Bernancke Considers Quantitative Easy 3

Because the first two worked so well I suppose. This is getting to be like the Scary Movie franchise.

With a subtle wave of his baton, the aspiring Maestro may have started the music for another round of Federal Reserve monetary easing.

Ben Bernanke, chairman of the US central bank and keeper of the keys to stock market money flows, oversaw a tweaking of wording in the Fed’s post-meeting statement that had trading floors buzzing. 

The statement, which preceded the chairman’s first-ever news conference following a Fed Open Markets Committee meeting, simply stated that the group will “ regularly review the size and composition of its securities holdings in light of incoming information and is prepared to adjust those holdings as needed to best foster maximum employment and price stability.” 

The change in wording was subtle, but for the market it was shorthand (or perhaps longhand, considering the chairman’s traditionally opaque language) that another round of quantitative easing—QE3 in market parlance—was on the way. 

This morning's crappy economic news shows just how well QE 1 and 2 worked. Feeble growth and terrible inflation, especially if measured historically.

Inflation is still calculated using a "market basket" to determine prices. But since 1980, other factors have been added to reflect a changing economy.

Still, it might be useful to measure today's rate of inflation using 1979 methods. CNBC's Fast Money gives us the bad news:
Inflation, using the reporting methodologies in place before 1980, hit an annual rate of 9.6 percent in February, according to the Shadow Government Statistics newsletter.