Fed announces another $600 Bln of "Quantitative Easing" (read money printing to buy Government debt). This is to join the other 5.5 trillion dollars of debt that is already owned by the FED. This dwarfs the puny approximate $1 trillion each we owe China and Japan.
So is this good or bad?
This new $0.6 Trillion, is swapped for government debt on the open market and is the mechanism used to bring the interest rate down. The fresh cash injected will get loaned out again and again multiplying the amount of loans. This will introduce many trillions of new money into the economy through bank loans. Theoretically, new bank loans don't disturb the balance if the loans create assets of equal value to the loan (e.g. build a factory) but too many of new loans go to speculation where no new value is created, only inflation.
Lets see where the next speculation bubble is going to be. My bet is on gold.
