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Tuesday, October 12, 2010

Fed Stimulus pt II

As I've written before, in November, the Fed will meet and by all accounts, plan to implement Quantitative Easing II, which is a complex way of saying the Fed is going to print more money out of the thin air and backed by nothing, in the process creating more National Debt which we, our children and our children's children will be responsible for repaying.   And all this to give another lift to the stock market and the banks & financials.

Think there's a chance sanity will prevail?  The headlines will tell us:

European Shares Gain, Hope of Further Fed Stimulus-  "European equities edged higher on Monday, led by financial services and automobile shares, with (European) investors betting that recent macroeconomic numbers will prompt the U.S. Federal Reserve to announce more stimulus measures."- Reuters, Oct 12

China's Stocks Post Best 2-Day Gain On Fed Outlook- "China’s stocks rose, capping their best two-day advance in a year, on speculation the yuan will extend gains and possible U.S. economic measures will weaken the dollar and make commodities more attractive"-  BusinessWeek, Oct 11

Feds Certain To Act In November In A Big Way: Survey- "Market participants are now virtually certain that the Federal Reserve will announce that it will resume buying assets at the conclusion of its November meeting and do so in a sizable way"- CNBC, Oct 11

Fed Undaunted By Uncertain Prospects For Money Printing- "The US Federal Reserve runs the risk of diminishing returns from its next round of money printing to amplify the subdued economic recovery, but that won't stop it from trying."- FoxNews, Oct 11

Wall Street, Crude Prices Rise On Fed Stimulus Speculation - China Today, Oct 9

Dow Closes Above 11,000 Amid Optimism About Quantitative Easing- "The strength in the markets came following the release of a report from the Labor Department showing that U.S. employment saw a notable decrease in the month of September, with another significant decrease in government employment offsetting continued job growth in the private sector."- RTT News, Oct 8

US Stocks Soar of Quantitative Easing Hopes- MarketWatch, Oct 5

~  At this point the Fed couldn't hold back pumping a minimum $500billion more taxpayer dollars into the system even if it wanted to.  The expectation is so high and media coverage so absolute on it being a certainly that even if Bernanke suddenly grew a conscience and decided not to, the markets would purposely crash to show their displeasure.

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