QE3 Is Here!

US Fed announced that it will buying USD40 billion in mortgage backed securities every month until the labor market "improves substantially"

A lot of money will flow into the market for this round, Gold, Share, property and food price will skyrocket soon. So do invest now.

The Day the Earth Stood Still For Fed!

Today all investor is waiting the outcome of the US Federal Reserve to print money or not.

On median, they see 60% chance will deliver QE3.

To QE or Not to QE, That is the Question

With the Federal Open Market Committee (FOMC) beginning today and the decision announcement scheduled for tomorrow afternoon, the most immediate question facing the markets is if the Fed will launch a third round of quantitative easing (QE3).

One noteworthy individual who has been predicting for several months that QE3 will be announced at the June meeting is Jan Hatzius, chief U.S. economist at Goldman Sachs.  In his latest report to clients, published on Zero Hedge, Hatzius noted that while he expects the Ben Bernanke-led central bank to announce further easing measures, “the form of the easing is a closer call.”

More printed money will likely flow into Malaysia share market and also Asia market when QE3 launched, inflation will be fly sky high.

Federal Reserve will launch a third round of quantitative easing (QE3) later this month

The recent stretch of disappointing U.S. economic data and financial market turmoil has increased the odds that the Federal Reserve will launch a third round of quantitative easing (QE3) later this month, according to Goldman Sachs.
In a recent report, Jan Hatzius – the firm’s chief U.S. economist – wrote that “Our confidence that the FOMC will ease policy once more at the June 19-20 meeting has also grown. At a time when Fed officials are far short of their dual mandate of maximum employment and 2% inflation, financial conditions should be accommodative and GDP growth should be well above trend in order to re-employ displaced workers and avoid a gradual transformation of cyclical into structural unemployment…Moreover, both financial conditions and growth have been moving in the wrong direction, to a degree that we think warrants action.”
As for the composition of QE3, the Goldman Sachs economist’s “baseline” case is that the Fed “will purchase a mixture of mortgages and long-term Treasuries, financed via balance sheet expansion and possibly coupled with an extension of the forward guidance into 2015.”
“This would be considerably more powerful than an extension of Operation Twist or other ways of changing the composition of the balance sheet, which are possible alternatives but are limited by the relatively modest amount ($200bn) of short-term paper that is still available for sale on the Fed’s balance sheet,” Hatzius added.  ”We still think that Fed officials might decide to ‘sterilize’ balance sheet expansion via reverse repurchases or term deposits.”
Although Hatzius did not specify the size which he expects QE3 to be, he went on to say that “We may get a better sense on all of these issues from Chairman Bernanke’s testimony to the Joint Economic Committee of Congress on Thursday or other Fed speeches this week.”

Gross Calls for QE3, Says Markets “Need More Ammo”

A third round of quantitative easing (QE3) could be arriving in the near futures, according to PIMCO’s Bill Gross. As the manager of the world’s largest bond fund at PIMCO, Gross wrote on the firm’s Twitter account this week that “Risk markets need more ammo if they are to stay up. QE3 getting closer.”
While Federal Reserve Chairman Ben Bernanke and his fellow central bankers will not be taking advice from Mr. Gross, his comments are not likely to fall on deaf ears.  The Fed’s next FOMC meeting will be held on June 19th and 20th, while the current “Operation Twist” is set to expire on June 30th.

QE3 is on - Dow Jones Already at History High

Dow Jones Ind already at history high 13,000 level and gold price is moving up. US dollar moving down so all this show that QE3 already start flow in printed money into share market.

Soon FBM KLCI will hits history high after the investment paper money flow into Asia. In future paper money will be no value.

No QE3 Yet!

The Federal Reserve did not launch a third round of quantitative easing (QE3) at its Federal Open Market Committee (FOMC) meeting today, but did extend the timeframe for near-zero interest rates from mid-2013 to late-2014.

In addition, the tone of the Fed statement was a bit more dovish than that from last month’s meeting. Specifically, the latest statement said that “the Committee expects to maintain a highly accommodative stance for monetary policy” – which was language not included in the prior statement.

Another key difference was that the one dissenting vote came from a hawkish rather than dovish member. Last month, Charles Evans dissented because he supported “additional policy accommodation.” This time, Jeffrey Lacker “preferred to omit the description of the time period over which economic conditions are likely to warrant exceptionally low levels of the federal funds rate.”

Fed Chairman Ben Bernanke will hold his third-ever post-FOMC press conference at 2:15pm ET today.

Following the release of the Fed statement, gold futures turned sharply higher. The yellow metal had already pared its losses by climbing back from $1,649.20 to $1,658 prior to the announcement, and subsequently rallied above $1,670 per ounce.

Gold shares bounced back as well, with the Market Vectors Gold Miners ETF (GDX) recovering from earlier losses to trade higher by $0.43, or 0.8%, at $52.25 per share.

