More Rumors the Fed Will Print

From Zero Hedge:

For now it was just Jan Hatzius calling for QE3 now if not sooner. With the addition of JPM to the list of banks now implicitly expecting (read demanding) QE3, it is now quite clear how Wall Street feels – after all someone has to pay those Wall Street bonuses – it sure won’t come from M&A activity, underwriting of Chinese IPO frauds, or trading volume. Here is the key sentence from a just released note by JPM’s Michael Feroli: “We believe the minutes lend themselves to our view that there is a somewhat better-than-even chance the Fed takes action at the next meeting to increase the average maturity of assets on their balance sheet.” Keep an eye on the market tomorrow for confirmation: a third day of the same low volume meltup we have seen this week should make the open QE3 question into case closed…

For those unfamiliar, a “low volume meltup” is when the stock market rises high for no reason (or, indeed, even rises when the news clearly indicates a down day) on low trading volume.  For the most part of late, if you see the market dropping it is a much higher volume trading day than the days you see it rise.  All part of the fake, ponzeconomy we currently have.

Anyways, getting back to the Fed printing money.  I’m still figuring it won’t happen.  I understand that the only way we may avoid an “official” recession (ie, where the government numbers clearly show it) is by printing up money…but even that isn’t a sure thing, and any “good” you get out of it will have to be counterbalanced by the knowledge that more printing will lead to more inflation for basic necessities (food and fuel).  To me, there is far more downside political and economic risk in printing than in not printing.  But rumors of “QE3” keep flying, and now there this statement from someone at JP Morgan saying it may well happen..and if anyone is juiced in to Fed decision making, it would be a firm like JP Morgan.

I hope they don’t do it as it would be, long term (and possibly short term) a catastrophe for the economy.  But the Ruling Class is desperate – something has to be done to get unemployment down below 8% by August of next year or Obama and his Ruling Class liberals are doomed.  Dying Ruling Classes do tend to cast around for desperate expedients to stay alive…even rather stupid expedients.  And, so, even though I still think they won’t print, I have to put money printing in the realm of distinct possibility…we’ll see how it comes out.


Wall Street Expects Fed Money Printing

From Bloomberg:

Stocks surged on Tuesday, with the S&P 500 and the Nasdaq up more than 2 percent, as buyers emerged before a highly anticipated address by Federal Reserve Chairman Ben Bernanke later this week.

Technology and other growth stocks drove much of the market’s gains, with the S&P Information Technology Index .GSPF up 2.4 percent.

A weaker-than-expected reading of the U.S. housing sector was the latest in a string of discouraging data that has raised expectations the Fed will take measures to prop up the economy…

Also hoping for a bit of Fed printing would be Obama and his Democrats…because only a boatload of “free” money can keep our financial system from falling apart over the next month or two, leading to a pretty bad recession.  Thing is, I don’t know if it would work – or, at least, work well enough to keep us out of official recession through the 2012 election.  A lot of observers are figuring that Bernanke has shot his bolt…all he can do by printing at this point is massively stoke inflation by killing the value of the dollar.  And, of course, even if Bernanke and the Banksters keep things afloat through 2012, it would be just scheduling a massive recession for 2013…that wouldn’t bother Obama, of course, because by then he’ll never have to face the voters again.

We’ll see how it comes out – but do note with care the sickness of our financial elite….hoping that the government will essentially steal your money via inflation in order to bail them out.  Gigantic reforms need to be undertaken to create a free, transparent market where Wall Street gamblers are replaced by careful investors.