I am still deciding what this week's weekly post will be on. Clearly, I need to write a bit more substantively about QE3 than I have so far. And I have two media appearances from last week to use to update you on my viewpoint.
The broad gist of what I think is that QE3 is a nice backstop for risk assets, especially mortgage-backed securities. But, ultimately it has limited feed through into the real economy. Without any fiscal action to add to it, the economy is likely to keep on a slow growth path until the fiscal cliff is decided. It still looks to me like the fiscal cliff will add a contractionary impulse to the US economy and tip it into recession.
At that point, the market monetarists and all the other people screaming for the Fed to do more will have to face up to the fact that the...
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Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator in print and on television for the past decade. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.