Six weeks ago the Federal Reserve announced a policy of “quantitative easing.” At the time I said that the goal of lowering the value of the U.S. dollar and of U.S. interest rates would be a failure. News abounds of the failure of this policy. I hope that you are not surprised. Interest rates are already effectively zero percent and businesses and individuals are not borrowing money. So the manipulation of numbers, the quantitative manipulation of the money supply, is impotent. What is left is the still potent voice of the Federal Reserve – its qualitative powers. But don’t expect the Federal Reserve to change the course of the economy.
Jason
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