Pre-Jackson Hole Prep: Quantitative Easing for Dummies

Tomorrow Ben Bernanke will be speaking at Jackson Hole. In 2010, at Jackson Hole, Federal Reserve Chairman, Ben Bernanke, announced QEII. Many pundits are speculating whether QEIII will be announced tomorrow at Jackson Hole. But many people do not even know what QEII or QEIII (quantitative easing is). Here’s the 101 on ‘quantitative easing’ (QE), a term much in the news lately in the context of economic growth concerns both within the U.S. and without.

QE is basically a tool used by the monetary authorities and central banks in unexpected and extreme situations when a country’s economy does not respond to...