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Originally Posted by Faust
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That story doesn't even mention that those ETFs include junk bonds, which is just one more little snippet of crazy in the story of the Fed over the last several years.
The Fed is holding the American economy together with pieces of string while pumping vast amounts of cash into corporate pockets. It's mind blowing, and it's a death cycle for the dollar standard. And it's not just creating vast amounts in the US market, but the credit swaps that saved the dollar from deflation a couple of months back are producing vast amounts in the global supply when multiplied through fractional reserves.
The dollar standard may not crash right away, but the implications of this mess will extend well into the future regardless of who wins in November.
Average Americans have no idea how badly they're getting ####ed right now either, but the IBs and hedge funds know the deal, so they're not going to hold onto what are becoming bad investments in the real economy when they can cut those losses and profiteer on the chaos.
The stock market is a mirage. Tax breaks that allowed buybacks, the repo market in the fall, now the stimulus packages and Fed buying corporate debt keep the markets headed up even as projected EPS is in a nosedive. Reality and the market parted ways a while ago, and the Fed's current action is just a part of the story.