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Qe Isn’T Dying, It’S Morphing

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http://www.nomiprins.com/thoughts/2014/11/10/qe-isnt-dying-its-morphing.html

A funny thing happened on the way to the ‘end’ of the multi-trillion dollar bond buying program known as QE - the Fed chronicles. Aside from the shift to a globalization of QE via the European Central Bank (ECB) and Bank of Japan (BOJ) as I wrote about earlier, what lingers in the air of “post-taper” time is an absence of absence. For QE is not over. Instead, in the United States, the process has simply morphed from being predominantly executed by the Federal Reserve (Fed) to being executed by its major private bank members. Fed Chair, Janet Yellen, has failed to point this out in any of her speeches about the labor force, inflation, or inequality.

The financial system has failed and remains a threat to us all. Only cheap money and the artificial inflation of asset values can make it appear temporarily healthy. Yet, the Fed (and the Obama Administration) continue to perpetuate the illusion that making the cost of (printed) money zero by any means has had a positive effect on the population at large, when in fact, all that has occurred is a pass-the-debt-ponzi-scheme co-engineered by the Fed and big US bank beneficiaries. That debt, caught in the crossfires of this central-private bank arrangement, is still doing nothing for American citizens or the broader national or global economy.

The Fed is already the largest hedge fund in the world, with a book of $4.5 trillion of assets. These will plummet in value if rates rise. Cue the banks that are gearing up their own (still small in comparison, but give them time) role in this big bamboozle. By doing so, they too are amassing additional risk with respect to interest rates rising, on top of all their other risk that counts on leveraging cheap money.

Only the naïve could possibly believe that the Fed and its key banks haven’t been in regular communication about this US Treasury security shell game. Yet, aside from a few politicians, such as former Congressman Ron Paul, Congressman Sherrod Brown and Senators Bernie Sanders and Elizabeth Warren, the notion that Fed policy has helped bankers, rather than other people, remains largely divorced from bi-partisan political discussion.

Adding more fuel to the central-private bank collusion fire, is the fact that the Fed is a paying client of the JPM Chase. The banking behemoth is bagging fees for holding and executing transactions on the $1.7 trillion New York Fed’s QE mortgage portfolio, as brilliantly exposed by Pam Martens and Russ Martens.

Wouldn’t it be convenient if JPM Chase was also trading this massive mortgage book for its own profits? Or rather - why wouldn’t they be? Who’s going to stop them – the Fed? Besides, they hold more trading assets than any other US bank, so why not trade the Fed’s securities ostensibly purchased to help the public - recover?

It's a rigged game and everyone is ensuring rates cannot raise. How long they can maintain this dislocation for is another matter, but this is the long term plan.

When another dip hits this depression the spin is going to be interesting.

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It seems like we are always told we are on the edge of the cliff and at any moment the black swan will be here in the form of higher interest rates or something. Yet this never comes (even when the country is in dire straights the "markets" do not seek interest rate rises). So, presumably interest rates will never rise :( and the bankers can go on stealing with impunity because they control the piper and he will never be paid.

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Guest UK Debt Slave

It seems like we are always told we are on the edge of the cliff and at any moment the black swan will be here in the form of higher interest rates or something. Yet this never comes (even when the country is in dire straights the "markets" do not seek interest rate rises). So, presumably interest rates will never rise :( and the bankers can go on stealing with impunity because they control the piper and he will never be paid.

Fear is how they control the bovine proletariat.

Fear of losing your job

Fear of rising interest rates pricing you out of your home

Fear of climate change

Fear of immigrants

Add as required

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Er, so its going to be done by the same people who were printing debt before 2008 then?!

Quantitative easing is just two words. Its been happening for as long as we've had the current monetary system.

No, QE is different.

Its a purchase of assets by the money maker.

before, it was the handing over of money against a loan backed by assets.

One is self extinguishing.

The clue is in the name...Quantity Easing...in banking, easing means adding more through low cost. Quantitative means Quantity, but obfuscated.

Edited by Bloo Loo

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