The rebound in gold coincided with a move lower in the U.S. dollar, which relinquished its gains against a basket of foreign currencies.

QE3, $2,200 Gold Ahead This Year, Says Morgan Stanley

The Federal Reserve will launch a third round of quantitative easing (QE3) and the price of gold will reach a new all-time record high above $2,200 per ounce later this year, according to analysts at Morgan Stanley.

In a recent report to clients, the Wall Street investment bank named gold among its top picks for 2012 and forecasted an average price of $2,200 per ounce.

Morgan Stanley’s view is based on part on Ben Bernanke launching a third round of asset purchases. Vince Reinhart – the firm’s chief U.S. economist and a former Federal Reserve official for 17 years – wrote the following:

The unwind of the negative shocks from Japan’s earthquake and the run-up in energy prices earlier in the year are responsible for the recent run of strong data in the US economy..Once these tailwinds have played out and a shallow fiscal pothole emerges, growth should slow to around 2% in early 2012. As a result, the Fed will probably mark down its growth and inflation forecasts. The deceleration will likely be enough to convince the FOMC that the downside risks to its dual objectives of maximum employment and stable prices need to be addressed. However, given the ambiguity in the Federal Reserve Act about how to weigh these objectives against each other, disagreement within the FOMC itself about the relative weights and Bernanke’s efforts to create a more democratic process for decision-making, progress on another QE package is likely to be slow and full of compromise. Eventually though, we believe that a package of Treasury and MBS purchases of US$500-750 billion will arrive some time between March and June.

Federal Reserve kept the Fed funds rate unchanged and did not announce a third round of quantitative easing (QE3)

The Federal Reserve kept the Fed funds rate unchanged and did not announce a third round of quantitative easing (QE3) at its latest Federal Open Market Committee (FOMC) meeting on Tuesday.

Today’s statement from the Bernanke-led central bank was very similar to the November FOMC statement. One meaningful difference was in the first paragraph that discusses recent developments in the economy: “Information received since the Federal Open Market Committee met in November suggests that the economy has been expanding moderately, notwithstanding some apparent slowing in global growth. While indicators point to some improvement in overall labor market conditions, the unemployment rate remains elevated.”

Another difference was in the second paragraph, where the Fed previously stated that “There are significant downside risks to the economic outlook, including strains in global financial markets.” This time, it said that “Strains in global financial markets continue to pose significant downside risks to the economic outlook.”

Once again, Chicago Fed President Charles Evans was the lone dissenting vote, as he “supported additional policy accommodation at this time.”

The initial reaction in financial markets to the Fed announcement included:

Gold futures extended their losses, falling $12.90 to $1,655.30 per ounce

U.S. Dollar Index extended its gains, by 0.7% to 80.10

The euro slid 1.0% to 1.3063 against the dollar

Dow Jones Industrial Average (DJIA) pared its gains but remained higher by 41.70 at 12,063.09

Bonds rallied, with the yield on the 10-year note falling 2 percentage points to 1.99%

More Money Will Print Out By End Of 2011

The only solution currant US and Euro can do is just print more money. This is the easy ways to push the problem to next year
so in short term share price will up and gold price will sky high as well as food price.

If your money now is in gold or share market, likely you will make profit by year end but if your money in bank, your money value will drop.

Another round of quantitative easing would almost certainly be positive for gold prices

Several members of the Federal Reserve have begun in recent days to make calls for the central bank to provide additional accommodative monetary policies. Fed President Eric Rosengren and Fed Governor Daniel Tarullo each made comments this week that the Fed should consider resuming its purchase of mortgage-backed securities, which would effectively mark the launch of a third round of quantitative easing (QE3). The Fed last purchased mortgage-backed securities as part of QE1.

The intention of such measures would be to further stimulate the housing market, which has shown few signs of improvement despite the rebound in numerous other sectors of the U.S. economy since 2009.

Judging by recent history, another round of quantitative easing would almost certainly be positive for gold prices and share market but food price will also fly sky high.

Worse than expected jobs report

Following this morning’s worse than expected jobs report, Goldman Sachs’ chief U.S. economist Jan Hatzius predicted that Ben Bernanke and his colleagues at the Federal Reserve will step up their level of accommodative monetary policies.

In a note to clients, the Goldman economist wrote the following:

BOTTOM LINE: We now look for the FOMC to announce a lengthening in the average maturity of its balance sheet at the September 20-21 meeting.

MAIN POINTS:

1. Following today’s worse-than-expected jobs report, we now look for the FOMC to announce a lengthening of the average maturity of the Fed’s balance sheet at the September 20-21 meeting, with sales of relatively short-dated Treasuries and purchases of relatively long-dated Treasuries.

