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Why all this continuing drama on “taper” concerns by the Fed?

June 20, 2013

A week ago I was conversing with an individual who has very important financial responsibilities. This individual did not agree with my assessment of the economy — that the high-flying financial markets were simply a product of massive liquidity. His response was that the Fed saved the day; that their intervention kept us from complete financial calamity.

This gentleman had drunk the Kool-Aid.

According to him, there was no doubt that the current monetary experiment was both necessary and working. Most individuals who have this level of financial involvement or responsibility may feel they have no option but to buy into the Fed riding in on a white horse. Isn’t that the best cover? Group-think led by the master manipulator (Fed Chairman), “It’s all good; they have it under control!”

Financial markets are beginning to figure out that the Fed’s monetary policy hasn’t been the perfect medicine for what ails our economy and that is what’s causing these dramatic swings in the financial markets. So wait until they find out the medicine the Fed has been feeding us is actually arsenic. Then what will happen to the markets?

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