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The Bernanke Bust: Shoot Blanks At The Stock Market



September 23, 2013 – Comments (1)

Last Wednesday, Ben Bernanke kept the juice flowing. He did not withdraw any of the $85 billion the Federal Reserve has been printing each month. This shocked the markets, sending stocks sharply higher initially. However, within days of the pop, the stock market finds itself lower than prior to the announcement. Why?

Simply put, the market realizes this is a fight where the Federal Reserve is shooting blanks. Not only does the market need to worry about when the Federal Reserve will remove some of the QE from the market...again, but now the question must be asked whether or not this is just getting silly. After printing almost $4 trillion, what has been accomplished? Is there any real benefit to printing another $85 billion next month, the month after? If no money had ever been printed, would we naturally be seeing a stronger recovery? I for one believe the economic recession would have been harsher, but truly believe we would be in a much more sustainable recovery by now. When you let the economy flush out, the weak hands are removed and the strong survive, thriving. It is just like nature. Yes, it would have been rough, but the recovery now would be much more robust. Instead we have an economy drugged and on life support from the Federal Reserve and their antics. Is it healthy? Hell no!

Major questions should be asked, investigations will eventually be done. Is the Federal Reserve holding onto a strategy that has shown little to no result? One thing is for sure, those of us around in the next 10 years will feel the pain of trillions of Dollars having been printed. The poor and middle  class will feel it sooner.

Gareth Soloway

1 Comments – Post Your Own

#1) On September 23, 2013 at 8:53 PM, awallejr (38.93) wrote:

The market finds itself lower is because it made a higher high and time now to correct.  You have constantly tried to scare people away from this BULL market.  Earnings starting in a couple weeks. 

I suspect you shorted before the taper announcement like many other traders and got caught in a short squeeze when the news wasn't what you guys expected.

My argument found here:

But one argument I do take issue with and something others besides you argued too is that we would have been better off if the FED did nothing and let it all collapse.  We did that once, it was called The Great Depression.

Why would the economy be robust now if we followed your advice?   We could be robust if Congress helped fiscally.  But they wont, not until the Republicans lose the House.  And if the Attorney General would go after all the gerrymandering it could make Congress more representative demographically.

And while we are at it take away this silly rule where people no longer need to filibuster in order to filibuster.  We've basically changed the Constitution  by changing majority rule into 60% rule.  Personally I would challenge the Constitutionality since the new rule in effect "amended" the Constitution without following the Constitution.  I don't know why the ACLU doesn't try to challenge it.  I would, but health precludes me from being slammed with paperwork.

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