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'Nanke said we still need help for the economy. I didn't want to hear that. The house of cards keeps getting bigger. It's gonna' fall someday and then what?
Meh, I will stay in the market and continue to make money. You can keep your tin foil hat lol. Corrections will come, but I don't forsee a crash in the near future.
The longer term rates are something the fed can not control directly or perhaps at all,
The global bond market is 100 trillion dollars. The fed buys 85 billion a month in securities. The us market is 1 trillion a month in trading.
The feds action will not influence much if the worlds investors decide rates should stay low.
By the same token If the worlds investors feel rates should be higher and decide to sell 100 trillion in bonds there is nothing the fed can do to keep rates down either .
We already saw the famous inverted yield curve right before the recession when the worlds investors disagreed with the feds actions of trying to raise rates.
End result was long term rates were lower than short term rates.
I believe Berneke when he said the Fed was going to monitor expected inflation much more carefully. But i also believe that the effect of QE on inflation will have a long lag and that is worrisome, if it's true. Look back at the 70s.
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