Survival And Prosperity

CNBC Tries Calling Out Peter Schiff Over Gold Price

Anyone remember those “Peter Schiff Was Right” YouTube.com videos that went viral right after the U.S. housing bubble popped and the global economic crisis really reared its ugly head in the fall of 2008?

Here’s probably the most popular one out there.

Well, I’m convinced a clip or more of Thursday’s installment of the CNBC show Futures Now, hosted by CNBC Reporter Jackie DeAngelis, will be included in a future “Peter Schiff Was Right About Gold” YouTube video. From an exchange between DeAngelis and the CEO and chief global strategist of Euro Pacific Capital:

SCHIFF: You’re talking about investors’ demand for gold going down. I would disagree. Because I own a gold company too, Euro Pacific Precious Metals. And we’ve never had more demand from our clients in the history of my company than we have now. I would say speculators, speculative demand, is what went down. I think a lot of people who came late to the gold rally were speculating in gold. They were simply buying it because the price was rising. They wanted to hop on that train. They use ETFs. They use futures markets. So I think the speculators have been flushed from the market in this pullback. But the investors- they’re still there. Because all of the reasons they’ve been buying gold for the past 10 or 12 years- those reasons have never been stronger. And so investor demand continues. We’ve flushed away the speculative demand. But I think the speculators will come back in the next rally.
DEANGELIS: Alright. Well, Peter, let’s step back for a second because you kind of jumped in there on the conversation we were having and I definitely appreciate your opinion on that. But I want to talk about the gold price that we’re looking at right now. $1,383.60. That is the price that we’re looking at at this point. We’ve had you on the show multiple times before, you said that gold was going to skyrocket, you say it’s going to be a bumpy ride and you can’t tell us exactly how we’re going to get there. But tell me today, Peter, why have you gotten it wrong?

(Editor’s note: Bold added for emphasis)

SCHIFF: I don’t think I have gotten it wrong. You just said I said it would be a bumpy ride. Look, it’s been bumpy, but I’ve been on this ride since gold was under $300 an ounce. It’s not like gold is down from that point. It’s off its highs. But I think what’s going on right now is you’ve got a false narrative out there that the U.S. economy is improving. It’s not. All the data points have been negative. A deluge of negative data came out today. The only evidence of a rebounding economy, is the stock market going up, or the real estate market going up. But that’s not because the economy is sound. That’s because of all the cheap money created by the Fed. That’s the same reason why stock and real estate prices were going up in 2006 or 2007. It is a bubble. The economy, meanwhile, is actually getting worse. And all this talk about the Fed getting ready to take away the punch bowl is all talk. They’re going to spike it even more. They’re going to up the size of QE. But people who are speculating of an early end are getting it wrong. Gold is going through a correction. All bull markets have a correction. It is a buying opportunity.

“Schiff: Gold a Generational Buy”
CNBC Video

By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s notes: Info added to “Crash Prophets” page; I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)

Tags: CNBC, gold, gold ETFs, gold prices, home prices, housing prices, Jackie DeAngelis, money printing, Peter Schiff, Peter Schiff Was Right, Peter Schiff Was Right About Gold, QE, quantitative easing, speculation, speculators, stocks, YouTube

Nouriel Roubini Warns Stocks Could Correct

Another “Dr. Doom” is talking of a stock market correction these days.

Nouriel Roubini, co-founder and chairman of Roubini Global Economics, spoke with CNBC Europe from Lake Como, Italy, last Friday. The former Treasury official in the Clinton administration, who correctly-called the 2008 global financial crisis, talked about the U.S. economy and larger financial system. “Dr. Doom” told viewers don’t expect quantitative easing to go away anytime soon:

Increasingly QE has less effects really on the economy. There is some credit creation right now. There is a positive and so on. But certainly it is becoming ineffective. The trouble is if you take away QE very fast you could have a significant back up in long rates, and that’s going to essentially kill the recovery in its tracks. Therefore, the Fed has no choice but maintaining QE3 for as far as I can see.

(Editor’s note: Italics added for emphasis)

In addition, the professor of economics at NYU warned of a possible correction in stocks later this year:

Down the stream, second half of the year, the U.S. stock market could correct somehow.

