The Unintended Consequences of Quantitative Easing

https://www.bloomberg.com/view/articles/2017-08-22/the-unintended-consequences-of-quantitative-easing

Quantitative Easing Worked For The Weimar Republic For A Little While Too

http://theeconomiccollapseblog.com/archives/quantitative-easing-worked-for-the-weimar-republic-for-a-little-while-too

The connection between quantitative easing and the gold price

http://www.usagold.com/cpmforum/2013/06/11/the-connection-between-quantitative-easing-and-the-gold-price-3/

Quantitative Easing

http://youtu.be/XrJHzbl7ay0

Quantitative Easing and Gold Price

This quote must be examined for its content and context.  The content is self-evident.  The context includes knowledge that Barron's is a sister publication of the Wall Street Journal, the preeminent financial periodical.  They are the voice of the status quo power structure, the bible of financial publications.

Wall Street is traditionally anti-gold.  Yet, this quote. 

"As long as we have unlimited quantitative easing, we have the potential for unlimited gains in the gold price." –Fred Hickey, "Stirring Things Up", Online.Barrons.com, February 2, 2013.

Bank of Japan Sprays World With Surprising ¥10 Trillion Gift In Valentine's Day Liquidity

This latest round of QE by the Bank of Japan is only bullish for gold.  The markets just don't know it--yet. 

http://www.zerohedge.com/news/bank-japan-drowns-world-surprising-%C2%A510-trillion-valentines-day-liquidity-present

BOJ Unexpectedly Adds Stimulus as It Sets 1% Target for Inflation: Economy

Japan QE's.

http://www.bloomberg.com/news/2012-02-14/bank-of-japan-unexpectedly-adds-to-monetary-easing-after-economy-contracts.html

Fed to Weigh Further Easing Amid Doubts About Recovery

http://www.cnbc.com/id/45977098

Fed leaves door open on QE3

The QE door was never closed. 

http://money.cnn.com/2011/10/12/news/economy/federal_reserve_minutes/index.htm?iid=HP_LN

Quantitative easing, or when there's nowhere left to run

http://www.goldmoney.com/gold-research/quantitative-easing-or-when-theres-nowhere-left-to-run.html?gmrefcode=gata

Prepare for More Money Printing: Analyst

Thanks to Dick again for finding this snippet.  I agree central banks (including the Fed) will have to continue easy monetary policy as far as the eye can see, but the timing of the next round of liquidity is debatable.  Without the sugar high of quantitative easing, the markets (and the financial system) would collapse.  At what pain point is the Fed willing to accept before resuming QE?  As with many things, timing is everything.

http://www.cnbc.com/id/43233866

Quantitative Easing is On The Way

http://video.cnbc.com/gallery/?video=1937291737

Hugo Salinas Price - QE in US Will Lead to Utter Destruction

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/5/16_Hugo_Salinas_Price_-_QE_in_US_Will_Lead_to_Utter_Destruction.html

With the Mexican central bank purchasing 100 tons of gold, today King World News interviewed multi-billionaire Hugo Salinas Price to get his thoughts.  When asked about the purchase Mr. Price stated, “Well I think the central bank (of Mexico) is watching what the Federal Reserve has been doing with utter amazement because we have been down that path before and it led to our ruin.  So maybe they are saying, ‘We better have a little bit of gold because what is going on with quantitive easing is really hair-raising.’  I must imagine that is the motive because they don’t think that what is being done is going to lead anywhere but where it lead us in the past, and that was to utter destruction."

Stimulus by Fed Is Disappointing, Economists Say

Here's the bottom line:  printing $3 trillion for quantitative easing and permanent open market operations (both policies create currency out of thin air) have produced about $400 billion in economic growth.  The law of diminishing returns is at work, and why economists coin the Fed is "pushing on a string."  Those massive mortgage-backed securities and US Treasury bond purchases by the Fed have offered very low returns, and some would argue negative returns, because many of those mortgage bonds are underwater.  In an exit strategy (tightening monetary policies), the Fed would have to sell those mortgage banks back--at much lower prices.

In other words, in the aftermath of the bank bailouts, the Fed essentially purchased these bonds at par value, when they were actually worth much less.  The balance sheet risk was merely transferred from commercial banks to the Fed.  Essentially, taxpayers own these worthless securities.

The question of whether the Fed will end QE 2.0 at the end of June is becoming much more cloudy.  Tighten too early, and the economy would tank due to rising interest rates.  Continue QE, and we could have runaway inflation, which would have a huge dampening effect on the economy.  The Fed has cornered itself.

