At today's meeting of the Federal Reserve, Yellen is trying to sneak out the back door without anyone noticing. She is talking about how the jobs situation, which still sucks badly for anyone who actually has to go looking for a job, is getting well enough that she can cut the monthly Welfare Elite (tm) payment down to only $45 billion of newly printed money each month. While it is still $45 billion each and every month of welfare for the already rich, the Fed's balance sheet is so full of overpriced assets right now that anyone with a brain should be trying to get cozy with the door.
Why? Because the Fed is rapidly running out of gas to help not just the elite of the US but the world economy. It's balance sheet is more than $4 trillion worth of basically unmarketable crap. If it was marketable, the fed would not have had to buy it. If it had a market price that would not scream "deflation", the fed would have let the market buy it. It's as simple as that. Sooner or later the Fed is going to need to sell that crap and in the mean time it will be buying less and less of it.
The end game is upon us. If the markets rallied since 2009 due to Fed intervention, what do you think will happen when the fed signals that it can no longer intervene (or at least that it wants to let the market have a temper tantrum to see how bad it gets)? It will be no different than a mother letting the baby cry itself to sleep in the crib, or so the fed hopes. But if you let that baby cry too long and too loud, it could hurt itself and so mommy Yellen will have to come running back in. Or so the markets hope. The fed knows that if it allows a full on stampede to get started then it will have to spend even more money and take even more measures in order to buy happiness again.
All the while, main street is getting angrier and poorer. The new money isn't trickling down like we were told it would. It is getting hoarded for the storm that is coming. The people are showing their anger and it is causing government officials to fear for their cushy jobs. Banks which have mostly avoided litigation are now paying huge fines. Banksters who have almost totally avoided litigation are now being targeted as well. The people are pissed and the people are starting to fight back. The people are figuring out who the patsy really was in this Vegas deal. This is not going to end well. Walk away in May.
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