Monday, June 6, 2011

End of QE2 is upon us, no wonder markets are down


Last summer financial markets looked decidedly queasy until the Fed announced its QE2 program to keep interest rates low by buying up its own bond issues. It did not actually start until November but the magic recovery in markets from correction mode began as soon as it was announced in August.

Can the Ben Bernanke Fed produce a similar rabbit out of the hat this year? And do we have to take the pain before August again? It is no wonder stocks are feeling a bit sick right now, quite apart from the lousy economic fundamentals that show the economic recovery to have been largely waffle from Wall Street.


It is of course harder to make a case for QE3 while we are so clearly beginning to suffer from the inflation created by QE2. The Fed is still in a state of denial over this but where else can inflation be coming from with the economy so weak?

But with a money printer at the Fed you do have to wonder if this might not be a repeat of last on

Desperate times

Hitler finds out about Adam Kokesh's Dance Party

House Financial Services Subcmte. Hearing on Federal Reserve Lending Disclosures

Ron Paul questions the Fed over Gold swaps at the 56 min mark.

A House Financial Services Subcommittee looked at lending by the Federal Reserve during the Financial Crisis. The Federal Reserve has made two disclosures of its lending practices in the past six months to comply with provisions in the new financial regulations law, as well as with a Supreme Court ruling on Freedom of Information requests from news organizations. It's the first time in the Federal Reserve's almost 100-year history it has made such disclosures. Witnesses include the general counsels for the Federal Reserve and for Federal Reserve Bank of New York. Rep. Ron Paul (R-TX) chaired the hearing.

Yemen update

Portugal set for $114 billion EU-IMF bailout

From: AlJazeeraEnglish | Jun 5, 2011

In return for a $114 billion EU-IMF rescue package Portugal will have to implement austerity measures -- already a key issue of its current election.

The country which is experiencing its highest unemployment rate in 30 years - 12.6 per cent -- must implement tax hikes, a freeze on pensions and wages, as well as introduce a big reduction in welfare benefits.