Daily Archives: September 24, 2012

The biggest thing that happened last week is QE3. Here’s what it is, and what it means for the future

Ezra Klein does a good job about explaining QE3 (Here’s why everyone is so excited about what the Fed did yesterday). So much so that I think you should go read it (if for no other reason, you will now know what QE3 is.)

What he does leave out is something I don’t think alot of people are talking about, and that is that the U.S. Federal Reserve is exercising new approaches to affecting the economy. I think QE3 will be either be successful or at the very least, not unsuccessful. While being successful is important now, what is just as important is that in the future, the Fed (and other central banks around the world) will have a precedent for doing the same thing again. And that is a good thing.

The head of the Fed, Ben Bernanke, should have done this along time ago. I think partly he did not because of push back and fears of what this might do. But now the precedent has been set, it will not be as hard to do again in the future.

And that’s a good thing.