1. What Is Quantitative Easing? http://www.businessinsider.com/what-is-quantitative-easing
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What Is Quantitative Easing?
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Quantitative Easing
The term quantitative easing (QE) describes a form of monetary policy used by central banks to increase the supply of
money in an economy when the bank interest rate, discount rate and/or interbank interest rate are either at, or close to,
zero.
A central bank does this by first crediting its own account with money it has created ex nihilo ("out of nothing").[1] It then
purchases financial assets, including government bonds and corporate bonds, from banks and other financial institutions
in a process referred to as open market operations. The purchases, by way of account deposits, give banks the excess
reserves required for them to create new money by the process of deposit multiplication from increased lending in the
fractional reserve banking system. The increase in the money supply thus stimulates the economy. Risks include the
policy being more effective than intended, spurring hyperinflation, or the risk of not being effective enough, if banks opt
simply to pocket the additional cash in order to increase their capital reserves in a climate of increasing defaults in their
present loan portfolio.[1]
"Quantitative" refers to the fact that a specific quantity of money is being created; "easing" refers to reducing the
pressure on banks.[2] However, another explanation is that the name comes from the Japanese-language expression for
"stimulatory monetary policy", which uses the term "easing".[3] Quantitative easing is sometimes colloquially described as
"printing money" although in reality the money is simply created by electronically adding a number to an account.
Examples of economies where this policy has been used include Japan during the early 2000s, and the United States
and United Kingdom during the global financial crisis of 2008–2009.
[edit] Concept
Ordinarily, the central bank uses its control of interest rates, or sometimes reserve requirements,[citation needed] to indirectly
influence the supply of money.[1] In some situations, such as very low inflation or deflation, setting a low interest rate is
not enough to maintain an adequate money supply, and so quantitative easing is employed to further boost the amount of
money in the financial system.[1] This is often considered a "last resort" to increase the money supply.[4][5] The first step is
for the bank to create more money ex nihilo ("out of nothing") by crediting its own account. It can then use these funds to
buy investments like government bonds from financial firms such as banks, insurance companies and pension funds,[1] in
a process known as "monetising the debt".
For example, in introducing its QE programme, the Bank of England bought gilts from financial institutions, along with a
smaller amount of high-quality debt issued by private companies.[6] The banks, insurance companies and pension funds
can then use the money they have received for lending or even buying back more bonds from the bank. The central bank
can also lend the new money to private banks or buy assets from banks in exchange for currency.[citation needed] These have
the effect of depressing interest yields on government bonds and similar investments, making it cheaper for business to
raise capital.[7] Another positive side effect of this is that investors will swap to other investments, such as shares,
boosting the price of these and increasing wealth in the economy.[6] QE can also help in reducing interbank overnight
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2. What Is Quantitative Easing? http://www.businessinsider.com/what-is-quantitative-easing
interest rates, and thereby encourage banks to loan money to higher interest-paying bodies.
More specifically, in terms of the lending undertaken by commercial banks, they use a practice called fractional-reserve
banking whereby they abide by a reserve requirement, which regulates them to keep a percentage of deposits in
"reserve",[citation needed] which can only be used to settle transactions between them and the central bank.[7] The remainder,
called "excess reserves", can (but does not have to be) be used as a basis for lending. When, under QE, a central bank
buys from an institution, the institution's bank account is credited directly and their bank gains reserves.[6] The increase in
deposits from the quantitative easing process causes an excess in reserves and private banks can then, if they wish,
create even more new money out of "thin air" by increasing debt (lending) through a process known as deposit
multiplication and thus increase the country's money supply. The reserve requirement limits the amount of new money.
For example a 10% reserve requirement means that for every $10,000 created by quantitative easing the total new
money created is potentially $100,000. The US Federal Reserve's now out-of-print booklet Modern Money Mechanics
explains the process.
