This morning I saw on Twitter an exchange between a financial writer, an underground economist and an abundant world economist. These are descriptions of themselves.
There discussion revolved around whether Quantitative Easing is inflationary or not.
Below is a repost of what I have put up on this site several times before that explains the operational mechanics of Quantitative Easing.
As you now know it is a simple asset swap of a security that earns interest for dollars.
It is in effect taking money out of the economy as there is no longer any interest earned. Given QE is often undertaken in a poorly performing economic environment that tends towards recession – do you really think taking money out of the economy is a good idea?
It is an event framed as a stimulatory measure but in effect, the opposite occurs. It is crystal clear in the operations.