What is QE3?
You may have been hearing a lot lately about something called QE3. In fact, we’ve had a lot of our customers sharing their thoughts about QE3 and asking us ours.
QE3 is The Federal Reserve’s third round of quantitative easing (hence the QE3). Basically, the Fed will pump $40 billion a month into the economy in an effort to stimulate the economy – with no end date. Their goal is to ease financial woes and increase spending across the market.
In their hope, this would lower unemployment from the current 8.1 percent to 7.6 percent by the end of next year.
The problem that many people have with QE3 is that it’s open-ended, could cause further inflation, and increases the national debt. The Federal Reserve announced plans to stimulate the economy but they did not put a limit to how long they will continue easing.
In the past, the Fed has tried this tactic and were met with meager gains. However, many believe that the reason the last attempts weren’t as successful was because they limited how much time they had stimulated the economy. They believe that QE3, with their open-ended timeline, would be more successful than past attempts.
Until now, the Federal Reserve has been trying to stimulate the economy by buying up Treasury bonds. This is done in a hope that stocks go up and increase everyone’s personal value and businesses would be able to borrow at a lower rate.
The Fed’s buying Treasury bonds has been met with some disdain and many wonder if they are moving toward buying mortgage-backed securities to combat that criticism.
“It all sounds squishy because it is. We don’t know if this will work and create more jobs. Even if it works it’s a long-term move, with no major impact on the job market before election day.” – Zunaira Zaki | ABC News
A lot of our customers prepare against tough financial times and self-sufficiency is a great way to do that. Be sure to keep track of the news and keep your eye on the economy. You can track economic issues in our new ReadyEconomy Center.
So, what do you think? Comment below and tell us what you’re thoughts about QE3 are? Is it going to work?