In this video, Liesman talks about an interview he conducted with Fed governor Bullard earlier in the day.
The link to that interview can be found here.
I guess the press has to continue to talk up the idea that the Fed will end the QE program at some point. It just amazes me that no one seems to learn. The internet bubble was fueled by easy monetary policy and crashed when the stimulus was pulled back ever so slightly in early 2000. The subsequent stimulus helped propel the housing bubble, which fell under its own weight after the marginal buyer of homes disappeared and the shadow banking system collapsed. The economy is now turning due to the unprecedented efforts by the Federal Reserve and other world central banks, leading to unsustainably low rates of interest and the likely misallocation of capital. The market and the economy will implode three seconds after any stimulus is pulled or slowed. I foresee three scenarios that could play themselves out. One, the Fed governors believe their own BS and slow or stop the QE programs. Either that or market chatter leads them to slow QE. In either event, the market and the economy decline significantly. The other scenario, the Fed knows a slowing in QE will expose their monetary sham, and they continue to move the goal posts and QE continues indefinitely.
The link to that interview can be found here.
I guess the press has to continue to talk up the idea that the Fed will end the QE program at some point. It just amazes me that no one seems to learn. The internet bubble was fueled by easy monetary policy and crashed when the stimulus was pulled back ever so slightly in early 2000. The subsequent stimulus helped propel the housing bubble, which fell under its own weight after the marginal buyer of homes disappeared and the shadow banking system collapsed. The economy is now turning due to the unprecedented efforts by the Federal Reserve and other world central banks, leading to unsustainably low rates of interest and the likely misallocation of capital. The market and the economy will implode three seconds after any stimulus is pulled or slowed. I foresee three scenarios that could play themselves out. One, the Fed governors believe their own BS and slow or stop the QE programs. Either that or market chatter leads them to slow QE. In either event, the market and the economy decline significantly. The other scenario, the Fed knows a slowing in QE will expose their monetary sham, and they continue to move the goal posts and QE continues indefinitely.
No comments:
Post a Comment