For cotton and Errol

[mcfarms]

http://seekingalpha.com/article/3569626-can-central-banks-save-the-world

[mcfarms]

Saving alpha is a great site sometimes a fellow may want to get in the bunker though after reading what a mess we've arrived at. Some days this froggy don't know which way to jump.

[cottonpicken]

Didn't really notice anything new from him zirp then nirp more qe.....

Rates can never be aloud to float within the free market now.

That was the whole point of qe,new and old/rolled bonds have to be monetized because there is not enough money that wants to bid at zero so the central banks where forced to act as backstop.

No there is nothing good about it but the alternative would have been chaos.

There is like 60 trillion in total credit market debt in the states......the system cannot handle it......

There is 200 trillion globally with gdp 70 trillion....

That means they can not have deflation,and they cannot allow anyone to think there is inflation,nobody would hold a 10 year at3 with inflation at 10,its an eight lane highway to get into these places and a goat path getting out.

Nirp as crazy as it is,increases the price of existing bonds.

the 70's early eighties was a sort of a forced system reset of the market,the decimal point was moved to right,then they stabilized it and we where just barley strong enough to survive the medicine,the market forced it again in the 00's,which i was able to successfully to predict.But the game has now changed and obviously 18% rates would be fatal......unless your running 40% inflation(this type of level of theory isn't found many places)

So basically its looking more and more like the 30's-40's where it is war and debt restructure,im sad to say.

[errolanderson]

mcfarms . . . central bankers are out of options.

But central bankers continue to believe (or want investors to believe) that their policies can still manipulate inflation. Their policies have increasingly lost impact. Now they are virtually powerless.

Central bankers continue to send investors the wrong message (IMO). Bank of England chair Carney just months ago spouted rate hikes just like he did as chair of the Bank of Canada. Now Yellen is doing the same thing . . . touting rate hikes when there isn't a chance in a blue moon of that happening in the foreseeable future. These policies reflect an economy that the Americans want to have or they are told they have, but in-reality . . . they don't have.

(IMO) this is plain mis-management, mis-communication and mis-judgement from these very important policy makers.

Agree with Cotton that the cure for these worsening situation will not be pleasant. This past year is tracking 1937 in my mind. In those years, the Fed tightened monetary policy at the wrong time and the rest is history. This time, rates won't be hiked, but already too late in my opinion.

[biglentil]

I think we are well into uncharted territory. There was a gold standard in 1937. We have massive inflation of money supply with near 0 rates and the cheap money addicted economy is still on the ropes. Deflation is the last thing to worry bout at these interest rates imo.

[errolanderson]

Walmart shares hit a 3-year low this morning on a flat sales warning. Also. U.S. retail sales data released today at -0.2%.

Translation . . . U.S. is heading into a recession in 2016.

[cottonpicken]

Wally World is down almost 10 points. Scary

[errolanderson]

The Walmart fallout is a truer indication of consumer spending than any government report. The U.S. economy is in-trouble . . . .

[hobbyfrmr]

Errol. Agreed. WalMart is the shining example of US consumerism. Everybody shops at Walmart because everything is so affordable. They are efficient beyond a doubt and there is no other business to get cheaper stuff. If they show signs of slowing retail sales, there is a problem at the "real people" level.
On the other hand, the real people might be taking a break, making room on the credit cards for thanksgiving and christmas. I think the walmart post holiday season media reports will be the ones to listen for.