A state must be in control of its own currency and monetary policy if it is to be able to unilaterally employ quantitative
easing. Countries in the eurozone (for example) cannot unilaterally use this policy tool, but must rely on the European
Central Bank to implement it.[citation needed] There may also be other policy considerations. For example, under Article 123 of
the Treaty on the Functioning of the European Union[7] and later Maastricht Treaty, EU member states are not allowed to
finance their public deficits (debts) by simply printing the money required to fill the hole, as happened in Weimar
Germany and more recently in Zimbabwe.[1] Banks using QE, such as the Bank of England, have argued that they are
increasing the supply of money not to fund government debt but to prevent deflation, and will choose the financial
products they buy accordingly, for example, by buying government bonds not straight from the government, but in
secondary markets.[1][7]
[edit] History
Quantitative easing was used unsuccessfully[8] by the Bank of Japan (BOJ) to fight domestic deflation in the early
2000s.[9] During the global financial crisis of 2008, policies announced by the US Federal Reserve under Ben Bernanke to
counter the effects of the crisis are a form of quantitative easing. Its balance sheet expanded dramatically by adding new
assets and new liabilities without "sterilizing" these by corresponding subtractions. In the same period the United
Kingdom used quantitative easing as an additional arm of its monetary policy in order to alleviate its financial crisis.[10][11][12]
The European Central Bank (ECB) has used 12-month long-term refinancing operations (a form of quantitative easing
without referring to it as such) through a process of expanding the assets that banks can use as collateral that can be
posted to the ECB in return for Euros. This process has led to bonds being "structured for the ECB"[13]. By comparison
the other central banks were very restrictive in terms of the collateral they accept: the US Federal Reserve used to
accept primarily treasuries (in the first half of 2009 it bought almost any relatively safe dollar-denominated securities); the
Bank of England applied a large haircut.
In Japan's case, the BOJ had been maintaining short-term interest rates at close to their minimum attainable zero values
since 1999. With quantitative easing, it flooded commercial banks with excess liquidity to promote private lending,
leaving them with large stocks of excess reserves, and therefore little risk of a liquidity shortage.[14] The BOJ
accomplished this by buying more government bonds than would be required to set the interest rate to zero. It also
bought asset-backed securities and equities, and extended the terms of its commercial paper purchasing operation.[15]
[edit] How
1. The national bank declares an extremely low rate of interest, for example 0.5%.
2. The national bank credits its own bank account with money created from 'thin air' through lending interests.
3. The newly created money is then used for buying government bonds from financial firms such as banks, insurance companies and pension funds.
[edit] Risks
Quantitative easing is seen as a risky strategy that could trigger higher inflation than desired or even hyperinflation if it is
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improperly used and too much money is created.
Some economists[who?] argue that there is less risk of such an outcome when a central bank employs quantitative easing
strictly to ease credit markets (e.g. by buying commercial paper), whereas hyperinflation is more likely to be triggered
when money is created for the purpose of buying up government debts (i.e. treasury securities) which in turn can create
a political temptation for governments and legislatures to habitually spend more than their revenues without either raising
taxes or risking default on financial obligations.
Quantitative easing runs the risk of going too far. An increase in money supply to a system has an inflationary effect by
diluting the value of a unit of currency. People who have saved money will find it is devalued by inflation; this combined
with the associated low interest rates will put people who rely on their savings in difficulty. If devaluation of a currency is
seen externally to the country it can affect the international credit rating of the country which in turn can lower the
likelihood of foreign investment. Like old-fashioned money printing, Zimbabwe suffered an extreme case of a process that
has the same risks as quantitative easing, printing money, making its currency virtually worthless.[1]
[edit] Origin
This section needs additional citations for verification.
Please help improve this article by adding reliable references. Unsourced material may be challenged and removed. (July 2010)
The original Japanese expression for "quantitative easing" ( 和緩融 金的量 , ryōteki kin'yū kanwa), was used for the first
time by a Central Bank in the Bank of Japan’s publications. The Bank of Japan has claimed that the central bank
adopted a policy with this name on 19 March 2001.[16] However, the Bank of Japan's official monetary policy
announcement of this date does not make any use of this expression (or any phrase using "quantitative") in either the
Japanese original statement or its English translation.[17] Indeed, the Bank of Japan had for years, and in an article
published in February 2001 had claimed that "quantitative easing … is not effective" and rejected its use for monetary
policy.[18] Speeches by the Bank of Japan leadership in 2001 gradually, and ex post, hardened the subsequent official
Bank of Japan stance that the policy adopted by the Bank of Japan on March 19, 2001 was in fact quantitative easing.
This became the established official view, especially after Toshihiko Fukui was appointed governor in February 2003. The
use by the Bank of Japan is not the origin of the term "quantitative easing" or its Japanese original (ryoteki kinyu kanwa).
This expression had been used since the mid-1990s by critics of the Bank of Japan and its monetary policy.
