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Then you should be thrilled with Quantatative Easing, oops
St. Croix 947 reads
posted

I mean credit easing, oops I mean asset-purchase program. At the end of the day, the Fed's plan is to purchase 2 year to 10 year Treasuries, thereby pushing their yields down even more, and hopefully induce investors to other securities with higher yields, i.e. mortgage back securities, auto loans, student loans, etc. Increasing demand for these securities would drive down their yields, thereby lowering interest rates, thereby stimulating demand.

The second value to this asset-purchase program is forcing investors away from fixed income securities to equities. Look at the S&P, DOW, NASDAQ, or any chart for that matter, starting in late August when the Fed announced the program. Stocks have increased by about 15%. If you have a 401K, IRA, taxable account, whatever, you feel wealthier, hence you will go out and buy shit. Based on early reports, people are buying all kinds of shit. Hopefully this demand will result in some level of hiring.

The guy running the economy today is Bernanke, not Obama, not Pelosi, not the Tea Party. Though the Fed is limited in its mandate, you have to at least initially agree that this asset purchase program aka QE 2, is starting to work, and they haven't even yet purchased their first batch of longer term Treasuries.

See how easy it is. Now if we could just get someone to tell North Korea to shut the fuck up and go away, and not fret over the insignificant PIIGS, then equities will go higher.

Foodyguy2212 reads

Quantitative Easing Explained

Related Link: http://www.informationclearinghouse.info/article26818.htm

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willywonka4u917 reads

...since they've heard me flap my gums about this before, but for any not so regulars, here goes:

Inflation is the value of money going down. With inflation prices go up.

Deflation is the value of money going up. With deflation prices go down.

Deflation sounds wonderful, doesn't it?

Suppose you have a lot of savings. Inflation is bad because your savings are worth less. Deflation is good, because your savings are worth more.

Now suppose you have a lot of debt. Inflation is GOOD because you debt is worth less. Deflation is bad, because you debt increases in value, making it harder to pay back.

This country is 13 trillion in the hole. Corporate, household, and gov't debt are at all time highs. To put this in perspective, since 1980 household debt has increased by over 1000%. Yes, that's with three zeros.

Deflation would absolutely cripple this country and bring it to it's knees.

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St. Croix948 reads

I mean credit easing, oops I mean asset-purchase program. At the end of the day, the Fed's plan is to purchase 2 year to 10 year Treasuries, thereby pushing their yields down even more, and hopefully induce investors to other securities with higher yields, i.e. mortgage back securities, auto loans, student loans, etc. Increasing demand for these securities would drive down their yields, thereby lowering interest rates, thereby stimulating demand.

The second value to this asset-purchase program is forcing investors away from fixed income securities to equities. Look at the S&P, DOW, NASDAQ, or any chart for that matter, starting in late August when the Fed announced the program. Stocks have increased by about 15%. If you have a 401K, IRA, taxable account, whatever, you feel wealthier, hence you will go out and buy shit. Based on early reports, people are buying all kinds of shit. Hopefully this demand will result in some level of hiring.

The guy running the economy today is Bernanke, not Obama, not Pelosi, not the Tea Party. Though the Fed is limited in its mandate, you have to at least initially agree that this asset purchase program aka QE 2, is starting to work, and they haven't even yet purchased their first batch of longer term Treasuries.

See how easy it is. Now if we could just get someone to tell North Korea to shut the fuck up and go away, and not fret over the insignificant PIIGS, then equities will go higher.

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willywonka4u1908 reads

As I see it, the Fed is trying to put a bandaid on a mortal wound. Instead of trying to make average people feel wealthier, we ought to focus on just making them wealthier.

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