{"id":395991,"date":"2019-02-16T22:09:16","date_gmt":"2019-02-16T21:09:16","guid":{"rendered":"http:\/\/rinf.com\/alt-news\/newswire\/what-happens-when-more-qe\/"},"modified":"2019-02-16T22:09:16","modified_gmt":"2019-02-16T21:09:16","slug":"what-happens-when-more-qe","status":"publish","type":"post","link":"http:\/\/rinf.com\/alt-news\/newswire\/what-happens-when-more-qe\/","title":{"rendered":"What Happens When More QE"},"content":{"rendered":"
\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t \t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/p>\n

The smart money is liquidating assets, paying off debt and moving capital into collateral that isn\u2019t impaired by debt or speculative valuations.<\/i><\/p>\n

The Federal Reserve\u2019s sudden return to \u201caccommodative\u201d dovishness in response to the stock market\u2019s swoon telegraphs its intent to fire up QE once the recession kicks into gear.<\/b>\u00a0QE (quantitative easing) are monetary policies designed to ease borrowing and the issuance of credit, and to prop up assets such as stocks and real estate.<\/p>\n

The basic idea is that the Fed creates currency out of thin air and uses the new money to buy Treasury bonds and other assets. This injects fresh money into the financial system and lowers the yield on Treasury bonds, as the Fed will buy bonds at near-zero yield or even less than zero in pursuit of its policy goals of goosing assets higher and increasing borrowing\/spending.
\n\"\"<\/a><\/span><\/span>
\nGet a Job, Build a Rea…<\/a><\/span><\/span>
\nCharles Hugh Smith<\/span>
\nCheck Amazon for Pricing.<\/span><\/span>
\n<\/a><\/span>
\n<\/span><\/p>\n

This is pretty much the Fed\u2019s only lever, and it pulls this lever at any sign of weakness in stocks or the economy.<\/b>\u00a0That sets up an obvious question that few seem to ask:\u00a0what happens when QE fails?<\/b>\u00a0What happens when the Fed launches QE and stocks fall as punters realize the rally is over? What happens when lowering interest rates doesn\u2019t spark more borrowing?<\/p>\n

What happens is the smart money sells everything that isn\u2019t nailed down<\/b>, a process that is arguably already well underway.<\/p>\n

Why sell assets when QE has guaranteed gains in the past? Answer: exhaustion.<\/b>\u00a0There are limits to everything financial, and once those limits are reached, no amount of goosing will push the limits higher. Rather, further goosing only increases the fragility and vulnerability of the system.<\/p>\n


\n\"\"<\/a><\/span><\/span>
\nMoney and Work Unchained<\/a><\/span><\/span>
\nCharles…<\/span><\/span><\/p>\n<\/div>\n

Read more<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The smart money is liquidating assets, paying off debt and moving capital into collateral that isn\u2019t impaired by debt or speculative valuations. The Federal Reserve\u2019s sudden return to \u201caccommodative\u201d dovishness in response to the stock market\u2019s swoon telegraphs its intent to fire up QE once the recession kicks into gear.\u00a0QE (quantitative easing) are monetary policies […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[519],"tags":[],"class_list":{"0":"post-395991","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-newswire"},"_links":{"self":[{"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/posts\/395991","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/comments?post=395991"}],"version-history":[{"count":0,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/posts\/395991\/revisions"}],"wp:attachment":[{"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/media?parent=395991"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/categories?post=395991"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/tags?post=395991"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}