Ponzi World (Over 3 Billion NOT Served): Wall Street's 4th Dopium Shipment Has Arrived

Wednesday, December 12, 2012

Wall Street's 4th Dopium Shipment Has Arrived

This new $1 trillion dopium stash will be cut and distributed to the junkies on Wall Street in $85 billion bong hits each month over the coming year. To give perspective, the highly criticized (by right wing stooges) GM bailout cost $50 billion, has already been paid back, and saved tens of thousands of jobs and entire towns. So this one QE4 program equates to 20 GM bailouts in cost, but of course will have $0 economic ROI. This new trillion of QE4 money is on top of the prior $2.8 trillion that has been thrown down the monetary shit hole already...

Today, as expected the U.S. Federal Reserve announced its latest money printing scheme ("QE4"). For the coming year, they will monetize $1 trillion in new debt issued by U.S. government agencies. Since we know with certainty that the U.S. Treasury will never pay any of this money back, I refer to this as "printing money". However, technically these are "temporary" acquisitions of very long-term debt. We also know that the U.S. Federal deficit for the coming year is expected to be around $1 trillion - assuming the "fiscal cliff" dive is avoided. $1 trillion of new government debt and $1 trillion of new money printing. Now that's some coincidence ! This is why monetary policy is not stimulative at this point - it's only offsetting new borrowings by the government. If the Fed did not monetize the deficit dollar for dollar, then monetary conditions would be contracting as new bonds entered the market "crowding out" other investments.

The Fed also for the first time, tied their money printing bonanza to the unemployment rate. They have indicated that money printing in size will continue until the unemployment rate is down to 6.5%. Sounds good. Unfortunately, the unemployment rate they are referring to goes down only when unemployment goes up. Currently it's at 7.7% and it only goes down because people have given up looking for work. Once they give up, they are no longer counted as unemployed. It's a fucked up way of counting the unemployed that only a government bureaucrat and Wall Street could love. What will be even more interesting is when the Fed suddenly chooses to stop monetizing debt at the point at which the entire country is fully unemployed. Bernanke even says in the article above that he wants to get unemployment down to 5% as quickly as possible - Does he know how many people have to give up looking for work for that to happen?