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  1. #31
    Senior Member ananda77's Avatar
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    Quote Originally Posted by turmeric View Post
    Im confused Ananda where you get this idea from? Whilst QE is not literaly printing money, it is creating money (electronically) in order to buy the bonds, MBS etc. Hence the inflationary pressures are very real.
    ...bonds are a form of Cash + maturity date - if the Fed creates 1 trillion in Cash to buy back 1 trillion worth of bonds, where is the net increase in value? QE changes the composite liquidity in the system not the net amount.

    ...as for the QE effect on the economy = devastating in the long run because none of the liquid Cash flows through into building industry but into financial speculation (finance capitalism).

    ...the Fed argument for QE (wealth effect) is fundamentally wrong in the long run

    ...of course it all depends on what side of the fence one sits (since WW2, the buddies of 'F. I. R. E.' from bankers, to landowners, to politicians have been served extremely well)

    Kind Regards

  2. #32
    Senior Member ananda77's Avatar
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    Bank reserves are increasing rapidly causing widespread distortion in financial markets
    Lending remains depressed!!!

    ...if all the newly created bank reserves would end up hit the road via increased debt loads - inflation would be soaring

    The Fed can stop that (hopefully) by selling bonds at some stage in the future

    Kind Regards

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