Bernanke is at it again, but July 13, 2011
Posted by hslu in Economics, Energy, Global Affair, Gold, jobs, Oil, Politics, stocks.Tags: Bernanke, commodity, jobless, QE2, QE2.5, QE3, stock
add a comment
Will QE2.5 and QE3 generate jobs?
The answer is “NO.”
It will pop up stock market which Bernanke is intended to do. The rational behind that is people will feel richer and will spend more, hence, stimulate the sagging economy.
But the next run of printing will inevitably increase the commodity prices which will negate any wealth effect bought on by higher stock prices.
Here is the $64 million question:
Will you go out buy a car or a house if your stock portfolio is up by 15% but you food and transportation cost is up by $250 a month?
No way. Not when your neighbors are out of work since March and your wife’s job is on the line.
That’s why QE2 didn’t work and that’s why QE2.5 and QE3 will not work either.
But inflation will be worse all over the world and we will all suffer because of Bernanke’s reckless action.
Krugman is at it again. January 21, 2011
Posted by hslu in China, Economics, Global Affair, jobs, Nursing, Politics.Tags: Bill Clinton, Democrats, first Obama stimulus, foreign capitals, foreign direct investments, Krugman, New York Times, ObamaCare, pay roll tax relief, QE2, Renminbi, second stimulus, the Fed, The TARP, US Congress, Wal-Mart
1 comment so far
http://www.nytimes.com/2011/01/21/opinion/21krugman.html?_r=1&emc=tnt&tntemail1=y
QE2 and 10-year Bond Yield December 13, 2010
Posted by hslu in Economics, Global Affair.Tags: 10-year Bond Yield, Bernanke, mortgage rate, QE2, QE3
add a comment
QE2 is supposed to lower the long term interest rate which should bring the mortgage rate down as well.
Yet the 10 year Treasury Bond yield has been spiked up since Fed’s announcement.
I have said before that Bernanke is out of silver bullets and this latest Bond action shows just how out of touch with the real world Bernanke is.
Now what? QE3, anyone?
US in no position pressing China on Currency November 12, 2010
Posted by hslu in China, Economics, Global Affair, Obama, Politics.Tags: double standard, G20, QE2, Renminbi, US dollar, 只许州官放火, 不许百姓点灯
add a comment
With QE2, the US is manipulating its currency with the intention to lower the value of US dollar further in the next few months in order to save its sluggish economy through export.
Isn’t this what US is accusing China of doing for the past several years? No wonder that G20 refuse to back Obama’s call to force China pushing up its currency, the Renminbi.
Chinese has a saying that describe Obama’s action perfectly:
只许州官放火, 不许百姓点灯
zhi1 xu3 zhou1 guan1 fang4 huo3, bu1 xu3 bai3 xing4 dian3 deng1
While county officer can play with fire, common people are not allow to use a lantern.
What that means is Obama is trying to speak from both sides of his mouth and applying a double standard on America’s conduct on currency manipulation.
No wonder why no one in the world like the United States. The greedy Wall Street bankers gave themselves billions of year end bonuses while Americans and many people in the world are suffering the consequences of melt down of American’s financial system.
QE2 won’t work November 12, 2010
Posted by hslu in Economics, Global Affair, Gold, jobs, Politics, stocks, Taxes.Tags: QE2
1 comment so far
QE2 will lower the long tern interest rate some but the excessive liquidity will not revive the US economy because the problem with US economy is not high interest rate.
It is spending the money we didn’t have over the last ten or fifteen years: explosion of consumer credits, enormous national debt caused by federal government spending, wars, defense build-up and welfare promises, state and local governments wasted tax money on unsustainable services, greed on Wall Street, and incompetent regulators.
The transformation of US economy into a service oriented economy and the lost of high paying jobs to foreign countries exacerbated the decline of the United States.
The US consumers are waking up to the fact of a permanent decline of standard of living for the years to come and they are scared. This mind set can not be easily changed or reversed by a lower long term interest rate. In short, they will not spend as they did in the past.
American companies have cut their work forces to the bone in the name of higher productivity and corporate profit. They are sitting on tons of cash but they will not invest it in the United States because of tough environmental laws, higher wages and highest income taxes among industrial nations. Lower long term interest rate will not make them borrowing more.
The lower interest rates on the other hand has an unintended consequence: lower income for many people who rely on interest income to live their lives. In short, it reduces economic activities from these consumers.
What will QE2 do then? The excessive liquidity will drive up stock prices and real estates values in developing countries and emerging countries all over the world. It will destabilize these countries’ currencies and make them vulnerable to currency manipulation by hot money chasing higher returns. It will chase commodities and drive up inflation down the road.
Look out! This is the beginning of the end of another bubble which will hurt you and I more than the last one did to so many Americans.