Category: Quantitative Easing
The analysis published under this category are as follows.
Wednesday, November 10, 2010
Quantitative Easing During Mid 1930s Appears to Have Been Successful / Economics / Quantitative Easing
By: Paul_L_Kasriel
There is much skepticism as to whether the Fed's second round of quantitative easing, QE2, will be effective in stimulating the nominal demand for goods and services in the U.S. economy. It was explained in our November 4, 2010 US Economic and Interest Rate Outlook why the Fed's first round of quantitative easing, which ran from the end of November 2008 through the end of March 2010, was rather unsuccessful in stimulating nominal aggregate demand and why we believe that the Fed's just-announced second round will be more successful. Keying off Mark Twain's aphorism that although history may not repeat, it often rhymes, perhaps we can get some guidance as to whether QE2 will be successful from the results of the quantitative easing that was initiated in the second half of 1933.
Tuesday, November 09, 2010
Fed Accelerating Cycles of Money Pritning Without Exit Strategy / Interest-Rates / Quantitative Easing
By: Peter_Schiff
While it's true that history repeats itself, the patterns should always be separated by a generation or two to keep things respectable. Unfortunately, in today's economic world, it seems the cycle can be counted in months.
Friday, November 05, 2010
Beware The Fed Money Printing Tide / Interest-Rates / Quantitative Easing
By: John_Browne
This week, desperation became palpable at the Fed. In both the formulaic statement that accompanied its FOMC policy decision and Chairman Ben Bernanke's unusual (and clumsy) Washington Post op-ed follow up, the guardians of our currency expressed grave disappointment at the slow pace of US economic recovery and emphasized the continued threat of deflation. The Fed is now pledging to defeat this recession using any monetary means necessary. Unfortunately, their embrace threatens to smother our economy.
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Friday, November 05, 2010
Winners and Losers in the Global Money Printing War / Interest-Rates / Quantitative Easing
By: Mike_Larson
There’s a Great Global Money War raging right now — and the U.S. is losing.
That’s the inescapable conclusion I draw from the market action I see on my screens … the headlines coming across the tape … and the actions being taken in the financial capitals around the world.
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Friday, November 05, 2010
U.S. Fed Buying $600 Billion in Debt with Debt / Interest-Rates / Quantitative Easing
By: Midas_Letter
Here is the glaring hole in the United States Federal Reserve’s approach to what it calls stimulus, and what history will one day categorize as fraud: You can’t use your own debt to purchase more debt when you can’t repay the original debt. The crime is compounded when you know you’re never going to repay the debt. It amounts to treason to intentionally destroy the integrity of the nation’s money. The Federal Reserve’s ability to “purchase” U.S. Treasury Bills is completely dependent on the fact that there is no overseer above the Board of Governors of the U.S. Federal Reserve to call an end to such self-destructive, immoral, and just plain criminal behaviour.
Friday, November 05, 2010
Bernanke Dares The World with QE2 Money Printing / Interest-Rates / Quantitative Easing
By: Brady_Willett
On November 3, 2010 the Federal Reserve Board announced another round of money printing (aka quantitative easing), and yesterday Chairman Bernanke defended the Fed's actions in the Washington Post. It is unusual for Mr. Bernanke to use the op-ed format to impart the Fed's thought process. This speaks to the fact that while so many are aware of the risks of QE2, so few see the potential benefits. Before some thoughts on QE2, first an overview of Bernanke's commentary.
Friday, November 05, 2010
South Korea, Hong Kong, Brazil, China, Complain about Bernanke's QE Policy / Interest-Rates / Quantitative Easing
By: Mike_Shedlock
A parade of countries have expressed grave concerns over the Fed's misguided Quantitative Easing policy.
South Korea Aggressively Considers Curbing Capital Inflows
Thursday, November 04, 2010
Fed QE2, Insanity Prevails Over Common Sense / Interest-Rates / Quantitative Easing
By: Andy_Sutton
It certainly looks as though once again insanity has prevailed over common sense. In what has become a recurring theme in our world, particularly from a policy standpoint, the Federal Reserve announced another round of government bond purchases, dubbing the effort ‘QE2’. I wonder if QE2 is any relation to R2D2 from the popular Star Wars series? I think a rather strong argument could be made that the little guy has more common sense than the entire board of Fed governors. All jest aside, however, there are rather serious ramifications to this latest round of pumping; especially since there is no reason to believe the results will be any different than the last effort. Banks and the Government will maintain the status quo while Main Street languishes.
Thursday, November 04, 2010
QE2 Is Likely to More Successful than QE1 / Interest-Rates / Quantitative Easing
By: Paul_L_Kasriel
On November 3, the FOMC announced that it would increase the quantity of its outright holdings of securities by a net $600 billion by the end of the second quarter of 2011. Thus, the Fed has re-embarked on a policy of quantitative easing. Its first real "voyage" of quantitative easing, QE1, started at the end of November 2008 and ended in March 2010. The expected (hoped for?) outcome of a quantitative -easing policy is increased nominal demand for goods and services. Under normal circumstances when the commercial banking system is not constrained by actual or expected capital inadequacy, the Fed is able to stimulate the nominal demand for goods and services by lowering its key policy interest rate, the federal funds rate.
Thursday, November 04, 2010
$600 billion Fed funny money! Big LIE! / Interest-Rates / Quantitative Easing
By: Larry_Edelson
This is it — the hot news that Wall Street was waiting for with bated breath.
