QE Effects

[craigerv]

Well it sounds like the Fed is going to be starting another round of QE. We've seen Tom post the chart below a number of times now so you can see the effect it has had on the S&P during the recovery. Anyone want to post some insight on the longer term effects? I'm sure we'll have to pay for this somewhere down the road...

 

[craigerv]

"If citizens approve of QE and spend more money, the economy will likely recover. If they dislike this route and hang onto their savings with a tight fist, no amount of quantitative easing can force people to spend their inflated dollars."

Short and Long Term Effects of Quantitative Easing | Suite101.com Short and Long Term Effects of Quantitative Easing | Suite101.com

I do agree with this. As long as people are willing to spend more using debt to grow their local economies, the recovery will continue. But if uncertainty about QE's effects cause people to keep their money to themselves, I think we'll see much more of a stagnation.

 

[Frixxxx]

This was a clear directive from outside the Fed.......Another short term fix for something that needs to shake out....I'd like to introduce our friend, once again, Inflation. Just like we need this now. Debt? We want people to go into debt to spend the money....Not me...and it seems that it never happened QE I or II.

BTW, they're buying MBS's, If people don't pay their mortgage, does the Fed own the houses?

 

[tomcat22]

I pulled some off the table a few weeks ago now I want to double down and get all in, but should I wait a few trading days for the hang-over to set in and clear up. Market's up nearly 2% since the announcement!

 

[Dutchy]

I pulled some off the table a few weeks ago now I want to double down and get all in, but should I wait a few trading days for the hang-over to set in and clear up. Market's up nearly 2% since the announcement!

I would not roll in at these elevated levels.... Let Markets settle for a few days...

 

[Dutchy]

This was a clear directive from outside the Fed.......Another short term fix for something that needs to shake out....I'd like to introduce our friend, once again, Inflation. Just like we need this now. Debt? We want people to go into debt to spend the money....Not me...and it seems that it never happened QE I or II.

BTW, they're buying MBS's, If people don't pay their mortgage, does the Fed own the houses?

So, they're buying the MBS's from the big banks?? How does this pump liquidity into the economy?? Look out inflation, I have to get into a hard metals ETF, ASAP!

 

[Birchtree]

There are so many short positions out there that this market may not slow down for several months - I'd buy asap and not look back.

 

[Birchtree]

My wife is 100% SPX index fund with her defined contribution plan and we will stay there for many more years into the future.

 

[craigerv]

Since 1999, the dollar has been devalued more than 80% against gold. Economic growth has averaged a paltry 1.7% a year – the worst 12 years since the 1930s. The Fed’s easy money policies during the middle of the decade contributed directly to speculative bubble in real estate and the financial crisis of 2008.

The Fed's Futile Effort To Bail Out Obamanomics - Forbes

 

[PLANO]

Quantitative Easing Explained

Quantitative Easing Explained

 

[burrocrat]

do you think it would help if we asked nicely?

we could pay a lawyer to draft a letter and send it to mr. ben. something like this: 'sir, we know your organaization has a long history of printing money and you are doing an outstanding job of carrying on the tradition, but could you please, please quit destroying the value all of us workers have scraped and saved for? seriously dude, these now worth less savings were what i planned to eat on in my golden years'.

please, don't, stop.

 

[KevinD]

BTW, they're buying MBS's, If people don't pay their mortgage, does the Fed own the houses?

Is this their already bad paper or are they buying NEW MBS's?

 

[Birchtree]

Money Printing: Good For Stocks - Bad For Bonds | Chris Ciovacco | Safehaven.com

 

[Warrenlm]

Through the Fed and the Congress, we're spending a lot of future dollars to create the illusion/perception of good feelings in consumers about spending and about our home values, our 401Ks, etc. John Mauldin's newsletter of Sep 22 has a discussion of what unlimited QE means and includes this chart of business peoples' perceptions. Looks like the President elected or reelected in 2016 will still be quite challenged judging by the timeframes on this graph.
http://www.mauldineconomics.com/images/uploads/pdf/mwo092212.pdf
View attachment 20428