Research (ČP INVEST)
Macroeconomics  |  September 24, 2012 14:45:41

Continuous printing greenbacks

Author: Michal Valentík, chief investment strategist at CP INVEST

According to the decision of the Fed's quantitative easing triggers Number 3 In fact,   but continues quantitative easing continuously for two years.Quadrillion tons of sites and comments have already been written for another round of quantitative easing.   Fed declared the fight against unemployment and wants to intervene in the market as long as it wins. In this commentary, I will not try to argue about whether expansionary monetary policy is effective / ineffective, good / bad, or such or poppy. My goal is just to show that an infinite QE began two years ago. Fed accommodative policy is carried out with the exception of 11 weeks from August 2010. Opinion whether QE only helps the growth of financial assets or helps the real economy, let alone make reader.

The following figure shows the weekly chart stock index S & P500 since mid-2010. Yellow vertical line represents the announcement by Ben Bernanke, the Fed intends to launch QE2. It was in Jackson Hole in August 2010. Dark green vertical line shows the official launch of QE2. To recap: the QE2 Fed bought government bonds worth 600 billion USD. The red vertical line represents the end of QE2 - it was in June 2011. Then followed eleven weeks without intervention. And whoops. Markets fell. So in September 2011, the Fed came with Operation Twist (dark gray vertical line), when the market sold government bonds with shorter maturities and buying longer-term maturities. In June 2012 there was a prolongation Twist operation (light gray vertical line).Light green line is the Jackson Hole 2012, blue line is QE3 announcement.

Basically, we have endless QE for two years. We just notice it until QE3 know J

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