Posts Tagged ‘quantitative easing’

Mario Draghi and ECB Begin Quantitative Easing

March 7th, 2015 Comments off

Following the prescription of the U.S. Federal Reserve begun under Ben Bernanke, the president of the European Central Bank, Mario Draghi, is about to unleash the monetary torrent that is referred to as quantitative easing. With the Eurozone remaining mired in a sea of economic stagnation, fiscal debt crises and enduring deflation, Draghi  is gearing up the printing presses, boasting that the ECB will succeed where the Eurozone politicians failed.

With a 1.1 trillion euro quantitative easing program about to be launched, which is roughly equivalent to $1.250 billion USD, many in the markets are hoping that the  perceived improvement in American economic metrics  attributed the Fed’s quantitative easing will come to Europe soon.  The massive debts that will never be repaid and the unprecedented distortions created in the U.S. market by those loose monetary policies are at present out of sight. There is such desperation in the Eurozone, amplified by the impotence of the political class, that the ECB is, just as with the Fed in the U.S., the last hope for the European economy.


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Hillary Clinton Nude

Hillary Clinton Nude

Ben Bernanke’s QE3 Will Not Reverse Global Economic Crisis

September 19th, 2012 Comments off


As expected, stock markets around the world swooned to the heavens after the Federal Reserve announced its third dose of quantitative easing. Ben Bernanke had already unleashed QE1 and QE2, with only short-tem, temporary stabilization of the financial and economic crisis still raging in the U.S. and Europe. What to make of Bernanke’s third version of quantitative easing? As Albert Einstein once said, the definition of insanity is repeating the same thing, over and over again, and expecting a different result.

The public is largely ignorant of what quantitative easing is ( and what it is not). It is simply money printing by a central banking, focused on using the artificially created liquidity to purchase sovereign or private sector debt instruments or depreciated assets, with the view of alleviating market conditions, such as countering high yields on government bonds. It is no substitute for sound economic and fiscal policies, and repeated doses of quantitative easing are inflationary, and typically create distorted asset bubbles.  The tech bubble of the 1990s,and the housing bubble that unleashed the global financial crisis of 2008, were the result of easy money policies by the Fed.

 Now we again have easy money intrusions into the market through the Fed, this time through QE3.  The only tangible result so far is the creation of a new bubble-the equity bubble  on Wall Street and beyond. As before, this bubble will not resolve the economic crisis afflicting most of the world, and will likely make it worse.






 To view the official trailer YouTube video for “Wall Street Kills,” click image below:

In a world dominated by high finance, how far would Wall Street go in search of profits? In Sheldon Filger’s terrifying novel about money, sex and murder, Wall Street has no limits. “Wall Street Kills” is the ultimate thriller about greed gone mad. Read “Wall Street Kills” and blow your mind.



Fed Chairman Ben Bernanke Ramps Up The printing Press

September 13th, 2012 Comments off

It seems an eternity ago when Ben Bernanke, Chairman of the U.S. Federal Reserve, spoke optimistically about “green shoots” on the economic horizon. No more. Two bouts of quantitative easing and “Operation Twists” have been abject failures, as the country’s economic crisis-which is global in nature-continues. Now, the Fed’s FOMC  has jumped in again with more money printing.

“The committee is concerned that, without further policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor market conditions,” say the FOMC (Federal Open Market Committee), justifying their decision to purchase $40 billion in mortgage backed securities each month. In addition, the Fed plans to keep interest rates at near zero until at least 2015.

The global economic crisis erupted in 2008. The Fed is now saying, through its ill-conceived policy decisions, that this crisis will last at least until 2015-seven years after the implosion of Lehman Brothers. An this is not an economic depression?







 To view the official trailer YouTube video for “Wall Street Kills,” click image below:

In a world dominated by high finance, how far would Wall Street go in search of profits? In Sheldon Filger’s terrifying novel about money, sex and murder, Wall Street has no limits. “Wall Street Kills” is the ultimate thriller about greed gone mad. Read “Wall Street Kills” and blow your mind.



Wall Street, Ben Bernanke and Illusions

August 24th, 2011 Comments off

 Today the Dow Jones rose by more than 300 points. This was not due to positive economic news; to the contrary, negative news drove the NYSE up. How is it that the cascading torrent of appalling economic data would raise cheers on Wall Street? In the bizarre economic and financial world of today, the computer program traders and investors on Wall Street are convinced that the worsening economic situation globally will compel Ben Bernanke, Chairman of the Federal Reserve, to unleash a third bout of quantitative easing. In the myopic universe of the Wall Street crowd, this is considered the most wonderful  thing that can happen on our planet.

