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No FED Taper Expected This Week

Written by Gary North on October 28, 2013

The experts predicted a taper for six weeks ago. They had predicted this all summer. I kept saying it would not happen. It didn’t. The experts then expressed surprise. Silly experts.

The FED is now trapped. It will continue to inflate at $1 trillion a year. If it doesn’t, we will get a replay of 2008. Some experts are now coming around on this.

The bubbles are expanding once again. So is debt. A Reuters story reports:

When he was chief economist at the Bank for International Settlements, Bill White issued a series of prescient pre-crisis warnings of bubbles and imbalances that were building up in the global economy. He was politely ignored.

White worries that policy makers are not learning the lessons. It will be harder to return to strong, sustainable growth because fiscal and monetary stimulus is storing up medium-term difficulties, he told a London audience last week.

“Not least of them is that the very easy monetary conditions that we’ve seen since the crisis have basically impeded the process of de-leveraging,” White said.

In the Group of 20 leading economies, government, household and corporate debt is now 30 percent greater than it was before the crisis, he said, citing BIS figures.

“We haven’t actually dealt yet with the problems of the advanced market economies and in addition, with the crisis having spread to the emerging market economies, we now have a problem that is bigger than before,” White said.

The FED’s Keynesian economists think the FED can do this indefinitely without negative feedback. They do not understand the Austrian theory of the business cycle. They do not understand that central bank monetary inflation creates huge distortions in the capital markets. Bernanke found out in 2008, as Austrian analysts said he would. He responded by inflating on a scale never seen before in American history.

Yellen will inherit this economy. She is more of an inflationist than he is.

Continue Reading on in.reuters.com

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2 thoughts on “No FED Taper Expected This Week

  1. While both Bernanke and Yellen are wrong-headed, i.e. Keynesian, they are not stupid. They know that they have a tiger by the tail. They do not dare make any changes until after the next election for fear of harming Democrat chances. After the election, all bets are off. No one will care. If they do nothing, there will eventually be a financial explosion with their names attached to it, so I seriously believe we will see the start of tapering at the end of 2014. See my blog at http://cranky-conservative.blogspot.com

  2. 1baronrichsnot1 says:

    We haven't dealt with anything, except gay agenda in the military, weaken the military, pass a very expensive do nothing health care bill and law, not enforce laws, destroy the dollar, add more debt, and feed the 12 reserve banks, which feeds the stock market, destroy the good healthcare system we had, finance muslim wars, prop up non productive people, increase and spend more on all social programs, piss off our allies, eavesdrop on americans, hire more gov't workers (IRS) to harass us, give epa more power bypassing legislation, give HSA more power and eavesdrop more with the power of arrest, travel and vacation, grow food stamp program, assist in the loss of jobs to part time, etc. Which of these programs are supposed to bring the economy out of the doldrums, create instead of lose jobs!