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QE Appears to Work Until It's Obvious it Never Did

drfredc Wrote: Apr 11, 2012 4:34 AM
If one looks at QE as a black economic box and tries to explain what it's supposed to be doing, one may find the more plausible notions is QE is all about adding some price to the underground economy to make it roughly on par with it's value if above ground, then 'taxing' it (by the QE amount) and instead of giving that revenue to Congress to waste, the Feds give it to the banks to spread around. As such, it's perhaps not as inflationary and economically damaging as one might otherwise think.

Lollipops and Tantrums

The Fed is much like a rotten mother who throws her spoiled brat a lollipop as a reward for a temper tantrum says John Hussman in yet another excellent missive: Is the Fed Promoting Recovery or Desperation?

On Friday, the Department of Labor reported that March non-farm payrolls increased by 120,000, falling well short of consensus expectations in excess of 200,000. For our part, we continue to expect a deterioration in observable economic variables, with weakness that emerges gradually and then accelerates toward mid-year. On the payroll front, our present expectation is that April job creation...

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