The Real Reasons the Fed Announced QE 4

On December 12, the US Federal Reserve surprised yet again by announcing QE 4: a program through which it would purchase $45 billion of US Treasuries every month.     Between this program and the Fed’s QE 3 Program announced in September, the Fed will be monetizing $85 billion worth of assets every month ($40 billion worth of Treasuries and $45 billion worth of Mortgage Backed Securities) ad infinitum.   Indeed, the Fed’s new policies are anchored to its goal of getting employment down to 6.5%. This means the Fed will buy these assets non-stop until employment gets down to 6.5%.   I’ve spoken to a number of people in the financial community as well as outside investors and no one seem to grasp the significance of this announcement.   First and foremost, QE does not create jobs. The UK has announced QE efforts equal to an amount greater than 20%...