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QE3 This Week?

8 August 2011 5 Comments

Markets are getting pretty volatile and many are expecting the Fed to step in. Of course, quantitative easing will do nothing but spike inflation so it’s a lose / lose. I’d hate to be Bernanke right now. How out of control does the price of gold get if they announce QE3? We could get to $2,000 / oz rapidly if so. Uncharted territory indeed.

5 Comments »

  • TaJ said:

    If we're in a solvency, rather than a liquidity, crisis then QE on Treasuries like they did with QE2 won't help at all. Solvency can only be addressed (apart from allowing the insolvent to default) by inflationary money printing, either just straight up inflating or by buying worthless assets (buying something worth $1 for $10 is obviously inflationary). There's some debate about wether QE actually created money, or whatever, but if they try and print their way out of it from here it will have to be the real deal, no ifs, ands or buts.

    My bet is for tomorrow is another useless statement like "we're concerned and considering policy responses to allow additional easing if it might help" rather than outright announcing more asset purchases. If stocks tank further between now and Jackson Hole, they'll probably do something though.

  • Money Beagle said:

    Right now, QE3 would be a waste. Investors are not responding to positive market catalysts, so trying to put one in place at this time would basically be flushing money down the drain.

  • Zoloft Litigation said:

    Hey, it’s my first time to visit this blog and so far, it’s very interesting especially its discussions. I’ve read from an article that both investors and economist agreed that they don’t want QE3. The majority of both groups said further stimulus would boost the stock market, but would have little to no impact on the broader economy. In my personal opinion, QE3 is just a waste of time.