Larry Jeddeloh and Bubbles Posted by John on October 14, 2012

Bubbles

An excerpt from Larry Jeddeloh’s October 15, 2012 Market Intelligence Report

So who wins, the Fed or Mr. Market? In the long run, my money would be on Mr.Market. But in the short run, I have been surprised at how long the money printing Fed hasbeen able to keep deflation at bay. The Bernank continues to state there are additional toolsin his tool kit. I believe, along with Lord Turner, they will have less of an effect, unless theFed changes the asset class they target, i.e. they must buy stocks to make stock prices rise. They are already in effect buying houses by purchasing mortgages. That is what I think the next phase probably looks like- QE4 or whatever number it is, will have to look and be different than QE3 or Mr. Market won’t buy it. That’s when the central bank bubble begins to pop.

       Fed Balance Sheet—The Central Bank “Put” in Action

Sources:
Bloomberg News
Treanor, Jill. “FSA Chief Lord Turner Calls For New Ideas to Kickstart Economy” www.Guardian.co.uk 11 October 2012