I just stumbled across this excellent article which has answered a few questions that have been niggling me lately - one being if there is a real opposition, why can't they stop, or at least bring to light, the asset purchases which are going on at break-neck pace around the globe - not many analysts seem to be talking about that. Here it's all explained, and it's Step 2 which is what I've been witnessing, and which is crippling:
'The three-pronged plan the Fed has started to execute is plain for everyone to see:
1) Stop QE. This hauls back in to the US dollars from around
the planet, from a million parties that owe debt denominated in USD.
Already happening at a frantic pace, though no-one involved would
2) Raise the value of the greenback. This makes it that more
expensive for all parties under 1) to pay off their debts. They have to
offer ever more just to stand still. And when they can’t, assets will be
3) Raise interest rates. The final blow. It will make life
much harder on the US government too, but they’ll have trillions of
dollars flowing in to cope with that. It’ll put millions of Americans
into the equivalent of medieval torture instruments, and out of their
homes and cars and jobs, but that too will be initially softened by the
dollars coming home to papa. Crucial take home: they’ve given up on the
US real economy, likely a long time ago.
And it will have the rest of the world begging for mercy. In that
regard, it’s funny to see Britain planning to raise its rates too. Do be
careful what you wish for there, lads.
The full taper of QE means everyone needs dollars, and most who do
are leveraged to the hilt, while the combination of higher interest
rates and higher dollar value means the buck will come much more
It’s going to be carnage out there.'
It is still my assertion that once the Fed goes, and it will soon with the large 'End the Fed' Movement gaining momentum, the International Bankers will still be sitting pretty at the BIS, and the dollar is just doing their dirty work for the moment, like a favourite prostitute, until it is put out of its misery like a supernova, which burns most brightly just before it explodes - as Rob Kirby just said in my previous post.
Ho-hum, nothing to do but watch.