Sunday, October 25, 2020

Tag: USFed: Infinite QE Forever at Zero Bound – Jim Willie

USFed: Infinite QE Forever at Zero Bound – Jim Willie

by Jim Willie, Gold Seek:

The widespread profound and recognized global recession, complete with numerous icon corporate failures, will lead the US Federal Reserve to return to unlimited Quantitative Easing with a Zero Percent chaser. The Jackass calls it a return to Infinite QE Forever at the Zero Bound. Not only is the double step of return to QE with a sequence of interest rate cuts urgently necessary, but the financial markets are demanding it. In fact, they are holding the USFed hostage, as the venerable august body is backed into a policy corner. This time seems different. For ten years, the USFed has relied upon coordinated policy with the Euro Central Bank, having used all the most extreme measures, yet has a systemic failure on its hands. Witness extreme monetary policy failure. The systemic failure is both financial and economic. The bond purchase program wrecked the bond market by driving away legitimate investors, while the ultra-low interest rates wrecked the economy by distorting asset allocation. The central bank is backed into a corner like never before. Their tightening procedure over the last three years is a monumental dismal failure. They cannot return to normalcy. In fact, quite the opposite. They must resort to permanent hyper monetary inflation. They must return to Infinite QE Forever. They must also move the interest rate toward the zero bound. Who knows? If they charge a small fee with negative bond yields in dozens of nations for sovereign bonds, maybe these master idiots at the controls will pay us to borrow money. They urgently need the participants within the economy to get busy, to conduct business, and to pay taxes.