The two bouts of quantitative easing already engaged in by the Fed have been, by consensus of most credible economists, ineffectual. What this mad money printing did accomplish was to inflate commodity prices, creating a drag on the global economy. But if at first you don’t succeed, try again, so say the Wall Street oligarchs. And so when the central bankers convene for their annual conclave in Jackson Hole, Wyoming the Wall Street oligarchs will be hoping and praying for QE3.  Only a clique infused with short-term greed and distorted illusions could believe that bad economic news leading to Bernanke unleashing another round of printing money will end the global economic crisis.








Fed Chairman Ben Bernanke Appears Clueless as Global Economy Sinks

June 9th, 2011 Comments off

Alan Greenspan, former Fed Chairman and a prime facilitator of the U.S. housing bubble, appears in retrospect a scion of fiscal prudence in comparison with his successor, Ben Bernanke.  This disaster-prone Fed Chairman presided over the financial collapse of 2008, which came in the wake of his prediction that the housing bubble would not cause a recession, let alone a global financial meltdown. And this man is still the most powerful architect of U.S. monetary policy?

 In his recent speech delivered at the International Monetary Conference in Atlanta, Bernanke blamed everything but himself for what he concedes is anemic economic growth, which he knows all too well is being artificially propped up by the most expansive monetary and fiscal policies in human history. In the Fed Chairman’s world, the earthquake and tsunami in Japan, weather conditions and other unpredictable “acts of God” are to blame, not the Federal Reserve’s polices, for the utter disaster that the U.S. and many other advanced economies are coping with.

While in Atlanta, Ben Bernanke made passing reference to the sharp rise in commodity prices, though without admitting that this was due largely to the Fed’s policy of quantitative easing. He then added the illogical assessment that inflation is “not broad based” in the economy. Really?

As he has done before, Bernanke made perfunctory remarks about the need for the policymakers to eventually bring down the U.S. federal government’s budget deficit. As he and his colleagues continue to propel the United States towards a fiscal train wreck, he holds the politicians with no power to rein in Bernanke with responsibility for preventing the future shocks that the Fed’s policies have in store for everyone.

The disconnect this man has with the real world is mind-numbing. One thing, however, we can be thankful for. At least Bernanke has avoided the personal behavior issues that led to the recent resignation of the head of the IMF. With Fed Chairman Ben Bernanke, the question is all about his performance as Fed Chairman, and nothing else. On that score, history will probably judge President Barack Obama harshly for reappointing Ben Bernanke as Fed chairman.






2011 Economic Crisis: Disturbing Signs On The Horizon

December 29th, 2010 Comments off

As a new year is about to dawn,  despite (and perhaps because of) massive government and central bank intervention in advanced and major economies, worrying signs are proliferating along with the contrived optimism about a supposed rebound  in global economic growth. Among the many clouds on the horizon regarding the global economic outlook for 2011, here are three:

1. Greek sovereign debt crisis not cured by the massive Eurozone and IMF bailout. Knowledgeable observers have pointed out that mathematically, it is not possible for the Greek state to deflate its economy in line with deficit reduction commitments required under terms of the bailout package, while simultaneously engineering a miraculous return to robust economic growth at a level sufficient to service the exploding public debt. There is already word being leaked to the Greek press by government officials that after the current bailout package expires in 2013, Athens will seek to restructure its sovereign debt.

2.  Irish banking crisis far from over. After receiving a staggering level of bailout assistance from the EU and IMF to cover the country’s insolvency due to guaranteeing the obligations of Anglo Irish Bank ( along with all other banking institutions in Ireland), the Dublin authorities were forced to inject nearly $5 billion into Allied Irish Banks, another bankrupt institution. As with Greece, it seems almost a certainty that Ireland will eventually seek to restructure its public debt.

3.  China, the one ray of hope in the global economy due to massive government injections of liquidity that have led to high levels of supposed growth during the global economic crisis, is now beginning to raise interest rates in a frantic effort aimed at reining in  burgeoning levels of price inflation. This could lead to a tightening in the Chinese economy, combined with a catastrophic deflation in the Chinese real estate market. Any downturn in China will reverberate with dire impact on the overall global economy.

Other than these three items, no need to worry, as Fed Chairman Ben Bernanke and a horde of policymakers assure us that their bouts of quantitative easing  and unprecedented levels of sovereign debt will somehow usher in a nirvana of good economic times. Unless, of course, you like I have no confidence in those who currently are the masters of our economic destiny.

Ben Bernanke, the Federal Reserve and the Road To Ruin

December 15th, 2010 Comments off

It is not the “Road To Morocco” ( for those who remember the classic film with Bing Crosby and Bob Hope) but he proverbial road to ruin that Fed Chairman Ben Bernanke is leading the U.S. economy towards, at flank speed. Under his leadership, the last meeting of the Federal Reserve’s FOMC of 2010 confirmed the zero interest rate policy being maintained, and the policy decision to purchase $600 billion in long-term U.S. Treasury debt. This, despite claims by many punch-drunk economists that the American economy is recovering, and at a heightened pace. Give Bernanke credit for one thing; he knows the supposed economic growth is not real, but rather marginal increments painfully extracted through massive public borrowing. But his solution, in effect creating even more public stimulus, this time through monetary policy, is totally antithetical.

