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Friday, May 18, 2012

What if there were a QE And.....

What if there were a Quantitative Easing, and the banks stopped plowing all that free money into the Stock Market?

Bernanke has the power to give the Banks as much money as he wants.  Nobody can stop him.  The banks don't have to lend the money.  They can gamble it til the cows come home.

But what if - just what if - the banks decide the stock market is under too much pressure - for any number of reasons.  So they hesitate, and put that money somewhere else for a while.  What if that money goes into derivatives - commodities - currencies - corporate preferreds - corporate bonds - balance sheet cash - anything else?

Imagine - just for a second - a world where the Fed loses control of the stock market.

What would that world look like?

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