Quantitative Easing - get ready for the new media buzzword

Quantitative Easing. Get ready for those two words to dominate the press over the next 18 months as the Federal Reserve attempts to cut off the credit crunch. As the LIBOR stymies the efforts of Fed rate cuts they have limited arrows left in the quiver, and Quantitative Easing is going to look more and more attractive.

What is Quantitative Easing? Ask the Bank of Japan. It’s taking interest rates to near zero and flooding the markets with manufactured liquidity to promote private lending. Ask Japan how that’s worked out for them…