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Fed's Massive Stimulus Had Little Impact: Greenspan

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http://video.cnbc.com/gallery/?video=3000030846

Video interview here.

http://www.cnbc.com/id/43598606

The Federal Reserve's massive stimulus program had little impact on the U.S. economy besides weakening the dollar and helping U.S. exports, Federal Reserve Governor Alan Greenspan told CNBC Thursday.

In a blunt critique of his successor, Fed Chairman Ben Bernanke, Greenspan said the $2 trillion in quantative easing [cnbc explains] over the past two years had done little to loosen credit and boost the economy.

"There is no evidence that huge inflow of money into the system basically worked," Greenspan said in a live interview.

.....

Greenspan was also pessimistic about the U.S. deficit talks........

If that happens, he said, the U.S. would have to continue paying debt holders or risk major damage in global financial markets. As a result, “we will default on everything else.”

He added: “At that point, I think we’ll all come to our senses.”

Greenspan was a poodle whilst at the Fed, he went again his instincts and went along with the party, kept the boom rolling at all costs, now it appears he's wanting to stick the boot into Bernanke.

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http://www.zerohedge.com/article/t-minus-two-months-500-billion-ticking-timebomb

Ever since the famous Stanley Druckenmiller Op Ed published in early May, which called for an outright default of the US, saying it would not be the end of the world, and in fact the US would emerge stronger as a result of finally taking the first steps to getting its fiscal house in order, there has been a visible shift regarding the US debt ceiling discussion, with republicans (so far) digging in and refusing to budge on the issue. After all, on the surface Druckenmiller is absolutely correct: with interest rates near record lows for the past 3 years, interest payments would be manageable for a long time even if general rates were to surge due to the Treasury's fixing of low cash coupons over the past 3-4 years, amounting to about 20-30% of all annual tax receipts. There is however one very big problem with this argument, one which we pointed out back in April 2010 when we said that "What people don't realize is that...unless the UST can roll its debt not on a monthly but now weekly basis in greater and greater amounts, the interest rate doesn't matter. All it takes is one semi-failed auction and it's game over as hundreds of billions in bills become payable." Enter the always forgotten maturing debt argument. And as a just released presentation by the Bipartisan Policy Center titled "Debt Limit Analysis" reminds us, aside from the actual deficit funding math, which is that in August there is a $134.3 billion cash shortfall that has to be funded with debt, there is a far greater risk. Or, put numerically, 467.4 billion far greater risks. This is the amount of debt that matures through August 31, and has to be rolled over or the US is bankrupt... in every sense of the word. Once again, America's politicians and media get broadsided by the definition of gross versus net. Because, in reality, the inability to issue more debt post August 3 means a halt to all new debt issuance. Which, unfortunately because it means Geithner's scaremongering is actually correct, would imply the end for the debt ponzi.

From the debt perspective there's this from zerohedge. August may be very interesting indeed.

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http://www.zerohedge.com/article/record-447-million-people-celebrate-geithners-departure-and-end-qe2-through-foodstamps

The one and only clearest indication of just how effective the recovery and QE2 in general has been, comes courtesy of the USDA, whose just released update of April participation in Supplemental Nutrition Assistance Program (SNAP), better known as "foodstamps", shows yet another record, this time 44.647 million people, an increase from May's 44.587 million.

June%20SNAP_0.png

An impressive chart.

Not bad for a couple of trillion is it?

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An impressive chart.

To be fair, it's less impressive if you use a proper chart starting at 0%. A 50% rise is bad enough, but that scale deliberately makes it look like a 1000% rise.

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To be fair, it's less impressive if you use a proper chart starting at 0%. A 50% rise is bad enough, but that scale deliberately makes it look like a 1000% rise.

It does appear on track to be a 100% increase.

Although isn't JP Morgan handling the issuing of foodstamps now?

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The Federal Reserve's massive stimulus program had little impact on the U.S. economy

F*cked China over though.

So I guess it depends on what you thought the purpose was.

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  • 311 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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