Wednesday, August 24, 2011

QE3


With American debt becoming the talk of every economist lets look at it what it is in simple words.

Debt definition according to wilipedia
debt is that which one party, the debtor, owes to a second party, the creditor; usually this refers to assets owed, but the term can also be used metaphorically to cover moral obligations and other interactions not based on economic value.

10 most indebted developed countries
CountriesDebt as % of GDPSize of debt ( $ bn)
Japan23413,795
Greece139434
Italy1202,564
Iceland10816
Belgium103504
Ireland102220
USA9914,270
Singapore95254
France882,365
Portugal87202
Source IMF, 2010.
The credit crunch brought this debt issue center stage,
In these financially gloomy times its every country priority to see how they can reduce their national debt .
In the past Americal FED came up with QE1 AND QE2
Quantitative easing (QE) is an unconventional monetary policy used by central banks to stimulate the national economy when conventional monetary policy has become ineffective. A central bank buys financial assets to inject a pre-determined quantity of money into the economy. This is distinguished from the more usual policy of buying or selling financial assets to keep market interest rates at a specified target value.

whispers are already heard about QE3 Coming ,will that happen or not we will know soon ,
If QE3 comes be ready to see short term liquidity flood in emerging markets whichin turn
should fuel inflation to them.

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