QE: Who got it right, Krugman or the Gold bugs? – Market Movers #41

This episode of Market movers is dedicated to Quantitative Easing (QE). This happens as the “QE baton” is passed from the Federeal Reserve to the ECB. These banks are not alone. We define and explain it, review the main uses, the benefits and the secondary effects. Does it really work? Will central banks know how to unwind it?

Welcome to a new episode of Market Movers, presented by Lior Cohen of Trading NRG and Yohay Elam of Forex Crunch.You are welcome to listen, subscribe and provide feedback.

The points we touch on are:

  • What it actually is
  • Does it work?
  • Implementations and peculiarities in Japan, US, the UK and the euro-zone
  • What are the perils for using QE?
  • How will it end?

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        Yohay and Lior hold no positions on any of the stocks and financial instruments that were mentioned on the show. The podcast should be used for general information. This isn’t financial advice.

2 comments for “QE: Who got it right, Krugman or the Gold bugs? – Market Movers #41

  1. Steve Kusaba
    March 19, 2015 at 10:57 am

    Do you guys just watch CNBC to form your vision of the world? I heard everything here on CNBC and I never thought people believed it. It was supposed to be a story. Japans problem was “they didn’t have enough of it” (QE) Oh man.

    So QE happens and things turn out OK, story: QE works. QE fails, story, they don’t do it enough.

    Yeah, and your prognosis for people behaving a certain way based on Fed policy, man you need to share what you are smoking with me.

    People and economies are so much more complex than these plastic television models you propose. Why don’t you read some different opinions?

    You think the US has “gone out of its recession”? I guess you are using government numbers aren’t you. Its a great jobs market out there isn’t it.

    “QE doesn’t do any bad thing…” my God the pain from these comments is astronomical. Can’t you diversify your sources a little bit? You don’t find a muddling stench economy with 0% interest rates a little bit scary. You follow that up by talking about pulling back on QE when needed or using it when needed as if it is some magic button which can be titrated to produce the proper result. Why would you believe the conceit of bankers and academics in the face of an economy which is infinitely more complex that any dumb economist could fathom.

    Unwinding QE, ahhh, that’s the rub isn’t it. An economy that putters at 0% rates will not take kindly to any normalization of rates. I always have a lot to learn. So do you.

    Good luck, I hope we can go out for drinks someday!

    You’re Krugman lovers too? Har har har!!

    • March 19, 2015 at 11:06 am

      Thanks for your comment Steve,

      I think we have voiced our concerns over QE and the problems it could cause down the line. So far it hasn’t seem to have much a dire impact on US, GB or Japan and perhaps even helped these economies.


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