Sunday 60 minutes interviewed Ben Bernanke : an unprecedented event. The head of the Federal Reserve had always declined any invitation to do so, perhaps to keep that golden mystery and inscrutability that always surrounds the central bank of the United States.
But times change. An economic crisis that is unprecedented in recent history and the jib of protest against the scandalous conduct of the directors of ' AIG - the insurance giant rescued by the U.S. government to sound of 180 billion dollars - that regardless of any torn from the taxpayer money, they are self-allocated $ 160 million in bonuses, have forced the old Ben a scendere in campo rivolgendosi direttamente alla nazione.
Il servizio di 60 minutes cerca in ogni maniera di mostrarci il lato umano di Bernanke . La storia della sua famiglia, i suoi studi, come si fosse preparato una vita intera per affrontare una crisi economica come quella odierna. Ad un certo punto, l'intervistatore interroga Ben, in merito ai salvataggi che la FED ha operato nei confronti di una serie di società finanziarie. Bernanke con aria afflitta, risponde di non aver potuto agire altrimenti e annuncia di essere profondamente infuriato nei confronti di queste entità, in particolar modo dell' AIG , la cui vicenda lo avrebbe riempito such a rage, to drive him several times to slam down the telephone receiver while debating the issue. It is perhaps the most touching moment of the entire interview. Reflected a genuine pain almost from the words of the old Ben.
As I followed the interview and was looking for, seized by emotion, to grab a packet of tissues, Bernanke totally changed gear and catch me unprepared to do with reassuring by declaring, "But we have a plan. We're working on. And I think that able to stabilize (the economy ed), and that we will probably end the recession this year. We will begin shooting next year. "
All right then. Ben
Fed tightening and the rudder firmly in their hands and have taken a route that will lead us out of the raging sea by the end of the year.
then came Wednesday, the day of the scheduled meeting of ' FOMC - the Committee of Federal Reserve which decides monetary policy of the United States - and everything changed. Generally, the committee shall undertake adjustments to the interest rate, but the rate at historic low of 0.25% was very little left now to retouch.
L ' FOMC decided to use the grounds as a final solution justification for the decision: The
L ' FOMC continues for yet a few lines to describe a situation that is ill-ever-worsening concilia con i discorsi fatti da Ben a 60 minutes su una prossima ripresa. La vera e propria bomba però, arriva poco più sotto nel prosieguo del comunicato:
, by itself, the announcement of the doubling of the purchases of MBS (securitized mortgages ) in possession of the two major GSEs , Fannie Mae and Freddie Mac is significant. Until now, this seemed to be the approach to the "quantitative easing " Ben's favorite, although the head of the Fed had threatened several times, from December onwards, di lanciarsi nell'acquisto diretto di buoni del tesoro a lungo termine. Un'opzione che però, si era sempre rifiutato di adottare concretamente.
Mercoledì è finalmente giunta la resa.
Non c'è modo di minimizzare la gravità del passo deciso dall' FOMC .
E' l'equivalente economico dell'aver spinto uno di quei bottoni rossi protetti da piccoli schermi di vetro. Quelli che solitamente nei film vengono premuti come ultima risorsa in contemporanea al girare simultaneo di una coppia di chiavi.
Se si è intrapresa una simile azione significa che la situazione sta tutt 'altro che migliorando. Altro che ripresa all'inizio del 2010.
Mercoledì afternoon, while everyone is still waiting for the release of ' FOMC and said, for the most part, make sure that did not contain any significant announcement, the stock market going on a casino. The dollar fell, gold as well, the ' XLF (an index of financial stocks comprising the S & P 500) galloped on the upside and was bought up purchase options on treasury bills to 10 years by some subjects. It seemed that someone knew in advance what was to exit from the rooms of the Fed . Naively, not really thinking that Ben would come to announce the direct purchase of long-term bonds, liquidai some extreme movements as the product of a few limited operations speculative.
