QE2 worked so well we will soon need QE3

It's cost $600 billion of our money, and it was supposed to rescue the economy, but has Helicopter Ben's huge financial stimulus package, known as "Quantitative Easing 2," actually worked as planned?

House prices are lower than before QE2 was launched. Economic growth is slower. Inflation is higher.

I guess it depends. I think QE2 protected us from a large scale dose of deflation and sparked a massive boom on the stock market.

But even the stock market boom hasn't been what it appears. An analysis shows that most of the rise in the Standard & Poor's 500 Index under QE2 has simply been a result of the decline in the dollar in which shares are measured.

What is the truth? QE2 has created a massive new bubble in dollar-based financial assets, from stocks to gold. Meanwhile, it has had zero visible effect on the real economy.

Take jobs. According to the U.S. Labor Department, since last August the number of full-time workers has gone up by just 700,000, from 111.8 million to 112.5 million.

At a cost of $600 billion, that's $850,000 a job.

I believe housing is double-dipping, according to the National Association of Realtors; the average price of an "existing" (i.e. used) home was $177,300 in August, just before QE2. Today it's $163,700 -- or 8% less.

If indeed QE2 has created an entirely artificial bubble in all dollar-based assets, what does it mean when the Fed is done spending its money? Most likely we can expect to see higher interest rates to protect the dollar from falling further and therefore a severe turn in the economy.  

Meanwhile the illusion of a boom is causing all sorts of investors to take crazy risks. Witness LinkedIn's IPO, opens at 80 and rises to nearly 120 before coming back to its senses, its currently trading at 86 today.  Some economists are calling for a return to the gold standard. It certainly makes you wonder what's next. I do not think the average American public can stomach the medicine required to fix this mess and therefore expect another round of stimulus, QE3 anyone?