The earliest written record of the phrase and concept of "quantitative easing" has been attributed to the economist Dr
Richard Werner, Professor of International Banking at the School of Management, University of Southampton (UK). At
the time working as chief economist of Jardine Fleming Securities (Asia) Ltd in Tokyo, and noted for his 1991 warning of
the coming collapse of the Japanese banking system and economy (reference: Richard A. Werner, 1991, The Great Yen
Illusion: Japanese foreign investment and the role of land related credit creation, Oxford Institute of Economics and
Statistics Discussion Paper Series no. 129), he coined the expression in an article published on September 2, 1995 in
the Nihon Keizai Shinbun (Nikkei).[19]
According to its author, he used this phrase in order to propose a new form of monetary stimulation policy by the central
bank that relied neither on interest rate reductions (which Werner claimed in his Nikkei article would be ineffective) nor on
the conventional monetarist policy prescription of expanding the money supply (e.g. through "printing money", expanding
high powered money, expanding bank reserves or boosting deposit aggregates such as M2+CD—all of which Werner
also claimed would be ineffective). Instead, Werner argued, it was necessary and sufficient for an economic recovery to
boost ‘credit creation’, through a number of measures. He estimated in this article that the incipient bad debt problem of
the Japanese system (i.e. including future bad debts) amounted to about ¥100 trillion, or 20% of annual Japanese GDP,
and that this had increased banks’ risk aversion. The subsequent slowdown in bank credit extension was the major
problem, because commercial banks are the main producers of the money supply, through the process of credit creation.
He thus recommended as a solution policies such as direct purchases of non-performing assets from the banks by the
central bank, direct lending to companies and the government by the central bank, purchases of commercial paper (CP)
and other debt, as well as equity instruments from companies by the central bank, as well as stopping the issuance of
government bonds to fund the public sector borrowing requirement and instead having the government borrow directly
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from banks through a standard loan contract. All of these, Werner claimed, would stimulate credit creation and hence
boost the economy. Many of these policies have recently been adopted by the US Federal Reserve under Chairman
Bernanke, who was familiar with the debate on Japanese monetary policy, under the expression of "credit easing".
However, while Werner used and explained the concept of credit creation in his article, he chose not to use it in the
article’s title, as too few readers would be familiar with it and alternative expressions were associated with flawed or failed
policy prescriptions. Werner preferred to coin a new phrase. In his subsequent writings, including his bestselling book on
the Bank of Japan (Princes of the Yen, M. E. Sharpe, and his 2005 book New Paradigm in Macroeconomics: Solving the
Riddle of Japanese Macroeconomic Performance, Palgrave Macmillan), Werner argues that the Bank of Japan’s usage
of his expression ‘quantitative easing’ may be misunderstood. While suggesting it was adopting the policy suggested by
a leading critic, the Bank of Japan implemented the standard monetarist expansion of bank reserves and high powered
money, which Werner had predicted would fail. It is not obvious why the Bank of Japan chose to use Mr Werner’s
expression, and not the already existing and widely used expressions ‘expansion of high powered money’, ‘expansion of
bank reserves’ or, simply, ‘money supply expansion’, which more accurately describe its adopted policy at the time.
[edit] Comparison with other instruments
[edit] Qualitative easing
Willem Buiter has proposed a terminology to distinguish quantitative easing, or an expansion of a central bank's balance
sheet, from what he terms qualitative easing, or the process of a central bank adding riskier assets onto its balance
sheet:
Quantitative easing is an increase in the size of the balance sheet of the central bank through an increase it is [sic] monetary liabilities (base money), holding constant
the composition of its assets. Asset composition can be defined as the proportional shares of the different financial instruments held by the central bank in the total
value of its assets. An almost equivalent definition would be that quantitative easing is an increase in the size of the balance sheet of the central bank through an
increase in its monetary liabilities that holds constant the (average) liquidity and riskiness of its asset portfolio.
Qualitative easing is a shift in the composition of the assets of the central bank towards less liquid and riskier assets,
holding constant the size of the balance sheet (and the official policy rate and the rest of the list of usual suspects). The
less liquid and more risky assets can be private securities as well as sovereign or sovereign-guaranteed instruments. All
forms of risk, including credit risk (default risk) are included.[20]
[edit] Credit easing
In introducing the Federal Reserve's response to the 2008-9 financial crisis, Fed Chairman Ben Bernanke was keen to
distance the new programme, which he termed "credit easing" from Japanese-style quantitative easing.In his speech, he
announced:
“ Our approach—which could be described as "credit easing"—resembles quantitative easing in one respect: It involves an expansion of the central
bank's balance sheet. However, in a pure QE regime, the focus of policy is the quantity of bank reserves, which are liabilities of the central bank; the
composition of loans and securities on the asset side of the central bank's balance sheet is incidental. Indeed, although the Bank of Japan's policy
approach during the QE period was quite multifaceted, the overall stance of its policy was gauged primarily in terms of its target for bank reserves. In
contrast, the Federal Reserve's credit easing approach focuses on the mix of loans and securities that it holds and on how this composition of assets
affects credit conditions for households and businesses. [21] ”
[edit] See also
Fiat currency
Debasement
Economic history of Japan
Economy of Japan
Open market operations
Money supply
Money creation
Inflation hedge
List of economics topics
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5. What Is Quantitative Easing? http://www.businessinsider.com/what-is-quantitative-easing
List of finance topics
ZIRP
[edit] References
1. ^ a b c d e f g h
"Q&A: Quantitative easing". BBC. 9 March 2009. http://news.bbc.co.uk/1/hi/business/7924506.stm. Retrieved 29 March 2009.
