Druckenmiller: Fed robbing poor to pay rich

Fisher said:

It is true, but I am not sure they have a choice. If the housing market were to truly collapse, most wealth of all poor and middle class people would be lost though. In theory all this money put into QE should be pulled out in the future by the government, but Obama won't do it so the next guy has to commit political suicide in doing it or the damage cannot be undone and the dollar will flounder.

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Don't fool yourself Fisher.

The Housing market exist in a massive sea of debt with FHA now repeating the exact same policies that sunk Fannie and Freddie.

Wells Fargo just layed off 1500 personel from its mortgage division, and this Country took on 5.4 Trillion in GSE debt in 2008.

A large portion of that was securities backed by sub-standard loans and actual loans that were made with next to no capital requirement.

The Feds QE policy is based on purely political rationale, as a sell off right befors midterms would look really bad on the Democrats.

With out QE, the DOW would simply readjust to echo the current state of the economy, as trillions would vanish from the 401k portfolios of millions of Americans in an instant.

Easy come easy go I guess.

QE is a massive unprecedented tax on the middle class as money thats made on interest bearing accounts is shifted over to the asset markets.

Only a incompetent liberal boob of a President could accomplish something like that, and only American low information voters could be so ignorant as to not notice

KevinKohler said:

Except that businesses operate on that imaginary paper wealth.

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Of course they do. That is what drives their value up. One big scandal could destroy google or facebook and all their investors' wealth in them.

Fisher said:

Of course they do. That is what drives their value up. One big scandal could destroy google or facebook and all their investors' wealth in them.

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If only.


They're likely too big to fail.

KevinKohler said:

If only.


They're likely too big to fail.

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I doubt it. I expect Europe to start slapping these companies silly as a proxy attack on the US for its intrusive spying programs on ordinary people. Microsoft was going to take over the world, and it didn't; Yahoo was going to take over the world, and it didn't; Amazon was going to take over the world, and it didn't; Myspace was the greatest thing since toilet paper, and now its stock might would buy you a pack of it. Don't believe the hype. Nobody is too big to fail.

Fisher said:

I doubt it. I expect Europe to start slapping these companies silly as a proxy attack on the US for its intrusive spying programs on ordinary people. Microsoft was going to take over the world, and it didn't; Yahoo was going to take over the world, and it didn't; Amazon was going to take over the world, and it didn't; Myspace was the greatest thing since toilet paper, and now its stock might would buy you a pack of it. Don't believe the hype. Nobody is too big to fail.

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Except the MIC. Our unemployment would become unsustainable and we would collapse.