Business

Get Ready for More Money-Printing: ‘QE3 May Be Coming After All’

“QE3 may be coming after all.”

That opening line from a new CNBC article says it all: experts are now predicting that the country’s economic woes will likely be used to justify a new round of quantitative easing (which is essentially the government printing money to buy its own bonds). It would be the third round in recent memory, hence the name QE3.

“In a dramatic turnabout, market participants now believe the Federal Reserve is more likely than not to resume purchasing assets during the next year in a third round of quantitative easing,” CNBC says regarding its August Fed Survey.

“There is no doubt that over the last week the odds of seeing another round of asset purchases has risen significantly,” Tom Porcelli, chief US economist at RBC Capital Markets, told CNBC. “This doesn’t mean we think it will have any more success than QE2. What this simply reflects is a Fed with few remaining options.”

The survey polled 60 different economists,  stock and bond strategists, and portfolio managers.

Besides predicting another round of quantitative easing, the respondents also overwhelmingly disagreed with S&P‘s downgrade of the United States’ credit rating.

“Fully 70 percent of market participants gave the US the top Triple-A rating, a higher percentage than France and the UK, which are rated Triple-A,” CNBC reports.

Some of the survey’s other findings:

  • Participants believe there is now a one-in-three chance that the US enters recession in the next 12 months.
  • The outlook for the federal funds rate—which the Fed uses to influence other short-term interest rates—was lowered to just 0.25 percent by the end of next year, down from a one percent forecast in the July survey.
  • Stocks will rise strongly from the current low levels, but are not seen regaining the highs of this year anytime soon.
  • 57% say the bigger threat to the US is cutting government spending too quickly rather than not getting the deficit under control quickly enough.

If you’d like to better understand quantitative easing, CNBC has put together a short tutorial video below:

Comments (116)

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  • The Eradicator
    Posted on August 12, 2011 at 9:10am

    Whilst this comes as no surprise to me, I must say that it is unfortunately ruining our country. Between back room deals and meetings in private (out of sight from the people), what more can you expect?…

    We will be on QE18 before it is all said and done, bank on it…er, assuming there is a bank o bank on.

    Report Post » The Eradicator  
    • Gold Coin & Economic News
      Posted on August 12, 2011 at 9:31am

      It’s crazy, the whole system is going to crash one day soon because these fools running our country can’t figure out that they simply need to stop spending money. There’s nothing more to it than that, but they want to get reelected and continue to try and cover up their schemes. The end of this is coming soon, buy gold before it’s too late:
      http://www.usgoldcoinauctions.com/Gold/american-eagle-gold-coins

      Report Post » Gold Coin & Economic News  
    • Secret Squirrel
      Posted on August 12, 2011 at 10:29am

      .
      How big is Goldmann Sachs vault?

      Ben Bernake! Stop the funds transfer already.

      Report Post » Secret Squirrel  
    • InversionTheory
      Posted on August 12, 2011 at 11:02am

      Our current monetary policy is like talking to a drug addict. They keep promising just one more hit and then they’ll get clean.

      Report Post »  
    • AvengerK
      Posted on August 12, 2011 at 12:17pm

      Yes Mr Bernanke the economy is already flooded with liquidity but we need more money printed to sit on the sidelines? Yes the dollar needs to be debased even more Mr Bernanke. The banks can lend, there’s plenty of liquidity in the banks, it’s busineses…they’re not expanding/new ventures or hiring because they don‘t know what kind of overheads and penalties they’re facing under Obama’s thousands of pages of Obamacare and “Dodd/Frank” finreg. August saw consumer confidence hit a new low. You want to fix this mess Mr Bernanke? State that we fire Obama and the Democrat senate.

      Report Post »  
    • stopspendingourmoney
      Posted on August 12, 2011 at 1:27pm

      This is why we need Ron Paul as pres in 2012..

      Report Post »  
    • Revere2
      Posted on August 12, 2011 at 3:21pm

      It’s like boot camp they have break you down to rebuild you in their eyes.

      Report Post » Revere2  
    • stuartr44
      Posted on August 14, 2011 at 2:17pm

      This guy is a leader in Barry’s parade of idiots, incompetents, crooks, liars, losers and crackpots!

