QE3! Fed Announces OPEN ENDED MBS at $40 Billion /Month!!!

by The Doc, Silver Doctors:

Fed to buy $40 billion/month in MBS!!

• Fed will increase purchases over $40 billion/month if required

• ZIRP extended to 2015

• QE TO INFINITY……..AND BEYOND!!!
• GOLD & SILVER GO VERTICAL AFTER FLASH SMASH JUST PRIOR TO ANNOUNCEMENT!!Silver with a last of $34.26, gold to $1755 CUE THE HELICOPTERS!!!
  Read More @ Silver Doctors
  

QE To Infinity

from TF Metals Report:

Long-rumored and oft-discussed, QE to infinity is finally a reality.
Here are the Bernank Fedlines from ZH:
*FED TO KEEP POLICY STIMULATIVE FOR `CONSIDERABLE TIME’
*FED WILL ADD TO PURCHASES IF LABOR MARKET DOESN’T IMPROVE
*FED DOES NOT SAY WHEN MBS PURCHASE PROGRAM TO END
*FED TO BUY $40B MBS MONTHLY, CONTINUE `OPERATION TWIST’
*FED TO BUY MBS, EXTENDS ZERO-RATE POLICY INTO 2015
Here’s the key take-way: This is it. This is open-ended, QE to infinity.
Note the Fedline: FED WILL ADD TO PURCHASES IF WHEN LABOR MARKET DOESN’T IMPROVE
I also saw a headline on CNBS that stated that Operation Twist will end at the end of the year. Of course it will. As noted a few weeks ago, The Fed is nearly out of short-term paper to exchange for long-term paper. The end of Twist will surge new printing from this $40B number to the full $85B number.
Now note this Fedline: FED DOES NOT SAY WHEN MBS PURCHASE PROGRAM TO END
This is QE to infinity. It has begun and it will not end.
Read More @ TF Metals Report.com

Live Webcast Of Politician The Bernanke Explaining Open-Ended QE Two Months Before The Election

This is the last Bernanke conference that people will actually pay attention to, as we now know going forward everything that the FOMC will do. He better make it count.

Fed Releases Latest Economic Forecast Which Will Be Proven 100% Wrong

With a few minutes to go until Ben speaks, the entirely useless projections are out (as noted before by Reuters that the Fed has been constantly wrong in its forecasts). The stunning punchline is that according to the Fed things are not as bad as one would have expected given the dramatic open-ended shart-fest that Bernanke is portraying. In fact, things are improving per the FOMC! Though we assume that these projections are self-defeating since they likely include this new policy. Be interested to see the pre-policy projections.

• *FED OFFICIALS SAY GROWTH WILL IMPROVE FASTER THAN JUNE OUTLOOK
• *FED: 2012 GROWTH OF 1.7%-2.0% VS 1.9%-2.4% IN JUNE
• *FED: JOBLESS END OF 2012 AT 8.0%-8.2% UNCHANGED FROM JUNE
• *FED: JOBLESS END OF 2013 AT 7.6%-7.9% VS 7.5%-8.0% IN JUNE

One wonders, whether in addition to having excel models which appoarently do not recognize circular assumptions, if the Fed's forecasts also assume $10 gas, $100 loaves of bread, and $10,000 gold?

The One Big Problem With QE To Infinity

There is one big problem with the Fed's announcement of Open-Ended QE moments ago: it effectively removes all future suspense from FOMC announcements. Why? Because the Fed has as of this moment exposed its cards for all to see from here until the moment it has to start tightening the money supply (which may or may not happen; frankly we don't think the Fed tightens until hyperinflation sets in at which point what the Fed does is meaningless). It means easing is now effectively priced into infinity. Now rewind back to that one certain paper by the New York Fed, which laid it out clear for all to see, that if it wasn't for the expectation of easing in the 24 hour period ahead of the FOMC meeting, the market would be 50% or lower than where it is now, and would have been effectively in negative territory in the aftermath of the Lehman collapse. What Bernanke did is take away this key drive to stock upside over the past 18 years, because going forward there is no surprise factor to any and all future FOMC decisions, as easing the default assumption. It also means that Bernanke may have well fired his last bullet, and it, sadly, is all downhill from here, as soaring input costs crush margins, regardless of what revenues do, and send corporate cash flow to zero. Unfortunately, not even in the New Normal can companies operate without cash flow.

LET THE GAMES BEGIN!

by Bix Weir, Road to Roota:

The Fed announced the beginning of QE3 with $40B in purchases of Mortgage Backed Securities PER MONTH without stating any end date or dollar amount. Here is the full statement.
“the Committee agreed today to increase policy accommodation by purchasing additional agency mortgage-backed securities at a pace of $40 billion per month.”
“If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of agency mortgage-backed securities, undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved in a context of price stability.”
No limits. No end date. This is QE to INFINITY! Make no mistake…this is all on purpose. This is the END GAME and the blame for the global meltdown will be placed, rightfully, on the shoulders of the Federal Reserve.
Basically, the Fed has chosen to FALL ON IT’S OWN SWORD!
The Gold and Silver move upward has caught all the shorts off guard. The Bad Guys are in deep, deep trouble as they took their cues from the likes of Jeffrey Christian and Jon Nadler who were advising EVERYONE to short gold and silver. Now it gets exciting!
By the way, Ron Paul just happens to be speaking tomorrow night at the Liberty Political Action Conference…if you think that is a coincidence then I have some lovely swamp land to sell you in Florida! The world is about to change.