“Roubini Warns on US Economy”
YouTube Video

Definitely more subdued than the other “Doctor Dooms”- Marc Faber and Peter Schiff- on the near-term prospects for the U.S. economy and financial markets.

By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s note: I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein)

Tags: money printing, Nouriel Roubini, QE, QE3, quantitative easing

U.S. Economy Grew Only 0.1 Percent Last Quarter

Since the following economic news wasn’t being talked about too much in the mainstream media Thursday, I thought I’d share it here. From the U.S. Department of Commerce, Bureau of Economic Analysis website:

National Income and Product Accounts
Gross Domestic Product, 4th quarter and annual 2012 (second estimate)

Real gross domestic product — the output of goods and services produced by labor and property located in the United States — increased at an annual rate of 0.1 percent in the fourth quarter of 2012 (that is, from the third quarter to the fourth quarter), according to the “second” estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 3.1 percent.

The GDP estimate released today is based on more complete source data than were available for the “advance” estimate issued last month. In the advance estimate, real GDP declined 0.1 percent. The upward revision to the percent change in real GDP is smaller than the average revision from the advance to second estimate of 0.5 percentage point. While today’s release has revised the direction of change in real GDP, the general picture of the economy for the fourth quarter remains largely the same as what was presented last month (for more information, see “Revisions” on page 3).

All that government intervention, all that stimulus, all that new debt. To which I say:

“Keepin’ your head above water…”

You can read the entire news release on the BEA webpage here.

By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)

Tags: BEA, Bureau of Economic Analysis, gross domestic product, real GDP, U.S. Department of Commerce

More Chicago-Area Homes Underwater Last Quarter

Back when I was running “The Most Hated Blog On Wall Street” I used to talk with increasing regularity about the “underwater people”- Americans who owed more on their mortgages than their homes were worth. According to online home and real estate marketplace Zillow, their ranks are now thinning out. At least in certain parts of the country. Cory Hopkins reported on the Zillow Blog yesterday:

Almost 2 million American homeowners were freed from negative equity in 2012, and the overall percentage of all homeowners with a mortgage in negative equity fell to 27.5 percent at the end of the fourth quarter, according to Zillow’s fourth quarter Negative Equity Report.

The falling negative equity rate is good news for struggling homeowners and is largely attributable to a 5.9 percent bump in home values nationwide last year to a median Zillow Home Value Index of $157,400 (when home values rise, negative equity falls). At the end of 2011, 31.1 percent of homeowners with a mortgage were underwater, or more than 15.7 million people…

Still, despite more than 1.9 million homeowners nationwide finding their way back above water last year, 13.8 million American homeowners are still struggling with negative equity.

Here in the Chicagoland region, there’s still plenty of “underwater people” around. Francine Knowles reported on the Chicago Sun-Times website early this morning:

Nearly 37 percent of homeowners with mortgages in the Chicago area had negative equity in the fourth quarter of 2012, edging up from the third quarter, according to a new report that forecasts conditions will be worse by the end of the year… That was up from 36.6 percent in the third quarter, but down from 39.2 percent in the fourth quarter of 2011.

The Seattle, Washington-based company predicts falling home prices for the “Windy City.” Knowles added:

Zillow expects the percent of homes with negative equity will rise to 37.3 by the end of this year.

“Our forecast shows that Chicago’s negative equity rate is expected to rise because home values are expected to decrease by 0.6 percent” in the metropolitan area in December 2013, Zillow senior economist Svenja Gudell said in an email.

(Editor’s note: Italics added for emphasis)

I’ve been reading/hearing about a Chicago-area housing market recovery in the local media outlets with more frequency these days. Sure, sales are up. But prices have been going down. Plus there’s a whole bunch of foreclosures in the pipeline.

A recovery? I’ll believe it when I see it. And let you know when that happens.

UPDATE: This afternoon the Chicago media is running stories about a February 21 Illinois Association of REALTORS press release which might be interpreted as showing the Chicago-area housing market is experiencing a solid recovery. The problem is, January 2013 home sales and median prices are being compared to just one month (“year-over-year”)- January 2012. Instead, consider what the REALTORS wrote on January 22 about the nine-county Chicago Primary Metropolitan Statistical Area (PMSA) over 12 months (January through December 2012):

Year-end 2012 home sales totaled 90,365, up 26.7 percent from 71,315 homes sold in the region in 2011… The year-end 2012 median price reached $160,000, down -1.5 percent from $162,500 in 2011.

