So the FED is meeting today and tomorrow.
The economists and every pundit on Wall Street have an opinion on whether they will inject more money into the system through a third round of Quantitative Easing.
There are plenty of reasons for and against and you can read all the economic and fiscal reasons on other sites.
My take is that there will be more QE tomorrow and it is for a reason I have not seen anyone else mention.
Because Ben Bernanke is a human being. Some of you conservatives might argue that point, but stick with me.
Everyone knows there is an election coming and a strong stock market will help the incumbent. The election is also turning out to be a close race so far.
Bernanke has the ability to give the stock market one more push higher before the election. But he is supposed to remain impartial. So why I do I say he will do it?
Because Romney made it perfectly clear that he would fire Ben if he wins the election.
The FED has made it clear that it is not a matter of “if” they will do QE3 but “when”. And if “when” is the question, then the next opportunity after tomorrow is in December, after the election.
To me, Ben seems like a very smart man and one that is very sure of himself. So I don’t think he will care much if he gets replaced because of politics. But I have a feeling that he wants to stick around and see this thing through. If he stays, and the economy recovers he will be hailed as the best FED chief ever, and people will forget all about Ben’s predecessor Alan Greenspan or at least continue to blaim him for the whole mess. On top of that, Ben would get to stick it to Romney.
So what’s the downside? Not much if they are going to do it anyway. The upside? For Ben, a lot.
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