My guru, Richard Suttmeier, in his weekly "Value Engine Newsletter", says this about QE2:
"Thoughts on QEII
The Fed decision to buy $75 billion in longer-dated US Treasuries in each of the next eight months will total $600 billion by the end of June 2011. This policy helps Wall Street make money on commodity speculation and staying short the dollar, while Main Street USA struggles with the higher cost of living resulting from higher energy and food costs. The Fed says there is no inflation which is hogwash! Just observe the rising Prices Paid components of the latest ISM readings.
The Fed Chairman says he wants higher stock prices and instead of giving retirees a money market rate they can live with. The Fed wants folks living on a fixed income to take more investment risks. Many on Main Street lost a bundle on the Fed-induced bubbles of the new millennium. First was the Tech Bubble in 2000, then the Housing Bubble in 2006, which continues today, and the stock market crash of October 2007 to March 2009. Now we have a gold bubble and an overvalued stock market. If Americans were allowed to vote on Fed policy the vote would have been against QEII.
Now, we are re-inflating the commodities bubbles as Gold pushes towards a new all time high and as Crude Oil breaks out to the upside. Please tell me how this helps Main Street USA where jobs are supposed to be created? Complicating the Main Street problems are rising home foreclosures, fewer hours worked in addition to higher real inflation. Americans are being forced into a scenario of accepting a lower standard of living, while the fat cats on Wall Street get a QE2 license to speculate. With all of the bailouts that have cost tax payer billions, nothing has been done to help end the cause of “The Great Credit Crunch”, which is the weakening housing market. This is the foundation that must be fixed before the US economy has a chance to create jobs and grow again."
