Off they go!

So Bernanke announces QE2 10 odd days with the objective of forcing bond rates even lower to further simulate the economy and what happens? Bond rates instead start taking off!!!!

As a decisive show of a thumbs down on QE2, the yield on the 10 year on BOTH sides of the border is up a whopping 25% (a move from 2.5% to 3.25% here in Canada) since the announcement. No wonder the markets and commodities are coming off.

Bernanke is learning the hard way that the bond market is bigger than he is.

What is QE2?

2nd line. (Is a second line required when asking a question)

So, for those of us less versed in world economics, what exactly does this mean? Can you delve for us, deeper into the idea you are projecting?

Won't have any affect though as China will just peg their currency accordingly. Such a cash injection essentially devalues the dollar so china will devalue at exactly the comparable rate, negating any affect.

Originally posted by justagirl
What is QE2?

2nd line. (Is a second line required when asking a question)

QE means Quantitative Easing. It's where the Fed prints money and buys assets like bonds.

reply to post by leo123


QE2 is DESIGNED to raise interest on treasury notes. Bernanke and the sheeple will say it isn't, but if you look at what QE1 did and since he's doing it again and lying about it, it's the goal.

Why? Because big banks borrow from the FED at 0%, buy US treasury bonds.

The highest the interest, the bigger their paycheck is... With no risk, at the cost of US taxpayers.

You think they are doing this for the little people? Please.

Originally posted by onequestion
So, for those of us less versed in world economics, what exactly does this mean? Can you delve for us, deeper into the idea you are projecting?

There's an old saying out there that the bond market rules the world. Investors, not governments set bond interest rates and when investors feel a government (or a company) is not acting financially responsible they will spank them by forcing them to pay higher interest rates.

Taken far enough, it can really harm an economy by slowing it down significantly.

Not much more to it than that.