The Fed is inching closer to QE3 and I will put the probability higher than 50%. It may boost assets prices in short term but will have a longer term negative impact on U.S. economy. Commodity prices will soar and U.S. dollar will depreciate. The higher import price couple with high food and energy prices will offset any positives the QE may bring. It will also make emerging market policy makers life miserable. All emerging markets have to tighten again to combat inflation. If you want to take advantage to invest in stock market, keep you time horizon short. I will buy real estate as a hedging of inflation.
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