Rate Rise Clue? The Dilemma of How To and If We Can Ever Exit QE – 6 Posts


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(how to exit QE?) Trade protectionism looms next as central banks exhaust QE – By Ambrose Evans-Pritchard – Officials at the US Federal Reserve may be more worried than they have let on about the treacherous task of extricating America from quantitative easing. This is an unsettling twist, with global implications. –  Telegraph.co.uk

(painted in a corner?) What Happens When the Fed Really Does Run Out of Ammunition? – By Michael Sivy – TIME
Why Central States/Banks Inflate Asset Bubbles, and Why They Implode – Charles Hugh Smith – Of Two Minds – … The answer boils down to this: inflate assets or die. The only way to support consumption in an era of declining wages is to enable more borrowing, and the only way to enable more borrowing is to:
1. Lower interest rates to near-zero so stagnant income can leverage higher debt
2. Inflate assets to create phantom collateral that can then support additional debt.
Central states live off taxes skimmed from wages and profits. If wages are stagnant, the state needs profits and capital gains to rise to support higher tax revenues. In other words: inflate assets or die.
(doing repos is the answer) Draining excess reserves and the exit strategySober Look Blog 
(6 observations) Can Endless Quantitative Easing Ever End? – Submitted by Tyler Durden – Authored by (and originally posted at) Detlev Schlichter.com – Zero Hedge

(Ben defends QE) Stimulus Isn’t Leading to Higher Inflation: Bernanke – Federal Reserve Chairman Ben Bernanke strongly defended the U.S. central bank’s bond-buying stimlus before Congress on Tuesday, saying that the bank sees little risk of higher inflation in the near  – CNBC


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