Sedating the Quantitative Easing Monster
Posted by Larry Doyle on September 19, 2013 9:04 AM |
At what point does a patient become addicted to medication so that a subsequent malady is potentially as bad if not worse than the original condition the prescribing doctor was trying to treat?
How disturbing is it to learn of individuals strung out on pain medication or more specifically methadone to treat a debilitating condition or drug habit?
In a very similar fashion, our resident medic, that being Fed chair Ben Bernanke, found himself boxed in by our patient, supposedly our economy but really our markets, that had begun to convulse and palpitate when word that its QE medication was going to be lessened.
Truth be told, the real patient is our US economy and it is not receiving the necessary medication in the form of meaningful tax and entitlement reforms, fiscal prudence in Washington, real regulatory reform addressing the crony capitalism inhibiting our entrepreneurial spirit and more.
So what are we left with? The ongoing application of a monetary sedative defined as quantitative easing that going on 5 years has done little more than mask the real issues that are slowly but surely killing our patient.
While another QE fix may provide a short term high, is there really any doubt that the pain of withdrawal may very likely be too much for the patient to handle?
Please pre-order a copy of my book, In Bed with Wall Street: The Conspiracy Crippling Our Global Economy, that will be published by Palgrave Macmillan on January 7, 2014.
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I have no business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.