Further QE unlikely to work when firms hoarding cash

Comments on Karen Maley “QE2 springs a leak”, 28/10/2010, http://www.theaustralian.com.au/business/news/us-companies-unlikely-to-use-their-us1-trillion-cash/story-e6frg90f-1225944556660
The main issue for the QE2 is how effective it will be, given the behaviours of people and businesses in the US.

The following report says US businesses are hoarding trillion dollars.

Is further QE likely to change that behaviour?

It is an open question. But the answer is likely to be negative.

The current financial or monetary issue in the US is not lack of liquidity or the costs of credit or loans are too high.

They are not.

Further QE is likely to transform to more cash hoarding. And that is a problem.

http://www.theaustralian.com.au/business/news/us-companies-unlikely-to-use-their-us1-trillion-cash/story-e6frg90f-1225944556660