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Washington, DC (Nov 14) – Quantitative Easing (QE2) is the Federal Reserve’s way of pumping money into the system hoping to avoid deflation. The “2” means this was tried last year by Ben Bernanke with little help to the economy.
The dollar will be worth less since there will be more of them. Watch for China’s reaction since they hold so many of our dollars!!!
Our exports will be cheaper, a good thing if you are a manufacturer, but the dollar will be weaker, therefore, imports will be more costly. Expect the price of oil to cost more at the pumps.
Mortgage rates should remain low with Treasury rates low. Expect inflation since the Federal Reserve is working to avoid deflation.
This will be good for the stock market, but those on fixed incomes will suffer, and so will the bond investors.
Putting your money in a savings account wouldn’t be the wisest investment with interest rates low so we are back to investing in the stock market. This could be the only place to put your weak dollar.
Brenda Hyatt – WorldNewsVine