NFP and QE3 Speculations

In a nutshell, the bankers have been handing out one loan after another, in order to substitute for the industrial capital’s flight to Asia: The West’s productive base has been shrinking for quite a while now, but the loans handed out out by the bankers have been masking this uncomfortable truth for all these decades So, the multinationals have been getting richer and richer by exploiting the -massively underpaid- Asian workforce, and the banks became bigger and bigger (they are now “too big to fail”, and Goldman Sachs’s CEO even considers himself as doing God’s work – talk about hubris).

But the economy reached a point where the Western worker simply couldn’t pay for his mortgage (that’s a bit of an over-simplification, but you get the point). So, now the banks are in trouble as well, because if they can’t collect the money they were supposed to collect from the recipients of those loans, they are bankrupt (ALL of them). Let’s not forget Lehman’s collapse, not to mention the hundreds of other (smaller) banks that have gone bankrupt in USA over the last four years.

But, as we all know, most banks are being rescued via your -and my- money. But the banks need a lot of money. Well, I know that they have already received huge bailouts, but that’s not enough. Banks are failing in Europe (now it’s the Spanish banks, then Greece again, etc) and in USA, stocks are going down, and it seems like everything is about to collapse.

But guess what – no matter how much the banks need, money can be printed in today’s economic system – and they will.

States all over the world have been printing money for quite some time now, and they continue to do so. Savings the banks is more important than preserving the value of their currencies, so…they will inflate these currencies. And as more and more people realize this, these currencies will hyper-inflate, as noone will want to trade (“loss of confidence”) in a currency that keeps losing value compared to gold, the only thing that will remain stable, as it always does.

[By the way, did you hear about China and Japan’s deal to trade with each other in their own respective currencies, instead of using the dollar? Or maybe about China’s deal to buy oil from Iran in exchange for yuan, instead of dollars? Oh, and guess what, China and Russia are no longer buying a lot of US bonds, are they? They are however buying gold…]

As for the workers, printing money is a great way for the ruling class to stealthily lower their wages, making them more “competitive”. After all, they do have to compete against the dirt-cheap Asian labor-force, don’t they? So, they only way to go forward, according to our rulers, is for us to become really poor, and for them to receive huge bailouts, making them even more powerful than they already are. This is the only way they will return to the West for investments – until the workers accept “modern serfdom”, the capitalists will simply let them starve. Hunger will take care of the rest. And since our rulers are already doing God’s work, they could even declare themselves to be Gods, like the Pharaohs. And why not? Their will is our command, isn’t it?

But this process of debasing the currency has to be completed “one step at a time”. If they print everything at once, everyone will be on to them, and things will get out of hand. So, they first let the stock market almost crash, and then they “save the day”, by printing more and more money. This has already happened a lot of times, and it will probably continue to happen in the future, in both USA and in Europe (Europe is an even more complicated case, since it is a monetary union of many different States: Germany is letting everyone else crash, and only then they allow the ECB to print money (in order to save the German banks among others). But before Germany agrees to money printing, they always hold a conference, where they propose a few new treaties, that give them more and more control over their fellow eurozone members protectorates. So, it’s a bit more political in the eurozone compared to the situation in USA, but the economics of it are pretty much the same, and the ECB will also print money sooner or later, and one way or another).

https://whataboutmarx.blogspot.com/2012/06/gold-and-jobs-report-if-you-only-knew.html

From a Dem brand long term perspective it might be more useful to lose the election. After all President Hoover started his term in 1929 and yet he is the one most strongly associated with the 1929 crash and misery AKA Hoovervilles.

If the wheels genuinely derail in 2013 or 2014 that president and his party will be the brand name associated with that failure.