Analizzando col senno di poi gli avvenimenti, specialmente ciò che è accaduto al prezzo dell'oro, colato a picco poco prima dell'annuncio dell' FOMC e salito alle stelle subito dopo, risulta evidente che in molti sapessero. Se non altro sono in buona compagnia. Rick Santelli ha dichiarato ironicamente alla CNBC , di essersi sentito estremamente stupido, quando un ora prima che fossero rese pubbliche le decisioni del comitato della Federal Reserve , si scatenò la caccia ai buoni del tesoro. Santelli dice di non averne capito le ragioni sul momento, dato che dal suo punto di vista non era affatto scontato ritenere Ben and his associates would be launched in some measures of "quantitative easing . He does not speak explicitly of insider trading, but the sarcastic grin that lights up his face as comments is more than enough to understand how he is ( here you can see the movie with Santelli ).
The latest demonstration that any illusion of legality and transparency of the market has gone down the drain for some time.
manipulations apart from Wednesday economists and commentators have been launched in the analysis of the possible consequences of the choice made by ' FOMC.
First it is interesting to note that the Federal Reserve's decision to brutally print money to buy stocks that foreign investors, especially central banks, have stopped buying for a few months: MBS and GSE debt of and long-term treasury bills.
Brad Setser in a recent article explained how the trend of purchases of bonds to raise long-term more of a concern. In the chart below you can see how foreign demand collapsed on them and on the titles of agencies:
But times change. An economic crisis that is unprecedented in recent history and the jib of protest against the scandalous conduct of the directors of ' AIG - the insurance giant rescued by the U.S. government to sound of 180 billion dollars - that regardless of any torn from the taxpayer money, they are self-allocated $ 160 million in bonuses, have forced the old Ben a scendere in campo rivolgendosi direttamente alla nazione.
Il servizio di 60 minutes cerca in ogni maniera di mostrarci il lato umano di Bernanke . La storia della sua famiglia, i suoi studi, come si fosse preparato una vita intera per affrontare una crisi economica come quella odierna. Ad un certo punto, l'intervistatore interroga Ben, in merito ai salvataggi che la FED ha operato nei confronti di una serie di società finanziarie. Bernanke con aria afflitta, risponde di non aver potuto agire altrimenti e annuncia di essere profondamente infuriato nei confronti di queste entità, in particolar modo dell' AIG , la cui vicenda lo avrebbe riempito such a rage, to drive him several times to slam down the telephone receiver while debating the issue. It is perhaps the most touching moment of the entire interview. Reflected a genuine pain almost from the words of the old Ben.
As I followed the interview and was looking for, seized by emotion, to grab a packet of tissues, Bernanke totally changed gear and catch me unprepared to do with reassuring by declaring, "But we have a plan. We're working on. And I think that able to stabilize (the economy ed), and that we will probably end the recession this year. We will begin shooting next year. "
All right then. Ben
Fed tightening and the rudder firmly in their hands and have taken a route that will lead us out of the raging sea by the end of the year.
then came Wednesday, the day of the scheduled meeting of ' FOMC - the Committee of Federal Reserve which decides monetary policy of the United States - and everything changed. Generally, the committee shall undertake adjustments to the interest rate, but the rate at historic low of 0.25% was very little left now to retouch.
L ' FOMC decided to use the grounds as a final solution justification for the decision: The
information received from Federal Open Market Committee , the meeting of January to date indicate that the economy continues to contract. The job losses, declining wealth and value of housing and a lack of credit have weighed on the mood of consumers and their propensity to spend. A deterioration of sales prospects and the difficulty in obtaining credit, have led companies to cut inventories and fixed investment. U.S. exports have plummeted since an increasing number of trading partners have fallen into recession.
L ' FOMC continues for yet a few lines to describe a situation that is ill-ever-worsening concilia con i discorsi fatti da Ben a 60 minutes su una prossima ripresa. La vera e propria bomba però, arriva poco più sotto nel prosieguo del comunicato:
Per fornite un maggior supporto ai prestiti per mutui e al mercato immobiliare, il comitato ha deciso di aumentare le dimensioni del bilancio della Federal Reserve arrivando ad acquistare fino a 750 miliardi di dollari aggiuntivi in mortgage backed securities dalle agenzie, portando il totale degli acquisti di queste securties ad un massimo di 1,25 trilioni nel corso dell'anno, e di aumentare l'acquisto di debito emesso dalle agenzie di 100 miliardi di dollari bringing the total of 200 billion. In addition, to help improve the conditions of the private credit market, the Committee decided to purchase up to 300 billion of treasury bills in the long run over the next six months.
