Developments in Europe may also have played a hand..

Who knows what spin is actually being put on the ball these days, but the Federal Reserve‚Äôs decision to implement QE3 has much complexity, and if you thought it was all about pushing up asset prices, think again.  

Recent developments in Europe have boosted European debt and equity prices, but the increased support for European debt may be key.   The Fed not only needs to keep US interest rates low but now may have to deal with a change in the demand equation.

The open ended monthly intervention promised today may be necessary if only just to keep the see saw balanced.

That said, $40bn of QE a month pales into comparison to the average monthly Federal fiscal deficit:


A monthly fiscal deficit that has shown an alarming increase in recent months:


And of course, any gradient of a fiscal cliff that is likely to come in the next few months may have added an extra level of desperation. 

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