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Subject:  Re: Rewarding bad behavior... Date:  12/13/2012  12:47 PM
Author:  Rimpynths Number:  411202 of 536610

notehound wrote:
If the Fed were going to announce something that would be beneficial (long term), the Fed should have said "we will stop buying Treasurys on June 1, 2013, unless before then the Congress can come up with a fiscal deal that will balance the budget within 10 years." That might have started some serious fiscal adjustments.

I think that many of the Fed's policies of having the opposite of the intended effect and that they would improve the situation with tighter instead of looser policies.

For example, I know that I would like to buy a bigger house sometime in the next couple of years and I've been saving up a down payment. Because the Fed has explicitly said that they will keep rates low until 2015, I'm in no rush to find a house because I know cheap loans will still be available in 2014. If I thought that the Fed might start raising rates next year, I would set a goal of finding a house in the first half of 2013. Instead, I'm putting off that decision until 2014 and I'm going to keep saving up more money in the meantime.

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