TR,
I believe both articles are correct and reflect the true fundamentals. Ben's money printing machine trumps all cards.
This game has three high probability results. I do not know which has the higher probability.
1. The printing is ramped and ramped (QE3-QE27) and equities rally as does everything real. Bonds do get sold and in size (which is just a complete freak of economics that this has not already started). Hyperinflation and end game. The upside is that the Fed will be to blame, this time. Too many are already calling this pure madness, which it is.
2. Bennie finds the perfect QE2 level and manages to keep the market floating. At some point, earnings fail to support valuations. This is real simple math, so even a Fed Head could do it. The sheeple are already broke and they simply cannot absorb any inflation. Anything besides food and fuel is not going to show growth. The market finally adjusts, but not to the level it should.
3. The ramp simply fails. The street's awareness that this is in fact now a Ponzi leads to a market implosion. It will come fast and printing will not stop it. The funny thing is that while the dollar rallies, so does gold. We could be in for a wait, as the POMO pump can keep a lot of people playing the greater fool game (easy when the Fed stands up and volunteers to be the fool).
Last, I put the odds at 1% or less that someone in power tries to stop the Fed. Maybe 1% of our political clowns have integrity, but of those 1%, only 1/100% has any power. So, we are fxxxxx.
I always thought the end game would come in 2012. Man was I wrong. The end game is here now. And soon we will find out what has scared the hell out of the Fed, for there is most certainly a very, very big monster waiting to pounce. It is mortgage fraud? I don't know, but there is something hiding in the wings.
To expect reality in this market is perhaps a mistake.
GT
TH |
