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Strategies & Market Trends : The coming US dollar crisis
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To: Giordano Bruno who wrote (36524)3/23/2011 5:06:00 PM
From: carranza2  Read Replies (4) of 71406
 
Re: QE3.

I thought it was coming too, certainteed.

I am not so sure anymore.

Velocity is not picking up.

The banks are simply increasing their reserves. Whether it is due to no loan demand or failure on their part to make loans or what, the purpose of QE2, i.e., to get moolah into the economy in order to stimulate it, has not worked out, at least if you think bank reserves and velocity provide a measure of circulating dough.

If I were The Bernank, I would think that more QE is not productive given what has happened with the dough. Most of its fruits are sitting in bank reserves, making low risk money for banks.

You can only stuff a fat goose with so much food. I think the same applies to fat cat banks. I apologize for the mixed metaphors.
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