Fannie, Freddie Loan Purchases May Spur ‘Wad of Cash’

“This is going to be a wad of cash coming into the fixed- income markets and it’s not immediately clear where it’s going to be reinvested,” said Jim Vogel, head of agency-debt research at FTN Financial in Memphis, Tennessee.

Here come another wave of QE regardless of the Fed's window dressing plan to restrict stimulus. Weimar taught us that infinite QE is a misnomer. Those familiar with the second law of thermodyanmics know that entropy within a close system never decreases. Money is clearly an isolated system that history has repeatedly shown the tendency to move from order to disorder. Push the accelerator pedal too long and order will most certainly turn to choas - both social and economic.

Thomas Jefferson was quite clear on this subject for a reason.

"If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them (around the banks), will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered." Thomas Jefferson, Letter 1802 to Secretary of the Treasury, Albert Gallatin

Source: bloomberg.com