Federal Reserve Wants To End Bond Buying

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http://online.wsj.com/article/SB1000142 ... 37552.html

That article appears to be behind the Great Paywall of Murdoch.

Calculated Risk (Blog) has a good rundown of how they percieve the possible "tapering" of QE3. Calculated Risk takes the postion that QE3 will not end before December 2013.

http://www.calculatedriskblog.com/2013/ ... g-qe3.html

Behold! The End is Near!

The Market floats on easy money, old higher interest bonds were bought, and the market flooded with low interest bonds, and the ending of QE ends market support, drives up intrest rates, and reduces the value of outsanding bonds. Shave and a Haircut.

More money in all levels of crop production leads to more production, and declining prices.

Job growth does not match the decline in unemployment, more people have given up, than have been hired.

The net worth of the people is not in the market, it is in their houses, which has not seen a bottoming of prices.

We are poorer, consume less, oil use is declining, incomes, hopes. New workers are taking the greatest hit, the never employed, which also fixes unemployment numbers. High debt, no job, or a job that cannot support, much less pay down debt.

Gold is down, Silver by a third, Stocks and Commodies will follow, then the losses will more than equal QE. Banks, Brokers, Pension Funds, are going to take a hit, and most likely have the computer set for auto sell, sell it all!

The Black Swan circled around and is returning. Stocks are over priced.

Business makes war on the people, low wages, exports jobs, The Government makes war on the People and Business, devaluing privately held assets. Reducing their debt by reducing the value of outstanding bonds, and the dollars needed to pay for them. It is not just China, it is The World Reserve Currency, held in bonds, reducing the value of world capital.

Countries that do not use Magic Accounting, say unemployment is a third to half, and they have been in recession for six years.

First the Government and then The Fed blew a Bubble, covering insolvent Pensions, Bankrupt Banks, but they are out of breath.

It is still a 70% Consumer Economy, and the consumer is in bad shape. At first Walmart and the Dollar store did well, and all my local Goodwills redecorated, expanded. Downscale shopping grew, but now those numbers are dropping, and the Shoppers did not go back to lord and Taylor, and Whole Foods.

There has been no recovery in Jobs, Wages, Housing. The Government is selling Citizenship to Illegals for $1,000. War, which takes up half our taxes has stalled, the cost of the last decade in long term care, 50,000 of our troop killed or injured, does not leave enough for New and Better Wars.

Upkeep on dated technology is staggering. A swarm of fifty missiles can overcome a Carrior Groups combined defenses, for less than the cost of one plane. Everyone has Drones in mass production. Next step, better targeting, where a thermal sighted sniper rifle drone can put a.50 caliber round in a six inch target at ten miles, over and over.

Where there is no vision the people perish!

Next Tuesday, after lunch.

If this slide continues through Friday, Monday will be Black.

Saw a headline, Congress has the lowest rating of any group. The Bloods and Crips have more street cred. Outlaw biker gangs can be depended on.

In China the interbank rate hit 13.9%, with production down. As the second largest economy, they are checking speculation, while we are funding it.

We must do what mature adults have always done, gather to demand redress of grivences, at the torchs and pitchfork rallies.

We cannot unelect Congress, not fast enough to count, O'Bama is looking for a home place in the old country. Their plans do not include us.

American Corporations are holding their earnings offshore and untaxed, likely in Yuan. All they have here is an office, they will be gone as fast as Cheny moved Halliburton.

Congress, who is exempt from insider trading laws, being a SRO, has a spot picked out for when they are questioned, a place without extradition.

Outstanding Credit Default swaps are worth more than ten times the world economy, and the coming crash is fully shorted.

The Fed has been buying $85 Billion a month, which matches our excess spending. When they stop buying, no one else will. That is a cut of a Trillion a year in Federal Spending.

Compared the Secquester was $85 Billion a Year, and ended school lunches, pet shelters, and gutted the safety net, food stamps, and raised user fees. The next cut is planned just before the next election, so it does not kick in till after the election.

The big ball of money was the War Baby retirement funds, which they spent and cannot return.

The fan has been shat upon.

They have been changing their tune at the Fed as a result of the market volatility. They like to think that the new improvements have been linked to housing and with the mortgage rates spiking like that this will dampen that considerably. The latest growth figures were lower than expected and the inflation rate is lower than ever (well since the gold standard era), deflation appears to be a risk. In Japan, for 15 years, they kept predicting that they'd stop the low rate policy because, well, they'd have to somehow, and at times they'd make such noises and this would lead to damage that would force them back to those low rate policies. The only thing I see different in the US is that there's a streak of Puritanism there that could make them be nastier in general. Then again the banks' balance sheets are loaded with bonds that would be reduced in value with a higher rate policy putting them in danger of collapse and they wouldn't want that now, would they.

I wish I could remember where I read a few days back, that George Osbourne is to ask Parliament what contingency plans are in place for the collapse of the Bond market, or similar.

So it looks like this side of the pond also.

Any collapse of the bond market would be a political decision. One that they never made in Japan despite predictions of such for many, many years. The only way I see this happening is if the puritan barbarians take over and demand a great cleansing and get one. That's the only way.

I am not making dire predictions, I am inclined to see things develop like in Japan. However, one difference between the US and Japan is that the US is full of crazy puritans who may gain decisive influence. Then again there may be equivalent people in Japan... though I doubt it.