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We know a reduction from 85 to 70 did not cause a drop, markets went up.
We know a reduction from 70 to 55 did not cause a drop, markets went up.
We know a reduction from 55 to 40 did not cause a drop, markets went up.
We know a reduction from 40 to 25 did not cause a drop, markets went up.
We know a reduction from 25 to 10 did not cause a drop, markets went up.
You are saying a reduction from 10 to 0 will cause a major drop.
We shall see. Maybe they should have reduced to $5.00, since the amount of QE does not seem to have anything to do with it until it hits zero.
QE has always been a weak stimulus. The biggie is the low interest rate. And QE helps there.
Oh, I'm hearing it. It looks like desperate rationalization to me.
Bottom line is that the factual data shows that when QE ends, the market drops by double digit percentages and doesn't increase consistently again until another round of QE is started.
No, you just proved you are either nor hearing, or not understanding it the point. What do you think I meant by the $5.00 example?
Never mind. Time will tell how it goes. I am actually hoping for a correction.
Has anyone ever thought "what if the FED ever loses control of interest rates?"
What if $4.6 trillion wasn't enough? How will it ever wind down that balance sheet?
I think it's a very real possibility that they lose control. Greenspan just spoke about this very thing happening. The problem the fed created is they distorted nearly every "market". Now we'll find out where things really stand.
How would the Fed 'lose control'? The Fed/Treasury sets the rates. At least overnight and short term.
The Fed will increase rates if they feel inflation is rearing its onerous head.
The Fed never has to raise rates to 'attract buyers'.
QE has always been a weak stimulus. The biggie is the low interest rate. And QE helps there.
Whether it is weak or strong is besides the point, but I agree about the interest rate. That has always been the Fed's primary weapon in regulating the economy.
There are actually complex arguments on both sides of the debate. My take? The markets are influenced by way too many factors to definitively answer those questions either way – even though the chart makes the case look pretty cut-and-dried. Certainly, the Fed’s actions have heavily influenced the markets in recent years. HOWEVER, trying to predict the market’s corresponding reaction to a single, predetermined event has NEVER been a winning strategy. Bottom line: I believe the end of QE3 will probably play out somewhat differently than either QE1 or QE2.
The point, though, is that the end of a MAJOR Fed program like QE3 is on the near horizon, and since this has all been one big, long experiment since 2008, investors simply MUST be aware of what’s coming. The risk of a market decline at some point is very real, whether the timing coincides perfectly with the whims of Janet Yellen & Co. (the Fed), or not!
How would the Fed 'lose control'? The Fed/Treasury sets the rates. At least overnight and short term.
The Fed will increase rates if they feel inflation is rearing its onerous head.
The Fed never has to raise rates to 'attract buyers'.
I'm not predicting this, but you only have to look at the late 70s and early 80s to see what happens when the Fed feels the need to raise interest rates to control inflation.
As long as TINA (There Is No Alternative) remains in effect, the stock market will remain strong. And those people, many of whom are seniors, who rely on interest income will continue to suffer.
These artificially low interest rates have resulted in a massive transfer of wealth from the middle class to the upper class. All of which suits Obama just fine.
As long as TINA (There Is No Alternative) remains in effect, the stock market will remain strong. And those people, many of whom are seniors, who rely on interest income will continue to suffer.
These artificially low interest rates have resulted in a massive transfer of wealth from the middle class to the upper class. All of which suits Obama just fine.
Speaking of TINA, the Republican alternative that would have stemmed the flow of wealth to the rich was what, Romney?
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