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Radical Difference Between Monetization 1 and QE2 by Daniel R. Amerman By Daniel R. Amerman, CFA Overview  It's official: the Federal Reserve announced on November 3rd that it will create approximately $600 billion of new money to fund US Treasury bond purchases, and will also utilize another $250-$300 billion of money that had been previously created (also out of the nothingness). The usual term in the media for these planned purchases is "QE2", as in the second round of quantitative easing. The "2" in "QE2" implies that this is something that has been done before. This implication is dead wrong....."

Federal Reserve, the price-adjusted dollar index is now lower than at any time since the index was first compiled in 1973 TUESDAY, APRIL 08, 2008 7:20 AM IST http://www.livemint.com/ Wall Street Journal One of the ways in which the US Federal Reserve has chosen to deal with the credit crisis is to increase inflation in the US. The series of interest rate cuts in the US are designed to lower the short-term cost of money for US banks. At the same time, the interest rate cuts weaken the dollar, make imports into the US more expensive and fan inflationary expectations. All these factors together prevent long-term interest rates from coming down drastically, so the net result of the cuts in the Fed Funds rate has been a steeper yield curve — short-term rates have fallen more than long-term ones. That’s good for the banks, who borrow short and lend long. Over time, that will enable banks to make profits and recapitalize their balance sheets. In short, the US Fed is trying to inflate its way...

Bush Would Like a Stronger Dollar? Economic Browser March 12, 2008 That's the title of a post in today's WSJ RealTime Economics: President George W. Bush said in an interview today with Nightly Business Report that the dollar's fall to record lows against the Euro is not a good thing and he "absolutely" wants a stronger dollar…… (Has he really seen the chart? By Norton) Comments by economic Browser: When Greenspan attempted to paper over glaring deficits in national security on the heels of the Oslo Peace accord-inspired Sept. 11 box cutter attacks, he set in motion this decline of the US dollar. I want to suggest that the apparent decline in US hegemonic capital has reduced America's status as the safest place on earth to invest and has reduced the ability of the US to intervene globally to prop up capitalism. However, the bond yields suggest that the US is still a safe place to invest. Or global bond investors are no more sophisticated than real estate inves...