The Fed: This will end poorly

MikeDamone

money.msn.com/top-stocks/post--fed-passes-on-trimming-its-bond-buying

keynesians need to DIAFF

TierbsHsotBoobs

LIFPO.

MikeDamone

TierbsHsotBoobs said:

LIFPO.

It has. The season is over.

RaceBannon

Will more people lose their homes?

MikeDamone

RaceBannon said:

Will more people lose their homes?

No. That has played out. They will lose their retirement saving though.

unfrozencaveman

I think we are in QE infinitum, esp w/ Janet Yellen around the corner

http://www.zerohedge.com/news/2013-09-16/janet-yellens-inability-foreseeing-financial-crisis

priapism

This is the solution for when they stop the QE.

http://finance.yahoo.com/q?s=DGLD

MikeDamone

What makes us rich is an abundance of goods, and what limits that abundance is a scarcity of resources: namely land, labor and capital. Multiplying coin will not whisk these resources into being. We may feel twice as rich for the moment, but clearly all we are doing is diluting the money supply.

- Murray Rothbard

creepycoug

MikeDamone said:

What makes us rich is an abundance of goods, and what limits that abundance is a scarcity of resources: namely land, labor and capital. Multiplying coin will not whisk these resources into being. We may feel twice as rich for the moment, but clearly all we are doing is diluting the money supply.

- Murray Rothbard

fuck. thanks for this. it's almost Friday and I was almost slightly less depressed. now I'm full on thinking about dooms day when the US dollar officially becomes the French whore of the world's currency.

creepycoug

MikeDamone said:

money.msn.com/top-stocks/post--fed-passes-on-trimming-its-bond-buying

keynesians need to DIAFF

But you gotta love all those hedge funds that got caught in a short squeeze today and losing their asses on stocks they thought were going to get pummeled with a rate hike.

fuck 'em. you live by algorythm, you die by the algorythm.

MikeDamone

creepycoug said:

MikeDamone said:

money.msn.com/top-stocks/post--fed-passes-on-trimming-its-bond-buying

keynesians need to DIAFF

But you gotta love all those hedge funds that got caught in a short squeeze today and losing their asses on stocks they thought were going to get pummeled with a rate hike.

fuck 'em. you live by algorythm, you die by the algorythm.

Yup. They took it up the ass. But their day will come.

MikeDamone

creepycoug said:

MikeDamone said:

What makes us rich is an abundance of goods, and what limits that abundance is a scarcity of resources: namely land, labor and capital. Multiplying coin will not whisk these resources into being. We may feel twice as rich for the moment, but clearly all we are doing is diluting the money supply.

- Murray Rothbard

fuck. thanks for this. it's almost Friday and I was almost slightly less depressed. now I'm full on thinking about dooms day when the US dollar officially becomes the French whore of the world's currency.

Right now there is no other currency challenging the dollar as the worlds reserve currency. For now. And we still control the oceans and all shipping lanes. That's a big deal. No other nation even comes close to matching our Navy. Most people don't realize how big a deal that is.

HeretoBeatmyChest

priapism said:

This is the solution for when they stop the QE.

http://finance.yahoo.com/q?s=DGLD

QE will never end. Now that they've lost control of the bond market, they'll have to ramp up QE to keep interest rates from rising too much. With rates going up 1% or 2% the debt burden will get exponentially worse. Current interest expense for FY 13 is about 15% of national income. If rates went up another 1% from here then in two years you could see the interest expense close to 25%. Remember, we've accumulated loads of debt over the past 5 years while rates were low and declining. We also financed at extremely short durations though its getting better. So a lot of debt will have to be rolled over and now at higher rates.

In the 40s, the Fed was on steroids to keep rates fixed. Real rates went extremely negative. They will do again soon including the BOJ. Until debt/gdp has peaked and is on the decline, we'll have QE.

priapism

HeretoBeatmyChest said:

priapism said:

This is the solution for when they stop the QE.

http://finance.yahoo.com/q?s=DGLD

QE will never end. Now that they've lost control of the bond market, they'll have to ramp up QE to keep interest rates from rising too much. With rates going up 1% or 2% the debt burden will get exponentially worse. Current interest expense for FY 13 is about 15% of national income. If rates went up another 1% from here then in two years you could see the interest expense close to 25%. Remember, we've accumulated loads of debt over the past 5 years while rates were low and declining. We also financed at extremely short durations though its getting better. So a lot of debt will have to be rolled over and now at higher rates.

In the 40s, the Fed was on steroids to keep rates fixed. Real rates went extremely negative. They will do again soon including the BOJ. Until debt/gdp has peaked and is on the decline, we'll have QE.

Disagree. U.S. will simply borrow more to pay off these debt interest payments. U.S. bonds won't get downgraded until there's $22-24 trillion of national debt built up...so that's where it's headed - with the help of the banking lobby. QE will end in 2-4 months as the 7 years of housing surplus dries up and the government's unemployment #s amaze the unemployed. Gold is headed back to $600-650 over the next few years as QE fades.

