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Sunday, September 02, 2012

QE3???

Bernanke last week at Jackson Hole neither affirmed or denied whether QE3 (Quantitative Easing III) would  occur.  Because he did mention that the Fed would take action if needed, the markets, especially the commodities markets rallied in anticipation that another round of QE3 is in the horizon.  As an avid trader, one must not jump to conclusions and always look at both sides of the story on any news.  The main problem with the markets are that they are specifically looking for Big Ben to say, "QE3."  But what if he calls it something else like, "Blue Light Special Donation" or "Make A Wish Per Diem"?  Will the markets be as responsive in a bullish tone if the government prints more money adding further erosion to US Dollars?  I think Ben knows that using the dangerous letters QE are as bad as any four letter word.  Look for the Fed to call their next round of funding something else and not necessarily 'QE'.

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