Posted on 05/11/2013 8:24:11 PM PDT by whitedog57
According to the Wall Street Journal, The Fed is planning to dial back the incredible monetary stimulus. But it won’t go “cold turkey.”
We can always rely on The Dallas Fed’s Richard Fisher for a pithy comment:
“I don’t want to go from wild turkey to cold turkey,” Richard Fisher, president of the Federal Reserve Bank of Dallas, said in an interview Friday. “I think we ought to dial it back.” Mr. Fisher is part of a contingent of Fed hawks who are wary of the central bank’s easy-money policies.
After all, Central Banks have lowered interest rates 511 times since June 2007 in an attempt to jump-start economic growth.
Of course, house prices have risen quite a bit since Q2 of 2012, mostly due to investors.
And of course the stock market has been frothed to dizzying heights by Fed intervention.
Will the stock market or housing “bubble” decline with a slow paring of the asset purchases? That is the $3 trillion dollar question.
The Fed will not go cold turkey, even though they went wild turkey since 2007.
The Fed can’t back off much at all. There is no one to “buy” US debt. The Fed backs off much and interest rates will have to go up to attract treasury buyers. Even rates far below what a real market would demand would break the budget. If what the federal government does with money could be remotely thought of as budgeting.
Obama has fooled the low information voters, entitlement spongers, illegal aliens (but I repeat myself) and useful idiots into re electing him.
Bernanke and the Congress had bankrupted the country borrowing money to provide the false illusion of recovery and normalcy that does not exist in reality and to pay off his base with money redistributed from the middle class and their children not yet born.
Now that he has been re elected it's time for the very real economic crisis Obama and the Democrats have been manufacturing for the last 4 years.
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