(Editor’s note: Italics added for emphasis)

Like I said before: Sales up. Prices down.

Analyze year-end totals for home sales and median prices, and a clearer picture emerges of how healthy the Chicago-area housing market really is.

Or isn’t.

By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)

Sources:

Hopkins, Cory. “2 Million Homeowners Freed From Negative Equity in 2012; 1 Million More to Come in 2013.” Zillow Blog. 20 Feb. 2013. (http://www.zillowblog.com/2013-02-20/2-million-homeowners-freed-from-negative-equity-in-2012-1-million-more-to-come-in-2013/). 21 Feb 2013.

Knowles, Francine. “More Chicago homes underwater in last 3 months of 2012.” Chicago Sun-Times. 21 Feb. 2013. (http://www.suntimes.com/business/18361768-420/more-chicago-homes-underwater-in-last-3-months-of-2012.html). 21 Feb. 2013.

“Home sales, median prices increase in January; housing gains extend into new year.” Illinois Association of REALTORS. 21 Feb. 2013. (http://www.illinoisrealtor.org/node/3203). 21 Feb. 2013.

“Illinois sees home sales increase in December; 2012 notches 22.9 percent sales gain over 2011.” Illinois Association of REALTORS. 22 Jan. 2013. (http://www.illinoisrealtor.org/node/3182). 21 Feb. 2013.

Tags: Chicago, Chicago PMSA, Chicago Primary Metropolitan Statistical Area, home prices, home sales, housing prices, housing recovery, housing supply, IAR, Illinois, Illinois Association of Realtors, median home prices, mortgages, negative equity, Negative Equity Report, Svenja Gudell, underwater mortgages, Zillow

Peter Schiff: Stock Market Rally ‘An Illusion’

Marc Faber. Jim Rogers. Peter Schiff.

Three “crash prophets” who correctly predicted the 2008 financial crisis in the United States.

I’ve already blogged today about what Faber and Rogers think of rising U.S. stock prices- and what they suspect is behind it.

How about Schiff, the CEO/Chief Global Strategist of Euro Pacific Capital and CEO of Euro Pacific Precious Metals, LLC?

From his February 1 entry on the The Schiff Report YouTube video blog:

Well the Dow Jones closed above 14,000 today. That’s something it hasn’t done since November 2007. Of course, the media is going to make a big deal about Dow 14,000, the economy is coming back, the markets are coming back.

But, of course, all of this is an illusion created by inflation.

When you debase your currency- when you have inflated dollars that you use to measure stock prices- of course stock prices are going to go up. The price of everything is going up. The government denies there’s inflation. But prices prove it. As if we even need that. The money supply going up is the sheer definition of inflation. And we’re creating a lot of money. And prices are responding by rising, and stock prices are no exception.

But remember, the last time the Dow Jones was at 14,000 back in ’07, gold was about $700 an ounce. Today, gold’s about $1,600 an ounce. So the Dow would have to double from here, and it still wouldn’t be where it was in terms of real money five-and-a-half years ago.

So this rally is an illusion.

But the people on Wall Street don’t even want to acknowledge that.

And going forward? Schiff pointed out:

We’re already at 0 percent interest rates, we’re already at 8 percent unemployment- 14 percent if you use the U-6 number. And that’s as good as it gets during a recovery. And now we’re already trending down.

