[NormsRevenge]

April Fools joke a few days early?

saw a piece a few days back that QE3 is on deck, they just need to make the call and roll the presses.

[Paleo Conservative]

I thought QE2 was going to be converted into a hotel.

[steve86]

They’re playing good guy/bad guy with contradictory announcements, made to keep everyone off balance.

[bkepley]

Means interest rates will have to go up, possibly very high.

[IamConservative]

IMO, if they go one dollar further, the market for US Treasuries will tank and people will run from the dollar likes horses run from a burning stable - which they may still do anyway.

[Georgia Girl 2]

I think QEII will probably be enough to push this train off the tracks anyway. We are all so screwed. Wait til the end of the year and unemployment is still at 9% and inflation is still going up up and away.

[sickoflibs]

RE :” With the economy on firmer footing the Federal Reserve Bank is unlikely to extend its bond-buying stimulus program beyond a planned $600 billion, several top Fed officials said on Friday. Members of the more hawkish wing of the Fed went further, with Philadelphia Fed Bank President Charles Plosser saying the U.S. central bank will have to reverse its easy money policy in the “not-too-distant future” to avoid sowing the seeds of inflation.
The Fed has kept short-term rates near zero since December 2008 and has bought more than $2 trillion in long-term securities to push borrowing costs down further and boost recovery from the 2007-2009 recession. “

Outside of the monetary effects you have to ask who will finance US debt if the federal reserve stops? Japan? There still is alot of money out there but you can see the government is spending like crazy.

[Buckeye McFrog]

maybe the thought of the Ron Paul Hearings was just more than they could stomach...

[Hoodat]

With the economy on firmer footing the Federal Reserve Bank is unlikely to extend its bond-buying stimulus program

This is false on so many levels. First, they imply that QE is a stimulus program. It is not. Second, they imply that a stronger economy removes the need for it. This is not so. The purpose of QE is to provide funding for government deficit spending while keeping interest rates low. The problem here is that deficit spending continues, and at current interest rates being offered by the Treasury, there is no way possible to sell enough bonds to finance $1 trillion in debt each year. It simply is not possible.

There are three possibilities here:

1. The government gets its spending under control so that it does not need to raise huge sums to run its affairs
2. The Treasury raises interest rates to around 20% in order to attract the $1 trillion needed to fund deficit spending
3. expand the money supply by another $1 trillion

   I bet they choose option 3.

[Errant]

I'll be called KE1 (Kinetic Easing) instead, and funded initially funded at 1 Trillion dollars.

[agere_contra]

Without QE2 there is only one place the Fed can get the money from.

Your Pension.

They may force all pension accounts to buy their garbage treasuries.

[mewykwistmas]

QE2 helping USA get to the bottom of 'things'