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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: LLCF who wrote (239454)2/25/2010 5:59:44 PM
From: patron_anejo_por_favorRead Replies (1) of 306849
 
The Fed will keep buying till the buying's done. There is no theoretical limit on the size of their balance sheet, the only restraint is imposed by the bond market (apparently easily sidestepped by QE and simply buying whatever is needed to keep long rates down). And by the Forex market, since you can't buy dollars with more dollars. Provided you're willing to tolerate all the other dislocations this causes, like holding home prices ridiculously high for no good reason, ditto commodities. Sooner or later the wheels come off, but as we saw with Greenspan, the thing Central Bankers are REALLY talented at is moving the consequences over to the next guy's watch. So I'd expect some bodacious hyperinflation and skyrocketing long treasury rates by year end 2014. Pseudonormalcy until then. And ever higher taxes in any event.
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