"Importantly, traditional rules and analysis no longer apply. Monetary policy has been locked in super ultra-loose mode now entering an unprecedented fifth year. Here in the U.S., financial conditions can’t get meaningfully looser. The Federal Reserve has pushed corporate and household borrowing costs to record lows. Liquidity abundance will ensure near-record 2012 corporate debt issuance. “Loose money” has already had too long a period to impact decision making throughout the economy – with decidedly unimpressive results. Arguably, previous unfathomable monetary measures some time ago created dependencies and addictions that are increasingly difficult to satisfy."
5 years of EASY money policies with unimpressive economic results. Unemployment goes down as job seekers give up in droves. What more can be done? A most noted wise man once said taxing is not the answer its the government spending that is the problem.
Year after year, the US must borrow $1Trillion plus, we now owe over $16 TRILLION, and what happens is near 70% of the gov't budget is used to pay JUST the interest on the debt. This is NON PRODUCTIVE.
We are LOCKED into a war in Afghanistan that President Obama is too stupid to figure out cannot be won, costing precious lives and gobs of money. Did he forget to look up the Soviet's experience? or anyone who has tried to roll over that country.
What DOug's essay goes into detail is to try to explain that now the US and WORLD eonomies (and stock markets) are addicted to QE like a CRACK ADDICT.
The direction and gains in world indices are in stark contrast to what feet see on the ground.
Only one of 2 things can happen, a CRASH in the stock market, or a ROUSING revival of world economies, which will it be?