QE3 Coming When?

RevDrBlimber · August 31, 2012 2:18AM

http://www.kitco.com/reports/KitcoNews20120831JW_update2.html

"Update: Comex Gold Backs Down Initially, then Rallies Sharply as Bernanke Leaves Door Open for QE3Friday August 31, 2012 10:25 AM

"Comex gold futures prices initially backed down from their early, modest gains but then rallied sharply and are presently trading solidly higher and near the daily high in late-morning trading Friday, following the much-anticipated remarks by Federal Reserve Chairman Ben Bernanke. The Fed chief's prepared text at his Jackson Hole, Wyoming speech did not specifically say fresh, unconventional U.S. monetary policy stimulus will be implemented, but did lay the groundwork for such in the near future. Indeed, he left the door open for a fresh quantitative easing initiative unveiled at the September FOMC meeting, or at some point in the not-too-distant future."

Gold at $1700+ before long?

derryb · August 31, 2012 2:45AM

looks like no immediate QE has no bad affect on metals and should fuel prices when it does arrive. Win/Win

Gold at $1700? very soon.

MsMorrisine · August 31, 2012 3:18AM

He did exactly what I thought he needed to do...

say the exact same thing in a totally new way.

it gets all those hopes up again along with the markets.

(pssst. sdds... same disaster, different story)

NumbersUsacom · August 31, 2012 3:26AM

A fundamental shift is quitely sinking into the mindset of the populance and the investment arena, that fiat may not come out on top this time, and until that premise is proven wrong expect alternative investments to increase in overall value. Silver, Gold, and (Hoisington Management is still solid on long term federal Government bonds.)

derryb · August 31, 2012 3:50AM

Equity investments are strongly influenced by QE, look for them to react accordingly. Also look for any reductions in equity investments to be looking for more sound alternatives such as PMs.

edmundfitzgerald · August 31, 2012 5:04AM

QE is essentially the printing of money and the addition of liquidity into the markets so that stock (and other asset) prices are given an artificial boost. Federal reserve chief, Ben Bernanke believes that by pulling up stocks, the masses will feel richer and spend more on consumer goods, thus lifting up the economy. This is based on Karl Marx’s reflexivity theory (George Soros basically paraphrased Marx) in which by turning the small wheel (stocks), you can turn the big wheel (economy), which in turn will come back and turn up the small wheel (stocks). Bernanke subscribes to such a theory, and he wants QE to lift up the small wheel (stocks), which he hopes will lift up the big wheel (the economy).

But after two successive rounds of QE (QE1 in 2009 and QE2 in 2010), it has become crystal clear that quantitative easing doesn’t work nearly as well as theory says it should! In the short term, QE can pull up stocks and the economy, but in the long term, the economy is going to go where it’s going to go, regardless of how much liquidity the Federal Reserve is pumping into the economy and stocks. Everyone has now recognized that the economy is slowing down (including Congress), and everyone knows that the Federal Reserve has only one bullet left: QE3. QE is like a medical drug – take it once, and you’ll heal very quickly. But every time the disease comes back, you’ll need to take bigger and bigger doses of that drug, and each time you take the drug, the drug becomes less and less effective until eventually, the drug is useless. QE3 is the last round of QE because everyone knows that QE four, five, and six will be pointless.

PerryHall · August 31, 2012 5:12AM

Will this next QE be in time to give the markets a boost before the election to give Obama a boost at the polls? Or, is it too late to make any difference in the election?

RevDrBlimber · August 31, 2012 6:01AM

The Kitco analysis says either September or December. The die is cast and pricing is more or less figured in with additional momentum building now. My bet would be sooner rather than later, why wait? If December and the reasoning is a "wait and see" attitude is in order and wait until the uncertainty of the election is over....Plus Romney has come out strongly against Bernanke not that good old Ben is going to make any move deliberately to undermine his candidacy.

pf70collector · August 31, 2012 6:42AM

QE is good to lift an economy out of recession, but our problem is structural and no QE is going to help that.

NumbersUsacom · August 31, 2012 6:57AM

If the Bersnake hit the QE 3 button in september and even if it resulted in a 20% surge in the S&P 500 relatively quickly, itttsss tooooo late to help the floundering Obumba administration and Bernanke's job.

We all need to vote to ensure this is not a close election !!

Silver and Gold would Benefit from another QE, but I would rather forgo the QE and have our country on the right track; there is a LOT more wrong besides the economy!

jmski52 · August 31, 2012 7:01AM

there is a LOT more wrong besides the economy!

It's been a long time coming.......it's going to be a long time gone. It runs deep. Way too many entrenched federal programs.

cohodk · August 31, 2012 7:36AM

I heard nothing new in The Bernankes speech.

PMs continue to trade on hope and promise, belief and faith.

NumbersUsacom · August 31, 2012 8:03AM

Isn't that what most all markets trade on ? There might be some underlying fundamental reason for this stock or that company or that commodity, but in the end it's driven by the expectations, disallusions, hope, fear, and every other palpable emotion known to man and his money(an _____ represented as having recognized and universally accepted value at the moment).

