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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?
Typical liberal thinking – it didn’t work the first two times, it’s bound to work if we try it again. And that’s the definition of insanity: trying the same thing over and over and expecting a different outcome.
September 16th, 2012 at 7:39 pmAll that I see that this administration is doing is destroying all aspects of the American way of life from financial, healthcare, liberties, weather, housing/mortgages, our independence as a free people, etc.
September 17th, 2012 at 3:37 ammary
QE3 seems a political move by “the Bernanke” to solidify his power grip. Q4 (not QE4) was going to show an improvement in the economy anyway, so why pump in more money? Very likely the banking system needs this infusion as mortgage backed securities on their books are in very tough shape. City Bank probably was going down because of MBS derivative holdings and cross sales with other banks/institutions, so this injection of money probably halted that bank’s failure and many other potential collapses. Inflation? You bet. Economic uncertainty? You bet. Ugly ending for us all? Very likely.
September 17th, 2012 at 3:58 amThe only way to fix this is to get Obama out office. Yes he was left with a mess, but he has only made it worse. Obama is a great speaker, but speaches do not make results. Get someone in the White House who has the qualifications of financial ins and outs.
September 17th, 2012 at 4:25 amBeing the far end of liberal myself, I do not agree with the QE either. It is corporate interests working to make more money for themselves. It has no gain for us.
September 17th, 2012 at 4:51 amI was thinking the same thing. My feeling is that they know exactly what they are doing but they play it off as the victim. Sounds like our society and how we have put up with things like this for years. Were prepared though and I hope that you all think seriously about this.
September 17th, 2012 at 4:52 amA recent artical on kingworldnews.com said “no rational person could (or should) believe what is being said/done right now.”
September 17th, 2012 at 4:55 amYou had better prepare to protect your family because no one else will. Food, water, basic medical knowledge and the ability to stand in front of what you own with a gun if need be. I have been slowly, over seven years papering my household for what was obviousely coming down the pipeline. You don’t have to do it all at once. One or two items a month we will get you what you need. Although most articals I read indicate time is running out. The above website is a great resource for getting the information you need. After all, at least two of the commentators are called upon by the US government for advise. If you can’t hear their warnings, you won’t hear any. BE SMART!!! It is after all your life. Regards, DDP
This entire, insane, inept and corrupt administration has to go, and…
AUDIT THE FED!!!
September 17th, 2012 at 4:58 amSo, the Fed makes money out of thin air and buys up all the mortgages???? And then owns all the properties? Nice move! If you have read the Creature from Jekyll Island you will know the Fed has been a house of crooks for 100 years. They have, in the name of “Preserving the value of the dollar”, diminished its value 98%. END THE FED!! Gold and Silver are Constitutional money the TREASURY is allowed to print/ coin. All else put out is counterfeit, and robbing the generations of their savings through planned inflation.
September 17th, 2012 at 5:11 am…no, it’s not going to work…Dave’s right…which sure makes me question my own ignorance on things. How easily we are led to believe a lie…for me, I could run these economic circles around in my brain until I’m sick of it…at the end, I still need water, food, shelter, etc. I wait for my Maker.
September 17th, 2012 at 5:15 amHow much interest will have to be paid for this “loan?” Let’s call it what it is. Why is the fed printing money when Congress can do the same thing at zero interest? Because Debt = Slavery. Let’s take a better look at who is running the fed.
September 17th, 2012 at 5:22 amIf the only tool you have is a hammer then everything looks like a nail….
If you truly believe the problem is not too much debt then creating more debt is the solution. What I can’t understand is how they cannot see the previous QE did nothing…
But they need to get the unemployment number below 8% by the election so Obama can say “see I got unemployment down” I can fix this with 4 more years.
September 17th, 2012 at 5:36 amdoesn’t this merely increase the inflated money supply ? Things will cost more worthless money.
September 17th, 2012 at 5:36 amInjected with a drop of truth serum, the Keynesian economists would admit the only way the US Govt. can ever service the massive debt being accumulated through run-a-way deficeit spending will be through massive inflation. Quantitative easing with freshly printeddollars ill eventually insure the inflation they need. Every citizen will see the real vale of their savings slashed accordingly. There’s never a free lunch!
