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Investment Analysis Clubs / Macro Economic Trends and Risks


Subject:  Re: Which Central Bank Will Blink Date:  4/2/2013  5:58 PM
Author:  notehound Number:  419544 of 578766

None of them blink until they are forced to do so.

Since they're all backward-looking in their decision making, they always, always, always either change their policies way past when due or, alternatively, maintain their existing policies for far too long.

I expect that the Fed will stop printing money, buying mortgages and flooding Wall Street with free liquidity about the time Ben Bernanke's limo driver pulls up to a gas station and, because the price has increased overnight to $25.00 per gallon, he turns around and asks Ben if he can spot him the extra cash.

At that point, the good doctor will put it on his calendar to discuss the possibility of tapering off Quantitative Easing at the next Fed meeting or possibly sometime shortly thereafter.

As Greenspan said: "No one could have forseen the real estate bubble," and as Bernanke said: "The subprime problem is contained."

My cat is more forward-looking and proactive than these people.

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