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iShares 20+ Year Treasury Bond Message Board

  • merenkov merenkov Aug 20, 2013 1:54 PM Flag

    What was the real point of QE3?

    In late August of last year, the yield on 10-year Treasuries was 1.56%, near the lowest rate in a generation. QE3 officially began on September 13th, and yields had crept up to 1.76% in anticipation. Since that time, the 10-year yield has gradually crept up further to the current 2.83%. So what was the point? QE3 did not lower rates, and in fact is likely responsible for the increase since that time (because it increased inflation expectations). Why do so many people believe Bernanke when he says the goal of Fed bond-buying is lower rates, when the exact opposite has occurred? I think the unstated purpose was simply to pump liquidity into the system in order to push up stock market and real estate values, and hope and pray for the “wealth effect”.

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    • QE Who?
      Nicknamed Helicopter Bernanke before FED job.
      Flies around in a helicopter and drops money down.

      Sentiment: Sell

    • LIKE ALLLLL gov policies

      its not about the FACT that they will fail ( which to the left is a victory as fear and anger sets in and with the help of the msm its always those gosh darn capitalists at fault)

      its about the fact that the politicians have to show they are doing something ( SO THEY KEEP THIER POWER)

      and , again, its the other guys who messed it all up

      THAT IS THE POINT OF QE 1 2 3 4 5 6

      QE really started with FDR

      or one can claim Woodrow Wilson when he created the Fed to control the money follow which is to control business

    • You are obsessed with QE my friend. Ignore that for a moment and embrace the notion that rising rates and an artificially inflated stock and real estate market are not mutually exclusive. Could be both bets will be profitable. Most assuredly this bond market will decline at some point. It won't be a straight line but the trend is in. Get with it and start making money.

      • 2 Replies to chip_stack21
      • The interest rate yield still has not broken out of the long-term down channel-need to see that to confirm the up trend in bond prices is over for now. Moreover, the rise in interest rates over the last year is very reminiscent to 1986-87, which could spell big trouble for equities shortly.

        Sentiment: Hold

      • There's more truth in your observation than I care to admit. I should just be happy that most people don't understand the true consequences of quantitative easing (rates have gone up during every single QE, and dropped after it's ended), because it's enabled me to make a lot of money trading it. But something about it bothers me. I hate the fact that so many people pay so much attention to the fool with the nice beard, as opposed to economic fundamentals. I believe in free markets, so my quest is really more political than economic. The Fed enables bubbles and then creates bigger bubbles to fix its past mistakes. Eventually, this will all end in tears.

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