Hussman - "The Minsky Bubble"

``The central effect of QE is not on the real economy, but on financial speculation. The Fed purchases Treasury and mortgage securities, and creates new base money (currency and bank reserves) as payment. This results in a huge pool of zero-interest assets that someone in the economy has to hold at any given point in time. This zero-interest money is a "hot potato" that creates discomfort and encourages a tendency to "reach for yield" in more speculative assets. Undoubtedly, the universal attention to Fed actions has already created a mob psychology where, to use Kindleberger's words, "virtually each of the participants in the market changes his or her views at the same time and moves as a herd." ''