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Thursday, December 1, 2011

QE3 Announced By the FED - Stock Market Soars

When the banking industry is unable to fix the fundamental problems in the system, all this does is kick the proverbial economic can down the road...for a while....But these moves fix absolutely nothing. ....The one thing this approach will do here at home is insure that massive inflation will be hounding the doorsteps of most Americans to an horrendous amount and will absolutely destroy the savings of those Americans who heeded the call by the government to save in dollars and buy stock rather than silver or gold.

The coordinated swap line bailout by the Federal Reserve Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, and the Swiss National Bank- and China’s reduction of reserve requirements by .5% – shows desperation. (For background on swap lines, see this, this and this.)

The Street notes:

Don’t get flustered by the terminology of “dollar swap lines” above. Here’s a more simple explanation: Central banks around the globe have acted in desperation to boost liquidity in the system, which has sparked a rally in equities.

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