Well, QE3 is here. That means the Federal Reserve Bank will print money in order to buy mortgage-backed bonds. The intention is to support the housing market by keeping mortgage rates low and mortgages available, and to stimulate the economy by another infusion of cash.

In a radical switch from its recent policies, the Fed says it will continue QE until the economy improves or inflation becomes unacceptably high. The Fed also said that monetary policy alone (what the Fed controls) can not solve all economic problems.

The Fed's action seems desperate. It acknowledges that its past efforts, as well as those of the President, have failed, and that it has no further ideas about what to do. It also acknowledges that this is an inflationary policy, and that real estate continues to slump.

Many countries have tried the same policies before. In all cases, the end was hyperinflation and economic collapse. The Fed knows this, but they hope to reverse course before the damage becomes irreversible. It's never been done before.

In my opinion, the Fed's action makes Obama's economic failure official. Most people won't understand what's happening, so Obama may not pay the political price he should. For those of you who might rejoice at this, remember that if hyperinflation and economic collapse hit, the poor and all those depending on government programs will be hardest hit. Inflation devastates anyone on a fixed income.

But BOB, the stock market is up on heavy volume. they love QE3.

That's why I started this thread. The two prior Qualitative Easing events goosed the stock market and since 8/31/2012 when I posted that, anyone using an index fund could have made a nice profit on the fact that QE3 would goose the market again.

In all of my goofy and mostly idiotic attempts at trading stocks, even I could figure that buying an index fund two weeks ago and heartlessly selling it today would have gone up 3.3% for roughly 14 days of doing nothing.

Goosing the stock market is matched by inflation.

End result. Middle Class loses.

Want stimulus funded?

Clean up the Regressive Tax code, don't print more money.

<sigh>

Am I the only one who gets it?

Moi

Progressive

The difference between a Progressive and a Liberal or Republican is "The Tax Code"

I reject the bugaboo of inflation.

When in the last ten years (or even twelve years) have we had inflation with all these tax cuts and loose money?

During a recession, inflation is growth.

I'm still a Keynsian for what pathetic economic sense I have. Spend in the bad years and save in the good years.

The stock market is tied to the money supply. Excess cash tends to wind up invested in securities. That shouldn't be mistaken for prosperity. It is, as Moi said, a sign of inflation. Stocks will cost more, just as kids' candy bars and toilet paper will cost more. When the cash in an economy increases more than the supply of goods and services, including assets such as stocks, prices climb. Prices adjust to match the available cash. Speculators who "buy low, sell high" profit, but the standard of living falls for everyone.