September 17th, 2012 at 5:40 amThe Fed has to do this because China etc. are not buying our treasury notes anymore. We with qe3are borrowing from ourselves, to pay back with interest to ourselves. China, Russia, India and more are dropping the dollar as the world currency. We, the U.S., make money off this as well. Not for long. Thats the reason we attacked Libya because they were dropping the dollar as a means of trade with there oil. We invaded. Guess we won’t be invading RTussia or China. Give it a few months folks, this will collapse as the world rejects our currency and demands payment. PREPARE
September 17th, 2012 at 5:41 amSince nothing works don’t try anything? This move by the fed is much different than the other moves it made in the last 5 years. Also, the fed had to make a move because congress is so deadlocked, they cant make a move themselves. Is it the best plan ever? No of course not, but you have to understand the limitations of the fed to understand what they can and can’t do. By the way, after this was announced all 3 major exchanges had huge gains… Just sayin…
September 17th, 2012 at 5:48 amThe definition of insanity, by Albert Einstien, is doing the same thing over and over again while expecting a different result.
September 17th, 2012 at 5:55 amCurrency devaluation has all been done before by economic powers of the time and ended badly but this time it’s being done on a global scale.
The results will be historical and those unprepared will be unable to weather the coming storm.
Make sure you are self sufficient with water, food and shelter.
Learn to protect yourself, family and property and buy and hold onto real assets like silver and gold to preserve your wealth when fiat currencies collapse.
Gold and Silver have and always will be real money.
I agree Dave and Passerby. Insanity, despiration and out of STRATEGIES! I think the stock market will respond short term like it did before, but it never has addressed the unemployment issue! People want to work! Open-ended timeline. Just great. I’m digging in.
September 17th, 2012 at 5:55 amThis ability of the Fed to do things with the countries money without answering to anyone needs to be stopped. It is Obama’s back door to help the economy for his gain. This doesn’t get counted in the $16 Trillion debt but adds 1/2 Trillion to our debt under the table.
September 17th, 2012 at 5:58 amAbout 100-150 years ago there was economic literature that dealt with the dangerous allure of paper money. It was a common belief then that it was too dangerous to rely on paper money because governments could not control themselves. For instruction the tales of past disasters were told and retold. Below is a link to the history of paper money in France during the French Revolution. The author was President of Cornell University, so it is not the work of some talk radio blowhard. As a matter of fact, the Atlantic Monthly reprinted it in its entirety back during Jimmy Carter’s inflation along with helpful side notes drawing parallels to (what was then) today. It is representative of many other historical episodes that could be recounted. If you read it, you will know why QE3 should scare you.
September 17th, 2012 at 5:58 amQE3 should scare you. If you want to know why google “Andrew D. White, Fiat Money Inflation in France” and read about what a comparable policy did to France many years ago.
September 17th, 2012 at 6:02 amYou answered the question yourself. You said it made gains. A minor gain is still a gain. The problem with the economy is the right wings unwillingness to negotiate policies with all parties to get the economy rolling in the right direction. They don’t even negotiate with there own party anymore. It’s ether there way or the highway. They have now become what they say they hate in the other parts of the world. They are Religions zealots. If they can’t have there way in all matters they would rather let the country go down. Yet they shout that they are the true patriots. They only want freedom if it’s the way they define it. The killings in the middle east and the terrorist attack are carried out by the extreme right in the groups. Our extreme right is bringing down our country just in a different more subtle way. Which of the 2 is more dangerous? Our founding gather
September 17th, 2012 at 6:03 amYou answered the question yourself. You said it made gains. A minor gain is still a gain. The problem with the economy is the right wings unwillingness to negotiate policies with all parties to get the economy rolling in the right direction. They don’t even negotiate with there own party anymore. It’s ether there way or the highway. They have now become what they say they hate in the other parts of the world. They are Religions zealots. If they can’t have there way in all matters they would rather let the country go down. Yet they shout that they are the true patriots. They only want freedom if it’s the way they define it. The killings in the middle east and the terrorist attack are carried out by the extreme right in the groups. Our extreme right is bringing down our country just in a different more subtle way. Which of the 2 is more dangerous?
September 17th, 2012 at 6:05 amThis is just the ” independent ” federal reserve ( a private bank ) pandering to the commander in chief to help in his re election efforts. creating more fake money which has neither goods or services behind the creating , only cheapens the value of all the other money that actually had something behind it ( a gold standard looks good right now ) so inflation has to result from this rotten mess the government has gotten the country into.
September 17th, 2012 at 6:21 amStupid is as stupid does. It didn’t work before but if we keep kicking the can down the road it will work this time? And about half of our nation still thinks this guy (Obama) is their savior. Good Lord save us. Audit the Fed is a good start but I fear we are lost unless we get the financial fate of our nation out of Ben’s hands.