The elephant in the room that nobody wants to acknowledge is the US is insolvent, as our debts are unsustainable.  And there is still way too much leverage in financial markets due to over-the-counter derivatives which are still unaccounted for.

Even the language of mainstream Keynesian economists is flawed.  What they refer to as "stimulus" is actually just issuance of more debt.  And massive debt levels are why we're in deep trouble economically in the first place. 

http://www.nytimes.com/2011/04/24/business/economy/24fed.html?_r=1&nl=todaysheadlines&emc=tha2

QE3 May Be ‘Unavoidable Fact of Life’

http://www.cnbc.com/id/42128767

Federal Reserve: QE2 boosts the economy

Video on how quantitative easing works, at least theoretically.  Only problem is that it doesn't work, as bond yields have risen in reaction to inflation fears, which is reflected in food riots worldwide.

http://hosted.ap.org/specials/interactives/_business/federal-reserve/index.html

Federal Reserve: Money-printing will continue at "full throttle"

http://www.thedailycrux.com/content/6607/Government_Stupidity/eml

That's an interesting take on rising interest rates--that the economy is recovering.  I believe the bond markets are starting to fear inflation more than anything else.  We shall see.

My belief is that hyperinflation is what we should guard against most, not deflation.  Americans don't complain when their heating and grocery bills decline.  Again, we shall see.

Fed warming up the printing presses?

http://www.thedailycrux.com/content/5998/Inflation/eml

Gold spikes on Bank of England quantitative easing

The threat of QE by the BOE causes gold to surge. The butterfly effect is alive and well.

http://www.zerohedge.com/article/gold-spikes-after-boes-posen-demands-more-qe-wants-buy-corporate-debt

Jim Rickards on the golden bullet

http://www.zerohedge.com/article/jim-rickards-tells-his-clients-get-out-stocks-and-discusses-feds-final-golden-bullet

What's happened is that all the markets have become so badly distorted that their price discovery function and therefore the information content around it no longer has any value." The primary culprit in this distortion is, of course, the Fed which is now and has been for over a year, openly (and not so openly when it comes to stocks) manipulating the broader market: "I always like to say if a private sector person does it, it's manipulation, but if the government does it it's policy. So they call it policy and they would say they had reasons for it, but in fact it was massively distorting."

In effect the US and policy intervention from homebuyer tax credit, cash for clunkers, quantitative easing, mortgage purchases have in effect destroyed our markets, they no longer give us valuable information." Obviously, today's most recent battery of micro fiscal stimuli announced by the administration will merely make the market even more irrelevant as a price discovery and a capital allocation deterministic mechanism: and the more administrative meddling, the more money will sit on the sidelines, and the more retail investors will withdraw capital from risky assets. If you no longer invest in stocks, you are not alone: "I don't even take the stock market seriously" says Rickards, "and I mean that in all seriousness. Who's in the stock market right? You have indexers and robots. Is anybody else trading the stock market?"

If you have an avalanche who cares what snow flake started it, what you care about is the instability of the mountainside. The Flash Crash was the warning, I don't think the warning has not been taking very seriously. The markets are not reflecting fundamentals, because there are no more fundamental traders. It is an accident waiting to happen. I recommend to clients that they not be in stocks anymore.

I don't think quantitative easing is a bullet that's going to work. I think that chamber is empty. But the Fed does have a bullet that they may not even realize which I call 'The Golden Bullet.' Which would be basically conducting open market operations in gold in such a way as to devalue the dollar.

If you're worried about deflation and you want to cause inflation and you're printing money as fast as you can and the inflation is not happening, at some point you have to stop and ask yourself well what else can I do? Well the answer is that you can severely devalue the dollar against gold...So the Fed wakes up one day and as fiscal agent for the Treasury, we're a buyer at $1,495 and we are a seller at $1,505, and that represents a 20% depreciation in the value of the dollar.

You have to scare the American people into spending money. Right now the American people are more afraid of not having money, they are not afraid of inflation, but if you make them afraid, they will go out and start spending. So what better way than to devalue the dollar 20% against gold, and the way to do that is through open market operations...Well if that happens to be $2,000 an ounce what have you done? You've depreciated the dollar by not quite 50%. Well that's pretty powerful stuff if you are trying to get people to spend money and dump dollars. So they are not out of bullets, they have what I call the golden bullet...They have that kind of ace in the hole if they really want to trash the dollar.