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The Federal Reserve’s seemingly endless program of quantitative easing (QE) begun under Ben Bernanke, and continuing at a slightly slower pace under Janet Yellen, has some of the punditry and much of the electorate up in arms. With good reason. Implicit in quantitative easing is the horribly obtuse notion that central banks can produce real economic growth through their monetary machinations. If only life were so simple. Back in the world of the reasonable, the sole purpose of money is as a stable measure of value that facilitates the exchange of goods and investment. Quantitative easing, by its very name,...

Philadelphia Federal Reserve President Charles Plosser is "very worried" about the potential for unintended consequences of the Fed's massive quantitative easing program. Plosser told CNBC that the U.S. was still suffering from "lasting effects" of the recession and "may never return" to its previous growth rates—and warned that policy should not bet on growth returning to previous rates, saying it could be "many, many years." (Read More: Fed's Plosser: We need to begin to get rid of QE) With gross domestic product expanding at a 2.4 percent annual rate, according to the Commerce Department last Friday, Plosser said that the...

There wasn't a lot of volume, but the market shrugged off an early indecision and rallied higher. The bias is to the upside, and despite a shaky start to the year, the long-term trend remains intact, which is very encouraging. Also encouraging is that the market is moving higher, even as the dollar edged higher as conventional wisdom shifts towards the belief; that it's going to take a universally acknowledged disaster or hiccup in the economy, for the Fed to divert from its unofficial goal of monthly tapering. The market moving higher on less Fed accommodation has been the...

In the month of December margin debt on the NYSE surged by over $20 Billion dollars hitting a new all-time high of $444.931 billion. The rise in leverage also sent investors net worth to a negative $149.358 billion which is also a record. This is shown in the chart below.

The government said GDP rose 3.2% in the last three months of 2013 -- one of the fastest rates since the end of the recession, though slower than the third quarter's 4.1%. Still, that sounds good, until you remember this: Employers only added 74,000 jobs in December -- one of the worst months in nearly three years. Stronger economic growth is supposed to equal more jobs. So what gives? It does appear that the normal relationship between jobs and GDP has broken down. In the first half of 2013, for instance, GDP growth was at 1.9% and employers added an...

U.S. stocks tanked on Friday, with investor sentiment slammed by increasing worries about trouble in emerging markets. "This is more of a geoeconomic kind of thing. The Friday dates plays into this, the end of the month plays into this, and it does appear emerging markets, one by one, will need to take additional central bank action over the next few days," said Jim Russell, senior equity strategist for U.S. Bank Wealth Management.

WASHINGTON — The Federal Reserve announced Wednesday another $10 billion cut in its monthly bond purchases in a statement that attributed the decision to “growing underlying strength in the broader economy.” The statement, published after a two-day meeting of the Fed’s policy-making committee, reflected the optimism of Fed officials that the economy is finally poised for faster growth after years of false starts and setbacks. It was the committee’s first unanimous decision since 2011. The Fed said it would expand its holdings of Treasury and mortgage-backed securities by $65 billion in February, down from $75 billion in January and $85...

The deregulation of the financial system during the Clinton and George W. Bush regimes had the predictable result: financial concentration and reckless behavior. A handful of banks grew so large that financial authorities declared them “too big to fail.” Removed from market discipline, the banks became wards of the government requiring massive creation of new money by the Federal Reserve in order to support through the policy of Quantitative Easing the prices of financial instruments on the banks’ balance sheets and in order to finance at low interest rates trillion dollar federal budget deficits associated with the long recession caused...

The Federal Reserve did something completely unpredicted on Wednesday; nothing. So called “tapering” of QE was indefinitely placed in deep freeze………until such time as the U.S. economy is more robust. Most asset classes shot up energetically. Both the S&P and the Dow closed at all-time highs. SNIP The question to be asked is did these asset classes all react rationally. Continuing to effectively print $85 billion per month of new money after months of telegraphing at least a modicum of reduction can only translate that our economy is frail and infirm, languid if you will. SNIP Up until ten years...

A Marketwatch column points out that the "Fed wants to exit QE but keep long-term rates low". This is as realistic as saying that "I want to get rich but I do not want to work". They cannot keep rates down without buying UNLESS the Treasury takes over, literally prints the money off their presses - then buys their bonds themselves at auction instead of the Federal Reserve buying. One of the things that keeps these scoundrels in the administration out of prison is that...

