insideoil

Shrinking Market Liquidity, or the Soon to Appear Black Swan of Black Swans

As long as they keep getting paid to take the bets and are covered for the losses, they will keep on betting till they make lots of money to have "profits" they do not have to give back.
If the added liquidity pumps the market, the government program will be seen as a success.
As you rightly point out this is nothing more than a clever scheme backed with tax payers money designed to force you to spend money and/or lose it through inflation. An investment nightmare for "buy and hold" and now a nightmare for traders as well. The game of the last 10 years has to be paid for, and there is no cheap escape, but there will be winners and a lot more losers. I think now the game is up, and unless main street starts showing some benefit - as in real money, real value creation, with real people to offer investors - we are all doomed to paying the price of past follies. Even the trick of getting somebody else to pay is simply not working any more as the "smart" money can smell the manipulation and are simply abandoning the game. Maybe its time to play in 3rd world markets that are not quite so sophisticated, or in physical commodities that are less easy to game.