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The Bernanke Put Is Real.

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					鈥淓 urasiaTrade 鈥? Alan Greenspan finally surrenders his crown to his successor.
  Depending upon whom you listen to, the US economy is either headed for a
double-dip recession or in the midst of a renaissance for its policymakers 鈥?preferred
(read: easily manipulated) asset values. By 鈥減 referred 鈥? we are talking about
equities, debt and real estate. According to the latter camp, the worst of the financial
crisis is over, the banks have been back-stopped at the expense of the taxpayers and
the equity market is in the throes of a 鈥渟 ecular bull uptrend within a cyclical bear
thingymajig 鈥?
  Analysts at 鈥淓 urasiaTrade 鈥?are rather more circumspect given the conflicting
signals emanating from the US 鈥檚 own Federal Reserve. On the one hand, they say,
Chairman Ben Bernanke has claimed that a double-dip recession in the world 鈥檚
biggest economy is unlikely but, on the other, the Federal Open Market Committee or
FOMC 鈥?the body which meets regularly to set interest rates and effect monetary
policy adjustments 鈥?is busy deciding, for the second consecutive month, on
whether or not to embark on another fresher and presumably larger round of
quantitative easing to help boost a faltering economic recovery.
  Mr. Bernanke recently intimated that the Fed would jump on the 鈥減 rint 鈥?button
鈥渋 f the outlook were to deteriorate significantly 鈥? Well even a cursory glance at
US economic data since he spoke at the Jackson Hole summit two weeks ago would
convince most that his conditions have been met. Whatever time the Federal Reserve
bought itself when it announced that it was to reinvest the proceeds of maturing assets
into the purchase of long-dated treasury bonds has more or less run out and the
markets are demanding more Kool-Aid regardless of what that would mean for the
long-term global economic outlook.
  A 鈥淓 urasiaTrade 鈥?analyst put it less than succinctly; 鈥淚 f the Fed green
lights on fresh QE, not only would it would invite ridicule but it would more than
likely trigger an escalation of the beggar thy neighbor attitude several key economic
powers are so obviously engaged in. Japan will almost certainly jump back into the
markets to suppress the strength of the yen and then, perhaps the Chinese and the
Europeans will join the party 鈥?
  In addition, it would reinforce the mounting suspicion that the Fed 鈥檚 policy
decisions represent nothing more than a safety net for asset prices, investors and the
wealthy. 鈥淓 urasiaTrade 鈥?believes there are a number of ways in which the
investor can protect his or her wealth. One involves the acquisition of precious metals
like gold and silver whilst the other involves the exchange of the sterlings, euros and
US dollars for Canadian or Australian dollars as well as some Asian currencies like
the Thai baht or the Malaysian Ringgit for the more adventurous.

				
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posted:2/12/2011
language:English
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