Financial topics

[richard5za]

Germany leaving the Euro
Germany must be getting very weary of other countries in the Eurozone, who it probably regards as spendthrifts and financial maniacs.
Is it within the realms of possibility that Germany goes back to the Mark?

[Reality Check]

Germany leaving the Euro
Germany must be getting very weary of other countries in the Eurozone, who it probably regards as spendthrifts and financial maniacs.
Is it within the realms of possibility that Germany goes back to the Mark?

Except when the other European countries are buying German manufactured goods. Germany has an export economy. If the other countries stop borrowing money to buy German goods, then Germany goes into recession as well.

Same in the U.S. as well. Pull 1 Trillion to 1.5 Trillion out of the U.S. economy each year and the current "great recession" will look like the good old days.

No easy answers, or as John would say, no answers at all.

[aedens]

Very nice and thought out site. Thanks O
http://nowandfutures.com/glossary.html#money_measures
“(A unified) ‘Europe’ is the result of plans. It is, in fact, a classic utopian project, a monument to the vanity of intellectuals, a programme whose inevitable destiny is failure: only the scale of the final damage done is in doubt.”
Margaret Thatcher

[vincecate]

I predict QE3 will be announced before the end of this year and be over $800 billion or with no fixed limit.

Anyone else willing to give a QE3 prediction?

[aedens]

I predict QE3 will be announced before the end of this year and be over $800 billion or with no fixed limit.

Anyone else willing to give a QE3 prediction?

Yes, 1 billion dead, 1 billion walking corpes. All 401k confiscated for the effort. Then the other riders mount there steeds as 10 look to 1
http://www.zerohedge.com/news/guest-pos ... iddle-east

[Higgenbotham]

Anyone else willing to give a QE3 prediction?

What would be interesting is, based on your QE3 forecast, if you gave some predictions for where gasoline and oil prices will trade for 12 months out from the time this QE3 happens.

I noticed today that average gasoline prices in the US are now approaching $4 per gallon. This price level has collapsed the US economy the 2 previous times it has been reached. The first time it was reached was 9 months after Bernake panicked and slammed down interest rates after he thought subprime was contained when it was not. Every time Bernake has made a huge "policy move" it has been with gasoline well south of $4 per gallon.

http://gasbuddy.com/gb_retail_price_chart.aspx

8 year chart available to compare against Fed "policy moves". It shows how the Fed has never made a "move" with gas prices near $4 per gallon, and how $4 gas has collapsed the US economy the 2 previous times it has been reached.

If Bernake panics with gasoline prices already near $4 per gallon, and the economy already weaker than it was in 2007/2008 (though with some efficiency improvements since then), I would wonder just how quickly a QE3 would destroy what's left of the US economy.

The Fed is in a bind. No good options.

[vincecate]

What would be interesting is, based on your QE3 forecast, if you gave some predictions for where gasoline and oil prices will trade for 12 months out from the time this QE3 happens.

[...]

The Fed is in a bind. No good options.

After sleeping on it, I now wonder if Ben will just say "No QE3 but we will keep interest rates near zero". Of course, the only way he can hope to keep interest rates near zero is to keep printing money like crazy and buying bonds. So really this is an unlimited quantity QE.

In the John Law and French money printing they had a QE1 and then a QE2 but after that tried to hide the money printing. But eventually people understood that the value of the currency was going down without bound.

As long as the government has a huge debt and a huge deficit the central bank will be in a bind with no good options. The government forces them to buy bonds so the government can have the money needed to stay in operation another month. The "kick the can" always means some more printing till it is all over. This experiment has been done many times before. The difference is just that this time it is the world reserve currency and so the magnitude of the disaster is far greater. I still think we are headed for hyperinflation, so the price of gasoline will go way up.

[Higgenbotham]

After sleeping on it, I now wonder if Ben will just say "No QE3 but we will keep interest rates near zero".

I think he's in a bind where it's too late to say "No QE3" because the bubbles are so huge due to the QE, and the minute he says "No QE3" the markets will crash with of course the HFT making the crash worse. But at the same time Bernake really can't do a QE because he's created a huge bubble in gasoline prices, which is something new that he didn't study in the Great Depression. For those that have been asking how this Depression is different, the gasoline price bubble and how it can collapse the economy is another thing that is different. I've noticed all year Bernake and the rest of the Fed officials have been playing a game of saying they have this 800 pound gorilla called QE3 in the closet and they will let him out anytime, or they might not let him out, depending on which Federal Reserve con artist is speaking. But it seems like the bind they are in is if they let the gorilla out for real it will collapse the economy with a bigger gasoline price bubble, and it could happen really quick, even quicker than if they do no QE3. The Fed doesn't want to get blamed for triggering an economic collapse. Also, I've noticed lately that Bernake has said more and more it's a budget problem that is out of the Fed's hands and it's up to Congress to do something about it. The bind the Fed seems to have created for themselves lately is there's a growing gasoline price bubble they're created just by threatening to let that 800 pound gorilla of QE3 out of the closet. Another thing to note is that in 2008 some people were saying the gasoline price bubble was demand driven. There's no demand for gasoline right now, but there's still a bubble, and it's the Fed and the speculators that are causing it.

[vincecate]

Also, I've noticed lately that Bernake has said more and more it's a budget problem that is out of the Fed's hands and it's up to Congress to do something about it.

The real problem is the debt and the deficit. The central banks get pushed into buying government debt because the government needs money and taxes don't cover their expenses. If Ben were to stop buying government debt then he would be replaced or the laws changed until the central bank was buying government debt again. So really it is congress that is responsible for the central bank actions. Central bankers have sometimes protested but in the end the central bank always caves in and buys government debt. They don't write the laws and they don't have the guns. The outcome seems clear.

[aedens]

Soon

http://generationaldynamics.com/forum/v ... 288#p15288
http://generationaldynamics.com/forum/v ... 070#p15070
http://generationaldynamics.com/forum/v ... 046#p15046
http://generationaldynamics.com/forum/v ... 021#p15021
http://generationaldynamics.com/forum/v ... 914#p14914 Our rollover will be here soon.
Some have there hair on fire in AUD land. We shall see... ht t/d
The seven P's are upon them so we will ponder there fate...
Prior to the 14th century vanity did not have such narcissistic undertones, and merely meant futility.
Margin, and we as many said do not be that guy. The policy direction has been confirmed from there own crypt keepers in the fed.
Forever we stated what they are after and how they are after it. Red or Blue makes no difference at all which is stone cold fact.
GM one Billion for Moscow and Ford 750 million for Peking.

http://duckduckgo.com/?q=enigma+temple+of+love

Thinking 20th to consider out. "May you be inscribed in the Book of Life"

http://www.rollingstone.com/politics/pi ... 29/0709617