It's not even 6:30 pm and already I've got a call.   That usually means a busy weekend.  I'll check in on the comments from time to time on my laptop when not at home.

Oh, and to all the Muslim Terrorist lovers out there, I never meant to offend anyone.   But neither do I wish to be offended, thick skin or no.

And good night all.

So folks, we are not only at another critical juncture in the economy, but at a point we have been at before. For yesterday the Federal Reserve signaled we will be going back to the future ... through another round of economic stimulus (QE3). So let us place ourselves in the shoes of Marty McFly and consider: to understand the future, we need to go back to the past.

What is quantitative easing (QE)?

QE is essentially a form of stimulus. It involves expanding the US balance sheet by printing money and then using it to buy assets to stimulate the economy. These assets in the past have been US government debt or mortgage-backed securities to keep interest rates low to spur on lending and borrowing.

The first bout of QE was announced in November 2008, and was extended in March 2009 to run for a year. It involved purchases to the tune of $1.25 trillion of mortgage-backed securities and $300 billion of US government debt. March 2009 was also the belly of "the Great Recession," and a turning point for economic data and for general sentiment. Accordingly, the equity market bottomed out:

(click to enlarge)

No sooner had QE1 finished in March 2010, the drumbeat for further stimulus began. With the economy not gaining enough traction post-QE1, a sequel was hinted at just five months later. QE2 was announced in November 2010, to the tune of a further $600 billion of US government debt purchases.

No sooner had QE2 finished, before the drumbeat for further stimulus began.....

QE3 was announced yesterday by the US central bank, and follows a similar theme to QE1 and QE2; $40 billion of mortgage-backed securities are going to be purchased each month. But what is different from QE1 and QE2 is that these purchases have been left open-ended; there is no end-date, and they will continue for as long as needed. The Fed also said Operation Twist will continue, while interest rates will remain near zero until at least mid-2015.

This news has been accepted emphatically by financial markets, as it did in response to QE1 and QE2. But let us consider what this means for energyland™ (OIL), and energy risk management. Well, US natural gas (UNG) is doing its own thing, insulated by its own fundamentals. QE3 should have little impact on natural gas, barring its success spurring on higher industrial demand. But for a global commodity such as oil (USO), it means the world. Here is what happened with QE1 and QE2:

(click to enlarge)

Given how we have seen oil react to QE1 and QE2, it is fair to assume that QE3 will have a bullish impact on prices.....

http://seekingalpha.com/article/868171-back-to-the-future-what-qe-means-...

Bear in mind that this is from a May 26th, 2010 article. Has anything changed?

Studies by McKinsey Global Institute and research by Romer and Reinhardt show that history is not kind in cycles with resulting high debt: on the average it can take six to seven years to deleverage, and can take as much as 25% off the top of GDP. It is painful and unavoidable, but understandable. This cycle is the biggest cycle in history and debt reached historic proportions, worldwide. Understand that mortgage backed securities, both residential and commercial, were distributed worldwide to banks, pension funds, insurance companies, hedge funds, and endowment funds.

How we could we fix this problem:

1. Require banks to mark-to-market the assets securing their loans, and raise more capital or go out of business.

2. Remove federally funded or guaranteed residential mortgage lending. This would include Fannie Mae, Freddie Mac, and the FHA.

3. End all Fed lending programs created at the beginning of the crisis, such as TARP.

4. End all programs to help home mortgage borrowers, such as HAMP and HAFA.

5. Require the Fed to auction its portfolio of mortgage backed securities.

6. Establish a program similar to the Resolution Trust Corporation (RTC) to quickly dispose of the assets of failed banks.

7. End tax policies that require borrowers to incur phantom income as a result of real estate debt relief.

8. End taxes on interest and dividend income to encourage savings.

9. Immediately raise the Fed Funds rate. This would mean also that the Fed should immediately cease quantitative easing.

10. Suspend or rollback enforcement of Obamacare and Dodd-Frank.

11. Extend Bush tax cuts.

Many of these solutions seem counter-intuitive, but one must question the path our government has taken to stimulate a recovery. We need to look at this crisis in an entirely different way: the boom was the real problem and the bust is the cure. The harm was done in the boom phase as a Fed induced credit expansion and various government programs misdirected capital to businesses that, but for this government action, would not have been otherwise profitable. In economic terms this is called “malinvestment.”

As in all booms, reality, usually in the form of a tightening of money supply by the Fed, brings asset value back to the ground, and even under the ground as we find these malinvestments unprofitable. That is what we are seeing now. The bust phase is a process of redirecting capital from these failed investments back into more profitable ventures. It is obvious that large amounts of capital will be lost. But by liquidating these bad assets, banks eventually go back to normal, credit loosens, people save more money because of financial uncertainty and to reduce their debt, thus creating the new capital needed for a true economic expansion.

