Category: Quantitative Easing
The analysis published under this category are as follows.
Tuesday, April 26, 2011
How the Fed Could Kill the U.S. Dollar Tomorrow / Interest-Rates / Quantitative Easing
By: Money_Morning
Martin Hutchinson writes:
Months or years from now, when analysts are studying the death of the U.S. dollar, they'll look back and see that the greenback's demise began on a specific day - Wednesday, April 27, 2011.
As in ... tomorrow.
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Tuesday, April 26, 2011
QE2 is Damaging the U.S. Economy and Reducing GDP Growth / Economics / Quantitative Easing
By: Dian_L_Chu
QE2 is going to go down as one of the worst monetary policy initiatives in the history of the modern Federal Reserve era. On almost any metric applied, QE2 ends up not only falling well short of its proposed goals, but actually turns certain metrics like GDP growth negative compared with the prior quarter, and heading in the wrong direction.
Tuesday, April 26, 2011
The Big QE2 Shakedown / Politics / Quantitative Easing
By: Frank_Holmes
The New York Times is bit late to the party but, better late than never, right?
Times economics writer Binyamin Applebaum has just discovered that the Fed's bond buying program--aka QE2--has lit a firecracker under stocks but done zilch for the real economy. Applebaum--who apparently never trolls the econo-blogs to expand his understanding of what's going on in the world of finance-- is "shocked" that Bernanke's $600 billion "credit easing" strategy has turned out to be an utter boondoggle that's had no measurable impact on output, unemployment or growth. Who could've known? But let's let Applebaum speak for himself:
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Sunday, April 24, 2011
Why the Fed Must End QE2 on April 27th / Interest-Rates / Quantitative Easing
By: Dian_L_Chu
The Federal Reserve has lost all credibility on Wall Street, and most of the American public with the absolute refusal to recognize the dire effects on asset prices that QE2 has created. But the refusal is part of the problem. It reinforces the wide spread belief of investors that the Fed is out of touch with reality, and that they sit in their Ivory Tower implementing an exceedingly loose monetary policy, with the stated goal of inflating asset prices.
Friday, April 22, 2011
Bernanke Strikes Again, QE2 sends margin debt soaring to new highs / Interest-Rates / Quantitative Easing
By: Mike_Whitney
Interest rates are the Fed's main tool for implementing policy, but when interest rates are already at zero and activity is still weak, then the Fed may try other unconventional strategies to rev up the economy. Quantitative Easing (QE) is one such strategy. In practice, it works like this; the Fed purchases some type of financial asset (stocks, bonds, mortgage-backed securities) which adds to the money supply thereby creating (in effect) negative interest rates. The Fed believes that this "monetary easing" can stimulate the economy.
Thursday, April 21, 2011
Bernanke's QEx Money Printing Box / Interest-Rates / Quantitative Easing
By: Gordon_T_Long
Chairman Bernanke has placed himself in a box. It is not a box of his choosing, but rather the result of his misguided economic beliefs, use of flawed statistical data, geo-political events occurring during his watch, poor decisions and a penchant for political pandering. Some of these may be requirements for academia success but not for leading global financial markets during turbulent times.
Wednesday, April 20, 2011
Quantitative Easing and the Fed Balance Sheets 50% Contraction / Interest-Rates / Quantitative Easing
By: John_Mauldin
Dr. John Hussman is no stranger to Outside the Box readers. And his recent posting has my mind reeling. In essence he is saying that if the Fed wants to stop the QE and allow rates to rise, they must either reverse the QE or bring on inflation. And he does it with numbers and his usual strong reasoning. I really did read this 3-4 times, thinking through the implications.
Tuesday, April 12, 2011
The End of QE2: Fed Major Policy Shift Ahead, How to Invest Accordingly / Interest-Rates / Quantitative Easing
By: John_Mauldin
This week’s Outside the Box is from my friend David Galland, an interview he did for The Casey Report, and it represents a philosophical train of thought more in line with Austrian economics and libertarianism than my own. But if we only read what we already think, then how do we learn? It is only when your ideas are challenged and you must determine why the other guys are wrong and you are right, that you can either become more firm in your beliefs, or change. And much of what David says in this interview resonates. (I wrote about the end of QE2 a few weeks ago.)
Saturday, April 02, 2011
Excess Liquidity & Cheap Money Runs Rampant on Wall Street / Stock-Markets / Quantitative Easing
By: Dian_L_Chu
If one studies markets trading during the week, one thing becomes glaringly obvious-- there is too much cheap money sloshing around markets these days (See Chart Below). You no longer have healthy, two-sided markets in most asset classes.
Friday, April 01, 2011
The Fed Still Can’t End Stimulus Efforts! / Stock-Markets / Quantitative Easing
By: Sy_Harding
The strong jobs report for March has expectations rising that the Fed will dial back its QE2 stimulus right away, and begin raising interest rates soon.
Even prior to the jobs report the president of the Minneapolis Federal Reserve Bank, and a voting member of the Fed’s rate-setting committee, said he expects a “big upward movement” in inflation, making it “certainly possible” that the Fed will raise interest rates this year. He said the so-called Taylor Rule, a method of predicting interest rates based on inflation, points to a sizable 0.75% increase in the Fed Funds rate if the rate of inflation he expects shows up.
