Thread: The REAL $200 TRILLION Problem Bernanke’s Worried About

The REAL $200 TRILLION Problem Bernanke’s Worried About

Submitted by Phoenix Capital Research
10/12/2011 14:51 -0400


I’ve stated before that Bernanke isn’t interested in interest rates for employment of economic purposes. We now have definitive proof this is the case.



As you can see, interest rates have actually RISEN after the announcement of QE lite, QE 2 AND Operations Twist #2.

The evidence is clear, QE has not lowered interest rates. Indeed, the only time rates FELL in the last two years was when the Fed WASN’T engaged in QE (May 2010-August 2010 and June 2011-September 2011).

So what gives? Does the Federal Reserve not have a stockcharts account? Don’t tell me that with the TRILLIONS spent bailing out banks the Fed can’t afford to print a couple hundred bucks to see Treasury yields. Heck, there are plenty of FREE sources for Treasury charts.

Jokes aside, it’s clear the Fed is engaged in QE for another reason or reasons. I believe they are:

1) To absorb the insane debt issuance to permit the US’s massive deficit.

2) To keep the interest rate based derivative market in check.

Regarding #1, it’s no surprise that the US has been running a deficit that would make Greece proud. Indeed, the primary strategy of the powers that be since the Great Crisis began in 2008 was to attempt to make up for the sharp downturn in the private sector by spending obscene amounts of money.

The Fed played a big part in this. Indeed, since QE 1 was announced the Fed has bought over $1.2 TRILLION in Treasuries. The Fed claims it isn’t funding the deficit directly. That’s only partially correct. The Fed is supposedly buying old Treasuries from the banks. However, the definition of “oldâ€

wow.