E, I think you need to bone up on QE.
QE is a central bank's purchase of securities in order to get a pre- determined quantity of money into a faltering system so that demand is stimulated. Because it involves a pre-determined quantity, it is referred to as quantitative easing.
It stands in contrast to a CB's buying and selling of stuff to keep interest rates at a certain level. That is not quantitative easing because the amount is not pre-determined.
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I disagree with the notion that QE is always hyper inflationary or even inflationary.....Japan is the example there, the rule- breaker.
IMO, the reason it does not work is that it's not a focused approach to stimulus. In our case, a lot of the QE money ended up financing stock market speculation. Main St., its purported target, saw little of the moolah.
It's great for gold.
My money says that we won't see any more QE in the US, though other approaches are possible. I also think gold will do very well, however, because real interest rates are negative, and are likely to be negative for a long time. Increased money supply, too, will help POG. |