September 17th, 2012 at 6:48 amThis is simply an attempt to keep his job and smack Romney in the face for saying that he would fire the fed chief. He is doing this in a sorry attempt to get barry reelected. The market, I believe will do what it needs to do to take the most money from the most amount of people. This run up is simply a lure to get more people into the market, only to hear a loud sucking sound when the big guys pull their money out along with ours.
September 17th, 2012 at 6:53 amI simply am amazed that they say half the people what this guy reelected. Ive spent much time thinking how this could be. The only thing I can think is, its spiritual blindness. Thats all I can come up with. Prepare for the worst and hope for the best. But I say, prepare for the worst and PRAY for the best.
Z
The problem with this scenario is that it is helping out the banks that put us into this mess to begin with by shoring up there bad debt and creating a perfect storm for a collapse of the us dollar. After the collapse they will have very little bad debt, a foreclosure windfall and asset rich for the revaluation or replacement of the US dollar. Essentially making the banks and govt owning the US, instead of working for the citizens.
September 17th, 2012 at 7:00 amDoing the same thing over and over and expecting different results is why people are committed of insanity!
September 17th, 2012 at 7:02 amThis is just another bail out for the banks? The fed is going to buy 40 billion of mortgage backed securities (crap) from the banks per month. Media silent on that aspect because it is their man doing it.
September 17th, 2012 at 7:08 amBeware the Keynesians.
As everyone is saying in this blog QE3 won’t work any better than the previous QE’s the government approved. What isn’t being said; unemployment isn’t 8.1% , it’s actually more like 14%….remember the government stops tracking people on unemployment when they no longer receive it, even if they never find a job! Two, our national debt is way higher than 16 Trillion, estimates of some conservative groups have reported it to be more in the range of 30 Trillion and I have read recently a staggering figure of more than 200 Trillion!
September 17th, 2012 at 7:18 amThey know it will not work, but they have convinced the masses that it will. Most people are hurting right now and they will accept anything the government suggest.
- Crisis
- Reaction
- Solution
The Hegelian Dialectic!
This is the fleecing of America, the final round. Educate yourself on history and you will find that this type of thing happens just before every empire collapses.
What you are witnessing is DESTRUCTION BY DESIGN!
Already long ago, from when we sold our vote to no man, the People have abdicated our duties; for the People who once upon a time handed out military command, high civil office, legions — everything, now restrains itself and anxiously hopes for just two things: Bread and Circuses
- (Juvenal, 10.77–81 – in reference to the fall of the Roman Empire)
September 17th, 2012 at 7:29 amthe definition of insanity is “doing the same thing, but expecting a different result.” we KNOW this didn’t work previous times; we DO NOT have the money to back up the printing of more paper! Time to LOWER regulations on businesses, HELP businesses with lowering costs of doing business and HELP people BUILD businesses!! That’s how you make money and help the economy! Busy, happy people who are earning/making money are then in a position of help others or employ others!
September 17th, 2012 at 7:37 amThe Fed now imposes QE3. ok. When gasoline prices go up even more, the administation will blame oil companies. As food prices continue to rise at an increased rate, the administration will blame greedy corporations.When even the cheapest ground beef will be over $4.00/lb by Thanksgiving, the administration will blame the drought. Most certainly (tongue-in-cheek!) it’s not because our money is worth less than it was last monday; and is worth more today than it will be next monday. At a rate of $40Billion/month, how many votes will $80billion buy in time for the election?
September 17th, 2012 at 7:38 amIf the first bail out had gone to rebuilding our infrastructure (using only US citizens), we would already be below the 8% unemployment AND have better roads and bridges.
September 17th, 2012 at 7:49 amI am no economist, but seems to me the only way companies will hire is if they need more employees to meet demand. No additional demand, no additional employees. Does not matter how much money they have in savings.
September 17th, 2012 at 8:00 amThe QE3 is buying mortgage debt. The banks have money to lend, but do not lend it to people or business that is a high risk. That will not change with QE3. This will just lessen the value of the dollar and once inflation takes hold, will increase the cost of everything.
The default on homeloans did not create the recession(depression) It is the fact that people quit buying because they overspent.
History repeats itself. If I remember right throwing money in the air and running out from underneath it as fast as you can doesn’t work out too well in the long run. Helicopter Ben is well aware of the consequences. http://en.wikipedia.org/wiki/Hyperinflation#Examples_of_hyperinflation
September 17th, 2012 at 8:13 amThis again shows how little the Obama administration understands business and the economy. I guess Harvard should have made the Weimar Republic mandatory reading, instead of the communist manifesto.
Dave is right, they do the same thing with public schools. As we all know, if we just raise our taxes providing more money for the schools, they will provide a better education, right?
