QE Forever
“Congratulations Mr. Bernanke. I’m happy, my assets’ values go up. But as a responsible citizen I have to say the monetary policies of the U.S. will destroy the world.” Marc Faber, investor, analyst and writer extraordinaire, September 14, 2012, Bloomberg Television.
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There’s no reasonable justification for Dr. Bernanke taking such extreme risks with financial and economic stability. And I struggle to understand how he doesn’t see the likely consequences. After the cult of Greenspan, I thought we had learned a lesson from having one individual exert such power and influence. Indeed, the Federal Reserve has now grossly overstepped its role. Never was it anticipated that the Fed would resort to massive purchases of Treasury bonds and mortgage-backed securities in a non-crisis environment. Never was it contemplated that our central bank would resort to pre-committing to massive ongoing money printing in the name of reducing the unemployment rate.
I’ll state what others hesitate to admit: this week our central bank took a giant leap from radical to virtual rogue central banking. If Bernanke’s plan was to leapfrog the audacious Draghi ECB, our sinking currency – even against the euro – is confirmation of his success. If his goal was to provide markets a Benjamin Strong-like “coup de whiskey” – he should instead fear the dangerous instability central bankers have wrought on global markets and economies. And I am all too familiar to the adversities of being a naysayer in the midst of Bubble mania. I’ve read about it, I’ve lived it and I’m ok with it – and actually am motivated by it. I highlighted last week the ominous divergence between world fundamentals and the markets. And this week, well, global markets enjoyed just a spectacular time of it. Away from the Bloomberg screen, it sure seemed like a less than comforting week for the world at large.
Full article at PrudentBear.
