Chicago Fed's Charles Evans ( not surprisingly ) calls for immediate open - ended MBS ( does the economic data in particular recent economic data support that ? And what about the bubblezone aka as the stock market - not quite March of 2009 is it how does present stock prices support unlimited QE 3 ? And why the need for more QE at this time , especially with Operation Twist - Part Two underway and not due to be completed until December - is Europe going to get the WTC N & S Towers treatment ? ? ) More interestingly , check the second piece lamblasting ultra easy monetary policy and its consequences ( not surprisingly from the Dallas Fed. )

CHICAGO FED’S EVANS CALLS FOR IMMEDIATE OPEN-ENDED MBS PURCHASES

AUGUST 27, 2012 BY THE DOC LEAVE A COMMENT

MOPE continues as the Chicago Fed’s Charles Evens in a speech today called for OPEN-ENDED MBS purchases.
Let that sink through for a moment.  Is the Fed preparing to announce open-ended and UNLIMITED QE??

Gold and silver are still MASSIVE BUYS in this QE to INFINITY environment.

WASHINGTON (MarketWatch) — In a speech in Hong Kong, Chicago Fed President Charles Evans said the central bank should make open-ended purchases of mortgage-backed securities until the economy shows clear signs of improvement, such as a steady drop in unemployment for two or three quarters. The dovish Evans isn’t a voting member this year. “Given the risks we face, I think it is vital that we make such moves today. I don’t think we should be in a mode where we are waiting to see what the next few data releases bring. We are well past the threshold for additional action; we should take that action now,” he said.
Read more:

http://www.silverdoctors.com/ultra-easy-monetary-policy-the-law-of-unintended-consequences-a-mutiny-at-the-fed/

ULTRA EASY MONETARY POLICY & THE LAW OF UNINTENDED CONSEQUENCES- A MUTINY AT THE FED

AUGUST 27, 2012 BY THE DOC LEAVE A COMMENT

It seems that The Bernank has a dissenter in the ranks in the form of the Dallas Fed’s William White.

In a economic paper just released White states:  ‘In this paper, an attempt is made to evaluate the desirability of ultra easy monetary policy by weighing up the balance of the desirable short run effects and the undesirable longer run effects – the unintended consequences. The conclusion is that there are limits to what central banks can do.One reason for believing this is that monetary stimulus, operating through traditional (“flow”) channels, might now be less effective in stimulating aggregate demand than previously. Further, cumulative (“stock”) effects provide negative feedback mechanisms that over time also weaken both supply and demand. It is also the case that ultra easy monetary policies can eventually threaten the health of financial institutions and the functioning of financial markets, threaten the “independence” of central banks, and can encourage imprudent behavior on the part of governments. None of these unintended consequences is desirable. Since monetary policy is not “a free lunch”, governments must therefore use much more vigorously the policy levers they still control to support strong,sustainable and balanced growth at the global level.’

What did you say Mr. White!?! Monetary policy is NOT a free lunch??  But we were under the impression that your boss believes any economic or fiscal problem can be solved via a proverbial helicopter drop of fiat debt notes?

MUST READ FULL PAPER BELOW!!

Dallas Fed QE