Quantitative easing is a powerful drug. During the 2008 crisis, most observers didn't even seriously consider the possibility that the Fed could buy long-term t

Quantitative easing is a powerful drug. During the 2008 crisis, most observers didn't even seriously consider the possibility that the Fed could buy long-term treasuries and mortgage securities. Those who did vastly underestimated the scale on which the Fed would eventually do so. But QE is also highly addictive. The next downturn will most likely take place within the next 18 months. It's going to catch a lot of dumb money flat-footed, and that means big declines in the stock market - something that has now become simply not acceptable politically. There's one more piece of candy in the jar though: negative interest rates. Where the Fed decides to go with short term rates isn't really that important anymore. Far more important is how it begins to lay the groundwork for negative rates. Because negative interest rates will transform the grossly distorted world economy into something completely unrecognizable.