Bank customers could look forward to being charged to keep their money in U.S. banks. That’s the latest threat coming out of Wall Street, according to a report in the Financial Times, as financial institutions look to combat a possible interest rate cut from the Federal Reserve on its bank reserves. This latest potential step would be a hit to depositors, already earning close to zero interest on checking and savings accounts. But the banks say it’s a side effect of the Fed’s quantitative-easing strategy and its eventual tapering of its asset purchases of $85 billion a month, which has...

Janet Yellen, nominated to be the next chairman of the Federal Reserve, signaled she will carry on The Federal Reserve’s unprecedented stimulus until she sees improvement in an economy that’s operating well below potential. Here is her prepared statement. “A strong recovery will ultimately enable the Fed to reduce its monetary accommodation and reliance on unconventional policy tools such as asset purchases. Supporting the recovery today is the surest path to returning to a more normal approach to monetary policy.” “Unemployment is still too high, reflecting a labor market and economy performing far short of their potential.” Of course, unemployment...

"I can only say: I'm sorry, America," he wrote. "The central bank continues to spin QE as a tool for helping Main Street. But I've come to recognize the program for what it really is: the greatest backdoor Wall Street bailout of all time."

The Fed keeps buying roughly $85 billion in bonds a month, chronically delaying so much as a minor QE taper. Over five years, its bond purchases have come to more than $4 trillion. Amazingly, in a supposedly free-market nation, QE has become the largest financial-markets intervention by any government in world history. And the impact? Even by the Fed's sunniest calculations, aggressive QE over five years has generated only a few percentage points of U.S. growth. Having racked up hundreds of billions of dollars in opaque Fed subsidies, U.S. banks have seen their collective stock price triple since March 2009....

Bill Still makes the case that given that QE injections ARE COUNTED in GDP growth, and 3Q GDP growth has been roughly $196 billion during the last quarter while QE injections are $85 billion per month or $255 billion. Meaning: The US actually shrunk $59 billion during the last quarter. http://www.youtube.com/watch?feature=player_embedded&v=qK6ftzkX7xc

The Federal Reserve will increase its monthly bond purchases not decrease them, says Marc Faber, publisher of the Gloom, Boom & Doom Report. "The question is not tapering. The question is at what point will they increase the asset purchases to say $150 [billion], $200 [billion], a trillion dollars a month," Faber told CNBC. The Fed is now buying $85 billion of Treasury and mortgage bonds a month in what's known as quantitative easing (QE). When the Fed first started buying long-term bonds, in what was called QE1, it initially said the program would last six months. But it started...

In the wake of an unusual trading pattern after the Federal Reserve's decision to continue economic stimulus last week, Fed officials have contacted certain news organizations to discuss rules and procedures for the central bank's advance release of sensitive information, CNBC has learned. On Sept. 18, the Federal Reserve shocked the financial world with its decision not to scale back its level of support to the economy as most market participants expected. Financial markets reacted at the speed of light, pushing stocks dramatically higher in just moments. But it looks like the speed of light just wasn't fast enough for...

Chairman Bernanke: “We could raise interest rates in 15 minutes if we have to. So there really is no problem with raising rates, tightening monetary policy, slowing the economy, reducing inflation at the appropriate time. Now that time is not now.”Scott Pelley, CBS 60 Minutes: “You have what degree of confidence in your ability to control this?” “100%.”* * *No doubt that exchange of 2010 will go down as the most famous of Mr. Bernanke’s tenure as chairman of the Federal Reserve. It is the context in which to savor — if that is the word — the news...

COMMODITIES Updated September 19, 2013, 3:15 p.m. ET Gold Climbs Nearly 5% Futures Extend Post-Fed Rally Gains By MATT DAY and FRANCESCA FREEMAN NEW YORK—Gold futures rose nearly 5% on Thursday, extending the gains made after the Federal Reserve surprised investors by announcing it would stick to its bond-buying program. The bond purchases have pumped cash into the financial system, raising the specter of inflation or a weakened dollar. Some investors view gold as a hedge against either scenario. The most actively traded gold contract, for December delivery, rose $61.70, or 4.7%, to settle at $1,369.30 a troy ounce on...

<p>An economy still stumbling toward recovery was not enough to sway the Federal Reserve, which defied market expectations Wednesday and said it will not begin pulling back on its monthly asset-purchasing program. Stocks surged on the news but bond yields were flat.</p>