Hey John,
what do you think of Japan's monetary shock and awe? If the US were to do a similar QE relative our GDP, it would be the equivalent of $200B per month in asset purchases from money printing.
My guess is that this is another domino falling. Japan has upped the ante on the world in the currency wars. The US started the currency war and we'll finish it, but I bet we'll keep ratcheting up our own QE, once we get close to Jan'14 and realize that none of the goals they set were met. Unemployment is not coming down fast enough, which is to say people aren't quitting looking for work fast enough, because the only way that unemployment figure has been coming down is because the government stops counting people when they've been unemployed too long to collect unemployment welfare checks. If you look at the Labor Participation rate, it's still abysmal and getting worse, which exposes the lie of the official Unemployment rate that the Fed watches. That means, with real labor participation not improving, GDP and deficits cannot improve substantially, which means QE must continue to finance Congressional deficits. This game will go on and the US Fed will up the ante late this year before Bernanke retires.
Another question for you. Do you own any gold? If so, are these good entry prices? |
