Tuesday, June 14, 2011

Quantitative Easing and its Affects in Three Sentences

"[The Fed's] Treasury purchases reduce the quantity of risk free assets, forcing investors to buy riskier assets. Commodities are among those risky assets.

By monetizing the debt, the Federal Reserve is debasing paper money and investors are seeking for tangible assets, things that hurt when you drop them on your foot, as one colorful commentator put it."

-- Marc Chandler, here