussion about the factors that will ignite the global financial and economic system into flames:
In this MUST WATCH interview with CNBC, our favorite Fed critic Jim Grant predicts that the Fed will be forced to revert to easing rather than raising interest rates in 2015, and that “The Fed can change the way things look, but not what things are.”
Grant’s full interview is below:
In this MUST LISTEN interview with Future Money Trends, Eric Sprott issues a warning that PHYSICAL gold & silver are FINALLY on the verge of BREAKING the paper markets, stating: “I will be right!!”
Full interview is below:
Our favorite critic of the Federal Reserve, Jim Grant was back on CNBC to provide his perspective on Janet Yellen & the Fed preparing to hike interest rates.
Grant unleashes another epic rant against the Fed, and ‘the virus of radical monetary policy‘.
Full must see interview is below:
You may have heard the news, the European Central Bank have started up the printing press. They are soon to print upwards of €60 Billion a month. The crowds of economic pundits have collectively cheered. Ireland stands to enjoy significant near term benefits, but at what cost?
They speak of lower government borrowing costs for new debt, by lowering funding costs and thus the hurdle that projects must meet to become viable. They believe our exchange rate will fall and our goods will be come cheaper abroad. US products and services will be flying off the shelves, etc. Well, it is absolute nonsense.
Yes there will be short term benefits. Any time you give a liquidity jolt you temporarily relieve pressure. But the longer term risks are far far greater, now that the act of QE has been taken. Essentially the technocrats have short circuited the capitalist system which continuously prices risk based on perceived repayment risks and cost of funds. This is a road to ruin as returns become obscured by official and politically motivated credit flows.
In this week’s Metals & Markets, The Doc & Eric Dubin break down the ECB’s massive €60 billion a month QE announcement Thursday, and discuss whats next for the global markets and gold & silver in particular:
- Gold & silver’s strong January continues with silver $4 off its lows and gold nearly $200 off its December lows
- Cartel setting metals up for a Classic Gold & Silver raid on next week’s options expiry and January FOMC statement!
- Why Fed will soon begin backpedaling on rate hikes, may announce QE4 by Q4!
- Cartel raid likely won’t last- Why gold is likely to rise by 20% at a minimum in 2015- and COULD DOUBLE!
The SD Weekly Metals & Markets With The Doc & Eric Dubin is below:
In this MUST WATCH Bloomberg interview, Peter Schiff warns that China is poised to follow in the footsteps of the Swiss National Bank, and ditch the dollar peg- resulting in the Yuan soaring and a collapse of the dollar.
Schiff warns the fallout will be a 10 on the economic Richter scale, and will occur prior to the end of 2015, when the Fed announces QE4- “which will be bigger than QE1, 2, & 3 COMBINED”
Schiff’s full MUST WATCH interview is below:
The current set of fiscal and monetary policies pursued by central banks and states are all based on lessons drawn from the Great Depression of the 1930s. The successful (if slow and uneven) “recovery” since the 2008-09 global financial meltdown is being touted as evidence that the key determinants of success drawn from the Great Depression are still valid: the Keynesian (or neo-Keynesian) policies of massive deficit spending by central states and extreme monetary easing policies by central banks.
Are the present-day conditions identical to those of the Great Depression? If not, then how can anyone conclude that the lessons drawn from that era will be valid in an entirely different set of conditions?
We need only consider Japan’s remarkably unsuccessful 25-year pursuit of these policies to wonder if the outcomes of these sacrosanct monetary and fiscal policies are truly predictable, or whether the key determinants of macro-economic success and failure have yet to be identified.
If you want to get a glimpse as to what gold will do one day soon just notice what happened to the Swiss Franc which rose 30% today, from 1.20 to the dollar to, at one point, .75 francs to the dollar and settled at .86 to the dollar( and the Euro/Swiss Franc at parity at 1.00.).
Even as the world perceives the Swiss Franc as a safe haven you can just imagine what gold would do and rise even greater than 30% in one day as our ancient metal of kings is the ultimate safe haven ( and ultimate money).
- *Update: During Press Conf, Yellen advises no rate hikes for “a couple” FOMC meetings, states “Almost all participants see 2015 rate hike“
- Fed to be “Patient” with interest rate hikes
- After initial pop, gold & silver selling off on que as Yellen takes the podium…
If the past 6 post-FOMC Statement gold & silver smashes are any indication however, don’t be surprised to see the cartel attempt to smash silver towards a $14 handle and gold towards $1150 by Friday…
Full December FOMC Statement is below:
A few years ago Jim Rickards came out with his book “Currency Wars” which talked about countries engaging in a race to devalue their own currencies to try and pump up sagging domestic economies. As things have unfolded, the currency wars have indeed been intense.
We can kind of think of all these massive QE and stimulus programs like a stock car race to see who can devalue their currency the fastest. Right now the US has pulled in for a pit stop, but Japan, China, and the EU are still fighting it out on the track.
Here is the net result of central banks pursuing quantitative easing and zero-interest rates: a massive increase in global risks resulting from the carry trades the money expansion and cheap rates fueled.
The central banks’ “solution” has blown another global bubble of risk that now threatens to destabilize not just the carry trades but the economies and credit systems that have become intertwined with the carry trade.
In effect, the failure to address the structural problems revealed in the Global Financial Meltdown of 2008-2009 have been transferred to the larger foreign-exchange (FX) market, which is connected to virtually everything in the global economy.
Miguel de Cervantes’ novel Don Quixote is brilliantly entertaining. But the modern-day monetary equivalent is not so much.
Central bankers today have an equally delusional view of the world. Just three months ago, Mario Draghi (President of the European Central Bank) embarked on his own Quixotic folly by taking certain interest rates into NEGATIVE territory.
Draghi convinced himself that he was saving Europe from disaster. And like Don Quixote, everyone else has had to pay the price for his delusions.
On November 1st, the first European bank has passed along these negative interest rates to its retail customers.
Mark October 29th on your calendars. The Dow is at 16974, the S&P 500 is at 1982 and the NASDAQ is at 4549.
From this day forward, we will be looking to see how the stock market performs without the monetary heroin that the Federal Reserve has been providing to it.
It is widely expected that the Federal Reserve is going to announce the end of quantitative easing this week.
Will this represent a major turning point for the stock market?
As you will see below, since 2008 stocks have risen dramatically throughout every stage of quantitative easing.
But when the various phases of quantitative easing have ended, stocks have always responded by declining substantially.
The only thing that caused stocks to eventually start rising again was a new round of quantitative easing.
Most Americans don’t even understand what derivatives are, but when the next great financial crisis strikes we are going to be hearing a whole lot about them.
The big banks have transformed Wall Street into the biggest casino in the history of the planet, and there is no way that this is going to end well.
A great collapse is coming. It is just a matter of time.
Gold & silver were whacked by the cartel in the access market today as Janet Yellen and the Fed announced QE will end at the end of the month.
Expect gold and silver to be under the weather for the remainder of the week.
Let’s head immediately to see the major data points for today: