cleller
8/23/2012, 08:03 PM
I do not intend this as a political post, and put it here to reach a wider audience. If you scan the headlines, you've probably read about Quantitative Easing. Aka QE1, QE2, and the possible QE3 coming any time now. Also thrown into the mix was Operation Twist. These are measures taken by the Federal Reserve to try and keep the US Economy from falling back into recession.
These are not commonplace practices. All of them are mostly theoretical, and designed to prod money to flow in specific ways, in hopes of stimulating the economy. To oversimply, the reason you can't earn any interest at your bank is because the Fed is acting to encourage that money to be placed elsewhere. In stocks, or economic growth areas.
This week the IMF has said Europe is sliding back into recession, despite similar measures there.
Just a reminder that if you ever though of doing your own research into QE, why we need it, and how it could effect you, another round could be coming up.
These are not commonplace practices. All of them are mostly theoretical, and designed to prod money to flow in specific ways, in hopes of stimulating the economy. To oversimply, the reason you can't earn any interest at your bank is because the Fed is acting to encourage that money to be placed elsewhere. In stocks, or economic growth areas.
This week the IMF has said Europe is sliding back into recession, despite similar measures there.
Just a reminder that if you ever though of doing your own research into QE, why we need it, and how it could effect you, another round could be coming up.