2. ^ Elliott, Larry (8 January 2009). "Guardian Business Glossary: Quantitative Easing". London: The Guardian. http://www.guardian.co.uk/business/2008/oct
/14/businessglossary. Retrieved 19 January 2009.
3. ^ Voutsinas, Konstantinos, and Richard A. Werner, "New Evidence on the Effectiveness of ‘Quantitative Easing’ in Japan", Centre for Banking, Finance and
Sustainable Development, School of Management, University of Southampton.
4. ^ "Quantitative easing: A therapy of last resort". The New York Times. 1 January 2009. http://www.nytimes.com/2009/01/11/business/worldbusiness/11iht-
views12.1.19248009.html. Retrieved 12 July 2010.
5. ^ Stewart, Heather (29 January 2009). "Quantitative easing: last resort to get credit moving again". The Guardian. http://www.guardian.co.uk/business/2009/jan
/29/question-and-answer-quantitative-easing. Retrieved 12 July 2010.
6. ^ a b c
"Quantitative Easing explained". Bank of England. pp. 7-9. http://www.bankofengland.co.uk/monetarypolicy/pdf/qe-pamphlet.pdf. Retrieved 20 July 2010.
"(page 7) Bank buys assets from ... institutions ... credits the seller’s bank account. So the seller has more money in their bank account, while their bank holds a
corresponding claim against the Bank of England (known as reserves ... (page 8) high-quality debt ... (page 9) ... such as shares or company bonds. That will
push up the prices of those assets,"
7. ^ a b c d
Bean, Charles (July 2009). "Ask the Deputy Governor". Bank of England. http://www.bankofengland.co.uk/monetarypolicy/qe/askqa.htm. Retrieved 12 July
2010.
8. ^ http://news.bbc.co.uk/1/hi/8517760.stm
9. ^ Mark Spiegel. "FRBSF: Economic Letter - Quantitative Easing by the Bank of Japan (11/02/2001)". Federal Reserve Bank of San Francisco.
http://www.frbsf.org/publications/economics/letter/2001/el2001-31.html. Retrieved 2009-01-19.
10. ^ Alloway, Tracy, The Unthinkable Has Happened, ft.com, 10 November 2008. Retrieved 9 August 2010.
11. ^ ‘Bernanke-san’ Signals Policy Shift, Evoking Japan Comparison, Bloomberg.com, 2 December 2008
12. ^ Bank pumps £75bn into economy, ft.com, 5 March 2009
13. ^ Evans, Rachel, Unsellable bonds structured to abuse ECB scheme, IFLR, 2 February 2009
14. ^ Easing Out of the Bank of Japan's Monetary Easing Policy (2004-33, 19 November 2004)
15. ^ PIMCO/Tomoya Masanao interview
16. ^ Shirakawa, Masaaki, "One Year Under ‘Quantitative Easing’", Institute for Monetary and Economic Studies, Bank of Japan, 2002.
17. ^ Bank of Japan, New Procedures for Money Market Operations and Monetary Easing, 19 March 2001. Retrieved 9 August 2010.
18. ^ Hiroshi Fujiki et. al., Monetary Policy under Zero Interest Rate: Viewpoints of Central Bank Economists, Monetary and Economic Studies, February 2001, p.98.
Accessed 9 August 2010.
19. ^ Richard Werner, Keizai Kyoshitsu: Keiki kaifuku, ryoteiki kinyu kanwa kara, Nikkei, 2 September 1995.
20. ^ Willem Buiter (2008-12-09). ""Quantitative easing and qualitative easing: a terminological and taxonomic proposal"". http://blogs.ft.com/maverecon/2008/12
/quantitative-easing-and-qualitative-easing-a-terminological-and-taxonomic-proposal/. Retrieved 2009-02-02.
