The FED has turned on the green light and set it to high for us, Pavlov’s Dogs. We know that there will be no end to the closed loop of liquidity provided by our very own Uncle Ben. It means that printing will not end.
No scenario, no eventual outcome will change the unending need to bring about another bubble. Only another big, fat bubble will give Central Banks their exit. The other option is that time will heal all wounds. But time brings a multitude of variables that cannot be controlled by the printing of money.
You will hear the gold bugs giggle with glee and the long-only stock market speculators breath a sigh of relief as the indices move ever higher. Also, every long-term Government Bond will soon be at 1%, so there are more gains coming in the bond market.
Mark my word, yields will be at zero percent until at least 2020. Maybe through our lifetimes. And a pullback won’t come until we break above last years highs at SPX 1370 or so, Joe Granville be damned.
It has taken three years and trillions of dollars for the FED to buy this mindset. Mission Accomplished.
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Question is will you still be bearish equities until 2020? When you throw in the bear towel, I sell. ROAR
I continue to rail against the manipulation but I still grudgingly buy stuff anyway.
Like in 1999-2000 when you could not “marry” those silly stocks but you had to “date” them or be left in the dust.
Scott, when do you think Ben will peg the long term rate?
next year?
good paper he wrote in 2004, playbook.
The economy is so weak that we will have zero rates till 2014. Must be a good reason to buy buy buy. There has to be some scenario that is bearish for stocks. Time for my daily 40!
The only way to carry these deficits is at -0-% interest. Why so much money stays in those low rage debt instruments is a mystery to me. It will eventually flow into other investments (stocks paying income)
Time takes time. I get tired of waiting for time.
(rage = range)
Watch for the next big thing from the FED to be Nominal Gross Domestic Product (NGDP) targeting which will basically allow them to inflate to infinity. Unlike the QE programs, NGDP targeting does not come with pre determined start and end dates. They will simply ease until their NGDB target rate is reached regardless of the composition of said target, i.e., real vs inflationary growth.