Gold collapsing. Bitcoin UP.

[sidhujag]

I don't understand your question - do you mean "how can we trust the Fed is doing the right thing"?

No, certainly not, nobody sane would suggest that the Fed is doing the "right" thing, me first

I would like to understand how it's possible to _verify_ how much the Fed is lending and how, since the movement "audit the Fed" had not much luck..

BTW, I profit to signal this one that is good for a laugh:
Hedge-Fund Manager Paul Singer ‘Shocked’ by Bitcoin Popularity

Instead, Mr. Singer encouraged investors to consider gold, which he wrote was “currently available at a good price.” As The Wall Street Journal reported earlier this month, some hedge fund investors have been taking advantage of gold’s largest annual decline in 32 years to increase their bullish gold wagers.

“Gold is out of fashion, but we think the explanation for why it has been drifting down is not compelling. The economy seems stuck in the doldrums, but most so-called ‘experts’ have been changing their minds almost weekly about when they think the economy will finally begin a long-term acceleration to the upside,” Mr. Singer wrote in the letter.

One of the best reads on this: http://m.rollingstone.com/politics/news/the-real-housewives-of-wall-street-look-whos-cashing-in-on-the-bailout-20110411

I strongly urge anyone who hasnt read it to please read.

[Dusty]

One of the best reads on this: http://m.rollingstone.com/politics/news/the-real-housewives-of-wall-street-look-whos-cashing-in-on-the-bailout-20110411

I strongly urge anyone who hasnt read it to please read.

Wow that article is a pretty big deal, I can't understand how I could miss it, it should be reprinted everywhere.

Yes, please, anyone who hasn't read it, I urge it to.

[cypherdoc]

I don't understand your question - do you mean "how can we trust the Fed is doing the right thing"?

No, certainly not, nobody sane would suggest that the Fed is doing the "right" thing, me first

I would like to understand how it's possible to _verify_ how much the Fed is lending and how, since the movement "audit the Fed" had not much luck..

BTW, I profit to signal this one that is good for a laugh:
Hedge-Fund Manager Paul Singer ‘Shocked’ by Bitcoin Popularity

Instead, Mr. Singer encouraged investors to consider gold, which he wrote was “currently available at a good price.” As The Wall Street Journal reported earlier this month, some hedge fund investors have been taking advantage of gold’s largest annual decline in 32 years to increase their bullish gold wagers.

“Gold is out of fashion, but we think the explanation for why it has been drifting down is not compelling. The economy seems stuck in the doldrums, but most so-called ‘experts’ have been changing their minds almost weekly about when they think the economy will finally begin a long-term acceleration to the upside,” Mr. Singer wrote in the letter.

One of the best reads on this: http://m.rollingstone.com/politics/news/the-real-housewives-of-wall-street-look-whos-cashing-in-on-the-bailout-20110411

I strongly urge anyone who hasnt read it to please read.

those kinda articles enrage the hell outta me.  Matt Taiibi has done some of the best articles on that whole fiasco known as the GFC of 2008-9.  the ripoffs were and are just astounding and were critical in understanding why Bitcoin was destined to do what it has done.  totally unsurprising why we now have the greatest wealth disparity in this country since 1929.

that story dovetails nicely with this well known video:  

https://www.youtube.com/watch?v=cJqM2tFOxLQ

Bernanke, Geithner, and Paulson, et al will go down in history as criminals.

[Dr Bloggood]

I don't understand your question - do you mean "how can we trust the Fed is doing the right thing"?

No, certainly not, nobody sane would suggest that the Fed is doing the "right" thing, me first

I would like to understand how it's possible to _verify_ how much the Fed is lending and how, since the movement "audit the Fed" had not much luck..

The Fed can and likely does inject more liquidity into the system than it admits. Some claim the real number is $130 (now $110) billions or even more. I haven't looked into how that works, but it would be interesting to know. So let us know if you find out!

EDIT: Here I have an excerpt for you from a blog I love, it's Andy Hoffman from Miles Franklin. Sure those guys have PMs to sell, but I learned a lot from their writings. Hoffman is counting it in a way so the real effective QE is actually about $130 billion. He writes:

"Unfortunately, the giant pink elephant in the room has been entirely ignored.  That is, the massive losses incurred by the Fed’s portfolio as a result of rising interest rates.  To wit, from May 2nd through December 18th, the 10-year yield nearly doubled, from 1.63% to 2.94%.  Consequently, the above calculations heavily understate the actual level of QE; which, in order to maintain the aforementioned $4.0 trillion balance sheet total, had to be increased by a whopping $329 billion to offset an estimated 9% capital loss."

