How to ‘Fed Proof’ Your Wealth
Tuesday, September 24, 2013 15:12
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by Bill Bonner, Daily Reckoning.com.au:
Maybe an economy with falling household incomes is not a good place to own stocks. Maybe an economy that is barely growing doesn’t justify the highest stock prices of all time. And maybe the Federal Reserve’s $85 billion a month bond-buying spree doesn’t work…
Economists, analysts and advisors have been trying to figure out exactly what QE does. The Federal Reserve is adding more than $1 trillion to the monetary base every 12 months. It’s got to have some effect, right?
In theory, it goes into banks’ excess reserves…which, in theory, the banks could lend out at a ratio of 10-to-1…for a total potential increase to the money supply of $20 trillion.
