– As Predicted, Bernanke Launches QE3 to Help the Big Banks … Which Will Destroy the Economy (ZeroHedge, Sep 13, 2012):
Image via Max Keiser
We predicted last week that Bernanke would launch QE3 this week.
Today, the Fed announced that it will buy $40 billion dollars of mortgage-backed securities per month … indefinitely.
This is in addition to numerous other easing programs. As CNBC notes:
In addition, the Fed said it will continue its program of selling shorter-dated government debt and buying longer-term securities, a mechanism known as Operation Twist. It also will continue its policy of reinvesting principal payments from agency debt and mortgage-backed securities back into mortgages.
“These actions, which together will increase the Committee’s holdings of longer-term securities by about $85 billion each month through the end of the year, should put downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative,” the Fed statement said.
And the Fed isn’t stopping there:
“There’s strong hints that they’ll do Treasurys next,” Joe LaVorgna, chief economist at Deutsche Bank Advisors, said in a phone interview from London. “They’re pulling out all the stops to try to get this economy to gain some traction and, most important, to get unemployment down.”
This sounds nice … except that the experts say that quantitative easing destroys the economy and – despite the initial optics of it – hurts the little guy.
As we said in 2008: welcome to the Fed’s Weekend at Bernie’s.
P.S. Yes … if you’re a homeowner, you will probably want to re-fi.