This week, the Federal Reserve announced it would continue with its $85 billion/month bond buying program, and the markets were positively giddy. Hooray! The Fed is going to flood the banking system with even more money that will slosh about in “cash assets” on bank balance sheets.
Never mind banks haven’t lent out all but a few pennies of the first $2 trillion or so the Fed has created out of thin air over the last several years. What harm will another $85 billion, or so, for the next several months do? My thoughts exactly. Frankly, there is little reason NOT to keep dumping brand new cash on the economy, because it isn’t going anywhere…Read On…
The opinions expressed within this report are those of John Norris as of the initial publication of this blog. They are subject to change without notice, and do not necessarily reflect the views of Oakworth Capital Bank, its directors, shareholders, and employees