September 17th, 2012 at 8:31 amSurprise! Some of us who Prep are those people who use “typical liberal thinking”, however it is not what “Dave B.” incorrectly describes. Liberal thinking is best identified as an openness to new experience and tolerance of differences. I hope everyone will please remember that Conservatives do not have a monopoly on the following: patriotism, love of family, compassion for humanity, financial competence, support for the 2nd Amendment, and the wisdom to prepare for natural and manmade disasters. By the way think the Fed’s actions are more likely to be beneficial or insufficient than detrimental.
September 17th, 2012 at 8:31 amI’m glad to have the water jugs. I let the emails come because it looked like they might have something interesting in them. I am not interested in political rants, so I just unsubscribed.
September 17th, 2012 at 8:37 amEveryone please read Congressman Ron Paul’s book,”The Revolution”. It deals with the history of The Federal Reserve, and stimulus spending.
September 17th, 2012 at 8:38 amLets be honest, if I could simply pring more money,to meet my hopes and needs, I surely would.
Thats what we have empowered the Fed to do.
Please correct me if I’m wrong. Is not QE no more than creating “money” out of thin air? Nothing to back up our fiat currency other than the peoples faith in the system? Does not inflation HAVE to follow this insane action? Can you spell H-Y-P-E-R-I-N-F-L-A-T-I-O-N?
September 17th, 2012 at 8:46 amI believe it was Enstein who said: “insanity is defined by doing the same thing over and over again expecting different results”. This is insanity. Give every working family three hundred thousand dollars each and the economy would grow much quicker and faster and manufacturing could not keep up with the orders.
September 17th, 2012 at 8:56 amThis is the systematic deliberate collapse of our economy in order to bring about socialistic/communistic change that liberals have wanted for some time. Watch for the continuing merger of the US with Canada and Mexico and South America to form an American Union. The African Union and European Union have been made, with the Asian or Pacific Union yet to come and the American Union in the works. Bad times are ahead; Dave Wilkerson had a Vision about these times in 1973 and put it in his book. The updated version is called The Vision and Beyond; i suggest everyone read it.
September 17th, 2012 at 9:34 amThis devalues the dollar causing inflation to increase. This lowers interest rates, decreasing the value of your savings and retirement accounts. It never worked the last two times he tried it, what makes him think it will work now?
September 17th, 2012 at 9:42 amwe love it …raises for everybody…how does this get to the people? nuts ….get ready for the storm.
September 17th, 2012 at 10:09 amIn college, there wasn’t five seconds of economics that I found worthwhile… Now I can’t get enough. Something about having a family and watching the tide. Reading “The Real Crash” by Peter Schiff and Endgame by John Mauldin… Pessimism in man’s wisdom is well-grounded in history… and, of course, the love of the phrase “this time it’ll be different.” Our peace comes from above- but while we’re here- we need to know likely outcomes and plan accordingly.
September 17th, 2012 at 10:32 amMany comments on QE and what it hasn’t done, but I think there are other facts out there that are even worse that are worth mentioning. One, the unemployment rate isn’t 8.1%, that’s just the number of people that the government is tracking that are receiving benefits. Last month some 400 THOUSAND fell off the charts b/c they stopped receiving benefits, so they are no longer counted in the 8.1%, but many remain unemployed! Two, if you think our national debt is 16 Trillion think again. Some fiscal monitoring groups say it is upwards of 30 trillion and one report I read recently by the Weiss Research group mentioned a staggering 222 Trillion.
September 17th, 2012 at 11:06 amHow about the comment at the very end of the video clip, ‘The FED says’ it doesn’t see any signs of inflation or even expect any for 2 or 3 years?! That is because those at the FED are using a credit card that is being paid for with taxpayer dollars! If there is No Inflation, then please explain to me why when I go to the grocery store and spend $100 I can still see the floor through the bottom of my cart?! It used to be that $100 at the grocery and your cart was filled, but I guess that is just the evil profit driven grocery store chains trying to stick it to the poor little consumer, what a joke!!! Surely is doesn’t have anything to do with the fact that the federal government is telling farmers what crops they can or can’t plant and the fact that the federal government is requiring that all gasoline have at least 10% ethanol in it, because burning a food source in our cars instead of opening up more drilling in this country, makes so much more sense. Unfortunately, we have yet to see anything, just wait for this years crop losses to catch up with the markets and we will see crazy increase in prices at both the pumps and the groceries. God luck and God Bless, don’t forget to Vote on Tuesday, November 6, 2012!!!
