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  • The Fed's "2016" Problem

    From zerohedge.com

    As JPM's Michael Feroli notes, the September FOMC Taper announcement (which certainly isn't assured, although if the Fed does not taper, it will end up monetizing 0.4%-0.5% of the total private TSY stock per week before year end) may just be a sideshow to a previously undiscussed main event: the Fed's first forecast of 2016 interest rates. Quote Feroli: "The problem is that at the end of 2016 [the FOMC's] economic forecasts may well show an economy that is close to full employment and price stability. Normally in that situation one would expect the fed funds rate to be close to neutral—which is somewhere close to ... (full story)

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  • Comment #1
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  • Sep 17, 2013 6:15am Sep 17, 2013 6:15am
  •  Guest
  • | IP XX.XX.20.210
First there has to be a recovery that is real.
So far it is an illusion event.
To predict what may or may not be in 2016 when the Fed can not even decide what it will release as policy on Wed. is an exercise in _______(fill in the blank)
The US must need shrug off the fantasy that Governmental intervention is the source of prosperity. Once the Dogma gets understood as delusion then maybe the US can address the issue that it is ideas and capital invested that creates Jobs and not a bunch of politicians redistributing the wealth of the Nation.

Since the mass media is so protective of the delusion and proclaim delusion as reality to protect the dogma of Big Government, the US will endure a shakeout, until reality overthrows the delusion.
 
 
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  • Sep 17, 2013 8:31am Sep 17, 2013 8:31am
  •  Puritan
  • | Joined Mar 2011 | Status: Member | 72 Comments
Yes, but how do we generate jobs when the government is doing everything it can to discourage any and all who are in business? For example, how great is the impact of ObamaCare?

The law of unintended consequences looms large in the sky. The more the government tries redistribute the wealth the less wealth there will be to redistribute. The more takers we have the fewer the givers until the less implodes (i.e. Greece).

Finally, what wasn't mentioned is the cost of the debt. What are the interest costs at 5% on a debt of 16 Trillion and growing. My theory is that the Feds will keep interest low just to enable the government to survive.
 
 
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  • | IP X.XXX.80.119
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  • Posted: Sep 17, 2013 5:59am
  • Submitted by:
     Newsstand
    Category: Fundamental Analysis
    Comments: 2  /  Views: 1,678
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