Bernanke taperJanet Yellen’s first FOMC statement is out:

  • Fed tapers another $10 billion/month beginning in April
  • Beginning in April, the Committee will add to its holdings of agency mortgage-backed securities at a pace of $25 billion per month rather than $30 billion per month, and will add to its holdings of longer-term Treasury securities at a pace of $30 billion per month rather than $35 billion per month. 
  • Gold & silver smash commences on que

Janet Yellen’s first Full FOMC release is below:


Silver:

 

 

 Gold:


Silver Buffalo Rounds As Low As 77 Cents Over Spot at SDBullion!

 

 

Janet Yellen begins her first FOMC Press Conference as Fed Chairwoman

Janet Yellen begins her first FOMC Press Conference as Fed Chairwoman

Full FOMC Statement:

For immediate release

Information received since the Federal Open Market Committee met in January indicates that growth in economic activity slowed during the winter months, in part reflecting adverse weather conditions. Labor market indicators were mixed but on balance showed further improvement. The unemployment rate, however, remains elevated. Household spending and business fixed investment continued to advance, while the recovery in the housing sector remained slow. Fiscal policy is restraining economic growth, although the extent of restraint is diminishing. Inflation has been running below the Committee’s longer-run objective, but longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with appropriate policy accommodation, economic activity will expand at a moderate pace and labor market conditions will continue to improve gradually, moving toward those the Committee judges consistent with its dual mandate. The Committee sees the risks to the outlook for the economy and the labor market as nearly balanced. The Committee recognizes that inflation persistently below its 2 percent objective could pose risks to economic performance, and it is monitoring inflation developments carefully for evidence that inflation will move back toward its objective over the medium term.

The Committee currently judges that there is sufficient underlying strength in the broader economy to support ongoing improvement in labor market conditions. In light of the cumulative progress toward maximum employment and the improvement in the outlook for labor market conditions since the inception of the current asset purchase program, the Committee decided to make a further measured reduction in the pace of its asset purchases. Beginning in April, the Committee will add to its holdings of agency mortgage-backed securities at a pace of $25 billion per month rather than $30 billion per month, and will add to its holdings of longer-term Treasury securities at a pace of $30 billion per month rather than $35 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 of rolling over maturing Treasury securities at auction. The Committee’s sizable and still-increasing holdings of longer-term securities should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative, which in turn should promote a stronger economic recovery and help to ensure that inflation, over time, is at the rate most consistent with the Committee’s dual mandate.

The Committee will closely monitor incoming information on economic and financial developments in coming months and will continue its purchases of Treasury and agency mortgage-backed securities, and employ its other policy tools as appropriate, until the outlook for the labor market has improved substantially in a context of price stability. If incoming information broadly supports the Committee’s expectation of ongoing improvement in labor market conditions and inflation moving back toward its longer-run objective, the Committee will likely reduce the pace of asset purchases in further measured steps at future meetings. However, asset purchases are not on a preset course, and the Committee’s decisions about their pace will remain contingent on the Committee’s outlook for the labor market and inflation as well as its assessment of the likely efficacy and costs of such purchases.

To support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that a highly accommodative stance of monetary policy remains appropriate. In determining how long to maintain the current 0 to 1/4 percent target range for the federal funds rate, the Committee will assess progress–both realized and expected–toward its objectives of maximum employment and 2 percent inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments. The Committee continues to anticipate, based on its assessment of these factors, that it likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends, especially if projected inflation continues to run below the Committee’s 2 percent longer-run goal, and provided that longer-term inflation expectations remain well anchored.

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. The Committee currently anticipates that, 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.

With the unemployment rate nearing 6-1/2 percent, the Committee has updated its forward guidance. The change in the Committee’s guidance does not indicate any change in the Committee’s policy intentions as set forth in its recent statements.

Voting for the FOMC monetary policy action were: Janet L. Yellen, Chair; William C. Dudley, Vice Chairman; Richard W. Fisher; Sandra Pianalto; Charles I. Plosser; Jerome H. Powell; Jeremy C. Stein; and Daniel K. Tarullo.

