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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Box-By-The-Riviera™ who wrote (92854)	7/25/2012 12:10:20 PM
From: carranza2	1 Recommendation Read Replies (3) \| Respond to of 217615

I don't think there will be QE in the near term because (1) the studies increasingly show that the bursting of a credit bubble leads inevitably to a long period of slow growth and low interest rates regardless of QE or other stimulus; (2) in fact, the current studies suggest strongly that QE and other stimulus is counter-productive; (3) current conditions are validating the studies; (4) the Fed probably has the largest staff of economists in the world and they are surely aware of these studies and findings; and (4) Japan is the model, and everyone knows what it went through following the bursting of its credit bubble. The knowledge base is there, and so obvious even a rank amateur like me can find it and understand it. It is folly to think the Fed is not aware of all this. That's the general basis for my thinking that the Fed is unlikely to engage in further QE. BB has turned his guns on congress and has suggested strongly that the onus is on it to deal with fiscal issues as part of any recovery and that the Fed is not to be looked at as an economic savior. In other words, BB is IMO slowly coming to a more Austrian view. In any event, the Fed is pretty much out of ammo if it has concluded, as I think it may well have, that QE is a waste of money and counterproductive. It can reduce the interest it pays on bank reserves to get them into the general economy, but that is not much of a step. Not to forget that QE is at this time deadly from a political standpoint.