If this liquidation phase is thwarted, as we have seen, we get stagnation and zombie banks. This is what Japan has experienced for the past 20 years.

Take the bitter pill, endure the inevitable pain, and we will recover quicker.

You axed for advice so I threw out my 2 cents.

Dude if you want to go into debt be my guest.

Mortgage the house for 200k and go buy physical silver. (don't buy Rhodium sheeeze)

And forget about food. Who needs it.

Give her servitude hell brother. We are behind you all the way.

I dont have a problem with what you proposed. The followers of "radical" islam can kiss my country ass as well. I see you feel the same way. 

Just received this email:

Something unusual is happening in Israel

I got  this from one of my close friends who has a brother in Israel and believe it 100%. Something is coming.
  
My brother and his family live in Jerusalem - he is a minister - and a former Navy SEAL - his office is close to one of  Israel's largest underground military bases. He called me last night which is very unusual - usually it is email. He called to tell me that he is sending his family back to the US immediately due  to what he is seeing happen within the last week and what he is being told by  his military contacts in both the Israel and US military. He said he is seeing with his own eyes military movements the likes  of which he has never seen in his 20+ years in Israel. What he called a massive redeployment and protective tactics of forces is underway.
  
Over the last two days he has seen anti-aircraft missile deployments throughout the Jerusalem area including 3  mobile units that he can see from his office windows. In addition, he has seen very large Israeli armored columns moving fast toward  the Sinai where Egypt has now moved in Armor.
  
There are reports of the top military leaders meeting with Israel's Sr. Rabi which is something that has happened preceding every prior military campaign. His admonition is to watch carefully and pray for Israel and its people. He is convinced that barring something extraordinary Israel will attack Iran - with or without the US - and very soon. It is the belief in Israel that Obama does not stand with Israel but with the Arab countries.
  
He has told me before that Israel will saber rattle from time to time but that this  time is very different from what he is seeing and hearing.

According to the islamic good book you are allowed kill your wife, have more than one wife, bang your wife up to 6 hrs after her death, stone your daughter or kill her.I bet when the man of that household speaks by God they all listen. I read all this on the internet so its gotta be true. Right?

I'm not for thy AR and thy Garand are with me!

No, Roark, you couldn't.  These protests aren't about the video.  That is just what sparked them.  The protests are against US policy in the Mideast.  That plus the fact that Middle Eastern peasants have no power, save to overthrow their own governments.  Their governments don't have significant armies.  Only if Russia or China steps in could there be anything more than a regional war there, and nukes in the hands of parties with differing interests (US and Pakistan) would likely limit such acts.

And for you, Short Stack, your characterization of all Muslims as terrorists, and your characterization of all who are against collectivism and racism as "terrorist muslim lovers" gets you a hearty "I hope you die in a fire, sincerely" and a place with the rest of the scum on my ignore list. 

To everyone else that hates all Muslims, please let me know.  Might as well make this a clean sweep.

And for that matter, anyone who hates all Jews can do the same.  And all blacks.  And all Americans.  And all Europeans.  And any other geographical, racial, or religious group.  Such collectivist garbage makes YOU into HUMAN GARBAGE, and I am tired of it.

This little piece fits like a glove. http://www.youtube.com/watch?feature=player_detailpage&v=Gv61zBZacpo

The Bible has similar, if not the same content.  Imagine the way those crazy Christians must talk with their children.  "Be a good person, and turn the other cheek, but be sure to stone to death any person who dares to eat meat on a Friday".

Further remember that the US is largely responsible for throwing down the Democratically elected governments that were moderate in nature, which resulted in people falling back upon their faith, which inspired many to fanatacism.  The people of the West forget the examples from their own back yard, in the IRA just a few decades ago.  Does Catholicism drive its adherents to violence?  Are all Catholics terrorists?  Might have seemed so to the British of the time.

There is a fine mooslum thread going in the forum.

What the hell is wrong with debating in the forums. ??

Why use the main page and pepper it with off topic confusion?

The IRA is a political terrorist group that hides behind catholithism!

Today I caught a piece of the fancy ceremony on TV honoring the 4 Americans that died in Libya 9/11/12.  While I join in with honoring their service and sacrifice and hope for comfort for their families, I found myself becoming more angry as the ceremony preceded.   Below is the the list of Americans that died in Afghanistan only since 8/1/12.  Where the hell was their fancy ceremony when they came home for the last time.?  Did I just not have the TV on that day?  Was their death (and those from earlier in the war and from other countries like the UK and Australia) any less meaningful?  Why does the press not report the deaths at the beginning of each newscast like they did a few years ago?  Why are we not screaming at our government to end the madness and bring them home?  Somehow I have to figure out how to do more.

Not a fancy ceremony but the best I can do:

In case you are wondering that is 45 American deaths from 8/1/12 to 9/5/12.  I know at least 2 more died today.