12:32CET
As always, ZeroHedge.com brings us a spicy post that unveils much of the truth behind the Fed's current market distortion and manipulation. A Fed paper released in September, which we luckily missed as otherwise it would have led to the collective death through uncontrollable foaming in the mouth of the entire Zero Hedge staff, was "Oil Shocks and the Zero Bound on Nominal Interest Rates", in which author Martin Bodenstein (an econ Ph.D.) argues that oil price shocks (i.e., surges in the price of oil such as the one we are about to experience courtesy of a fresh trillion in liquidity about to be unleashed by the Fed) are... wait for it... beneficial to GDP and stimulative to the interest-rate sensitive parts of the economy. To wit: "In fact, if the increase in oil prices is gradual, the persistent rise in inflation can cause a GDP expansion.". http://www.zerohedge.com/article/fed-trying-force-surge-commodity-prices-and-input-costs-diapason-explains-why-precisely-casePosted via email from MT4
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