it was called q.e. 1 or quantitative easing, 1.0. it was in effect from november 2008 until march 2010 over that time, we saw a drop in borrowing rate. the rate did drop. that's a pretty decent high, 6.3% to 5.2%. the cost to get that drop in rates was $1.7 trillion. so when the economy was still dragging after that, ben gave up a little bit more. q.e. 2 in effect from november 2010 until june of the following year was like a bad trip. the 30-year mortgage rate actually went up by the end of q.e. 2. and the cost? $600 billion. and the economy still as we all know didn't get better. so ben gave us a little more, an even more creative cocktail called operation twist. that launched in september of last year and mortgage rates fell but only a little bit from 4.2% to 3.6%. not nearly the buzz of the first hit and the reason rates went down had a whole lot more to do with europe falling apart than the fed spending another $400 billion. the $2.7 trillion total cost of the fed stimulus? another way to add it up is whether it succeeded in the

without q.e. at all, the world economy would have fallen apart. but here we are and what can we do from here? >> well, strictly speaking, erin, the fed is not borrowing money. the fed is not spending money. the fed is actually creating money and there's a danger that if the fed creates too much money, it could generate inflation. that is a danger. and it also, as you said before, wants to keep some reserve in its quiver. the real problem right now is that even though interest rates are low and even though they have gotten lower, it's not stimulating the economy. it's not boosting the economy because i don't know if you've tried to get a -- refinance your home, i tried just a couple of weeks ago. it's very difficult to do it because the banks are sitting on so many bad loans still that they just don't want to, even with very low interest rates. >> steven moore, i have to say i bet you agree with robert rice on this one. >> well, i was going to say, i'll give you an "a" in economics today because i agreed with everything you said and i'll give rober

well if you did it too soon on the heels of q.e. two i think you would have seen gold shoot for the moon and you would see oil back up above one forty in the u.s. economy grinding to a halt because just simply from. the anticipation of inflation. they have to you know right now we've got this great pullback in gold which is to me is just another buying opportunity. silver you know it still hasn't even reached its nine hundred eighty high of fifty dollars and here we are in two thousand and twelve with these these huge stimulus packages i think q e three is an inevitability it's just a matter of time ben bernanke made all of his intentions very clear even before he became fed gov in some of his speeches in papers he's basically an inflationists he's alan greenspan had one solution to every problem print currency ben bernanke he is of the same school yeah so we can have more to come that we can expect and your view in my view and a lot of people's views so let's talk about inflation because that's something that that you just brought

call it a q.e. i call it q europe but it was a trillion dollars with the by two more q.e. is after that too you want to q.e. two despite all of the massive inflation and they've also helped bail out the european banks as well despite all of that real estate is still down about fifty percent as you pointed out commodities are down and they topped in two thousand and eight that's four years ago well top back then as well you have to go back to april twenty ninth two thousand and eleven to see the more recent highs number one in the your composite index number two in the in the commodity index number three in the foreign currencies even silver topped on april twenty ninth of two thousand and eleven people have kind of ignored that high but i think it was crucially important to me was the real recovery high was made sort of a double top here in twenty twelve but this is despite all these massive attempts at inflation you can only imagine what would happen if they really realize that there's too much to handle and start slowing that inflation pressure down we're already in such

to get into what efforts they're making now because we just saw the fed come out not with some big q.e. measure but with operation twist which changes the composition of the fed's balance sheet but doesn't add to it so what exactly does this do dr martin say and does it do anything for that to prop up the economy does it do anything at this point even to prop up banks. no this most recent f.o.c. decision was punting i think they did it to look like they were doing something really it didn't expand their balance sheet so it's not the equivalent of printing all they're doing is taking shorter dated maturity treasuries and swapping them one for one with longer dated maturity treasuries so if they take the ten year and they drag it from one point five all the way down to one point three percent is that going to reignite the animal spirits in the las vegas housing market i do not so you know i don't see how this is really going to do much incrementally at the margin it does nothing and very little and so i think that the federal reserve is nip it in as some people think they are miss placed

