I agree with Philip Cross: Quantitative Easing will be hard to reverse (How do you reverse counterfeit money?) – February 11, 2022
In a nutshell, Quantitative Easing(QE) is counterfeiting money, now if we’re to use the politically correct term “Quantitative easing is a monetary policy whereby a central bank purchases predetermined amounts of government bonds or other financial assets in order to inject money into the economy to expand economic activity.” In a nutshell, QE is the LEGALIZED version of counterfeiting money.
The definition of counterfeiting money is as follows “Counterfeit money is currency produced without the legal sanction of the State or government, usually in a deliberate attempt to imitate that currency and so as to deceive its recipient. Producing or using counterfeit money is a form of fraud or forgery, and is illegal.”
Once you understand that QE is legalized way to counterfeit money, you immediately understand the point Philip Cross is making in the post I point to below.
QE involves injecting money into the banking system by buying long-term bonds from banks. This differs from a central bank’s usual purchases of short-term government debt to control interest rates; by buying long-term bonds, central banks not only lower long-term interest rates directly but also reduce the supply of the financial system’s preferred mode of saving, forcing it to buy riskier assets. As Leonard writes, “Quantitative easing would flood the system with money at the very same moment that it limited the refuge where that money might be safely stored.”
Philip Cross: Quantitative Easing will be hard to reverse
Luckily most humans have no financial education, which is why central banks and big governments are allowed to get away with all this buffoonery. If the Canadians as an example were financially educated, they’d see how stupid Justin Trudeau is. Justin Trudeau managed to rack up more debt than all the previous Prime Ministers combined, but guess who bought up all of Justin Trudeau’s dumbass spending ideas? You guessed right, The Bank of Canada.
You have to also remember the mentality of idiots like Justin Trudeau who are rewarded for reckless spending because the Bank of Canada never pushed back, not only did Justin Trudeau spend recklessly, he also overly regulated the Canadian economy indiscriminately, after all, why shouldn’t he? The Bank of Canada rewarded his dumbass idea by purchasing his debt, thereby making Justin Trudeau appear smarter than he is, not only in his own mind but in the minds of the Canadian people.
The cost of living will not come down when Quantitative Tightening policies are imposed, because the regulatory environment has changed, this is why I haven’t sold much of anything, because all signs point to INFLATION. I’d love to be wrong because I also save Canadian fiat dollars and I’d like to buy things for the cheap, but I see no appetite for Austerity measures in Canada, meaning that I expect more inflation to come to Canada, which I believe will lead to a wave of BANKRUPTCIES! Imagine that, bankruptcies during Zero Interest Rate policies? Does that almost sound like shortages and hyperinflation? No, we’re Canada, our fiat dollar is respected on the forex markets? So I do not know what the future holds! but I’m trying to remain as flexible as I can.