Fed. Reserve chairman Ben Bernanke stood up in Frankfurt yesterday and gave it right back to his critics. He was under fire from various sources for the latest round of Fed money creation, known as QE2, not to be confused with the cruise liner! At the heart of the Fed's strategy is the intention to boost asset prices. As long ago as March last year, former Fed chairman Alan Greenspan clearly stated that rising equity prices were key to a global recovery. Critics of the Fed are missing the point - QE2 is not about weakening the dollar. It's about restoring assets to value levels, after the shock overreaction down during the crash. Although it's not on anyone's radar screen right now, house prices are also likely to turn the corner. Currently the US is building far to few homes for the growth in the adult population. Sometime next year perception of this is likely to dawn which will add a further boost to asset prices in the US and abroad. The QSL is from the Hessischer Rundfunk in Frankfurt, home of the European Central Bank. I heard it on 594 kHz AM when living in Johannesburg in 1990.
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