21. ^ Credit Easing versus Quantitative Easing
[edit] External links
Look up quantitative easing in Wiktionary, the free dictionary.
Stimulus Watch Tracking all measures taken by the Federal Reserve and other government agencies to address the financial and economic crisis
Deflation: Making Sure "It" Doesn't Happen Here, 2002 speech by Ben Bernanke on deflation and the utility of quantitative easing
Modern Money Mechanics Federal Reserve Document Explaining How Money Is Created
Quantitative easing explained (Financial Times Europe)
A Fed Governor Discusses Quantitative Easing Among Other Topics
Quantitative Easing Explained Pamphlet Putting More Money Into Our Economy To Boost Spending
Retrieved from "http://en.wikipedia.org/wiki/Quantitative_easing"
This page was last modified on 9 August 2010 at 05:29.
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Summary Summary
Ben Bernanke is the current Chairman of the U.S. Federal The term quantitative easing (QE) describes a form of
Reserve. He was chairman of President George W. Bush's monetary policy used by central banks to increase the
Council of Economic Advisers. He taught at Stanford's supply of money in an economy when the bank interest
University School of Business from 1979 to 1985, before... rate, discount rate and/or interbank interest rate are
More » either at... More »
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14 Comments Receive email updates on new comments!
Sandy on Nov 2, 2:00 PM said:
Why can't we all print money to increase our Bank accounts? It's all backed by nothing........... Flag as Offensive
aaron on Nov 2, 4:34 PM said:
@Sandy: Wow, wiki cut and paste. That's fine journalism they have here. Flag as Offensive
halroper on Nov 2, 2:11 PM said:
Is there a counterpoint to ex nihilo like in deep s---? Flag as Offensive
Only kidding, I don't know what the hell to do either. Why not just admit that and start a barter trade again?
Anyone got a couple of loose shells in their pocket?
MauiMike on Nov 2, 3:40 PM said:
@halroper: No shells, but I do have silver and gold bullion. Oh, right. That's not REAL money! Flag as Offensive
Fidel C on Nov 2, 3:35 PM said:
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7. What Is Quantitative Easing? http://www.businessinsider.com/what-is-quantitative-easing
qe is the marxist second favorite way to spread the wealth. Flag as Offensive
the first is income taxation.
bystander on Nov 2, 11:33 PM said:
@Fidel C: Um wrong. Ben Bernanke is going to drop money from helicopters. But you must own a bank to stand under the helicopter Flag as Offensive
when the money is dropped.
Translation Please! Mr. Or! on Nov 2, 3:47 PM said:
CORRECTION: Flag as Offensive
Quantitative easing (QE) is a monetary policy used by central banks to increase the wealth of banks on the assumption that a wealthy bank is an easier touch
when credit-unworthy consumers/businesses come a-knocking for questionable loans. This desperate but generally futile sleight-of-hand, or slit-of-throat, by the
central banks is accomplished by the central banks buying shit assets from the banks at outrageous prices. This policy is the nuke option when the central banks
cannot get the stubborn banks to loan money even when that money is lent to them by the central banks at near or zero interest rates. A central bank accomplishes
this outrage by first pretending it has more money than it has. It then purchases from the banks financial assets priced like the only whore when the Navy comes
ashore. This is a process referred to as open market operations, or larceny. The purchases give banks the wealth required for them to create new money by the
process of deposit multiplication from increased lending in the fractional reserve banking system. (No one actually knows what the last sentence means, but it is
part of the QE process to pretend to know what this means).The increase in the money supply stimulates the economy if it doesn't kill it first. Risks include the
policy being more effective than intended, spurring hyperinflation, the installation of a murderous dictatorship, the establishment of concentration camps, and the
onset of two-front world war, or the risk of not being effective enough, if banks opt simply pocket the additional cash to pay higher bonuses and to upgrade to a
sluttier class of little dumplings on the side.
TED NUGENT on Nov 2, 4:22 PM said:
WHAT IS QE? Flag as Offensive
RAPE SAVERS
REWARD RAPISTS
Anonymous Comment on Nov 2, 6:32 PM said:
The problem with QE is that the original concept was conceived before [wink*wink*] the 'powers that be' [aka in this case - led by Helicopter Flag as Offensive
Ben] were aware of the rampant fraud in the system they were trying to save.