Supposedly, Bernanke’s stratagem is to force down long-term interest rates through his $600 billion second round of quantitative easing. However, the bond market is reacting in a manner contrary to expectations. With Europe already mired in a deep sovereign debt crisis, the prospect of a surge in now record low interest rates on U.S. sovereign debt is becoming increasingly likely, due to the Fed’s policies. Should the U.S. encounter anything remotely like the spike on bond yields currently plaguing Europe, the game is up. Not even Bernanke could print enough money to cover the ruinous implosion an increasingly likely sovereign debt crisis will have on the already fragile American economy.

U.S. Structural Unemployment Rate Stuck at Record High

December 6th, 2010 Comments off

The latest U.S. official employment data states that fewer than 40,000 new jobs were created in November, well below the level required to cover new entries into the workforce due to natural population growth. Officially, the U.S. unemployment rate stands at 9.8%, though factoring in discouraged workers and part-time employees unable to find full-time work, the actual figure hovers near 20 percent. More alarmingly, long-term unemployment in America stands at the highest level since the Great Depression of the 1930s.

Despite the dismal employment numbers, there remains among economic commentators in the United States eternal optimists who believe there are still “green shoots” pointing to an economic recovery. Some even maintain that the actual job creation numbers for November are much higher than the official numbers, despite much more voluminous contrary evidence.

In contrast with the optimists, the Federal Reserve Chairman, Ben Bernanke, is already hinting at the need for a third round of quantitative easing, after his recent unleashing of QE2, a $600 billion orgy of money-printing by the Fed. Bernanke knows that the employment situation in the U.S. is a catastrophe, meaning there can be no consumer-led recovery of the economy, that at a time when the Obama stimulus money is running out. With a second stimulus program off the table now that the Republicans have taken control of the House of Representatives, the Federal Reserve sees itself as the only avenue for stimulus in a desperate drive to revive job creation in America. However, to think that monetary policy can be more effective than fiscal policy in facilitating job creation seems like the last great gasp of an incorrigible fool.

Desperate Federal Reserve Speeds Up the Printing Presses :$600 Billion in QE2

November 3rd, 2010 Comments off

Ben Bernanke, Chairman of the Federal Reserve, is up to his old tricks and gimmicks. His earlier bout of quantitative easing, totaling nearly two trillion dollars, was a miserable failure, attested to by an official U.S. unemployment rate of 9.6% and unofficial but more accurate rate of 17 percent, when underemployed and discouraged workers are accounted for. With no likelihood that Congress will spring for a second economic stimulus spending program, Bernanke and the Fed are now implementing QE2.

The second round of quantitative easing by the Federal Reserve will involve the purchase of 600 billion dollars in long-term U.S. Treasuries by the 2nd quarter of 2011. This is a gamble by the Fed, which I don’t see having a snowball’s chance in hell of being any more effective than the first round of quantitative easing. Furthermore, printing money out of thin air to buy government debt, in effect monetizing the debt, creates the risk of severe inflation, failed treasury auctions and the radical devaluation of the U.S. dollar.

It may be that Bernanke is doing QE2 precisely to weaken the dollar, though he would never say so publicly. In theory, a weaker dollar would make U.S. exports more competitive, leading to the creation of new jobs. However, as reported in an earlier blog, virtually every major economy is manipulating its currency in a race to the bottom. Not even dollar devaluation, if that is the Fed’s goal, will reverse the negative character of the U.S. economy and its grim unemployment crisis.

Will the UK Follow Greece in Facing a Severe Debt Crisis?

February 24th, 2010 Comments off

The British pound sank like a stone as the Governor of the Bank of England, Mervyn King, issued a grim warning during testimony before the UK Parliament’s Treasury Select Committee. The central fiscal problem is the £178 billion annual deficit incurred by Gordon Brown’s government in the midst of the global economic crisis.

Mervyn King indicated that the Bank of England will have to continue with quantitative easing in the face of the massive government deficits, sending negative signals to investors as to the stability of the nation’s currency. He warned that both the current government, and a likely new government to succeed Brown after the next British general election, must send a clear message to the markets that they have a credible plan to significantly reduce the nation’s fiscal deficits.

I think the current breed of politicians, in the UK and elsewhere, haven’t a clue how to address the massive, unsustainable deficits that plague virtually every major and advanced economy. Which means that it is only a matter of time before the UK, and then the US, follow in the footsteps of Greece down the road of national insolvency.