QE & The Monetary End Game

Now that we are only a  few days away from the Nov 3rd announcement of the Fed's Monetary Debasement Policy, which is affectionately being called QE2 by the media, what does this mean for the markets? Have the markets run their course? Are they going to sell on the news? Will QE2 just ignite more buying by SkyNet? Your guess is as good as mine. I have my opinions dangerous as they are, but I will say this, a few months back I posted just before the August Fed Meeting that what the Fed intends to do with more monetary stimulus was the beginning of the start of the End Game.

http://tradersutra.blogspot.com/2010/08/expect-deflation-as-deleveraging-is.html

http://tradersutra.blogspot.com/2010/08/qe-20-we-can-hope-that-fed-waits.html

Before that meeting there were many at the Fed who believed that deflation was the biggest problem that the Fed had to deal with and that monetary policy should be used at any and all costs to break the back of deflation. I agree that deflation is a bigger worry than inflation at the moment, I also believe that inflation as well as its evil step brother hyperinflation is not such a worry at the moment. So why am I so up in arms about the Fed's QE plan? Quite simply, because it doesn't work. It won't work. It has never worked. The Fed knows this. Why do they do it? Even more simply put, the Fed is owned by the Financial  Sector. Why else would the Fed ask the financial sector what the expectations for QE would be?

http://www.bloomberg.com/news/2010-10-28/fed-asks-dealers-to-estimate-size-impact-of-debt-purchases.html

This is truly appalling behavior from our Central Bank. This overtly shows who is running monetary policy in our country. I have always known who really pulls the strings but it is truly staggering the in your grill mentality of both the financial sector and the Fed. The lies are not even credible anymore. Everyone knows that both the US Financial Sector as well as the global economy is a giant ponzy scheme. What's even worse is that this giant ponzy scheme is being built on a house of cards. This house of cards is stuffed to the rim with bad loans and debt paper. These bad loans and debt paper are vastly over valued and primarily denominated in over valued currencies. What we have is a house of cards that is termite riddled. This is the current sorry state of global finance. This is the system that central banks and governments all around the world are propping up. This is the rotten to the core system that tax payers all around the world are subsidizing.

We are truly facing an impending Monetary End Game. I capitalize this only because it really is a game for central bankers and financial elite's. It's a game and normal citizens are the pawns.

http://tradersutra.blogspot.com/2010/08/keynesian-end-game-fooled-by-stimulus.html

The Federal Reserve I am sure will conduct another round of QE when this round fails. It will become a movie franchise on its own, kind of like the SAW franchise. The Fed can start QE37 in 3D and it won't work. To bad or even thank our lucky stars it won't really matter because by that time Hiroshima would be the theme. The only thing the Fed can do is print. That is the primary and only  monetary policy choice that they have. They are not any real problem solvers working at the Fed. What we really have in place of central bankers are Bennie and the Inkjets. This policy can only make things worse. If the elite rich like it then that means its bad policy for the rest of us. How long can this go on is really anybody's best guess. What we have finally figured out over the last few years is that the Fed has no idea what they are doing, they they defer to the Financial Oligarchy for any type of policy recommendations, and that the Fed Institutions are all dying. The later something that is greatly welcomed.

2008 Redux....A Walk In The Park

The more things change the more they stay the same.

Step into my Time Machine and lets transport us back to 2008.

In 2008

The Dollar was very weak. It had dropped from 92 at the end of 2005 all the way down to 72 in Mid 2008.
The Euro was rallying from 1.20 all the way to 1.60.
Asia was decoupling from the rest of the world.
The US was in a massive easing cycle
The Euro was in a tightening cycle.
Bank Issues were being put on the back burner because the Fed was accommodating.

Lets take it to the present in 2010

The Dollar is extremely weak. A 15 year low vs the Yen.
The Euro has rallied from 1.18 to over 1.40
Asian markets ex Japan are all hitting highs. Can we say decoupling?
The US is in the middle of a massive easing cycle (QE2)
Euro overnight rates are rising as many in Europe are anticipating higher rates.
Foreclosure gate is not in the minds of equity investors as the Fed is accommodating.

We all know how 2008 ended up.
2010-2011 will make the events of 2008 seem like a walk in the park.