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Thanks Syd-appreciate your effort and perspective.Scary stuff...

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Max5

10,071 Posts.

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17/01/20

12:03

Post #: 42432497
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Originally posted by sydneyguy: ↑

Got no idea max

fed thought two direct operations would do it

then they saw rates would jack front end of the curve and it wasn’t enough so extended it a week and announced more duration loans.

mone or two weeks at 3 percent ( it was spiking way higher) would result
In major major problems

then it moved to a month program- then two- then Extended to 15 Jan- now apparently till April to help with tax payments.

no one really knows I guess

the first bank bailout known as Bank stabilization act was 700 bln- you see that come in on the fed balance sheet in 2008 as it goes off zero balance - aig- Fannie Freddie etc all reported as repaid- but the balance never fell back- infact we know there was Taft- twist- bond buying- qe - qe light-

it only came down when bernanke signalled a taper and fed signalled rate rises

so from zero to 4.5 t to 3.7 and last year market rates demanded higher fees-/ interest and the fed has since stepped back in to control the front end of the curve and stop the curve inversion

where does. It stop?- I think only when someone challenges politically and says who is going to pay - what do we own- how did you get approval for first 700 but no other approval to get us to 4 plus trillion

so I guess maybe never- or until people change in Oval Office and fed- gravy flowing with leverage provided by the people, I mean fed

who knows, insanity can go for a long time- people love buying stocks in oz with little to no yield because no one sees risk when the fed is flossing money into the system to anyone who wants it at present

worst case - if anything goes wrong greata and her generation can pay for it via mass tax increases, trump and fed ppl will be long gone

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Thanks Syd-appreciate your effort and perspective.

Scary stuff potentially I think-hard for me to imagine it going on too much longer surely but as you say insanity can go on for a long time-it already has really.

Do you have any thoughts on how one might best position/insulate/protect oneself to some extent against any worst case/nasty type scenarios ?

Head for the Hills with some rabbit traps and chooks maybe ?
2 Upvote

0 Great analysis

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