QE3 aka Quantitative Easing aka Free money

So the Feds officially announced QE3 or for some you who are new to the world of finance and investing...the third round of Quantitative Easing. The question your asking is how or why this will affect you, right? Listen up. FYI, Quantitative Easing is an unconventional monetary policy used by central banks to stimulate the national economy when conventional monetary policy has become ineffective. A central bank implements quantitative easing by buying financial assets from commercial banks and other private institutions with newly created money, in order to inject a pre-determined quantity of money into the economy((thanks wiki)). What this means is that the fed reserve bank is about to buy a bunch of instruments from banks for cash. This will probably cause some type of inflation considering that the US is in a somewhat stagnant/low performing state. Things will cost more because there's more money in circulation. If you have any interest bearing accounts with a rate that can change you can probably expect it to fall ((if that's even possible at this point lol)). If you're looking to finance something your interest options will look a little more attractive. If the banks get this money and don't lend it out we're all fucked because then things will be more expensive and interest rates will be lower but we the people won't have get any of that QE currency, so we'll just be suffering. As far as investing goes we should see stocks rise from a bit of optimism but the behavior of the banks will determine the overall time going into the future. If you're looking at a potential FX trade I'd consider shorting the dollar against the Australian Dollar because the Asians (specifically Japan) have enacted a currency devaluing program to keep their currency from becoming too strong. As far as bonds go... Stick to the rules, buy US bonds. Well other than that, it's Tuesday and my computer is still with the squad so I'm on the i. But iOS6 is legit so it's cool. Remember folks, keep your mind happy and keep your eye on the prize.