While such a measure would differ from the first two rounds of quantitative easing – in that the Federal would not be expanding the size of its balance sheet this time – the fact that the Fed would be purchasing Treasuries is likely to cause many investors and economists to label this move as QE3.

Moreover, such a decision by the Fed could establish a precedent for further easing, such as outright Treasury purchases similar in nature to that of QE1 and QE2, which would certainly qualify as QE3.

U.S. policymaker suggested the economy is in need of further fiscal stimulus

While Fed Chairman Ben Bernanke did not advocate for additional monetary stimulus in his Jackson Hole speech on Friday, another key U.S. policymaker suggested the economy is in need of further fiscal stimulus.

Aboard Air Force Two, Vice President Joe Biden stated that “I think the economy does need more stimulus.”

Although Biden did not elaborate on the size of any proposed stimulus measures, he did note that “that it was difficult to get the 2009 package of some $830 billion in spending and tax cuts through Congress even when Democrats had majorities in the House of Representatives and the Senate,” according to a reuters report.

The article also noted that the Obama administration is planning to present new proposals over the next month to tackle the nation’s ongoing unemployment problem.

QE3 - Most likely scenario

A third round of quantitative easing (QE3) by the Federal Reserve is now considered the “most likely scenario,” for U.S. monetary policy, according to Goldman Sachs.

In a report to clients, Francesco Garzarelli - chief interest-rate strategist at Goldman Sachs – wrote that “The recent sharp price action in equities and bonds has probably more to do with a focus on ‘tail risks’ in an anaemic US growth environment, concerns about a broader global growth slowdown (as reflected in the sharp moves in global indices and cyclical currencies) and positioning considerations, rather than outright weakness in the incoming data.”

“The macro backdrop and the tightening in US financial conditions that it caused precipitated a further round of policy easing by the Fed,” he continued. ”The central bank has indicated that its current economic forecasts warrant policy rates remaining close to zero for at least another two years and that it stands ready to expand its balance sheet further if needed.”

Based on these developments, Garzarelli noted that “We have built a third round of long-term asset purchases (‘QE3’) into our baseline, although that is, of course, contingent on sub-trend growth in the near term. Judging from our client interactions, and recent investor surveys (e.g., CNBC/Liesman), this is now seen as the most likely scenario, although it is far from being a universally held view.”

As for the investment implications of QE3, the report focused on the outlook for the credit markets – rather than gold, commodities, currencies, or equities.

Bernanke doesn’t seem to understand that he is 100% trapped

The above title refers to comments from Bill Fleckenstein, an investor and market pundit who has been bullish on gold and a strong critic of the Federal Reserve for many years.

In his latest article for MSN Money, Fleckenstein wrote that “Bernanke doesn’t seem to understand that he is 100% trapped. Either he needs to spring more quantitative easing (i.e., QE3) soon, or stocks will crash more and he will have to do it later anyway. For a guy committed to printing our way to prosperity, he sure doesn’t seem to understand the monster that he and his predecessor, Alan Greenspan, have created.”

Fleckenstein went on to talk about the impact of the European sovereign debt crisis on the markets and economy, noting that “No matter what the Fed does, though, it can’t fix the problems inside the European banking system, nor can it cure the potential insolvency of European sovereign debt.”

“The scary part about Europe is that, at every step along the way, the European Central Bank, led by Jean-Claude Trichet, and the heads of the European Union have been a day late and a euro short trying to get out in front of the issues they face,” he continued. ”That is partly due to the inherent flaw of the euro system, namely, the difficulty of getting disparate countries to agree to the same policies…All this leaves us in a mode in which anything in any market can trade anywhere.”

Lastly, he wrote that “The potential bright side to all of the carnage is that it will force us to start dealing with our problems and hopefully scare us enough that we find the courage to solve them. However, in the short run (i.e., the next year or two), turmoil and pain will likely continue, as there are no short-term solutions to the litany of economic and financial problems that we — and the rest of the world — face.”

Ben Bernanke’s hypocrisy was on full display

Ben Bernanke’s hypocrisy was on full display on Friday as he chided Congress over a variety of fiscal policy matters.

“I only ask … as Congress looks at the timing and composition of its changes to the budget, that it does take into account that in the very near term the recovery is still rather fragile, and that sharp and excessive cuts in the very short term would be potentially damaging to that recovery.”

The Fed Chairman, who has on numerous occasions told Congress not to interfere in monetary policy, “warned Congress on excessive budget deficits, warned Congress on reducing deficits too quickly, and warned Congress about not hiking the debt ceiling,” according to Mike “Mish” Shedlock, author of Mish’s Global Economic Trend Analysis.

Mish – a long-time critic of the Federal Reserve and Bernanke in particular – went on to say that “After bitching and moaning on numerous occasions about Congress interfering in monetary policy, Bernanke repeatedly plunges headlong into fiscal policy, hoping to place the blame for the next collapse on anyone other than the Fed.”

