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Many stock market investors have, in the back of their minds, the comforting illusion that the Quantitative Easing with which the Fed showered Wall Street during the past three years could restart if the market falters. (Under Quantitative Easing, the Fed gave banks $85 billion each month to help stimulate lending and spending and to drive up stock prices). Some also see that the impending rise in interest rates can be reversed if the economy begins to drop. Both assumptions are really illusions. The factors that impelled an end to Quantitative Easing and to higher interest rates rule out a...

The euro slipped to a fresh 12-year low against the US dollar on Thursday as the common currency continued to buckle under pressure felt since the European Central Bank launched its massive quantitative easing scheme at the start of the week.

The European Central Bank has hit the launch button on its 1.1 trillion euro ($1.2 trillion) stimulus program by starting to buy government bonds. The chief monetary authority for the 19 countries that use the euro confirmed Monday it had begun the purchases, which aim to make credit cheaper, boost growth and raise inflation. ECB President Mario Draghi had announced the start date last week, sending stocks higher and the euro lower.

Eleven trillion dollars: that’s how much of so-called Quantitative Easing the world’s central banks have done since the 2008 crisis. To put that in perspective, with eleven trillion dollars you could pay off pretty much all U.S. household debt – all mortgages, all car and student loans, credit cards – you name it. So what did the global economy get for $11,000,000,000,000 in QE? Following a post-recession pop, we got collapsing world trade growth, and that’s even with prices falling over the past three to four years. Why is this happening? It’s not because this time around things are different....

Despite endless proclamations that the world has 'escaped' the financial crisis, the data (and actions) simply do not back that up. The constant propagandizing of either a) US is economically strong and will drive the world's growth engine (factually incorrect), or b) the rest of the world is about to revert to higher growth seems entirely anathema to the fact that in 2015, we have seen a wave of monetary easing - most recently today by Israel. That makes it20 central banks that have cut rates (or eased policy) in the last few weeks - covering over 50% of the...

With the Federal Reserve printing trillions upon trillions of dollars to keep the economic system afloat, many investors and financial pundits have surmised that the fundamental economic problems facing the United States during the crash of 2008 have been resolved. Stocks are, after all, at historic highs. But the insiders know different. And if there’s any single person out there who understands U.S. monetary policy and its long-term effects on domestic and global affairs it’s former Federal Reserve chairman Alan Greenspan. As the head of the world’s most powerful central bank for nearly two decades he’s privy to the insider...

Sweden has cut interest rates below zero and launched quantitative easing to fight deflation, becoming the latest Scandinavian state to join Europe’s escalating currency wars. The Riksbank caught markets by surprise, reducing the benchmark lending rate to minus 0.10pc and unveiled its first asset purchases, vowing to take further action at any time to stop the country falling into a deflationary trap. The bank presented the move as precautionary step due to rising risks of a “poorer outcome abroad” and the crisis in Greece. Janet Henry from HSBC said the measures are clearly a “beggar-thy neighbour” manoeuvre to weaken the...

Fed’s $4 Trillion Holdings to Boost Growth Beyond End of QEQuantitative easing may turn out to be a gift that keeps on giving for the U.S. economy. As the Federal Reserve prepares to end its third round of bond buying next week, the central bank plans to hang on to the record$4.48 trillion balance sheet it has accumulated since announcing the first round of purchases in November 2008. That will continue to keep a lid on borrowing costs, helping the Fed lift inflation closer to its target and providing support to a five-year expansion facing headwinds abroad, from war in...

European Central Bank (ECB) President Mario Draghi announced the launch of an open-ended, expanded monthly 60 billion euro ($70 billion) private and public bond-buying program on Thursday. The long-anticipated introduction of euro zone government bond purchases will bring the ECB's buying program into line with the U.S. Federal Reserve's quantitative easing (QE). The program will be open-ended, lasting until at least 2016, Draghi told reporters at his regular media conference on Thursday, and will start in March this year. The hope is that it will boost the region's painfully low inflation rate, which came in at an annual minus 0.2...

The economic prophet who foresaw the Lehman crisis with uncanny accuracy is even more worried about the world's financial system going into 2015. Beggar-thy-neighbour devaluations are spreading to every region. All the major central banks are stoking asset bubbles deliberately to put off the day of reckoning. This time emerging markets have been drawn into the quagmire as well... "We are in a world that is dangerously unanchored," said William White, the Swiss-based chairman of the OECD's Review Committee. "We're seeing true currency wars and everybody is doing it, and I have no idea where this is going to end."...

