Why talk of Fed “tapering” is just talk

Investors expect the Fed to begin reducing QE as early as this summer. However, whether or not the Fed follows through on “tapering” largely depends on whether the US economy can stand on its own two feet without support from the central bank? Our view is that it cannot and this article examines why that’s the case and why talk of “tapering” is just talk.

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Universities’ endowment funds dump Treasuries

Last week, Ben Bernanke made a speech in which he warned that a long period of low interest rates could lead to asset price bubbles and a new financial crash. Bernanke is worried about another banking crisis or another bubble caused by bank lending while low interest rates and Fed manipulations have already led to a new bubble. It’s in US Treasuries.

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This will end badly but not yet

Since the onset of the global financial crisis governments and central banks have been attempting to bring about economic prosperity by creating money and pushing it out into the global economy. After almost six years however, they have failed to produce a lasting recovery, or indeed anything close.

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The case against deflation

Regular readers will know I am in the inflation, possibly hyperinflation camp; but there are those that think the future is more likely to be deflationary. In the main this is the view of neoclassical economists, Keynesians and monetarists, who generally foresee a 1930s-style slump unless the economy is stimulated out of it.

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