The Federal Reserve announced what is being called QE3 – which means the third round of quantitative easing – in hopes of improving the American economy.
Quantitative easing is where the Fed wants to lower the cost of borrowing debt in some manner in order to push interest rates even lower than they are.
QE1 and QE2 helped push and keep mortgage rates at historic lows. Now QE3 is going to kick in to the tune of $40 billion per month in purchased mortgage-backed securities.
There is a real risk of inflation and you are essentially increasing the money supply by that amount each month.
It will be interesting to see if the plan works — the stock market has liked it thus far, but will it work long term?
As the government and Federal Reserve try to amp up the economy, here are some articles to help you amp up your financial life:
NPR’s Planet Money | Where the Bailouts Stand, in 1 Graphic
Excess Return | Are You Swimming Naked?
Couple Money | Couple Money’s Nexus 7 Giveaway
PT Money | 5 Financial Moves Required After You Get a New Job
Bloomberg | Bernanke’s Battle for Jobs Eclipses Inflation Concerns
Amateur Asset Allocator | 5 Reasons Your Portfolio is Too Complicated
CNN Money | Who are the Unbanked?
Consumerism Commentary | It’s Time to Create a Will
Moolanomy | 19 Ways to Improve Gas Mileage and Save Money on Gas
Money Smart Life | FinCon Virtual Networking Giveaway
Free From Broke was featured in the following carnivals this week:
Carnival of Personal Finance #378: “You Better Work!” Edition
10 Life Planning Lessons -Wealth Management Carnival #2 | Marotta On Money
Carnival of Financial Discipline: Are You Ready For Some Football? Edition « 6400 Personal Finance
I really need to consider something to put my emergency fund into other than my savings accounting… we shall see if I come up with anything.
I totally agree with Lance that we need to come consideration to minimize risk.