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End The Fed: Chicago Federal Reserve Bank President Just Announced QE 4

Before It’s News – by Josey Wales

“Goldman Sachs expects, next month, for the Fed to come out of their policy meeting announcing QE4.  It will be a purchase of $45 billion each month in Treasuries.  This number will be in addition to the already existing QE3, which is $40 billion per month in mortgage-backed security debt.

But in a sense, Eric, QE4 is going to be a replacement for Operation Twist.  Operation Twist was designed to push down the long end of the curve in order to keep interest rates artificially low….

Chicago Federal Reserve Bank President Charles Evans, who rotates into a voting seat on the Fed’s policy-setting panel in January, also said the Fed should step up its program of quantitative easing in the new year to keep its overall level of asset purchases at $85 billion a month for most, if not all, of 2013.

  “It’s important to maintain the overall level of asset purchases at $85 billion, at least for a time until we can see whether or not we are doing better or things are going more slowly, and we can adjust, depending on that assessment,” Evans told reporters attending a speech at the C.D. Howe Institute in Toronto.

“But here we go, now we’re talking about an additional $85 billion each month.  This is fresh purchases of Treasuries.  Here’s what is interesting, Goldman Sachs expects that to continue all the way through 2013.  So do the math, that’s more than $1 trillion worth of QE for 2013.

In 2014, Goldman believes the economy to pick up.  They believe there will also be a drop in unemployment at some point in 2014 which will allow the Fed to drop those $85 billion in purchases back down to $50 billion each month.  So you are talking about $600+ billion for 2014.

Goldman expects this to continue all the way into 2015.  So we are looking at close $2 trillion of QE over the next couple of years.  Keep in mind this is already in addition to the $2.5 trillion of QE1 and QE2.  We are talking about close to $4.5 trillion which has been and will continue to be manufactured out of thin air in order to keep interest rates artificially low.

Goldman also predicts there will be no change in the Fed’s interest rate policy until 2016.  So we are talking three full years, 2013, 2014, and 2015 where we will have these near zero interest policies from the Fed.

So you take that near zero interest rate environment, with negative real interest rates, plus close to an additional $2 trillion of upcoming additional QE, and QE4. The Federal Reserve is going to keep printing and printing and printing and things are not going to get any better.

Those running the Fed have essentially used up all of their bullets and the next great financial crisis has not even fully erupted yet.

Sadly, the truth is that money printing is not a “quick fix” and it never has been.  Just look at Japan.  The Bank of Japan is on round 8 of their quantitative easing strategy, and yet things in Japan continue to get even worse.

You never know, by the time this is all over we may see QE4, QE5, QE Reloaded, QE With A Vengeance and QE The Return Of The Bernanke.

Meanwhile, Europe is gearing up to print money like crazy too.

A couple months ago, European Central Bank President  Mario Draghi made the following pledge….

“Within our mandate, the European Central Bank is ready to do whatever it takes to preserve the euro, and believe me, it will be enough.”

And of course the Bank of Japan has joined the money printing party too.  The following is from a recent article by David Kotok….

The recently announced additional program by the BOJ includes a fifty-percent allocation to the purchase of ten-year Japanese government bonds. The other fifty percent will buy shorter-term government securities. Thus, the BOJ is applying half of its additional QE stimulus to extracting long duration from the government bond market, denominated in Japanese yen.

All of the central banks seem to be getting on the QE bandwagon.

But will this fix anything?

Unfortunately it will not, at least according to Paul Volcker….

“Another round of QE is understandable – but it will fail to fix the problem. There is so much liquidity in the market that adding more is not going to change the economy.” 

This is the “most extreme easing of monetary policy” he could recall. Mr Volcker’s comments came as the World Trade Organisation intensified the economic gloom by slashing its global growth forecasts.

Sadly, most Americans have a ton of faith in the people running our system, but the truth is that they really do not know what they are doing.

Just check out what Dallas Fed President Richard Fisher said the other day….