Voting against the action was Narayana Kocherlakota, who supported the sixth paragraph, but believed the fifth paragraph weakens the credibility of the Committee’s commitment to return inflation to the 2 percent target from below and fosters policy uncertainty that hinders economic activity.

Statement Regarding Purchases of Treasury Securities and Agency Mortgage-Backed Securities (PDF)


  1. There is no way that the “tapering” is truthful.  There is no other entity than the Fed willing to buy the toxic MBS’s and UST bonds.  They will back door the buying through 0% loans to megabanks or other entities. Otherwise interest rates will inexorably rise and blow up the IRS derivative structure. No way am I buying this.

    • yeah ugly dog, the IMF via belgium is the garbage collector of last resort. At this point the govt is OK because they are getting so much tax revenue. When the obamabortioncare factor kicks in and the deficit explodes again, sayonara.

    • UglyDog is correct.  This is all smoke-and-mirrors for the masses.  As they are tapering in the U.S. someone is giving money to Belgium which is buying more T-Bonds than it’s entire GDP produces so go figure that one out.  Sure Belgium is the financial center but could someone please play the “Grand Illusion” by Styx. 

    • @UglyDog
       
      “Once again Fed is caught in their web of lies.”
       
      It is entirely possible that those who lie for years on end eventually end up believing their own lies.  Unfortunately, this tends to make them even better liars.  :-(
       
      @4 oz
       
      Still say she reminds me of Dr. Ruth— & we can look forward to her telling us all about screwing in the coming months.”
       
      I agree with the comments in other threads wherein people say that she looks like Daisy Duck.  I dunno… maybe it is the hair that resembles feathers?  As to the screwing, it is happening in full force as we speak and it involves millions of Americans who try to save a little money only to have it vanish into the maw of unacknowledged inflation.  The Fed still claims that inflation is about 1.5%, which is short of their 2% ideal inflation number.  Personally, I think these people are on crack.

       
       

    • @Ed_B >>> Personally, I think these people are on crack.

      Fiscal Crack Whores indeed! But the crack never seems to run out, the Pimp in the big house in DC seems to be the CEO of the biggest Crack Racket in universal history.
      I’ve got to hand it to them; if they can pull this charade off for another year or two I will be very impressed. I hate to say it, but it is quite impressive how long they have managed to keep the world in this debt paradigm, I’m astonished actually.
      If this Ukrainian engineered ‘crisis’ develops into a pan-European war, all the flight capital and Gold Bullion will flow to New York all over again just like WWI and WWII, and US Treasuries purchases ponzi will last even longer.
      “When all else fails they send you to war” – G.Celente

    • @WillNotBeASlave
       
      “Fiscal Crack Whores indeed! But the crack never seems to run out, the Pimp in the big house in DC seems to be the CEO of the biggest Crack Racket in universal history.”
       
      You got it.  They have a never-ending supply of crack and political crack (money) and they are into both BIG-TIME.  Maybe we should call them “The DC Crack HOs” from now on?
       
      “I hate to say it, but it is quite impressive how long they have managed to keep the world in this debt paradigm, I’m astonished actually.”
       
      Indeed.  Of course, even Hitler had opponents who admired the skill with which he pulled so much wool over so many eyes.
       
      “If this Ukrainian engineered ‘crisis’ develops into a pan-European war, all the flight capital and Gold Bullion will flow to New York all over again just like WWI and WWII, and US Treasuries purchases ponzi will last even longer.”
       
      That would be in agreement with the past, no doubt, but today’s reality is far different than the past.  The tricky part of this is how does a country like Russia become involved in a large-scale war that only uses conventional weapons?  At some point, battlefield necessity could overcome good sense and when it does someone is gonna get nuked, chem-ed, or bio-ed.  At that point, any gentlemen’s agreement to only use conventional weapons will be out the window and it will be “Game On!”.  But I really can’t see it coming to that.  The EU has no real will to fight.  The US is war-weary from all this conflict in the MENA.  The Russians are far below the strength levels they had before the USSR collapsed.  And to top it all off, the EU and Russia need each other badly.  Russia needs hard currency and technology while the EU needs oil and gas.  They have an economic marriage that benefits both greatly and I do not see either of them screwing that up over a former Soviet client state.  What I DO see is a lot of bluff, bluster, and political theater that is being played out to occupy the news media and therefore the minds of the people, primarily in the West but also in Russia.  This will be resolved.  The fall in the price of gold from $1385 to $1335 shows that the market is not convinced that this is a terribly serious issue.  We are now in the bluff phase which will soon be followed by the dickering phase.  Once through that and each side can claim some kind of “victory”, both sides will back off and simmer down.  There is far too much at stake here for military conflict to be allowed to escalate, IMO.  Like a lot of other things in this, it too is a bargaining chip that has to be used… a little… to make it seem a credible threat before it is cashed in… which it will be.
       

