What Is Quantitative Easing (QE)?
Quantitative easing (QE) is a form of unconventional monetary policy in which a central bank purchases longer-term securities from the open market in order to increase the money supply and encourage lending and investment. Buying these securities adds new money to the economy, and also serves to lower interest rates by bidding up fixed-income securities. It also expands the central bank’s balance sheet.
When short-term interest rates are either at or approaching zero, the normal open market operations of a central bank, which target interest rates, are no longer effective. Instead, a central bank can target specified amounts of assets to purchase. Quantitative easing increases the money supply by purchasing assets with newly-created bank reserves in order to provide banks with more liquidity. Investopedia
Forever Quantitative easing; robbing the poor to feed the rich
Corporations are using share buyback programs to manipulate earnings, by reducing the float of outstanding shares. This ploy was not as ubiquitous before, but today it is being used rather indiscriminately by companies as a way to boost EPS. This modern form of alchemy turns would-be losses into profits or can be utilised to make modest gains appear to be impressive in nature. We are now in the paradigm of lies and deceit. In these conditions, the truth does not thrive.
Many experts predict that share buybacks and dividend payments by US companies are expected to reach new highs in 2015. The troubling factor is that it appears that companies are taking the easy path in their quest to boost profits. Rather than investing in the future, they are spending inordinate sums of money on buying back their shares. Tactical Investor
I was listening to the news on the radio on our drive back from Mass last Saturday evening. There was a news story about the economy, the National Debt (Capitalized because it is HUGE), interest rates, money supply and Quantitative Easing. Actually, not all of the above stuff was in the story, but the story alluded to all of this if one really paid attention and understood what is happening to our currency in America.
The Muckster was astonished by the misrepresentative, misleading, confusing, ambiguous, disingenuous, deceptive, false and untruthful commentary. So I lost it completely and went into a five-minute rant over a two-minute story. I don’t know if it was a story. I am labeling it a story because it was brilliant science-fiction without the facts.
So what happened next. You guessed it. Lovely Lainey was sitting in the shotgun seat without a shotgun. If she would have had one you would now be reading my obituary. Very calmly, she reminded me that we had just been told the Mass was over and we should “Go in Peace.” She then said, please, just write that down for your next article. Or something like that implying she would rather read about it than listen to another of my rants on how “We the People” are being lied to by the MSM (Main Stream Media) and our political knights in shining armor. Thelibertybeacon
Quantitative easing (QE) is when a central bank buys long-term securities from its member banks
In return, it issues credit to the banks’ reserves.
Where do central banks get the funds to purchase the banks’ securities? They simply create them out of thin air. In the United States, only the Federal Reserve has this unique power.2 That’s why some people say the Federal Reserve is printing money.
QE increases the money supply It lowers long-term interest rates, makes it easier for banks to lend, and spurs economic growth.3
QE is an expansion of the Fed’s open market operations. The Fed uses QE after it’s lowered the fed funds rate to zero. This rate is the basis for all other short-term rates.4 In the United States, the QE purchases are done by the trading desk at the New York Federal Reserve Bank. The Balance
The Quantitative Easing Fraud and the Inflation Lie
Christine Lagarde – the incoming chair of the European Central Bank – is planning her first press conference after the governing council meets on Thursday. She is expected to announce no interruption to the €20 billion per month capital fabrication scheme these governments call “Quantitative Easing”.
This ongoing willful expansion of the monetary supply that is the driving force behind asset bubbles (too much liquidity chasing too few returns) is conducted under the premise of pursuing an inflation rate of 2%.
Inflation exists in two forms, economically. Monetary inflation – or the credit and equity of nations fractionally banked into 10X supply side excess (on a minimal basis) and Price Inflation, which is where the prices for goods and services rise.
The cause of oth price inflation and monetary inflation is human. Inflation is not some independent force that swirls through the economic universe. Its a measurable coefficient of supply and demand imbalances.
The bubble analogy could not be more apropos.
Printing money, quantitative easing, and zero interest rate policy are all inputs to the bubble. The expandability of the bubble is equivalent to how much there is to buy out there. If you could print enough money to buy everything there is and all that there could be, you’d be at a point of total global liquidity we passed long ago…like somewhere back in the 80’s, more than likely. Midasletter
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