September 17th, 2012 at 11:09 amQuantative Easing = Printing Money …
Every month THE FED will PRINT another 40B$ FRNs (Federal Reserve Notes a.k.a. paper bills $1,$5,$10,$20,$50,$100). What does Treasury do with ALL the FRNs Treasury trades with the Fed? What does the FED do with ALL the pretty Bonds it now possesses?
FRNs go to the Central Banks…YOU, Joe the Plummer gets to borrow that free, 0% interest money from the bank at Principle ++ 13% Interest if your Credit Score Exceeds 800!
Now, envision this. The Fed prints up and mails to every man, woman and child having legal residence 40 Billion dollars a month. 40 Billion bucks divided by 300 Million Amreicans is $133.33 a month. Almost $1600 in a year. Here FOLKs. You’re such Good Americans Uncle Sam wants to repay you (indefinitely) till you die. No strings attached. HEY BEN! Can you increase that 10 fold. How about 400 Billion a month?
So your part of the GDP, your individual portion of the nation’s annual production would pay your bills at a modest level of $1333 a head, a month.
OUR MONETARY SYSTEM + OUR BANKING SYSTEM IS THE PROBLEM. Without CONTINUOUS Credit INJECTIONS the system fails. Without growth the system fails. Will QE 621,422 work? Go figure it out.
September 17th, 2012 at 11:17 amGood luck getting liberals or Obama-backers to read and believe all of these comments, and especially the mainstream news. The American people are being hoodwinked every minute, including this “GO” signal that was the embassy attack. Instantly, over night, 25-30 nations are suddenly represented in the gulf of Hormuz? For war games? I won’t write here what I’m thinking that attack really was, but I think you all know, especially since it was done in 15 minutes, commando style. (Yeah, a mob does that!) Conversely, all politics is just a ruse for what’s behind the curtain. I’ve never been more proud to be an Independent. Nothing but deception, hate, resentment and lies everywhere. The world kingdom is crumbling, as is the earth with it. I urge you all to also pay attention to all of the volcanic eruptions going on, from Indonesia to the Canary Islands, to the coast of California and stretching to even Louisiana, where they’ve just found natural gas leaks about 90 feet down, with seismic activity. Lots happening. It’s an exciting time to be alive for certain. Godspeed and love to you all.
September 17th, 2012 at 11:28 amWhen I went to school, we were taught that history repeats it’s self. It looks like Ben did not learn this lesson or else he has a different agenda in mind. Such as destroying the US so that him and his friends can take over with a one world economy.
September 17th, 2012 at 12:34 pmThe FED is buying worthless derivatives and the only people who are going to benefit are the bankers who will get record bonuses for selling the junk to the FED. Where will the $40 billion a month come from? Where it allways comes from–thin air. We the people will pay for this through interest on the national debt and through inflation. No jobs will be created.
September 17th, 2012 at 5:41 pmOf course it won’t work. But all the filthy wealthy like Donald Trump will benefit, as he himself has observed. For God’s sake, what will it take before we see the public outcry and demand for the bankers’ heads on stakes? Keep prepping, everyone! The fun’s yet to begin. Best of luck to everyone, hope to see you on the other side.
September 17th, 2012 at 6:47 pm@Christopher
Politcial rant? The article described what QE3 was, didn’t take one side or the other.
I think its fairly obvious you are not a fan of most sane people’s comments on here about the runaway debt our nation is creating, so feel free to ignore what 80% of the thinking people in this nation are worried about.
September 18th, 2012 at 8:50 amSo, we print money to buy mortgage back securities from banks. The banks take the money they make from the sale, and deposit it with the Fed, and get .25% interest from the Fed to not lend the money (they already have $1.6T parked with the Fed now which is also more than the banks give to us who have savings accounts. Money stays with the banks and the Fed. The bank executives get their bonuses off of money the banks make including interest, so their bonuses go up. Our inflation levels go up because the markets are flooded with more money, although it’s not there for us because the banks aren’t lending, so our buying power goes down. Yeah, how exactly is this supposed to help us?
September 19th, 2012 at 11:26 amIt’s too easy to take sides, the division of congress and senate, and their unwillingness to work together for the common good of our country is the real problem, all are equally to blame. Those who do not study history are doomed to repeat it.
September 23rd, 2012 at 12:17 amIf there’s anything I’ve come to grips with at this point, it’s that from the time that I became responsible for my own words and actions, I should have never expected anything from anyone. I sure don’t now. Doesn’t mean I don’t give; just means I don’t expect.
This is all about money in this realm; its never been about anything else.
If you got chickens, I got vegetables…wanna trade?
September 24th, 2012 at 6:24 am