I am a catholic conservative and a registered republican (I think). I believe in small government, a balanced budget, and personal responsibility. I am studying austrian economics on my own ( as opposed to the Keynesian model). I reject moral relativism and collectivism. I am an individualist which means I don’t believe in the concept of lgbt/women’s/black/Indian/some minority/poverty rights and unions. I am pro-life. I am Catholic. I believe in the constitution and the America and American values instilled by our founding fathers. I am against all government entitlement systems and the welfare state.
Although many were up in arms when the Fed said it would buy $600 billion in government debt outright for the previous round, QE2, all seems quiet about the magnitude of QE3 because it doesn’t come with huge up-front total price tag. But by year’s end the Fed’s balance sheet could hit $4 trillion.
With no recovery in sight, where’s all this money going? It is creating bubbles. Bubbles in the housing sector, the stock market, and government debt.
The stock market has been hitting record highs for the past two months as investors seek to capitalize on the Fed’s easy money. After all, as long as the Fed keeps the spigot open, nominal profits are there for the taking. But this is a house of cards. Eventually, just like in 2008-2009, the market will discipline the bad actions of the Fed and seek to find the real normal.