The results are in. Thank you for your responses. Here are the results:
1) Four people said they have not ended it yet. Have to love the conspiracy theorists.
2) Three people said they ended it because the markets are going to crash anyway. This way they don’t take the blame and can start it up again to show that they have some dry ammo. Maintain the illusion of power.
3) Had no other choice.
4) Ended QE on purpose to fund the government and cause a strong dollar that would attract foreign capital.
5) Give the EU and BOJ a turn.
6) Not working so end it.
7) Ended it to maintain our standard of living.
What is interesting is that no one actually thinks they ended it because the economy is improving. TraderX pointed this out and it is true I don’t know anyone who believes the official story.
I think it was reason 4. They ended it to fund the government and prop up the dollar. Prior to QE ending foreign investment in our debt was plummeting. They had a choice between the stock market and the government. I think I know who they picked.
The other thing that I don’t hear talked about much is the geopolitical aspect of ending QE. As tensions mount with Russia and China a strong dollar hurts these commodity intensive economy’s. Lower commodity prices hurt Russia the most. There will be collateral damage which are the emerging market economies, leveraged speculators, stock markets and junk bond markets. The Fed likely does not directly control the dollar. If they were to do QE 4 they could potentially stop the ascent of the dollar but once the process gets going its hard to stop. Reflexivity will be in action as the dollar goes higher more and more people will be forced to deleverage and that will beget more of the same and it will feed on itself until done. Again this process could go quickly or slowly. Only time will tell.
And yes I have been a few days early on the bounce ending. However, we have made marginal new highs and we are extremely overbought. Be careful out there.
If you enjoy the content at iBankCoin, please follow us on Twitter
Damn fine work! Thank you.
Blue, haven’t capital flows been comingthis way for some time now? Looking at action in the S&P, and high end real estate? Not sure QE was ended for this purpose as flows were already there. Granted this will now increase it even more. Ergo, would your thesis of a correction then be deferred as more cash flows into the only market in the world that can absorb it?
Great topic and thanks for the respectful
replies.
Blue – Conspiracy theories are fun – and, unfortunately, sometimes they prove to be true. May I have my tin foil hat now, please, kind sir. 🙂
Marc,
Thanks
Jimmy two times,
Martin Armstrong says that we could get a blow off top as a result of capital flows. however he hedges on his blog. He was bullish, then bearish, now bullish now may be getting bearish. But before QE ended we were seeing a major decrease in the purchases of treasuries by foreigners.
Cat,
I meant it in jest. “the term conspiracy theory is code for an uncomfortable truth.” Gore Vidal
Gorby,
Thanks
I think that decades from now, we will learn or realize that the last 7-8 years plus the next 3-4 were a time of intense economical warfare on a global scale. Many realize that now but I do not think the magnitude of what has transpired is fully appreciated yet. It may never be, due to the fact that knowledge of them would destroy faith in fiat currency.
………(backed by the full faith and credit of the US government…….that kind of BS,,,,,,