FED is busy printing more money -- Inflation concern rises

Markets Less Enthusiastic About Fed Plan

One day after the Federal Reserve ramped up its plans to revive the economy by pumping in more than $1 trillion, financial markets seem somewhat skeptical how it will pan out. Inflation worries top investor concerns as the Fed’s decision means its essentially printing money in high gear. While investors are still debating whether the plan, together with all the other Fed and government facilities, will be enough to restart consumer lending, they are already worrying that the Fed will find it very hard to extricate itself from its deep market involvement. Stock markets, which rose Wednesday in response to the news, have reversed much of those gains Thursday. The dollar fell against most currencies, recently hitting a 10-week low against the euro and a near one-month low versus theyen.Commodity markets, including gold and oil, are performing well Thursday. But that’s because they are seen as safe-haven purchases by investors looking toget their hands on hard assets - real stuff - amid concerns that paper assets such as stocks and currencies are losing value fast. It’s not surprising that investors are fretting about inflation. The Fed’s actions include buying $300 billion worth of long-term Treasurys as well as doubling its purchases of mortgage-related debt. In all, the steps could inject $1.15 trillion inadditional liquidity into the system.

Source: http://www.scottrade.com/DowJonesNews/TNT/tnt.pdf?cid=18006