That begs this question: If QE1 and QE2 and Operation Twist didn't work, why would QE3 work? The quick answer is that it will fail like its predecessors.Continue Reading: The Fed Panicked | ZeroHedge
We predicted last week that Bernanke would launch QE3 this week.
Today, the Fed announced that it will buy $40 billion dollars of mortgage-backed securities per month … indefinitely.
Today, the Fed announced that it will buy $40 billion dollars of mortgage-backed securities per month ... indefinitely.
This is just another bailout for the big banks. (If the government had instead given money directly to the consumer, we would be out of this economic slump by now).
Bernanke claims that the main justification for QE3 is to boost employment. This is slightly ironic, since Bernanke's policies are largelyresponsible for creating high unemployment in the first place.
The real justification is to try to artificially prop up asset prices. But that approach has been proven to be an absolute failure.
They are now doing 'open ended' bond buying - no finite time or amount...hence this will go down as QE Extreme. I remain of the view this is final phase...
I'm long stocks, gold, short us dollars next 24-48 hours but ..on the anniversary for LEHMAN... tonight could be the day where FED did too much.
Low yield and monetary policy stopped having an impact two years ago, tonight could be the night where after the rally low rates no longer impact stock and risky asset - the only cheap asset right now is: money ...every time this has been the case in history it has ended in bubble and tears. Read more at http://globaleconomicanalysis.blogspot.ca/#IKUVstmyL7JKsFxS.99