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QE3 announced.. what will this do to the Korean Won??

 
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Poker



Joined: 16 Jan 2010

PostPosted: Thu Sep 13, 2012 11:16 pm    Post subject: QE3 announced.. what will this do to the Korean Won?? Reply with quote

US Fed chairman, Ben Bernanke has announced an open ended QE of 40 billion dollars per month.


http://www.guardian.co.uk/business/2012/sep/13/fed-bond-buying-stimulus-growth?intcmp=239

Quote:
Federal Reserve chairman Ben Bernanke pledged to keep injecting money into the US economy until it recovers Thursday as it announced a rolling program to buy $40bn a month in mortgage-backed securities.

The widely anticipated third round of quantitative easing dubbed QE3 comes after Fed chairman Ben Bernanke had said he was increasingly concerned about the recovery.

Bernanke said the plan was aimed at reviving the jobs market by stimulating the still troubled housing market. "This is a Main Street policy because what we're about here are jobs," he said at a press conference.

He said the Fed stood ready to take more action if the situation deteriorated further and that the he would not "rush to tighten policy" even when signs of a stronger recovery emerge.


Not a good time to save in US dollars. Will we see the Won shoot to 1000 in the long run?
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young_clinton



Joined: 09 Sep 2009

PostPosted: Fri Sep 14, 2012 5:26 am    Post subject: Reply with quote

It will make the Won stronger. Anything that strengthens the American economy will bring support to the Won also because of the increased trade from people buying Korean products.
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bucheon bum



Joined: 16 Jan 2003
Location: DC area

PostPosted: Fri Sep 14, 2012 7:26 am    Post subject: Reply with quote

young_clinton wrote:
It will make the Won stronger. Anything that strengthens the American economy will bring support to the Won also because of the increased trade from people buying Korean products.


While your answer is right, your explanation is wrong: you're assuming QE3 will strengthen the economy. Time will tell.

No, the won will become stronger simply because QE3 will be another infusion of USD, and the greater the supply of USD, the less value it has.

So not only will the won strengthen, but other currencies will too.
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jaykimf



Joined: 24 Apr 2004

PostPosted: Fri Sep 14, 2012 8:49 am    Post subject: Reply with quote

bucheon bum wrote:

No, the won will become stronger simply because QE3 will be another infusion of USD, and the greater the supply of USD, the less value it has.

So not only will the won strengthen, but other currencies will too.


Ceteris paribus .
http://www.youtube.com/watch?v=lBOgH5f36cQ
http://www.youtube.com/watch?v=5Hfa_BoVZHY
http://www.youtube.com/watch?v=pLLoNi4qHPg
http://www.youtube.com/watch?v=i0vEgU88IQQ
http://www.youtube.com/watch?v=-GsTaxk5UWo
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bucheon bum



Joined: 16 Jan 2003
Location: DC area

PostPosted: Fri Sep 14, 2012 9:09 am    Post subject: Reply with quote

jaykimf wrote:
bucheon bum wrote:

No, the won will become stronger simply because QE3 will be another infusion of USD, and the greater the supply of USD, the less value it has.

So not only will the won strengthen, but other currencies will too.


Ceteris paribus .
http://www.youtube.com/watch?v=lBOgH5f36cQ
http://www.youtube.com/watch?v=5Hfa_BoVZHY
http://www.youtube.com/watch?v=pLLoNi4qHPg
http://www.youtube.com/watch?v=i0vEgU88IQQ
http://www.youtube.com/watch?v=-GsTaxk5UWo


yes. Sorry, I forgot to add that caveat. That is with the assumption nothing else were to change.
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chellovek



Joined: 29 Feb 2008

PostPosted: Fri Sep 14, 2012 6:32 pm    Post subject: Reply with quote

jaykimf wrote:
bucheon bum wrote:

No, the won will become stronger simply because QE3 will be another infusion of USD, and the greater the supply of USD, the less value it has.

So not only will the won strengthen, but other currencies will too.


Ceteris paribus .
http://www.youtube.com/watch?v=lBOgH5f36cQ
http://www.youtube.com/watch?v=5Hfa_BoVZHY
http://www.youtube.com/watch?v=pLLoNi4qHPg
http://www.youtube.com/watch?v=i0vEgU88IQQ
http://www.youtube.com/watch?v=-GsTaxk5UWo


Good use of the lingo, son. They've taught you well.
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