The Fed has been stuffing the stock market with pretend money for many years.
They call it Quantitative Easing – introduced in 2008. I call it Air-cash, as in “air-guitar.” You keep strumming, but there is nothing there.
Today, the Fed said it would keep e-mailing money into the markets to the tune of $85 Billion per month. EIGHTY-FIVE BILLION! PER MONTH! In Air-cash. It doesn’t exist!
For some dumb reason I will never understand, supposedly wise people at the stock market with MBAs thought, “Oh goodie! He didn’t stop the flow like we thought he might!”
Hey, wake up. Eventually, the chairman of the Fed (currently Ben Bernanke) will announce a stop to this insane continued raising of the Federal Debt. Debt – something you have to pay back.
As Fox News noted, “The Fed has been prepping markets for months for an eventual phasing out of quantitative easing. Bernanke in June sent stocks tumbling and bond yields surging when he laid out a hypothetical timetable for tapering, suggesting September as the starting point and mid-2014 as the end of quantitative easing.”
The only thing I can figure out is that those wise people in the stock market realize when the Air-cash finally hits the fan, the market is going to CRASH! So, for now, they are happy the Air-cash will keep on coming.
But those MBAs are right – it has to happen eventually.
Are you ready, peeps?
Here are some more quotes from FOX NEWS – enjoy.
“Stock markets, which have surged under the Fed’s stimulus programs, reversed course immediately on the announcement, roaring into positive territory. After spending the day in negative territory, the Dow Jones Industrial average was up about 110 points minutes after the announcement. . . (but) . . “The Fed understands they can’t keep this going forever. They have to realize they’re possibly inflating another asset bubble and that they can’t own the entire treasury market.”
“Through three rounds of quantitative easing, which has more than tripled the Fed’s balance sheet to more than $3.6 trillion, and holding interest rates at near zero for nearly five years the Fed has sought to energize the economy by creating an environment conducive to lending. The results have been mixed, at best.”