Dimon, Mack and MoynihanQE2 is the June end. But global QE3 has already begun. As usual, is Japan pacemaker. As temperatures rose at its reactor Fukushima so Japan of the monetary base, amounting to 100% per week! What happens with this new, hot money? Nobody knows exactly.
Advice for all - central planners, politicians, and households, is also here: If you have money, you do so robbed a bank.
From the point of view of a modern Economist stimulates nothing better than a bank robbery. The money leaves the cold embrace of a bank vault; soon, each pimp and bartender has his pockets full. Hot money gets.
An article in Rolling Stone magazine shows. It is explained, as a Wall Street founded woman and a Wall Street widow, a company specially known spending spree on the US Government as a TALF. She would think that already had done enough for the Mack family fed. John Mack is Morgan Stanley. It had been reserve not for the generous support of the US Government and the Federal, he could be parking cars. Instead, the Fed rescued the entire financial sector.
First bought Wall Street bad bets at inflated prices and then banks lent money to artificially low interest rates; You were invited, the money, give back to the Government for a sure win.
Business was so good at Morgan Stanley, which the distaff side of the budget of Mack apparently couldn't resist. In June, 2009, with her friend Susan Christy Mack investment company and in 15 million. Then, she borrowed $220 million from the Government. A bold move on their part? If you think so, you are as naive as a root. The update was; the money of non-recourse loans at deep discount buy the two used. If the loan to value increases, she would make profits. If they fell, the Government would take the losses. Are much safer and more profitable than robbing banks.
Two months later, Mr. Mack, bought carriage house in Manhattan, with 12-space maybe with a little help from his blonde Assistant, limestone garage for the getaway car.
If your own small stimulus was you have go, you can listen to. Their dollars, pounds, euros and pesos are losing value. You trust in the Government inflation figures. A honest measure of "Inflation" is available through a couple of professors at MIT. Their "billion price project" pussyfoot (BPP) not to. It troll Internet, data sets prices and always reveals the most accurate measure of inflation. This new index shows the rate of consumer price increases for the last 12 months at 3.2%. This laboratory Department CPI tally rose by 2.1%.
Something is terribly wrong. Either a billion prices are in error. Or are people who buy US Treasury bonds. You accept a real yield (based on the numbers of BPP) of just 1.2% on a 30-year dollar-denominated, inflation and sensitive Treasury bond, decreases while the dollar and the depositary is actively trying to drown it.
In the last six months according to BPP, prices have risen almost twice as fast - at an annualized rate of 6.1%. If these numbers hold, bond investors already have a built-in negative return. For the last three months, the inflation rate is even higher, 7.4%, about 300 basis points more than the yield on the long bond.
Treasury prices have increased for almost 30 years began. You are now could be prepared? Perhaps. Inflation is not as holds a liquor store. It is more like a major bank heist, the product of long planning trained by professionals. Whenever the nominal amount of which were faster than the real available money and services buying money increases, you expect rising prices.
In America real private sector achieved output a plateau at the end of the twentieth century. In the last 10 years, it has hardly ever. 2001 9.31 Trillion dollars was all private sector GDP. Now it is $9.72 trillion. But flat while real has been output, the output of the hot "money" has not. If they steal it not by taxpayers or bond it pay him with no intention that the feds are fake.
The Fed is "up to 1.8 trillion dollars as of end of 2008 to end of June, 2011 - partly to finance the staggering deficits of almost $4.5 trillion Federal Government in the three years printed". This led to an increase in GDP, almost entirely by government spending, with 79% of household income growth of Government transfer payments.
Meanwhile, the U.S. monetary base has tripled in the last three years. These increases are not all immediately households as "Money." You are mostly still in Bank vaults, waiting, be free. Then, watch out. Dollar will be too hot to hold.
You spend it like you it by Bill Bonner stole originally appeared in the daily reckoning.
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