Quantitative Easing: The New American 'High'
Is there anybody in there?
Just nod if you can hear me
Is there anyone home? (Comfortably Numb – Pink Floyd)
The stock market has now reached a place where no market has gone before and yet very few Americans understand the level of Federal Intervention that has gotten us here. We are being “eased” ladies and gentlemen with waves of “quantitative” cash intended to stimulate spending, lending and investment.
In four Quantitative Easing events since 2008, the Fed has credited its own account to purchase Treasury bonds and bank CD’s to juice Money Markets to record levels. The theory is that a flood of liquidity will encourage lending institutions to give money more freely while also boosting the markets and making us all feel incredibly comfortable and astonishingly numb.
This delusion of prosperity has literally kept the good times rolling and the champagne corks popping on Wall Street where investment bankers are riding high and investors are eagerly embracing a cavalier “eggs in one basket” approach to their retirement and savings accounts.
The Fed knows all too well that markets are driven by cash and confidence and that the rally-hungry populace will slurp up short-term gains with reckless abandon. But they also know ...