dailyreckoning.com.au / By Bill Bonner / June 25th, 2013
‘All due respect, you got no f—-g idea what it’s like to be Number One. Every decision you make affects every facet of every other f—–g thing. It’s too much to deal with almost.’
– Tony Soprano
Whew! The US Federal Reserve is number one in central banking. And it’s finding out just how tough it can be to meddle with a $16 trillion economy.
On Wednesday, Ben Bernanke came out with a public statement. He said that if all went well…and he didn’t change his mind…and nothing unexpected came up…and the Federal Reserve’s Open Market Committee felt like it…the Fed would begin tapering its bond buying sometime soon.
That was all it took to send a shiver up investors’ spines…and a sell signal to Wall Street. Everything sold off — stocks, bonds, commodities, gold…you name it.
Over the next two days, the Dow sank more than 500 points, before stabilising on Friday. From Adrian Foster, head of financial markets research for Asia-Pacific at Rabobank International in Hong Kong:
‘Clearly, the Fed tapering is on the table now. There is a reversal of perception in liquidity and it will take some time for investors to digest, rebalance and what not.’