"It's not scary at all if
you believe, like I do, that the primary goal of QE was not to "print
money" or stimulate the economy, but rather to satisfy the world's
apparently insatiable appetite for safe-haven, risk-free assets. It's not unreasonable
to think that now, after four years of recovery, with over 6 million jobs
created, with industrial production having staged an almost-complete recovery,
with housing starts and auto sales growing at double-digit rates, and with
global equity market capitalization only 8% shy of its 2007 all-time high, the
demand for risk-free assets is beginning to taper off. If the world is now
beginning to feel more comfortable with the fact that economic and financial
conditions have improved, and thus the risk of another collapse has receded,
then it would be entirely appropriate for the Fed to begin tapering its balance
sheet expansion, simply because there is no longer a need for it."