Fed Chief Bernanke’s going to buy another $600 billion in Treasury securities to pump liquidity into the economy.
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Thursday, November 04, 2010
Reasons Why QE2 Will Fail / Interest-Rates / Quantitative Easing
By: Mike_Shedlock
Dr. El-Erian, CEO and co-CIO of PIMCO states several reasons why QEII will backfire.
1. The Fed is going it alone, without meaningful structural reforms
2. Emerging economies burdened by capital inflows in the wake of QEII will react with currency wars, protectionism, and capital controls
3. Resultant commodity price increases will increase input costs and reduce earnings of American companies
Wednesday, November 03, 2010
Fed Announces QE2 to Make a Dent in the Unemployment Rate / Interest-Rates / Quantitative Easing
By: Asha_Bangalore
The FOMC policy statement, as widely expected, indicated the Fed's plan to purchase $600 billion of longer-term Treasury securities by the end of the second quarter of 2011. At the end of October 2011, the Fed's balance sheet stood at $2.278 trillion, with its holding of securities at $2.039 trillion.
Wednesday, November 03, 2010
Fed Anounces $600 Billion QE2 to Buy U.S. Treasury Bonds and Reinvest $250 Billion More / Interest-Rates / Quantitative Easing
By: Mike_Shedlock
As expected, the Fed announced a "modest" $600 billion second round of Quantitative Easing. Estimates rated as high as $2 trillion.
Wednesday, November 03, 2010
What to Expect from the Federal Reserve’s Next Round of Quantitative Easing, QE2 / Interest-Rates / Quantitative Easing
By: Money_Morning
Jon D. Markman writes:
The U.S. Federal Reserve today (Wednesday) is all but certain to announce a second round of quantitative easing - "QE2."
Most analysts believe the Fed will pledge to buy another $500 billion in U.S. Treasuries, but I think it will go even further. My expectation is that $500 billion in Treasury purchases over six months will be just a first step, and that the full amount contemplated - as much as $2 trillion - is much larger than consensus.
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Wednesday, November 03, 2010
Why Quantitative Easing Is Similar to Monopoly / Interest-Rates / Quantitative Easing
By: Jared_Levy
The second iteration of quantitative easing (QE2) is supposed to make "money easier" -- make it flow from the banks to consumers to businesses, etc. The first round of quantitative easing pumped billions of U.S. dollars into the system, but not much of it made it into my hands, and I'm guessing yours either...
If you have ever played Monopoly and have been "the bank," you get to control all the money that is divided out to each player.
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Tuesday, November 02, 2010
A Refresher Ahead Fed's Announcement of Second Round of Quantitative Easing / Interest-Rates / Quantitative Easing
By: Asha_Bangalore
The Fed is widely expected to announce the second round of quantitative easing (QE) after the FOMC meeting on November 4. The goal of the policy change is to bring about an increase in real GDP above the tepid 2.0% pace reported for the third quarter such that it eventually makes a dent in the current elevated unemployment rate of 9.6%. The details of QE2 in terms of timing, size, and speed are awaited.
Monday, November 01, 2010
Slow U.S. GDP Growth Sets Stage for Fed’s Next Round of Quantitative Easing / Economics / Quantitative Easing
By: Money_Morning
Don Miller writes :
The U.S. economy continued to struggle to grow in the third quarter, most likely giving government officials enough cover to pump more liquidity into the financial system to stimulate hiring.
Gross domestic product (GDP), the value of all goods and services produced, increased by 2% in the third quarter, the Commerce Department reported Friday. Economists polled by Dow Jones Newswires were expecting GDP to rise by 2.1% in the July to September period, The Wall Street Journal reported.
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Monday, November 01, 2010
Bernanke Torching the U.S. Economic Recovery with Quantitative Easing / Economics / Quantitative Easing
By: Paul_Lamont
Investors Burned by Bernanke’s QE Demonstrations
While Chairman Bernanke has his theory on quantitative easing, we suspect QE will turn out more like this Turkish firefighter demonstrating fire safety (no one was hurt in this video). Instead of limiting losses to those that took risks, Bernanke’s first round of bailouts in 2008-9 spread the fire to all American taxpayers. Ben’s next demonstration of quantitative easing is likely to create uncertainty and chaos by torching the credit markets.
Sunday, October 31, 2010
Bernanke Makes a Pact with the Devil / Stock-Markets / Quantitative Easing
By: Uncommon_Wisdom
Monty Agarwal writes: When Fed President Hoenig declared last week that Bernanke is making “a pact with the devil,” he wasn’t kidding.
Nor was he talking about a little side deal that would someday be forgiven in money heaven.
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Thursday, October 28, 2010
What is Quantitative Easing? Fed’s Perspective and Writings / Stock-Markets / Quantitative Easing
By: Chris_Ciovacco
A Wall Street Journal article (10/27/10) on quantitative easing (QE) hints the Fed will take a middle of the road approach in terms of the size and duration of QE2. As we would expect, the stock and commodity markets’ initial reaction is negative. A middle of the road approach to QE seems counter intuitive to the Fed’s own historical analysis of why quantitative easing was ineffective in Japan. In CCM’s July 2010 review of James Bullard’s Seven Faces of “The Peril”, our read between the lines interpretation of Bullard’s take on QE included: