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Quantitative easing
Now the Federal Reserve has effectively cut the target lending rate to zero, it only has one more weapon in its arsenal. Quantitative easing. Senior Editor Paddy Hirsch explains what this "nuclear option" it is, and what the Fed hopes it'll do.
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The last words speak volumes - I would add that no matter what happens, the US dollar is not going to maintain its current value. The US dollar is an means to an end not the means itself. Let me explain - People have rushed to the dollar for now but those people who got into it first are now getting back out and into something else. What happens if the US dollar goes down? All commodities which are quoted in US dollars appear to go up.
Analysts tend to give people too much credit. People act like lemmings (following the crowd) because acting independently and getting it wrong is fatal while getting into the next 'party' late or leaving to late won't kill your assets.
Making 10% per year is possible this way with constant vigilence.
My way is different - find a nice place and throw your own party. I'm in gold and silver and run two junior mining companies. See you at the party sooner or later. Hopefully sooner.
Mr. Hirsh, that is one of the BEST explanations on the subject, as well as the best approach to summarizing what the Fed delivers in their minutes. Keep up the good work! Any chance you can discuss what makes indexes like the 1, 6 & 12 Month LIBOR, 12 MTA, 1 year CMT, fluctuate up and down? I am interested on what makes these move as they apply to ARMs that are becoming adjustable in the coming months and years.
WOW! I just have to say that this whiteboard explanation is just simply brillant! This is what I call "conceptual finance". I will soon start my Master degree in finance and if there's something I dislike about teachers and student is their lack of creativity. Using the whiteboard and visuals to explain is just amazing. you guys are my hero... I AINT JOKING!! Every time I do a presentation at school and I use the board I get people by surprise but hey..IT WORKS!!! We have to teach students to develop their right part of their brain be freakin creative. Absolutely amazing... I wish in the future to work in some way with you guys!! (Using the white board is like the book "The back of the napkin" - its book explaining how using pictures can solve multiple problems!)
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