Tyler Durden 01/02/2015 It seems like it was only yesterday when we reported that, in yet another slight of hand for the US Treasury and Social Security Administration, US debt rose by $32 billion on the last day of November sending total US debt above $18 trillion for the first time ever. As we further noted, it also meant "that total US debt has increased by 70% under Obama, from $10.625 trillion on January 21, 2009 to $18.005 trillion most recently." Fast forward to today when we are happy to report that according to the US Treasury, America's debt-funded spending...

A wheelbarrow of money to buy a loaf of bread. This is what Obama, with his fiscal cliff plan, threatens us with. For many years now we have heard chilling tales about that elusive, powerful and manipulative entity conspiracy theorists have called “The New World Order”. Not only have the members of this group managed for the most part to remain anonymous, but their agenda has remained mysterious and obscure. So much so that many good people have been perfectly fine with ignoring its existence or viability. Whether or not this New World Order is in lockstep with World Communism...

In a normal economic times falling energy costs would be considered unadulterated good news. The facts are simple. No one buys a barrel of oil to display above the mantle. No one derives happiness from a lump of coal. Energy is simply a means to do or get the things that we want. We use it to stay warm, to move from Point A to Point B, to transport our goods, to cook our food, and to power our homes, factories, theaters, offices, and stadiums. If we could do all these things without energy, we would happily never drill a...

(Reuters) - European Central Bank President Mario Draghi has moved closer to launching sovereign debt purchases and data this week will show just how dangerously low inflation has fallen in the $13 trillion euro zone economy. A sickly Europe has held back global economic growth for years, and now it is contributing significantly to powerful forces already dragging down inflation across the globe. A spectacular drop in crude oil prices over the past month will be the center of discussion when ministers from the world's top oil exporters meets in Vienna on Friday.

The Cultural Economist Nov 13, 2014 TCE ( The Cultural Economist) writes: Like other Central Banks, the U. S. Federal Reserve has “printed” copious quantities of money. Despite better GDP numbers and positive media commentary, much of the American economy continues to be lethargic. The Eurozone appears increasingly vulnerable to recession. Financial and geopolitical risks could derail economic growth. What are the long term trends that will shape the outcome? The Case for Inflation Oil As I have documented several times, the rate of inflation is sensitive to the price we pay for a barrel of oil. Political turmoil in...

The week was dominated by news by central banks as the Federal Reserve ended QE and the Bank of Japan pushed its QE program to new heights. The result was another rally in stocks around the globe that made the mini-correction earlier this month seem like a dream (or a nightmare). The question is what happens next, and all indications are that markets will continue to ride the wave of central bank liquidity as far as it takes them. Markets were also boosted by a strong initial third quarter U.S. GDP report showing the economy grew at 3.5% and strong...

Julia La Roche October 31, 2014The Federal Reserve ended quantitative easing this week. And soon it'll start tightening monetary policy with interest rate hikes. This is coming as central banks in the rest of the world maintain loose monetary policy or even go as far as to loosen monetary policy further. All of this is bullish for the US dollar relative to other major currencies. Business Insider recently asked the smartest people in finance for what they considered to be the "most important charts in the world." Without hesitation, former global macro fund manager Raoul Pal sent us a long-term...

Mike Bird October 31, 2014The Nikkei closed up 4.83%, hitting a seven-year high after the Bank of Japan (BoJ) unexpectedly announced it was expanding its monetary easing policy Friday morning. In a tight vote, the BoJ backed an 80 trillion yen ($720 billion) target for expanding the monetary base (a measure of the amount of money held by the central bank and in the economy). That's up from a previous target of 60 trillion to 70 trillion yen. Analysts were basically not expecting anything Friday: this one was a genuine surprise. Just as the Fed this week announced the final...

It appears it is time for some Hillary-Clinton-esque backtracking and Liesman-esque translation of just what the former Federal Reserve Chief really meant. As The Wall Street Journal reports, the Fed chief from 1987 to 2006 says the Fed's bond-buying program fell short of its goals, and had a lot more to add. Mr. Greenspan’s comments to the Council on Foreign Relations came as Fed officials were meeting in Washington, D.C., and expected to announce within hours an end to the bond purchases. He said the bond-buying program was ultimately a mixed bag. He said that the purchases of Treasury and...

The Federal Reserve on Wednesday voted to end the last leg of its bond-buying stimulus program, cutting purchases of Treasury's and mortgage-back securities to zero from $15 billion starting on Nov. 1. The central bank also sounded more upbeat about the labor market and said it doesn't expect falling energy prices to hold inflation down in the long run. For the first time, the Fed explicitly said it could raise interest rates sooner than markets expect if the economy grows faster than the bank projects.