The markets would prefer to see an Operation Shock and Awe than an Operation Twist. After all, this economy is going nowhere and there is Europe, again. Well, in terms of monetary easing, we can’t say that the Fed is sitting on its hands because the money supply is still growing at an annual rate of 23% – so there is plenty of QE going on. It is what’s needed to prevent the system from collapsing.
So what is a central banker to do? Operation Twist? Buying longer term bonds, reducing the yield curve by .oooo5%? Won’t do much in reality. …Read More