THE QE ” QUANTITATIVE EASING” STORY

22 Dec

Here a short versión of maybe the biggest FRAUD=QE in modern time. US economy have reached a point critical classified as a liquidity trap. Interest rates cannot fall below ZERO. Are we in a continous BOOM and BUST CYCLE fueled with QE printing? A secular stagnation as described by Larry Summers. Poor investments prospects. Is the starting OIL&GAS SHALE BOOM and FRACKING going to help US? It provides investment opportunities.The coming SHALE -ENERGY REVOLUTION.

QE is FED printing Money by BUYING BONDS from BANKS. In first round of QE US BANKS had a lot of BONDS to sell as they wanted to RAISE CASH FAST to get JUNK ASSETS of BALANCE SHEETS. After some time they got it done. IN first QE FOREIGN BANKS got 35% of Money created or 450 Bilj. USD.

In Second QE2 that began around time of the GREEK CRISIS 2010 almost all went into FOREIGN “EU” BANKS.

Third QE3 “Infinite” most of printed Money into Foreign BANKS.

WHY?? Basically US GOVERNMENT is helping to KEEP “USD” as WORLD RESERVE CURRENCY by paying BANKS to do that!

It helps US BANKS by ELIMINATING COUNTER PARTY RISK. We can see this in the falling LIBOR”London Interbank Offered Rate” later years.

Libor rate Chart

Money is still not reaching MAIN STREET= REAL ECONOMY! Same story in SOUTHERN EUROPE!

When it reaches we can expect an INFLATION BOOM. LIABILITIES are going up in US Balance sheet on a falling REAL INCOME STREAM. This will not be sustainable longer term! Present form of USD is DOOMED!

If they have to print money to BAIL OUT all Banks in the WORLD having US BONDS when Interest rates go up you get HYPERINFLATION= END of US EMPIRE. The US Industrial Empire is gone long ago! Back 50Y US produced 80% of CARS IN THE WORLD!  QE TAPERING have just been announced with a QE cut of 10 BILJ /Month of total 85 Bilj./Month. Small step  in the MINEFIELD ahead that can blow up in a BANG!

HOW IS THIS QE STORY GOING TO END??

A new lenfred Finance insight.

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