'Tis the season for Quantitative 'easin!
Enjoy 20% off of your entire SoleMates order using the discount code, "QE2" today - November 5th.
Over the weekend, while celebrating Halloween with some local pals, I spilled the beans about the special discount code "QE2" (don't worry, it was not yet activated). For the most part, save for a few CNBC watching finance types, no one had a clue what I was talking about. I didn't think to explain it in any other way than in finance speak. This quickly proved fruitless.
How best to understand what quantitative easing means and how it will affect us? With a pedicure analogy, of course!
The US Economy feels like your feet after a day of walking around in 4" heels. They are still totally going, but they kill and you really don't know what will make them feel better. Quantitative easing is the heavenly massage that accompanies a spa pedicure. Your feet have rarely known such relief. The belief of course, is that once the pedicure is over and your nails have a new dazzling coat of polish, your feet will be well-equipped to continue walking. Maybe you can even pick up the pace and start a little jog. For the US economy, this means that quantitative easing will inject billions of dollars (maybe even a trillion) into the economy to help move things along.
The argument against more fed-fueled intervention is that sometimes there is too much of a good thing. Sometimes, post-pedicure, your feet are actually so soft and smooth that they are even more susceptible to blisters and pain. If this happens, you are actually worse off than if you never got the pedicure to begin with. For the US economy, this means that all of this cash will come flooding into the economy and it still won't get things going. This is what leads to deflation, which is just about the scariest of words for finance-peeps. It's like a dead toenail. Bad news.
The situation is definitely dicey and there are super-smart minds on both sides of the debate.
What are we to do? Pay attention, buy SoleMates with the QE2 discount, and use the savings for a pedicure; but maybe skip the hot stone massage...
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