When do we junk the velcro for the shoelaces?

As my 7 year son last week junked his velcro sneakers for a pair of Nike’s with shoelaces as he finally learned to tie them, it was hard not to think about when the private sector was finally going to learn how to tie its shoelaces again without the help of government velcro. The FOMC on Wednesday will update us with their thoughts but expect little to change as they reiterate the end to their Treasury purchase plan while they continue to buy RMBS to keep mortgage rates artificially low. However, the Pandora’s box of government intervention has opened and just because some program ends soon doesn’t mean it can’t be resurrected if things change again in the future. The G20 meets too and expect only style with very little substance but unwind strategies will certainly be a topic of discussion. The $ index is rising for a 2nd day and the reflation trade is taking a rest as a result. The IMF detailed its gold sale plans initially announced months ago.

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