The fallacy of QE2

Fed’s desperate and out of interest ammunition.
QE2 doesn’t address the US economy’s structural deficiencies, low consumer confidence and business confidence.
A huge chunk of that $600 billion will be channeled into asset speculation, into emerging markets such as China as hot money and speculation of Food-security related goods: corn etc.; Energy-security related goods: oil etc.; Reserve-security related goods: gold, silver etc.; Commodity-security related goods: iron ore etc. The asymmetry between wealth creation and job creation will grow even bigger.That will push up costs of production even further. Corporations will have even more incentives to outsource works to rein in costs and less incentives to create domestic jobs. At best the US will have a Stagflation thanks to QE2. The fed and treasury will run out of policy options.
More funny money, more trade deficit.
Currency and trade tension will intensify somehow.


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