Replies to post #25776 on FinancialAdvisor's College Class (FACC)

[flota]

I hear you, but there is a chance of deflation, because at some point the printing press will run out of ink or should I say zeros.

There will be deflation in the future and if it happens the Fed will not be able to stop the next one with already insane balance sheet.

Lets see Japan has been printing for the last 15 years and that hasn't helped. Just check Japan's public debt liability.

[flota]

Well, let say we get a bond bubble or we are already in one and the money will take a flight-to-liquidity. Then you will have another stock market bubble? Additionally you will get emerging economies currency bubble.

The velocity of money that is being lost when things go south cannot be reprinted by any central bank.


This QE is not good for the middle class as this will lead to increase costs in food, gas, prescription drugs and you can go on and on.

I will suspect we will see another recession soon and when that happens the Fed will be helpless. Bottom line corporations are not spending, they are using the cheap rates to refinance their debt. The only place that meaningful number of jobs can be created is small business and these guys are having a hard time surviving in this economy and borrowing money.

[flota]

"zero chance of deflation"

There is always a chance as many economic theories that were used in real life went up in flames in relatively short period of time.

Fed can print, but the public is unwilling to spend and they will continue to pay down their revolving debt in my opinion. This is the age of frugality.

[flota]

Check out this article is a pretty good read.

http://www.cibmagazine.com.cn/Columnists/Andy_Xie.asp?id=1442&to_hell_through_qe.html