Friday, June 1, 2012

Those lovable animated bears explain what QE3, no jobs and inflation means to you! (Video)

The old hope and pray trade!
Few jobs created and higher unemployment can mean only one thing! An expectation for the Federal Reserve to step in with yet another round of Quantitative Easing!

One would suppose that the definition for insanity could be invoked were the Fed to embark on another round of QE (doing the same thing time and time again while expecting a different outcome), but on the other hand they have no other ammunition left in the quiver.

They can of course do nothing which is their other option but either way there are pros, cons and unintended consequences.

The consequences of a zero interest rate policy!

Remember the adage that there is no free lunch!

The truth of the matter is that inflation in the U.S. remains a growing problem whether you choose to look at it ex-food and energy or include food and energy, savers reliant on interest income are being badly hurt with yields being kept as low as they are, the attempt by the Fed to push these same savers into risky assets like stocks can backfire (as we are seeing today) and if banks aren't lending and businesses aren't trying to borrow due to regulations and uncertainty it is all moot anyway!

Let the animated bears explain the situation to you clearly, concisely and so that anyone can understand which is unlike listening to any of the "experts" who try to tell you why any weakness represents a great buying opportunity in language that no one but they can understand!

Da Bears!

H/T The Daily Capitalist
Cartoon Source



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