The Fed Has Quietly Started QE4

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The Fed Has Quietly Started QE4
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I am a financial writer, publisher, and New York Times bestselling-author. Each week, nearly a million readers around the world receive my Thoughts From the Frontline free investment newsletter. \n\nMy most recent book is Code Red: How to Protect Your Savings from the Coming Crisis. I appear regularly on CNBC and Bloomberg TV. I’m also Chairman of Mauldin Economics, a research group that provides monthly analysis and recommendations to thousands of readers around the world.\n\nI was previously CEO of the American Bureau of Economic Research. Today I am President of the investment advisory firm Millennium Wave Advisors, LLC. I am also president and registered principal of Millennium Wave Securities, LLC a FINRA and SIPC registered broker dealer.\n\nWhen I’m not traveling to speak at conferences and events, I live in Dallas, TX. I’m also the proud father of seven children.

We Hear Different Theories

Notice at the link how the NY Fed describes its plans. The desk will offer “at least” $150 billion here and “at least” $75 billion there. That’s not how debt normally works. plus an implied promise of more. The US doesn’t have negative rates, but the Fed is giving banks negative credit limits. In a very precise violation of Bagehot’s Dictum.

Here’s the official line, from the minutes of the unscheduled Oct. 4 meeting at which the FOMC approved the operation. It insists the latter isn’t QE, but it sure walks and quacks like a QE duck. So, I and many others call it QE4.

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