Whether it’s Barack Obama releasing 30 million barrels of oil from the Strategic Petroleum Reserve, or Ben Bernanke saying they might buy another $300,000,000 worth of U.S. Treasurys… even after QE2. But, no, it’s not QE3… nah.
The oil gambit was, from a purely stimulative standpoint, an interesting move. It would have been more effective when oil was at $110 and rising rather than in the $90’s and falling. But, perhaps there was some political hay to be made. Short term this was not an inflationary move. However, someday, those 30 million barrels will have to be repurchased… which will have an inflationary effect. It was a short-term political move. From a geopolitical perspective, it also signals a US willingness to manipulate the oil markets… rather than being truly “Strategic” (aka for military and other strategic purposes). Ironically the Obama administration is accusing others of oil price “manipulation” while they just did just that with the SPR oil release.
And for Helicopter Ben, QE and QE2, both unprecedented; it seems that maybe a little more magic juice is called for. He doesn’t understand the current economic problems, other than to call them (mysterious) “headwinds”.
The situation, as I see it, is inflation-triggering non-stimulus. The magic “CPI” may not reflect this right away. In fact I believe inflation is currently outpacing “CPI Index” inflation by 1 to 2 percent.
I’m not fully aware of the whats or whys of QE3, I just know that I’m not supposed to call it QE3.