from TF Metals Report:
Since The Bernank clearly believes that all’s well that ends well, measure for measure this comedy of errors most certainly should be categorized as a comedy.
So now we get this:
- $85B/month of QE continues. No changes.
- Inflation expectations, which The Fed wants to see at 2.5%, have been ratcheted down to 1% for 2013. This is a Fed “green light” for more QE, not less.
- The fact that the unemployment rate has fallen from 8.1% to 7.6% is a “substantial improvement” due, in large part, to Fed policies. This despite that fact that most of the drop is because the labor force participation rate has fallen to 30-year lows.
- The economy would be growing at 3% instead of 1.5% if it weren’t for “bad fiscal policy”. And these “bad policies” are going to improve soon? Good one.
- The Fed Funds rate will stay at 0% for at least two more years. (Doesn’t that say something about the overall economic condition?)
- IF…and this is a huge, qualified IF…”continued improvement is seen in the economy”, The Fed will begin to reduce asset purchases and end them outright by this time next year.
And it kills me that so many people continue to take this nonsense so seriously. The Bernank offers conjecture, guesswork and hope and the internationally-recognized price of gold drops by over 1%. Stocks plummet and The Pig rallies. Why?
Traders react instantly to the forecast of less economic stimulus by The Fed.
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