If the Fed won't print more money, markets could turn very ugly

By the end of last week, junk bonds had soared back to pre-crisis levels. Emerging markets were doing the same, as were countless different commodities. Stock markets in the West continued their rise. For those on the long side, things were looking very rosy. Meanwhile, the US Federal Reserve Bank, which had been hinting strongly that QE2 - the next bout of quantitative easing, or money printing - is on the way, meets next week. They've got a hell of a decision to make. Markets have been fuelled in recent months by the promise of more cheap money. Will the Fed take the risk of popping the bubble now? Or will it continue to let it inflate?