Ranting Andy Hoffman and I connected for our usual Monday discussion. The Fed has adopted a new term for their eventual withdrawal from Quantitative Easing–Tapering. It means absolutely nothing. There’s no specifics for when and if they’re going to reduce bond purchases and so far they haven’t done it yet. Harvey Organ rightly brings up the question, with evey central bank in the world buying back its own debt, who besides the Fed is going to buy US debt? The only one left to buy US debt is the Fed, so they can speak of tapering all they like, but when push comes to shove, they can’t possibly do it. And we talked about the real inflation rate, which is best illustrated by the accompanying chart.
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