And I think if the Federal Reserve wants to slow down the rise in interest rates- which we know it does- it’s going to have to accelerate the QE. I don’t think $85 billion of money printing is enough to keep interest rates from rising. And so they’re going to have to print even more. That means the dollar is going lower. Commodity prices going higher. Looks what’s happened to oil prices- they’re almost at $98 a barrel. Look at Brent- Brent Crude is really up. It’s almost at a $20 premium now over North Sea. Gold prices have been stable, but I think gold’s about to take off. I think on Wall Street they’re rationalizing. They’re selling gold and selling gold stocks because they claim that the crisis is over, there’s nothing to worry about anymore, Europe isn’t falling apart, the U.S. economy is getting better, so there’s no reason to own gold. And so you sell gold and you sell your gold stocks. But they don’t understand. People weren’t buying gold because of the European crisis or because of even the U.S. financial crisis. They were buying gold long before those crises began. Look at how gold was doing from 2000 to 2007, 2008. It did better before the crisis than it did during the crisis because the real crisis that worries the gold buyer is a currency crisis. People aren’t buying gold because they’re worried about political uncertainty. They’re buying gold because the politicians are printing too much money. Well, the cheap money policies that were in place prior to the 2008 financial crisis are still here, only, it’s worse. It’s more excessive. The monetary policy is easier. Rates are lower. Central banks are printing money even faster. So, instead of there being no more reasons to buy gold, the reasons have never been better. There have never been more reasons to buy gold, it’s just that Wall Street doesn’t understand this yet. But they will.

“Dow 14,000, GDP, Jobs, Fed, inflation, treasuries, & gold.”
YouTube Video

By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s notes: Info added to “Crash Prophets” page; I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)

Tags: central banks, crude oil, crude oil prices, currency crisis, gold, gold stocks, Jim Rogers, Marc Faber, money printing, Peter Schiff, QE, quantitative easing, U-6, U.S. dollar, unemployment

Quote For The Week

Something like the Dow going to 14,000. I can contain my enthusiasm about that. It doesn’t mean very much…

I don’t think the economic signs are going to change very much. The path of our economy, which, I think, 2 percent real GDP growth in the year 2013 is not a bad target- maybe 2.5. That hasn’t changed whether the Dow is 14,000 or 12,000 or 16,000.

-John “Jack” Bogle, chairman and founder of mutual fund company The Vanguard Group, on CNBC’s Squawk on the Street Friday, February 1

By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)

Tags: Dow Jones index, Dow Jones Industrial Average, John Bogle

GDP Drop Blamed On Hurricane Sandy, Republicans

In the aftermath of Hurricane Sandy, some talking heads on the TV were saying how the U.S. economy would take a significant hit from all the destruction. I remember turning to my girlfriend and saying, “Well, there’s their out.” I went on to explain that if the economic numbers for the fourth quarter ended up being crummy, the White House would just go ahead and blame Sandy.

So while I was a little surprised to hear about the drop in GDP today (I thought enough “stimulus” was already coursing through the financial system), the same can’t be said about what the White House said this morning. Alan Krueger, Chairman of the Council of Economic Advisers, wrote on The White House Blog today:

According to the “advance” estimate released by the Bureau of Economic Analysis today, real GDP edged down 0.1 percent at an annual rate in the fourth quarter of 2012, amid signs that Hurricane Sandy disrupted economic activity and Federal defense spending declined precipitously, likely due to uncertainty stemming from the sequester. This was the first quarterly drop in real GDP in three-and-a-half years (see first chart below). Over the last fourteen quarters, the economy has expanded by 7.5 percent overall, and the private components of GDP have grown by 10.9 percent. During the four quarters of 2012, real GDP grew by 1.5 percent, the third consecutive year of economic expansion.

(Editor’s note: Italics added for emphasis)

Don’t get me started on that “economic expansion” bit, as it’s been oh-so-terrific for many Americans.

Hurricane Sandy’s economic impact and a decline in government spending last quarter is repeatedly mentioned in the blog post, leading some to believe that the Obama administration is blaming the economic contraction last quarter a good deal on that late October storm and the Republican Party. Reuters’ Mark Felsenthal wrote on Yahoo! News this afternoon:

The White House on Wednesday blamed the surprising contraction of the economy at the end of last year at least partly on Republican “political brinkmanship” for threatening to let defense cuts take effect.

White House spokesman Jay Carney said similar threats over a looming March 1 deadline when defense and other cuts take effect absent a broader budget deal could similarly hurt the U.S. economy and taxpayers.

“This is political brinkmanship with one primary victim, and that is American taxpayers and the American middle class,” Carney said at a briefing.

“Our economy is facing a major headwind … and that’s Republicans in Congress.”

