[brobinson]

"Essentially, the mechanism of QE is that the Federal Reserve and other central banks are buying government bonds - but not directly from the Treasury Department. They’re buying government bonds from banks and paying for them with central bank reserves.

Crucially, these cash reserves are held by the central bank and pay an interest rate just as the treasury bonds did. In a sense the Federal Reserve swapped ten year treasury bonds with hypothetical Federal Reserve Bonds. That’s why you can see a graph of the money supply that shows a massive increase, and yet inflation has not spiked. The money never entered the economy - it is being held in a vault at the central bank (or more realistically is just a number in a spreadsheet). In practical terms it was an asset swap, not a true increase in the money supply."

https://www.cassandracapital.net/post/quantitative-easing-ha...

[MiroF]

> The money never entered the economy - it is being held in a vault at the central bank (or more realistically is just a number in a spreadsheet)

This is just incoherent. The money does enter the economy because now the banks can lend out money without their cash reserves dipping too low.

The reason that inflation is not spiking is because of the actual reason that the Fed reserve felt that it was necessary to engage in QE in the first place - huge amounts of deflationary pressure. Without the QE, we would be seeing deflation right now.

[diogenescynic]

>Japan’s QE has been about four times that of the U.S. For the U.S. to do what Japan has done, the Fed would have to QUADRUPLE down and print $12 trillion in addition to the $4 trillion it has already printed.

>Try proposing that after the last round of QE finally fails.

>But even if the Fed tried to print a fraction of that, it still wouldn’t result in hyperinflation.

>Europe has printed almost twice as much as what we have, when compared to GDP, and it has very low inflation and lower growth than the U.S. That’s because our workforce and demographics are flattening, but not declining, as is the trend in Europe and Japan.

https://www.economyandmarkets.com/economy/central-banks/japa...

QE is deflationary.