Markets Will Implode On Full Taper
Jeff Nielson: After five years of (empty) promises; this is it? Today, to the thunderous applause of the Corporate Media, the Federal Reserve announced what is being called “modest tapering”. However, to appreciate how truly trivial and token was the “tapering” announced today requires first stepping back, and recalling what Big-Talk Bernanke was saying five years ago:
…he promised to quickly unwind massive Fed lending programs when the economy improves, so they don’t stoke inflation.
However, after five years of a (supposed) U.S. economic recovery, instead of “quickly unwinding” this reckless money-printing (and 0% interest rate) with the Exit Strategy that Bernanke promised the world again and again; he has tripled his money-printing.
Now, today, after tripling what he promised to “quickly unwind” five years ago; B.S. Bernanke is taking bows because he has reduced one portion of this money-printing (the visible portion) by 10%. But with the Federal Reserve continuing to conceal all of its “lending activities” (among other things); today’s sleight-of-hand is nothing more than another clumsy performance by a Cheap Magician.
For any adults in the audience; B.S. Bernanke has no credibility: promising one thing, doing the opposite, year after year. For today’s announcement of (supposed) “tapering” to possess any legitimacy, this would require that the Cheap Magician show us what he is doing with both of his hands.
Understand that the exponential, out-of-control explosion in the monetary base of the United States (indicated in the previous chart) is a “two-fisted” operation. One hand gives out “quantitative easing” sugar-plums to Wall Street at a nominal rate of $1 trillion per year. Meanwhile; the other hand dishes out an equally sweet treat: (supposed) “0% loans”, funneled into the vaults of Wall Street at an undisclosed rate.