(Editor’s note: Italics added for emphasis)

Since the campaign for the 2008 U.S. Presidential election, Barack Obama and the Democratic Party have consistently blamed George W. Bush and the Republican Party for the nation’s ongoing economic woes (I submit both major political parties are truly at fault and the damage began decades earlier). Believing that this strategy worked to retain the Oval Office in 2012, and based on Carney’s words today, be prepared to hear even more blamethrowing of this type going forward in President Obama’s second term.

In the meantime, the financial house of cards keeps growing more unstable with trillions of dollars of debt being continually heaped upon it.

Hurricane Sandy. The GOP. How about the “stimulus” being injected into the cancer (debt)-ridden patient is perhaps becoming less effective over time? Instead of a strong, sustainable economic recovery, we’re seeing a weak one that’s requiring constant assistance.

What QE are we on again?

Furthermore, Washington and the Fed are “running out of bullets.” It’s somewhat amazing they’ve managed to “kick the can down the road” this far.

Looking back on today’s GDP announcement and related events, it’s apparent the blamethrowers are alive and well in the nation’s capital.

And the proverbial brick wall- or our “financial reckoning day,” as some like to call it- keeps getting closer.

Be advised.

By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)

Sources:

Krueger, Alan. “Advance Estimate of GDP for the Fourth Quarter of 2012.” The White House Blog. 30 Jan. 2013. (http://www.whitehouse.gov/blog/2013/01/30/advance-estimate-gdp-fourth-quarter-2012). 30 Jan. 2013.

Felsenthal, Mark. “White House blames Republican ‘brinkmanship’ for GDP contraction.” Reuters. 30 Jan. 2013. (http://news.yahoo.com/white-house-accuses-republicans-brinkmanship-spending-cuts-181022857–business.html). 30 Jan. 2013.

Tags: 2008 election, 2012 election, Alan Krueger, Barack Obama, Council of Economic Advisers, Democrats, George W. Bush, Hurricane Sandy, hurricanes, Jay Carney, Republicans, severe weather

S&P/Case-Shiller: Chicago-Area Home Prices Decline Again

Data through October 2012 from the Standard & Poor’s/Case-Shiller home price indices paints a not-too-pretty picture for Chicago-area residential real estate. Sandra Guy wrote on the Chicago Sun-Times website yesterday:

The Chicago-area housing market continued to lag national numbers, posting the largest non-seasonally adjusted single-home price decline — 1.5 percent from September to October and 1.3 percent year-over-year — of 20 major cities in the Standard & Poor’s/Case-Shiller national home price index released Wednesday.

Of the 20 cities, 12 saw housing prices drop.

(Editor’s note: Italics added for emphasis)

Recent rising prices have led to claims the U.S. housing market is in recovery-mode.

However, doubts remain. AnnaMaria Andriotis reported on the MarketWatch website on December 20:

But experts say that spike is largely due to the limited number of homes on the market. There were about two million existing homes available for sale at the end of November, which equates to the lowest housing supply since September 2005, according to the NAR. With fewer homes to choose from, buyers intent on purchasing a property are more inclined to offer a higher price or engage in bidding wars, housing analysts say, which ultimately drives prices up.

The problem is this limited inventory underscores a weakness in the housing market: Many sellers have resisted putting their home up for sale, out of concern that it will sell for far less than they paid for it, says Jack McCabe, an independent housing analyst in Deerfield Beach, Fla. That’s set off a domino effect. Because they’ve held off, supply has remained limited, in turn pushing prices up. “Prices have gone up in the last year because of this temporary, artificial market,” he says…

Separately, in some neighborhoods, median or average sales prices are rising because the mix of homes selling has been shifting toward higher-end, more expensive properties — not necessarily because the value of the typical home is rising, says Jed Kolko, chief economist at Trulia.com, a real-estate listing site. Sales of existing single-family homes priced at $1 million or more increased 52% in November from a year ago, a trend that’s been in play for most of the year, according to the NAR.

(Editor’s note: Italics added for emphasis)

More later on these doubts…

By Christopher E. Hill, Editor
Survival And Prosperity (http://www.survivalandprosperity.com)

Sources:

Guy, Sandra. “Chicago-area home prices see steepest drop nationwide: report.” Chicago Sun-Times. 26 Dec. 2012. (http://www.suntimes.com/business/17230482-420/chicago-area-home-prices-see-steepest-drop-nationwide-report.html). 27 Dec. 2012.

