Another word for hot money is easy money
After all the money the Fed has created, one would think the masses would say “no mas”, instead they are begging for more. Do you have any idea what kind of effect such huge amounts of hot money will have on the markets for years to come? The naysayers can talk all they want about supply lines being backed up for months or other scenarios that they pull out of their rears. The fact is that the market will eventually discount (if it has not already done so) all those scenarios. Furthermore, these experts are severely downplaying the role of technology. Suddenly a host of businesses are going to see that a lot of personnel can be replaced with AI-based technology without interrupting the flow of goods. Replacing them will improve efficiency on a colossal scale.
Once the markets discount all the bad news, this massive mountain of money is going to flood the system, and it is going to make the Bull Run from 2009 look like Child’s play for the amount of money the Fed has already thrown into this market makes 2008 look like a stroll in the park. Officially we think they will throw north of $5 trillion; unofficially the figure could end up being north of $10 trillion.
Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, said Sunday night on CBS’s “60 Minutes” that “there is an infinite amount of cash in the Federal Reserve. We will do whatever we need to do to make sure there’s enough cash in the banking system.” https://yhoo.it/2JdtRlH
And there you have it, a tacit acknowledgement that forever Q.E. is real and here to stay. When the Fed states they will do whatever it takes, you better believe this statement. Regardless of what the penguins state, the Fed is good to maintain an environment that is conducive to the hot money.
If that is not enough, then this should help you understand just what the Fed is willing to do, and by the way, we stated that they would take this route.
Struggling to illustrate the scale of the measures, T.D. Securities’ Priya Misra was left asking, “What’s bigger than a kitchen sink? “Wells Fargo’s Jay Bryson attempted to answer that question by comparing it to what the Bernanke-led Fed did during the last economic crisis: “The actions taken are breath-taking in their scope. Indeed, these steps surpass in breadth and depth the measures that the Fed created in the midst of the financial crisis a decade ago. If the Fed pulled out a monetary policy ‘bazooka’ during that crisis, then the steps it announced this morning are the central bank equivalent of ‘going nuclear.’ “ https://yhoo.it/3bqrmIT
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