Bernanke and QE2

Many argue that the workings of macroeconomic policy in the US are inaccessible to the average person.

I do no accept this thesis.

We need for more people to understand the inner workings of decisions in macroeconomics and other areas. Perhaps the decrease in the American primary and secondary educational system to instill the basic principles of science and math along with reading and writing has had a long-term effect on understanding the complexities of government and everyday life,

There are many mainstream publications that provide accessible analysis of macroeconomic affairs. For example, I found the following article extremely informative:

Forsyth, Randall W., 2011. Bernanke takes credit for stocks' rally, disavows commodities' rise, Barrons, Feb. 4.

"According to the Fed chairman, QE2 has boosted asset prices, notably stocks; lowered market volatility and thus, risk; narrowed corporate-credit risk spreads; and has lifted inflation premia in the Treasury Inflation Protected Securities market. That Treasury yields are higher since the Fed started buying Treasury securities is not inconsistent with QE2's working."

The article goes on to speculate that QE2 has played a role in preserving American interests in the face of reticence by the Chinese to reform its currency exchange systems.

Though it is speculation, I believe that QE2 was partially aimed at China.

Fixed currency exchange by any country is a bad policy. It protects non exportable domestic goods and causes a misapplication of resources within society.

In the case of China, I think the policy of pegging might be distorting domestic energy markets and decision-making. I consider this a serious issue or the country and its future.

I wonder what will happen to US equity and bond markets when QE2 expires in June?