I’m speechless, open end quantitive easing at a pace of 40b / month (85b until year end). How about that, huh..?
FED is buying loans.. what BS is that? What money do they have to buy loans with? None at all! They are just transferring loans from place X to the people (= printing more money out of thin air to buy debts will send groceries higher and thus you and me are paying the debts). To make a long story short, this means that the middle class is going to take another hit and will probably sooner than later only be a history mark. Over time, this will lead to more poverty and the difference between rich and poor will grow exponentially.
What about stock prices then; will the market continue higher forever? Well, it depends on a lot of things. Firstly, and most important, companies needs to start hiring. No jobs = no consumption. Imagine this, you’re in charge of a successful business. You have money to hire more people but the demand at the moment is not exactly at its best and it is uncertain how the short term future will unfold. Would you aggressively start new production and hire more people..?
Basically what (I think) FED is trying to accomplish, is that he tries to ‘give people more money’ so they can consume more sh*t they don’t really need. I feel the outcome of this is the opposite; consumption will decrease (bad for economy but good for the environment). This whole QE is basically an experiment and with the latest announcement, I think the end game has started.
Euforia is at top and I guess all pullbacks will be aggressively bought. Seems to me though that we could expect pullback at the beginning of the week.
