will there be a QE 3 ?

Possibly a double dip "W" recession. At the very least, high unemployment sticks around for a while.

 

without QE 3 the whole house of cards of this phoney recovery will come crashing down!

 

and just how can buying the debt of a bankrupt nation be a wise move?

 

stimulus doesn't work...it didnt work in japan and as you can see it didn't work here either. The system is going to eventually collapse anyways so whats the point in kicking the can to a future date? By delaying you are just guaranteeing a bigger collapse in the future!

 

purchasing the debt of a bankrupt nation is considered a safe haven? You're joking right?

 

You are being overly dramatic here. We're in better shape then more European countries (not just Greece). The United States isn't going to default in the next two years. It is still the case that treasuries are a very liquid form of investment.

 

QE 1 and 2 has failed.

Nope cause I've never seen it. I'd bet it wouldn't be that bad as it'd allow housing prices to decline so low middle class could buy a home at low 30 yr fixed rates.

Problem with QE is it's about creating a bubble thus leaving a certain portion of the population out of any recovery. For example poor and middle class feel the hit in inflation (yes, inflation is happening).. while rich and banks make more money benefiting from that inflation. Which ends up having a President and Liberals wanting to help a system they helped create by making the rich, richer. QE has never worked. Japan still hasn't recovered from it's QE. Nor has the US recovered from it's QE in the 1930s (dollar value is not the same). Weimar Republic turned to Nazism. Zimbabwe is a hell hole, same with some South American countries.

Housing has already collapsed. Can't do any worse really. If you are really worried about it, ask why hasn't the Government (Local or State) knocked down all abandon homes which would cut supply or better yet.. get some matches and burn them down.

Bank failures since 2007 = 370. FDIC lost $78,283,200,000.

So you understand.. some banks failed over $500,000 or less. Some even were declared failures when it has 100% in deposits and it's assets sold to bigger banks (dirty politics which will come out in the future).

Even European banks again are under pressure. Today, France had 3 MAJOR banks put on watch for future downgrade, with the big dog of the group being said to need a Government bailout.

So failures happen with bailouts or without them.

That's the problem. The Fed is printing money to keep the US Government running thus destroying the economy (despite what you are told its harming us big time). We will (*)(*)(*)(*) China off, and China will drop a trillion dollars worth of treasuries. This will make the Fed null and void and bond rates will sky rocket. Plus, the Fed can't expand it's balance sheet anymore without truly destroying the dollar.

 

it has not failed as the rich may not sit idle any longer and watch their savings and assets decrease in value.

as noted during the recession many companies and wealthy are holding onto their money in the trillions.

QE so far may have influenced them to start spending again, if not QE 3 will start.

 

It has not failed? Really? The rich are sitting idle and have been for years. Rich have just parked their money in commodities, bonds and short term stock runs not investments. This actually makes them money, not lose money as assets go up in value when you print money. It's why Oil is near $100 and not at $75.

You need investments preferably long term to spur future growth. Think Microsoft with AT&T and IBM investing capital in Microsoft during the 1980s. Nobody is going to invest if there is high risk or little reward. I can pump money into some idea but only if the reward ("profit") is there. If the risk is high, I won't. When I speak of risk I speak of uncertainly such as how Obamacare is gonna work, how regulations are gonna work, if taxes are gonna go up as these things eat into my "profits" in taking a risk on some small cap company.

I would rather sit on $2 trillion and tuck it away in commodities, bonds, or even currency trades before I would invest right now.. and business agree with me.

Even though the claim $2 trillion made by Obama is way over stated.. its more like $1 trillion or less as most companies sit on money for payroll purposes.

QE 2 and QE 3 has nothing to do with getting companies to spend. It has with lowering borrowing costs and making a speculation bubble. I.E. trying to bring up home values so people weren't "underwater". But the issue with that is if people are losing or doesn't have jobs, it doesn't matter how much their house is worth as nobody is gonna buy.

Thus back to what I said.. QE2 was about making the rich, richer. It harmed the poor not just in the US, but all over the world. Why do you think there is riots in Syria? An overthrow in Egypt and a US backed support of an overthrow in Libya? Because all those events started with INFLATIONARY pressures on food (even with droughts around the world) and basic items because it became to expensive to buy food and basic items as the dollar is the world reserve currency. So while our dollar fell, prices there INCREASED. What you don't understand is that Egypt imports wheat, in fact they are the no. 1 in the world, and wheat was up 10% before the riots started. Imagine 10% on top of what you normally spend just going to wheat products.

And you said QE2 has worked.. get a degree in economics then talk.

 

As noted in the news since 2008 companies are sitting on trillons of dollars that they would have ordinarily spent if not for the recession.

Anytime the free market holds the economy hostage the government has the power with quantatitive easing to give them a push in the right direction.

The wealthy have the most to lose with Quantatative Easing as it decreases the value of their net worth, they can counter a bit with their liquidity invested in commodities, bonds, etc...but most of their real worth is found invested in American real estate and companies.

QE 3 will arrive if they continue not to spend money.

 

No, it doesn't not decrease their net worth..

Here's some basics you need to understand..

