Putting QE2 into Perspective: Stock Market

We are looking at close to $100 billion in QE2 purchasing by the Fed each and every month for the next eight months.  That number is higher than a good year for U.S. equity fund inflows.  That figure alone is bullish for the market.  And, as per Bernanke's direct statement, it is clear the Fed is targeting equities as well as bonds with QE2.  In other words, he wants QE2 to inflate the price of financial assets in order to increase the wealth effect of individuals.  That is, if your perceived wealth increases, you are more liking to spend a percentage of that increase, which will increase GDP through your consumption.  That is the game the Fed is playing going forward.  With this game plan, the Fed has directly implied that it is willing to destroy the value of the dollar for the sake of increasing the value of financial assets with the ultimate consequences of creating a massive financial asset bubble and rampant inflation.  And, then taking "no" responsibility for its actions.  Something like Greenspan did leading up to the sub-prime mortgage debacle.