Here is the article, the interesting part starts halfway through:

http://blog.milesfranklin.com/proof-of-the-tapering-mirage

[zeetubes]

This quote came from the summary of last week's FOMC meeting. I don't really understand how it works or how often it will be used but it implies another non-QE way to keep stoking the markets.

"The Fed also extended an experimental program which it could someday use to manage short-term interest rates. Known as a "reverse repo" facility, the program uses the Fed's portfolio of bonds as collateral for loans to market participants and uses the rate on those loans to influence market rates. The experiment was set to expire Wednesday, but the Fed extended it for a year until Jan. 2015. They increased caps on the size of trades the Fed can make to $5 billion per counterparty from $3 billion"
 

i.e. we'll taper by $10B but we'll pump that and more back into the markets by any means possible.

[marcus_of_augustus]

This quote came from the summary of last week's FOMC meeting. I don't really understand how it works or how often it will be used but it implies another non-QE way to keep stoking the markets.

"The Fed also extended an experimental program which it could someday use to manage short-term interest rates. Known as a "reverse repo" facility, the program uses the Fed's portfolio of bonds as collateral for loans to market participants and uses the rate on those loans to influence market rates. The experiment was set to expire Wednesday, but the Fed extended it for a year until Jan. 2015. They increased caps on the size of trades the Fed can make to $5 billion per counterparty from $3 billion"
 

i.e. we'll taper by $10B but we'll pump that and more back into the markets by any means possible.

Good catch. I did not know anything about that stinky little program ... actually not that little by the sound of it.

Gawd whatta mess. The Fed is now sitting on a pile of debt (some of it unmarketable, i.e. worthless except when using the right 'model') that it bought off busted-ass banks to get it off their books ... now it turns around and posts those bonds as collateral for loans to 'market participants' i.e. probably the same busted-ass banks it bought them off ... it's just lunatic asylum stuff. How many more times can they chase the same crappy debt around the circle and still fool the markets it is worth anything whatsoever?

[sidhujag]

This quote came from the summary of last week's FOMC meeting. I don't really understand how it works or how often it will be used but it implies another non-QE way to keep stoking the markets.

"The Fed also extended an experimental program which it could someday use to manage short-term interest rates. Known as a "reverse repo" facility, the program uses the Fed's portfolio of bonds as collateral for loans to market participants and uses the rate on those loans to influence market rates. The experiment was set to expire Wednesday, but the Fed extended it for a year until Jan. 2015. They increased caps on the size of trades the Fed can make to $5 billion per counterparty from $3 billion"
 

i.e. we'll taper by $10B but we'll pump that and more back into the markets by any means possible.

They increased leveraged essentially because of snowball effect they have to... they can have multiple counterparties... they didnt say what leverage they r getting for that collateral.

[sidhujag]

One of the best reads on this: http://m.rollingstone.com/politics/news/the-real-housewives-of-wall-street-look-whos-cashing-in-on-the-bailout-20110411

I strongly urge anyone who hasnt read it to please read.

Wow that article is a pretty big deal, I can't understand how I could miss it, it should be reprinted everywhere.

Yes, please, anyone who hasn't read it, I urge it to.

Ya not many ppl caught it.. i got it the day it came out told all my forex buddies.. ill never forget it.

[Dr Bloggood]

This quote came from the summary of last week's FOMC meeting. I don't really understand how it works or how often it will be used but it implies another non-QE way to keep stoking the markets.

"The Fed also extended an experimental program which it could someday use to manage short-term interest rates. Known as a "reverse repo" facility, the program uses the Fed's portfolio of bonds as collateral for loans to market participants and uses the rate on those loans to influence market rates. The experiment was set to expire Wednesday, but the Fed extended it for a year until Jan. 2015. They increased caps on the size of trades the Fed can make to $5 billion per counterparty from $3 billion"
 

i.e. we'll taper by $10B but we'll pump that and more back into the markets by any means possible.

Good catch. I did not know anything about that stinky little program ... actually not that little by the sound of it.

Gawd whatta mess. The Fed is now sitting on a pile of debt (some of it unmarketable, i.e. worthless except when using the right 'model') that it bought off busted-ass banks to get it off their books ... now it turns around and posts those bonds as collateral for loans to 'market participants' i.e. probably the same busted-ass banks it bought them off ... it's just lunatic asylum stuff. How many more times can they chase the same crappy debt around the circle and still fool the markets it is worth anything whatsoever?

I have never heard of that one either. The MSM don't like to write about it apparently.

5 billion per counterparty sounds like a lot.

So that might be the next step: Reduce public QE, while increasing the QE coming in through the backdoor.

[zeetubes]

This quote came from the summary of last week's FOMC meeting. I don't really understand how it works or how often it will be used but it implies another non-QE way to keep stoking the markets.

