Tuesday, January 17, 2012


More QE?  Now?  I thought the economic situation in the US was getting better?  I thought employment was improving?  What could possibly lead the Fed and it's newly elected doves to conclude that the US economy needs another dose of the economic elixir that heals all woes?

Apparently, there is something out there that these guys see as a significant risk to cause them to want to double down and flood the economy with more liquidity.  It doesn't matter if it doesn't help the real economy, asset values may go higher, so thus we probably need more of it huh?  Or, is it even more simple, is it just the non-partisan Fed working the election cycle?

Enjoy the video where Steve Liesman from CNBC examines the possibility of more action by the Fed to save us from even the possibility of a slow down.  He also mentions something I highlighted last year that the composition of the Fed has changed again and those terrible fiscal and monetary hawks have been replaced by doves that are all for pushing the envelope of monetary safety.

The stunner here for me is that message expressed in the video that even if GDP comes in a 3% or more, there is a real possibility for Fed intervention.  Perhaps this talk is simply setting the ground work with a plausible threat for action by the Fed as we know they like to believe that the mere mention of their action will cause market participants to act in new and risky ways.

If we consider that a breakdown of the Greek situation is coming and very rapidly, these may be not-so-subtle efforts to pre-warn the market that they will be acting to keep the world from ending.....again.


Goatmug is an investor that cares about you and your family. Goatmug's Blog - Financial Perspectives From The Mountain Top is a collection of thoughts on our economy and how it impacts the lives of investors and average people. While several specific investments are named in many of his posts, these articles are simply invitations for you to do your own research and reference to these securities does not constitute financial advice. Your situation is complex and unique and you should seek professional assistance with your trading and investing. Please visit Goatmug and share your comments at http://www.goatmug.blogspot.com/