QE: To Infinity...And Beyond!Submitted by MarcMadness on Thu, 09/20/2012 - 07:35
Stagnating economy got ya down? Well have no fear, citizen, world famous superhero Buzz Bernankyear is back to save the economy once again! What superpower will he use to save the day this time? Will it be…no, wait, I’ve got it…more money printing?! YES, citizen, more money printing! Only this time we’re going to call it Quantitative Easing 3!
Still with me? My apologies, but my brain can only handle hearing the same thing over, and over, and over and over until it finally implodes upon itself and creates an alternate reality where all of my thoughts manifest as filtered through Pixar animated films. We all have our ways to cope.
Yes, in classic Keynesian style, Ben Bernanke has once again announced another round of “Quantitative Easing” , a fancy term for “creating money from nothing”. This new money will be used to buy stuff like mortgage-backed securities and U.S. Treasuries. It’s hard to predict exactly the immediate and precise effects of this new round of QE. It seems it will be used in some ways to prop up the housing market – and we all know how well that usually works out. But one way or another, once this newly created money finds it’s way into the economy it will hurt the value of the dollar and cause price inflation. Inflation, the most insidious of taxes, as it is one that most people don’t even realize is occurring, content shrug their shoulders and accept rising prices as an Act of Nature, or perhaps the doings of Evil Speculators!