, by itself, the announcement of the doubling of the purchases of MBS (securitized mortgages ) in possession of the two major GSEs , Fannie Mae and Freddie Mac is significant. Until now, this seemed to be the approach to the "quantitative easing " Ben's favorite, although the head of the Fed had threatened several times, from December onwards, di lanciarsi nell'acquisto diretto di buoni del tesoro a lungo termine. Un'opzione che però, si era sempre rifiutato di adottare concretamente.
Mercoledì è finalmente giunta la resa.
Non c'è modo di minimizzare la gravità del passo deciso dall' FOMC .
E' l'equivalente economico dell'aver spinto uno di quei bottoni rossi protetti da piccoli schermi di vetro. Quelli che solitamente nei film vengono premuti come ultima risorsa in contemporanea al girare simultaneo di una coppia di chiavi.
Se si è intrapresa una simile azione significa che la situazione sta tutt 'altro che migliorando. Altro che ripresa all'inizio del 2010.
Mercoledì afternoon, while everyone is still waiting for the release of ' FOMC and said, for the most part, make sure that did not contain any significant announcement, the stock market going on a casino. The dollar fell, gold as well, the ' XLF (an index of financial stocks comprising the S & P 500) galloped on the upside and was bought up purchase options on treasury bills to 10 years by some subjects. It seemed that someone knew in advance what was to exit from the rooms of the Fed . Naively, not really thinking that Ben would come to announce the direct purchase of long-term bonds, liquidai some extreme movements as the product of a few limited operations speculative.
Analizzando col senno di poi gli avvenimenti, specialmente ciò che è accaduto al prezzo dell'oro, colato a picco poco prima dell'annuncio dell' FOMC e salito alle stelle subito dopo, risulta evidente che in molti sapessero. Se non altro sono in buona compagnia. Rick Santelli ha dichiarato ironicamente alla CNBC , di essersi sentito estremamente stupido, quando un ora prima che fossero rese pubbliche le decisioni del comitato della Federal Reserve , si scatenò la caccia ai buoni del tesoro. Santelli dice di non averne capito le ragioni sul momento, dato che dal suo punto di vista non era affatto scontato ritenere Ben and his associates would be launched in some measures of "quantitative easing . He does not speak explicitly of insider trading, but the sarcastic grin that lights up his face as comments is more than enough to understand how he is ( here you can see the movie with Santelli ).
The latest demonstration that any illusion of legality and transparency of the market has gone down the drain for some time.
manipulations apart from Wednesday economists and commentators have been launched in the analysis of the possible consequences of the choice made by ' FOMC.
First it is interesting to note that the Federal Reserve's decision to brutally print money to buy stocks that foreign investors, especially central banks, have stopped buying for a few months: MBS and GSE debt of and long-term treasury bills.
Brad Setser in a recent article explained how the trend of purchases of bonds to raise long-term more of a concern. In the chart below you can see how foreign demand collapsed on them and on the titles of agencies:
The graph stops in December, but also during the month of January, the decline continued. I grandi investitori esteri preferiscono concentrarsi sui buoni del tesoro a breve termine, quelli a scadenza trimestrale, per non correre il rischio di rimanere intrappolati negli eventuali problemi futuri degli Stati Uniti.
Conclude Setser il suo articolo:
As the play's debt to buy goods produced by developing countries - China and India in the first place, but also other children - is broken, the funds available to foreign central banks should be recycled as good Americans, are scarce. The Fed
decided to intervene, directly taking on the long-term treasury bills. The most classical form of monetization of debt.
