Bernanke's Bazooka, what does QE3 mean to you?
The Federal Reserve undertook a very serious decision last week announcing QE3 and while the stock market and commodity market responded positively, it remains unclear what this decision means for the average American. The seriousness of the Fed decision cannot be understated and is hinged on the following commitment : "The Committee will closely monitor incoming information on economic and financial developments in coming months. If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of agency mortgage-backed securities, undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved in a context of price stability" The actual plan consists of three primary actions. Outright purchase of MBSs, buying long term Government bonds and keeping the short term rates near zero until 2015. What is frightening is that this plan will continue until the economy improves