FED can't stop with printing!
After ‘Lehman failure’, the FED started with biggest money printing of all time. Prior to the Lehman Brothers failure, the FED reports that the monetary base stood at $849.8 billion and until today, the monetary base had expanded to more then $4,0 trillion. This $3,15 trillion expansion has all taken place within 8 years. If, instead, the Fed had continued to expand the monetary base at a normal pace, it would have taken nearly 170 years to come this far. In other words, With normal growth, the FED’s recent $3,15 trillion monetary expansion would not have been achieved until the year 2185.!
We have seen at this week’s FOMC meeting, that the FED can’t stop with printing, not until… the next meeting? I don’t think so. Next FOMC meeting is in June and there is no way for FED to hike rates then, on my oppinion not until at least the end of this year, maybe in October’s meeting!? But most likely, the FED will extend that for the next year, for 2016.! Janet Yellen admitted that it’s not so easy to tighten monetary policy now, and based on this numbers, you can see why. On my oppinion, when it comes to tightening, that will be much smaller and softer than expected. As for that, I think we can be calm until at least until October, regardless of the better figures from the US economy.