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Will The Fed Really Stop its QE Adventures?

The Fed: Talk Taper, Print Paper

Since the beginning of the year the Fed has been talking about cutting back on its quantitative easing (“QE”) program that has been in effect for nearly five years. That talk has been increasing in recent months. QE involves creating money out of thin air in order to purchase US Treasuries and Mortgage Backed Securities (MBS’s) – securities for which there is limited market demand and the Fed is the primary buyer.

The reason for QE is to lower interest rates and stimulate demand. Fed Chairman Ben Bernanke is currently touting his low interest policy as the reason for the recent upswings in the housing and stock markets which are doing well in spite of the generally sluggish economy. Mr. Bernanke has also claimed that the Fed’s low interest rate policy did not contribute to the housing bubble, its subsequent bursting and financial crisis of 2008. The Fed’s policies only help, never hurt.

Next Fed Trick-”tapering” -Making Dollars Created Out of Thin Air, Vanish into Thin Air
Read More:
http://smaulgld.com/the-fed-talk-taper-print-paper/



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James Rickards was on Max Keiser's show

echoing the "No Exit" point .
http://www.youtube.com/watch?feature=player_embedded&v=-r0uX...

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Before that Max Keiser made the point

that stocks are up and earnings are up because companies are borrowing money courtesy of low interest rates via the Fed to buy back their own stock!
Same point made here http://smaulgld.com/as-the-band-played-on-the-crowd-called-f...
but Max really dives into the issue in the first ten minutes of the show.

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if the Fed does stop QE..

how long before they start another round?

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This is the inflation scenario no matter what

many "inflationistas" are no seeing that we will probably have deflation before inflation (esp if the Fed decides to "taper" too soon)
If there is any deflation the Fed will probably go "Abe" and go into over drive with QE

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