And let's hope
this third round of Quantitative Easing helps. It's a little later than
I expected, but it's welcome nonetheless. Its purpose is to reduce long-run interest rates (they're the only ones that aren't already low) and thereby provide an incentive for business to invest and get the economy moving. But don't get too excited. It's not likely to get us out of the current depression, but it may help create a little economic growth and reduce the chance that the depression will deepen. (I case you were wondering, it's hard to find a nice picture of quantitative easing. But it turns out there's a cruise liner called the Queen Elizabeth, and its the third one of that name, hence the QE 3 is also a ship!)
2 comments:
What happens when QE3 ends? The markets will just readjust themselves again and likely fall.
@Sparticus - Thanks for your comment. I think the hope is that it will spur business investment that will get the economy moving so that when the QE3 ends, the economy will continue to move forward. However, you're right to be concerned. My sense is that until all the excess debt (and most of that is private debt both in the US and Europe) is liquidated, nobody's economy is going to do much.
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