What this implies, and what is also concludes is, that unless the Federal Reserve decides to continue Quantitative Easing (QE3), then every market in our economy will implode in a very short amount of time once the cheap money faucet is turned off. On top of this, the Federal government is in no position to cushion the fall since they no longer have a lawful right to borrow money, or implement taxpayer stimulus now that the debt ceiling has been reached.
Richard Koo has a very long and respected track record on analysis and economic projections. As a former economist with the Federal Reserve, and currently as the Chief economist for Nomura Equity Research, the leading securities house in Japan, his reports and analysis of global and national markets have been vital in advising numerous Prime Ministers during the Japanese banking crisis of the 1990's.
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