http://bottomline.msnbc.msn.com/_news/2011/09/21/7883153-desperate-fed-grabs-at-policy-straws
Dont be shy. I want to know exactly how you feel.
Hmm…we haven’t heard from qqqq, Chainpin, or AnthonyS in a while. Maybe they’ve all been ‘disappeared’ by the Fed’s secret police.
I’m wearing my tinfoil cup JIC. Of course when it comes to the Fed you dont need tinfoil to come to the conclussion that there may be something fishy going on.
Hmm…we haven’t heard from qqqq, Chainpin, or AnthonyS in a while. Maybe they’ve all been ‘disappeared’ by the Fed’s secret police.
AnthonyS has been doing crazy sh!t like posting in the Tri folder…what is the world coming too?
http://bottomline.msnbc.msn.com/...abs-at-policy-straws
Dont be shy. I want to know exactly how you feel.
Let’s be clear, this is a not a new idea, it is simply Bernanke recycling a failed policy of the 60’s.
He even alluded to Operation Twist in his deflation speech from 2002:
Footnote #11: http://www.federalreserve.gov/boarddocs/speeches/2002/20021121/default.htm
The price of money is not the problem, our debt levels and deficits are the problem.
Bernanke is trying to manipulate the yield curve by engaging in a feeble central planning exercise that is designed to artificially suppress rates so the marginal borrower can more readily access capital–but again, that is not the problem.
Central planning will always fail and this time will be no different.
The Fed is simply adding more volatility and uncertainty to the bond and equity markets, as every investment decision is made in the context of what the Fed is and will be doing.
Unless Bernanke expands the balance sheet and abandons these sterilized approaches, the markets are going to tank, as they did this afternoon, when it was clear that a large scale asset purchase program was not in the cards.
Its a sad testament as to the state of our economic and monetary systems, that asset values rise and fall on the hopes and expectations for greater levels of centralized intervention by the worlds central bank.
Such a ridiculous situation, by logic, can’t and won’t last.
And as a side note, I see that Lloyds of London is pulling funds out of European banks, which is the only prudent option at this point: http://www.businessweek.com/news/2011-09-21/lloyd-s-of-london-pulls-deposits-from-banks-on-debt-crisis.html