The Consequences of Quantitative Easing – Podcast 2.17.14

The Consequences of Quantitative Easing

JM Bullion
Buy Physical Silver Online

Podcast Summary

0:00-4:07 Intro

Al Roker for Fed Chair?

4:07-7:40 Discussion of why the markets buy into the Fed’s projections. Every year since 2009 we have heard about recovery summer, green shoots and projections that growth will accelerate in the second half of the year. Recovery has not really happened and the Fed has embarked on a series of quantitative easing (QE) programs as a result. When economic recovery doesn’t happen lately the weather is blamed. Louis notes that a poor workman blames his tools for bad results and a poor economist blames the weather and suggests if weather is so important to economic forecasting that Al Roker be named head of the Federal Reserve. As long as the Fed provides the stimulus or monetary cocaine as Dallas Fed President Richard Fisher calls it, the markets believe the Fed. The Fed is now saying they can taper because the economy is recovering, tapering is not tightening and they can achieve escape velocity. Will the Fed ramp up the QE if the economy continues to falter for non weather related reasons? Can they if China and other creditors complain?

Monetary and Fiscal Policy

7:40-11:40 how the U.S uses monetary (QE money printing) and fiscal policy (raising the debt ceiling to increase deficit spending) to try and boost the economy. Both lower the confidence of the U.S. creditor. These policies have not helped the economy. The Fed probably can blame the weather one more month. Review of the state of the economy, employment participation rate, youth unemployment, real estate and housing market.

The Wizard of Oz

11:40-15:27 Janet Yellen’s back ground and her (in)ability to make financial projections Discussion of how the Fed can keep interest low without QE and the Fed’s No Exit Dilemma.

QE Has Consequences
15:28-18:00 The Fed has printed $4 trillion out of thin air and told the world with a straight face it was to help the economy and to create jobs. They can’t just stop and not expect adverse consequences. Discussion of Art Cashin’s views of QE and inflation

Can the Economy Operate without Fed Intervention?

18:00-22:10 Discussion of an economy without an interventionist central bank. Review of the economy pre and post Federal Reserve. Discussion of how the Fed buys mortgage backed securities and U.S. Treasuries

22:10-23:30 discussion of tight regulations on lending vs. loose monetary policy and lax fraud enforcement.

23:30- 38:45 discussion of the “American Spirit”, a culture of laziness and entitlement – “we think, they sweat”. Why people don’t or won’t work and the debt driven economy. A good portion of the US economy is spending and a lot of that spending is done with borrowed money. Discussion of the value of a college education and people who either did not go or did not graduate college. How to learn without college and the need to diverentiate. Discussion of college internships and minimum wage jobs/apprentice.

38:45 -42:45 Discussion of real estate leads and how real estate agents follow up or don’t. Discussion of the value that a real estate agent needs to add to a transaction.

No One Makes You Do Anything

42:45-45:20 discussion of personal responsibility

45:20- discussion of determining an appropriate comparable when selling a home.

The Consequences of Quantitative Easing

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Further Reading:

Why The End of Quantitative Easing May Be Bad for The Dollar (and Good For Gold and Silver)

The King is Surrounded – No Fed Exit

Millennials Not Part of the Club

Fed’s Fisher Says Carry on With Tapering QE

Royal Canadian Mint

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