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David,
You should read “QE 2” by Bill Woolsey, he is a famous monetarist, but he says expectations of recovery should raise nominal and real interest rates. How do we get to those higher rates? QE is part of the solution.
By the way, a second round of QE worked in the Great Depression.
“By the way, a second round of QE worked in the Great Depression.”
That’s impossible to prove (like most central banking maneuvers) because we never got to see the outcome WITHOUT Fed involvement. Many economists have argued that the typical Fed intervention occurs after it would have been useful (i.e., the purge of malinvestment has already occurred, or, in the case of the Minsky framework, the Ponzi players have left the equation and we are left with hedgers).
Oh, Woolsey’s link is here:
http://monetaryfreedom-billwoolsey.blogspot.com/2010/11/qe-2.html
It appears that the Fed is actually targeting stock prices…
http://alaricinvestments.blogspot.com/2010/11/if-you-only-have-hammer-everything.html
or perhaps the Fed is simply the interest rate capping division of the government trying to keep government interest costs low…
http://alaricinvestments.blogspot.com/2010/10/during-wwii-fed-successfully-targeted.html