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The chart which we presented a few weeks ago courtesy of Sean Corrigan sees a few additional components added to it. Whereas before the chart focused on the Adjusted Austrian money supply and commodity prices, it now sees the addition of the S&P and Junk spreads. In a word: every single asset class correlates 1:1 with the Fed’s balance sheet. If the Fed is really planning on ending QE2 on June 30, the market collapse will be epic. And, yes, this should not come as a surprise to anyone.
Originally posted by nydsdan
Correct me if I am wrong, but this basically means that we are damned if we do and damned if we don't. In other words, if the Fed stops QE then we will have an epic crash. If the Fed continues QE then we will have epic inflation.
Pick your poison.
(Again, if I am wrong please correct me because I am a novice on these economic things...)