Egan-Jones Ratings Co. said Friday it downgraded its U.S. sovereign rating to AA- from AA on concerns that the Fed's new round of quantitative easing, or QE3, will hurt the U.S. economy.
http://www.marketwatch.com/story/egan-jones-downgrades-us-rating-on-qe3-move-2012-09-14
I don't understand the logic of another round of QE, beyond a temporary and artifical reprive from the situation. It didn't work the first two times. Why would it work on the third attempt.
Quote from: Bison on September 14, 2012, 02:58:13 PM
I don't understand the logic of another round of QE, beyond a temporary and artifical reprive from the situation. It didn't work the first two times. Why would it work on the third attempt.
I knew Moodys was considering a downgrade if a budget deal didn't get done.
This is not good news.
As best I can tell Bernanke is going all-in for Obama. Romney has already made it clear he'd fire Bernanke if he wins, so I guess this is a last-ditch attempt to save Obama's job, thereby saving his own.
If Bernanke can just keep things going until after the election, then the currency devaluation can begin in earnest.
Quote from: Bison on September 14, 2012, 02:58:13 PM
Egan-Jones Ratings Co. said Friday it downgraded its U.S. sovereign rating to AA- from AA on concerns that the Fed's new round of quantitative easing, or QE3, will hurt the U.S. economy.
http://www.marketwatch.com/story/egan-jones-downgrades-us-rating-on-qe3-move-2012-09-14
I don't understand the logic of another round of QE, beyond a temporary and artifical reprive from the situation. It didn't work the first two times. Why would it work on the third attempt.
There are a number of very dark predictions about the impact of this, but here's a good article that lays out the fact that even the brightest picture is not good. This is a dumb move no matter how you look at it. Maybe Bernanke has started smoking crack to feel better, because there's not a good reason to do this.
QuoteConcerned about potential negative side effects like inflation, skeptics of current Fed policy paint a much darker picture of the impacts of QE3.
"A best-case scenario is that it doesn't do harm to the economy. I can't really get much better than that," said John Ryding, chief economist at RDQ Economics.
Michelle Girard, senior economist at RBS, echoed that sentiment. "I don't think it'll have much impact. I don't even think the Fed thinks it will have much impact," she said.
Read more: http://www.foxbusiness.com/economy/2012/09/14/even-qe3-best-case-scenario-wont-thrill