Is Bernanke Prepping the Banksters for QE3?

As we have previously written (see Breakfast with Jamie), when top Fed officials break bread with top banksters, massive monetary intervention is in the cards. WSJ reports that last Friday, March 30, Ben Bernanke flew to the New York Fed to meet with the panoply of TBTF bank and financial company execs.

According to WSJ, guests at the Bernanke lunch in New York included:

• [JP Morgan Chase President Jamie] Dimon,
• New York Fed President William Dudley
• Michael Cavanagh, chief executive officer of Treasury and Securities Services for J.P. Morgan Chase
• Bob Diamond, chief executive of Barclays PLC
• Douglas Donahue, Jr., managing partner of Brown Brothers Harriman & Co.
• Brady Dougan, chief executive of Credit Suisse
• Larry Fink, chief executive of BlackRock, Inc.
• Gerald Hassell, chief executive of Bank of New York Mellon Corp.
• Glenn Hutchins, managing director of Silver Lake
• Colm Kelleher, co-president of institutional securities, of Morgan Stanley
• Brian Leach, chief risk officer of Citigroup, Inc.
• Brian Moynihan, chief executive of Bank of America Corp.
• Stephen Schwarzman, chief executive of the Blackstone Group LP
• James Tisch, president and chief executive of Loews Corp. and
• David Viniar, chief financial officer of Goldman Sachs Group Inc.

Though touted as a "private listening session" for Mr. Bernanke, wherein he offered "few of his own opinions," none other than JP Morgan Chase President, Jamie Dimon, "brought up the question of whether the U.S. financial system has done enough to prepare for any future shocks."

In the context of the global money printing Ponzi, wherein "preparation" can only mean more of the same money printing to prop up said Ponzi debt structure, we are left to wonder if this was nothing more than a thinly veiled threat--that, absent another LSAP or OT announcement at the next FOMC meeting, the supplemental liquidity providers of last resort will not be so keen on ramping the Apple&P 500 into the election.

Regardless, as EPJ has been harping on (since last year), the global central bank coordinated money printing bonanza has been laying the groundwork for serious price inflation, the signs of which the Fed must be seeing. Accordingly, the window for a new round of bond market intervention is approaching quickly, notwithstanding last meeting's FOMC minutes. The Fed, after all, would look rather foolish if it decided to attack the long end of the curve but was forced, shortly thereafter, to raise the Fed Funds target.

Later this month on April 25, EPJ's own Robert Wenzel will visit the Hallowed Halls of Econometrics at the New York Fed to give a seminar on Austrian Business Cycle Theory--the very day the FOMC announces its next policy decision and releases the voting members' interest rate forecasts. While one can never predict the outcome of such crossing of the streams, we are confident Mr. Wenzel's track record will remain intact, while the Keynesian forecasters and their linear regression models will once again fail to detect the turn until it is all too obvious.

In that regard, erring on the side of policy accommodation would appear to be the prudent course in anticipating the voting Members' herd mentality.