Every time I hear a fed official talk, I am becoming more and more convinced they just crave attention and really have absolutely no idea what they are talking about. We have seen Benny B and the QE band defend qe2 on its success, but unfortunately, they are the only ones who believe it was a success. The rest of the world is looking at it for what it really was-a complete failure in any measure of the Fed mandates.

But that has not stopped these wanna-be movie stars from coming out and getting their 15 minutes of fame by saying something that has a q and an e in the same sentence, just so they can hear the camera’s flashing and people talking about what they said.  Everybody was waiting and hoping desperately that Ben would announce qe3 at Jackson Hole-just like he did last year and the markets would turn back into a Vegas Casino and everybody would go bonkers with risk and drive the markets higher. Of course, once that that round of qe ends,  we would embark our 3^rd crash in as many qe programs they have tried. There is only 1 certainty with Benny B and the qe band program-when they end, we crash!!

So Ben came out last Friday and mentioned nothing about QE3 and what did the markets do? They rallied off the lows and continued to rally on Monday. But Fed Governor Evens decided the markets needed some reassurance and came on CNBC this morning and said that things would have been much worse if the Fed didn’t launch QE2. Really, what proof do you have of that Mr. Evens? How much would real estate of been down without QE2-or where would unemployment be without QE2? If you are going to come out and continue to back qe2 and its success, you better have some proof about why things would have been worse. 

Then comes the best part of the interview, I think. When Mr. Even’s was asked about QE2 making things worse instead of better, because of soring commodity prices, he responded with “I do not see how anyone can blame higher commodity prices on QE2, when emerging market countries are growing at such a fast rate and they were the reason for higher commodity prices. Hmm-Did the emerging markets stop growing at a fast pace at the EXACT time qe2 stopped Mr. Even’s? If no, then why did oil drop from 114 to 75 once qe2 stopped?  Better yet Mr. Even’s did the emerging markets really start growing again at 8:41 am TODAY, when you said you think the Fed should do another round of qe3 in September? Because if qe2 wasn’t the reason for higher commodity prices, why did oil jump 3% and gold jumped $30 at exactly 8:41 a.m. when you mentioned qe3? It is absolutely amazing how these emerging markets really seem to grow once anything mention of qe hits the airwaves. Below is a chart of CL (Light Sweet Crude Futures) You tell me if QE was the reason for higher commodities or not.

These are the guys making the decisions that affect  the world, but yet the only thing they want is their 15 minutes of fame.  To say this is scary is an understatement. Even’s has now triggered the 3^rd round of chasing the qe3 ghost in the last 45 days. How does it end? Very simply-the qe3 bazooka will not even be a water pistol this time and they may even have to crush the water  pistol before the next meeting in September-meaning Ben comes out before the meeting and says there will be NO QE3. But I do not believe he will have to do that, as the boyz running the show are just getting the “herd” all bulled up and they know exactly where the spx and oil has to be by that September meeting. They may start that move as soon as tomorrow and all of the talking heads that are on the trading floor (I have no idea how) and saying there will be QE3 in September because Ben won’t let this market down-will be left chasing Casper the qe3 ghost for the 3^rd time in 45 days. I think these guys should go work for the Fed-as they seem to be as clueless as the Fed governors.

It is a very simple formula for QE3 to be launched. Oil has to be much lower than these levels as well as the SPX. Just to launch QE3 because of unemployment is useless, as the only thing QE2 did was prop up the stock market and commodities. Unemployment went up and not down during the QE2 experiment.  If Ben launched QE3 just because of the unemployment numbers when oil and the spx are at these levels, he will launch our economy into the next recession that he will not be able to stop until he starts raising interest rates. Our very weak economy can NOT handle oil at 160, which it would be before Ben starts QE3. If they want QE3, they will start taking the markets down and soon. Good luck trading. G-