Grant Williams wrote a brilliant piece, with a few excerpts here and a link to John Mauldin's website:
That Was the Weak That Worked
On
the one hand, Bernanke would want to leave the Fed with the wind-down
of his expansionist policy underway so that he would have the kind of
plausible deniability that history has gradually been stripping away
from Alan Greenspan. ("Hey, don't blame ME. We were exiting QE when I
left office!") On the other hand, though, he wouldn't want to hand Janet
Yellen an impossible situation.
The solution? Taper Lite
"All the goodness of the Taper with no bitter aftertaste!"
... and the markets, after the scares in May and June, LOVED it!!"
Or what I call it: The Taper ... that isn't!
Bernanke
is trying to evade accountability for what's coming, while giving
Yellen the green light to keep the monetary heroin going.
Later, after the market collapse again, he'll then deny all responsibility!
Just like Greenspan has done, including just within the last few weeks.
Then,
after having KILLED free markets and capitalism, they'll declare that
free markets and capitalism don't work. As if their endless state
interventions were somehow some form of capitalism.
We will need
to hold them accountable when that happens. What they have been doing
is NOT capitalism nor free markets. It's progressivism. It's statism.
It's fascism. They have the same roots.
"Errrr ... sorry to spoil the party, but a couple of things here:
Firstly,
the reason the market spiked is that the Fed's Taper turned out to be a
paltry $10 bn a month and not the "whopping" $20 bn a month that had
been floated by various Fed mouthpieces back in May
cough-cough-cough-hilsenrath-c ough." /Jon Hilsenrath, the Fed's "voice"
at the Wall St Journal, who I refer to as Bernanke's whore./
from
the article, quoting "Bernanke's whore", who released the Fed's
"translation" (this is only a tiny quote, while Hilsenrath's entire
explanation was much longer) just seconds after the Fed's statement. My,
how fast he types!
"(WSJ): The Fed went to great lengths to send
the message that interest rates are staying low even longer than the
Fed indicated earlier. It said today that it will keep interest rates
low "well past" the time when the unemployment rate reaches 6.5%."
As I said, the Taper... that isn't!
"Thirdly,
they managed to communicate that this policy will be reversible at the
drop of a hat should things start to look as though the vaunted
"recovery" is nothing more than a mirage conjured by their actions."
"...the
markets reacted just as you would expect, once they realized that they
had faced down the Fed in the summer and forced them into a taper that
is essentially a non-event."
Again, the taper... that isn't! This so-called QE taper is worse than mere mistake. It's deception! It's PROPAGANDA!
I will next post a graph that shows what a farce -- a HOAX -- the Fed's
QE taper really is! It's just more debt monetization, while calling it a
return to normalcy. It's really a SCAM!
Here's another view of:
The QE Taper... that isn't!
Does that really look like much of a wind-down to you? The Fed will
still monetize $900 billion of new debt over the next year! Does that
sound like the end of QE to you?
Me neither!
It's looks like more of the SAME to me! It's a hoax -- a scam -- perpetrated by the Fed on a grand scale!
another excerpt from the article:
"A
look at the correlation of the S&P 500 to the Fed's balance sheet
tells you just about all you need to know. Since 2009, the correlation
has been an astonishing 89.7%. Why would anybody not just buy markets,
given that they are going to go up based purely on the Fed's aggressive
stimulus?"
more:
"Bizarrely, by creating an environment that
forces those with capital to seek out additional risk due to the paltry
returns afforded by zero percent rates, the Federal Reserve has steered
investors to seek out the least-risky place to invest their money, and
that has been equities."
Just posted another chart that shows that 89.7% correlation between the Fed's balance sheet and stocks.
It's the Fed's own version of "trickle-down economics". Push more and
more money into the pockets of the already-wealthy, hoping it finds it
way eventually into the pockets of those lower down on the economic
scale. It hasn't so far! The rich just get richer instead!
Note that without endless QE, stocks would be only about 1/3 of their current price.
more from the article:
"Equity
prices USED TO BE a reflection of the strength of the underlying
economy — after all, the component pieces of benchmark indices were
functioning companies that existed in the real world where they need to
manufacture something and sell it to a buyer in order to stay in
business and make a profit...
"But under the surface and in the wider
economy, the story is very different, indeed, as the mountain of cash
on corporate balance sheets has led to an avalanche of buybacks, which
has in turn boosted earnings and given the impression that things are
roaring, when in fact the true story is a familiar one of an increase in
debt." (emphasis mine)
more from the article:
"Assets
less liabilities for corporations economy-wide are approximately where
they were in the last quarter of 2004 or the first quarter of 2005. But
stock prices are much higher in aggregate."
Do you understand
that? Corporations aren't any stronger today. But stock prices are MUCH
higher. Does that sound sustainable to you? Doesn't that sound like a
description of a BUBBLE, rather than sound economic growth?
more:
"This
chart was bad at the end of 2012 — in bubble territory, for sure —
which was a big part of why I didn't think we'd get through 2013. Well,
we did — and now it's worse, because this is only updated through the
end of September and of course the market has gone screaming higher in
the last three months."
Did he use the word "bubble"? And that was a YEAR AGO! And he's says it's much worse NOW!
