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Dow Jones Industrial Average ( DJIA ) Close - 10809.85 Down 634.76 Nasdaq Stock Market Close -2357.69 Down 174.72 S&P 500 Close -1119.46 Down 79.92
Commodities Closing Prices - 8/8/11
Gold Close - 1720.50
Oil Close - 80.30
Natural Gas Close - 3.95
Gold obviously is the big winner here in the last eight months.
The purpose of the $600 billion dollars of QE2 was to stimulate the economy by lowering interest rates on long-term loans, stimulating consumer spending and reinvigorating hiring.
I think we can say it was a waste. Quantitative Easing, printing money - whatever you want to call it - didn't work. In less a year the economy went nowhere, maybe even backwards - and the increased supply of money raised food and gas prices.
The money from the QE's never got into the system.
It stopped at the banks.
It worked in that banks got government money to invest and make a profit off of.
Exactly. Which is why the stock has been disconnected from reality. It will return to reality the further away we get from QE2 - at least until QE3 is reality.
The money from the QE's never got into the system.
It stopped at the banks.
It worked in that banks got government money to invest and make a profit off of.
Look for that to happen with QE3 as well. I've been reading that QE3 may go to purchase homes and mortgages (read buyout Freddie/Fannie's toxic assests and foreclosures).
II went to foreign branches of US banks that then came home and they turned around and bought up debt with it. It's pure insanity.
QE III to purchase homes? So why am I paying my mortgage when Fannie will pay for it? So if I stop paying my mortgage they'll just wipe it away from Well's books? Free houses for everybody? Hell I may just stop paying and see what happens. The way foreclosures are backed up or thrown out probably never hear from em anyway. Credit will be zapped but hey the government's is and Obama just says they were wrong. I'll just tell the credit companies the same thing and see how they respond. Maybe call em terrorists too.
The money from the QE's never got into the system.
It stopped at the banks.
It worked in that banks got government money to invest and make a profit off of.
Well it got into the system to the degree that whatever money the banks and the elites who were the beneficiaries of all the freshly printed money didn't have to spend their OTHER money. One way you can tell it made it into the system is by looking at the rate of the price increases of food. If all they were doing was storing it under a mattress, we'd see prices stable or even go down like they should in a rotten economy.
Actually QE2 did accomplish some things - a partial list...
The Federal Reserve was indeed successful at provoking a speculative frenzy in the financial markets, which has now been completely wiped out.
The Fed was also successful in leveraging its balance sheet by more than 55-to-1 (more than Bear Stearns, Lehman, Fannie Mae, Freddie Mac, or even Long-Term Capital Management ever achieved)
The Fed was indeed successful in provoking a wave of commodity hoarding that affected global supplies and injured the poorest of the poor - particularly in developing countries.
The Fed was successful in setting off a very predictable decline in the value of the U.S. dollar.
The Fed was successful at boosting the trading profits of the banks that serve as primary dealers, by announcing precisely which securities it would be buying prior to Treasury auctions, and buying them on the open market a few days later from the dealers that acquired them.
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