The Markets Reaction to Quantitative Easing II….

Preferred Financial Services analyzes what impacts are of the latest round of quantitative easing enacted by the Federal Reserve.
Nov. 9, 2010 - PRLog -- Andover, Massachusetts November 9th, 2010 – Since the Fed announced its latest round of Treasury purchases last week the markets have responded in a variety of different ways. Late last week, the Fed announced that it would be buying back close to 600 billion dollars worth of Treasuries by basically printing new money. The reasoning behind this move was to flood the market with more liquid assets which should in theory spark more lending and open up the credit markets. This would then allow firms to expand their operations and hire more workers. The potential side effects of rapid inflation and a sudden drop in the value of the dollar were considered worthwhile as the US economy remains slow to recover from the recession.

Over the past week, all the major players in the markets have moved due to the latest round of money printing. Gold has surged to a recent high of over $1,400 per oz. as investors have flocked to the safe haven that gold provides during periods of uncertainty or expected inflation. Oil has also seen a spike as of late since oil is traded on the international markets using US dollars. As the dollar loses value, it takes increasingly more dollars to purchase a barrel of oil, thus oil will continue to trend upwards as long as the dollar experiences continued weakness. The actual stock markets have also seen a relative surge mostly due to the lower values of the dollar. Many firms that have huge markets for their products overseas will see a benefit with a weak dollar. Their products will be cheaper to sell in foreign markets and thus should drive up revenue and profits. While this may seem like a good way of boosting the economy, a dollar that is valued to low will not only cause many commodities to become even more expensive but it could also trigger a new trade war as other countries also devalue their own currencies to remain competitive on the international market. The Fed took a gamble with its latest moves and it will be at least 6 months before we can say with any certainty if it paid off or if we just shot ourselves in the foot with a devalued dollar and ever increasing commodity prices.

Preferred Financial Services is a debt reduction firm certified by the CFC (Center for Financial Certifications) and accredited by U.S.O.B.A. (United States Organizations for Bankruptcy Alternatives). Headquartered in Andover, Massachusetts, Preferred Financial Services has been a leader in the debt reduction industry since 2003. Preferred Financial Services has acquired some of the best experience in the industry over the past 7 years. In 2009 alone Preferred Financial Services reduced over $16.5 million worth of consumer debt for just $6.4 million, for a savings of about 60%- and over 2,900 accounts were settled on behalf of their clients.

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Stephan Tavernini
Marketing Coordinator
Certified IAPDA Debt Arbitrator
Preferred Financial Services

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Preferred Financial Services is the leading voice in the debt settlement industry. PFS has worked with hundreds of creditors to help negotiate realistic goals for those drowning credit card debt.
Source:Stephan Tavernini
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Tags:Stephan Tavernini, Debt Settlement, Preferred Financial Services, Federal Reserve, Quantitative Easing
Industry:Consumer, Finance, Government
Location:Andover - Massachusetts - United States
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