Quantitative Easing is Bad

Quantitative easing (QE) is an inflationary strategy. The FED basically creates and adds more money into the economy. Creating this new money devaluates all the existing money as more money becomes available. This is pretty much the same thing as when previous civilisations debased their coins by using less silver and more copper in them.

A The consequence of this is that the money you currently have buys you less than it previously would. Thus savers become losers when money loses in purchasing power. This basically discourages savings. But savings and investments are what fundamentally drive production and the economy.

That is roughly why I believe that QE is bad.


Blue text: edits made 2020-12-27

1 thought on “Quantitative Easing is Bad

  1. Елена

    The damaging effects of the previous rounds of quantitative easing are still being felt in low bond yields, falls in European and US bank shares and increased income inequality Further monetary policy loosening might convince investors a recession is imminent while a market rally could encourage Trump in his trade war

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