We know that QE has been holding the economy together, or at least the fat cats. Low interest has allowed the government to spend and the big banks to make a massive amount of money by investing in safe treasuries. However, the effects of QE are obvious, worldwide inflation, at least of commodities. Now the Federal Reserve has no one left to buy US bonds except for themselves. They want a bubble of some sort, probably in real estate, in order to stop or pare back QE. The question remains, will they get their securitization bubble or will the Fed need to maintain a really destructive QE in the face of world unrest over commodity price rise? Maybe we need a little deflation in order to lower the cost of living for everyone the world over. Now that we have oil dislocations because of Mideast unrest, it is even more important that we not destroy the dollar and pursue QE forever. Maybe the rich need to take a hit. How that would affect mainstreet is anyone's guess. I hope mainstreet does not fall for another bubble in real estate. People get hurt when this sort of thing happens. It is interesting to try to determine how the US will react to any end of QE, as PIMCO's Bill Gross is fleeing US bonds, fearing the worst. So my question at Business Insider is: When will QE end and Securitization of easy money loans begin again? Maybe you could join in and help answer these questions.
Post Your Predictions. When Will QE End and Securitization Begin?