PETER SCHIFF : Here Comes Quantitative Tightening

Also, if the markets react to the beginning of QT the way they did to the first rate hike of this cycle the Fed has another problem on its hands.

Remember the 8% rout that occurred in the first two weeks of January 2016.

At that point markets were reacting to the Fed’s first rate hike in nearly a decade (which had occurred in mid-December of 2015).

When weakening economic data surprised the markets in January, traders had to digest the possibility of rising rates coming at the wrong time.

The slide continued for two weeks until the Fed shifted to solidly dovish policies by mid-January. Imagine what could happen this time around if the economy continues softening in the face of QT?

If that ship actually sales it will be a short journey, with her sister ship, the QE4, following closely behind.