The Fed Shocker: Part II The Consequences
20 Minutes, 32 Slides
The Fed shocked the markets with its reversal on the expected September initiative of a "Taper" Policy. What are the consequences of this apparent "delay"?
There are immediate ramification and there are others associated with Moral Hazard and (Un)intended Consequences due to a protracted period of what can only be termed Monetary Malpractice. These and the following are discussed in this video by Gordon T Long and John Rubino.
- With economy decelerating and interest rates already rising, Fed can't end QE.
- Massive infusions of new dollars for as far as the eye can see.
- Rising danger of instability.
- Hot money flows back into emerging markets, destabilizing them AGAIN.
- Weaker dollar?
- Rising precious metals?
- Stock market? Technically ready for a major correction, but all that new money...
- Bonds? Fed will keep trying to force long rates down. Will they succeed?
Not So Evident
- A Glimpse At What Will Be a Much Larger Problem - The Fed Was Caught Off Guard in June!
- We have Past the Event Horizon and a Return Near Impossible without a Crisis - Credibility Shaken.
- We Now Have Global "Abe-nomics"
- Serious Shortage of Risk Free Collateral - The TBAC Warning Left Unheeded
- Mispricing & Mal-Investment
- Elements of Moral Hazard and Unintended
- Currency Wars Return - Now "Risk-On" with Hot Money Flows
The question John & Gordon grapple with is whether the Fed has now intentionally or unintentionally placed the world on the road to a Von Mises Crackup Boom?