      Report Post » stuartr44  
    • TheDailyEconomyReport.com
      Posted on August 16, 2011 at 6:58pm

      Hello inflation. Not nice to see ya. It’s been a loooonng tiiime, you’re just as ugly as you used to beeeee……..

      Report Post » TheDailyEconomyReport.com  
  • leftcoastslut
    Posted on August 12, 2011 at 9:08am

    just like my mom always used to say, “just because someone told you to jump off a bridge, are you going to do it?” DON’T JUMP, IDIOT

    Report Post »  
  • Joisey
    Posted on August 12, 2011 at 9:06am

    Of course they are going to do QE 3: Obama’s re-election campaign is in trouble and he can’t afford to have a stock market crash until AFTER Nov. 2012. After that he’ll let everything collapse and celebrate with the marxists: “Mission Accomplished”.

    Report Post » Joisey  
    • mikem1969
      Posted on August 12, 2011 at 9:12am

      You said it, as if the first to qe’s did not do enough damage now they have to have a third one.

      Report Post »  
    • Atlas Watching
      Posted on August 13, 2011 at 1:13am

      if the POS and his minions would just die horribly and painfully we would all be better off before the revolution starts

      Report Post »  
  • kdzndogdad
    Posted on August 12, 2011 at 9:05am

    Team Urkel – um Obama – knows exactly what they are doing. It is called The Cloward and Piven Strategy. What does everybody think that “Fundamental transformation of America” meant? Tiddly-winks as the new national pass-time? The global economic and social situation has only helped Urkel accelerate his plan to destroy the American way of life. It is just sad that so many useful idiots don’t realize that if the plans go through to fulfillment, they will be among the first tossed into the gulags. If you were a leader, would you want backstabbers and sell-outs on your “team”? Highly unlikely.

    Report Post »  
    • NJTMATO
      Posted on August 12, 2011 at 9:17am

      THANK YOU for repeating my thoughts EXACTLY. What in the world were people thinking when he said he would fundamentally transform America??? All you had to do was read his damned book!!! For cryin out loud, how many different ways does it need to be said? The American people thinking that Hope and Change was anything but a strategy to destroy THE American way of life, it shows just how truly ignorant most of us are and how complascent we have become. The government doesn’t take care of everything, it screws everything up. We need to take personal responsibility and we also need to take personal responsibility for letting this Lenonist in the White House!!!!! I am ashamed and embarrassed.

      Report Post » NJTMATO  
  • jacobstroubles
    Posted on August 12, 2011 at 9:01am

    Seriously… how could anybody think for one moment that QE3 wasnt going to happen?
    Listen this guy is right on track with his agenda! This should have been obvious from the very moment he arrived on the scene. Your instincts should have immediately kicked in, you should have had that horrific feeling in the pit of your gut. But alas…here we are…

    GOD is about to wrap things up down here folks!
    The Church will be called home, in just a short bit.
    The Tribulation will begin
    The ac will be revealed and force ALL MAN to worship his vileness, and take his mark.

    Report Post »  
    • Vickie Dhaene
      Posted on August 12, 2011 at 11:54am

      and may HE have Mercy on our souls…….I will welcome my home that is waiting.

      Report Post »  
  • Cymry
    Posted on August 12, 2011 at 9:00am

    Definition of Insanity: Repeatedly applying the same solution to a problem and expecting different results.

    Report Post » Cymry  
    • lylejk
      Posted on August 12, 2011 at 9:10am

      I agree; insane, not to mention it’s the equivalent of stealing your money from your savings just to give to the fatcats again on Wallstreet. Guess we will see gold get to $5000/oz soon and to just think of all those idiots who laughed at Beck for saying you better buy gold. Time to stop this madness and stop out of control DC spending and repeal NAFTA/GATT. That is our only solution but they won‘t listen so I’ll repeat again. :)

      The Solution

      First of all, we have to understand that we are going broke. My solution: we got to recall all our military from all foreign lands (and I mean all) and cut it by a third to a half and the remaining troops main mission should be guarding the borders as they are Constitutionally demanded too. Now that would save a heck of a lot of money. Let the rest of the world take care of their own business; we can no longer be the police force of the world. Domestically, I would eliminate the Income tax and IRS and go to a National Sales Tax model. Less entities to collect from so that will further reduce the need for government workers saving more money. Also, before we even had income tax, we got most of our money from tariffs and other fees. Repeal NAFTA/GATT and bring the tariffs back. Short term, things will cost more. Long term, the jobs will return (they have too if companies want to sell their goods to us at a reasonable cost to them). NAFTA/GATT just gave them incentives to leave. That’s my take; want to hear yours.