  2. If the stock market (fraud market) continues up from here, despite three consecutive “tapers”, and no end in sight, it will be plain to see that they are not actually tapering at all. The only thing meaningfully moving this fraud market is the fed (in both directions), so it should serve as a good indicator

  3. The Daisy Duck Lady lies as did Bullshit Bernanke. The Fed buys a lot  more toxic T Bonds a month and will continue.
    What is needed here is for the real economic gurus to connect the dots!

  4. Man that $1380 gold and $21.50 silver looked good while it lasted right? I’m really amazed how good of a job the cartel is doing keeping a lid on PM prices in light of Ukraine, Syria, Venezuela and all of the other mess going on in the world right now. Maybe we should sell our metals here and go long the Iraqi Dinar?? LOL!

    • I believe the slang term you are looking for is: “Rigged”
       
      “to arrange or tamper with the results of something. : Somebody rigged the contest so no one got first prize.”

  5. Yellen says the Fed will kind of ignore the 22%, uh I mean the 6.7% unemployment rate.  Well duh.  
    Now they’ll focus on the inflation rate of 2.5%, uh I mean the 9% inflation rate.
    Maybe the Fed realized that with a 75 to 1 leverage, an equity position of $80 billion, unless it’s negative $250 billion, maybe snorkeling up more garbage MBS is destroying the Fed BS
    That’s balance sheet.  But BS in any case.
    Could the Fed go bankrupt
    Could we ignore the Fed?  
    Yes and no
    Could Daisy Duck fly?
    Does s*** float?
    Yes—it’s already bankrupt morally and fiscally
     We might try to ignore the Fed but that dos not mean they will ignore us
    I heard a rumor that the Fed will merge with the DHS.   The DHS has a $55  billion budget    That would stave of the day of reckoning.
     

    • @AGXIIK
       
      “Could the Fed go bankrupt”
       
      Nope.  Can’t happen as long as they can order the US Treasury to print up all the currency they want.  Maybe the real question is, “Will the Fed abuse the dollar into complete worthlessness?”.  Currently, people will still give us stuff in exchange for FRNs.  That makes them valuable.  Anything that can be used to buy something of value HAS value.  There is an equivalence there, else the other side would not make the trade.  But time is neither on the dollar’s side nor on the UST bond’s side.  Both are sliding along very near to the razor’s edge, hoping not to come too close to that edge and get sliced to ribbons.  Will they make it past the edge intact?  My head says no but my heart says yes.
        

  6. how about stuffing the TBTF  with all the excess lawyers that are being channel stuffed out of law school
    It’d be like a turducken.  A duck stuffed in a chicken stuffed in a turkey
    Very tasty or so I’ve heard.
    as far as the Fed goes, it’s 100% white meat turkey. With an emphasis on the Ferguson part

  7. Sorry Dave.    Ben and Jerry beat you to that flavor.  
    I don’t know what they call it but it goes well with the favorite product of Belgium.
     Waffles.
     Loaded up with Made in the USA  maple flavored US Treasury bonds

    • NO.  NO INFLATION UNTIL WE SAY THERE IS INFLATION!  ;-)
       
      But, speaking of meat for the table… looks as if the California “drought” is taking a toll on beef producers. Herds are being culled because the ranchers do not have the water to maintain the herds at their usual size. Don’t know if this is affecting chicken and pork producers but it could be a very good bet to stuff the freezer with all the meat we can find at today’s prices. Watch for sales, if any, and then load up.

