And the market goes wild....

[hardnox604008]

In continuation of yesterday's discussion, Benanke says that the Fed is ready to provide stimulus as needed and the markets go wild.

And of course, if they do, oil will immediately go to $150 without passing go, etc., And corn and beans will follow. That is until energy and food inflation inevitably damp off whatever real effect is felt.  And then what?

Just think, 10 years ago he was mediating blood feuds about parking spaces among the econ faculty at Princeton. Now his utterances move the world. Must be fun.

It does seem likely that if therre really was a QE3 the market will discount it fairly quickly.

QE 1 packed a fair amount of punch in a grossly oversold market, QE 2 only a small amount in comparison. QE 3 will flop which is why he'll try to get all the mileage he can out of words rather than action.

[Jim Meade / Iowa City]

I find it a challenge to try to fold what I've learned, good and bad, about grain marketing into the peaks and valleys of national and international economics.  I fear that the more volatile the economy becomese, the more likelihood processors will want to contract the inputs and producers will be willing to lock in a given income rather than risk the market.  Oh, for the good old days?