When Ben Bernanke announced that the
Federal Reserve's Open Market Committee was going to continue its
monetary expansion program it calls Quantitative Easing, almost everyone
in the financial media was taken by complete surprise. According to the
mainstream media, the non-taper "surprised almost everyone out there."
Well it did not surprise me, nor anyone who had been paying attention to
what I had been saying. As I said repeatedly over the past several
months, the Fed knows that the appearance of economic health would
evaporate if its stimulus were withdrawn, or even diminished.
understands, as the market seems not to, that the current "recovery"
could not survive without the continuation of massive monetary stimulus.
In fact, the Fed's next big move will likely be to increase, rather
than taper, its monthly QE dosage! One reporter on this video said that
its time for the Fed to take the training wheels off the economy.
have been saying for years, QE is not the training wheels, its the only
wheels the economy has. Take it away and the economy stalls. However,
as the economy is now headed toward a cliff, taking the wheels off is
much better than leaving them on and going over that cliff.
For more on how I knew the Fed wouldn't taper, here's an oped I released after the decision was announced http://www.europac.net/commentaries/t...
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