This page has been archived and commenting is disabled.
What Can the Fed Do to Save the Markets This Time?
Throughout the last six years, whenever stocks began to collapse, some Fed official emerged to dangle some new monetary policy (usually more ZIRP or QE) as an incentive to get investors back into the market.
If these verbal interventions didn’t work and the markets cratered, breaking through key support, the Fed implement a new monetary policy.
The most obvious examples of this occurred with QE 2 in 2010 and Operation Twist in 2011: both policies were unveiled when stocks took out the critical 12-month moving average and we at risk of re-entering a bear market.
The August 2015 sell-off has once again brought stocks below this critical line. Right now the markets are rallying to retest this line, but the question remains… what can the Fed do to ignite another major rally in stocks as opposed to a dead cat bounce?
With interest rates already at zero, and negative rates politically unsavory, the Fed cannot cut rates today. So this leaves another QE program or Operation Twist as options.
Or does it?
Unfortunately for the Fed, more and more research has gone public revealing that QE didn’t actually boost the economy in any meaningful way. On top of this, more and more media outlets have picked up the message that the Fed’s policies, specifically QE, have increased wealth inequality.
How Federal Reserve Quantitative Easing Expanded Wealth Inequality (Forbes May 2015).
Fed Policy May Have Widened America’s Wealth Inequality, Philadelphia Fed Paper Says (Wall Street Journal June 2015)
The Federal Reserve and inequality (Washington Post June 2015).
The US within 13 months of a Presidential election. And wealth inequality has become one of the big topics for the 2016 race. With the Fed’s policies now openly being associated with wealth inequality, the bar for another QE program has been set unbelievably high.
The next round of the Crisis beckons. And this time around, the Fed’s hands are tied.
If you’ve yet to take action to prepare for the second round of the financial crisis, we offer a FREE investment report Financial Crisis "Round Two" Survival Guide that outlines easy, simple to follow strategies you can use to not only protect your portfolio from a market downturn, but actually produce profits.
You can pick up a FREE copy if you
Best Regards
Phoenix Capital Research
Our FREE daily e-letter: www.gainspainscapital.com
- advertisements -
Markit (formerly known as CDS Indexco) still headed by founder Lance Uggla and Bradford Levy has grown exponentially since their days as a Canadian bond pricing service division of a bank. They were the tools (indeed the smoking gun) behind the controlled collapse of the mortgage market in 2007-2009.
Want proof?
http://www.zerohedge.com/news/2015-10-01/wall-street-banks-admit-they-ri...
Nada.
Well, price controls and all that Nazi shit, but good luck having a civil country if they try that.
Yup this rally looks like PPT on steroids. The $hit is bananas.
The grammar really sucks. I quit reading.
One does not read Phoenix for grammar, one reads it to know that Grant knows and has saved the last copy of a very informative text...just for you.
Now say sie sie amd wan an.
Fed works 24/7 365 days a week crisis planning OR Fed works bankers Hours with long tee time and parties
Inquiring minds want to know
What's the mystery. They will just do QE but not tell anyone. Buy up everything to prop the prices of stuff so their friends can get out with a profit. What you gonna do? Audit them?
"They will just do QE.."
They will or they are?