QE2

$2.6 Trillion for 2 Million Jobs

Submitted by on

bernake say whatAnyone find these economic stimulus packages put out by the government and the Federal Reserve ridiculous at this point?  The reality is a direct jobs program would be much cheaper and much more effective to get the economy moving.   Yet, magically that idea has been dismissed and worse since 2008.

Fire in the Jackson Hole - Bombastic Stimulus Claims

Federal Reserve Chair Ben Bernanke will do more quantitative easing. That's the consensus from his Jackson Hole speech.   As usual, the utterances on labor are ignored by Wall Street or in this case, used to justify Wall Street's crack addict quantitative easing fix.

The stagnation of the labor market in particular is a grave concern not only because of the enormous suffering and waste of human talent it entails, but also because persistently high levels of unemployment will wreak structural damage on our economy that could last for many years.

Taking due account of the uncertainties and limits of its policy tools, the Federal Reserve will provide additional policy accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability.

Bernanke is justifying this action through various studies claiming quantitative easing generated jobs.

Bernanke Say What?

Submitted by on

bernakesaywhat.jpg
Federal Reserve Chair Ben Bernanke gave one hell of a speech at the G-20 implying emerging economies are to blame their own inflation and currency manipulation could lead to another global financial crisis.

Firstly, Bernanke's speech, Global Imbalances: Links to Economic and Financial Stability, is reprinted below, in it's entirety. The reason to reprint the speech in total is too many in the press are interpreting his speech, many incorrectly, so I suggest reading what he said directly first.

It's All Good - Just Don't Eat, Heat Your Home, or Buy Clothing

By Numerian

If the US can’t constrain its own central bank from ruining the nation and the global economy, it will be up to the financial markets to punish the US in order to put a stop to the madness.

comindex_1.png

By definition, an unhealthy financial market is one in which prices move daily in one direction only, for an extended period of time. Markets without corrections, without the give and take of investors having different opinions about the future, are prone to sudden shocks. This is precisely the situation that has afflicted US stock markets since last July, when investors began to entertain the unanimous opinion that the stock market can only go up because the Federal Reserve will never allow it to correct. And why shouldn’t they think this way, when Fed Chairman Ben Bernanke keeps repeating that a rising stock market with low volatility is a monetary objective of the central bank? He said so again yesterday during his speech and follow-up press conference at the National Press Club:

... the Federal Reserve's securities purchases have been effective at easing financial conditions...equity prices have risen significantly, volatility in the equity market has fallen, corporate bond spreads have narrowed, and inflation compensation as measured in the market for inflation-indexed securities has risen from low to more normal levels...

The QE2 Binge - Inflation on the Horizon

Submitted by on

By Numerian

bernanke.jpg
Don’t these men know the nasty history of central banks which monetize government deficits as the Fed is now doing?

The QE2 left New York harbor yesterday, on its voyage to ports all around the globe. Captain Ben Bernanke has promised to shower the inhabitants of such diverse locales as Brazil, India, and China with up to $600 billion of free money. Following his departure, central banks in these countries announced that they did not want the money and will enact regulations to forbid the QE2 to land in their country. (Image)

Such is the bizarre state of monetary policy in the United States that the second round of Quantitative Easing by the Fed is already being feared and rejected by economists and financial analysts around the world before it is even implemented. It may be that the market has come to realize that QE1 did not perform as promised. Job creation remained anemic, economic growth declined, commodity inflation accelerated, and bubbles popped up in a variety of markets.


Pumping up the Market