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What Happened The Last Time A Major Central Bank “Tapered” QE?

Posted By admin On December 19, 2013 @ 6:54 am In Money Watch | Comments Disabled

Zero Hedge [1]
December 19, 2013

After having followed a zero interest rate policy strategy and facing a further deteriorating economy in an environment of falling prices (deflation), the Bank of Japan (BoJ) announced the introduction of QE on 19 March 2001 and kept it in place until 9 March 2006. The BoJ chose for a very orderly and gradual unwinding of its government securities portfolio, by continuing its regular purchases of these securities (i.e a taper and not sale).  The market rejoiced at the normalization for a week or 2… before dropping 24% in the following 2 months. Of course, that was a “policy mistake”; the Fed knows this time is different.


What Happened The Last Time A Major Central Bank Tapered QE? 20131218 taper1 0 [2]

Think 24% is ok and Fed will just rescue stocks again?… things “esclated”…

What Happened The Last Time A Major Central Bank Tapered QE? 20131218 taper2 0 [3]

to end -75%.

Awkwardly that lines up with the 1920/30s analog we have previosuly noted [4]

What Happened The Last Time A Major Central Bank Tapered QE? 20131206 1929 [5]

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URL to article: http://www.prisonplanet.com/what-happened-the-last-time-a-major-central-bank-tapered-qe.html

URLs in this post:

[1] Zero Hedge: http://www.zerohedge.com/news/2013-12-18/what-happened-last-time-major-central-bank-tapered-qe

[2] Image: http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2013/12/20131218_taper1.jpg

[3] Image: http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2013/12/20131218_taper2.jpg

[4] lines up with the 1920/30s analog we have previosuly noted: http://www.zerohedge.com/news/2013-12-07/ghost-1929-re-appears-pay-attention-signals

[5] Image: http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2013/12/20131206_1929.jpg

[6] Central Bank Hid Housing Market Crash Forecast: http://www.prisonplanet.com/central-bank-hid-housing-market-crash-forecast.html

[7] Russian Central Bank Buys 100 Tons of Gold: http://www.prisonplanet.com/russian-central-bank-buys-100-tons-of-gold.html

[8] World’s Most Prestigious Financial Agency – Called the “Central Banks’ Central Bank” – Warns of Bursting Bubble: http://www.prisonplanet.com/world%e2%80%99s-most-prestigious-financial-agency-%e2%80%93-called-the-%e2%80%9ccentral-banks%e2%80%99-central-bank%e2%80%9d-%e2%80%93-warns-of-bursting-bubble.html

[9] Central Bank Intervention Is Now Self-Defeating: http://www.prisonplanet.com/central-bank-intervention-is-now-self-defeating.html

[10] The “Central Banks’ Central Bank” says Bailouts Putting Nations at Risk, as Confirmed By Higher Credit Default Swap Spreads: http://www.prisonplanet.com/the-central-banks-central-bank-says-bailouts-putting-nations-at-risk-as-confirmed-by-higher-credit-default-swap-spreads.html

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