Federal Reserve to Start "proper" Quantitative Easing (QE) Any Day Now

in #bitcoin4 years ago

Since September of last year, the Federal Reserve has been conducting repo operations to support the unstable banking system. So far they have injected a total of approximately half a trillion dollars to prop up the repo market.

Jerome Powell, head of the fed, has stated that "this is not QE" simply because they are purchasing short-term (12 months or less) treasury bills instead of long-term bonds. However, their balance sheet has been increasing nonetheless.

In the latest FOMC minutes, the fed hinted at starting to purchase coupon bonds (those that pay interest at set intervals), which would mean a return to "traditional" QE - the QE we saw in the early 2010s that we were told would only be temporary until the economy improved.

In this interview, the anchor suggests the balance sheet could increase to over 5 trillion in 2020, but due to the worldwide economic slowdown and contracting manufacturing sector, the balance sheet is likely to grow by an even greater amount.

While the fed cannot admit it, the economy is in terrible shape, and they have started monetizing their debt. Every day more people are waking up to this fact. Awareness will accelerate in 2020 and whether we'll see a selloff off stocks and bonds, or a continued meltup, is still anyone's guess.

But the meltup cannot last forever and eventually we will see a market collapse or significant inflation as all the money creation over the past ten years enters real goods and services. Investors are likely to take refuge in gold, Bitcoin and other cryptocurrencies to preserve their wealth.