Quantitative Easing: The Fed's Latest Attempt to Improve The Economy

Thursday, November 04, 2010

US Federal Reserve Board Chairman Ben Bernanke (Karen Bleier/AFP/Getty)

The Federal Reserve Bank announced Wednesday that it will once again make a large purchase of Treasury Bonds — $600 billlion worth — as part of a Quantitative Easing to help the struggling economy. The response of many to this news: "Quantitative what?" Louise Story, Wall Street and Finance Reporter for our partner The New York Times, joins the show to break it down.

The Fed has two big strategies for getting the money flowing: spend money, or cut the interest rate. But when they've tried both (they have), and when the problem still isn't solved (it isn't), the Fed tries strategy three, basically printing cash. The strategy came from Japan, where it was first used in 2000. (It didn't work as well as they'd hoped.)  It's been done here in the states once before; The Fed made a similar decision in 2008. Is the second time a charm?

Guests:

Louise Story

Produced by:

Posey Gruener

Comments [1]

Los Alamos Joe

Companies will not invest in the U.S. so long as they can make more money by building abroad.

Currently, we are encouraging foreign investments. If you want to increase investment in the U.S., then individual investors and companies should get tax breaks on earnings from production in the U.S., but they should pay tax bracket rates on foreign earnings and on foreign capital gains, as well.

Unfortunately, our politicians and political parties are corrupt, cowards, or clueless. Goodbye U.S.A.

Nov. 06 2010 02:06 PM

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