Unlike our past asset-purchase programs, this one doesn’t have a preset expiration date. Instead, it is explicitly linked to what happens with the economy. We might even expand our purchases to include other assets. - San Francisco Fed President John Williams LINKThis is what it is being used for:
Lindsey said that with the Fed purchasing at least $40 billion a month in mortgage debt through QE3, “they are buying the entire deficit.” - Lawrence Lindsey, Chairmen of the National Economic Council and assistant to the President on economic policy for President George W. Bush. LINKI have maintained all along that the primary purpose of QE has been to keep the big banks from going insolvent and to finance Government deficit spending. I guess Larry Lindsey agrees with me for the most part.
What has gone unnoticed in the commentary about QE3 is that the duration and commitment level to more QE has been pegged to the employment level, as reported by the Government. As everyone knows, and as has been detailed on this blog exhaustively, the Government has insidiously manipulated the unemployment level to an unbelievably relative low level for political purposes. Now, the Government can let the reported unemployment rate "breathe" a little by reporting a higher unemployment rate and thereby enabling the Fed to "justify" increasing the level of QE and expanding the range of assets purchased. Several Fed Governors are already discussing the expansion of QE3 to include Treasuries. Fait accompli. It's all very systemically Orwellian.
As for what some of this Government spending is being used for, let's ask Barack. He won't answer that question, but a new book, "Presidential Perks Gone Royal," by Robert Keith Gray outlines in detail the $1.4 billion spent by Taxpayers on perks for the Obama family during 2011. Here's the report from The Daily Caller: LINK As an example, the baby-sitter and pooper-scooper of the family dog was paid $102,000 last year. Nice work if you can get it...
Thankfully King Barack and Queen Michelle get to live the life of luxury while our economy falls to pieces. Yesterday's durable goods orders plunged to a low not seen since January 2009. Yesterday's final revision for Q2 GDP came in at 1.25%, well below consensus estimate and below even the lowest estimate. If you assume the manipulated Government CPI rate of about 2%, that means that on a real basis the U.S. economy contracted in Q2. Believe me, the real inflation rate is multiples higher than 2%. And today the Chicago PMI - a widely followed economic barometer - fell below 50%. It actually plunged, as a reading of 53 was expected. Again, more indications that real GDP is negative.
On a more positive note, as most know, the NFL referee lock-out was ended Wednesday evening and we get the real referees back. Thankfully. Apparently there was a $500 million swing in gambling payouts from the wrong call by the referee on Monday Night Football that gave Seattle a win. This Sunday my Broncos host the much-hated Oakland Raiders. The Broncos have had two tough losses to two potential Super Bowl teams. But for as poorly as Denver played during the first half of each of those games, Denver still had a chance to win them. I expect Denver to hammer the Raiders this weekend. Have a great weekend.