Sachs anticipates that the real cost of the second round of
quantitative easing will be in excess of $2 trillion and will
continue well into 2012, while other prominent economists have
denounced the Fed's actions.
The Fed announced yesterday that it would purchase $600 billion
in Treasury securities in a statement that left open the possibility
of the real cost rising much higher.
"The Committee will regularly review the
pace of its securities purchases and the overall size of the
asset-purchase program in light of incoming information and
will adjust the program as needed to best foster maximum employment
and price stability." the statement read.
As pointed out by Tyler Durden at the Zero
Hedge blog, Goldman Sachs has predicted that the
real cost of the Fed's plan will sky rocket.
"We believe that the program will grow significantly
beyond the initial $600 billion" remarks Goldman's Jan
"In practice, QE2 is likely to continue
well beyond June 2011—at least well into 2012—if
our forecasts for unemployment and inflation are close to the
mark. We believe that purchases could ultimately cumulate to
around $2 trillion..." she continues.
"Under our longer-term projections it is
easy to come up with models that show no tightening until 2015
In a report last month Hatzius concluded that
the projections for QE could reach
reported yesterday, the Fed no longer cares about
hiding the fact that it is openly devaluing the dollar and forcing
China and other major countries to move away from holding reserves
of the currency.
Several prominent economists and even some of
the Fed's own members have warned that the resulting decline
in the value of the dollar and rampant inflation could spell
disaster for any possible economic recovery.
Meanwhile, influential professor of economics
Nouriel Roubini today tweeted that the purchase of debt will
continue into a third and fourth round. but will do nothing
to revive the real economy:
Watch Alex Jones' analysis of the announcement
to print billions more dollars out of thin air:
Steve Watson is the London based writer
and editor at Alex Jones' Infowars.net,
and regular contributor to Prisonplanet.com. He has a Masters
Degree in International Relations from the School of Politics
at The University of Nottingham in England.