Quantitative Easing

Why the European Central Bank's Massive Economic Experiment Will Fail

Eurozone conflict

Last week, the European Central Bank's turn finally came to announce large scale quantitative easing.

As the continent witnesses a battle between deflation and attempts at inflation, will it finally be enough?

Europe is following in the footsteps of the United States, hoping for similar "successful" results.

Instead, it's likely to fall somewhere between the U.S. and Japan.

From the Land of the Rising Sun there is precedent, but it's a forewarning.

Here's the story...

FOMC Meeting Today: A Tale of Two QEs

FOMC Meeting Today

The Federal Open Market Committee (FOMC) Meeting today marks 2015's inaugural meeting of the U.S. Federal Reserve's monetary policy makers.

It's only been a month since the last meeting convened. But a lot has changed. It's following big stories in the way of global central, particularly from the European Central Bank.

Here's how this QE story will play out, and why today's FOMC meeting will just be noise in a much more troubling outlook for central banking...

Protect Your Money From the QE Delusion

quantitative easing

While this week's announcement of a massive new QE program by the European Central Bank (ECB) was the worst kept secret in the world, it may not produce the results that everyone expects.

For one thing, while the immediate reaction was to push European interest rates lower, recent experience in the US shows that QE results in higher rates.

And while everyone is talking about deflation - and Europe is definitely experiencing deflation - the US is still experiencing inflation that could lead the Fed to start raising rates by summertime.

So before getting too carried away with celebrating another major central bank opening up the printing presses, investors should take a serious look at the facts and then decide how to play the markets.

The World Slides Deeper into the Dangerous "Helicopter Money" Delusion

global marketplace

If it seems to you that central banks and government leaders have run out of ideas, you're not totally wrong.

Indeed, the latest move by Japan smacks of pure desperation, and it might seem silly if it wasn't already an idea that's been floated before.

In fact, we may yet have the chance to see "helicopter money" and its effects after all.

The whole thing is so sad, it's almost funny. Almost.

But like too many crazy ideas, desperate people may be inclined to try anything...

Here's What Rising Rates Really Do to Your Shares

rising rates

There is a lot of lip service being paid to the upcoming stock market crash that we're supposed to expect once the Federal Reserve starts raising rates.

Every time we get close to a regularly scheduled Federal Reserve statement, financial pundits pontificate about the nuances of what the Fed Chair might say, not say, or imply.

It's like clockwork.

But one theme remains constant: any tightening of the Fed's easy monetary policies will spell impending doom for the easy-money-addicted stock market.

The only problem, though, is that historical facts just don't support the fear. In fact, there are opportunities for investment out there no matter what rates do... Full Story

Fed Policy Failures Leave $10.8 Trillion Under the Mattress

fed policy

Despite billions in bond-buying "quantitative easing" and near-zero interest rates courtesy of recent Fed policy, Americans have stashed $1.8 trillion in low-yield accounts since the QE program started in 2008.

It's a failed stimulative policy that has left a shocking $10.8 trillion on the sidelines. But when it comes to investing in stocks in particular, the news gets even worse.

This trend is truly ominous…

Janet Yellen Sticks to the Script (Here's What It Means for Investors)

Janet_Yellen_Headshot

Janet Yellen made her debut before Congress Tuesday as the new head of the Fed...

And just like they did for her predecessors, the markets hung on every single word.

Except in this case, nobody (and I mean nobody) expected any major fireworks. What they were looking for instead was a confirmation that it would be "business as usual."

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What the Fed Taper Means for Markets and Your Money

I didn't think it would happen, but Fed Chairman Ben Bernanke up and did "it" a few minutes ago.

He announced the "Fed taper" - the Fed will cut its bond buying by $10 billion a month (to $75 billion) beginning in January.

I think there are a few points to consider about Bernanke's move. I want talk briefly about those, and then highlight what this news of a Fed taper means for your money.

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Deflation Is Coming (and It's Not What You Think)

Be careful out there.
The stock market rally that started in March 2009... The one that's taken us out of the Great Recession and to new highs... The rally that's driving sentiment indicators of people who benefit from rising financial assets directly, peripherally, or because they hope all boats rise with the market...
The rally has never been loved.
The thing is, equity markets don't need love to go twice as high from here, or three times as high in the next 20 years. If they get what else they need, they'll keep going higher.
We could be on the verge of a generational bull market. That's if deficit-plagued, interconnected global sovereigns deleverage and, at the same time, re-capitalize middle and rising classes by making "recourse-sound" capital available and simultaneously reconstituting entirely the notion of taxation.
Too bad the likelihood of that happening is somewhere between slim and none.
That's one reason why I'm an increasingly reluctant bull.
But there's another reason too.

And it has to do with deflation...

Keith Fitz-Gerald Nails It on Today's FOMC Meeting

KFG mug tight

Money Morning’s Chief Investment Strategist went on record with his prediction months ago, stating that there’s not a central banker in the world who has the guts to step away from QE. Few – if any – investors agreed. But they didn’t lock in a 100% gain, either…

Read more...

BREAKING: Bernanke to Continue Controversial Bond Buying Program

Fed Chairman Ben Bernanke announced in a press conference this afternoon that the U.S. Federal Reserve will continue quantitative easing, the controversial bond buying program, for now. Chairman Bernanke expressed concern over rising borrowing costs and their effect on the economy, saying that the situation calls for continued quantitative easing.

Analysts on and off Wall Street were surprised, to put it mildly. Markets responded very well to news of continued easy-money policy. The mainstream consensus was that the Fed would begin to taper off its $85 billion monthly bond purchases by around $10 or $15 billion each month. Current pricing just didn't take continued bond buying into account, and the bullish reaction was immediate, intense, and widespread.

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