quantitative easing effects on oil prices

quantitative easing effects on oil prices : With quantitative easing, or QE, dominating headlines, it may be worth examining exactly what this policy entails, as well as its implications on Asia. Simply put, quantitative easing is a monetary policy whereby central banks create new money to buy securities from the open market. Because we live in a world of electronic money, the U.S. Federal Reserve does not have to literally print money. However, the effect of quantitative easing is the same—it increases the money supply.

Effects of Quantitative Easing 2 on Asia
When the supply of anything increases, the price typically falls. Therefore, the U.S. dollar has weakened. In addition, by increasing the overall monetary base, quantitative easing is estimated to lower U.S. Treasury yields by about 50 basis points (0.50%), effectively lowering the cost to borrow in U.S. dollars—U.S. Read More...

US Federal Reserve launches new round of quantitative easing
America's central bank announced that it would pump an additional $600bn (£372bn) into the ailing US economy over the next eight months in an attempt to accelerate growth and cut unemployment. Read More...

Avoid the oil-price shock by investing in flexible friends
Unfortunately, it is pointless to look to the Bank of England for succour: it prefers to nurse the economy back to health rather than cauterise inflation. It believes it is powerless to curb inflation imported through higher energy, labour, and commodity prices elsewhere. Read More...

Bullard's "missing slide" on QE and oil prices
In a thoughtful speech Thursday, St Louis Fed President James Bullard outlined the impact of quantitative easing on a range of financial markets, including equities, the dollar, Treasury bonds and inflation expectations. Bullard showed financial market responses to a second round of quantitative easing (QE2) were entirely conventional. Read More...

Treasuries Advance as Libya, Oil Costs Boost Demand for Safety
Ten-year yields slid toward a three-week low as stocks fell after loyalists of leader Muammar Qaddafi sought to crush dissent in the capital of Libya, which holds Africa's largest oil reserves. The Federal Reserve is scheduled to buy $4 billion to $6 billion of Treasuries due from August 2012 to August 2013 today, while the government plans to auction seven-year notes. Read More...

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