Why QE2 will continue

[Lemon Thrower]

Fed has made hints that QE2 is ending.

here are some arguments that says it will continue. in summary, QE2 keeps long rates down and Uncle Sam can't afford a tick up in rates.

http://video.cnbc.com/gallery/?video=1937291737#eyJ2aWQiOiIxOTM3MjY5ODkwIiwiZW5jVmlkIjoiRmJHZWZhZm45ZUZBMUNQOTVDZ284dz09IiwidlRhYiI6ImluZm8iLCJ2UGFnZSI6IiIsImdOYXYiOlsiwqBMYXRlc3QgVmlkZW8iXSwiZ1NlY3QiOiJBTEwiLCJnUGFnZSI6IjEiLCJzeW0iOiIiLCJzZWFyY2giOiIifQ==

[theo]

What gets me is that Bernake acts like he can turn off QE anytime he chooses. But in reality the Fed has to buy the lion's of the newly issued bonds to keep the auctions from failing and interest rates from exploding. We are truly on the tiger's back.

[shinnosuke]

What gets me is that Bernake acts like he can turn off QE anytime he chooses. But in reality the Fed has to buy the lion's of the newly issued bonds to keep the auctions from failing and interest rates from exploding. We are truly on the tiger's back.

Since your post mentions lions and tigers, I will add only that the bears will eat us alive when all the Fed tinkering is exposed for what it is.

[avidbrandy]

I see what you did there.