re: Federal Reserve and Quantitative Easing (QE)

The Fed has a variety of options at it's disposal when it comes to QE. Currently, they are purchasing bonds in the open market in droves.

In a theoretical sense, QE is supposed to drive interest rates down, urging investors to spend money now, instead of sitting on their hands, thus stimulating the economy.

What's actually happening?

1. Banks are sitting on large stockpiles of cash. The cash that is supposed to be getting to consumers hands to spend and stimulate isn't getting there, for a variety of reasons.

2. Since open market bond buying drives down the yield on bonds, to get returns, then investors must put their money into equities to gain returns.

3. Our dollar weakens as the M2 supply increases at huge rates.

4.

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3) artifically creating the illusion of Wealth

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Once again, Ben has said this is what he wants. He wants people to "feel richer" because the more wealthy people feel, the more money they spend.