Bernanke opened Pandora’s Box

As I entered my EURUSD short positions at 1.3400 and GBPUSD short positions at 1.5700 earlier this week I was well aware of the fact that Ben, the Septic Tank, Bernanke and his 12 plumbers will start their Fed meeting on Tuesday and that the FOMC will make a statement Wednesday at 1400 hours New York time followed by a press conference 30 minutes later. It was obvious that Bernanke would spill some feces as soon as he starts his speech which has named him the nickname ‘Septic Tank’ to start with.

When quantitative easing, or QE as it is commonly known, started the Fed had no exit strategy. QE2 followed QE and QE3 followed QE2 while a final adjustment was made which many refer to as QE4. After QE4 was announced which amounts to a total of $85 Billion of wasted tax payers money each and every month the Fed had to think about some sort of guidelines as to when they will be forced to phase out their socialistic market manipulation and eventually reduce it down to $0.

The sole reason for the stronger than anticipated bear market rally was QE which artificially propped up markets and dumb money investors happily opened their watering mouths to catch all the feces Bernanke decided to drop into them. Dumb money swallowed the still steaming feces with a smile on their face and kept buying US equities which resulted in all-time highs for major benchmarks. There was a severe disconnection with the real world and as history has shown us time and again such a disconnect will correct itself later rather than sooner.

Bernanke then announced one day that the Fed will remain committed to throw away tax payers money until the unemployment rate will drop to below 6.5% and the economic outlook will remain stable. Since the 6.5% unemployment target was and remains unachievable to the point that even dumb money realized this it essentially meant that the Fed will defraud tax payers without an end in sight.

After the S&P 500 eclipsed past 1,650 and everyone was talking about how you should move into equities smart money understood it was the end of the rally. Bernanke than found out that he is essentially fired after his term expires and then decided to make statements that the Fed is considering to adjust QE. Bernanke was able to do so because the US economy was in the eye of the storm and economic data, especially unemployment figures, painted a somewhat better picture.

After Bernanke rattled the markets with his statements dumb money actually wanted bad economic news in order to keep the Fed in financial markets and continue their idiotic interference. Each economic data point was anticipated to show a US economy in bad shape and dumb money cheered each time they received worrisome economic news. This perversion allowed US equity markets to not contract as much as their European as well as Asian counterparts.

During his press conference yesterday Bernanke stated that the Fed may start to alter QE starting this fall without using the word ‘taper’ and called a full end of QE by the end of H12014. That statement was equivalent to opening Pandora’s Box. Financial markets started to correct and smart money portfolios increased in value as dumb money will be left holding the bag just like in 2009 after they dropped 50% or worse.

Some dumb money segments translated Bernanke’s comments as an overall improvement in the US economy and therefore cheered the end of QE. In reality the US labor market started to crack eight weeks ago and overall economic activity is closer to contraction than consistent expansion. Despite what Bernanke said, which was nothing more than an uneducated guess powered by hope about the state of the US economy by mid-2014, the Fed under a new chairman will not be able to taper or adjust QE.

Since he specifically mentioned this fall and he will still be at the helm of the Fed he may reduce QE by $10 Billion per month to $75 Billion just to make his prediction come true. This fall the US economy will flirt with a recessive performance and his reduction will come at the wrong time. After he passes the torch to the next Fed chairman who may end up being Janet Yellen, the first female Fed chairman, the only thing that will remain of Ben, the Septic Tank, Bernanke, is the fallout of his moronic Fed policy which dumb money praised over and over again.

Plenty of the dumb money camp claim that Bernanke tried to prepare financial markets and make the job of the next Fed chairman, or chairwoman, a bit easier. That is utter crap as he made sure he could do all he can to make the job even more challenging for his successor. Given the fact that traditionally every Fed chairman was absolutely unqualified to hold that post it will be at least entertaining to witness pathetic retards make monetary decisions which will impact the economy.

Either way, I closed my short positions for profits of 200 pips as well as 275 pips respectively and those who followed my rogue forex trades were able to do the same. 

PS: The hottie in the above picture is Breanne Benson.