QE 3 Sails, Government to buy bonds

Mr. Bernake in his statement today says the treasury will continue to purchase mortgage backed securities to the tune of $85 billion per month through the end of the year and $40 billion per month indefinitely until the economy strengthens. Bernake also states the Fed will continue to stimulate the economy even after it continues to gro in order to make sure there is not a relapse. For more in depth discussion read:
http://www.washingtonpost.com/business/economy/fed-expected-to-announce-stimulus-thursday/2012/09/13/38a31be2-fda4-11e1-8adc-499661afe377_story.html?hpid=z1

BUT, what might this lead to long term? INFLATION!!!! Where is the Fed getting this money to buy the bonds. Lets start the printing press and keep running 24 hours. With this influx of funds it could get real ugly fast when the Fed decides the economy is heating up to fast and they start to constrict the economy by raising rates and pulling funds out.

Something needs to happen, is this the answer. I will make loans to homebuyers and support the housing industry. The consumer better get on the bank wagon now and buy their home if they are able because when the economy does improve rates will move up and move fast.


Leonard Winslow
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