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Politics : Politics for Pros- moderated -- Ignore unavailable to you. Want to Upgrade?

To: rich evans who wrote (525842)	12/9/2012 10:32:12 AM
From: carranza2	Read Replies (2) \| Respond to of 793578

Right. And price is dependent on interest rates. The problem with the Fed's orderly exit from this monetary insanity is that it cannot stop QE, and will likely have to increase it if we jump the dismal cliff. Thus, its balance sheet is likely to balloon up thereby making the exit at a reasonable range of interest rates devilishly difficult. And remember that no one but the Fed is buying. It is a monopoly buyer at this point and likely in the future. When the Fed needs to sell, who is going to buy and at what price? Remember that the primary dealers are mere conduits. They need to have their own buyers lined up and there are at present no such buyers.