Next month the Federal Reserve will start to run down the stock of bonds which it bought under the quantitative easing (QE) programme as Janet Yellen signals the end of the scheme to pump more money into the US economy.
Interest rates are also set to rise further in the coming months as the US economy adapts to a higher pace of growth, allowing rate hikes to move the Fed further away from its emergency policy position.
This will mean that the Federal Reserve is actually destroying money and as Ritchie tells us this means disaster, complete chaos for the economy. That’s after his insistence that it will never happen of course. And after his insistence that the UK QE debt is cancelled because no one will ever reverse it.
Ritchie still not having grasped that destroying money is the purpose of reversing QE of course.
I’ve not looked at the US market numbers as yet but I expect the reaction to be nothing, near nothing at all.