How did the fed do all those QE1234s w/o causing massive inflation?
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Date: March 22nd, 2018 8:38 AM Author: Mischievous maniacal menage mad-dog skullcap
They found a way to relatively quietly print money by inventing an obscure description (quantitative easing). It did cause inflation. But because all the money was given to giant banks the price of consumer goods did not rise, hence no "inflation" insofar as the cpi did not rise.
The money all went to equity markets and/or was used to underwrite mortgages. So the price of real estate and equities is inflated in obvious bubbles. But we don't call that inflation because (((reasons)))
(http://www.autoadmit.com/thread.php?thread_id=3925450&forum_id=2#35659882) |
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Date: March 22nd, 2018 9:17 AM Author: drab fiercely-loyal fanboi
this is Bernake:
"“Now, you might ask the question, well, the Fed is going out and buying 2 trillion dollars of securities – how did we pay for that? And the answer is that we paid for those securities by crediting the bank accounts of the people who sold them to us, and those accounts, at the banks, showed up as reserves that the banks would hold with the Fed. So the Fed is a bank for the banks. Banks can hold deposit accounts with the Fed, essentially, and those are called reserve accounts. And so as the purchases of securities occurred, the way we paid for them was basically by increasing the amount of reserves that banks had in their accounts with the Fed."
(http://www.autoadmit.com/thread.php?thread_id=3925450&forum_id=2#35660038) |
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Date: March 22nd, 2018 9:18 AM Author: drab fiercely-loyal fanboi
"Sometimes you hear that the Fed is printing money in order to pay for the securities we acquire. And I’ve talked about that in some, you know, in giving some conceptual examples. But as a literal fact, the Fed is not printing money to acquire these securities, and you can see it from the balance sheet here, the light blue line is basically flat. The amount of currency in circulation has not been affected by these activities."
The Fed is selling notes and paying with money that essentially doesn't go into circulation
"What has been affected is the purple area. Those are reserve balances. Those are that accounts that banks, commercial banks, hold with the Fed, and they are assets of the banking system and they are liabilities of the Fed, and that’s basically how we paid for those securities. And so, the banking system has a large quantity of these reserves, but they are electronic entries at the Fed. They basically just sit there. They’re not in circulation. They’re not part of any broad measure of the money supply. They’re part of what’s called the monetary base, but again, they’re not, they certainly aren’t cash."
(http://www.autoadmit.com/thread.php?thread_id=3925450&forum_id=2#35660045) |
Date: March 22nd, 2018 1:24 PM Author: Cerebral parlour
QE *has* caused inflation of CPI and consumer goods
the ruling class just pretends that it hasn't, and normal people aren't smart or interested enough to figure out what happened
(http://www.autoadmit.com/thread.php?thread_id=3925450&forum_id=2#35661569) |
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