300 billion that Ben has committed to print this purpose, represent about 5% of the market - the market for U.S. treasury bonds amounted to 5.8 trillion - and, as reported David Rosenberg of Merrill Lynch in a recent report, the announced expansion of the budget of FED additional 1.15 trillion total is nothing compared to a ratio of private credit to GDP in excess of 8 trillion historically sustainable levels and that will necessarily shrink in the near future (the chart below shows the trend over time in the U.S. private debt - business groups - relative to GDP).
Conclude Setser il suo articolo:
E se - come sembra probabile - la domanda da parte straniera per buoni del tesoro svanirà prima del deficit fiscale USA, il tesoro USA dovrà vendere una grandissima quantità di buoni del tesoro agli investitori americani. Per alcuni anni ho argomentato che fosse impossibile esagerare l'impatto che la domanda delle banche centrali estere ha sul mercato dei buoni del tesoro USA.
Essa potrebbe non esserci più guardando al futuro.
The world is changing. The global reserves are not growing. The echo of the peaks that we observe in the data passed on treasury bills will disappear.
As the play's debt to buy goods produced by developing countries - China and India in the first place, but also other children - is broken, the funds available to foreign central banks should be recycled as good Americans, are scarce. The Fed
decided to intervene, directly taking on the long-term treasury bills. The most classical form of monetization of debt.
300 billion that Ben has committed to print this purpose, represent about 5% of the market - the market for U.S. treasury bonds amounted to 5.8 trillion - and, as reported David Rosenberg of Merrill Lynch in a recent report, the announced expansion of the budget of FED additional 1.15 trillion total is nothing compared to a ratio of private credit to GDP in excess of 8 trillion historically sustainable levels and that will necessarily shrink in the near future (the chart below shows the trend over time in the U.S. private debt - business groups - relative to GDP).
Because of this imbalance, Rosenberg does not see real changes of trend in the market liquid and recent gains as the rally in a down market.
The main concern of Ben & Co, seems to concern the impact that the flight of foreign investors may have on the yields of long-term bonds. Bernanke wants to avoid that they will increase, aggravating the situation of all those borrowers who pay interest, the rate of which is attached to these returns. As might be inferred, even reading between the lines of the statement issued by ' FOMC, the problem would then be private debtors, first of all homeowners (as well as companies) and owners who are facing the last measurement of FED .
The most direct consequence of a "quantitative easing " operated by buying Treasury bonds in the long term will be an inevitable decline in yields. Along with them will also decrease the amount of interest on pretended loans. Anyone who has a loan contract will have the option to refinance at a lower interest, but those who intend to buy a house for the first time may obtain loans on more favorable terms.
At least in theory. In practice, the extent of the interest sought by banks depends on many factors, including expectations about the economy. When the overall situation is perceived as dangerous, banks claim in each case a high spread on interest, as protection from the risk that loans will not be returned.
The strategy announced Wednesday by ' FOMC can thus be summarized as a further incentive to the property market and indirect. If until now the U.S. had always acted in the state into debt or taking steps soft of "quantitative easing " as the purchase of mbs agencies, now Fed has decided to proceed straight as a ram and use brute force.
The primary danger in such an approach is that the Fed over time happens to be the only buyer of long-term treasury bills. In England, when the BOE (the British central bank) has taken the road of "quantitative easing " a few weeks ago, it was found to have, during the purchase, a " bid to cover "of 7.35. In essence, for each treasury bill that the BOE was willing to buy the market, it offered 7.35. The investors - and speculators who had bought up anticipate the moves of the BOE - have downloaded en masse British treasury bills. Nothing dramatic at the moment, but if this trend continues, the BOE would soon be mired in an extremely slippery. Another consequence negative of "quantitative easing " was the drastic drop in demand for those bonds that are not among the cuts by the central bank bought English. The British treasury bills that expire in March 2014 for example, have had a bid to cover 1.45, the lowest since 2005.
