QE3: Obama ushers in hyperinflation with more “quantitative easing”

Investors Business Daily explains Obama’s latest desperate ploy to cover up his economic failures.

Excerpt:

The Federal Reserve announced a third round of quantitative easing Thursday afternoon, and it is big: A net $40 billion a month in additional purchases of mortgage-backed securities. And policymakers said additional accommodation will continue “for a considerable time after the economic recovery strengthens.”

[…]Ordinary Americans can expect to see higher gasoline prices. Quantitative easing also pushes up commodity prices — both by boosting demand for financial assets and by weakening the dollar.

Crude oil prices have been trending higher, and were up $1 to nearly $98 a barrel in mid-afternoon trade.

That will quickly filter down to gasoline prices at the pump. Gas prices moved back to $3.847 a gallon last week, the highest since April. They’ve risen for 10 straight weeks in part on anticipation that QE3 was coming. Gas prices could once again threaten the $4 level — it’s already well over that mark in California. And that’s with no major supply issues or feared disruptions around the world.

Higher oil and gas prices also could push food prices higher, by encouraging more corn burning to produce ethanol, as IBD’s Jed Graham recently noted. Corn prices are near record highs due to this summer’s historic drought.

The producer price index shot up 1.7% in August — the biggest jump in three years — on higher food and energy costs. Gasoline prices at the wholesale level exploded 13.6%. Food costs rose 0.9%, the most in nine months.

With job growth and wage gains so weak, higher food and gas prices will cut into consumers’ buying power on everything else. That will offset much of the modest QE3 benefits.

First and second round of quantitative easing:

Third round of quantitative easing:

It means they are going to print the money. There really is no difference between Barack Obama and Robert Mugabe when it comes to economic policy. The only thing stopping him is the Republican House and the conservative alternative media.

3 thoughts on “QE3: Obama ushers in hyperinflation with more “quantitative easing””

  1. given the deflationary context of freeing up the banks spreadsheets with writedowns of credit and collateral how exactly is it hyperinflation? The dollar is still the world benchmark and acts like this only serve to drive down the value of the dollar, decreasing the value of foreign held US debt forcing other countries to pay for the follies of wall street – you should be excited…yay capitalism.

    Additionally, the price of gas in California shot up immediately after a fire at a Chevron refinery (http://articles.latimes.com/2012/aug/08/business/la-fi-refinery-gas-prices-20120808) – it had nothing to do with this round of debt buying.

    Out of curiousity, in countries like ours that use fractional reserve banking, do you know how growth is created?

  2. Hi Jerry,

    I’m just curious, do you think there is a point where too much money can be printed? If so, why would it be too much, and when in your opinion would that point be reached?

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