QE Is Sovereign Default In Slow Motion!! We Are All Going To Be Financially Obliterated

Rising  stock markets, when no one  buys shares and while the real economy is shrinking – is fishy. Something stinks! Beware, from now on anything can happen very suddenly.

QE should never of happened in the first place…
Central financial planning is a disaster. Its bizarre that almost all economists agree that trying to centrally planning an entire economy Soviet Union style is foolish, but yet they believe centrally planning the financial part of the economy not only can, but should be done. They are all taught more or less the same failed theories at almost all major universities.
The FED and other central banks around the world have painted themselves into a corner. They have propped up bond and stock markets with new money. They foolishly believed they could continue forever because there was no obvious inflation, or at least no serious inflation.
Keeping bond and stock markets and housing markets inflated artificially through QE keeps the illusion of economic recovery, but with horrible unintended consequences of borrowing cheap money, and creating bigger and better bubbles further down the road. The practice prevents the correction of huge economic imbalances, drags out the recovery, and will result in an even worse catastrophic crash once the QE finally stops, which eventually it must. At some point, the massive amounts of money on bank balance sheets has to start leaking into the real economy. Take less pain now, or more pain later, red or the blue pill, it would however have been better not to start QE in the first place.

What Ben Bernanke and the Fed have come to understand very clearly over the last 5 years of QE is that accommodative monetary policy, in the face of intransigent state consumption rather than returnable investment spending continues to squeeze the number of voluntary wealth creating transactions in the economy. The more QE is applied, the smaller the wealth creating sector of the economy becomes.
The problem lies with the political will to deal with the trend of fiscal deficits that leave behind only worthless debt that is not backed by any tangible or intangible assets that can repay that debt.
And so Ben Bernanke and the Fed have to try to change political behaviour and its economic consequences some other way. That way is the withdrawal of QE – the politicians have blown it again – the carrot approach has failed – the stick now needs application.

The era of “ultralow” mortgage rates could officially be over
They say that one sign of creeping old age is that memories from past decades are more vivid than those from past days or weeks. They’re right. I don’t remember what I had for lunch yesterday but clearly recall bragging about refinancing our mortgage for 6% back in the early 2000s. That was a killer rate at the time, and my thought was that if banks were dumb enough to give us such cheap money for 30 years, then we should take as much as possible.
This illustrates the relaxed attitude about debt that a lot of baby boomers had back then, and also the way the previously-unthinkable becomes normal after a while. Where a 6% mortgage seemed cheap 10 years ago, now 4% seems expensive. And apparently even 4% is now in the rearview mirror:
Say goodbye to ultralow mortgage rates

CHICAGO (MarketWatch) — Mortgage rates spiked over the past week, causing some to believe the ultralow rates of recent years could be gone for good.

The 30-year fixed-rate mortgage averaged 3.93% last week, according to Freddie Mac’s weekly survey of conforming mortgage rates. But the results to be released this Thursday could very well shock the average mortgage shopper, as the average rate for the 30-year mortgage could move closer to 4.5% — or maybe even higher than that, said Dan Green, loan officer with Waterstone Mortgage in Cincinnati…

 http://dollarcollapse.com/housing-bubble/thinking-about-5-mortgages/
The 441 TRILLION Dollar Interest Rate Derivatives Time Bomb
http://theeconomiccollapseblog.com/archives/the-441-trillion-dollar-interest-rate-derivative-timb-bomb
The Trigger Has Been Pulled And The Slaughter Of The Bonds Has Begun
Over the last several years, reckless bond buying by the Federal Reserve has forced yields down to absolutely ridiculous levels.  For example, it simply is not rational to lend the U.S. government money at less than 3 percent when the real rate of inflation is somewhere up around 8 to 10 percent.  But when he originally announced the quantitative easing program, Federal Reserve Chairman Ben Bernanke said that he intended to force interest rates to go down, and lots of bond investors made a lot of money riding the bubble that Bernanke created.  But now that Bernanke has indicated that the bond buying will be coming to an end, investors are going into panic mode and the bond bubble is starting to burst.  One hedge fund executive told CNBC that the “feeling you are getting out there is that people are selling first and asking questions later”.  And the yield on 10 year U.S. Treasuries just keeps going up.  Today it closed at 2.59 percent, and many believe that it is going to go much higher unless the Fed intervenes.  If the Fed does not intervene and allows the bubble that it has created to burst, we are going to see unprecedented carnage.
http://theeconomiccollapseblog.com/archives/the-trigger-has-been-pulled-and-the-slaughter-of-the-bonds-has-begun
The markets continue their dead cat bounce while the economic data worsens. This is the crux of the US’s current economic woes: consumer-spending accounts for roughly 70% of our GDP. And QE does nothing to help incomes, which drive consumption.
The US Federal Government has subsidized a weak economic recovery via food stamps and other social program, but the private sector is lagging with most of its hiring coming in the form of temporary or part-time jobs.
http://gainspainscapital.com/2013/06/26/the-single-largest-driver-of-the-us-economy-is-about-to-collapse/

If QE were great, we should be doing it all the time
In fact, it does not generate growth or wealth. GDP is a composite calculation dependent on calculating the inflation deflator correctly. Our economists are mired in delusion if they believe GDP rise generated by QE is actual beneficial economic growth.
QE is wealth-neutral or a net negative on wealth.
It benefits those with access to cheap money – primary dealers, banks and those who are asset-rich. It bails out debt-burdened economic zombies.
It hammers those on fixed incomes, on low pay and those who save.
So it robs the poor and deserving to reward the rich, feckless and fraudulent. It is an instrument of evil.
And it achieves these horrendous outcomes through massive state intervention in supposedly free markets. This causes malinvestment on a massive scale by destroying the price signal in those markets.
Adam Smith’s free market delivers innovation, higher quality and lower costs. The broken markets we have now deliver the opposite. In some ways, these markets are worse than communism – at least that ****ed-up model pretended to deliver benefits for the masses. Our markets deliver wealth to the super-rich by destroying the middle classes.

Jonathan