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In an unprecedented and controversial move, the Federal Reserve today announced the initiation of an open-ended round of Quantitative Easing (QE3) and extended the period for which it will keep rates between 0 and 1/4% to mid-2015. Here is the paragraph from the FOMC statement that sums it up: "....The Committee agreed today to increase policy accommodation by purchasing additional agency mortgage-backed securities at a pace of $40 billion per month. The Committee also will continue through the end of the year its program to extend the average maturity of its holdings of securities as announced in June, and it is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities. These actions...should put downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative." Translating from Fed-...

Mike Maloney asks Ben Bernanke some important questions about gold and its role as money, along with his thoughts on our fraudulent monetary system.

On the heels of the release of the Fed statement and the Bernanke press conference, today King World News interviewed Bill Fleckenstein, President of Fleckenstein Capital, to get his take on the situation. Fleckenstein told KWN the economy will roll over, Europe will go into the abyss and the Fed will be forced to ease. He also described the Fed as “idiots” and said they are completely wrong about what they are saying: “Let’s take a step back for a second. Who are these people? They’re the same idiots that never saw anything coming. So whatever they think they see or whatever they want to talk about is meaningless because they are probably wrong about what they think.” Bill Fleckenstein continues: “For this five minutes they think the economy is okay, and it isn’t. They seem to think Europe’s kind of okay, and it’s not. So the next thing you know they will have to realize they are not so right about being sanguine and then they will have to do a U-turn. How is that any d...

The stock market is overreacting to what the Federal Reserve didn't say about quantitative easing in the minutes from its March meeting, bond king Bill Gross told CNBC Wednesday. "It's much ado about nothing or much ado about a little," the founder of Pimco said. "We should think of the Fed as like a chess game where some of the pieces are more important than others," likening Fed Chairman Ben Bernanke to the king, San Francisco Fed governor Janet Yellen to the queen and New York Fed chief William Dudley to the castle, with the rest of the governors the knights. "You have a story when some of these major pieces, one of the three, basically concedes and says, 'Check mate.' But we haven't seen that," Gross said. "Until that happens this wordsmithing...is relatively unimportant." The Fed minutes released Tuesday showed central bank policymakers less keen to launch a fresh round of monetary stimulus as the U.S. economy impr...

With gold remaining in a trading range below the $1,700 level, the Godfather of newsletter writers, Richard Russell, had this to say about what is happening with regards to gold, silver, stocks, inflation and the Fed: “Technically, both the US and Europe are dead broke, and their GDPs would have to run wild on the upside to make the debt to GDP ratio more acceptable. How will it all end? It will end with the central banks churning out junk fiat inflation-adjusted money in order to service the debts. Meanwhile, the precious metals and other tangibles are being bought up by millionaires and billionaires as they await their turns to feast on the remnants.” Richard Russell continues: “The fact is that the Fed is happy with 2% inflation each and every year. Compound 2% inflation year after year, and you know what's happening? -- you've effectively wiped out the middle class. Between inflation, stagnant wages, higher taxes, and no jobs, the middle class has hit the brick w...

Guessing whether the Federal Reserve will undertake another round of quantitative easing has become a popular parlor game on Wall Street. As could be expected, ahead of the Fed's Tuesday policy meeting, chatter has been renewed over whether the central bank should and could institute another round of QE to help the economy and keep its two mandates, high inflation and unemployment, at bay. Despite a more stable economy in recent months, the word last week was that the Fed is considering another potential long-term bond buying program called "sterilized QE." This program would be similar to QE2, except this time, the Fed would restrict how banks can use the funds earned from the sale of the securities. Markets loved the idea, since with each round of additional easing, asset prices have jumped. Lance Roberts, CEO of Streettalk Advisors, compares the Fed to a "drug dealer" for Wall Street -- he says Fed Chairman Ben Bernanke took on a third unofficial mandate ...

WASHINGTON (MarketWatch) — Federal Reserve officials are considering a new type of quantitative easing that will attempt to boost the economy without accelerating inflation, according to a report published Wednesday. Analysts said the new approach would allow the Fed to move despite high oil prices. Under the new approach, the Fed would print new money to buy long-term mortgage or Treasury bonds but effectively tie up that money by borrowing it back for short periods at low rates, according to a story in The Wall Street Journal. This “sterilized” quantitative easing, would use reverse-repurchase agreements to keep the money from flowing to bank reserves. Markets reacted to the report, with stocks SPX +0.69% advancing to their strongest level of the day. Commodities also rose. Read more about stocks in Market Snapshot. Economists said that Fed Chairman Ben Bernanke seemed to back away from more quantitative easing during two days of testimony before Congress last week. Finan...

