Bernanke Pushes the Button | The Big Picture

Bernanke Pushes the Button | The Big Picture.

  • “The prospect of hundreds of billions of newly minted dollars coursing through the global financial system caused currency traders to thrash the greenback by almost 3%.”
  • ” The Fed is “now bringing out all the ammo in its arsenal”, according to Rosenberg.”
  • “And, for those who think the time is ripe for upping their equity allocations, Mr. Rosenberg would like to remind them of what happened to buyers of the Nikkei 225 after Quantitative Easing was tried in Japan. Longs were treated to a 20% rally that lasted six weeks before stocks set new lows just four months later. Ultimately, predicts Rosenberg, QE helps bond buyers more than stock buyers.”
  • “But since I doubt dollar holders will sit idly by as the paper they hold shrinks in value, I see a quick and happy resolution as being a low probability event. Then again, other central banks (the BOE & SNB) are engaging in the same currency-busting policies, so it’s not altogether clear whether the world’s fiat currency system can survive a war of attrition.”
  • “We’ve arrived at this unfortunate juncture in our nation’s financial history because of reckless behavior in both New York and Washington D.C.”
  • “Let us all hope the U.S. experiment with pushing the button on Quantitative Easing is more successful for us than it was for the Japanese. But given all the behavior that brought us to this point, we will need to be both lucky and good from this point forward.”

Hard to feel good about nearterm prospects for anything. Betting on volatility seems to be the smartest thing. Holding any asset seems risky.