January 25th, 2011, 7:20 pm
QE2, I think is 75 bio. a month. So almost nothing of the money has found its wayinto the market, nor the extension of the tax cuts have had an immediate effect onthe money in circulation. It is a typical shock and awe tactic, to scare the marketsin order to change investors asset allocation. The FED says to the Market for risky assets: When ever you fall, I will be there. Asthey did sharply, several times in 2010, it finally jumped in and printed money. The moveof the markets, after announcement was out of bonds into risky assets whatever - but as fast as possible. This created a real vacuum in risky assets, since the previous sellersall became buyers again and the liquidity for some commodities and equities was very low. The FED, with it's meager 75 bio. a month program, at that point, was not in the markets.They were thinking: What would be the most expensive way for the US tax payer to buy These bonds? Let's give the deal Wall-Street, to the poor bankers with the broken businessmodel, financed by us, the FED anyway. And I think, and I am almost sure, 70 % of thesetrades will be done by Goldman Sachs. The only effect the FED has on markets with QE2 is the change in asset allocation, but themoney injected is never enough. Since the blindfolded central bank interventions started with Mr. Greenspan, the US house hold has added about USD35 trillion in debt, Hugh Hendry writes. Compare this with a total money throwing including bailouts by the FED, that was about 9 Trillion, we are from over with QE's. There will be debt! Debt, coupled with an aging population and a Central Bank out of it's mindmust be Japan! No it's the US, or probably both.Twin Brothers