August Surprise – QE 2 – Quantitative Easing 2

on 08 8, 2010

Extend and Pretend – August Surprise – QE 2 – Quantitative Easing – Who comes up with this stuff?
Are we on the eve of the next round of manipulation aka “Extend and Pretend” ?
Will you even know what the financial talking heads will be referring to if this is about to happen?
Get ready because they could be back with the next stage of their gambit on Tuesday when the FED meeting concludes and they inform us of our future.  First off let us translate “Extend and Pretend” for you into what it really means: Avoid addressing the problems now and for as long as needed and then pretend that the problem never existed in the first place once memories become hazy.  Sounds responsible right?
Well, since we’ve started down the path of reality and truth let’s cover a few things that are a little more challenging.  You may have heard or read a little something about “QE 2” or “QE Lite” or about some sort of “August Surprise” that the current administration will need to unveil soon to change the negative dynamic that’s in place in the country ahead of Novembers midterm elections.
Let’s take them one at a time starting with the August Surprise that many are speculating could be unveiled imminently by an Obama Administration that’s losing support rapidly for its economic policies.  Outward signs confirm this as this “Summer of Recovery” has seen the resignation of two key economic advisors from this administration, Christina Romer and Peter Orszag.  But back to the August Surprise since nearly everybody likes surprises.  The most popular rumor goes something like this and by the numbers:
1. The Administration’s Economic Spin isn’t working
2. They are (rightly) perceived to have helped Wall St. in every conceivable way and have actually not done anything (or hurt) Main Street
3. All but the hardcore Obama Zombies see and understand this
4. So…., Since Fannie Mae and Freddie Mac, the dual epicenters for the Housing/Mortgage Bubbles/Fraud/Eventual Collapse were conspicuously absent from the recent “Financial Reform Bill”, they can still be hyper-abused as they already have over the past two years
5. So…., put them to work in some new and ridiculous ways so that Main Street homeowners are bailed out so that they feel better and thus the stock market can be further juiced so everyone feels better even more so once it has been
6. Dynamic changed.  Poll numbers improve. Real solutions to the problems ignored.  Public then focuses on other things.  Avoid Democrat annihilation in November.
There are of course variations to this but that is the August Surprise Blueprint in a “nutshell”.  Now let’s embark on covering the “QE 2”.
This does not refer to the Queen Elizabeth or some reduced quality (if that’s possible these days) Hollywood sequel.  It refers to quantitative easing.  If you have no idea what-the-heckenzie that means then  they’ve managed to illicit the response from you that they sought to.  Not surprisingly QE 2 is related to the FED where all things are at least intentionally non-descriptive and cryptic at best.  If QE 2 does occur in our near future it will be QE 2 because we’ve already seen QE 1 in the not so distant past when the FED took money from all of us taxpayers, gave it to the greedy Wall St. bankers and corrupt corporations that helped the government to really exacerbate the fine mess they set in motion, and took the risky assets that had lost most of their value and gave them to us in return for our money.  Voila! Problem solved!  And with the added benefit of allowing the banks to then take what was our money and loan it back to us at far higher rates than what the FED charges the banks to hold into it!  This would be funny if it weren’t true but the only people laughing about this are the con perpetrators and other assorted but connected beneficiaries that just keep on keepin’ on getting away with it.
We have to bring this to a wrap our editor informs us but we’d be remiss if we didn’t provide some sort of definitiony-sounding explanation of quantitative easing.  So here it is:
Quantitative easing is the Federal Reserve going out and buying US government Treasury debt and/or corporate debt thereby placing enormous sums ($100’s of Billions and eventually possibly $Trillions) of freshly created dollars into the financial system and economy.  The government through the US Treasury auctions would have even more cash to throw around into the banking system and the huge corporations would have much more cash on hand at better prices for their debt than they could obtain otherwise.  With all that extra loot sloshing around in “the system” some of it would have to make its way towards spurring the economy forward and of course igniting a stock market rally because what wouldn’t ignite a stock market rally these days?
See how easy all this really is once you can decode the words that they intentionally try to confuse us with?
We’ll leave you with this: If a friend of yours that fancies themselves a “No BS” kinda guy responded to all that you’ve just read as if you explained it to him with: “So basically what you’re tellin’ me is that they’re gonna try to make things look better with a bunch of gimmicks that all involve adding more and more debt even though all the debt they’ve added hasn’t really helped.  They’re about to give us more of the same and they think that’s gonna help them in November? Is that what you’re sayin’ or did I miss something?  Well?…
How would you respond?

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