Friday, September 14, 2012

It’s the end of the world as we know it… QE3

Bernanke launches an open-ended round of Quantitative Easing (QE3).

It’s the end of the world as we know it… Thursday, the Federal Reserve announced that it will buy $40 billion dollars of mortgage-backed securities per monthindefinitely.) and extended the period for which it will keep rates between 0 and 1/4% to mid-2015.

This FOMC statement that sums it up:
"....The Committee agreed today to increase policy accommodation by purchasing additional agency mortgage-backed securities at a pace of $40 billion per month. The Committee also will continue through the end of the year its program to extend the average maturity of its holdings of securities as announced in June, and it is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities. These actions...should put downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative."

To give you some comparison so you know how GIANT this is, QE1 was $1.7 Trillion. QE2 was roughly half a trillion. The new plan isn't really QE3, because it's never scheduled to end. It is an entirely different, evil BEAST.

But…what’s really scary is in this next paragraph:
If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of agency mortgage-backed securities, undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved in a context of price stability. In determining the size, pace, and composition of its asset purchases, the Committee will, as always, take appropriate account of the likely efficacy and costs of such purchases.

When will it end? “Indefinitely” is the key word here. The Fed has essentially given itself the power to do as it pleases for as long as it pleases. We are talking unlimited power.

Okay, I know, enough bad news… what can we do about it? The answer is not much until something is done to get these criminals out of control. For now we must protect what we have, stay liquid and support those who respect our freedoms and liberty.

Until next time,
Barry Page
Legacy Insurance Agency, PLLC

Shield Financial Consulting

Barry Page is recognized as a leading expert on life insurance and private banking. He is a financial consultant and independent life insurance agent who helps clients with tax advantaged investment alternatives. He specializes in showing families how to protect their assets, income and lives utilizing a macro-financial approach to planning. 

His specialized knowledge and services help consumers find alternatives to traditional investing and the stock market that not only safely protects their savings, but also provide tax advantages. His business is based in Ocean Springs, Mississippi and he services clients throughout the Southeast.

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