Goldman on NEW QE: "it is also possible that the program would be specified as a 'flow' of purchases of perhaps $50bn-$75bn per month"
$75 billion in added reserves would be huge. If it doesn't end up as excess reserves, $75 billion alone would mean annualized money supply (M2) growth of 10.5%---not including any multiplier effect as a result of fractional reserve banking.
If Goldman is correct on what's coming, we are talking about a major manipulated upside move for stocks, commodities and the economy. It means Bernanke is pitching for the Team Obama.
If Bernanke believes that Romney promised Rand an audit of the Fed, and if Bernanke believes that Romney would keep that promise that could be reason to tilt the Fed in the Democrat's direction.
ReplyDeleteI don't think that Obama is from Kenya. Zimbabwe, on the other hand...
ReplyDeleteMetals afterburner...Lit, Check.
ReplyDeletePaper Money..........Lit, Check.
I don't think Bernanke does QE3 this week. Stocks are not down enough just yet. They need at least a 15% drop from the highs before they pull the trigger in my view. They could wait until August or, if the market really crashes in the days and weeks following the announcement in June, call an emergency meeting in July to implement more easing. It's all very predictable really. If they ease in June I'll be surprised, but happy because I own Silver and Gold.
ReplyDeleteIt wouldn't be the first time Obama played catcher.
ReplyDeleteOr maybe this is GS hype so they can dump to the Muppets.
ReplyDeleteKey phrase: "IF it doesn't end up as excess reserves."
ReplyDeleteLESSON NUMBER ONE:
ReplyDeleteAlways infer from what Goldman SAYS as the exact opposite of what Goldman actually believes.
Dollar Index and CNYUSD rates are key to QE3, or nominal GDP targetting, or whatever the Fed chooses to do next. Break above 85.00 on the DXY along with further falls in CNYUSD and we'll see more money printing from the Fed, sure as eggs are eggs.
ReplyDeleteIt coincides with war plans this summer (Iran / Syria). They need to finance the bullets, beans and propoganda somehow.
ReplyDelete