Tapering off ‘the gear’…

We are now a week away from the September FOMC (US Fed) meeting which for many is D Day for tapering Quantitative Easing (aka easing back on money printing).  For some time now the Fed has been indicating this may start in September.  It seems they now have little choice (outside of going to war beforehand) and there will be inevitable ramifications around the world.  Just remember these key things; it appears they are largely the only ones willing to buy Treasuries so if they stop who will step in? If they don’t sell enough who will pay their interest bill on $17 trillion and social security etc? When bond yields soar, how will they even be able to afford their interest bill?  What will happen if this triggers a collapse of emerging markets?  An analogy for tapering QE is giving up heroin. You know you need to but it is incredibly hard to do and can make you very sick… But that is for an individual.  They have got a world hooked on it and this could be very nasty and possibly very short lived before they need to start the fix again…