Comments on: Is QE2 already working? http://blogs.reuters.com/felix-salmon/2010/11/15/is-qe2-already-working/ A slice of lime in the soda Thu, 23 May 2013 23:51:59 +0000 hourly 1 http://wordpress.org/?v=3.4.2 By: jmalicki http://blogs.reuters.com/felix-salmon/2010/11/15/is-qe2-already-working/comment-page-1/#comment-20973 jmalicki Tue, 16 Nov 2010 09:54:45 +0000 http://blogs.reuters.com/felix-salmon/?p=6134#comment-20973 Isn't the goal of QE to jump-start the economy by bringing down long-term *real* rates? And isn't the expectation that it will do so by increasing inflation? After all, when there is deflation with low nominal rates, that is a high real rate. And as payer skew is about nominal rates, this seems to be working as intended, if it is a strong signal at all. Isn’t the goal of QE to jump-start the economy by bringing down long-term *real* rates? And isn’t the expectation that it will do so by increasing inflation? After all, when there is deflation with low nominal rates, that is a high real rate.

And as payer skew is about nominal rates, this seems to be working as intended, if it is a strong signal at all.

]]> By: Tom_in_PA_USA http://blogs.reuters.com/felix-salmon/2010/11/15/is-qe2-already-working/comment-page-1/#comment-20945 Tom_in_PA_USA Tue, 16 Nov 2010 00:16:18 +0000 http://blogs.reuters.com/felix-salmon/?p=6134#comment-20945 Back when I took Econ 101 they called it "Printing Money". Whatever you call it, the main result will be devaluation of the dollar. That seems like the only option the US has at this point. It might help slow the hemorrhaging of jobs to Asia. It will certainly increase the cost of imported oil (which some will see as a helpful side effect). Back when I took Econ 101 they called it “Printing Money”. Whatever you call it, the main result will be devaluation of the dollar. That seems like the only option the US has at this point.

It might help slow the hemorrhaging of jobs to Asia. It will certainly increase the cost of imported oil (which some will see as a helpful side effect).

]]> By: Sandrew http://blogs.reuters.com/felix-salmon/2010/11/15/is-qe2-already-working/comment-page-1/#comment-20909 Sandrew Mon, 15 Nov 2010 15:44:52 +0000 http://blogs.reuters.com/felix-salmon/?p=6134#comment-20909 What marks the beginning of QE: when the Fed first buys bonds under the program, or when the Fed first makes a credible commitment to do so? What marks the beginning of QE: when the Fed first buys bonds under the program, or when the Fed first makes a credible commitment to do so?

]]> By: OnTheTimes http://blogs.reuters.com/felix-salmon/2010/11/15/is-qe2-already-working/comment-page-1/#comment-20907 OnTheTimes Mon, 15 Nov 2010 15:06:49 +0000 http://blogs.reuters.com/felix-salmon/?p=6134#comment-20907 "The stated aim of QE, after all, is to bring down long-term interest rates"? Really? I thought the goal was to jump-start the economy. Given that interest rates (including long term ones, like 30 year mortgages) are already pretty low by any measure (how much lower than almost free for banks can money be?), how is this going to move the economy at all? The only hope for QE to work is if those with cash hoards believe it will help the economy and they start deploying the cash. And that definitiely hasn't started yet. “The stated aim of QE, after all, is to bring down long-term interest rates”?

Really? I thought the goal was to jump-start the economy. Given that interest rates (including long term ones, like 30 year mortgages) are already pretty low by any measure (how much lower than almost free for banks can money be?), how is this going to move the economy at all?

The only hope for QE to work is if those with cash hoards believe it will help the economy and they start deploying the cash. And that definitiely hasn’t started yet.

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