Surely this new understanding [brought forward ala foreclosure-gate] broadens the awareness of why the earlier QE did not work. Even the top of the food chain
knows that the system has run its crooked course and are awaiting what more opportunities will arise out of QE. QE is about giving the institutions who brought this
crisis upon us a chance to figure out/fix the problem. However, they never conceived of a scenario in which their calamitous antics would NOT get bailed out. It
never mattered how bad they mess up - in their minds the solution was always meant to come in the form of creative QE. Therefore, real solutions in which their
arses are on the line do not cross their mind. All they can think is "QE! QE! Now, mommy, please, we're thirsty."
Surely now that Bernanke [et al.] know the depravity of the minds that he is dealing with, he would not put it past them to starve half the world to get the upper
hand on this thing called money. In such a case, it is wise not to give them more, until they have shown they understand the meaning and values of a functioning
legal system as well as food security as a concept in their greedy litttle brains... and what it's like to go a day without food would do them some good... I think it's
one of those forty days and forty nights moments.
They need to take this paradigm-shift moment and create a new approach. The old one - made with limited understanding - is not ideal. New information of this
magnitude [system-wide fraud] must be brought to bear on the situation. None of this is isolated. We all see [those of us looking] the connection, but perhaps the
expectations have allowed some to misinterpret reality. Do not be fooled by expectations. Reality always eventually wins.
In the short term, expectations can seem very long term. Until, in the middle of the night when the rest of the world wakes up to see that we've 'Ooops', waged
more war in the name of QE. At least that's how it will be taken. And it will solve nothing. If they [the banks] had wanted to fix the problem they could have rooted
out the fraud rampant in their culture with the first rounds of easing. [As they should be doing now, but apparently are not.] No-one in their right minds thinks the
banks have made a serious attempt to create a real solution. They have none.
Now that the 'powers that be' really know who they are helping, surely they will act in a way that protects the fragile planetary food and monetary systems.
Plausible deniability only works until the cat is out of the bag. It's Justice or Bust, b*T*ez.! [Please don't let it be bust.]
QE on Nov 2, 6:50 PM said:
Quantitative Easing = More free money for the financial terrorists that destroyed Amercia Flag as Offensive
Sooty on Nov 2, 7:43 PM said:
I don't trust Wikipedia. Flag as Offensive
Wikipedia doesn't say the "central bank" is a private cartel of banks that are beholden to no one but themselves. Wikipedia should state this clearly at the top.
The Reserve's chairman has to be approved by the government but that's it. Usually the government approves the board's choice anyway.
So Wikipedia fails in spelling it out honestly off the bat.
All the Rothschild central banks are privately-run institutions and their goal is to maximize profit for themselves.
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8. What Is Quantitative Easing? http://www.businessinsider.com/what-is-quantitative-easing
The MSM has omitted this fact and keeps running articles about the Rothschild central banks that imply they are some kind of government body that is concerned
with making sure the economy runs well.
If they lower or raise interest rates, do quantitative easing or restrict the supply of money, it is because the bankers that make up the Federal Reserve benefit
financially. Goldman and Morgan are members of the private Federal Reserve.
They are not going to vote to take actions that hurt themselves financially. They will do the opposite. And they will also capitalize on their insider-trading status to
make as much money as possible.
They try and sell the policies of the Federal Reserve as being good for the economy and that they are acting on behalf of the government, but they do nothing of
the sort. Why should they? They are a private for-profit organization. The bottom line for them is profit. Nothing else.
You can be sure there is always an agenda behind everything they do. They just don't state it publicly. They put forward reasons that the nation needs it, that the
US dollar is overvalued etc. If they want QE now, it will be good for them financially. What's their angle for selling QE II to the public?
I suspect it has something to do with TARP bailouts. The banks and other corporations that were given taxpayers' money can more painlessly pay back the money
if QE is in place.
longcatislong on Nov 2, 7:58 PM said:
copypasta copypasta Flag as Offensive
long cat is looooong
Quantitative Easing (URL) on Jan 12, 4:19 AM said:
Interesting to know about the origin of Quantitative Easing that it is basically used by Central Bank and Bank of Japan. I want to include that it Flag as Offensive
is a policy of government to increase the money supply by adding and buying their bonds and securities to lower the rate of interest in
markets. Central banks tend to use it when interest rates are already been lowered to near 0% levels and failed to produce the desired effect.
bunuunutma on Jan 19, 3:30 PM said:
Wikipedia doesn't say the "central bank" is a private cartel of banks that are beholden to no one but themselves. Wikipedia should state this Flag as Offensive
clearly at the top.
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Comments on this post are now closed.
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