QE slow is for 2014, FED starting saying something just to see how the market reacts. Based on that it prepares the measures to be taken when QE slow is implemented.
It also a psychological game to intimidate.
QE slow will come for sure:
It is estimated that in the last five years, central banks injected U.S. $ 12 trillion in financial markets and promoted 500 cuts interest rates. This mountain of liquidity, however, is barely 5% of the total stock of financial assets in search of better remuneration in the global markets.
Systematic surveys of the McKinsey Global Institute (MGI), the research arm of global consultancy McKinsey, indicate that this stock is now growing at a slower pace - averaging 1.9% per year since the crisis began - than that recorded in the explosive period spanning 2000-2007. But already surpassed in 2012, the 2007 record, reaching stratospheric $ 230 trillion. Even today represents "only" four times the total world production of goods and services, in a year, compared to four and a half times in 2007, is a horrifying scale resources.
QE slow will be a delicate dismantling operation, with extreme care, in little and carefully calculated doses. tHus the need to try the water as now is being done.
Note that even this talk about QE slow was preceded by a G-8 meeting, which points to coordination between major economies. |