The U.S. fiscal deficit, planned for this year will amount to some $ 2 trillion. Taking a simple division, the United States will be obliged to sell 160 billion dollars in vouchers to several deadlines each month. 300 billion a figure likely to be insufficient if the flight of foreign investors from long-term bonds should continue. If so, Ben will inevitably be forced to increase the financial commitment of the Fed , since its possible withdrawal - and then the disappearance of the buyer of last resort - might produce a dislocation in the market for treasury bills, which can to rocketing returns and interest on debt related. A half
financial Armageddon.
Even in a progressive increase in purchases by the Fed that exceed the limit announced 300 billion, if the pressure produced by the flight of foreign buyers exceeded a critical threshold, there would be printing money by the Federal Reserve , able to avoid dislocation.
This is the scenario by the end of time that takes away the sleep, a couple of years now, to Karl Denninger (find her blog in my blog roll).
A remote possibility that personally I think at the moment, but Tutt 'simply impossible.
Other observers however, are concerned with a chance almost the opposite: that all this money creation can produce both a galloping inflation which will culminate in a devastating and terminal hyper inflation.
I am very skeptical about it. It 's true that the ability to inflate the market for a central bank è teoricamente infinita. Essa ha il potere di creare tutto il denaro che vuole e sparpagliarlo in giro in 1000 modi differenti. Nella realtà però, esistono dei limiti varcati i quali, un economia come quella americana si auto-distruggerebbe ben prima che una reale iper inflazione possa prendere piede.
Intanto, in casi come questo non si tratta mai di sistemi chiusi. Anche volendo inflazionare l'economia, quanta di questa inflazione si riverserebbe negli stipendi della gente? In altri termini, se la maggior parte dei beni di consumo vengono prodotti dai paesi emergenti, quanta dell'inflazione prodotta dalla FED si riverserebbe negli stipendi degli americani e quanta confluirebbe all'estero?
Del resto, da quasi 20 anni a questa parte l'intero sistema si è basato sull'esportazione dell'inflazione USA in Cina e nei paesi emergenti. Dato che la produzione avveniva in quei luoghi anche il denaro vi confluiva invece di infilarsi nelle tasche degli americani andando ad incentivare la produzione industriale locale e la creazione di ricchezza negli Stati Uniti. La crisi attuale non ha ancora cambiato questa situazione. Le industrie non sono state rilocalizzate negli USA e neppure sono comparse (ancora) sostanziali barriere commerciali nei confronti della Cina. Considerando quanto gli USA dipendano da essa come acquirente di buoni del tesoro, non è neppure detto che ne vedremo entro breve. Nel caso accadesse, ciò equivarrebbe ad una vera e propria dichiarazione di guerra commerciale, una misura possibile, ma che puzzerrebe tanto di ultima spiaggia.
Se il resto del mondo seguisse l'esempio di Bernanke con il "quantitative easing ", forse l'andamento ricorderebbe più da vicino quello di un sistema chiuso, ma sebbene alcuni dei principali stati si siano lanciati a stampare denaro, all'appello mancano ancora fondamentali soggetti come la UE e la Cina. Inoltre, anche stampare qualche trilione qua è la, non può bastare a compensare una distruzione globale di capitalizzazione pari a 35 trilioni di dollari e la poderosa contrazione del credito a cui stiamo assistendo.
A questo va aggiunto l'effetto che l'aumento della disoccupazione, the bad performance of the economy and the destruction of stocks and shares is having the attitude of the population. The propensity to spend has been steadily declining while the save is increasing. Unfortunately, the propensity to party - as shown Mish in one of his last post - Recent research shows that 50% of U.S. citizens is at a distance of two incomes from economic collapse (in the United States is a month ) while 28% would not be able to keep going for more than two weeks without pay. 57% of respondents also said it will spend less than ever this year and none of those contacted said they intend to increase their costs.
To be able to squeeze a population in debt and completely unwilling to consume and expose themselves further, Ben inflation would run so fast to produce, well before obtaining the desired result, the performance of the economy. If in the future there will be significant inflationary effects schizophrenics and will be located. Some goods will rise in price, but without it to make substantial impacts of general inflation or signal a real recovery.
