Fed Chair Introduces New Quantitative Easing - Can It Succeed?

By: Ian Campbell | Fri, Sep 14, 2012
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By the time you read this you will have been over-exposed to the news that yesterday Fed Chair Bernanke announced further U.S. 'quantitative easing' without a stated end-date. Mr. Bernanke announced the U.S. Federal reserve will purchase up to U.S.$40 billion of mortgage-backed securities each and every month until it saw 'a sustained upturn in the weak U.S. jobs market'.

Say what you will, from my perspective for any such a plan to succeed:

Following from introduction of this new quantitative easing, the Fed has reduced its expectation of year-end 2014 unemployment to (at the mid-points) 7.0% from the 7.35% estimate it made in June. Consider:

After considering the foregoing, I suggest you:

For me any prediction for a specific U.S. economic statistic forecast today for December 2014 invokes a vision of a man pulling his car over to the side of the road, unzipping his fly, and facing squarely into the 'proverbial breeze' as he goes about his business.

Topical Reference: Fed bets big in new push to rescue economy, from Reuters, Pedro da Costa and Allister Bull, September 13, 2012 - reading time 4 minutes, thinking time longer.

 


 

Ian Campbell

Author: Ian Campbell

Ian R. Campbell, FCA, FCBV
Economic Straight Talk

Through the Economic Straight Talk Newsletter Ian R. Campbell shares his perspective on the world economy, the financial markets, and natural resources. A recognized business valuation authority, he founded Toronto based Campbell Valuation Partners (1976), Stock Research Portal (2007) a source of resource companies market data and analytic tools, and Economic Straight Talk (2012). The CICBV* annually funds business valuation research in his name**. Contact him at icampbell@srddi.com.
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