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Steven Hansen
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Steven Hansen is an international business and industrial consultant specializing in turning around troubled business units; consults to governments to optimize process flows; and provides economic indicator analysis based on unadjusted data and process limitations.
My company:
Econintersect LLC
My blog:
Global Economic Intersect
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  • Michael Clark
    , contributor
    Comments (9220) | Send Message
     
    So, if the Fed stops QE, the dollar rises, and the asset bubbles finally really pop and we get back to Ground Zero where we can perhaps begin a real recovery and an organic growth again.

     

    So why does the Fed HAVE TO continue QE? Just to keep driving the dollar down and keep stocks and commodities and housing prices artificially inflated.

     

    Japan tried the government bond-buying scheme and then QE also. It didn't work. Their stock market is down 88% from the Housing Bubble Top in 1989. Why do we need to keep following Japan?

     

    I'm not suggesting any of this is going to be easy or painless. Pain is GUARANTEED. When you take out massive debt you are guaranteed massive pain. So, there is no easy way out. We let the dollar be strong, and deflate all the false prices in the market, all the bubbles cheap money created -- or we pretend that QE 'is working' for the next thirty years, like Japan.

     

    The Austrians understood this:

     

    “There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.”
    Ludwig Von Mies

     

    Do we let the Fed murder our dollar in order to not have pain today but to have pain and a slow death over a longer period of time. Rome killed its currency and that was the end of the empire.
    15 Dec 2012, 11:56 PM Reply Like
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