Quantitative Easing

deanhills · Mar 28, 2009

Just learned something new tonight about how Governments seem to be able to raise money "out of nothing" .... Quantitative Easing . Why does things have to be so complicated? Isn't that just another way of making things totally non-transparent? Anybody else familiar with this concept?

The term quantitative easing refers to the creation of a pre-determined quantity of new money 'out of thin air' through open market operations by a central bank as the start of a process to increase the money supply. It can, more simply, be understood as an indirect method of printing money. This new money is injected into the private banking system when the accounts of the vendors of the securities purchased by the central bank through the open market operations are credited.

curious · Mar 28, 2009

I wasn't familiar with the terminology, but I don't think the concept is new. This isn't something that they came up with because of the crisis, but has been a part of attempts to manage the economy for a long time.

Money isn't real, and has no value beyond what people believe it is worth. If a country prints more money, and the economy does well, the perceived value of the money won't drop. If an economy is expanding, more money is necessary just because there are more things to spend it on.

The reserve thing was set up to keep banks from lending money without holding anything back, so that if someone wanted to take money out of the bank, there would be some money there to pay them.

deanhills · Mar 29, 2009

curious said:
I wasn't familiar with the terminology, but I don't think the concept is new. This isn't something that they came up with because of the crisis, but has been a part of attempts to manage the economy for a long time.

Money isn't real, and has no value beyond what people believe it is worth. If a country prints more money, and the economy does well, the perceived value of the money won't drop. If an economy is expanding, more money is necessary just because there are more things to spend it on.

The reserve thing was set up to keep banks from lending money without holding anything back, so that if someone wanted to take money out of the bank, there would be some money there to pay them.

This reminds me of that parable about the ceaser who was wearing no clothing, and then everyone commenting on his fantastic outfit. Looks as though there is one major delusion around at the moment.

mattaff · Mar 29, 2009

quantitative easing is a misinterpreted term it does not mean to print money. It is when your central bank injects a lot of money by buying up assist on key targets.

deanhills · Mar 30, 2009

mattaff said:
quantitative easing is a misinterpreted term it does not mean to print money. It is when your central bank injects a lot of money by buying up assist on key targets.

Exactly, that is what it says in the original Wikipedia definition that I quoted below, the money is NOT PRINTED DIRECTLY, I call it fiddling with the accounts:

The term quantitative easing refers to the creation of a pre-determined quantity of new money 'out of thin air'[1] through open market operations by a central bank as the start of a process to increase the money supply. It can, more simply, be understood as an indirect method of printing money. This new money is injected into the private banking system when the accounts of the vendors of the securities purchased by the central bank through the open market operations are credited.

The Parakeet · Mar 30, 2009

It's just an easier way to do it. No need to kill that many trees and cotton plants to print out the dollar bills when you can just put the money right where it needs to be.

Quantitative Easing

deanhills

curious

deanhills

mattaff

deanhills

The Parakeet

Similar threads