Tom, various theories are making the rounds, from a secret bail-out to an attempt to actually pre-empt a stock market crash. in any case, the stresses in the credit markets are incredible, with spreads having blown out to panic levels.
what you witness is the typical Greenspan solution to financial problems: print your way out of it, in the process inflating the bubble even more, and ensuring that next time, the problems will be even bigger.
he risks a total collapse of the fiat currency system, with hyperinflation and all that entails. i know, this sounds unduly alarmist at first glance, but imo the risk certainly exists.
just wait for the first event that really shakes confidence a bit...the Fed by that time will have already made use of it's main weapon. the question is what will they do when a real crisis hits? how do you top this printathon?
regards,
hb |
