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Gold/Mining/Energy : Blue Chip Gold Stocks HM, NEM, ASA, ABX, PDG
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Recommended by:
Machaon
richard hawkins
From: John McCarthy6/29/2013 9:24:59 AM
2 Recommendations   of 48092
 
The Lie

There is NO connection between QE and the printing of money.

The thesis that QE *is* the printing of money - and therefore - will lead to
"future - anticipated - whatever" inflation is simply untrue.

There is no QE $ in the money supply.

And here - right now - gold finds itself caught up in this QE non-sense.

My 2 previous posts imply gold is tied to QE

The facts were/are:

At the outset -

1 - We were in a deflationary cycle.

2 - Thats really good for gold.

Then -

3 - Ben invents QE - thats really good for low interest rates

4 - QE leads to the train of thought that - QE portends inflation to infinity .....

5 - QE becomes the anchor around gold valuation

Where is the QE $.

It is in big banks reserves - sitting at the Fed - earning interest.

Each dollar of interest income the banks earn is equivalent to EBIT
on their P&L

Whose paying this interest - the US taxpayer - in effect.

These dollars will never make it to the US money supply.
Simply because these dollars are controlled by (a) the interest they earn and (b) a wink
from whoever the Fed chairmen is

QE - cannot end. Why.

We - right now - are in the SAME deflationary cycle that we started out in.

But housing prices are rising. They are. Its a bubble.

You can't have a deflationary cycle AND rising housing prices.

Yes you can. Thats the monster that QE creates.

If QE ends - mortgage rates will go to infinity - 5% ?? - the current housing
flipping charade is over -

and we are back - AT - the same deflationary cycle we started at.

When Yellen takes over - she will continue QE - hoping to spur hosing buying from
real buyers.

In theory - this s/b good for gold - based on the wrong-headed QE leads to inflationary
infinity.

Here is the only guy out there that knows what he is talking about

FELDSTEIN: Quantitative Easing Is Not 'Printing Money'

businessinsider.com

Finally - if the QE $ were released to the money supply - would we have inflation.

Sure. At least on the face of it.

FHA Swamped By Defaults;
Congressional Report Shows FHA Could Suffer Losses as High as $115 Billion;
Shut Down Fannie, Freddie, FHA

globaleconomicanalysis.blogspot.com
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