canadiananalyst

MattLikesAnalysis Wrote:
-------------------------------------------------------
> I've been thinking about this, and isn't promising
> to keep rates at "near zero" until 2013 a form of
> stimulus which does what QE2 was supposed to do
> without the cost to the Fed while attacking the
> areas Bernanke wants to attack?


Close in my opinion. I would say that it accomplishes the fed's goal of discouraging savings and encouraging spending and investment without have to actually "do" anything.

Where I disagree is in the implications of the word "cost" which seems to imply that the fed is running low on spending power (nothing could be further from the truth). What I think this does do is implement policy in a tricky political atmosphere without having it as easily labeled as "QE" or "money printing" etc. So I think the action has less political cost.

Good illustration of the range of things the Fed can do given the latitude of control over a fiat currency.