When government officials believe they need to “get the economy going again,” they typically spend money on works projects to flood the market with dollars. Japanese economists invented the financial policy of quantitative easing in 2001 to intentionally inflate the currency. In the process, they dropped the interest rates of their country to zero. Quantitative easing occurs when the central bank purchases government Treasury bonds or other financial securities.Read more ›
Post Tagged with: "quantitative easing"
The too-big-to-fail friends of the government will be made whole. The perpetually re-elected and their handlers will have their golden parachute pensions and plush jobs on K-Street and at Fannie, Freddie, and crony filled board rooms across the country. The only ones hurt will be those who do the real work, those who play by the rules. When the new bubble blows up the remedy is ready made: we’ll just blow up another bubble. How could this ever go wrong?Read more ›
European countries have racked up debts so numerous that Europe’s financial system eventually could not even keep up with the demand for government credit, forcing a showdown between Euro members over whether to monetize the debt or not. Stronger economic powers like Germany are deciding whether or not to fire up the presses at the European Central Bank. We should be having the same debate here in the U.S. in 2012 over whether we should continue the disgrace of printing money to refinance and expand the debt.Read more ›