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  • Is the Fed Now Leaning Toward QE3?

    Since late last year, the consensus has been that the Fed will not enact more quantitative easing, or QE3, since the economy is slowly improving. Yet there is new evidence which suggests that the Fed may yet implement QE3, despite the fact that QE is unpopular politically. If this is the case, and no one knows for sure, I would expect the Fed to announce QE3 no later than this summer and maybe even sooner. They don't want to do something unpopular during the election season in the last half of this year.

    Following that discussion, we turn to Europe and the fact that the European Central Bank has now made over $3 trillion in bailout loans to banks across the region. That tops even our own Fed which has $2.9 trillion on its balance sheet! Greece has reportedly completed its huge bond swap in which investors took a haircut of 70%. In return, it appears that Greece will get its much needed second bailout loan of 130 billion euros. While Greece may be off the front pages for now, it won’t be for long.

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