QE3 Used to Prevent Euro From Dropping too Far From Dollar?

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limitgov Posted: Thu, Sep 20 2012 12:01 PM

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Was the QE3 used to prevent the Euro from being too devalued in comparison to the dollar?

In other words, the Euro is tanking because of Greece and now Spain.  To keep both systems more stable and going, did they start QE3 to devalue the dollar so it won't be too far ahead in value from the Euro?

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Bogart replied on Thu, Sep 20 2012 1:03 PM

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I doubt it.  My opinion is that QE3 is a desperate move with potientially disasterous medium and longer term consequences as payback from Bernake to Obama for his re-nomination.  QE3 will help the current adminstration by devaluing money in the hope that 4 things will occur in the very short term: 1. More dollars will appear to entrepreneurs as excess savings so the entrepreneurs will start new business ventures and employ some of the short term unemployed (The government has statistically engineered the long term unemployed out of existence).  2. Lower interest rates so people buy new homes with artificially depressed loan prices so the number of homes sold and unnecessarily manufactured (Like my new home) goes up.  3. Make the house jesters like Paul Krugman say that the Fed is doing something to help the disadvantaged but not enough.  4. Force China to devalue more so it looks like US competitors have a leg up in costs to stymie Romney's assnine attack that Obama is nice to China.

Looking at Wikipedia for the Chairman of the Federal Reserve I encountered this paragraph that says it all:

"The current chairman is Ben Bernanke, an academic nominated by George W. Bush and sworn into office on February 1, 2006 for a term lasting until January 31, 2010. He was nominated for a second term by President Barack Obama in 2009, and was confirmed by the Senate in 2010"