The last sentence of the last paragraph was best - "Investors are buying into the strategy,” said Kos, who noted that prospects for further quantitative easing have depreciated the dollar without a rise in Treasury yields that foreign investors typically demand to compensate for currency risk. “You worry that at some point they don’t. A loss of credibility in central banking is really difficult to recover from.”
As Bell Labs engineers learned long ago how to separate the "Signal" from the "Noise" hence SDT Signal Detection Theory; as discussed on Charlie Rose recently.
When the Fed has to reveal - as it should - the parties and amounts of support extended to banks in a certain Federal Reserve district east of the Hudson - THEN - the you know what will hit the fan; also as it should.
I and many others were born at night but not last night. Think the creditors / owners of US Treasuries are NOT watching and waiting? Think they are NOT already long PAST the reality that the US is addicted to, reliant upon imports; think they are NOT reducing reliance upon US? Think they are not quickly selling higher value added products and THEN services?
Think there is any question; they know where they're going?
China, foremost among all others has like its many other endeavors, lifted the first page out of GE's playbook; either be #1 or #2 in the market or get out. China WILL be #1 or #2 in ANY market it chooses to pursue; they have all the advantages. They have "capitalism" on there side too; how's that? If the US engages in protectionism, China can rightly claim hypocrisy.
The Fed's NOISE is getting in the way, officially DIS-INTERMEDIATION, of NATURAL economic forces is a ruse, more like rouge on (for) the "financial sector" which the Chinese and many others KNOW; it's only a matter of time before they act as any rational actor; find substitutes.
SAID MORE CLEARLY - ONLY WHEN THE FED STOPS DISCONNECTING THE ECONOMY (INNOVATION, JOB TRAINING, JOBS = OPPORTUNITY) FROM THE FINANCIAL SECTOR (FED WELFARE RECIPIENTS) AND CERTAIN SECURITIES; MARKETS WILL RETURN - UNTIL THEN HEADING and STAYING SOUTH FOR THE WINTER.
It is undeniable, when the Fed acquired you know what of nearly $2T of "securities" directly from certain financial institutions on and off balance sheets entities the Fed simply transferred the credit and valuation problem onto its own balance sheet. The reality of the problem did NOT go away.
And when, not if, the Fed, encounters the same problem, the inability to roll over debt, the same problem which CAUSED the September 2008 "panic" the Fed will hopefully have learned the ultimate lesson, and be forced to let financial markets function as they should - find liquidating values.
Come on - give me a break. Ending the siesta on the Taxpayers' dime - one easy to read blog at a time.
NOT MY FIRST RODEO.
Since 2004, my office issued annual, 1 page FiduciaryALERTS™. It’s not about me being right or lucky because I’m half Irish – its about recognizing the obvious. For instance, July 2008's “Denial of Twin-flation™ is not a prudent investment strategy” Copies available.
Chris aka McFid* * Since 2003, when you need to know exactly what a BFD looks like. Call McFid, the Fiduciary Expert. (BFD means breach of fiduciary duty.)
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