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QE3 & You

James Doan - Friday, September 14, 2012

Federal Reserve chairman, Ben Bernanke announced the launch of QE3 yesterday.  For information on what quantitative easing is watch the videos at the end of this blog.

According to Mr. Bernanke, the rationale behind the third round of QE, is help an economy that is "facing headwinds" by supporting the housing market through making home loans and refinancing more available, as well as to boost employment.  If you are like millions of other Americans who are unemployed, facing foreclosure, wage garnishment, or otherwise being crushed under surmounting debt, this sounds like good news.  However, the problems here are many.  First, we are not in an economy that is merely facing headwinds.  We are in an economy that is continuing to suffer repercussions of unsound financial policies.  If you watched either of the above videos, you will see that quantitative easing cannot help a suffering economy.  

Regarding the housing market, the fact is that banks are not being stringent with home loans because they do not have the money to give them.  Interest rates are already artificially low, and low interest rates haven't been keeping people out of the housing market.  According to Richard Green, director of the University of Southern California Lusk Center for Real Estate, in a statement “The constraint that is keeping people out of the housing market is absence of equity. The drop in house prices means that many borrowers are underwater on their houses, and high unemployment has prevented potential first-time buyers from accumulating down payments.“  This is common sense, that all of us know.  This is the reason so many good and honest people are trying to stop foreclosure on their homes when they wish they could simply refinance.

The creation of job opportunities would solve the financial problems that so many families are dealing with. However, just to get back to 2008 employment levels, 4.7 million jobs would need to be created.  Bernanke himself said "I want to be clear -- While I think we can make a meaningful and significant contribution to reducing this problem, we can't solve it. We don't have tools that are strong enough to solve the unemployment problem."  While the Fed may be well intended, economists think QE3 will do very little to help the job market.

So what does this mean for you?  The straight answer is that QE3 is not likely to help you improve your financial situation.  If anything, the cost of basic goods from food to gas will likely go up.  In order to forge ahead in an uncertain economy, you need to free yourself from financial constraints that may prevent you from having the money you need available to provide for your family.  These constraints may be in the form of credit card debt with skyrocketing late fees and interest rates, a second mortgage forcing your home upside down in equity, a lien, unsurmountable medical bills, a wage garnishment, unpaid taxes, foreclosure, etc. The burden of debt has touched all of our lives in one way or another, so think ahead.  

Doan Law Group, California’s Largest Family of Bankruptcy Attorneys, offers a free consultation to come up with a plan with you to free you from unnecessary financial burdens, protect your assets, and give you the best opportunity to turn your personal economy around...because Ben Bernanke isn't going to.

The bankruptcy attorneys at Doan Law Group have assisted thousands of clients obtain relief from toxic debt for well over the last fifteen years.  

Call Doan Law Group at 888-DOAN-LAW.  888-362-6529.  Visit us at  If you are in need of real estate services (short sales, equity sales, purchases, etc) visit

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