"The Fed also extended an experimental program which it could someday use to manage short-term interest rates. Known as a "reverse repo" facility, the program uses the Fed's portfolio of bonds as collateral for loans to market participants and uses the rate on those loans to influence market rates. The experiment was set to expire Wednesday, but the Fed extended it for a year until Jan. 2015. They increased caps on the size of trades the Fed can make to $5 billion per counterparty from $3 billion"
 

i.e. we'll taper by $10B but we'll pump that and more back into the markets by any means possible.

Good catch. I did not know anything about that stinky little program ... actually not that little by the sound of it.

Gawd whatta mess. The Fed is now sitting on a pile of debt (some of it unmarketable, i.e. worthless except when using the right 'model') that it bought off busted-ass banks to get it off their books ... now it turns around and posts those bonds as collateral for loans to 'market participants' i.e. probably the same busted-ass banks it bought them off ... it's just lunatic asylum stuff. How many more times can they chase the same crappy debt around the circle and still fool the markets it is worth anything whatsoever?

I have never heard of that one either. The MSM don't like to write about it apparently.

5 billion per counterparty sounds like a lot.

So that might be the next step: Reduce public QE, while increasing the QE coming in through the backdoor.

The Fed is literally destroying the world economy and they are the single biggest obstacle to any recovery. I don't care if it is gold or bitcoin that finally fucks them but I suspect that one of them or a combination will finally do it. Best comment I read about the change of Fed ruler is that at least Ben can leave the toilet seat up for his replacement. I bet her computer will still have an "out of CTL-P" key.

[NewLiberty]

Who bails out the Fed when it is insolvent.  If interest rates start climbing at all, it can wipe them out pretty swiftly.

The IMF?
The US Taxpayer?
Neither of these have the funds to do it.

[sidhujag]

Fed files for bankruptcy and govt takes the assets which are worthless.. us govt claimd bankruptcy and owners of bonds are on the hook.

[billyjoeallen]

Who bails out the Fed when it is insolvent.  If interest rates start climbing at all, it can wipe them out pretty swiftly.

The IMF?
The US Taxpayer?
Neither of these have the funds to do it.

cant they keep printing?

yes

[Dusty]

One of the best reads on this: http://m.rollingstone.com/politics/news/the-real-housewives-of-wall-street-look-whos-cashing-in-on-the-bailout-20110411

I strongly urge anyone who hasnt read it to please read.

those kinda articles enrage the hell outta me.  Matt Taiibi has done some of the best articles on that whole fiasco known as the GFC of 2008-9.  the ripoffs were and are just astounding and were critical in understanding why Bitcoin was destined to do what it has done.  totally unsurprising why we now have the greatest wealth disparity in this country since 1929.

I was so upset reading that article (thanks Taiibi, a rare example of journalism less and less found nowadays), that I had to translate it to Italian (thanks also to a friend that helped me).

So, for the italian ppl here: http://ilporticodipinto.it/content/le-vere-casalinghe-di-wall-street

Thanks so much to sidhujag for sharing: that kind of stuff is exactly why we need Bitcoin more than everything else.

[sidhujag]

I got plenty more:

http://www.zerohedge.com/article/whistleblower-exposes-jp-morgans-silver-manipulation-scheme

[smoothie]

I got plenty more:

http://www.zerohedge.com/article/whistleblower-exposes-jp-morgans-silver-manipulation-scheme

Isn't this old news? Or did I miss something?

[sgbett]

Who bails out the Fed when it is insolvent.  If interest rates start climbing at all, it can wipe them out pretty swiftly.

The IMF?
The US Taxpayer?
Neither of these have the funds to do it.

I think the fed chooses the interest rate...

The fed *never* goes insolvent, they print whatever they want. The govt might very well. Inflation is the one they don't have any direct control over. They can report it how they wish though.

[sgbett]

I got plenty more:

http://www.zerohedge.com/article/whistleblower-exposes-jp-morgans-silver-manipulation-scheme

Isn't this old news? Or did I miss something?

Submitted by Tyler Durden on 03/25/2010

very old

[sidhujag]

Old is gold lol no its just that these are the inportant ones everyone should know.. The rollingstones one was from 2011 so its old too in that sense

[NewLiberty]

Who bails out the Fed when it is insolvent.  If interest rates start climbing at all, it can wipe them out pretty swiftly.

The IMF?
The US Taxpayer?
Neither of these have the funds to do it.

I think the fed chooses the interest rate...

The fed *never* goes insolvent, they print whatever they want. The govt might very well. Inflation is the one they don't have any direct control over. They can report it how they wish though.

Fed chooses the target rate for bonds and the fed funds rate, the market chooses the actual rate for the bonds.
When buying slows the bond rate rises.  For the last few years, the fed has been buying the treasury bonds to keep to its target rate.
This tapering of the buying...  who in their right mind is going to pick up the slack?