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Wednesday, November 17, 2010

A Hilarious Animated Take On The Federal Reserve: Xtranormal (VIDEO)


To be perfectly honest, I don't feel really qualified to explain how Quantitative Easing will help employment. I'm not sure that it will exactly. Of course as you know, the idea behind QE is to drive long term interest rates down and raise the price of bonds to drive investors back into equities (by making bonds more expensive, it will yield less compelling folks to invest in stocks to have a chance for a decent return). It's a play on behavior and it's a risk.



I have no academic source to cite but that seems to be happening with both the bond market and the equity market (they have been climbing). Retail investors are climbing back in, and with folks investing again and with businesses better able to raise capital...



You're right...How is this serving the end game of getting people back to work? Getting businesses hiring again? Listen, I'm not certain that QE is the solution or is being sold as such...Bernanke embarked on an even more intense QE round beginning in early 2009 and we've seen where employment has been during that time.



All I'm responding to is the populist backlash against a legitimate idea (which may fail) by competent people with good intentions.



Discourse is really bashing this measure (and perhaps rightfully so), but it'd be great to see a couple more pundits speaking of its merits. What if this does bring confidence back?
About Ben Bernanke
Read the Article at HuffingtonPost

 

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