Fed Needs to Pump Trillions More Into Economy: Analyst

A consumption driven economy based on ever increasing amount of debt fostered the illusion of the plateau of economic prosperity that so many Americans and citizens of the world came to embrace. When the illusion of the plateau of prosperity was smashed, initially in 2000 and intensified in 2008, it revealed the historical consistent boom-bust cycle of capitalism. The boom, regardless of the headlines and official policies, cannot restarted until the excesses of the previous expansion have been liquidated. The liquidation can range between lump sum wholesale defaults, such as sovereign debt defaults, or the more historical prevalent incremental currency debasement defaults. Is it a suprise to anyone that an End to currency dispute eludes finance ministers over the weekend?

"U.S. households have $70 trillion in assets," Sumerlin explained during a live interview. "And the Fed essentially needs to buy enough Treasurys and mortgages that you can get a bid on all those other assets. And when you have leakage in the international system it takes a pretty big amount to be successful. To me, it starts to get interesting at six to seven trillion dollars."

Source: cnbc.com