Dollar Collapse Could Be Imminent: Federal Reserve Expected To Announce QE3 Today
The Federal Reserve Board Members met in New York City this week after rumors of another round of quantitative easing (QE3) started to spread throughout the worldwide business newspapers. SpreadLibertyNews reported on September 8th that concerns were increasing about QE3 after Fed Chairman Bernanke’s speech in Jackson Hole, WY, in which the July “jobs report” showed disappointing results to the Chairman. The article SLN reported can be found here. The Fed hinted before the meeting at Jackson Hole about a new quantitative easing plan, but no plans were officially set in stone.
Bloomburg News polled numerous economists and the results showed that two-thirds of the sample believed the Fed will be announcing the plans for QE3 this afternoon on September 13th, 2012. Goldman Sachs also believes QE3 will be carried out as well.
Many question whether or not quantitative easing will aid in the assistance of job creation and keeping interest rates low, while free market advocates state that quantitative is further exacerbating the issue of a poor US economy. Quantitative easing is essentially the Federal Reserve’s purchases of assets, thus injecting printed currency into the economy. Quantitative easing inflates the dollar, because the dollars that are printed from the Federal Reserve have zero-value until they are finally circulated.
Peter Schiff, active in the economic liberty movement and CEO of Euro Pacific Trade, made a statement to Yahoo News about the upcoming QE3: “The U.S. economy is addicted to QE, but if the Fed had any backbone it wouldn’t supply the heroin anymore. It would let the market restructure without QE, which is what we need.”
Many disagree with Schiff’s opinion towards QE3 because many are afraid that the economy will enter yet another recession if the rounds of quantitative easing ceases. Schiff disagrees and believes that the Federal Reserve needs to accept that a recession is imminent due to the amount of government spending. In addition, Schiff believes the Federal Reserve is further expanding the “federal government bubble” which is eventually going to burst like the former housing and dot-com bubbles.
Tune in this afternoon to find out the results of the Fed’s announcements and New York City meeting. SLN will report the recent speculation on the Fed’s decision after the announcement is made.
- Ben Bernanke expected to take further BOND BUYING action on US economy (sgtreport.com)
- What More QE Means for Bank Stocks (fool.com)
- Quantitative Easing Helps the Big Wheels and Hurts Everyone Else (ritholtz.com)
- 6 reasons QE3 may not come this week (investmentwatchblog.com)