a q.e.3 would do the same thing. i know how it is-- politicians in office want to do everything they can just before an election to try to temporarily boost something but the potential threat down the road in inflation is something we have to be aware of, and the last q.e.2, the last monetary stimulus, did not put americans back to work, did not raise our home valuees, did not bring jobs back to this country or encourage small businesses to open their doors. what's wrong with our economy is that our government has been warring against small, middle, and large businesses. and people in the business world are afraid to make investments and to hire people. i want to make it very clear that in my administration, government will see itself as the friend of enterprise and job creators, and we'll start building jobs again. >> schieffer: but are you saying here that when this trouble that's going on in europe right now, that we-- there's not much we can can do but just sort of watch and see what happens? >> we can certainly

into the treasury market as you can and we are starting to starting to hear a little bit more about q.e. three than we've heard in quite a long time the jobs numbers a part of that equation i do want to say too when we talk about the numbers that came out today it's not just you know politicians that are kind of spinning this and whatever way they want i want to show you and show some of our viewers the way that some of the means mainstream media sort of interpreted these numbers on their web sites today let's start with that with the fox web site the headline says does nother month of distressing economic news put the obama campaign on the clock and it says so and in a new. organists banner you'd think that christmas came early this year for fox news let's go to m s n b c it says. global economic woes appear to ensnare us a little bit of the smaller headline there and if we looked on as c.n.n.'s web site and actually didn't see those jobs numbers anywhere it was of course. you know the george zimmerman the accused trayvon martin killer that news came out so that was on there is so very

long term interest rates low, rather than launch a third round of so- called "quantitative easing", or q.e.3. my first question to why not do more now. >> i don't the conditions yet call for really stronger action. interestingly, the anecdotes are painting a stronger pie thanhe datas i, which is one reason i prefer to wait a little while to see if the data p in itssoftness. don't think the conditions have developedhat ree us to bring out bigger guns quite yet. >> susie: how likely is it that we will see qe 3 by the end of this year? >> it is certainly an option. remains an option on the table, i would say. if the circumstances call for it, the more stimulus could be provided. >> susie: if the unemployment rate goes higher, or stays where it is now, could that trigger qe 3 and how bad do things have to>>rom my own pepei would erytevng on simply the unemployment rate. there's l conditions i think are important. first would be if the growth ratef the economy slowed dramatically, was moving woul be one element a picture that i thinkight call f asponse. obviously, losing ground on unemployment,

our best guess is that they will wait in terms of announcing outright bond purchases, the so-called q.e.3, that they'll instead use very aggressive language, maybe like they used during the financial crisis, to suggest their tipping ser on the trigger, they're watching and they're ready to act but they're watching and that's i think the biggest point. the only question we have is whether, as you mentioned, they extend their maturity extension program where they buy long-term treasuries and sell short-term treasuries. it won't help the economy but it might send a psychological signal-- an important signal that the fed is trying to take some action wherever it can on the margins to provide some support. >> susie: if it's not going to help why are they doing it? do you think policymakers feel pressured because of what's going on in europe or because of all of the chatter in the markets? >> well, i do think you're right, susie. i think the markets are expecting, as we talked about, the fed to do something, and so i think if they can, this idea about buying these long-term securities and sel

the federal reserve meeting is a two day meeting and there's a lot of speculation building up about q.e. three in other words if they're going to inject more cash into the system i also wanted to mention apple as well because that going to round five percent and it's got a bit of competition because microsoft has a real revealed view and you tap it like overtalk tablet and it is kind of like to compete with the apple i pad so it could surface as well so that's one to watch and we'll move on if we may day and check out those currency rates we got the ruble that is a change of fortunes for the russian currency is now losing out to the basket of currencies just your is managing to get a pretty optimistic that it will be keeping well it's more like. seventy grays not a softer. results so that the pro will star city government had the biggest majority there want twenty six zero. and if we look at those oil prices now they are indeed dropping for a second day that's because of the bad loans rising in spain is fueling speculation that the european sovereign crisis will spread and that will spr

