Wednesday, June 22, 2011

Quantitative Easing Continues

Today it was reported that QE will continue in the form of another QE Light program.  This will be to support the fragile monetization program.  It appears, due to the size of the program, that the goal this summer will be to support prices, and not increase them. 

The new QE Light will monetize debt twice a week, and only twice a week, until QE 3 is announced.  The amount is not substantial, but it will be enough to put a top on the dollar.  M2 may contract slightly from where it is now, but it will not last long.  The further this policy lasts, the more weight will be placed on the dollar.

The mainstream media did not think there was a hint at further easing, but they did not listen to the NYFed.  The NYFed confirmed what we already know:  there is only one form of monetary policy- monetize the debt, so to keep rates at zero.  At this point, there is no other option and there is no going back. The Fed will continue to monetize the debt until it has no more credit to do so.


  1. Where does this leave PM's?
    Any guesses as the the form of the next QE; any guesses as to its size?

    Thank you,


  2. It appears Gross knows his stuff. I think QE Light will last the summer, and because the economy will flounder about, QE 3 will be announced sometime late this Summer. QE 3 will need to be larger than QE 2, so let us speculate it will be around the size of a cool trillion worth of bond monetization.

    As for PMs, like I have said, they will remain relatively flat this summer, with maybe a slight upside more than the other markets. Come next Fall, they will see a rise on strong demand, like always, but also massive dollar devaluation due to QE 3.

  3. Deflation for now buddy.

    QE is on hold until prices tank.
    Think perception not reality.

  4. Buddy, I think I called this pullback with my article, "One Last Pullback"; I was a little high on oil and gold, but accurate on silver and the dollar so far, and QE continues, albeit, "Light".