Gold will likely continue to strengthen given what you like the Monet prints. The yield on the U.S. are expected to decline. Some say they are confident that the Fed will not only to buy the long term, but will buy a good all maturities. We'll see. The dollar will probably continue to show signs of weakness and oil could realistically appreciate, even if it does no longer the current situation in the work of "hedge" against inflation which he performed last summer. For it all depends on the real economy. New stock market declines that signal a continuation of the difficulties and a decline in industrial demand, slowing down the value of black gold.
Just from the standpoint of the scales, the decision taken by the Fed is likely to have an impact so significant. Japan can give us a lesson in that regard, as elucidated by Rosenberg in his report. When the Japanese central bank began with the "quantitative easing" in March 2001, the Nikkei was at 12,190. The index rose a good 20% over the next two months and touched up to 14,529 on May 7, 2001. Within four months, the Nikkei share returned to 12000. His descent continued in 2002-03 to arrive in mid-2003, at an altitude of 8900, 30% below the level at which he was when he introduced the QE.
The contraction of GDP and the collapse of corporate earnings - equivalent to a 30% year over year in 2001 - had the better of the transient positive effect produced by the "quantitative easing" of the Bank of Japan.
There is a saying who plays the stock market that goes something like: "Do not go against the Fed." In substance, should never underestimate the ability of an entity like the Federal Reserve to influence the market, especially in the short term but the medium to long term there is little that the Fed might do if the economic fundamentals play against. And right now, the fundamentals do not bode well.
The decision Wednesday by Ben Bernanke dell'FOMC and gentlemen, is the last cartridge available to the Fed (apart from printing money to directly buy shares) and seems to indicate, the precise determination to transform the Federal Reserve in what BOJ (Bank of Japan) was during the period called "the lost decade." This is not to take more time, because time is usually needed when you want to calmly weigh the possible strategies.
take time hoping for a miracle is the strategy right now, as it was for Japan then.
Some say that Ben has loaded cartridge and it is stuck the barrel of the gun in his mouth. Other that the barrel is pointing to his head in debt and a population that expresses the super silent threat: "spend, consume, and yet indebitatevi Please do not think absolutely save you."
remains once again, the impression of being in the hands of an armed Brancaleone impegnata a sparare colpi nel buio nella speranza che uno di essi centri il bersaglio giusto.
Ma se la FED, con l'ultima manovra avesse veramente esaurito le munizioni a sua disposizione, cosa si potrà mai inventare in futuro il vecchio Ben per stupirci?
PS:
Obama ha promesso che domani, i dettagli del piano di Geithner per la gestione degli assets tossici in pancia alle banche, verrano finalmente rivelati al mondo. Abbastanza è già trapelato da scatenare reazioni disgustate da parte di diversi economisti (potete leggere qua cosa ne pensa Krugman e qua l'opinione di Yves Smith ). A riguardo ho già detto abbastanza. Mi limiterò ad aspettare la spiegazione di Obama (o Geithner se Obama ha ancora il fegato di farlo parlare in pubblico) con un pacchetto di popcorn in mano.
The main concern of Ben & Co, seems to concern the impact that the flight of foreign investors may have on the yields of long-term bonds. Bernanke wants to avoid that they will increase, aggravating the situation of all those borrowers who pay interest, the rate of which is attached to these returns. As might be inferred, even reading between the lines of the statement issued by ' FOMC, the problem would then be private debtors, first of all homeowners (as well as companies) and owners who are facing the last measurement of FED .
The most direct consequence of a "quantitative easing " operated by buying Treasury bonds in the long term will be an inevitable decline in yields. Along with them will also decrease the amount of interest on pretended loans. Anyone who has a loan contract will have the option to refinance at a lower interest, but those who intend to buy a house for the first time may obtain loans on more favorable terms.
At least in theory. In practice, the extent of the interest sought by banks depends on many factors, including expectations about the economy. When the overall situation is perceived as dangerous, banks claim in each case a high spread on interest, as protection from the risk that loans will not be returned.
The strategy announced Wednesday by ' FOMC can thus be summarized as a further incentive to the property market and indirect. If until now the U.S. had always acted in the state into debt or taking steps soft of "quantitative easing " as the purchase of mbs agencies, now Fed has decided to proceed straight as a ram and use brute force.