    • Right on per usual Ed. PED is bad news bears for pig herds.  Chicken stable, but likely will see more demand as beef and pork get higher priced. The beef in my freezer is just costing me some electricity each month.

    • @mikeyj80
       
      Thanks, Mike.  Yeah, when one kind of meat spikes in price, the others will rise too as people switch to the cheaper meat.  The good news for consumers is that we can watch this unfold and take some preemptive action to reduce our costs.  A full freezer uses electricity pretty efficiently.  But it is good to have some sort of Plan B on stand-by.  I am buying a pressure cooker this spring and will be doing some home canning this year.  I used to help my Mom do that when I was a kid and have read up on it since.  That works well when the well-researched directions are followed to the letter, which I will do.  When the local stores have sales is a good time to stock up… love those buy one, get one free deals!  :-)
       
      I like to preserve foods by canning in case electrical power is lost.  A quart of canned meat makes a great base for soup, stew, or casseroles of various kinds.  Adding some onion and garlic to the jar is good too.  Without this, if power is lost, we would have to scramble to keep the meat frozen in picnic coolers with dry ice.  While this can work for a while, it is only a temporary solution.
       

  8. http://www.thanhniennews.com/society/vietnam-sentences-banker-to-death-debtors-get-life-in-grand-scam-24668.html

    Vietnam sentences banker to death, debtors get life in grand scam 
    Monday, March 17, 2014 22:16 
     

    A court in the Central Highlands on Thursday gave the death sentence to a Vietnam Development Bank (VDB) executive and several life sentences to others involved in a hundred-million-dollar scam.
    The defendants had taken advantage of credit privileges given to exporters to fake documents and borrow more than VND2 trillion (US$94.88 million) from VBD’s Central Highlands branch for Dak Nong and the neighboring Dak Lak Province, as well as Nam A bank at its Hanoi branch, and the Ho Chi Minh City-based Orient Commercial Bank.
    Vu Viet Hung, 57-year-old former director of the VDB branch, was punished on three charges – a death sentence for taking bribes in the form of a BMW car worth 3.2 billion in late 2009, a life sentence for fraud, and 20 years in jail for violating lending regulations.
    His borrowers, Cao Bach Mai and Tran Thi Xuan, former directors of two local companies, both received life sentences on fraud and bribery charges.
    Mai told the court that she had colluded with wholesalers in Nanning, China to establish a company there and faked 70 contracts for agricultural produce export with them to borrow VND1 trillion from VDB between October 2008 and July 2010.
    Xuan had asked Mai to help fake 65 export contracts to borrow some VND940 billion from the bank.
    The two had appropriated more than VND357 billion from the bank by the time they were arrested.
    Mai said they had to bribe Hung when they needed to borrow due to business  roubles. She also mentioned bribes worth around VND130 billion, including 3-5 percent commissions for approving each loan contract, a diamond ring worth $25,000 and $100,000 in cash, but the judges said there was not enough evidence to hold Hung responsible for those.
    Nguyen Thi Kim Loan, another company director, received 20 years in jail for fraud because she helped Mai open the fake company and also borrowed VND200 billion from OCB on Mai and Xuan’s behalf.
    Nguyen Thi Van, former chairman of Song Cau Cooperative, received a life sentence, and Dang Thi Ngan, 20 years, for fraud as they borrowed money from OCB and Nam A Bank to pay the interest at VDB.
    A number of bankers also received jail punishments for violating lending regulations.
    Truong Dinh Hai, former director of the Hanoi branch of Nam A bank, ended up with ten years, Ta Thi Xuan Y, former head of the customers service department at Ho Chi Minh City office of Orient Commercial Bank (OCB) eight years.
    Five-year jail terms were handed down to Vo Tien Dat, former director of the HCMC office of OCB, Lam Huu Hanh, who was former general director of OCB, and Tran Xuan Loc, former head of the credit department for export at VDB branch.
     

  9. “To support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that a highly accommodative stance of monetary policy remains appropriate. In determining how long to maintain the current 0 to 1/4 percent target range for the federal funds rate, the Committee will assess progress–both realized and expected–toward its objectives of maximum employment and 2 percent inflation.”
     