DugtheDoog

Fuck you Woodrow Wilson

priapism

MikeDamone said:

creepycoug said:

MikeDamone said:

What makes us rich is an abundance of goods, and what limits that abundance is a scarcity of resources: namely land, labor and capital. Multiplying coin will not whisk these resources into being. We may feel twice as rich for the moment, but clearly all we are doing is diluting the money supply.

- Murray Rothbard

fuck. thanks for this. it's almost Friday and I was almost slightly less depressed. now I'm full on thinking about dooms day when the US dollar officially becomes the French whore of the world's currency.

Right now there is no other currency challenging the dollar as the worlds reserve currency. For now. And we still control the oceans and all shipping lanes. That's a big deal. No other nation even comes close to matching our Navy. Most people don't realize how big a deal that is.



The more debt we owe to China, the smaller our navy can be.

CuntWaffle

My liberal friends told me to LIPO. Quoted the Obama change speech. I feel so very confident now.

HeretoBeatmyChest

priapism said:

HeretoBeatmyChest said:

priapism said:

This is the solution for when they stop the QE.

http://finance.yahoo.com/q?s=DGLD

QE will never end. Now that they've lost control of the bond market, they'll have to ramp up QE to keep interest rates from rising too much. With rates going up 1% or 2% the debt burden will get exponentially worse. Current interest expense for FY 13 is about 15% of national income. If rates went up another 1% from here then in two years you could see the interest expense close to 25%. Remember, we've accumulated loads of debt over the past 5 years while rates were low and declining. We also financed at extremely short durations though its getting better. So a lot of debt will have to be rolled over and now at higher rates.

In the 40s, the Fed was on steroids to keep rates fixed. Real rates went extremely negative. They will do again soon including the BOJ. Until debt/gdp has peaked and is on the decline, we'll have QE.

Disagree. U.S. will simply borrow more to pay off these debt interest payments. U.S. bonds won't get downgraded until there's $22-24 trillion of national debt built up...so that's where it's headed - with the help of the banking lobby. QE will end in 2-4 months as the 7 years of housing surplus dries up and the government's unemployment #s amaze the unemployed. Gold is headed back to $600-650 over the next few years as QE fades.

If banks buy all the bonds then there is no money to lend commercially. Although I do think the government will find a way to force people to buy bonds.

QE is not ending anytime soon. It will be increased next year & the year after as the debt burden gets worse and to ensure the bond market stays under control.

This is why Janet Yellen will be the new chair. Someone who has said she'd vote for negative interest rates if she could and who wants to get the QE money "in the hands of the middle class."

Inflation is going to explode over the next several years. Gold has just had a warm up. Less than 1% of global assets are invested in Gold. It was 20% at the 1980 bubble peak.

unfrozencaveman

Less than 1% of global assets are invested in Gold.

Is this just physical gold? What's hard to believe is how the paper gold market is such a factor now.

HeretoBeatmyChest

unfrozencaveman said:

Less than 1% of global assets are invested in Gold.

Is this just physical gold? What's hard to believe is how the paper gold market is such a factor now.

Its everything. Global financial assets are in the Trillions. GLD ETF is $38B now I think. I don't expect Gold assets will reach 20% again. It reached 33% in the 30s. Back then Gold was legal money. In 1980 there weren't as many options. This time around I bet it peaks at 7% or so. No way it goes much higher than that given the alternatives.

creepycoug

MikeDamone said:

creepycoug said:

MikeDamone said:

money.msn.com/top-stocks/post--fed-passes-on-trimming-its-bond-buying

keynesians need to DIAFF

But you gotta love all those hedge funds that got caught in a short squeeze today and losing their asses on stocks they thought were going to get pummeled with a rate hike.

fuck 'em. you live by algorythm, you die by the algorythm.

Yup. They took it up the ass. But their day will come.

their day always comes. that's why you have to celebrate small victories when they do, occassionally, take one up the hershey.

i wonder ... whether one day society takes a hard look at hedge funds, and all the other artificial "investors" who've turned Wall Street into an annex of Vegas, and ask itself the fundamental question: why do we have capital markets in the first place? is it to provide a forum for those who are really good at math to make piles of cash doing nothing more than being really good at math? or is it for the distinct purpose of providing the best economic system for capital formation, which is ultimately a "greater good" kind of argument?

what would happen, for example, if we imposed a couple of simple rules: (1) there is no such thing as after-market trading, and all trades of any capital stock of any company registered under the '33 and/or '34 Acts must be done on an exchange (no dark pools) unless it meets the current requirements for a good private placement; and (2) [this is the big one], all capital stock purchased on said exchange must be held for at least one full day - no trading that position for 24 hours.

i honestly don't know the answer to that question, and it won't be the first time I've been described as a reactionary, but there was a time in this country when you made an investment to make a fucking investment, and it wasn't meant to be another weekend in Vegas. Sure you were betting on a company's prospects, but not like what we have going on now. of course there was other shit going on then, but that's why it became regulated. technology limitations just made it impractical to turn over investments every millisecond, or to make buy/sell decisions w/in milliseconds of this or that news crossing the wire.

one thing is for sure in my mind - the efficient market theory is under more pressure today than it has ever been.