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QE2 Big Mistake

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Tracking System Co. Looks At QE2

Economy Is Crap? Print More Money!!!

moneyWhile monetary policy is an effective tool to help fire up a sluggish economy, it can also be bubble-causing and sometimes dangerous as too much meddling can be counterproductive to long-term goals. This is what some economic analysts are saying about the FOMCs recent move to buy $600 billion worth of US treasuries, also known as Quantitative Easing 2 or QE2. One of the main problems with the second round of quantitative easing that some economists have is that the measure feels sort of like a knee jerk reaction to the problematic unemployment rate that is closing the gap toward 10%. Especially since the first round of quantitative easing has not even had time to really marinade, causing some people to compare the move to the “fool in the shower” analogy. (The fool in the shower analogy references to monetary policy lag problems that often create additional economic instability. The “fool in the shower” who is constantly tinkering with the hot and cold controls because he doesn’t realize there is a lag between the time he orders up the temperature change and when the change occurs. By trying to get the water temperature perfect, the fool is always a step behind. Applied to the economy this suggests that the policy makers are prone to overshoot their target. This is something many people believe caused the financial and housing bubble births in 2001 after Alan Greenspan’s knee-jerk reaction to the 9/11 terrorist attacks).This is why our GPS tracking system experts would like to ask whether you believe the Federal Reserve printing more money is a good thing or bad thing for our economy?

 

Although everyone believes that something must be done to help get people back working again, when it comes to economics nothing happens fast. Unemployment did not turn from 5% to 10% overnight, and it sure as hell will not get back to 5% in a few months. The economic policies in place need time to cultivate and grow. Congress needs to help alleviate the cost of doing business for companies so they will want to hire people instead of securing cash just in case. Another round of QE seems likely to have no immediate impact on the unemployment rate and will only push the dollar down while costing taxpayers untold amounts of cash in interest. This vehicle tracking analyst views more QE as a big mistake that could be problematic years down the road.

GPS Tracking Customer Thoughts

Do you have faith that the steps the Fed is taking will help get the economy back to prosperity, or do you think they are making a gamble that could make them crap out?

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