11-03-2010, 02:02 PM
They are effectively devaluing the dollar. That should help the deficit, but will create inflation, and will piss off countries that hold our debt (like China). Hence the talk of currency wars.
It should also drive up the stock market and commodities (more overall dollars in circulation should mean "stuff" is worth more of those dollars - i.e. inflation), but right now it seems to be "sell the news" (i.e. this was already priced in).
The fed wants inflation, since it makes people (and businesses) less keen to have their cash in savings, where they will earn less than inflation, and more keen to invest (take risks for higher returns).
It should also drive up the stock market and commodities (more overall dollars in circulation should mean "stuff" is worth more of those dollars - i.e. inflation), but right now it seems to be "sell the news" (i.e. this was already priced in).
The fed wants inflation, since it makes people (and businesses) less keen to have their cash in savings, where they will earn less than inflation, and more keen to invest (take risks for higher returns).
Ex SWG, L2, CoH, Wow, and War
Currently PvPing in the stock market
Currently PvPing in the stock market