Forbes Publisher: QE2 Just the Beginning
Addressing a crowd of REALTORS® Sunday, Forbes Magazine Publisher Rich Karlgaard expressed skepticism that the Federal Reserve’s plan to give the economy a jolt by purchasing $600 billion of Treasury bonds — known as quantitative easing 2 or QE2 — would work, but added that it may be the start of a series of similar moves. Karlgaard was one of the Entrepreneurial Excellence Series speakers at the 2010 REALTORS® Conference & Expo in New Orleans.

The first round of quantitative easing — which took place earlier this year when the Fed bought up hundreds of billions of dollars worth of mortgage-backed securities — did not achieve its aim of boosting housing values, Karlgaard said.

“If there is a single reason for QE2, it’s to float up housing values,” he said. “So far, [Fed Chair Ben Bernanke has] hit everything but housing.”

Instead, quantitative easing pushed up the cost of gold, commodities and food, said Karlgaard, and he predicted that this trend would continue as the Fed sustains this strategy over the next year or two.

“There will be a QE3 and a QE4 in 2011 -- mark my words,” he said.
 
- Brian Summerfield, REALTOR® Magazine