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<p>[QUOTE=&quot;InfleXion, post: 1839691, member: 29012&quot;]Make no mistake, without QE we would not have markets as we know them today. The Great Reset would be a memory instead of an eventuality.</p><p><br /></p><p>When interest rates hit zero in 2008 bonds hit a brick wall and we had an electronic run on the banks. In order to simulate negative interest rates they had to print new money to buy up more bonds, because when the floor can&#039;t go any lower the only alternative is to raise the ceiling. This was how they restored confidence for the speculators to continue to play in the casino by ensuring that the show would go on. If you want to know the alternative, look up what Hank Paulson said to Congress - which was a rosy outlook that stocks would drop 2000-3000. In actuality markets would have imploded due to counter party risk and hundreds of magnitudes of leverage (which is still the case today).</p><p><br /></p><p>We can only speculate what would have happened next, and while the Fed can spin it like they saved us from impending chaos the reality is that they created the problem in the first place by enabling financial institutions (their primary dealers) to leverage themselves to the hilt with free money thus no having consequences for making bad financial decisions, and Congress for not performing their Constitutional obligation to audit these institutions.</p><p><br /></p><p>So what has changed since then? Things have been papered over and the problem has gotten worse.</p><p><br /></p><p>QE is not good for the buying power of gold and silver. It is preventing them from reaching fair value by enabling markets where price is determined not by supply and demand but rather by assets with no underlying value that can be duplicated infinitely by a process known as rehypothecation - reloaning the same asset over and over to balloon balance sheets with debt which is actually a liability and not an asset.</p><p><br /></p><p>However, it is good for people who were late to get a clue and still have a chance to acquire undervalued assets that are not at risk of financial system implosion. It is also &quot;good&quot; for the price of stocks and bonds for as long as it is sustinable, however commen sense and more concretely the law of exponents tells us that is temporary.[/QUOTE]</p><p><br /></p>

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