Federal Reserve Statement In English - Denniger

[interestrateripoff]

http://market-ticker.denninger.net/archives/2444-Federal-Reserve-Statement-In-English.html

From The Fed:

Release Date: June 23, 2010

Information received since the Federal Open Market Committee met in April suggests that the economic recovery is proceeding and that the labor market is improving gradually.

The economy is falling off a cliff. The Federal Government has blown over $1.5 trillion a year for the last two years to try to get private parties to lever up again, but they have no more credit capacity and still have no jobs.

Household spending is increasing but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit.

Housholds can't spend what they don't have, and they don't have. There has been no income growth other than government handouts. Household "wealth" has been revealed to be an empty suit, devoid of any substance, as it was simply a $100,000 VISA credit line, which has now been slashed to $100.

Business spending on equipment and software has risen significantly; however, investment in nonresidential structures continues to be weak and employers remain reluctant to add to payrolls.

Nobody in their right mind would hire anyone with the economy this crappy and the only consumer and business spending that is taking place is coming from the nipple of a government tit. Businesses are taking seller-financed OptionARM equipment deals, which will soon start bankrupting the firms that were idiotic enough to do that.

Housing starts remain at a depressed level.

New home sales printed the lowest number on record today. "Depressed"? Well, yes. As in DEPRESSION. Welcome to our use of that word. Expect it to expand.

Financial conditions have become less supportive of economic growth on balance, largely reflecting developments abroad.

Greece is the first of many. It's coming here. Be ready.

Bank lending has continued to contract in recent months.

Banks have not only lied, they've bought all this crap paper from the European nations. The banks are still bankrupt, incidentally, but we're still too chickensh1t to tell you the truth.

Nonetheless, the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, although the pace of economic recovery is likely to be moderate for a time.

Prices of energy and other commodities have declined somewhat in recent months, and underlying inflation has trended lower. With substantial resource slack continuing to restrain cost pressures and longer-term inflation expectations stable, inflation is likely to be subdued for some time.

There is no demand for these commodities - except for financial speculation.

Which we support.

Especially if it bankrupts the middle class.

The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period.

Point, pull, CLICK.

Oh damn.

The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to promote economic recovery and price stability.

Our financial forecast:

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; James Bullard; Elizabeth A. Duke; Donald L. Kohn; Sandra Pianalto; Eric S. Rosengren; Daniel K. Tarullo; and Kevin M. Warsh. Voting against the policy action was Thomas M. Hoenig, who believed that continuing to express the expectation of exceptionally low levels of the federal funds rate for an extended period was no longer warranted because it could lead to a build-up of future imbalances and increase risks to longer-run macroeconomic and financial stability, while limiting the Committee’s flexibility to begin raising rates modestly.

Hoenig has it figured out and we're warning you, so you can't say we didn't later. Just like we "never saw the housing bubble" coming.

Oh wait - Greenspan did. In 2004. He just didn't want anyone to know about it.

Just like us.

Denniger being his humorous best.

Still I'm sure the Fed know what they are doing as they are the experts and they've done a terrific job over the decades....

[interestrateripoff]

Recovery? WHERE?

What sort of abject ******** have the folks on Tout TV been running?

June 23 (Bloomberg) -- Purchases of new homes in the U.S. fell in May to a record low as a tax credit expired, showing the market remains dependent on government support.

The entire economy is dependent on government support.

But the government has no money. It is in fact borrowing nearly as much as it takes in via taxes.

If you made $20,000 a year, and borrowed another $20,000, for how long would your credit card company allow that to continue?

Why does the American Public continue to lap up this crap from CNBS and other media, along with the White House and The Fed?

Can you not figure out what would happen to you if you tried to run your personal family budget the way the government does?

"Quantitative Easing", "Easy Money", "Zero down mortgages" and all the rest - it is all a scam designed to impoverish you by stripping you of every asset you have now and as much of your future earnings as they can get you to sign away.

Housing, education, consumer credit, all of it. A scam. Every bit of it. Top to bottom.

The entire intent of these "programs" has been and is an attempt to get you to spend money you don't have and can't acquire. The Government has built it's entire "empire" over the last 20 years on the premise that it can continue to borrow more and more money, without any hope of ever being able to pay any of it back.

This was 3-4% of GDP, and is now 11-12% of GDP. It has been the latter now for more than two and a half years. It was mathematically impossible to continue at the former rate and obviously is impossible to continue at a rate three times the 2003-2007 borrowing pace.

We are in a Depression now and have been since 2008. A Depression is defined as a 10% contraction in GDP. But for the government borrowing 11% of GDP and spending it, GDP would have contract by at least the same amount borrowed and spent.

