Monetary Morphine (printing money)

Richard Fisher, head of the Federal Reserve Bank of Dallas, explained in March 2012 that the Federal Reserve’s quantitative easing program (printing money) had caused some people to expect that the Fed would keep printing money:
 
“Trillions of dollars are lying fallow, not being employed in the real economy. Yet financial market operators keep looking and hoping for more. Why? I think it may be because they have become hooked on the monetary morphine we provided when we performed massive reconstructive surgery, rescuing the economy from the Financial Panic of 2008–09, and then kept the medication in the financial bloodstream to ensure recovery.”
 
The term “monetary morphine” has been cited in print since at least 2007.
   
   
Wikipedia: Richard W. Fisher
Richard W. Fisher (born 1949) is currently the President and CEO of the Federal Reserve Bank of Dallas, having assumed that post in April, 2005.
       
Reuters   
Dollar hit by U.S. growth worry
By Natsuko Waki
LONDON | Thu Nov 22, 2007 4:45pm GMT
LONDON (Reuters) - The dollar hit record lows against the euro on Thursday as growing concerns over the U.S. economy cemented expectations of a near-term interest rate cut, while world stocks edged higher after this week’s sell-off.
(...)
Pressure on equity markets is now broadening beyond financial stocks to encompass pro-cyclical sectors that previously benefited from expectations of monetary policy easing,” Bank of Scotland said in a note to clients.

“In other words the monetary morphine is wearing off at a time when the underlying economic injury is worsening.”
     
SafeHaven
Global Central Bankers at Odds, but Gold Soars into Orbit
By: Gary Dorsch | Tue, Jan 29, 2008
(...)
But so far, the Fed’s 175 basis points of monetary morphine, (the “Bernanke Put”) haven’t eased the pain in the stock market. Instead, they have been as effective as “pushing on a piece of string”.
 
New York (NY) Times
Bank problems in spotlight before G-7 meeting
By Natsuko Waki
Published: Sunday, February 3, 2008
(...)
In December the world’s top central banks acted together for the first time since after the Sept. 11, 2001 attacks on the United States, pumping billions of dollars into the financial system to ease the strain on money markets.
 
But coordination has been scarce on the monetary policy front. Only a few central banks are expected to release as heavy a dose of monetary morphine as the Fed has. The others are weighing the need to restrain inflation against uncertainty over the global economy.
 
Forbes,com
Markets|3/05/2012 @ 5:37PM
Dallas Fed Says Wall Street ‘Hooked On Monetary Morphine,’ Don’t Expect QE3
By Agustino Fontevecchia
In an unusually blunt and frank speech, Dallas Fed President Richard Fisher told Wall Street it has become “hooked on the monetary morphine” the Fed delivered during the financial crisis.  Fisher said delivering QE3 would be the equivalent of medical malpractice, while telling Congress and President Obama to get their act together, emulate Texas and Mexico, and spark job creation once again.
 
It is rare to see a Fed President, who happens to also be a member of the FOMC, be so straightforward regarding his views.  Fisher did exactly that.  He bashed the political establishment and Wall Street, telling them to put money back into the real economy to foster growth.
 
Zero Hedge
Dallas Fed’s Fisher “Perplexed” By Wall Street “Fetish” With QE3 And Disgusted With The Addiction To “Monetary Morphine”
Submitted by Tyler Durden on 03/05/2012 13:36 -0500
And now for some pure irony, we have a member of the Fed, granted a gold bug, but a Fed member nonetheless, one of the same people who not only enacted ZIRP, but encourage easy money every time there is a downtick in the market, complaining about, get this, Wall Street’s “continued preoccupation, bordering upon fetish” with QE3. The irony continues: “Trillions of dollars are lying fallow, not being employed in the real economy. Yet financial market operators keep looking and hoping for more. Why? I think it may be because they have become hooked on the monetary morphine we provided when we performed massive reconstructive surgery, rescuing the economy from the Financial Panic of 2008–09, and then kept the medication in the financial bloodstream to ensure recovery….I believe adding to the accommodative doses we have applied rather than beginning to wean the patient might be the equivalent of medical malpractice.” So let’s get this straight: these academic titans, who for one reason or another, are given free rein to determine the fate of the once free world with their secret decisions every two or three months, are completely unaware of classical conditioning, discovered by Pavlov nearly 90 years ago, also known as a salivation response. The same Fed is shocked, shocked, that every time the market dips, the red light goes off, and the “balls to the wall” crowd scream for more, more, more free money. Really Fisher? Really?
(...)
COMMENTS
SeverinSlade
Mon, 03/05/2012 - 13:40
What?  Hopium is just as addictive as crack cocaine?  Really?  Who’d have known?
 
The trend is yo…
Mon, 03/05/2012 - 13:57
All this QE is, is a MORPHINE DRIP.  When the patient is dying in the ER or ICU and nothing can be done, all you can do is a morphine drip to ease the pain a little while longer until the patient flatlines
 
CNBC.com
Dallas Fed President Fisher Says Markets Hooked on Monetary Morphine
Published: Monday, 5 Mar 2012 | 11:06 PM ET
By: Patti Domm
CNBC Executive News Editor
Dallas Fed President Richard Fisher said the markets are hooked on “monetary morphine” and he sees no reason for further easing.
 
Fed officials have said they would consider another round of quantitative easing or QE3 if the economy needs it.
 
“Personally, I see no need to do another additional dose unless the patient goes into post-operative decline,” said Fisher, speaking at the CERAWeek energy conference Monday evening.