OUT OF MIND
Would you like to react to this message? Create an account in a few clicks or log in to continue.
Latest topics
» Insatiable demand for cannabis has created a giant carbon footprint
  QE3 Explained Simply EmptyToday at 5:02 pm by PurpleSkyz

» Johnson and Johnson Has Paid $BILLIONS in Criminal Settlements and Never Produced a Vaccine Before – Why Would We Trust Them for a New Experimental COVID Vaccine?
  QE3 Explained Simply EmptyToday at 5:00 pm by PurpleSkyz

» Skid Row homeless encampment in downtown Los Angeles in the rain
  QE3 Explained Simply EmptyToday at 4:59 pm by PurpleSkyz

» CDC releases highly anticipated guidance for people fully vaccinated against COVID-19
  QE3 Explained Simply EmptyToday at 4:58 pm by PurpleSkyz

» Monsanto Found Guilty of Chemical Poisoning in Landmark Case
  QE3 Explained Simply EmptyToday at 4:41 pm by PurpleSkyz

» Leftists Start a Pillow Fight with Mike Lindell
  QE3 Explained Simply EmptyToday at 4:40 pm by PurpleSkyz

» Radio is dangerous, but not 5G? FCC greenlights rollout for 5G tech but reaffirms radio radiation
  QE3 Explained Simply EmptyToday at 4:39 pm by PurpleSkyz

» Sacha Stone - Institutional Child Trafficking Part 3 - SHARE WIDELY -
  QE3 Explained Simply EmptyToday at 4:37 pm by PurpleSkyz

» Benjamin bla bla blah Fulford - 3/08/2021 - Gnostic Illuminati Targets Bloodline Elite 2021 Offensive Begins
  QE3 Explained Simply EmptyToday at 4:36 pm by PurpleSkyz

» Whanganui woman one of just 11 in the world with MAM negative blood type
  QE3 Explained Simply EmptyToday at 4:35 pm by PurpleSkyz

» What is Superior Mirage? Why the Ship looks Floating?
  QE3 Explained Simply EmptyToday at 4:34 pm by PurpleSkyz

» Sense of Taste
  QE3 Explained Simply EmptyToday at 12:02 pm by Consciousness Of Economic

» Truths in small doses
  QE3 Explained Simply EmptyToday at 12:01 pm by Consciousness Of Economic

» Sense of Smell
  QE3 Explained Simply EmptyToday at 11:59 am by Consciousness Of Economic

» Covid testing: DfE confirms arrangements for extra school funding
  QE3 Explained Simply EmptyToday at 11:57 am by Consciousness Of Economic

» The Six Basic Exercises for Esoteric Development
  QE3 Explained Simply EmptyToday at 11:54 am by Consciousness Of Economic

» Avoid These Fake Silver Bars! We show you how!
  QE3 Explained Simply EmptyToday at 11:53 am by Consciousness Of Economic

» Morality will be built on the foundations of spiritual knowledge — or it will not be built at all!
  QE3 Explained Simply EmptyToday at 11:52 am by Consciousness Of Economic

» at Woodborough - Harald Kautz Vella
  QE3 Explained Simply EmptyToday at 11:50 am by Consciousness Of Economic

» A Royal Conflict: Buckingham Palace vs. Hollywood
  QE3 Explained Simply EmptyYesterday at 7:34 pm by bs4ever

» Sean Stone Goes Full Cringe - Is this Really the Great Awakening?
  QE3 Explained Simply EmptyYesterday at 4:53 pm by PurpleSkyz

» Clif High - Woo Rules!
  QE3 Explained Simply EmptyYesterday at 4:51 pm by PurpleSkyz




You are not connected. Please login or register

OUT OF MIND » THE INSANITY OF REALITY » GOVERNMENT & THE NEW WORLD ORDER »  QE3 Explained Simply

QE3 Explained Simply

Go down  Message [Page 1 of 1]

1  QE3 Explained Simply Empty QE3 Explained Simply Mon Sep 17, 2012 1:30 am

godsfool713

godsfool713
http://currencyeconomics.com/qe3-explained-simply
  QE3 Explained Simply Qe-3-explained

Written by:CurrencyWritten on:August 15, 2011 Comments

QE3, or quantitative easing 3, lingers in the back of investors’ minds.

Few investors seem to know exactly what quantitative easing really means.

We’ll take the time to explain it now.

QE3 Explained

Quantitative easing is a simple concept: a central bank “prints” money to buy long- and short-dated government debt. The goal is to drive down interest rates, boost demand for investment capital, and increase economic output.

Supply and demand are equally powerful forces in the currency and debt markets as they are in the market for shoes, toothpaste, or jelly beans. Increasing supply means lower prices. For currency, the price is not only the current price, but also the future price—interest rates.

Many think that quantitative easing 3 will never come. The Fed has agreed to make the market for dollars liquid with a promise to keep interest rates at 0-.25% for the next two years. That action alone should keep the price of money inexpensive enough to end all talk of QE3.

Effects of QE3

We can’t predict with certainty what the Federal Reserve will do to boost output, stave off deflation, and promote general economic growth. However, we can explain how QE3 will affect the markets, pending that it does eventually come:

Lower Treasury Yields – The Federal Reserve is authorized to buy US Treasuries with freshly printed dollars. When the Fed bids up the price of US Treasuries, the yield on US Treasuries moves down. This is true for any bond—price and yield are inversely-related.
Lower dollar value – By nature of any quantitative easing program, the Fed must create more dollars to buy up US Treasuries. Naturally, this results in a lower dollar value against other currencies, as the price of the currency is dictated primarily by supply and demand.
Inflation concerns – It happens every time the Fed acts to loosen monetary policy. Inflation remains low in the US, but a small group of investors worry that quantitative easing will lead to inflation. The reality is that the Fed would like to see inflation, since it has thus far failed to create any real measurable amount of it. Deflation remains a top concern.
Rising asset prices – Assets are priced into the future, whether we’re talking about stock prices, or the price for a barrel of oil. When the time value of money falls, investors can pay for earnings further out into the future. Bernanke made it clear his goal was to boost the financial markets, and that means giving lift to asset prices.
See? Economics doesn’t have to be difficult to understand!

Back to top  Message [Page 1 of 1]

Permissions in this forum:
You cannot reply to topics in this forum