The primary danger in such an approach is that the Fed over time happens to be the only buyer of long-term treasury bills. In England, when the BOE (the British central bank) has taken the road of "quantitative easing " a few weeks ago, it was found to have, during the purchase, a " bid to cover "of 7.35. In essence, for each treasury bill that the BOE was willing to buy the market, it offered 7.35. The investors - and speculators who had bought up anticipate the moves of the BOE - have downloaded en masse British treasury bills. Nothing dramatic at the moment, but if this trend continues, the BOE would soon be mired in an extremely slippery. Another consequence negative of "quantitative easing " was the drastic drop in demand for those bonds that are not among the cuts by the central bank bought English. The British treasury bills that expire in March 2014 for example, have had a bid to cover 1.45, the lowest since 2005.
The U.S. fiscal deficit, planned for this year will amount to some $ 2 trillion. Taking a simple division, the United States will be obliged to sell 160 billion dollars in vouchers to several deadlines each month. 300 billion a figure likely to be insufficient if the flight of foreign investors from long-term bonds should continue. If so, Ben will inevitably be forced to increase the financial commitment of the Fed , since its possible withdrawal - and then the disappearance of the buyer of last resort - might produce a dislocation in the market for treasury bills, which can to rocketing returns and interest on debt related. A half
financial Armageddon.
Even in a progressive increase in purchases by the Fed that exceed the limit announced 300 billion, if the pressure produced by the flight of foreign buyers exceeded a critical threshold, there would be printing money by the Federal Reserve , able to avoid dislocation.
This is the scenario by the end of time that takes away the sleep, a couple of years now, to Karl Denninger (find her blog in my blog roll).
A remote possibility that personally I think at the moment, but Tutt 'simply impossible.
Other observers however, are concerned with a chance almost the opposite: that all this money creation can produce both a galloping inflation which will culminate in a devastating and terminal hyper inflation.
I am very skeptical about it. It 's true that the ability to inflate the market for a central bank è teoricamente infinita. Essa ha il potere di creare tutto il denaro che vuole e sparpagliarlo in giro in 1000 modi differenti. Nella realtà però, esistono dei limiti varcati i quali, un economia come quella americana si auto-distruggerebbe ben prima che una reale iper inflazione possa prendere piede.
Intanto, in casi come questo non si tratta mai di sistemi chiusi. Anche volendo inflazionare l'economia, quanta di questa inflazione si riverserebbe negli stipendi della gente? In altri termini, se la maggior parte dei beni di consumo vengono prodotti dai paesi emergenti, quanta dell'inflazione prodotta dalla FED si riverserebbe negli stipendi degli americani e quanta confluirebbe all'estero?
Del resto, da quasi 20 anni a questa parte l'intero sistema si è basato sull'esportazione dell'inflazione USA in Cina e nei paesi emergenti. Dato che la produzione avveniva in quei luoghi anche il denaro vi confluiva invece di infilarsi nelle tasche degli americani andando ad incentivare la produzione industriale locale e la creazione di ricchezza negli Stati Uniti. La crisi attuale non ha ancora cambiato questa situazione. Le industrie non sono state rilocalizzate negli USA e neppure sono comparse (ancora) sostanziali barriere commerciali nei confronti della Cina. Considerando quanto gli USA dipendano da essa come acquirente di buoni del tesoro, non è neppure detto che ne vedremo entro breve. Nel caso accadesse, ciò equivarrebbe ad una vera e propria dichiarazione di guerra commerciale, una misura possibile, ma che puzzerrebe tanto di ultima spiaggia.
Se il resto del mondo seguisse l'esempio di Bernanke con il "quantitative easing ", forse l'andamento ricorderebbe più da vicino quello di un sistema chiuso, ma sebbene alcuni dei principali stati si siano lanciati a stampare denaro, all'appello mancano ancora fondamentali soggetti come la UE e la Cina. Inoltre, anche stampare qualche trilione qua è la, non può bastare a compensare una distruzione globale di capitalizzazione pari a 35 trilioni di dollari e la poderosa contrazione del credito a cui stiamo assistendo.