While Congress clearly deserves its fair share of the blame for the United States’ economic problems, so does the Federal Reserve. The fact that the most fervent supporter of money printing in the history of mankind is lecturing others on fiscal responsibility illustrates the severity of Bernanke’s hypocrisy and ego.

He is just another can-kicking advocate who refuses to acknowledge the structural problems in the economy, which are rooted heavily in the Federal Reserve’s ability to create money out of thin air.

Greenspan Says QE Ineffective, Greece Will Still Default

Alan Greenspan provided his latest thoughts on a variety of economic topics, including quantitative easing and the potential for a Greek default.

The former Federal Reserve Chairman stated in a CNBC interview that the Fed’s quantitative easing programs under Ben Bernanke have done little to increase lending and stimulate the U.S. economy. ”There is no evidence that huge inflow of money into the system basically worked. It obviously had some effect on the exchange rate and the exchange rate was a critical issue in export expansion. Aside from that, I am ill-aware of anything that really worked. Not only QE2 but QE1.”

Going forward, Greenspan said he “would be surprised if there was a QE3″ due to the damaging effects it could have on the value of the U.S. dollar.

Greenspan went on to discuss the sovereign debt crisis in Greece, noting that a Greek default is eventually likely. A default would substantially weaken the profitability of U.S. companies, because of their large economic commitments to Europe, which holds a significant portion of Greek debt.

The former Fed Chairman also talked about the U.S. deficit, predicting that Congress will not reach an agreement on raising the debt ceiling by the August 2 deadline.

Ben Bernanke’s approval rating reached its lowest level in two years

Fed Chairman Ben Bernanke’s approval rating reached its lowest level in two years, according to the latest Bloomberg National Poll.

In the most recent poll, conducted June 17-20, 26% of respondents viewed Bernanke unfavorably, 30% favorably, and 44% were unsure. This compares quite poorly to September 2009, when the Fed Chairman received a 41% approval rating and only 22% disapproved.

Other worrisome results from the poll included:

- 66% said the U.S. is on the “wrong track”

- 44% said they are worse off now than at the beginning of 2009

- 55% expect their children to have a lower standard of living than their parents do today

The poll was conducted by Des Moines, Iowa-based Selzer & Co., and is comprised of interviews with 1,000 U.S. adults. It has a margin of error of +/- 3.1 percentage points.

While the poll is closely followed by economists and investors, if one wants a more real-time estimate of Bernanke’s approval rating, he/she has to look no further than the price of gold.

As Marc Faber stated this week, “Not to own any gold is to trust central bankers, and that you don’t want to do in your life.”

For QE3 to materialize, the U.S. economy must undergo “a meaningful rise in the unemployment rate or flat unemployment coupled with a sharp fall in co

For QE3 to materialize, the U.S. economy must undergo “a meaningful rise in the unemployment rate or flat unemployment coupled with a sharp fall in core inflation and inflation expectations,” according to Goldman Sachs chief U.S. economist Jan Hatzius.

In a recent report, the Goldman Sachs economist presented his thoughts on the potential for QE3, in light of the substantial wave of disappointing U.S. economic data of late.

“Sure enough, markets that not long ago were predicting rate hikes are now starting to debate QE3,” Hatzius wrote. “But we believe that the Fed’s ‘zone of inactivity’ is much wider than these wild swings might suggest. The hurdle for rate hikes is high, and we feel good about our long-standing view that the funds rate will remain at its current near-zero level until 2013.”

“But the hurdle for QE3 is also high, and indeed much higher than it was for QE2. First, the perceived cost of QE3 is higher because inflation has accelerated. This reflects the fact that at least some of the weakness in growth this year is due to higher commodity prices, i.e. akin to a supply shock. Second, the perceived benefit from QE3 is lower.”

“Fed officials viewed QE1—defined as the overall balance sheet extension that started in late 2008 and ended in early 2010—as a resounding success, and that was probably one reason why they were fairly quick to climb aboard QE2. But they are much less confident that QE2 made a big difference; while it probably did help financial conditions ease and the economy grow a bit more quickly than it otherwise would have done, it’s hard to argue that the effect was large. That has to color their expectations for what QE3 might deliver.”

“And third, the backlash against QE2 both domestically and abroad was greater than Fed officials had anticipated, and they are not keen to subject themselves to another round of similar criticism.”

Month Of June Likely To Happen Panic Selling

In month of June likely to happen panic selling due to growing fare of economic crisis will return in Euro and US. By end of June, QE2 will end and printed money will stop flow into the financial system. Jobless in US did not show any drop yet along the QE2 so policy maker will likely to dip the share for government to launch QE3.

Now in western country printing money is the best ways to solve the problem. However if QE3 launched, 2nd half year share market will be very profitable.