Fed Puts Stamp of Approval on Riskier Assets

Despite a very good PR department, the Fed is still a player not a maker of the markets. The failure of leadership to engender confidence in fiat currencies, in effect neglecting to place their own stamp of approval as interpreted by their actions, has made these currencies riskier to hold. This neglect has forced capital to seek the safety of what the media has ironically deemed “riskier” assets.

The Federal Reserve is expected by investors and economists to announce a second round of bond purchases, or so-called quantitative easing (QE2).

Investors need to understand that QE2 will have a major influence on their investments. The most important aspect is that quantitative easing will help fuel a demand for riskier assets.

Source: finance.yahoo.com