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QE or Not to QE: That is The Question

February 25, 2013 – 6:16 pm

691.StockMarketWill QE3 end soon? In the most recent Fed minutes there is a debate between the Fed governors about ending the open ended buying of debt in their effort to keep interest rates artificially low to spur the economy and specifically trying to grow jobs. Just the release of the minutes detailing the discussion of the possibility of cutting the program sent the stock market lower.

At some point this program will end. The economy has to achieve a normal footing and to do that the government has to extricate itself from the market forces. There are those that think the government should continue to intrude in the free market but that does not work. It has never worked but it certainly can feel like its working for a long time before it collapses.

You do not have to look far to see that this is true. Take a look at Europe, or even the old Soviet Union or even the old Chinese communist system. Greece has had their government heavily involved in their economy where a huge amount of Greeks work for the government. Look what happened. Free enterprise produces the best economic results and has proven over and over again that it generates jobs and wealth for the most people. Government produces debt, slow economic growth and interference in commerce.

The hard part is the balance. Too much of any one thing is usually not good either. Today we have too much government.

Good Trading
Steve Peasley

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