SOS What is the QE effect?

What Next

• Interest near zero since crisis


• QE1 & QE2 - buy bond, indirect injection money into the market - go into speculation by banks - creating another bubble
  
• Crash of stock market may be deferred to mid 2011

Can market continue to rise? Based on statistic, 90% bullish and 10% bearish on US market.

I wonder what will happen when Euro drop significantly against US Dollar in the next few months?

I wonder what will happen if crude oil continue to go up to USD120 per barrel in the next few months?

The financial markets is simply a very big puzzle, comprising interest, currency, commodities, money supply & credits, GDP and last but not least, social mood. Hence, there is no expert is able to predict the market "accurately" over a long period of time. Mainly because, there is no definitive correlation between GDP, interest, commodities, currency nor credits AND stock market mainly because stock market behaviour cannot be determined "scientifically or logically". A word of cautious, actual DEMAND is lower than SUPPLY.

The rise in GOLD price is not due to FUNDAMENTAL, it relates more to social mood, which based on the perception of money printing craze.

But one factor is clear, when central banks print money via QEs, eventually the fiat currency will depreciate substantially against "real money", which is GOLD or SILVER. Perhaps one should allocate 10-20% of their portfolio in GOLD or SILVER for a long term investment, between 10 to 20 years, to finance one's child EDUCATION.