WEB Notes: This is major news. The only thing that has held up the banks to this point was “QE” which is printing money and giving it to the banks at low interest rates. This has held the economy together for six years. If the economy had been healthy the entire time this policy would have never existed. Now they think the time is right to pull the plug. I am very interested to see what is going to happen. This could be the peak of the market and the start of the down turn. Let’s all keep our eyes open.
With this news I would like to point out how uncertain our banking system really is. Here is an article we posted a few months ago. 5 U.S. Banks Each Have More Than 40 Trillion Dollars In Exposure To Derivatives and Europe is doing no better. 13 Europe banks flunk test, must find 10 billion euros.
(Source: Guardian) – The US Federal Reserve has called time on its $4.5tn bond-buying programme, halting a radical monetary policy introduced nearly six years ago to steer the world’s largest economy through the financial crisis.
The central bank, led by Janet Yellen, said the final tranche of bonds under its quantitative easing programme would be bought this month, but it committed to keeping record low interest rates for “a considerable time”.
Announcing the decision on QE, made at its October policy meeting, the Fed said: “The committee judges that there has been a substantial improvement in the outlook for the labour market since the inception of its current asset purchase programme. Moreover, the committee continues to see sufficient underlying strength in the broader economy to support ongoing progress toward maximum employment in a context of price stability. Accordingly, the committee decided to conclude its asset purchase programme this month.” – Read More – Guardian