Quantitavive Uneasing

[5.56NATO]

Three Fed Officials Start Prepping Market For Post Stimulus Economy

Posted by: Alfonso EsparzaPosted 2 minutes ago


In the last week, three vocal Federal Reserve officials have been urging their colleagues to stop filling up the proverbial punch bowl.

Not only do they want the Fed to stop buying bonds (there's already a plan in place to eliminate those as early as October) -- they also want the central bank to raise its short-term interest rate sooner than investors are expecting.

This isn't just economist talk. Doing so could raise the rates on everything from mortgages and small business loans, to credit cards and auto loans, thereby tightening financial conditions throughout the U.S.

"I believe the time to dilute the punch is close upon us," Dallas Fed President Richard Fisher said in a speech at the University of Southern California on Wednesday.
http://www.marketpulse.com/20140717/...mulus-economy/


Ok so I read about a bank in China that ran into an overnight interest rate hike a while back. It goes like this;
Chinese bank is right on the edge of being insolvent most of the time but nightly loans from larger banks have always floated the lesser bank, largely due to 0 or very low interest.
One day Chinese bank is really low so they ask for a loan from the go to larger bank and the larger says hey no problem, 12 percent interest.
Lesser bank can't take the loan at 12 percent so fails, leaving account holders with nothing.
It can happen here.

[5.56NATO]

"“We know that production is likely to fall off because of the lack of financing, the difficulty of getting projects approved, the unwillingness to go into projects, and the massive decline in exploration.

So if you look at it from a longer-term perspective, you can see that all the catalysts are in place. In terms of the immediacy of something, it’s going to be a failure to deliver. I don’t know where it’s going to occur, but it will be a failure to deliver somewhere.”

Eric King: “It almost sounds like you feel that failure to deliver is imminent.”

Sprott: “It’s hard for me not to think it’s imminent. When I got into the gold market back in 2000 I read Frank Veneroso’s gold book. He suggested that the central banks, who said they had 35,000 tons of gold, probably only had 18,000 tons.

And I see data every year that suggests demand might exceed supply by 2,000 tons. So the metal can come from only one place -- (Western) central banks. That’s why I wrote the article in 2012, ‘Do They Have Any Gold Left?’ Then you see data points out of the U.S., where the U.S. is exporting 40 tons of gold one month, and the U.K. is exporting 112 tons to Switzerland one month, and the U.K. doesn’t even produce any gold -- so where is this gold coming from?

These numbers all reek of the suppression of the gold price and tell you the game will have an end date. I think we might be very close to that end date now. I know lots of your readers and listeners will have seen a comment by some reporter from Bloomberg who suggested that the Bank of England's vaults were empty now. [LAUGHTER.]

And I suspect that is very close to the truth -- that the supply is dwindling, and someday they just give up on it. Like they should be giving up on the policy of money printing. They accomplished nothing. We’re so misguided on all this stuff. It’s not working. All we’re doing is piling on the debt. Well, there is a cost to debt and that cost gets bigger all the time."

"When you see a bank goes down, what’s the first thing you think about? ‘I want my money out of the bank. Where am I going to put it all? I better put it into something real.’ We keep hearing that the bad loan problems are getting worse, the trading volumes for the commercial banks are going down, the spreads are narrowing. And I would never have my money in a bank. They are so levered and risky.

It’s funny that it doesn’t strike people as being risky, but when you put your deposit into a bank, you’ve lent your money to the bank. If the money is lent to someone else who is not going to repay it, you are going to be on the hook for it. We just had the German government approve of bail-ins in that country. So we are all set up for it. Everybody knows there is going to be a problem in the banking industry because it’s just way too levered based on any normalcy in banking. So our day will come.”"
http://kingworldnews.com/kingworldne...Are_Empty.html

Gold may be ready to rise unless the banks can sell "paper" gold.

[Oswald Bastable]

I fully expect the free-fall of the the dollar to begin soon.

QE is the only thing that has been propping it up for the last several years.

[Viking350]

Never bet against the American economy.

[Oswald Bastable]

Never bet against the American economy.

We no longer have an American economy. We have a socialist manipulated, government mandated and regulated, psuedo-economy...one which is just waiting to plummet to the depths at the moment of George Soros's choosing.

[5.56NATO]

Yeah, it's a controlled and planned economy, controlled and planned by the fed.

[Viking350]

Believe what you like. Those that bet against the American economy more often than not lose.

[imanaknut]

Seems like just another attempt by our wonderful federal government in their seemingly continued attempt to cripple this country.

As others have said, I truly believe that we the people are stronger than this government realizes, and we have the capability to outlast their attempts to turn the US into a 4th rate country.

[chiak47]

I'm surprised that the mere mention of the QE3 end hasn't spooked the markets. This is going to be a hot summer...

[5.56NATO]

Believe what you like. Those that bet against the American economy more often than not lose.

You're equating federal reserve notes with the hardiness of America and Americans, there's no correlation.

[Viking350]

You're equating federal reserve notes with the hardiness of America and Americans, there's no correlation.

Just like there is no correlation between what happens in a Chinese bank and what happens in an American bank.