Yellen is back! Or should I say “Yellenator” is baaaaaaaaaaaaaaacccckkkk!!
The chatter continued through the summer…”Summers or Yellen“?? Back and forth like a tennis match. Yet Summers bowed out and gave the new queen of “injection” Yellen the official role. Janet Yellen Bio is impressive and will become the first female to lead the Federal Reserve Board. Although the markets tried to create new candidates…even the infamous “Geithner increase your cap limit ECB” was mentioned? Could we imagine that?
Yellenator was the only choice…she consults with Bernhamlet on his FOMC meeting minutes & FOMC Statement….how could she not be the chosen one? She is the “status quo” for Wall ST…the “fat cats” will continue to see the equity markets inflate as all “hail rise to Yellenator”.
Bullion markets have loved Bernhamlet ..can the Yellenator provide the same boost?? Yellen will be challenged yet she will keep the “ship afloat” for how long? While the US continues to play their “Hollywood epic” to the world, the world is looking to other alternatives and will the USD be tagged with an SDR? Overall, markets are pro “stimulus” regardless of “taper” talks…there will be no “Octaper” ..”Decaper” or even “Janaper.
If we do see tapering…expect the return of huge stimulus in the future. The US cannot operate their military machine nor pay their bills and risk default, US debt limit will increase and all will remain “status quo”. As well the Federal Reserve Balance Sheet needs to continue to increase their bond purchases. Who else will buy these “toxic assets” leftover from 2008. How will this play out….2014 or maybe 2015 alot of changes expected for our world financial system.
TIC..TOC..TIC..TOC…the clock strikes midnight..and will the US shutdownallow a partial or full shutdown today????
Since 2005, the US has provided numerous “Hollywood” events…Iraq war invasion, Obama Bank Bailout 2009, GM Bailout 2009 (although GM Bailout Pay Back 2012 cleared debt), Us Debt Ceiling increase, “to taper or not” via Bernhamlet…and now…a possible US shutdown looming..the first in 17 years?? Can we believe this scenario?? How many more epic issues can the “magicians in the U.S.” provide to the world?? Hasn’t the “rabbit” out of the hat trick been shown??
The world has changed allover from a financial perspective and if your seeking a “main event” of all nations in the world the US provides “Superbowl” style hype like no other…grab some popcorn and refreshments and enjoy the show!!
Let’s be honest, Obama under his current term will continually provide these “illusions”, Bernhamlet will continue his “rabbit out the hat tricks” as both need to maintain “status quo”…all is good in their minds. We all know the US is heading towards a downward trend with a memorable U.S. Debt History …and continual devaluation of the USD does not benefit the world economies. The digital printing press via the FED is the only resolve for the US as they need “easy money” to feed their Bank Bailout List and cushion Wall St “fat cat” bonuses. The financial world is slowly trying to evolve into a new standard and will the BRICS nations banking system that is currently developed..become the a model to follow for the future??
US Debt ceiling looming in the next couple of days…..
U.S. Congress will be debating on September 30th 2013, to pass a federal budget pertaining to U.S. Debt 2013 and increasing the “US debt ceiling limit”. This scenario reminds me of U.S. Treasury Secretary Timothy Geithner plea to the senate back in January 2013 and to increase the “debt limit” …otherwise military salaries will be affected, Social Security payments etc.
Once again another Us Debt Crisis scenario is lurking behind the scenes…as the drama unfolds, similar to the FED debate to “taper or not” via the infamous “Bernhamlet”. The hype was building for months and what we found out, no tapering..for now??? This issue is identical, the US Federal Reserve Bank will not allow U.S. Congress to halt the “digital printing” press…as the U.S. economy cannot survive without the continual stimulus flow. Geithner, Bernhamlet, Yellen…the “song remains the same” as the famous line from Led Zeppelin. Status quo is here to stay and expect no change coming up this week.
Overall, if we assess the overall U.S. economy and the use of stimulus, by adding more to their debt has not changed U.S. government or administration policy. In fact, since 2008, the Big banks, Wall St have not changed their business model…if the Fed is not willing to change their monetary policy of continual injection…why would the world expect anything new from the U.S. Congress??
Regardless of how Moody’s rates the outcome…the bigger concern for the U.S. administration is how will the BRIC nations react? Currency wars are amongst us as Jim Rickards (author of the National bestseller “Currency Wars”) and how will those nations respond to this current U.S. issue?
Famous quote we are hearing today in the financial markets…”to taper or not…that is the question?”
Bernhamlet (as we all know him Bernanke) has managed to provide the most elusive hype of the current century. Over the past 3 mths ...Bernhamlet has continued to keep the media, traders and analysts guessing as to the Fed’s true plan. Either to end bond purchases and clear Federal Reserve Balance Sheet, slice alittle or continue to “print to infinity”. Yesterday’s Bernanke Speech via his Bernanke Press Conference in Washington, was not a shock for myself or others in the market..yet the media had seemed surprised. No TAPER…what??? After years of assessing technical and more so “macroeconomic” data…the Fed will continue provide these “menagerie tricks” as the U.S. economy cannot survive without continue more stimulus.
I read an article yesterday from the Telegraph in the U.K…and the editor had mentioned a valid point. Stimulus can be a positive factor for any economy…the key is to direct it where it is needed most. In the U.S. we have seen…the path of Unconditioned Stimulus into the “big banks” pockets or right into Wall St.
Can the Fed continue this hype as “chatter” continues today…will “Octaper” commence for next month? If Yellen is nominated or whomever the next candidate to replace Bernanke…will they correct the U.S. monetary policy and provide hope…or continue the “petal to the metal”.
Truly, Who Owns Federal Reserve..we all know it’s a private entity…and it will remain at the “helm”. Overall, next month’s “Octaper”..if that transpires and U.S. debt limit will be heated discussion. Grab your popcorn as the end of 2013 will be the “highlight” in coming years and possibly Bernhamlet’s legacy.