Third Time's a Charm? Whispers of QE3 Emerge

[madfranks]

http://www.cnbc.com/id/43244609

Might the Federal Reserve extend its bond purchases beyond June? What until this week was a pie-in-the-sky notion is suddenly fair game for market speculation.

The triggers have been many.

The latest one-two punch came from reports on Wednesday showing both a sharp deceleration in private sector hiring and a slowdown in manufacturing.

Compounded with weakness from China and Europe, the news was enough to knock stock prices — a key beneficiary of the Fed's ultra easy policy — more than 2 percent lower. The Standard & Poor's 500 index suffered its worst day since August.

Most Fed watchers still see a third round of quantitative easing, or QE3, as a very remote possibility. The obstacles this time around are greater, since inflation has been creeping higher and the jobless rate, while still at an elevated 9 percent, has come down quite a bit in recent months.

More at link... (http://www.cnbc.com/id/43244609)

[madfranks]

I think QE3 is inevitable at this point, like the end of the article says, the only form of life support the US Gov't has at this point can not be taken away.

[osoab]

I think QE3 is inevitable at this point, like the end of the article says, the only form of life support the US Gov't has at this point can not be taken away.




Well, raiding fed gov pensions is keeping things in check for now. If they don't raise the debt ceiling before August, they will heading to IRA's and 401k's next. It is only fair isn't it?

Then again, they could be doing some more back room shenanigans that we will never know of. The circle jerk of paper can continue longer than we think.

[Dogman]

I think QE3 is inevitable at this point, like the end of the article says, the only form of life support the US Gov't has at this point can not be taken away.




Well, raiding fed gov pensions is keeping things in check for now. If they don't raise the debt ceiling before August, they will heading to IRA's and 401k's next. It is only fair isn't it?

Then again, they could be doing some more back room shenanigans that we will never know of. The circle jerk of paper can continue longer than we think.


It sucks! But what the fed giveth , the fed can taketh away ++ interest! :sarc:

[Ponce]

I for one never pay attention to all that double talk, I have taken care of myself and that's what counts.

[vacuum]

When I heard that congress was 'putting their foot down' and not raising the debt ceiling, then hearing how they were going to 'fill the gap', it was obviously what was going on. Congress would never go against the wishes of the fed...this little stunt they're pulling has two purposes: (1) give them an excuse to raid the federal pensions, and (2) make it look like there is "opposition" within our government to stop the debt expansion. That makes them look good in the eyes of other countries in terms of confidence in the US. Or at the very least gives adequate enough excuses to ignore what's going on.

[Neuro]

No doubt there will be QE3, but first they will do QE2.5, which is the same as QE1.5 was, IOW the Federal Reserve Bank, does a currence swap with another central bank, and buys that countries government bonds, while the foreign central bank buys Treasury bonds. QE1.5 was at least $500 Billion, this time around I think they are going to break the Trillion... But this summer they speak hard about fiscal responsibility, crash the markets, to get a good discount in late summer...

[Hatha Sunahara]

It might be time for prudent planners to bail out of IRAs and 401Ks about now. Take the tax hit. 35% in taxes lets you keep 65% of your tax deferred savings. That will be better than getting worthless Treasury debt in exchange for your savings. The time to beat inflation is before it starts in earnest.


Hatha

[Ares]

It might be time for prudent planners to bail out of IRAs and 401Ks about now. Take the tax hit. 35% in taxes lets you keep 65% of your tax deferred savings. That will be better than getting worthless Treasury debt in exchange for your savings. The time to beat inflation is before it starts in earnest.


Hatha


I quit contributing to my 401K after I woke up and realized it'll be used by uncle sam to pay his bills. Only problem is, I cannot take out what I've accumulated because I am still with my employer. If I leave I can take it with the tax hit.

[Neuro]

It might be time for prudent planners to bail out of IRAs and 401Ks about now. Take the tax hit. 35% in taxes lets you keep 65% of your tax deferred savings. That will be better than getting worthless Treasury debt in exchange for your savings. The time to beat inflation is before it starts in earnest.


Hatha


I quit contributing to my 401K after I woke up and realized it'll be used by uncle sam to pay his bills. Only problem is, I cannot take out what I've accumulated because I am still with my employer. If I leave I can take it with the tax hit.
Can you ask your employer for a strategic fire-rehire?

[mamboni]

There will be QE3 for certain, and it will be massive, the motherload of funny money. But, it will not happen until the markets have tanked and investors and pundits are begging the FED to do something. Between and then we will see the last interum price nadir in gold and silver for a long time; this will be the last chance to jump on the PM train because when QE3 is announced the metals will lauch to the stratosphere. So keep your powder dry and prepare to load up with silver and gold in the next few weeks.

