Here's why the Fed is trapped: Ron PaulSubmitted by GBAmerica on Mon, 01/27/2014 - 21:36
Here's why the Fed is trapped: Ron Paul
Ron Paul has a warning for the markets: The Federal Reserve Bank is the source of today's market instability and it will likely get worse.
As the Fed begins its two-day policy meeting on Tuesday, world markets are being rattled by two major issues: credit market instability in China and a further taper of the US monetary stimulus.
Former congressman Ron Paul believes that Ben Bernanke is going to avoid responsibility for additional tapering and foist it on his successor, Janet Yellen. He believes the Fed has its back against the wall – if it tapers any more, emerging markets will spin out of control; if it continues buying bonds at the same monthly pace indefinitely (which is expected to be $75 billion this month), US and world markets could find themselves overvalued and susceptible to a big drop if and when the music stops. The US dollar's role as a reserve currency is part of the reason this could be a global problem, according to Paul.
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