Jim: > I don't think that QE is about that (increasing the money supply). > It's about trying to maintain the stability of the banking system and > to get long-term interest rates (and the real effective cost of > longer-term credit) to fall more in line with short-term nominal > rates. That's why the Fed has bought risky and/or long-term assets > from banks.
QEI+QEII+Operation Twist (QEIII) and mortgage purchases are about saving the real estate market. That is why the Fed bought/did those things. And we can say that so far so good. I have never seen the 30 year fixed mortgage rate this low in my life before. Had they not done this, even in Manhattan the house prices would have been way below. However, with or without what Fed does, long term rates are bound to come down further. Whether this can save the real estate market or not, only time will tell. I have serious doubts though. See the US mortgage issuance from here yourselves to reach your own conclusions: http://www.sifma.org/research/statistics.aspx Best, Sabri _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
