Zeev's Turnips Patch-No Politics (ZEEV)

[ogm]

I think Feds are very concerned. Thats why we have rethoric about "conundrum" and "economy in unexplored territory".

they saved one bubble by creating another. And they know it.
Theproblems are deeper and bigger then expected and are now threatening economy even more then Nasdaq 5000.

So they are scratching their heads with an obvious question ... Now what ?

Any increase in liquidity goes straight into inflation. Andany decrease in liquidity threatens the economy. catch 22.

I think the obvious would be to take a harsh medicine as soon as possible, but it might be too late for that.

So they'll probably keep moving slowly, by pressuring lending standards and interest rates. And draining liquidity very slowly.

They drained for a while in the beggining of the year, and spooked the market. so they pumped a lot back in to calm them down. Now they seem to be slowly draining again.

At least I think thats their plan. We'll see how it works out, but the adjustment of the imbalances one way or another is inevitable.