      Report Post » lylejk  
    • avenger
      Posted on August 12, 2011 at 7:28pm

      Thank you ! Here is the solution with a new Certified Gold by the Gram 24K Currency available internationally from a German/Swiss company now.They own the gold mine,the refinery and the distribution system.You can open an account on line,no fees or hidden charges. http://det.goldfromkb.com

      Report Post »  
  • Living In NYC
    Posted on August 12, 2011 at 8:58am

    Dim-wits! Just more inflation and we will be a DDD rating if this keeps up. Come on Ben and Barry what in the world are you clowns thinking!

    Send Barry and Ben to Kenya and give them a tarp, shopping basket and some cardboard…cause that is what these clowns are doing to the USA!

    Report Post » Living In NYC  
  • rabblechat
    Posted on August 12, 2011 at 8:55am

    I think all this government spending is non-helpful and counter productive; but if they are hell bent on spending it, why not give this round of funny money to the people? We have already given big bucks to the bankers who created this mess; TWICE. If they are going to do a third round, why not give it to the proletariat? I mean after all we are the ones ultimately on the hook to repay all this funny money, at least let us have the benefit of spending some of what we and our progeny will have to repay.
    I would love to pay down some of my debt, or better yet stock up on non perishable food, hand tools and silver before the collapse.
    Why should the ruling class be the only ones given the chance to prepare?

    Report Post » rabblechat  
  • green_manalishi
    Posted on August 12, 2011 at 8:55am

    Hello , Has anybody seen my Hypersonic Mach 20 +++ low orbit rentry vehicle , I seem to have misplaced it somewhere over the Pacific Ocean , Finders fee , please return to Media madhatters and Obama Re-election failure Headquarters,

    Report Post »  
  • leftcoastslut
    Posted on August 12, 2011 at 8:53am

    the super committee is a great idea, they come up with the ideas and we the citizens give the up or down vote

    that means that the rest of congress must be layed off – due to lack of work. that means 94 layoffs in the senate and two hundred and something in the house and then when you start peeling off the layers of all assisstants gone, make-up artists gone, pages gone, pilots and the cabin crews gone, secretaries gone, coordinators gone, housing in DC gone, personal drivers gone and i’m sure i can find more layers to be discarded…. wow i think i just solved our debt problem

    Report Post »  
  • SpankDaMonkey
    Posted on August 12, 2011 at 8:49am

    .
    Hey Ben! We need $600k………………..

    Report Post » SpankDaMonkey  
  • love the kids
    Posted on August 12, 2011 at 8:48am

    most Serious economis said that they would do this. Why, because it props up the market for a while. Obama would love to do this so things look good for about a year, then, the next pres will have yet another TRILLION in debt to deal with, making the inevitable recession even worse for those in power. Just think, if we had bitten the bullet in 08, let some of those too big to fail companies fail, we would now be rounding the corner without the too big to fail even bigger than they were before. It would have been rough, but we would have reset.

    Report Post »  
    • realjohn
      Posted on August 12, 2011 at 10:41am

      I am not sure QE affects debt ceiling. The problem with electronically creating more money and putting it out to the banks is that the banks do not in turn lend it to consumers. They invest it, make a profit and return the pricipal. “Dougral Supports Israel” defines it pretty well in his post below.

      Report Post »  
  • bcope01
    Posted on August 12, 2011 at 8:42am

    Obama-geddon, the destruction of America. Its here!!

    Report Post » bcope01  
  • ares338
    Posted on August 12, 2011 at 8:37am

    If this doesn’t finally convince everyone that there is not a person in Washington who is serious about the so called debt crisis then nothing will! When people get to Washington, THEY CHANGE! All good intentions go away. We will collapse from within if we don’t throw away the dam(n) checkbook and credit cards.

    Report Post » ares338  
  • Secessionista
    Posted on August 12, 2011 at 8:34am

    There already is a big inflation problem – the federal government has bloated to 25% of the economy. QE3 will make that worse. As did raising the debt limit.