employ a novel tools and that's what we've seen during the bernanke administration at the fed where q.e. is now become the norm whereas that was something that when you don't even a thought of just a few years ago it was something relegated to japan. and you mentioned to you at the z.b. some of their programs earlier we spoke well yeah. you know you only have to go back to november early november of two thousand and eleven and a distinguishing point in time was when druggy took over the e.c.b. because trish a his predecessor was kind of a hawk at least in central bankers terms and a really didn't go along with the program so when druggie came in he almost immediately announced these form these packages he lowered capital requirements decrease haircut on the margins for collateral for stuff that the banks were posting so he did a number of novel methods of his own to address the problems over there and they did have an effect although it took a few weeks to maybe a couple of months and i should also mention that on the mit mafia i know you brought to my attention a few other folks i just

markets are depressed on the fed's initiatives to continue with its twist program but with no signs of q.e. coming up so therefore the markets are down in russia there's pretty much the same trend all those m i six is more supportive than the obvious because of a weaker ruble and indeed it's the pulling against the basket of currencies right now on the we could well price well the euro is also descending versus the dollar so that's the way the markets look at this hour but do join us next hour for the latest update from the st petersburg economic forum we absolutely will dmitry near the end thanks very much indeed for bringing us what's happening there at the st petersburg economic forum and in just a few moments i'll be back with headlines followed by a special report on the fate of women in war torn afghanistan. we have a lot of war lords war criminals we have a lot of illegal call groups of the called citizens who says all our views in the home or right enough against my marriage was like many other marriage that wasn't forced marriage it's just money when i was fourteen years so you ca

the point of view put forward by my colleagues on the other side of the aisle in strong opposition to q.e. 3. the fed it should use whatever tool recovery is to provide support for our fragile economy. we need to insure against any down returns that would hurt housing, an appointment, and all the other areas in our economies. it is important coming up on your june 17 meeting that you act forcefully to help our economy, given the fact that china has cut its benchmark lending rate. already in response to that, the price of gold has gone up. the dollar has fallen. i would like to hear your comments on china. will china be buying our treasury notes now with the the economic downturn and what appears in their economy combined with the news from the past month that the euro-zone debt and banking crisis seems to have deteriorated? can you comment even further on china specifically and the impact china will have in the overall, our economy? they have been a partner in financial recovery and your comments on china. >> part of the slowdown is policy induced, intentional. in particular, china took a

the point of view put forward by my colleagues on the other side of the aisle in strong opposition to q.e. 3. the fed it should use whatever tool recovery is to provide support for our fragile economy. we need to insure against any down returns that would hurt housing, an appointment, and all the other areas in our economies. it is important coming up on your june 17 meeting that you act forcefully to help our economy, given the fact that china has cut its benchmark lending rate. already in response to that, the price of gold has gone up. the dollar has fallen. i would like to hear your comments on china. will china be buying our treasury notes now with the the economic downturn and what appears in their economy combined with the news from the past month that the euro-zone debt and banking crisis seems to have deteriorated? can you comment even further on china specifically and the impact china will have in the overall, our economy? they have been a partner in financial recovery part of the slowdown is policy induced, intentional. in particular, china took a number of actions to try to av

. >> and this is in the wake of no q.e. 3 from the fed.that you're going to get any sort of relief. >> that's a great point, with crude down more than a dollar now. >>> hampton pearson's been our guy on the ground in washington watching for a health care decision. not going to happen today. give us some color outside the court. >> reporter: number one, we don't have an obamacare ruling today. we're still waiting to find out whether that's going to happen or wednesday or thursday. but another big headline case that people were waiting on was the arizona challenge to federal immigration laws. specifically each side gets something to cheer about out of the 5-4 decision here. the state of arizona, basically that portion that allows law enforcement to make checks, trying to check a person's immigration status on the ground or on everyday stop, if you will, that part for the moment has been upheld. on the flip side, more onerous checks of a person's employment status, as far as being legal or illegal, that part was struck down. what the court al