BERNANKE'S ATTEMPT TO "LIQUIFY" THE CONSTIPATED CREDIT MARKETS IS REALLY NOT THE RIGHT ANSWER...
LIQUIDITY IS LIQUIDITY IS LIQUIDITY...AND IT CAN CAUSE MORE PROBLEMS THAN IT SOLVES.
CONSIDER:
THE MARKETS ARE AWASH IN OVERPRICED ASSETS THAT HAVE BEEN RUN UP BY THE PRIOR HYPER-LIQUIDITY EPISODES...AND NOTHING WILL CHANGE THAT...
WILL BANKS BE ABLE TO SELL OVER-PRICED ASSETS JUST BECAUSE THEY HAVE MORE ACCESS TO READY CASH FROM THE FED...? I DON'T THINK SO...
LIQUID SHIT IS STILL SHIT...
ASSET PRICES MUST ADJUST DOWNWARD...OR THE DOLLAR MUST ADJUST DOWNWARD TO REFLECT THE NEW "PROTECTED" ASSET PRICING SCHEME THAT THE FED ANNOUNCED ON FRIDAY...
MY HUNCH IS THAT THE DOLLAR WILL PLUNGE...TO SAVE THE NOMINAL ASSET PRICES THAT ARE ALREADY IN PLACE...
GOLD AND OIL OR THE EURO ARE THE ONLY PLACES TO HIDE FROM THE INSANITY AT THE FED.