THAT IS A DEPRESSION and the intentional avoidance of recognition of same only accumulate more damage to GDP that ultimately must be faced and absorbed.

Geithner and Obama have continued to insist that we "spend and borrow more", along with idiots like Krugman and Summers. Their entire model is predicated on what amounts to a claim of perpetual motion, which anyone with more than one hour of physics class knows is impossible.

It has been my position since I began writing The Ticker that this is an enormous fraud perpetrated upon the public, that it is not new, that responsibility extends to the banks, to the administration (both former and current) and to the media.

That all of the above have been and continue to preach that which is mathematically impossible, and that as this mess proceeds we will run into the hard wall of reality - that we have used credit as a means of pulling forward final demand rather than productive investment and that continuing to do so requires ever-greater amounts of credit - that is, debt - all of which has to be serviced if not paid down.

At some point it is inevitable that we will run out of the ability to continue to compound debt upon debt.

This is not conjecture, it is mathematics.

It is not open to debate, it is fact and cannot be avoided.

We argue when, not what.

I have been making clear that the "when", at the point it arrives, will not provide you with a clean means to exit. It will come like a freight train barreling along at 80mph with you standing on the tracks and ignoring the whistle and the singing of the rails. If you are unprepared you will be smushed like a bug on a windshield.

"When" appears to be "now", but you're still, even with these numbers, not hearing the truth out of ToutTV. They don't want people like me on the air, as math is boring and it's sexy to tell people to "Buy Apple because the US Consumer will continue to buy more and more crap they don't need and spend money they don't have."

Cramer was pumping that garbage line of BS again last night.

I know the heroin is enticing folks, and we as a society have been main-lining it for the last several years.

We're coming up on the fatal overdose in our economy and the people who led you off the cliff are still playing their pied piper song.

I hope you're ready.

The elusive recovery.

I'm sure eventually Denniger will simply explode.

[_w_]

I'm sure eventually Denniger will simply explode.

[R K]

I'm sure eventually Denniger will simply explode.

The Denningerless recovereh.

He's bound to be dead when it eventually happens.

[Errol]

There is no recovery. God knows what the Fed is smoking.

[plummet expert]

There is no recovery. God knows what the Fed is smoking.

It's called MethylDollarMorphineAmexcard - also called MDMA or ecstasy printing. Moody Fitch & Co auctioneers of fine debt ratings

Edited June 23, 2010 by plummet expert

[aa3]

The problem is 1.5 trillion in spending isn't enough. To get out of the great depression took the USA running a deficit of 30% of gdp for 5 years straight.

Running a 12% of gdp deficit for 18 months is a good start. But we see it is not near enough. Businesses are rightly scared to hire employees with so much downside risk for demand, and demand being currently so shaky.

Otoh if a torrent of money was rushing into the society, business owners would have the opposite fear. The fear of missing some of the action.

At a minimum this year's budget should have been $400 billion higher.

Edited June 24, 2010 by aa3

[Errol]

The problem is 1.5 trillion in spending isn't enough. To get out of the great depression took the USA running a deficit of 30% of gdp for 5 years straight.

Otoh if a torrent of money was rushing into the society, business owners would have the opposite fear. The fear of missing some of the action.

At a minimum this year's budget should have been $400 billion higher.

PRINTY PRINTY.

[aa3]

PRINTY PRINTY.

Basically imo the foreseeable future will be epic printing in the developed nations.

[Zngland]

The problem is 1.5 trillion in spending isn't enough. To get out of the great depression took the USA running a deficit of 30% of gdp for 5 years straight.

Running a 12% of gdp deficit for 18 months is a good start. But we see it is not near enough. Businesses are rightly scared to hire employees with so much downside risk for demand, and demand being currently so shaky.

Otoh if a torrent of money was rushing into the society, business owners would have the opposite fear. The fear of missing some of the action.

At a minimum this year's budget should have been $400 billion higher.

You crack me up.Boom.Boom.

[interestrateripoff]

Basically imo the foreseeable future will be epic printing in the developed nations.

Why not allow poor nations to print there way out of trouble?

[TwoWolves]

The problem is 1.5 trillion in spending isn't enough. To get out of the great depression took the USA running a deficit of 30% of gdp for 5 years straight.

Running a 12% of gdp deficit for 18 months is a good start. But we see it is not near enough. Businesses are rightly scared to hire employees with so much downside risk for demand, and demand being currently so shaky.

Otoh if a torrent of money was rushing into the society, business owners would have the opposite fear. The fear of missing some of the action.

At a minimum this year's budget should have been $400 billion higher.

The US didn't get out of the great depression. WW2 culled the population and they nicked all the best minds from Europe, great scam really.