Thursday, July 12, 2012

QE3 Pressure Rising on Bernanke

Even though it's a failed strategy, the pressure is rising on Ben Bernanke to institute another round of quantitative easing to give the appearance something is being, and can be done, to stimulate the economy.

With no hint in the minutes from the latest FOMC meeting the Federal Reserve is close to pulling the trigger on QE3, it does appear pressure is growing for something to be done, as unemployment remains high, as no job growth is really happening, as the few jobs being created doesn't even keep up with those entering the job market for the first time, let alone those in the job market for years continuing to look for jobs without success.

The growing consensus is the Fed won't wait until the job market further deteriorates to institute more easing. It can't afford to look like they waited too long and are now behind the economic curve.

But whether the idea of QE3 is attractive to you or not, it's going to come, and for investors they must prepare accordingly in the areas they're prepared to put their money into.

There is no doubt commodity and commodity-related companies will largely benefit from the next round of stimulus. The U.S. dollar will start to plummet again after the recent outrageous upward climb, based upon nothing else than it being perceived as the only safe place to park one's money during that period of time.

At this time investors will have to wait until it happens, in the meantime building up their strategy as to how the next round of easing will affect the market.