I traded my Tulip Bulb because it was worth way more than what I gave for it. I traded it for my current House, Car and life time Medical Insurance. Now I wish I hadn't traded away my Tulip Bulb, because it keeps going up !!

derryb · August 31, 2012 8:22AM

<< PMs continue to trade on hope and promise, belief and faith. >>

That the economic idiots in charge remain in charge. And they will remain in control because they are put in place at the direction of the banksters.

cohodk · August 31, 2012 11:40AM

<< 

<< PMs continue to trade on hope and promise, belief and faith. >>

That the economic idiots in charge remain in charge. And they will remain in control because they are put in place at the direction of the banksters. >>

Were the banksters in control from 1980 to 2000?

derryb · August 31, 2012 11:44AM

<< 

<< 

<< PMs continue to trade on hope and promise, belief and faith. >>

That the economic idiots in charge remain in charge. And they will remain in control because they are put in place at the direction of the banksters. >>

Were the banksters in control from 1980 to 2000? >>

Not like they are today. They've been building this for years.

dpoole · August 31, 2012 12:03PM

<< QE is essentially the printing of money and the addition of liquidity into the markets so that stock (and other asset) prices are given an artificial boost. Federal reserve chief, Ben Bernanke believes that by pulling up stocks, the masses will feel richer and spend more on consumer goods, thus lifting up the economy. This is based on Karl Marx’s reflexivity theory (George Soros basically paraphrased Marx) in which by turning the small wheel (stocks), you can turn the big wheel (economy), which in turn will come back and turn up the small wheel (stocks). Bernanke subscribes to such a theory, and he wants QE to lift up the small wheel (stocks), which he hopes will lift up the big wheel (the economy). >>

Thanks, EF, for as clear an expounding of the QE ploy as I've heard!

MsMorrisine · August 31, 2012 1:17PM

QE was also supposed to give banks a little extra liquidity and ease to lend.

that ain't happening because they are still paranoid from the housing bubble and economic downturn.

QE might boost asset prices, but it is not boosting lending and business growth.

I've often wondered if the Fed Res couldn't set up a dummy bank to pass the money right back to the US Treasury and let them waste it. At least with the US Gov't wasting it, some business other than a bank is getting the benefit.

Of course the best and my preferential option is to NEVER NEED QE AGAIN.

renman95 · August 31, 2012 4:41PM

<< QE is essentially the printing of money and the addition of liquidity into the markets so that stock (and other asset) prices are given an artificial boost. Federal reserve chief, Ben Bernanke believes that by pulling up stocks, the masses will feel richer and spend more on consumer goods, thus lifting up the economy. This is based on Karl Marx’s reflexivity theory (George Soros basically paraphrased Marx) in which by turning the small wheel (stocks), you can turn the big wheel (economy), which in turn will come back and turn up the small wheel (stocks). Bernanke subscribes to such a theory, and he wants QE to lift up the small wheel (stocks), which he hopes will lift up the big wheel (the economy).

>>>Problem is that in Marx theory the wheel doesn't turn wheel...only two sides and both are flat.

But after two successive rounds of QE (QE1 in 2009 and QE2 in 2010), it has become crystal clear that quantitative easing doesn’t work nearly as well as theory says it should! In the short term, QE can pull up stocks and the economy, but in the long term, the economy is going to go where it’s going to go, regardless of how much liquidity the Federal Reserve is pumping into the economy and stocks. Everyone has now recognized that the economy is slowing down (including Congress), and everyone knows that the Federal Reserve has only one bullet left: QE3. QE is like a medical drug – take it once, and you’ll heal very quickly. But every time the disease comes back, you’ll need to take bigger and bigger doses of that drug, and each time you take the drug, the drug becomes less and less effective until eventually, the drug is useless. QE3 is the last round of QE because everyone knows that QE four, five, and six will be pointless. >>

What I have to laugh at is their gaul to manipulate, I mean, keep rates low til 2015 now. No one seems to be alarmed anymore.

derryb · August 31, 2012 8:48PM

An often overlooked fact is that the very person claiming to have the tools to solve our post bubble crisis was very, very much involved, along with Greenspan, in creating the bubble crisis. To expect a person responsible for a problem to be the expert in fixing the problem is a problem in itself. Time for new economic leadership and a different outlook on solving the problems.

RevDrBlimber · August 31, 2012 11:41PM

I remember how Greenspan was hailed as a genius by most all political heads for years. Even after he left the FED he was preaching the advantages of the credit derivatives market and the hedge funds for advancing the liquidity of the the money supply. History proved him dead wrong. Basically we need top to bottom accountability and a government that says "no!" to the lobbyists who advance a money supply that is too loose. We need the gravitas in political leaders of John Houseman, not the super stars who tell people what they want to hear. But there are very few of that type on the political stage in this country.

cohodk · September 1, 2012 3:36AM

<< 

<< 

<< 

<< PMs continue to trade on hope and promise, belief and faith. >>

That the economic idiots in charge remain in charge. And they will remain in control because they are put in place at the direction of the banksters. >>

Were the banksters in control from 1980 to 2000? >>

Not like they are today. They've been building this for years. >>

What is the Evil Bankster's endgame?

jmski52 · September 1, 2012 3:44AM

What is the Evil Bankster's endgame?

Money for Nothing and you're Chicks for Free.

MsMorrisine · September 1, 2012 4:22AM

<< I remember how Greenspan was hailed as a genius by most all political heads for years. Even after he left the FED he was preaching the advantages of the credit derivatives market and the hedge funds for advancing the liquidity of the the money supply. History proved him dead wrong. Basically we need top to bottom accountability and a government that says "no!" to the lobbyists who advance a money supply that is too loose. We need the gravitas in political leaders of John Houseman, not the super stars who tell people what they want to hear. But there are very few of that type on the political stage in this country. >>

credit derivatives are not necessarily the problem, just like low interest rates is not necessarily the problem.

it's the widespread abuse.

QE3 Coming When?

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