Of course who knows…

I can’t help wondering if there’s a stalemate between the Fed and the consumer. The Fed wants credit growth, but the credit-worthy consumer is refusing to borrow (as much as the lenders won’t lend to anyone “less”). And I just can’t help wondering if these credit-worthy consumers have dug their heels in. They are refusing to budge. Contrary to the Fed’s expectations, these consumers are shrugging off 0% returns because they are going to wait this out in cash, no matter how low the Fed’s rate goes. And so the irony is that eventually, it may become apparent that the only way to increase spending is to capitulate to the consumer and give them yield on their savings. Once they have yield on their savings, THEN they will spend something. Only then will they feel richer and use some extra interest income to buy a nice car. Because as it stands, the 0% policy just makes the wealthy consumer feel poorer and poorer and even while he loses spending power to inflation, psychologically he feels like he still needs to hang on to that money for dear life. It totally flies against conventional wisdom….but I can’t help wondering if that’s where we’re at. An interest rate boost would actually increase the wealth effect rather than decrease it. The less credit-worthy would be more broke, but they aren’t going to spend no matter what. They’re broke either way, with or without an increased interest rate. However, the cashed up consumers, even as a wealthy minority, might start to spread some wealth around if it was earning something without having to engage in ridiculous gambling risks. Just a thought, somewhat different from the typical deflationary explanation that insists the consumer waits for things to be cheaper to explain the psychology behind his refusal to spend.

What Canada has, to knit all the provinces together, is called “equalization payments”.

https://en.wikipedia.org/wiki/Equalization_payments_in_Canada

What the EU needs is “equalization payments”. It might not be possible to implement such a program in time to save the EU.

https://www.zerohedge.com/news/why-grexit-would-make-lehman-look-childs-play

“I still think we should have had more Lehman moments.  In fact, not letting the AIG moment occur was probably a bigger mistake, but most politicians have taken the lesson never to let a “Lehman” happen again, so once they see that Greece is Lehman on steroids, they will back down and figure out enough to give Europe and the markets a solid kick.”

As far as the US, the bankrupt states are already getting “equalization payments” by the back door.
I expect QE3 to come up with programs aimed at saving state and local gov. and with the banks benefitting from the admin of those programs .

AndrewP post=3323 wrote: QE3 will definitely NOT be Treasuries. The Fed already owns a large fraction of long term bonds. Bernanke will probably buy mortgages the way he did in 2008-2009, although he could surprise us by purchasing real estate directly, or even stocks.

For any QE to work, Helicopter Ben would have to buy Greece, Spain and Italy for a start. So forget it, unless he bails out all of Europe a QE is SOL as a fix.

RE

Candace post=3315 wrote: From a Dem brand long term perspective it might be more useful to lose the election. After all President Hoover started his term in 1929 and yet he is the one most strongly associated with the 1929 crash and misery AKA Hoovervilles.

If the wheels genuinely derail in 2013 or 2014 that president and his party will be the brand name associated with that failure.

Of course who knows…

Hi Candace,

Please consider that both political parties report to the same Big Finance Capital interests.

Perhaps Woody Harrelson narrating Ethos will drive this point home…

https://www.youtube.com/watch?v=bjeFLPGWO5c

As long as people are duped into voting for Bankster Puppet on the Left or Bankster Puppet on the right, we are DOOOOOMED.

“In the technotronic society the trend would seem to be towards the aggregation of the individual support of millions of uncoordinated citizens, easily within the reach of magnetic and attractive personalities exploiting the latest communications techniques to manipulate emotions and control reason.”
― Zbigniew Brzezinski, Between Two Ages: America’s Role in the Technetronic Era

“The argument that the two parties should represent opposed ideals and policies, one, perhaps, of the Right and the other of the Left, is a foolish idea acceptable only to the doctrinaire and academic thinkers. Instead, the two parties should be almost identical, so that the American people can “throw the rascals out” at any election without leading to any profound or extreme shifts in policy.”
– Carrol Quigley, Tragedy and Hope

“The history of the last century shows, as we shall see later, that the advice given to governments by bankers, like the advice they gave to industrialists, was consistently good for bankers, but was often disastrous for governments, businessmen, and the people generally.”
Carroll Quigley

“In addition to their power over government based on government financing and personal influence, bankers could steer governments in ways they wished them to go by other pressures.”
Carroll Quigley

Please consider that Left vs Right is a false narrative designed to keep you on the bankster reservation – where the banksters win regardless of whether you pick Bankster Puppet #1 or Bankster Puppet #2.