Do you think the Fed will taper this year?

[Rambo35]

A lot of discussions back and forth have talked about this topic since Bernanke first mentioned it which caused a market sell-off. Everyone knows that sooner or later QE will end and that the markets will have to return back to some sort of normal without Fed life support.

Do you think the economy will survive once the Fed starts pulling the plug?

I think as soon as the Fed tapers (which I think will happen by a very small amount this year) we will see the economy contract further and the USD after a brief spike will weaken as well as the economic picture is not as good as the headline figures suggest.

 

[Pharaoh]

Everyone knows that sooner or later QE will end and that the markets will have to return back to some sort of normal without Fed life support.

Do you think the economy will survive once the Fed starts pulling the plug?

Beautiful contrast between those 2 sentences. Everyone knows it will return to normal vs. Will it survive?

Bernake's going to need to pull a few more rabbits out of his hat if he wants to be able to taper off to any significant degree without causing huge shocks. He went too far and too fast with his emergency measures and now the economy has a serious addiction issue.

Hmmmnn. . . . I predict nothing too big until after the mid-term elections in 2014. Neither party wants to be in the position to be blamed for anything before then. At that point, since Obama is a lame duck and there's a reasonable chance of the next president being a Republican, I could picture massive pressure from Obama and the Democrats to go ahead and take drastic steps. The economy falters, the Republicans sweep the Presidency and Congressional elections in 2016, but the issue is so bad that they can't fix it and the Whitehouse and Congress goes back to the Democrats in 2020.

Oh wait. Political fighting between the 2 parties and control of the economy are supposed to be separate, right? No one would ever try to manipulate the economy to win an election. After all, every elected politician is just there to do the best possible job to help all the people in the most efficient way possible.