Monday was the 9th consecutive day of little-to-no range, no volume, and no volatility. This NINE day period has an amazingly small range of just 17.00 points, but about 90% of that was just 12.00 points. The prior number is a decent range for ONE day, while the latter barely acceptable. This should be coming to and end as the market tests the lower bound of the chop zone. Maybe its next move is an early new low, then a rally back into congestion?
Last week a Fed official, Richard Fisher, gave a speech in which he nearly accused himself of monetizing the debt of the US. We all know that the Fed is indeed monetizing US debt via a brief stop on the books of the Primary Dealers (PD) through its POMO scheme. Since these folks will never admit to it, this is as close as an admission I believe we’ll ever hear.
“There are perceptional risks, for example. Our duty is most distinctly not to monetize – or even be perceived as monetizing – the debt of fiscally imprudent government. Throughout the history of nations, monetizing the budgetary excesses of governments has proven to be a direct path to economic perdition. Having already peeked inside that door, I feel strongly that we must now shut it, lock it and throw away the key.
“There is the risk that we might breach our duty to hold inflation at bay. Inflationary impulses are gaining ground in the rest of the world. At the core of the euro zone, Germany, where unemployment is actually lower than before the crisis, wage inflation is pressing up against 3 percent. Retail price inflation in the United Kingdom now exceeds 5 percent, despite very high unemployment. Reported inflation now exceeds 4.5 percent in China, 6 percent in Brazil and 8 percent in India…”
One day the Fed “may” admit to the presence of inflation in the US economy, but it will certainly not admit to causing it. One more thing that Benny & The Inkjets will never confess is its participation in the greatest Ponzi scheme of all time: the aforementioned POMO purchases to placate the psychopathic spending of the US Congress and White House.
From MarketWatch:
Last week a Fed official, Richard Fisher, gave a speech in which he nearly accused himself of monetizing the debt of the US. We all know that the Fed is indeed monetizing US debt via a brief stop on the books of the Primary Dealers (PD) through its POMO scheme. Since these folks will never admit to it, this is as close as an admission I believe we’ll ever hear.
“There are perceptional risks, for example. Our duty is most distinctly not to monetize – or even be perceived as monetizing – the debt of fiscally imprudent government. Throughout the history of nations, monetizing the budgetary excesses of governments has proven to be a direct path to economic perdition. Having already peeked inside that door, I feel strongly that we must now shut it, lock it and throw away the key.
“There is the risk that we might breach our duty to hold inflation at bay. Inflationary impulses are gaining ground in the rest of the world. At the core of the euro zone, Germany, where unemployment is actually lower than before the crisis, wage inflation is pressing up against 3 percent. Retail price inflation in the United Kingdom now exceeds 5 percent, despite very high unemployment. Reported inflation now exceeds 4.5 percent in China, 6 percent in Brazil and 8 percent in India…”
One day the Fed “may” admit to the presence of inflation in the US economy, but it will certainly not admit to causing it. One more thing that Benny & The Inkjets will never confess is its participation in the greatest Ponzi scheme of all time: the aforementioned POMO purchases to placate the psychopathic spending of the US Congress and White House.
From MarketWatch:
http://www.marketwatch.com/story/us-treasuries-pozi-scheme-says-ex-pboc-adviser-2011-04-11?link=MW_related_stories we read...
A former adviser to China's central bank said on Monday that China should have retreated from the U.S. government-bond market and instead allowed the yuan to appreciate more freely, warning that U.S. sovereign debt was akin to a giant Ponzi scheme, according to a newswire report that cited an editorial on Caixin Media Group's website. Yu Yongding, a former member of the People's Bank of China monetary-policy committee and now a member of a state-run policy group, said allowing appreciation of the yuan against the U.S. dollar under a free-floating currency regime would have reduced China's need to acquire U.S. Treasuries. He likened the U.S. Treasury market to a "giant Ponzi scheme," arguing that Federal Reserve buying of Treasuries has artificially kept bond prices high, but that they would eventually fall to levels which reflected fundamentals of the U.S. economy.
OK, we can read that and say “who cares what a communist thinks” but when Fed member Richard Fisher nearly admits to the same thing, well...
A former adviser to China's central bank said on Monday that China should have retreated from the U.S. government-bond market and instead allowed the yuan to appreciate more freely, warning that U.S. sovereign debt was akin to a giant Ponzi scheme, according to a newswire report that cited an editorial on Caixin Media Group's website. Yu Yongding, a former member of the People's Bank of China monetary-policy committee and now a member of a state-run policy group, said allowing appreciation of the yuan against the U.S. dollar under a free-floating currency regime would have reduced China's need to acquire U.S. Treasuries. He likened the U.S. Treasury market to a "giant Ponzi scheme," arguing that Federal Reserve buying of Treasuries has artificially kept bond prices high, but that they would eventually fall to levels which reflected fundamentals of the U.S. economy.
OK, we can read that and say “who cares what a communist thinks” but when Fed member Richard Fisher nearly admits to the same thing, well...
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