What will happen when or if the fed reserve stops supporting the bond market?

[bojulay]

Will they keep on doing so forever, how can they?

If they stop or slow down will we get hyper inflation?
The collapse or devaluation of the dollar?

Will the stock market take a nose dive?

Am I wrong or isn't a failing bond market what is the
main cause of the financial crisis in Europe?

Seems a much bigger potential problem than any Sequester cuts.

Continued uncontrollable government spending and debt and an ever
weakening economy along with the fed trying to keep the whole thing
afloat, something will eventually have to give.

[joe bloe]

We can't go on artificially propping up the economy much longer. All we're doing is making the eventual collapse more severe. The country is addicted to deficit spending like an alcoholic. Our economy is sick, largely because we have a crippling debt burden. The Democrat's solution to treating the symptoms of the debt is to take on more debt. It's like an alcoholic that treats a bad hangover by drinking more whiskey.

[Guest040616]

Originally Posted by joe bloe

It's like an alcoholic that treats a bad hangover by drinking more whiskey.

Joe the Bloehard, you might as well take another shot of whiskey!

Hopefully, your splittin' headache will soon go away!

[Chica Chaser]

"Paging Mr. SEE to thread 683527"

[Jewish Lawyer]

You know what would be sweet poetic justice? Obama adds 4 trillion more to the deficit, Hillary wins the election, adds trillions more, and the whole house of cards collapses on her watch - time for the I told you so's...

[oden]

Inflation is already here.don't you feel it in gas and food prices. It is time to invest in real assets not bonds or notes. All of you that went through the '80s know what I am talking about.

[Whirlaway]

If by "real assets" you mean farmland, seeds, guns, stockpiles, ammo, there will be no hiding from the destruction that the next collapse will bring; unless you have 40 acres with a well.

The next crash will make the 1980s look like a party..

Obama can then say: "Mission Accomplished"..............

[JD Barleycorn]

The fed is pumping about 85 billion dollars a month into keeping the stock market afloat by printing money. Inflation can be the only result. Yes, your 401K is worth more but the money that you get back is worth less (worthless). If the fed stopped doing what it is doing the stock market would decline for a time and probably rapidly. It would probably stabilize about where it should be....9,000. When the bust comes, and it will, it will decline faster and farther. I predict that Obama will blame it on the GOP too. Poor Hillary, they may have to throw the next election to the GOP just so they can have a republican to blame when the economy blows up.

[Texas Contrarian]

How and when does the Federal Reserve unwind the unprecedented level of monetary policy accommodation?

That's the biggest question in the world of finance today. We're in uncharted territory; no one knows for sure.

Carnegie Mellon economics professor Allan Meltzer is the author of the excellent work A History of the Federal Reserve. Diana Furchtgott-Roth (who is no slouch herself when it comes to understanding the macroeconomy) offers a concise rundown of a few of Meltzer's key points:

http://www.marketwatch.com/story/eas...=home_carousel

Note particularly this excerpt:

Former Treasury Secretary Timothy Geithner believed in taking care of today’s problems today, and letting tomorrow take care of itself.

(end of excerpt)

Got that? It's assumed that tomorrow will "take care of itself." (That's going to be a tough one.)

Of course, much of the idea of ZIRP and quantitative easing (QE) is to reflate the housing market and push money out into risk assets. One important point to remember is that stock prices partly undergird pension funds in both the private and public sector, whose managers have made projections assuming higher rates of return than are realistic in these days of ultra-low bond yields. But monetary policy actions such as these have always been considered emergency measures, not policy prescriptions to be kept in place year after year.

And it's important to note that ultra-easy monetary policy and loose fiscal policy go hand in hand. One enables the other.

We've gotten ourselves in quite a bind. Extrication is going to be very difficult, to say the least.

[bojulay]

Some countries keep their currency exchange rate artificially low to
keep the export of goods up. Sense most of our manufacturing
has moved to other countries what will we have for our economy
to fall back on if the dollar looses a lot of it's value.

Talk about painted into a corner. A much higher cost on imported goods,
little that is exported, and a possible crumbling of the world economy.

I have always thought, so goes America so goes the World.

Especially with such a shaky and interdependent word economy like
the one we have now.

Could it bring about some kind of one world Government, the European
Union is failing, I don't know, could be some big change though.

[joe bloe]

Originally Posted by bojulay

Some countries keep their currency exchange rate artificially low to
keep the export of goods up. Sense most of our manufacturing
has moved to other countries what will we have for our economy
to fall back on if the dollar looses a lot of it's value.

Talk about painted into a corner. A much higher cost on imported goods,
little that is exported, and a possible crumbling of the world economy.

I have always thought, so goes America so goes the World.

Especially with such a shaky and interdependent word economy like
the one we have now.

Could it bring about some kind of one world Government, the European
Union is failing, I don't know, could be some big change though.

I think that's the radical left's ultimate goal. It has been for a long time.

JOHN LENNON
"Imagine"

Imagine there's no heaven
It's easy if you try
No hell below us
Above us only sky
Imagine all the people
Living for today...

Imagine there's no countries
It isn't hard to do
Nothing to kill or die for
And no religion too
Imagine all the people
Living life in peace...

You may say I'm a dreamer
But I'm not the only one
I hope someday you'll join us
And the world will be as one

Imagine no possessions
I wonder if you can
No need for greed or hunger
A brotherhood of man
Imagine all the people
Sharing all the world...

You may say I'm a dreamer
But I'm not the only one
I hope someday you'll join us
And the world will live as one

[SEE3772]

Stone & McCarthy Research Associates: 12/31/2013 The Federal Reserve Will Start Losing Money (Negative Net Interest Margin)

Several Federal Open Market Committee Members Concerned About Risks Of Further Asset Buys

Federal Reserve Gov Jeremy Stein: Banks Could Be Smacked By Bursting Bond Bubble (Bigger Than 2008)

Office Of Debt Management 2013 Q1 Report: In February 2013 The Federal Reserve Will Buy 75% Of New 30 Year Treasury Supply (An Economy Built On An Illusion)

[SEE3772]

Originally Posted by bojulay

Some countries keep their currency exchange rate artificially low to
keep the export of goods up. Sense most of our manufacturing
has moved to other countries what will we have for our economy
to fall back on if the dollar looses a lot of it's value.

Talk about painted into a corner. A much higher cost on imported goods,
little that is exported, and a possible crumbling of the world economy.

http://www.eccie.net/showthread.php?t=671538&highlight=

[CuteOldGuy]