In practice, the only option for Bernanke is to press on with his QEs. Actually, he needs to accelerate it and gain traction, other wise it will be a huge disaster. Independently of how I see it, conceptually, it´s really like the too-big-to fail situation. Just can´t let it reverse.

There is no way out, Bernanke will have to press on with QEs for a long time. That means a much higher stockmarket, even though it´s artificial and so on. I think we will end up dislocating the curve of nominal prices in the economy to a way higher level. Notice that i´m not defending the Fed´s policy, just saying what...more

They figured the magic formula to make everyone rich, just print money until everybody have lots of it, starting by banks and billionaires...

If Bernanke keeps pumping up fake money into the economy, the rally may go on to very surreal levels and, at a certain point, there will be a sudden explosion of inflation. One may say that right now there is no inflation, which is a questionable statement, but, anyway, there isn´t rampant inflation so far. However, it...more

ref. psychedout: I agree, this is the objective of Japan and Europe. And it was also one of the objectives of the US with all the QEs. There is a competition to devalue currencies and the fact that the US dollar has been appreciating lately may lead to a loss of US jobs. Even though it´s too early to say that that´s th...more

I think it´s also because of weakness abroad, the dollar has been appreciating against the yen and the euro lately and it makes imports cheaper. At the same time, if this new tendency persists, job creation will suffer and recent gains may be reversed some.

There is too much leverage.On junk bonds being "overpriced for the return" but "not carrying as much risk for default", it just doesn´t make any sense....

The way things are now, we´re going to see a repeat of the subprime crisis pretty soon. And also banks going under because of excessive risk-taking, as even Bernanke has already started to realize. Junk bonds are being bought at ridiculously low yields and stocks are being bought on margins by a lot of players. The Fed...more

The Fed has recreated conditions for another subprime crisis, also involving junk bonds. Real estate prices are climbing again and the search for yields has turned junk bonds attractive at ridiculously low yields. Bernanke is starting to realize it and has recently mentioned the risks, but is so far inactive as he was ...more