Saturday, November 13, 2010

Quantitative Easing Explained

First the Robots:

Then the senior editor:


  1. That's good stuff. QE has certainly been the buzz phrase recently. Thanks for sharing these links.


  2. I'm a huge fan of Paddy Hirsch but I think he missed it on this one. The fed funds target rate is kept at 0.25% by the Fed buying Treasuries - mostly at the short end. In other words,it too is pumping reserves into the system. A key is targeting fed funds doesn't affect long rates. With quantitative easing they aren't specifying an interest rate target but a quantity of buying. And they are affecting longer term rates. They are trying to affect consumer behavior by affecting mortgage rates etc. It isn't just about Barry the bank manager.
    At least that;s my take.

  3. I like the videos, very informative. The cartoon was a little painful to watch but the Marketwatch guy was excellent. I learned a lot. The printing of money seems like a gamble and could fail with unintended results. Like a lot of economic activities by our government, the general public is dumbfounded by what it all means. I am curious what this QE2 will do to mortgage rates.