The Fed Is Already In the End Game
Phoenix Capital Research
September 19, 2013
The Fed failed to announce a Taper yesterday of any kind.
It is positively outrageous, but it does inform us of many things.
First and foremost, the Fed has made it clear that it cannot be hawkish is any way. We had just two months of hinting at tapering QE from the Fed (Bernanke was back talking up how accommodating he’d be by July).
So for all the talk of taper and shifting to a more hawkish tone, the Fed’s actions speak louder than words: the Fed is totally and completely incapable of being hawkish at this time.
Secondly, the Fed knows that the US economy is a total disaster. If tapering even $10-15 billion per month from $85 billion month QE programs would damage the economy, then we’re all up you know what creek without a paddle.
Put it this way… here we are, five years after 2008, and the Fed is stating point blank that the economy would absolutely collapse if it spent any less than $85 billion per month. This admission has proven just how long ago we crossed the Rubicon. We’re already in the End Game. Period.
Finally, the Fed has proven that it has absolutely no exit strategy. The Fed is going to print money and buy bonds until the entire financial system collapses. Any time stocks fall it will try to rescue the markets. And it is going to do this ad infinitum because it has no clue what else to do.