DSGE
VIP Member
- Dec 24, 2011
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QE3 and Operation Twist will never end. The reason is simple. These actions put the federal reserve at the top of the pyramid in market acting. It's all about the flow of asset pruchases.
If they never end it means that there'll never be any recovery. We'll be stuck at the zero lower bound forever. If there is a recovery somewhere, anywhere, in the future, the Fed with have to shrink its balance sheet or face hyperinflation.
Also, your argument should apply equally to other countries, but recall that other countries have done QE and undone it down the road; case in point being Sweden.
Hyperinflation is rather unlikely for the US. What is extremely likely, is default.
I disagree, but thanks for having some god damn sense.