When Will the Fed Announce More QE (Money Printing to Buy Treasuries/Bad Bank Assets)?

I've been getting a lot of inquiry as to when we can expect Banana Ben to announce the extension of the Fed using printed money and Taxpayer guarantees to continue bailing out Big Banks and the Treasury.  My answer is that we may not see Banana Ben advertise his continued deployment of money-dropping helicopters.  In fact, I would like to post a quote from Alan Blinder, multi-decade Princeton professor and academic colleague of Banana Ben AND a former Vice Chairman and FOMC Commitee member of the Fed:

"The last duty of a central banker is to tell the public the truth." -- Alan Blinder, Vice Chairman of the Federal Reserve, on PBS's Nightly Business Report in 1994

Just stare at that Statement for awhile and learn to stand in awe of it as a fundamental Truth of Nature.  It really deserves to be incorporated into the Constitution as part of the Bill of Rights.

The fact of the matter is that QE is going on as we speak, only it's disguised as Treasury, aka Taxpayer guarantees. The FNM/FRE/FHA/FDIC/State Unemployment Fund bailouts are QE. The GMAC/AIG cash bailouts are QE. It's QE because the Treasury has to sell additional debt in order to raise the funds. That money will never be paid back. Even though Treasury debt issuance, or a fractionalized bank loan, does not show up in M2, when debt issued has NO chance of eventual repayment it is the same damn thing as printing money.

As for when the Fed will announce additional mortage/Treasury QE:   they may not make an explicit announcement. They are playing games with the Treasury auctions and mortgage buybacks by playing "hide the real source of funding behind the big mysterious buyers." In effect, this is really QE in disguise.

The other fact is that several Federal Reserve officials have already issued public statements in which they explicity expressed the probable need for an extension of QE, including Bill Dudley, head of the all-powerful NY Fed and Janet Yellen, SF Fed head who is vying for one of the three vacant FOMC Board Member seats.

So my direct answer to the question is that QE will not end and the Fed will do whatever it takes to continue printing money at an accelerating rate, but in a way that will be insidiously devious. There are many reasons the Fed has spent $10's of millions on the effort to successfully quosh Congressional legislation requiring an audit.  The ability to hide the true money supply is one the primary reasons.

In fact, we can expect that the Fed/Govt is now entering into the final chapter of the U.S. dollar, in which the laws of history and of economics suggest that the process of QE is going to accelerate, increasing at a geometric rate until the U.S. dollar collapses.  Rob Kirby wrote a must-read analysis for financialsense.com yesterday (kudos to DC of NJ for sourcing this):  Here is the link:  Rob Kirby and here is his brilliant chart he posted:

(click on the chart to enlarge)

That chart is even more tragically beautiful than the Alan Blinder statement that preceded it - both are the golden truth.  The economic law to which I refer is know as "the law diminishing marginal returns." This law applied to money printing dicatates that the amount of money to be printed will have to increase at an increasing rate in order to maintain the intended result, at the margin.  In other words, as is reflected in Mr. Kirby's chart, if the Fed does not keep printing more money at a faster rate, the system will completely collapse.  History has repeatedly given us this result - that plus we can expect, at some point, that price inflation will accelerate at an increasing rate.