“The truth, however, is that nobody on the committee, nor on our staffs at the Board of Governors and the 12 Banks, really knows what is holding back the economy. Nobody really knows what will work to get the economy back on course. And nobody – in fact, no central bank anywhere on the planet – has the experience of successfully navigating a return home from the place in which we now find ourselves. No central bank – not, at least, the Federal Reserve – has ever been on this cruise before.”

But that’s not going to hold the Fed Back.

“There’s strong hints that they’ll do Treasurys next,” Joe LaVorgna, chief economist at Deutsche Bank Advisors, said in a phone interview from London. “They’re pulling out all the stops to try to get this economy to gain some traction and, most important, to get unemployment down.”

The experts say that quantitative easing destroys the economy and – despite the initial optics of it – hurts the little guy.

But at this point the Federal Reserve has already “jumped the shark”.  If you don’t know what “jumping the shark” means, you can find a definition on Wikipedia right here.  Whatever shreds of credibility the Fed had left are being washed away by a flood of newly printed money.

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8 Responses to End The Fed: Chicago Federal Reserve Bank President Just Announced QE 4

  1. David2 says:

    When Sir Issac Newton was master of the Royal Mint it was rightly an act of treason to debase the coinage and the sentence was hanging.

    Today the FED openly admits to treason, the educated fools class do not object and go along with it because their paper stocks and shares market artificially benefits, the poor fools class do not object because they derive welfare payments and food stamps paid for by means of this artificial money.

    The counterfeiter counterfeits because he prospers by it, it is treason because it debases not only the coinage but the value of all things including a countries morals.

    As a society of fools ruled by charlatans the end price will be devastating as the financial collapse will wipe out the stock market gains, pensions and all paper wealth, the welfare recipients will be wiped out as no funds will be available to continue their welfare payments. Because of the low morals of this ship of fools they will run like headless chickens in all directions while the slick zionist bankers as counterfeiters will own all wealth and have all power.

    This is the sad story of the end times.

    • Mark Schumacher - NV says:

      And if you own Gold or Silver, don’t expect cash when the SHTF. All you will be getting is worthless paper. You’ll be using your metals for trading of equal value in Amerika anyway. That’s it. Even then, fraud will be rampant.

      Not sure about other countries, but Amerika is finished.

      • David2 says:

        Disagree with you Mark. There are two types of currency hard as in commodity backed and soft being fiat paper. When debt saturation happens in one then the country adopts the other. Gold has been going up in value for the past 10 years in reflection of this.

        The next currency will be gold or some stable combination.

        The reason you need gold is that the present system of fiat paper value will end and paper assets will be worthless, the zionist banks hold the deeds and being Shylock will demand your repayments regardless of the fiat collapse. Gold or silver will help you and protect your assets from being foreclosed in the transition to the new currency.

        In addition gold and silver will have greater purchasing power than their present purchasing power. This will greatly help you.

        Do not be fooled, the zionists own most gold and we are in the transition to their new evil empire. It will help to have gold and silver if you are to survive their plan.

        The new phrase will be ‘we are all Palestinians now’ as the jew will rule and fools will suffer, you cannot imagine what is planned but Palestine should give you some idea of life under the zionist rule.

        • Mark Schumacher - NV says:

          When gold hits $6000.00, don’t expect too many dealers to pay you in cash. If they do it sure as hell won’t be dollars.

  2. NC says:

    QE4 is here. Hmm…Now why doesn’t that surprise me?

    So QE5 will hit maybe in January and then QE6 will hit in late February and maybe the final QE7 will hit in March on St. Patties Day. You know, the luck of the Irish when everyone transitions to their pot of gold. I, to be sure!

  3. # 1 NWO Hatr says:

    It’s just gone past abounding.

    Insanity reigns supreme.

  4. Whizerd67 says:

    I don’t know why this story made me think of another one…
    Has anyone seen anything about any investigation of the undisclosed amount of new 100 bills that was…um…stolen?….um…went missing?…?
    I don’t think a saw a follow-up of it anywhere, and this story made me think about it for some odd reason.
    I suppose I could just search it maybe. *shrug* Felt it needed a little attention.

    As for QE4?
    *grumbles many obscenities in ways that even the Internet hasn’t heard*

    Man…it’s coming. Tick…tick…..tick…..

    ~Blessed Be to all~

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