The only real way that the Fed can reverse this policy is to stop buying securities and then gradua

In recent paige wyatt years the provision of cheap, young money in exchange for assets of dubious quality has become something paige wyatt of a norm for many of the world's central banks. As Federal Reserve Chairman Ben Bernanke and his colleague from the ECB, Mario Draghi continue to call such operations "non-standard". Practice, however, speaks otherwise.
Announced on September 13, 2012 third round of quantitative easing (QE3) by the Federal Reserve, shows clearly that it is providing cheap money in support of economic growth, is the new standard of monetary policy in the world. The goal of surgery is to improve the outlook for employment in the U.S. economy and the mechanism to achieve it is buying up mortgage-backed securities (bundles of mortgage loans) of $ 40 billion a month. As an additional measure, which the Fed is trying to support economic growth, was launched "forecast" that the central bank will keep the levels of interest rates at the current record low until at least mid-2015
This seems to be the main question many investors are asking themselves. In the summer of 2012 in the U.S. stock indices reached 4-year highs, interest rates on U.S. debt fell to a record low, and although the official inflation paige wyatt remained within the mandate of 2%, the price of energy and food prices remained high. At least on the surface, real prerequisites for intervention of the central bank of this size and character missing.
In his speech on September 13, Bernanke pointed out as the main reason for initiating another round of quantitative easing paige wyatt slow recovery in the labor market and the Fed's mandate to pursue full employment. In view of the revised months later for growth in U.S. GDP in the second quarter of 2012 (from 1.7 to 1.3% of GDP) shows that in 2013 the Fed would prefer to try to increase employment without regard to the effects on price stability.
Although last month the official unemployment rate fell below 8 percent paige wyatt for the first time since February 2009, a careful analysis paige wyatt of the labor market of the United States reveals what caused the intervention of the Federal Reserve. From January 2009 to July 2012 the number of dropouts from the labor force is estimated at 8.42 million people. For the same period the U.S. economy created only 3.4 million jobs. Despite falling unemployment in the country, employment paige wyatt remains nearly 5% lower than before the crisis, and its tendency to increase, at least at this stage is not visible. Namely employment indicator, which most fully describes the state of the labor market, as it shows what proportion of the working age population actually works. Amplified pressure on social systems, since the beginning of 2009 the number of Americans receiving disability pensions or food coupons has increased by 17 million paige wyatt people.
How well the announced program will actually help create jobs, however, is highly debatable given virtually no effect on the two previous paige wyatt programs on the labor market. The idea of being pompous again cracked mortgage bubble in the hope that it will create new jobs based on too many contingencies. At the same time, however, there are a number of immediate and real risk of the policies undertaken:
Accumulation of more securities, many of which have dubious value, jeopardize the balance sheet of the Federal Reserve, which extend over only three times within four years. The new round of quantitative easing will further increase the systemic importance of the Fed on the Functioning paige wyatt of the U.S. banking system in general and the overall economy. At the same time, each intervention will bring fewer benefits to financial markets and the increasing threat to the real economy due to rising concerns about the solvency of the central bank.
If money QE3 still find a way to the real economy, it will create significant inflationary pressures will force the Fed to reverse its policy to comply with the mandate for stability of the currency. For this purpose, the base rate will have to be increased, and redeemed during the operations of financial assets will have to be put back on the market. Despite claims Bernanke that the Fed at any time can get rid of these assets, the market logic suggests the opposite. Realistically, if the demand for these assets there were, it would not have required the Fed buys them. Not surprisingly, in such cases, it is the central bank is defined paige wyatt as a "buyer paige wyatt of last resort."
The only real way that the Fed can reverse this policy is to stop buying securities and then gradually start selling off or wait until the end of maturity. The problem with such a policy is that the Federal Reserve is dependent both on the amount of oncoming demand, and