Jim Grant is simply brilliant in this must watch interview with CNBC's Maria Bartiromo, which we won't spoil with commentary, suffice to provide the following pearl of an exchange: Maria Bartiromo: "What are the alternatives?" Jim Grant: "Capitalism is an alternative for what we have now. I highly recommend it." Maria: "We all do." Grant: "No we don't." Maria: "The Federal Reserve may not." Grant: "We ought to be discussing an intelligent move to a sound currency by which i mean a currency that is based on a standard and not at the whim and the discretion of a bunch of mandarins sitting around Washington D.C." In other news, Joseph Stalin has never been happier in his grave that Ben Bernanke has decided to shoulder the legacy of central planning and is firmly committed to proving that where Vissarionovich failed, the ChairSatan will succeed. At any cost. Original source

Update: yup. It's Jon "Mouthpiece" Hilsenrath all right. This is nothing but a test to gauge if the market will ramp on the clarification that future QE may be sterilized. If market ramps regardless, the sterilized clause will be ultimately eliminated. Full story link . Original: While we have yet to see the actual report, almost certainly emanating from Jon Hilsenrath, it appears that the QE3 rumormill has started, initially with speculation that the Fed's activity will be merely "sterilized" or more Twist-type purchases, unclear however if in TSYs or also in MBS. Via the WSJ: Fed Officials consider "sterilized" option for Future bond buying Operation Twist Reprise, QE Other Options For Fed Bond Still Unclear Whether Fed Will Launch Another Bond-Buy As a reminder, yesterday we said that according to the EURUSD, the implied market expectation is for a $750 billion QE out of the Fed . However, that is for unsterilized balanc...

While there is precious little in terms of detail coming out of the latest and literally greatest "fake" bond story in history, the BBC has been kind enough to release the pictures of the boxes that the supposedly fake bonds were contained in. While we reserve judgment on the authenticity of the bonds, what we wonder is whether the boxes were also fake. Because while we can understand why someone would counterfeit the Treasury paper itself, what we don't get is why someone would go the extra effort to also create a "fake" compartment in which to store it. In this case a compartment that is property of the " CHICAGO FEDERAL RESERVE SYSTEM . " Perhaps Fed uberdove and Chicago Fed President Charles Evans will be kind enough to explain why Versailles Treaty Chicago Fed crates are floating around in Europe (and filled with $6 trillion in supposedly fake bearer bonds)? What is also interesting is that a simple google search for Mother Box Treat...

Federal Reserve Bank of San Francisco President John Williams said the U.S. central bank should keep trying to boost growth because it’s missing its goals for employment and price stability, while stopping short of calling for more asset purchases for now. “I’m sticking with my story that economic growth won’t be that strong,” Williams told reporters yesterday after delivering a speech in Claremont, California . “Going forward, it’s about weighing the costs and benefits of doing more,” he said, adding that he’s looking “at the broad picture for what the outlook on the economy is” instead of a specific threshold that would signal that more easing was unnecessary. Williams, a voting member on the policy-setting Federal Open Market Committee this year, said that inflation is likely to be about 1.5 percent this year and next, below the central bank’s goal of 2 percent. He also said the current 8.3 percent unemployment rate is “very far from maximum employment,” and that joblessness ...

The Federal Reserve Open Market Committee (FOMC) has made it official: After its latest two day meeting, it announced its goal to devalue the dollar by 33% over the next 20 years. The debauch of the dollar will be even greater if the Fed exceeds its goal of a 2 percent per year increase in the price level. An increase in the price level of 2% in any one year is barely noticeable. Under a gold standard, such an increase was uncommon, but not unknown. The difference is that when the dollar was as good as gold, the years of modest inflation would be followed, in time, by declining prices. As a consequence, over longer periods of time, the price level was unchanged. A dollar 20 years hence was still worth a dollar. But, an increase of 2% a year over a period of 20 years will lead to a 50% increase in the price level. It will take 150 (2032) dollars to purchase the same basket of goods 100 (2012) dollars can buy today. What will be called the “dollar” in 2032 will be worth one-th...

Back in 1969, Disney cartoonist Vic Lockman sat down at his story board and produced a booklet that the Disney organization never saw: The Official Counterfeiter. It was a presentation of fractional reserve banking and the role of the Federal Reserve System. Read the full comic strip in PDF .

