Sunday, December 15, 2019

Driver, let me off this minute!

I have been watching this train wreck [shoveling massive amounts of money into the repo markets] unfold since it began and have written numerous articles on how the Fed's statement that this is "not QE" is completely and utterly laughable. The expansion of their balance sheet is happening at such a rapid velocity that it is now occurring at a faster rate than the immediate months following the announcement of QE2 and QE3!

* * * *

Call it what they want. ["QE" or "not QE."] However, I believe history will show that QE4 is not going to begin at the end of 2019, nor the beginning of 2020, nor even later that year—because it has already begun.

QE4 began with the Federal Reserve’s massive injections into the repo markets in September 2019, despite the Fed's absurd claim that an accumulation of over $300 billion in debt within three months is "not QE".

The question is, how much more will they accumulate? How much more before they can put out this debt garbage fire, and how many more digital, fiat dollars will be created out of thin air before the pain stops?

Who knows? But one thing I do know is that this isn't over yet. Far from it.[1]

The citizen monetary policy naïf has to marvel at the sophisticated concepts used by the real experts in these lofty matters. "Not QE" is breathtaking in its precision and inspires confidence that the experts are on top of that Confucian calling things by their right names thingy. That concept that if you don't use accurate terminology in matters of governance the kingdom sooner rather than later goes tits up, if you'll pardon the mixed metaphor.

Despite the impressive building that houses the Fed and the impressive credentials of the people who work there, I'm wondering if, to borrow from the Chinese oncet again, whether we're actually looking at more of a Chinese fire drill than anything indicating actual stewardship.

[1] "The Fed’s Recent 'Not QE' Is 'Not Working' and People Are Starting to Notice." By Nathan McDonald, ZeroHedge, 12/14/19.

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