Is the Fed pushing too hard , extending itself too much - and does anyone believe will be able to unwind its balance sheet after it reaches 4 trillion by the end of 2013 , perhaps 5 trillion in two years ?

http://www.zerohedge.com/news/2012-12-13/fed-pushing-too-hard

Is The Fed Pushing Too Hard?

Submitted by Tyler Durden on 12/13/2012 15:26 -0500

• Monetary Policy

It may seem like a rhetorical question but Citi's credit strategy team fears that the Fed may be pushing a bit too aggressively at this stage. The chart below shows monetary policy (defined as the funds rate and the Fed's balance sheet) vs. a "market health" index comprised of economic factors, systemic risk metrics, and valuation metrics.Historically the two have tracked well, but not recently. The health index is firming, but policy is getting easier, not tighter. Is the Fed out of its depth here, or do they know something we don't?

http://www.forexlive.com/blog/2012/12/13/fed-says-extends-us-swap-arrangements-wbocboe-ecb-text/

Fed Says Extends US$ Swap Arrangements W/BOC,BOE & ECB – Text

By Market News International  || December 13, 2012 at 13:40 GMT

|| 0 comments || Add comment

WASHINGTON (MNI) – The Federal Reserve issued the following statement
Thursday:

The Bank of Canada, the Bank of England, the European Central Bank, the
Federal Reserve, and the Swiss National Bank are today announcing an extension
of the existing temporary U.S. dollar liquidity swap arrangements through
February 1, 2014. Previously, these swap arrangements had been authorized
through February 1, 2013.

These central banks are also extending through February 1, 2014 the network
of temporary bilateral liquidity swap arrangements that enable the provision of
liquidity in each jurisdiction in any of their currencies should market
conditions so warrant. The bilateral liquidity swap arrangements had been
authorized through February 1, 2013.

The Bank of Japan will consider an extension of both sets of swap
arrangements at its next Monetary Policy Meeting.

http://www.zerohedge.com/news/2012-12-13/santelli-false-dictatorships-and-fed-exit-strategies

Santelli On False Dictatorships And Fed Exit Strategies

Submitted by Tyler Durden on 12/13/2012 13:54 -0500

• Rick Santelli

In a little under three minutes, CNBC's Rick Santelli clarifies (in a much-needed manner) that we do not live in a monarchy or dictatorship (hoping for benevolence) - no matter how many Democratic senators and congressmen believe the President was given a mandate leaving him "holding all the cards"- we live in a republic (where the sovereignty rests with all individuals) and removing 'debt ceiling' checks and balances (for example) is a ride down a slippery slope. The chagrined Chicagoan then goes on to discuss the fact that the Fed, having unloaded another package of potentially infinite unsterilized money-printing, was actively discussing its exit strategy. Put simply, Santelli notes, "mark my words" themarket will decide that exit - and the Fed had better be ready when it comes.

Some  folks say yes , like Paul Craig Roberts  ........

AMERICA IS GOING TO CRASH BIG TIME-PAUL CRAIG ROBERTS

DECEMBER 13, 2012 BY THE DOC 3 COMMENTS

Paul Craig Roberts was Assistant Treasury Secretary in the Reagan Administration, and he warns, “America is going to crash big time.” Dr. Roberts says, “The real problem is not the fiscal cliff.” The dollar is on very thin ice. Dr. Roberts says, “They can’t stop hemorrhaging the debt, and the way they cover that is to hemorrhage the dollar.” In this real time scenario, Dr. Roberts goes on to say, “When you have debt pouring out and dollars pouring out, the dollar can’t keep its value forever. At some point, people will run away from it, and it will start abroad.” Dr. Roberts thinks there is “an impending collapse of the exchange value,” and the U.S. dollar could unexpectedly plunge in buying power. Dr. Roberts contends, “All of a sudden, people walk into Walmart, as usual, and they think they’ve walked into Neiman Marcus.” Dr. Roberts says there are no quick fixes to the bulging debt because “there’s no way to close this deficit when corporations are moving the tax base off-shore.” Join Greg Hunter as he goes One-on-One with Dr. Paul Craig Roberts. [Read more...]