WASHINGTON (Reuters) - Federal Reserve Chairman Ben Bernanke on Thursday defended the U.S. central bank's policies against charges from Republican lawmakers they risked sparking inflation, saying the economy still needs plenty of support. Testifying before Congress, the Fed chief was repeatedly thrown on the defensive as he parried critiques from Republican lawmakers over the Fed's zero interest rate policy, its focus on employment and its policy prescriptions for housing. Bernanke told the House Budget Committee that Europe's financial crisis still threatened the U.S. recovery, and said the Fed would do everything it can to ward off damage. "The basic reason for low long-term rates, which are also a feature of every other industrial economy, are low inflation, slow expected growth and the fact that the dollar is a safe haven," Bernanke said. Paul Ryan, the committee's Republican chairman, took issue with the central bank's new 2 percent inflation ...

One of the laments of the uberdoves in the world over the past several years has naturally been the fact that interest rates are bound by Zero on the lower side, and that the lowest possible rate on new paper is, by definition, 0.000%. Which is what led to the advent of QE in the first place: in lieu of negative rates, the Fed was forced to actively purchase securities to catch up to a negative Taylor implied rate. This may be about to change, because as the just released letter from the Treasury Borrowing Advisory Committee, or as we affectionately called the JPMorgan/ Goldman Sachs Chaired committee , the "Supercommittee That Runs America", simply because it alone makes up Tim Geithner's mind on what America needs to do funding wise, demand, "It was broadly agreed that flooring interest rates at zero, or capping issuance proceeds at par, was prohibiting proper market function. The Committee unanimously recommended that the Treasury Department allow ...

This animated short film reveals the insidious and fraudulent nature of the Federal Reserve System. It explains basic concepts, historical facts, and ways out in a easy and fun to understand format.

From Yahoo! Finance . Gold is getting its groove back and it's taking the rest of the commodities along with it. The precious yellow metal rose 4.1% last week to $1,732.20 an ounce; the highest close since December 7. The bulk of this latest burst of energy in commodity prices directly coincided with the Federal Reserve's policy statement last Wednesday. While much of the Fed's details were similar to the previous release, they dropped a bombshell by extending the outlook for near zero interest rates through late 2014. The extension of the "free money" deadline caused a feeding frenzy in all asset classes, a sure sign money on the sidelines was coming back into riskier assets. "You can tell by the way the markets traded that people were caught off guard," says Rich Ilczyszyn, trader and founder of iiTrader.com about the Fed's statement. "This to me gives the green light for gold specifically, and a lot of commodities." But not all c...

The New York Federal Reserve Bank came out with a publication called " The Key to the Gold Vault " show the gold that is in held in the vault of Federal Reserve Bank of New York. It's very interesting to read. Here's the link to the PDF .

From Yahoo Finance . WASHINGTON (AP) -- The Federal Reserve has downgraded its outlook for U.S. economic growth this year but is slightly more optimistic about the unemployment rate. The Fed expects the economy to grow between 2.2 percent and 2.7 percent in 2012, according to its updated economic forecasts released Wednesday. That's down from November's forecast of between 2.5 percent and 2.9 percent. Many economists expect Europe will suffer a recession this year, which will slow U.S. growth. Earlier Wednesday, the Fed noted the weak but growing economy when it said it doesn't plan to raise its benchmark interest rate until late 2014. And some members wanted to push that back even further, according to new interest rate projections released with the quarterly forecasts. Still, the Fed said it expects unemployment to fall low as 8.2 percent. That's an improvement from November's bottom rate of 8.5 percent. In December, the unemployment rate fell to 8.5 p...

By Ryan Vlastelica NEW YORK (Reuters) - Stocks fell for a second straight day on Tuesday after the Federal Reserve gave no hints of new stimulus measures to offset the effects of the worsening European debt crisis. Though the Fed did leave the door open to further easing next year, as it has done after recent meetings, it gave no indication it was any more inclined to provide new economic stimulus. The Fed left monetary policy on hold and said financial market turbulence posed threats to economic growth. It also characterized the U.S. economy as expanding moderately despite an apparent slowing in global growth, though it added that unemployment remains elevated and housing activity depressed. The Fed "gave the economy a very slight upgrade, but it sort of took the wind out of domestic equities, probably because some were hoping that they would hint at another (quantitative easing)-like program," said Robert Phipps, a director at Per Stirling Capital Management in Aust...