Wednesday, March 30, 2011
Quantitative Easing QE3 is on Its Way, Inflation Will Go Through the Roof / Interest-Rates / Quantitative Easing
By: Bob_Chapman
QE3 is on the way accompanied by almost zero official interest rates. QE1 was to bail out the financial sectors in the US and Europe and QE2 was to bail out US government debt. That is why the Fed has purchased 70% to 80% of Treasuries. Previous debt and the $1.6 trillion of new debt created this year means someone has to buy that debt and there are very few buyers. That means the Fed has to buy most of paper with funds created out of thin air in this monetization process.
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Tuesday, March 29, 2011
To QE or Not to QE? That is the Question / Interest-Rates / Quantitative Easing
By: Paul_L_Kasriel
At its March 15 meeting, the FOMC decided to continue with its program of quantitative easing, which would result in a net increase of $600 billion of Federal Reserve holdings of securities by the end of June. Of course, the FOMC issued a proviso with its decision. To wit, "The Committee will regularly review the pace of its securities purchases and the overall size of the asset-purchase program in light of incoming information and will adjust the program as needed to best foster maximum employment and price stability." Upon what "incoming information" should the Committee base its decision to modify its quantitative easing policy between now and June or, as important, beyond June?
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Monday, March 28, 2011
End of QE2 Could Trigger Blood on the Streets / Stock-Markets / Quantitative Easing
By: Dian_L_Chu
Federal Reserve Bank of St. Louis President James Bullard, when speaking to reporters in France on March 26, stated,
Read full article... Read full article...“If the economy is as strong as I think it is, then I think it may be reasonable to send a signal to markets that we’re going to start withdrawing our stimulus, and I’d start by pulling up a little bit short on the QE2 program… We can’t be as accommodative as we are today for too long, we’ll create a lot of inflation if we do that.”
Monday, March 28, 2011
Where Is QE2 Taking Us? / Interest-Rates / Quantitative Easing
By: Robert_Murphy
Five months into the second round of quantitative easing — "QE2" — it is useful to take stock of what it has, and has not, accomplished. In short, the monetary base is way, way up, price inflation is up, long-term interest rates are up, and bank lending is down. QE2 has thus begun to deliver on all the dangers of which the critics warned, but not the alleged benefits.
Friday, March 25, 2011
Why Quantitative Easing Has NOT Brought Back Inflation / Interest-Rates / Quantitative Easing
By: EWI
Below is an excerpt from the newest free Club EWI investor education resource, The Independent Investor eBook 2011. Inside are some of the most eye-opening research findings by EWI's president Robert Prechter, as published in the recent issues of his monthly Elliott Wave Theorist.
Sunday, March 20, 2011
What Happens When We Come to the End of QE2? / Interest-Rates / Quantitative Easing
By: John_Mauldin
What happens when the Fed is finished with QE2? I have been letting that filter into my thinking lately as I look at the economic landscape and the data we have seen the past few weeks. Correlation is not causation, as I often say, but all we can do is look back at what happened last time and speculate about the future. A very dangerous occupation, but your fearless analyst will plunge on ahead into the jungle of a very hazy future. You come with me at your own risk!
Saturday, March 19, 2011
Key Market Trends between QE1 and QE2 / Stock-Markets / Quantitative Easing
By: Asha_Bangalore
The Fed's latest policy statement suggested that it is most likely to complete the second round of quantitative easing (QE2) by June 2011. Discussions are underway about the status of financial markets after the termination of QE2 and if additional support will be necessary for self-sustained economic growth. In the interim, it is informative to trace the behavior of markets when QE1 was completed and QE2 was not in place. Chairman Bernanke's August 2010 speech laid the foundation for expectations of QE2.
Friday, March 18, 2011
U.S. Monetary Policy that Encourages Malinvestment / Interest-Rates / Quantitative Easing
By: Richard_Daughty
Thorsten Polleit, of the Frankfurt School of Finance & Management, penned an article in The Free Market newsletter of the Ludwig von Mises Institute titled "The Many Names for Money Creation."
It starts off almost humorous, reading more like an interesting, mood-lightening sidebar to a banner article titled "We're Freaking Doomed (WFD)!" as he notes that the dire economic conditions are such that "euphemisms have risen to great prominence. This holds true in particular for monetary policy experts, who are at great pains to advertise a variety of policy measures as being in the interest of the greater good, because they are supposed to 'fight' the credit crisis."
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Thursday, March 17, 2011
Monetary Lunatics, Is QE3 Ahead? / Interest-Rates / Quantitative Easing
By: LewRockwell
Austrian School economists have often explained the business cycle using the metaphor of liquor or drugs. The expansion of paper money and credit gives a sense of exuberance, an economic high that leads to excessive risk-taking and ballooning production. But it can’t be sustained. There is a morning after.
Thursday, March 17, 2011
Japan Natural Disaster to be Fought with a Tsunami of Credit / Interest-Rates / Quantitative Easing
By: Dr_Jeff_Lewis
Following the worst natural disaster in decades, the Japanese central bank will begin an instant round of easing to boost liquidity as Japan continues to recover after disaster. The country, wrecked by an awful 9.0 earthquake and following tsunami, along with nuclear reactor exposure, will now cope in perhaps the worst way with economic fallout: 15 trillion yen in bond-buying, worth roughly $183 billion.
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