long end of the curve?, page-23

k8sy, "What do central banks do in an inflationary environment."

this has been canvassed before but Ben B has to choices:

go too early or

go too late.

The figure to watch is the inflation gauge. The worst fear, and why QE was used in the first place, is deflation taking a grip of the US economy.

That effects everyone because it is the world's largest economy.

When figures are published on the US economy we are watching an attempt by the FED to counterweight deflation with inflation.

Look at Japan's last miserable 20 years.

Sure monetary policy works well against inflation and if there is inflation in the US it is the lesser of two evils.

However I am NOT convinced that QE is working. Ben B and his mates at the BoE are playing ghosts with the markets trying to scare and spook.

Rising interest rates would kill off the EZ peripherals, stone dead.

The FED's fight against deflation has a long way to go.