[Neuro]

There will be QE3 for certain, and it will be massive, the motherload of funny money. But, it will not happen until the markets have tanked and investors and pundits are begging the FED to do something. Between and then we will see the last interum price nadir in gold and silver for a long time; this will be the last chance to jump on the PM train because when QE3 is announced the metals will lauch to the stratosphere. So keep your powder dry and prepare to load up with silver and gold in the next few weeks.
We are on the same page! I just hope that prices of Silver will drop below $30 before June 20, when I go to Sweden for the summer! I will not be back to Istanbul until beginning of September...

[Book]

WWIII will get us out of the Great Recession.

This is also gonna be one hot summer in da 'hood.

[Dogman]

WWIII will get us out of the Great Recession.

This is also gonna be one hot summer in da 'hood.


Also help solve the overpopulation problems on the planet. Plus make the industrial/war barons more bucks. ::)

[chad]

qe3 will spell ultimate doom for the economy if they do it.

there is NO WAY banks will lend to companies to build infrastructure, expand, etc. if they know they can just sit on capital and keep sucking off the bernak's tit. this will just further accelerate unemployment and companies going bust.

i can't believe they would actually be stupid enough to do this. wait.

[gunDriller]

qe3 will spell ultimate doom for the economy if they do it.

there is NO WAY banks will lend to companies to build infrastructure, expand, etc. if they know they can just sit on capital and keep sucking off the bernak's tit. this will just further accelerate unemployment and companies going bust.

i can't believe they would actually be stupid enough to do this. wait.


2012 is an election year.

Obama wants to be re-elected.

[Trinity]

I have no doubt at all that QE III is on the way. The only delay will be what good name they can come up with besides QE III to blur or muddy it up so the people don't understand what they are really doing.

[ximmy]

Warming up the helicopter now
http://blogs.wsj.com/marketbeat/2011/06/06/five-out-of-five-pessimists-agree-qe3-is-coming/


http://www.thelibertypapers.org/wp-content/uploads/2008/09/bernanke-helicopter-med.jpg

[Neuro]

I have no doubt at all that QE III is on the way. The only delay will be what good name they can come up with besides QE III to blur or muddy it up so the people don't understand what they are really doing.
Everyone Will Be A Millionaire by 2012, EWBAM-12, followed by EWBAB-13, followed by EWGTH-14. ;D

[gunDriller]

I have no doubt at all that QE III is on the way. The only delay will be what good name they can come up with besides QE III to blur or muddy it up so the people don't understand what they are really doing.


if they decide officially against QE3, they will have to do what Denninger un-covered - they will sell the bonds to the primary dealers, the 16 banks that buy these things & turn around & re-sell them.

then those banks will take their commission & turn around & sell them to the usual suspects - sovereign wealth funds, the IMF, etc.

my guess is, the IMF will issue (create out of thin air) SDR's, & will pay for the bonds with those. then the banks will sell the SDR's for $ - thereby creating a demand for dollars.

see how easy that was ?

then whatever part they don't want you to see, they will cover under "national security reasons".

like when i'm playing Monopoly with my nephew & he steals $20 million from the bank when i'm looking the other way.

[Trinity]

I have no doubt at all that QE III is on the way. The only delay will be what good name they can come up with besides QE III to blur or muddy it up so the people don't understand what they are really doing.


if they decide officially against QE3, they will have to do what Denninger un-covered - they will sell the bonds to the primary dealers, the 16 banks that buy these things & turn around & re-sell them.

then those banks will take their commission & turn around & sell them to the usual suspects - sovereign wealth funds, the IMF, etc.

my guess is, the IMF will issue (create out of thin air) SDR's, & will pay for the bonds with those. then the banks will sell the SDR's for $ - thereby creating a demand for dollars.

see how easy that was ?

then whatever part they don't want you to see, they will cover under "national security reasons".

like when i'm playing Monopoly with my nephew & he steals $20 million from the bank when i'm looking the other way.



I think you nailed it here on how they might go about it.

[ShortJohnSilver]

Thinking about history - the Reichsbank was in control of the German mark though the country was on the hook for the pain of inflation... the Reichsbank itself however was making a boatload of money even as inflation surged ... I think the Fed will behave similarly - gaining ownership of real, physical assets by electronically printing 1's and 0's .

[bellevuebully]

If I was stuck on a country road 100 miles from the nearest settlement with a the wheels on my truck falling off because the nuts came loose and all I had in my toolbox was a screwdriver, you can bet your paycheck I would try to use the screwdriver to somehow leverage the nuts tight, whether it worked or not.

Of course Qe3 is going to happen. It's called despairity. :P




Actually, I got out of the bush one time by using yellow 1/4'' poly rope and electrical tape to hold a tie-rod in but the ride wasn't pretty. ;D