The gloves are off, QE is now seen as an aggressive depreciation tool
We live in a strange world. On Friday, data were released showing that during September alone the US economy lost a worrying 95,000 jobs. In response, Wall Street rallied.
By Liam Halligan
09 Oct 2010
Under normal circumstances, additional evidence that America’s recovery remains anaemic, and unemployment is rising, would cause share prices to drop. But these are not normal circumstances. Instead of viewing the ongoing stagnation of the world’s biggest economy as bad news, equity traders pushed the Dow Jones Index of leading US stocks above the 11,000 mark, to a five-month high.
The reason, of course, is that less than a month before key Congressional elections, President Obama is under heavy fire for his economic stewardship. The new numbers confirm that unemployment has remained above 9.5pc for 14 consecutive months – the longest stretch since the Second World War. America’s House of Representatives, and possibly even the Senate, could soon be under Republican control. Were that to happen, Obama would look like a “one-term” President. That wasn’t in the script.