Quantitative easing is a monetary policy tool used by a central bank to try and stimulate an economy when the economic cycle is far below optimum levels. Central banks increase the quantity of money in the financial system through quantitative easing by purchasing securities, such as treasury bonds, to increase the price of assets; this will lower prevailing yields and entice investors into other areas that might be more beneficial for an economic rebound. One worry with quantitative easing is that the increase in the supply of money might lead to inflation, or the overall increase in the price of goods.
Quantitative Easing was last modified: September 7th, 2013 by admin
This past Friday, the Bureau of Labor Statistics reported only 142,000 jobs were added to the U.S. economy in September. And August’s figure was revised lower from 173,000 previously reported jobs created to an actual number of only 136,000 jobs. (Source: Bureau of Labor Statistics, October 2, 2015.) Overall, September’s jobs.
U.S. Dollar Collapse Could Send Gold Prices Through the Roof
Looking at gold prices today, investors didn’t really seem to get the whole story last week. The U.S. Federal Reserve’s decision not to raise interest rates not only reflected lackluster economic growth, but also suggested a weak paper currency. When people finally realize.
Alan Greenspan’s 1998 Statement Haunting Janet Yellen Today
When Federal Reserve Chairman Alan Greenspan made a famous speech in 1998, no one knew how relevant it would be to Janet Yellen in 2015. Greenspan’s warning that the U.S. economy would suffer from global turmoil appears prophetic nearly two decades later.
In a speech.
On Thursday September 3rd, the EUR-USD exchange rate plunged as much as 1.26% from 1.1233 to 1.1091. Why? The European Central Bank (ECB) just unveiled a revamp of its quantitative easing program.
ECB president Mario Draghi said in Frankfurt that the Governing Council has now raised the purchase limit of any give bond from 25% to 33%. .
Just one day before the European Central Bank declared an expansion of their stimulus program, Marc Faber was on Bloomberg TV arguing that rogue central banking will cause an economic collapse. He argued that “easy money” policies are dangerously irresponsible, and investors should be wary of assets whose value depends on more.
Immediate term outlook:
The bear market rally in stocks that started in March 2009, extended because of unprecedented central bank money printing, is coming to an end. Gold bullion is up $1,000 an ounce since we first recommended it in 2002 and we are still bullish on the physical metal.
Short-to-medium term outlook:
World economies are entering their slowest growth period since 2009. The Chinese economy grew last year at its slowest pace in 24 years. Japan is in recession. The eurozone is in depression. With almost half the S&P 500 companies deriving revenue outside the U.S., slower world economic growth will negatively impact revenue and earnings growth of American companies. Domestically, America’s gross domestic product grew by only a meager 2.3% in the second quarter, which will negatively impact an already overpriced equity market.