Wednesday, September 19, 2012

QE-Infinity: The Last Card in the Deck

Recently the Federal Reserve announced that they would begin a new cycle of Quantitative Easing (QE), which is just a fancy way of saying that they're going to print money. However, this time around there was no limit set on the total bond purchases. Instead it was dubbed 'open-ended' which is why the term 'infinity' is most appropriate [http://bloom.bg/TXVSh4].

Following the Fed's announcement the Bank of Japan (BOJ) came out and said that they would also begin a similar bond buying program to essentially weaken the Yen and combat the Fed's program [http://bit.ly/UcIUxD].

Though this seems like 'business as usual' nowadays the open-ended nature of QE is very dangerous. It is tantamount to playing the last card and it will not provide real economic growth for anyone. Its only purpose is to provide an illusion of stability and buy a little bit more time. I encourage you to review some of the more popular posting on this blog to get a background on the drama that has been paying out for several years now. I'll also be updating this blog more often to provide alternative perspectives and information on what the actual State of the Union is.