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Quantitative Easing could not exist without creating money. Its literally the Fed creating money to buy bonds to reduce interest rates.
https://www.investopedia.com/terms/q/quantitative-easing.asp > Quantitative easing is an unconventional monetary policy in which a central bank purchases government securities or other securities from the market in order to increase the money supply
Is there no limit at which point the Fed will stop printing money? In theory, once all that money printing hits the actual economy and inflation starts going up, they'll have increase interest rates. I'm not sure I believe that 100%. I wonder how complacent they will be once inflation does start to raise, and eventually spiral out of control.
https://inflationdata.com/Inflation/Inflation_Rate/CurrentIn...
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Except that "Quantitative Easing" is NOT "printing money"... it's just media who dubbed it "printing money" as it is a more clickbaity term that works better for driving traffic to the advertisement infested pages.
Quantitative Easing could not exist without creating money. Its literally the Fed creating money to buy bonds to reduce interest rates.
It's not the same thing as printing money and spending it and suggesting otherwise is either disingenuous or ignorant.
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Except that "Quantitative Easing" is NOT "printing money"... it's just media who dubbed it "printing money" as it is a more clickbaity term that works better for driving traffic to the advertisement infested pages.
It is exactly printing money, just the amounts are so large they just skip the paper and ink
It's not the same thing as printing money and spending it and suggesting otherwise is either disingenuous or ignorant.
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It's stealing money out of everyone's pockets to keep the banks going. Devalues the existing currency already in circulation. I love the obsession with keeping the system going, if the system is cyclical and flawed for human beings, maybe we shouldn't base the system that feeds, clothes and houses humanity on a craps table. The more of this sort of news that comes up the closer I listen to Richard D. Wolff.
> Devalues the existing currency already in circulation. Anyone with debt (e.g., mortgage, student loans) is advantaged from a future lower-value currency: > If wages increase with inflation, and if the borrower already owed money before the inflation occurred, the inflation benefits the borrower. This is because the borrower still owes the same amount of money, but now he or she has more money in his or her paycheck…
Broadly speaking, it's a position of weakness and servitude. It's a similar suggestion that if you're deep in debt, you "win" if you get hit in the head with a baseball bat. Sure, you enjoyed spending the money and now you're mentally deficient so you got away with not having to pay it off, but you've still been beaten over the head with a bat.
But ultimately, even if my view is an inaccurate description of reality, what you're saying is true, but I'd argue it's still a net loss. The end-goal over a lifetime of earning is to be in the black, not red. It's difficult to lose your way to the top. Wages don't track inflation (contrary to those 2% raises a year, because salaries are suppressed from downward pressure on wages). So the relatively short time someone is in debt doesn't outweigh the time spent out of debt thus the advantage you speak of isn't worth it.
All that said, debt is not inherently bad.. but that's another discussion and not in the context of this discussion.
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I was talking about the two levers the Fed has to guide the economy at work - Printing Money and Lowering interest rates (as described by Ray Dalio https://youtu.be/PHe0bXAIuk0 ). My coworker starry eyed, looked at me and said, "What about Quantitative Easing?". I responded that is printing money. I think the issue is, these concepts are given difficult sounding names, so people do not question their ethics. I'm not…
Yes, print money and pay for student loans!
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Quantitative Easing could not exist without creating money. Its literally the Fed creating money to buy bonds to reduce interest rates.
https://www.investopedia.com/terms/q/quantitative-easing.asp > Quantitative easing is an unconventional monetary policy in which a central bank purchases government securities or other securities from the market in order to increase the money supply
When the central bank 'buys' securities, they do so with money they're creating in that purchase. In effect they're dumping new money into wherever they're buying securities from, but the 'dumping' isn't with dump trucks or dropping it from planes.
Now those bonds come due and the money is supposed to leave the system, but until then the velocity of money means there are knock on effects.