Andriotis, AnnaMaria. “The real meaning of rising home prices.” MarketWatch. 20 Dec. 2012. (http://www.marketwatch.com/story/the-real-meaning-of-rising-home-prices-2012-12-20). 27 Dec. 2012.

Tags: Chicago, home prices, housing prices, housing recovery, housing supply, Illinois, Jack McCabe, Jed Kolko, NAR, National Association of Realtors, S&P/Case Shiller

Dow Jones MarketWatch: ‘We May Already Be In A Recession’

If MarketWatch from Dow Jones is displaying the following headline in giant letters on their home page tonight, I suspect they know something most of Main Street doesn’t. From the sometimes Pollyannaish website:

Why a recession may be coming regardless of ‘cliff’

How will the fiscal-cliff talks end? Will leaders reach a last-minute deal, saving the economy from disaster, like a script of a TV drama? Spoiler alert: We may already be in a recession. Here’s why…

You mean, there’s a chance that the sustainable U.S. economic recovery Washington, the Fed, and the mainstream media have been peddling to Americans for quite some time now might just be a farce? You don’t say?

Here’s a link to the accompanying article. Following MarketWatch pretty much daily now for the last five years, a headline of this type seems rare to me. Perhaps this is their way of staking a claim to a correct recession call if the economy does indeed go south next year.

Tags: Dow Jones, MarketWatch

Fed Launches QE4

Yesterday, I took some time off from blogging to watch CNBC’s coverage of the Federal Open Market Committee meeting. Okay, truth is I really felt sick after eating like a third-grader at lunchtime and needed to lie down on my couch. But the FOMC meeting happened to be on TV, and I was curious to hear what Fed Chair Ben Bernanke would say about the highly-anticipated meeting.

Basically, QE4 has just set sail.

Funny thing was, based on the back-and-forth movements in the stock indexes, the CNBC talking heads covering the meeting suggested traders were looking to their pocket protector-armed colleagues to decipher just exactly what it was the Fed Chair said. Yes- Bernanke was laying on the Fedspeak thick and heavy Wednesday. So much so a number of mainstream media outlets today don’t seem to have figured out just what is was the Federal Reserve announced they were going to do. However, I did come across a very good explanation of what went down at the Fed meeting on the website of Chicago-based investment research company Zacks. Neena Mishra, Director of ETF Research there, reported on their Real Time Insight blog yesterday:

QE 4 is Here: Fed Announces Fresh Stimulus

As widely expected by the market, the Federal Reserve announced at the conclusion of their FOMC meeting that they will purchase longer-term treasury securities to replace “Operation Twist”. Initially the purchases will be about $45 billion per month.

Operation Twist—which involves buying longer-term bonds and selling a like amount of shorter-term treasuries—is expiring at the end of this month.

Additionally, Fed buys 40 billion of agency mortgage-backed securities each month, under QE3. In all, Fed will continue to buy about $85 billion of longer-term bonds each month under the two programs.

Per their statement “these actions should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative”.

“These actions should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative”.

Remember what I blogged about recently regarding suspicions the Fed is trying to inflate another housing bubble?

And to quote Monty Python, “And now for something completely different.” Mishra added:

Another important announcement in the release was the adoption of “economic targets” for unemployment and inflation. They decided to keep the target range for the fed funds rate between 0% and 0.25%– as long as the unemployment rate remains above 6.5% and medium-term inflation does not exceed 2.5%

Yep. That was pretty much what I heard Bernanke say.

QE4. Yet another dose of reality for the Pollyannas that argue a U.S. economic recovery is strong and sustainable and that rising interest rates are right around the corner because the economy is humming right along.

Source:

Mishra, Neenah. “QE 4 is Here: Fed Announces Fresh Stimulus.” Real Time Insight. 12 Dec. 2012. (http://www.zacks.com/stock/news/88466/qe-4-is-here-fed-announces-fresh-stimulus). 12 Dec. 2012.

Tags: Ben Bernanke, central banks, federal funds rate, Federal Open Market Committee, FOMC, government bonds, housing bubbles, mortgage-backed securities, Neenah Mishra, Operation Twist, QE3, QE4, quantitative easing, Treasuries, unemployment, unemployment rate