inthemoney
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I think they will taper it off and then tell the markets retroactively after they have done what they have done.
Bond prices move inversely with yield.
Yield is at all time lows. The economy will recover, raising yields.
Bond prices will fall.
This ain't rocket science.
Inflation is still limited by the depressed levels of demand, that is still limited by high unemployment. Until unemployment drops below 5%, we will not see price rises on most goods since wage pressure is not going to push them until unemployment drops.
I think they will taper it off and then tell the markets retroactively after they have done what they have done.
I think they will keep it going till the mid terms elections....ofailure can't afford to lose any more seats in the senate or house.
I doubt it. We should have a new fed chairman early next year. That would be the latest I would put it, but who knows.
LOL !!
Maybe you should start thinking that the situation is a bit more complicated than it actually is.
And maybe you wouldn't post such drek.
They will continue until Obama is out of office.
The Fed is buying MASSIVE amounts of short term Securities, with the likely result being a spike in bond yields and a spike in our debt service paymemt as those bonds mature
With NO private sector growth to speak of the spike in yields will kill off any legitimate growth as interest rates rise.
With that the US's off the books unfunded liabillities are growing exponentially as our population ages and millions get new subsidies from Obama Care.
Harry Ried admitted Obama care was a path to single payer, but with our debt swelling out of control and our private sector spinning its wheels there will be no way to fund it.
So what will cause the Federal Reserve to taper the current QE-3 program? Obviously, the central bank tells us that there is very little inflation in the economy so there is really no danger to having the QE-3 program in place. History has told us that prolonged stimulus has resulted in high inflation or some type of bubble. In 2001, the former Federal Reserve chairman Alan Greenspan lowered the fed funds rate to 1.0 percent and that lead the stock market to new all time highs. Unfortunately, it also lead to the largest housing and credit bubble in seventy years. Could there be another bubble being created at this time, or is this time different? After all, almost every central bank is following the lead of the Federal Reserve when it comes to easy money policies. The Bank of England, Bank of Japan, and many other central banks are all creating money out of thin air so perhaps this time it is different.
Recently, yields on the 10-year U.S. Treasury Note have climbed sharply higher. Today, the yield on the 10-year U.S. Treasury Note is around 2.67 percent. While this is still a very low yield it should be noted that it has spiked higher by more than 1.25 percent since bottoming in July 2012. The yield chart of the 10-year U.S. Treasury note is signaling a move to 3.0 percent in the near term, so it would be prudent to expect bond prices to continue to fall. Yields are moving higher despite the Federal Reserve buying $40 billion a month in U.S. Treasuries. Is the bond market trying to tell us something? There is an old saying on Wall Street that the bond market is smarter than the stock market. You see, the people that run the bond market have much more capital than the people that buy stocks. Remember the old saying, follow the money. [/COLOR]
If the bond market is moving higher it is telling us that the Federal Reserve is going to need to taper their current QE-3 program very soon.
If they do not taper soon then they are risking another bubble or perhaps massive inflation.
" The economy will recover soon.." Says who ?
A ignorant Obama supporter who has no idea what kind of damage Bernake is doing to our long term economy ? Or Obama is doing to our economy?
Banks are holding record reserves, with off balance sheet debt climbing as our population grows and ages.
There isn't going to be a spike in yields just like
there wasn't a spike in inflation when QE was first implemented.
The same way government funds its spending now, by selling bonds...
Sorry, I just can't take your uninformed opinion seriously. The stopping of this unprecedented QE will cause itnerest rates to rise....
Sorry, I just can't take your uninformed opinion seriously.
The stopping of this unprecedented QE will cause itnerest rates to rise
and you want us to pay for single payer by borrowing more money ?
From who ? Ourselves ?
You advocate for the exponential increase of our debt to pay for healthcare and ofcourse the debt service ?
lol
Uh, yeah, interest rates will rise. That's the entire point of tapering.
Definitely.
Bond buyers.
Yes, though it wouldn't be "exponential".
Are you really willing to go there?
What causes yields to increase?
He actually has it right. Interest rates cannot increase if the supply of bonds < demand unless there is real economic growth.
Banks don't control reserves. Even if a bank lent every penny it had in excess reserves, it would still show up as a reserve in another account. How can you be discussing such topics and not be aware of this?
Yes, higher interest rates with a stagnant economy and a massive debt payment as all of those short term securitiesthe Fed owns matures.
And WHAT "bond buyers " ?
Right now the biggest purchaser of US bonds is the FED. If the Chinese ever devalue their currency to their target level they will stop buying our bonds.
So your'e saying a move into single payer could be fininanced by monetizing our debt in perpetuity ?
Fed
tapering is based on specific economic indicators. If those indicators don't satisfy Fed benchmarks then they won't taper...
Not only are you a conspiracy theorist, but you are also completely ignorant as to how US debt issuance works.
Yes.
Newsflash: We're already monetizing our debt in perpetuity.
So far all QE has accomplished is to remove untold amounts of interest payments from the private sector and pay the Treasury off as bankers and Wall Street take advantage of easy money and low interest rates.
The most important risk of the US financial policy is social upheaval – class friction. One of the themes I have posted often is how the election strategies of both parties have grown to emphasize class warfare; get elected with the “Robin Hood” strategy or the “hold back the unruly looters” strategy. It is win by fractionation over unification. This has become more and more acceptable and dangerous as wealth has concentrated steadily and inexorably in a few percent of the population since about 1980. The Fed’s policy has really accentuated this problem – as holders of stocks and various investment instruments have benefited from the high stock prices while the majority of American’s have insufficient income to accumulate the wealth needed to get this benefit. In effect , the Fed has indirectly channeled much of the money supply expansion to those who are wealthy enough to invest it. The “Occupy Wall Street crowd” makes emotional protests from the obvious trend, but they blame “the corporations” and fail to see that it was really federal monetary policy at the root of the trend. Ironically they want the Fed to do more to “stimulate the economy”.
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