September 19, 2012

QE3 Has Sunk Before It Has Even Left Port

Fortunately, the crude limitations of the Fed’s only policy tool have become more apparent to the markets. If you must stick with the nautical metaphors, QE3 has sunk before it has even left port.

The move was explicitly designed to push down long-term interest rates, but interest rates spiked significantly in the immediate aftermath of the announcement.

Traders realize that an open-ended commitment to buying bonds means that inflation and dollar weakness will likely destroy any nominal gains in the bonds themselves.  - excerpt from the Operation Screw

Related: iShares Barclays 20+ Yr Treasury Bond ETF (TLT), 30 year treasury bond, ProShares UltraShort 20+ Year Treasuries ETF (TBT), 

Peter Schiff`s comments on the economy, stock markets, politics and gold. Schiff is the renowned writer of the bestseller Crash Proof: How to Profit from the Coming Economic Collapse.

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