The article posted by the OP is backwards looking over the past 5 years, the 5 years after the financial crisis when things were pessimistic. You're posting current data.

I did mention the Zerohedge article was very pessimistic. But I found it explains well in what circumstances companies choose to pay dividends, acquire using stock and to perform stock buybacks, instead of making new investments.

You've linked to a reference to dividends. What about stock buybacks?

Debt-service repayments are low due to low interest rates. If you've gotten a $1.5m loan at low variable rate of 1%, it would still be difficult to convince you to borrow another $1.5m, since there is uncertainty of future interest rates. You're not going to borrow more just because it's cheap, unless of course you're not on the hook in the case when interest rates go up. (i.e. using a limited-liability vehicle, i.e. a corporation.)

A high value of loans being made does not a healthy economy make. There was a very high amount of loans being made just before the financial crisis, too.

You've cherry-picked data that shows the economy seems to be in good shape.

I can do the same too.

Median household income in continuous decline since 2007: http://research.stlouisfed.org/fred2/graph/?id=MEHOINUSA672N

Less money = less spending.

Civilian-Employment ratio stagnating at 1983 levels: http://research.stlouisfed.org/fred2/graph/?id=EMRATIO

Stagnating employment = stagnating future income.

Inflation over 14 years at 2.5% is 40%: http://research.stlouisfed.org/fred2/graph/?id=CPIFABSL

Reduced savings and income due to inflation reduce leverage available, leading less to spend.

Investment looks like it's approaching a possible peak: http://research.stlouisfed.org/fred2/graph/?id=GPDIC96

Let's hope it can continue to increase - it's still far from the previous high in 2006.

If the inflationary policies of the Federal Reserve aren't doing any harm to the economy why not just keep up the bond buying program? Why taper? They have to, that's why.

> If the inflationary policies of the Federal Reserve aren't doing any harm to the economy why not just keep up the bond buying program? Why taper? They have to, that's why.

Wasn't your first contention that interest rates were too low? Now the Fed is responsible for the lack of inflation because.. why again?

Honestly, I was getting geared up to type a full rebuttal, but if you consider 2.5% p.a. inflation an issue, I'm just going to save my time.

It was a rhetorical question. I did not say tapering is bad move. I say it is a forced move because they can't afford to keep their current inflationary policy any longer, even when many of economic indicators remain below trend.. I'm not for or against anything the Fed does, the financial system is too far gone to save in the long run.

There's no way that Fed balance sheet will ever return to 'normal'.

The federal debt will never go back to previous levels.

Good. Our perspectives are too different.

Their policy was designed around avoiding deflation which is a vary real issue because when total debt decreases so does the money supply.