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Do you think the Fed will continue to support the markets by creating money out of thin air?

Bob Wiedemer
September 19, 2017
Video Transcript

There's always a tendency that if you get rewarded for doing bad things, to do more bad things, right? So, if you can steal a cookie out of the cookie jar, get away with it. Hmm...good cookie, maybe I could steal a few more, and you do, more and more. So, there's a tendency to do what you get rewarded for even if it's bad for you or if it's bad in general and that's exactly what we're doing right now when you're printing money. You're getting rewarded for it. It's not good, otherwise you'd find you'd make no interest in quantitative tapering (QT) or raising interest rates. Why in the world would you do that unless you were worried that what you're doing now somehow is bad and needs to be reversed. If for a while inflation stays low, lower than I would have expected it to be at this point, if it stays low, you can guarantee that's going to encourage more money printing and that's the bad part of getting rewarded for bad things. We all know what a credit card is like or anything like that... same thing. Government has found that it gets rewarded for borrowing more money, because they don't have to make spending cuts, they don't have to make tax cuts, I mean excuse me... I mean they don't have to make tax increases. So, bottom line is what we're really being lured into makes a lot of common sense. Being rewarded for doing bad stuff is going to encourage more bad stuff until finally somebody slams the cookie jar top on your hand or in this case you'll find that you print money and you get inflation very, very quickly, like you see in a country like Venezuela or you've even seen in countries like America before. Right now, we're printing money and not getting inflation quickly, but that will change and you get inflation, and you print money, and you get inflation quickly, and all of a sudden all those bad things you did before come to the top, and you're in big, big, bad, bad trouble.

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