Correlation: 1

So far, the Fed's QuEnfinity has lifted cross asset-class correlation back up to near 1.00 and while stocks look marginally rich to their credit, rate, vol, precious metal, FX, and commodity cousins, its barely notable. The inexorable draw of 'risk-on' has once again dominated the smartest-guys-in-the-room's minds - and while calling a turn here is foolish, this level of systemic move often ends badly/quickly as one leg of the multi-factor correlation breaks down (keep an eye on 2s10s30s).

Gold Chart: The 'Cup' Has Formed As Confidence Continues to Erode

Fed Pulls Trigger, to Buy Mortgages in Effort to Lower Rates

Eric De Groot at Eric De Groot - 34 minutes ago

The headline might as well have read "Bernanke reluctant to return to Princeton kicked the can down the road." An aside observation, perhaps the Republican strategists should have thought about the consequences of standing against Bernanke (at least publicly) a little longer. Gold and silver's sharp reaction illustrates the real consequences of today's Fed... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] 

 

FOMC: This Is The Beginning Of "The Big Print" - Unlimited QE

Dave in Denver at The Golden Truth - 37 minutes ago

*The fact that enough people still listen to Cramer is the perfect indicator of just how stupid part of our population is and it explains how we - the people - let our country lapse into systemic collapse. At it's base level, Government intervention in our lives prevents the Darwinian mechanism of natural selection from doing what it's supposed to do. That Cramer still sells his crap and that CNBC is still on the air is a perfect testament to that*...Dave in Denver For the first time since QE first started, today's FOMC announcement stunned me. Not because I was expecting somet... more » 

 

The Fed and the ECB determine to Destroy the Middle Class

Trader Dan at Trader Dan's Market Views - 49 minutes ago

While Wall Street cheers the actions by the Fed to further enlarge its already bloated Balance Sheet, those of us who live on Main Street should get accustomed to further increases in our food and energy costs. What I find rather perverse, is the statement by the FOMC that "longer term inflation expectations remain stable". Yeah, maybe on the salaries and wages front but sure as hell not on the raw materials front. Take a look at where hedge fund money is now flowing - right back into the hard or tangible assets category again. Get used to higher gasoline and heating oil prices and ... more » 

Desperate central banks should benefit Gold

by Ben Traynor, Bullion Street:
London Gold Market Report
The spot m,arket gold price touched a new six-month high at $1746 an ounce Wednesday morning, while stocks and the Euro also rallied following a ruling by Germany’s Constitutional Court cleared the way for the creation of a permanent Eurozone bailout fund.
“The price action remains bullish with support at $1700 and an upside target of $1790,” says the latest technical analysis from bullion bank Scotia Mocatta.
The silver price meantime traded as high as $34.16 an ounce – also a six-month high – while other commodities were broadly flat.
Ahead of tomorrow’s Federal Reserve decision, analysts continue to speculate on whether the Fed will announce more quantitative easing (QE), with one suggesting the Fed could show itself to be “desperate” and another predicting central banks could be about to open the floodgates.
On the currency markets, the US Dollar Index, which measures the Dollar’s strength against a basket of other currencies, fell below 80 for the first time since May yesterday, following a ratings update from Moody’s that warned the US could lose its Aaa rating next year if legislators fail to agree measures “that produce a stabilization and then downward trend” in the US debt-to-GDP ratio.
Read More @ BullionStreet.com

New Fed stimulus: the eve of decision day

by: Chris Marcus, Gold Money:
The moment that many precious metals investors have been waiting for may be upon us. I have felt strongly that another large easing package was on the way, and most Austrian School economists have felt similarly. An understanding of the business cycle and the effects of money printing allowed one to see clearly that the economy was never going to recover under current monetary policy.
As the summer progressed, the Federal Reserve and its Chairman Ben Bernanke slowly increased the tone and rhetoric of their dovish comments. The most recently released Fed minutes stated that if the economy did not improve soon, they would take action (previously they had merely said that they were prepared to be accommodative if growth slowed). And while last Friday’s nonfarm payroll report was somewhat short of a complete catastrophe, it was still weak. This could be the final justification the Fed is looking for to announce the start of QE3 tomorrow, at the conclusion of the Federal Open Market Committee’s (FOMC) latest two-day policy meeting.
Read More @ GoldMoney.com

$150 Silver & An Ocean Of Paper Money To Flood The System

from KingWorldNews:
Today acclaimed money manager Stephen Leeb told King World News, “There is no doubt that the Fed is going to print hundreds of billions of additional dollars.” Leeb also said, “They (the Fed) will have created multiple trillions of dollars and it won’t stop.” Leeb also said that in this environment, “… silver is easily going to $150.”
But first, here is what Leeb had to say about the situation in Europe: “I think the German high court decision was expected. It won’t have any effect on Europe’s ability to reflate. Bond purchases will take place, and Europeans now recognize they are all interrelated. If something happens to any of those big economies, Spain, Italy, etc., they all go down.”
“That’s a big deal, Eric. That’s the big takeaway from the last couple of months. Europe, they are going to be creating a great deal of money. The implications for precious metals, gold, etc., are very, very positive. They’ve printed a ton of euros already, but guess what? The euro today, at 1.29, is higher by about 5% vs its average since the beginning of the century …”
Stephen Leeb continues @ KingWorldNews.com