    Report Post » Secessionista  
  • Perspective
    Posted on August 12, 2011 at 8:33am

    Pure insanity. What the h3ll are these people thinking?

    Report Post » Perspective  
    • Anonymous T. Irrelevant
      Posted on August 12, 2011 at 8:54am

      Pure incompetence, it drives me crazy!

      Report Post » Anonymous T. Irrelevant  
    • voxpopuli2012
      Posted on August 12, 2011 at 9:06am

      They’re thinking about their own butts, not the good of the country. I think that Speaker Boehner needs to call the House back and pass legislation that prohibits further QE

      Report Post » voxpopuli2012  
    • Shrugged
      Posted on August 12, 2011 at 9:44am

      They don’t get the excuse of stupidity – that’s too polite. Their actions are intentional – and as long as we continue to be “dumb and dumber” they will continue to smile and lie to us.

      Report Post »  
  • Dougral Supports Israel
    Posted on August 12, 2011 at 8:30am

    I believe QE3 is inevitable, but no exactly for the reasons the Fed will give. I think that there are not enough buyers for the massive amount of bonds the US government has to sell to cover it’s $1.5 trillion in borrowing. So, the Fed creates money and buys bonds. If we keep doing it, there will be big inflation problems.

    In regards to a recession, I believe we are already in one. The massive government spending is masking this by creating economic activity. Geithner would call it stimulus but is not really stimulating anything sustainable. Stop the spending and we will see where we really are, keep it going and we will be broke. We are not in a good position at all.

    Report Post »  
    • Ex_Masshole
      Posted on August 12, 2011 at 8:59am

      …and the buyers who are interested are only buying short-term bills. The knee-jerk solution is “QE”, but the real, long-term solution is to suck it up and let it run its course. Otherwise, we’ll be seeing QE4 and QE5 within the next 24 months.

      Report Post » Ex_Masshole  
  • emertz8413
    Posted on August 12, 2011 at 8:25am

    Please!!! Make it STOP. These people are crazy, it’s passsed time to get our house in order.

    Report Post »  
  • IntransigentMind
    Posted on August 12, 2011 at 8:23am

    The bad part is, Sarah Palin, Glenn Beck, and a handful of others has warned you about this:
    http://markamerica.com/2011/06/24/stealing-america-blind-how-to-steal-money-by-printing-it-or-sarah-palin-warned-us/

    Report Post »  
  • Sicialian Eyeball
    Posted on August 12, 2011 at 8:23am

    The pyromaniacs known as Obama and his lunatic administration, are Hell bent ondestroying America.Since they only have 15 months left to do it,It’s full speed ahead. Impeachment is the only solution.

    Report Post »  
  • IAMMADDOG
    Posted on August 12, 2011 at 8:23am

    We need PE1!!! Politician Exodus!! ALL LIBERAL POLITICIANS GET THE F OUT!

    Report Post »  
  • progressiveslayer
    Posted on August 12, 2011 at 8:22am

    It’s a great idea seeing how wonderfully qe1 and qe2 worked,keep creating money from nothing and before ya know it our dollar will be worthless.

    Report Post » progressiveslayer  
  • capitalismrocks
    Posted on August 12, 2011 at 8:20am

    What idiots!!!! So do we just say “three strikes their out” The keynesian economics never ever works, it always fails and yet the “intellects” always keep pushing and pushing it, like somehow they will be the smarter ones and get it right….

    if it had like a 60% success rate, sure I’d say try to do it, but we are talking about a system with a ZERO (Z-E-R-O) success rate…. Capitalism has an about 70-80% success rate, not perfect but nothing is perfect, but to keep trying to use a competing (can we even call it competing) economic system with a 0% success rate over and over is just plain insanity !

    Report Post » capitalismrocks  
  • smithclar3nc3
    Posted on August 12, 2011 at 8:19am

    The Federal Reserve is purchasing what..? The reserve hasn’t the capital to back their purchasing on anything….God Please oh Please let a Republican win in 2012 and put Ron Paul in as secretary of Treasury.

    Report Post »  
  • fatsomann
    Posted on August 12, 2011 at 8:19am

    Oh joy. More inflation. Thanks Obama. How’s that Hope & change workin for us?

    Report Post » fatsomann  
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