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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum

GLD 387.98

+1.3%

Nov 28 4:00 PM EST

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To: elmatador who wrote (101253)	6/19/2013 6:20:00 PM
From: THE ANT	Read Replies (1) of 218092

Quite simply, the wealth effect is rendered moot by languishing incomes. zerohedge.com The Fed has made a tremendous mistake and is trying to back track. The wealth effect is far surpassed by the falling income effect. QE is a tax--only the wealthy benefit and their spending does not counter act the income fall that QE causes. It also distorts investment. Their policy is ultimately deflationary even if they continue it. Where is inflation? At the right time deficit spending will be needed. It should come from cutting out the FICA tax on individuals, but a divided congress and incompetent President unlikely to see this or react in the correct manner. Most likely a crash in the mkts will lead the Fed to continue QE for the next 20 years leading to a long Japanish deflationary outcome.If this happens it should mean low interest rates for as far as the eye can see. The Fed started QE because no one would act on the fiscal side. They should have stopped after QE II and dared congress to let the economy go down the hole (not have increased deficit spending) One side didnt trust Obama with spending and he wouldn't cut taxes

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