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Pastimes : The Philosophical Porch
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From: Rarebird10/11/2010 9:11:52 AM
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QE will never create American jobs. QE will have exactly the opposite effect and will destroy American jobs (although it will create jobs outside the USA).

Richard Fisher of the Dallas Fed, has begun to realize that QE is not only disasterous for the dollar, but for jobs as well.

"In my darkest moments I have begun to wonder if the monetary accommodation we have already engineered might even be working in the wrong places. Far too many of the large corporations I survey that are committing to fixed investment report that the most effective way to deploy cheap money raised in the current bond markets or in the form of loans from banks, beyond buying in stock or expanding dividends, is to invest it abroad where taxes are lower and governments are more eager to please. This would not be of concern if foreign direct investment in the U.S. were offsetting this impulse. This year, however, net direct investment in the U.S. has been running at a pace that would exceed minus $200 billion, meaning outflows of foreign direct investment are exceeding inflows by a healthy margin. We will have to watch the data as it unfolds to see if this is momentary fillip or evidence of a broader trend. But I wonder: If others cotton to the view that the Fed is eager to “open the spigots,” might this not add to the uncertainty already created by the fiscal incontinence of Congress and the regulatory and rule-making “excesses” about which businesses now complain?"

Richard Fisher

dallasfed.org
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