    What utter nonsense.  Does anyone with an IQ above room temp believe this crapola?  Considering the TRUE state of the US economy AND the TRUE levels of inflation and unemployment, we should be begging these knuckleheads NOT to do us any more favors!  We are already screwed.  Maybe they are now working on “blued” and “tattooed”.  :-(
     

    • Ed, the trouble with the Fed is that, ever since Alan Greenspan’s day, they’ve always thought they could emulate Alan’s ability to spin BS and get away with it just through the sorcery of speech.  I used to listen to Greenspan in Congressional Humphrey-Hawkins testimony.  He’d spin the most incredibly disjointed phrases and nonsense and when the cameras would pan to the faces of the Committee members, you could see that they were dumbfounded by the illusion that Swami was gracing them with his presence and wise wis-DUMB.  Of course, they had no clue what he was saying, but, because their theatrical role was to simply sit there and look important and significant, the mere fact that Greenspan’s words were utter BS was completely lost of them.  Whenever they’d open their mouths to ask the guy a question, it would just add to the hilarity of the whole scene.
       
      While it may be that some of the Fed speechwriters from Greenspan’s day are still on the Fed payroll now, it’s clear that they are losing their air of mystery and high financial sorcery.  Bernanke didn’t have Greenspan’s ability to look intelligent and as for the marionette in the CHAIR now…  what can ya’ say, perhaps the flouride in the water was added a bit too copiously??? Now, the whole production has devolved into the same muck that prevails all throughout the Capitol.  Their idea of the IQ of the masses today is that the “I” stands for IDIOT…  and, speaking of idiots, some of THOSE even get jobs with the financial press.

    • @Sovereign Economist
       
      “Ed, the trouble with the Fed is that, ever since Alan Greenspan’s day, they’ve always thought they could emulate Alan’s ability to spin BS and get away with it just through the sorcery of speech.”
       
      HA!  The trouble with the Fed could be the subject of a rather lengthy book.  Agree on Greenspin (lol) as the root cause of their self-created mystical persona.
       
      ” I used to listen to Greenspan in Congressional Humphrey-Hawkins testimony.  He’d spin the most incredibly disjointed phrases and nonsense and when the cameras would pan to the faces of the Committee members, you could see that they were dumbfounded by the illusion that Swami was gracing them with his presence and wise wis-DUMB.”
       
      Yes, I have observed that phenomenon myself.  The problem with these spin-meisters is that they cannot fool anyone who is as intelligent or more so than they are.  I don’t know which seemed worse to me: that Greenspan was spewing his cr@p or that the dunderheads who were listening to him in Congress did not recognize B$ when they heard and saw it.
       
      “While it may be that some of the Fed speechwriters from Greenspan’s day are still on the Fed payroll now, it’s clear that they are losing their air of mystery and high financial sorcery.”
       
      I suspect that a lot of that was due to the fact that the economy was reasonably good during Greenspan’s tenure.  Much can be forgiven when success is achieved.  Bernanke had a poor economy to deal with and I am unconvinced that his actions were of much, if any, benefit to the economy or to the country.  That the Chair of the Fed is granted unearned respect bordering on reverence is nauseating.
       
      “… as for the marionette in the CHAIR now…  what can ya’ say, perhaps the flouride in the water was added a bit too copiously???”
       
      I dunno.  What I do know is that every so often in politics, a throw-away candidate is needed to wipe the slate clean and atone for past sins.  Yellen reminds me very much of such a disposable person.  The country has no investment in her at all, so her loss will not be keenly felt.  If the entire Fed-created house-of-cards economy crashes hard on Yellen’s watch, it will be due to the excesses created by Greenspan and Bernanke that have finally come to their true worth.  But she will take the blame for it.
       
      “Their idea of the IQ of the masses today is that the “I” stands for IDIOT…”
       
      Unfortunately, this has considerable justification.  An intelligent electorate would not be putting about 90% of these clowns into high office or retaining them once their incompetence was revealed… and WE ARE.  Not as individuals but as a nation and it is most disheartening.  They say that a people tends to get the government they deserve and I am afraid that this is exactly what is happening.  :-(
       

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