We have heard about the Quantitative Easing 2 and it is going to happen soon. What are the reasons that the US government would want to do that? I rarely share my opinions on economic affairs and this is one of the rare moments. To put things into the right perspective, I am not trying to argue that my point of view is correct. In fact, I am okay if I am wrong. And to make things interesting, I called it my own conspiracy theory. Enjoy:
#1 – Boost liquidity to spur economic recovery
This is what most people would agree with. The reason for QE2 is to inject US$600 bn into the capital market and help ailing businesses with liquidity. Hopefully they can recover. In my opinion, I am not buying this reason as much as others.
#2 – Reduce Trade Deficit with China
US has been importing more ......