[RC_ITR]

I love all the Austrian Economics (thanks Satoshi!) comments we get in a supposedly data-driven environment.

How does this chart [0] show a debasement of any sort? We were in a 'secular demand stagnation crisis' back then! Is everyone here just too young (oh God) to remember 2012?

https://fred.stlouisfed.org/graph/fredgraph.png?g=LBU7

[thaumasiotes]

> How does this chart [0] show a debasement of any sort?

It's the gigantic jump in the blue line almost halfway between 2008 and 2010. A spike in the value of "all assets" is the definition of currency devaluation.

[RC_ITR]

Hey, sorry for not providing more context, the blue line is the Fed's balance sheet and the red line is inflation.

Yes, the Fed's balance sheet skyrocketed, but inflation (the value of money vs. goods & services) remained lower than before that line spiked.

[MadSudaca]

So why did they stop growing their balance sheets then?

[RC_ITR]

Because QE is an active tool to support credit liquidity and they determined that markets were liquid enough to remove that support.

EDIT: And just to be very clear to the 2 people who read this comment, maintaining a balance sheet is still market support b/c you still buy treasuries on the open market to offset the principle of your existing treasuries that reach maturity. So stopping the growth of the balance sheet just means you're not accelerating support. Tapering is the thing that you do if you're worried that your balance sheet is 'debasing' the currency.