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wil717
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QE3’s Ominous End Looms

- Adam Hamilton - Zealllc

Interesting article, but Mr. Hamilton I'm stuck on one point. I'm not an economist but I've seen one main reason given for why inflation didn't take off like many Gold proponents thought it would after all the Fed money printing. That reason is that the fed money is sitting in the banks as excessive reserves and was in large part not loaned out which would have caused inflation. That makes sense to me except I don't understand how QE really helps or hurts the economy if the banks just sit on the money, what's the point??

However, you say that QE "goosed the US stock markets". How is that possible if the banks are sitting on the money?

Any insight would be much appreciated since the answer makes a big difference in terms of investment planning.

Commented 3716 days ago

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Beginning of the headline :The Federal Reserve?s third quantitative-easing campaign is on track to wind down in late October.At that point the Fed will likely stop printing new money to buy bonds, a sea-change shift with ominous implications for the stock markets.Their entire surreal levitation during QE3 mirrored the huge growth in the Fed?s balance sheet from QE3?s bond monetizations.When they cease, another major selloff is likely.QE3?s impact on the global financial markets has been vast beyond belief.The Fed launched... Read More

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