Posted on 12/17/2013 4:26:01 AM PST by Lucky9teen
(Reuters) - The possibility that the Federal Reserve could finally start to trim its extraordinary stimulus for the economy could make this week an explosive one for financial markets.
Though the odds still point to no major policy change when U.S. central bankers meet December 17-18, most of the recent domestic economic data suggest the beginning of the end of their massive bond-buying program is coming sooner than later.
If it acts it may reflect as much a growth in confidence in the global economy, for whom the withdrawal of the flow of cheap dollars will be a shock, as in the recovery in the United States alone.
(Excerpt) Read more at reuters.com ...
"Another slowdown and stock crash" ~ Harry Dent
"We have unbelievable levels of debt, and unbelievable levels of money printing...be worried and get prepared." ~ Jim Rogers
"There is going to be a global currency reset in about 90 days." ~ Pastor Lindsey Williams
"We are on the eve of deflationary shock..." ~ Russel Napier
"They are preparing for a major societal collapse. It is obvious and it will happen..." ~ Jeff Berwick
"We are going to see a series of bankruptcies." ~ Hugo Salinas
"World financial markets are extremely dangerous, unstable, and subject to serious trouble and dislocation..." ~ David Stockman
Pumping money into the stock market is not a “stimulus.” It is more like pumping air into a balloon. No matter how much air you pump in, and how big the balloon appears, it still contains exactly as much rubber as it did before the air was pumped in.
What happens when you take the drugs away from a junkie?
What happens when they take away the half of the $85B/month the Fed has been pumping into the market?
QE is a monthly fix pissed down the drain.
Well, there will be some good news out of that deflation: the market will be on sale.
I seriously doubt a precipitous decline would lead to a “crash,” per se. Every financial guru I’ve consulted predicts a correction down to 8k-9k on the Dow. That’s the REAL value of the market without the artificial pump.
At some point, socialists run out of other people’s money, and I think that’s starting to bear fruit in our market and esp. with Obamacare.
As far as societal collapse, I’m not wearing rose-colored glasses, but I’m also not going full-retard on doom and gloom. I predict rioting in major cities (NYC, Chicago, LA, Atlanta), but all tolled those of us deep in suburbia and out in the sticks will likely see minimal impact. Obviously those of us stocked up on supplies will be better prepared for the long haul eventualities.
It wont happen during Obama’s reign, or at least it wont happen until after the 2014 elections
the fix is in
Probably true. But the fat lady dress is withering at the stitches.
Just think, that $35B is just $265.63 a month for every 320 million of us. And this has been going on for how long now? Nevermind the insane inflation on food and just about everything else the gubermint excludes from their magic formula on calculating the official inflation rate.
Try taking a junkie’s fix away from him, and you have a good idea where this economic move is going.
As far as I know, it’s been going on since 2009. The Fed takes $85 billion a month and buys Treasury Notes (their idea of collateralizing the debt, really just paying off one credit card with another) and also puts money in the market, I think in MBS (mortgage backed securities).
I just know what’s going to happen specifically, but I sure as hell know it is not good, not one bit.
I have been waiting for the balloon to burst since late spring so I can come back in and pick up the pieces that I like.
To add one to the list of quotes above, Warren Buffet - When people are greedy be fearful, when people are fearful be greedy.
That's an excellent analogy. I also wonder if "the stimulus" isn't just the opposite. What would be a stimulus is interest on savings. Think of all of the retirees and near-retirees who are cutting back spending to try to conserve principle. That interest is money that goes almost directly into the economy, and a lot of it locally.
Has anyone noticed that the economy tanked and poverty increased when savings rates went on this decline to near-zero? Can't all be coincidence.
I can’t see the fed doing anything that will occasion immediate “hardships” until the collapse actually happens and then, of course, the whole world is different and the power grab and the resistance throws everything out, except, of course the laws of the market. They still work even if the inputs are all garbage, GIGO, you know.
Here in Russia! people are beginning to talk about a second crisis (the first being 2008). Several large banks have just been closed.
I think 2014 is going to be rough. It’s gonna hit Obama over the head, along with ObamaCare. Wouldn’t want to be sitting in the White House...
So that is only $15,937.80 that every person in this country has pissed away trying to vote away their liberal white guilt! Geez, that is some guilt I never had.
Pumping money into the stock market serves to keep that money from raising consumer and commodity prices as fast as would be normally indicated by such vast increase in the money supply. Of course that bubble, too, will pop. Then we get the effects of the ongoing hyperinflation in our immediate situations. Something likeamine in areas not close to food producing land is a likelihood. Chaos is a given. Caeserism is a given.
Pumping money into the stock market serves to keep that money from raising consumer and commodity prices as fast as would be normally indicated by such vast increase in the money supply. Of course that bubble, too, will pop. Then we get the effects of the ongoing hyperinflation in our immediate situations. Something like famine in areas not close to food producing land is a likelihood. Chaos is a given. Caeserism is a given.
The Fed is now like a hamster on a wheel. Everytime they slow the printing the stock market starts to dive. They are caught in their own trap. They have no choice but to keep on printing until finally the train runs off the tracks.
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