A questo va aggiunto l'effetto che l'aumento della disoccupazione, the bad performance of the economy and the destruction of stocks and shares is having the attitude of the population. The propensity to spend has been steadily declining while the save is increasing. Unfortunately, the propensity to party - as shown Mish in one of his last post - Recent research shows that 50% of U.S. citizens is at a distance of two incomes from economic collapse (in the United States is a month ) while 28% would not be able to keep going for more than two weeks without pay. 57% of respondents also said it will spend less than ever this year and none of those contacted said they intend to increase their costs.
To be able to squeeze a population in debt and completely unwilling to consume and expose themselves further, Ben inflation would run so fast to produce, well before obtaining the desired result, the performance of the economy. If in the future there will be significant inflationary effects schizophrenics and will be located. Some goods will rise in price, but without it to make substantial impacts of general inflation or signal a real recovery.
Gold will likely continue to strengthen given what you like the Monet prints. The yield on the U.S. are expected to decline. Some say they are confident that the Fed will not only to buy the long term, but will buy a good all maturities. We'll see. The dollar will probably continue to show signs of weakness and oil could realistically appreciate, even if it does no longer the current situation in the work of "hedge" against inflation which he performed last summer. For it all depends on the real economy. New stock market declines that signal a continuation of the difficulties and a decline in industrial demand, slowing down the value of black gold.
Just from the standpoint of the scales, the decision taken by the Fed is likely to have an impact so significant. Japan can give us a lesson in that regard, as elucidated by Rosenberg in his report. When the Japanese central bank began with the "quantitative easing" in March 2001, the Nikkei was at 12,190. The index rose a good 20% over the next two months and touched up to 14,529 on May 7, 2001. Within four months, the Nikkei share returned to 12000. His descent continued in 2002-03 to arrive in mid-2003, at an altitude of 8900, 30% below the level at which he was when he introduced the QE.
The contraction of GDP and the collapse of corporate earnings - equivalent to a 30% year over year in 2001 - had the better of the transient positive effect produced by the "quantitative easing" of the Bank of Japan.
There is a saying who plays the stock market that goes something like: "Do not go against the Fed." In substance, should never underestimate the ability of an entity like the Federal Reserve to influence the market, especially in the short term but the medium to long term there is little that the Fed might do if the economic fundamentals play against. And right now, the fundamentals do not bode well.
The decision Wednesday by Ben Bernanke dell'FOMC and gentlemen, is the last cartridge available to the Fed (apart from printing money to directly buy shares) and seems to indicate, the precise determination to transform the Federal Reserve in what BOJ (Bank of Japan) was during the period called "the lost decade." This is not to take more time, because time is usually needed when you want to calmly weigh the possible strategies.
take time hoping for a miracle is the strategy right now, as it was for Japan then.
Some say that Ben has loaded cartridge and it is stuck the barrel of the gun in his mouth. Other that the barrel is pointing to his head in debt and a population that expresses the super silent threat: "spend, consume, and yet indebitatevi Please do not think absolutely save you."
remains once again, the impression of being in the hands of an armed Brancaleone impegnata a sparare colpi nel buio nella speranza che uno di essi centri il bersaglio giusto.
Ma se la FED, con l'ultima manovra avesse veramente esaurito le munizioni a sua disposizione, cosa si potrà mai inventare in futuro il vecchio Ben per stupirci?
PS:
Obama ha promesso che domani, i dettagli del piano di Geithner per la gestione degli assets tossici in pancia alle banche, verrano finalmente rivelati al mondo. Abbastanza è già trapelato da scatenare reazioni disgustate da parte di diversi economisti (potete leggere qua cosa ne pensa Krugman e qua l'opinione di Yves Smith ). A riguardo ho già detto abbastanza. Mi limiterò ad aspettare la spiegazione di Obama (o Geithner se Obama ha ancora il fegato di farlo parlare in pubblico) con un pacchetto di popcorn in mano.
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