By Douglas V. Gibbs
Quantitative Easing is a temporary fix. Keynesian economics only props up economies for so long before the spending becomes too much, and it all falls apart. Flooding money into the system may keep all from falling apart for a short moment, but it devalues the currency, and simply pushes the inevitability of collapse down the road. In other words, stop spending and go through the lighter pain of fixing it through fiscal responsibility now, or keep spending, and make the pain worse down the road, and possibly cause complete collapse.
This is why the markets gained yesterday - the market thought there would be another stimulus. Someone leaked to the investors that QE3 was on the horizon. Today, they discovered that was not the case. After it was all over, the market plunged today 520 points.
The federal government manipulates at a whim, and the insanity has finally reached a tipping point.
They are trying to fend off disaster by at least holding the interest rates at practically zero past the next election, while somehow not spending at the maddening rate we have been for the last couple years. That way, they think everything won't fall apart before they can get ol' big ears back in the White House.
But the big thing the market wanted they didn't get. They wanted QE3 just so they could stay afloat until the need for the next fix arose again. They didn't get it. Boom, big drop.
Then there is Goldman Sachs. They are the ones that said a third round of quantitative easing from the Fed was likely. Now, it turns out, they were wrong. They need investors crowding the market, and their announcement did that yesterday - the investors were looking for bargains in a low market - Goldman Sachs makes money when people enter the market. They made it look like QE3 was coming, but then when the mistake was exposed today, we dropped.
The Dow realized they had been had by Goldman Sachs, but it was too late.
It'll be interesting what will happen tomorrow with the market. Dropping below 10,000 may be coming up soon. The liberal Democrats are panicking. This is not what was supposed to happen. On paper their liberal policies worked. But in real application, as has happened so many times before, their policies failed.
Liberalism fails whenever it is tried.
-- Political Pistachio Conservative News and Commentary
Goldman says QE3 likely after dovish Fed statement - Yahoo News
Stocks plunge as attention returns to weak economy - Christian Science Monitor
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