The endless hype about the FED " tapering " is similar to an alcoholic talking about drinking less !
" the road to hell is paved with good intentions " .. Anything more than a small "token" tapering will crush the fragile financial markets that now float on an ocean of cheap fiat currency !,,,,just wait .....
The Fed is worried about deflation because of the havoc it would create for the government and all other big debt holders. The fed has a difficult task as it has to promote inflation while fixing interest rates low. High inflation would normally promote high interest as lenders want a return of their purchasing power. Seldom if ever mentioned is the cascade effect on local governments from school districts to state level if interest rates rise and property values decrease along with associated tax revenues. Also seldom if ever mentioned is the beneficial side of deflation for the wage earner and saver. If the federal reserve board was truly independent and unbiased, interest rates would have never been manipulated and we would not be in this catch 22 that is bound to end real ugly. Since purchasing power or wealth cannot be preserved with dollars, sooner or later people will be turning to hard assets. PM's should do very well in dollar terms and their derivitive, PM stocks should do well also.
Wonder what a reduction of say from the 85 billion to 80 would do. Hummm I think the market could live with a 5 billion cut per upcoming quarters as they would see the total elimation of QE as a far-off event. We shall soon see.