An article a few weeks back titled "QE3 will just keep the lights on" is very apropos to this discussion. The efficacy of these policies will continue to deteriorate as time goes on. We've already reached the sort of upper boundaries as far as political pressure is concerned (in a quasi stagflationary environment). The balance of trying to keep the TBTF's solvent while not producing runaway commodity inflation is a damn near impossible task. It also doesn't help the cause that it does nothing for unemployment while simultaneously putting on full display that the "emperor has no clothes" each and every time there is a "stall" between episodes of QE...
The true "blink" moment will arrive soon enough, when we are on our fourth or fifth round and assets deflate en masse.
Remember, unless you can produce inflation greater than previous inflation, this thing unwinds. Hence, the parabolic amount of deficit spending in the past 2 years just to maintain a perverse semblance of the status quo. Anybody thing it's remotely possible (in this political environment) to do a repeat performance of the past two years of borrowing?
The true "blink" moment will arrive soon enough, when we are on our fourth or fifth round and assets deflate en masse.
Remember, unless you can produce inflation greater than previous inflation, this thing unwinds. Hence, the parabolic amount of deficit spending in the past 2 years just to maintain a perverse semblance of the status quo. Anybody thing it's remotely possible (in this political environment) to do a repeat performance of the past two years of borrowing?
