QE3 or QuEstion3 ?

QE3 or quantitative easing declared this time by FED is not a real good news for India per se.

More printing of money simply devalues it & as there'll be always scarcity of commodities in the world, the prices of these will go up in USD terms.

India being a major importer
of all the commodities albeit a few, will have to shell out more USD for the same pie in the world commodity exchange.

This will not only affect current account deficit but will also jack up the prices in the domestic market.

Inflation in India which is already very high for almost 3 years now will increase more and we will revert back to our original stage of today (high current account deficit, high inflation, poverty etc.)

In the long term it won't be in-correct to state that the gold will reach new highs and USD exchange rate will see never seen before levels. But for the shorter term, yes on the face of it, QE3 looks good and will give the much required impetus to the economies world around.