A person with $1 million will park that money in something that will outpace inflation (increase in money supply), i.e. Stock, Bonds, Commodities and currencies. This is a fact to ignore it shows your lack of knowledge..

A person with $12,000 to say $150,000 will have their paychecks eaten up by inflation. As basic items will go up in price and they have no way to earn more then inflation. For example a person working 40 hours a week at McDonald's will not get a pay raise that will match inflation, nor will a Federal Government employee at GS-12/13 making $80,000. This is a fact again.

So when Gas, Food and Utilities go up, it eats up their paycheck. While the rich person will not be harmed and more then likely make money on this.

Look at Corporation profits over QE2. They've gone up. They didn't expand. They didn't hire more people. They actually downsized. So how can you downsize and still make a bigger profit? Because of inflation or low borrowing costs (which is inflation based item).

It's why a Goldman Sachs can make $2.7 billion in Q1 2011 after paying Warren Buffet back $5 billion. If they didn't pay back Buffet, they would have doubled profit from Q1 2010. Get rid of QE and Goldman Sachs isn't making $7.7 billion Q1 2011.

 

Incorrect the wealthy have the most to lose

their liquidity may be invested in commodities, bonds, etc...but most of their real worth is found invested in American real estate and companies, simply they are watching their properties and companies lose value

also downsizing is not caused by inflation, its caused by cheap companies.

the government taxes them with quantative easing as punishment for not spending, expanding

 

depends on how you look at the debt....if you just look at debt to GDP then perhaps many european countries including Japan are in worse shape....but you need to look at the bigger picture....for example Japan borrows its needs from its own people as Japan has a huge savings rate, plus Japan has huge foreign exchange reserves thanks to their trade surplus. MMany eiropean countries also have huge debt to GDP but again many have other factors that cancel out those negatives.

The USA on the other hand has not only a very large debt to GDP but also has to borrow most of that money abroad as the savings rate in the US is very low...add to that the huge trade deficit and you have the perfect storm of whats to come...and that is the currency crisis that I have been warning about that is coming in the next few years!

 

all QE 1 and 2 did is delay the inevitable.......the economy desperately needs to rebalance. The recession is actually the cure that is desperately needed in order to rebalance the economy. With QE all you are doing is growing the debt and making the coming crisis and collapse that much worse!

 

it is my opinion that the main reason for QE 1 and 2 was to bail out Bernacke's banking buddies on wall street!

 

yes the price of housing desperately needs to fall so that first time buyers can come back into the market...I have been argueing this point for the past 6 months. But the problem is that there must be some pain ( the hangover) before things can get back on track. This means many more banks must fail and this includes freddie and fanny.....also some home builders must dissappear as there is too much capacity!

 

America hasn't had high inflation in almost thirty years. And it's not expected to anytime soon.

china, on the other hand, is experiencing rising inflation, because QE2 is putting pressure on their economy because they've basically pegged their currency to 40 or 50% lower than it would be on the currency markets.

 

Greece? Who cares? That's Germany's problem. and frankly, if Greece cut defense spending and increased domestic spending, they'd be able to get out of their debt problem on their own.

 

Japan's stimulus was offset by their propping up of their banking system.

And instead of kicking the can down the road, there's a lot of domestic policies that could put the U.s. on a sustainable path. Cutting military spending and taking a portion of that and spending it on infrastructure, single payer health care and more would be smarter and bring in the revenues needed to lowering deficits and debt.

 

we're not even in trouble of defaulting in 30 years, unless the GOP institutes more tax cuts and more domestic spending austerity.

 

When assets and earning are more than debts, calling it bankruptcy is insane.

 

Let me show you were you are wrong.. by using this very post of yours.

Real Estate is a commodity. A cheaper dollar means house values actually don't fall as much (thus protecting that asset more then if no QE was done).

Investments in companies are called STOCKS or Corporate BONDS. The stock market is actually up during QE2. For example the Dow is up 14%, S&P 500 is up 13.5% and Nasdaq is up 14.13% well above CPI (Government inflation numbers). We are talking 3xs CPI. This works another way as well, since if you sit on a Board or get a bonus, that's making more money as Stock Option are usually part of a bonus package or it's stock value that determines bonus.

I never said it did.

LOL, if you think so.. think that.. but what does QE do to poor people who are effected by QE as well. Liberals (*)(*)(*)(*)(*) about rich not paying enough taxes and that poor pay too much.. but low and behold QE has no effect on the poor right? Typical liberal economic nonsense.

 

Shanty I see you still are ill-informed.

Greece is actually our problem too as the US fund 20% of the IMF, so basically 8 billion of the 145 billion bailout came from US. Or in other words $345.82 per U.S. household.

Next, all of the Greece bailout (and the Banking bailout) is that the US Government (and the rest who forked money over) is/are the JUNIOR in existing debt. This means when Greece can't pay us back we are SOL. The lender of last resort is suppose to be SENIOR. But for some reason banks are Senior in the Greece deal.

I am sure Krugman and Stiglitz didn't explain that one to you. Oh and just so you know, of that 8 billion, we are borrowing it from China, paying China interest, just to loan it to Greece, a country, that doesn't have it's act together.

 

So the US is bankrupt under that definition?

 

Then you should be against QE. As QE is propping up Freddie, Fanny and others.