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The fed doesn't experience risk. It has full control over the size of its balance sheet. There may be other problems with QE4 in the form of Operation Twist II
by bradleyjg 11y ago
The fed doesn't experience risk. It has full control over the size of its balance sheet. There may be other problems with QE4 in the form of Operation Twist II but risk to the Fed isn't one of them.
Also your claim that "the liquidity is not passed on to end consumers" besides being debatable, doesn't answer the claims made by the parent poster. If the Fed so chooses it can prevent yields from rising, which means that the US government will not have higher interest costs.
In sum, the entirety of your argument comes down to the something, something hyperinflation which your heritage link makes explicit. We've heard that story before. There's no reason to think it will be any more accurate this time than it has been for the last 50 years.
- roymurdock 11y agoEvery entity in the world experiences risk. If you can't identify it, you're not trying hard enough. The Fed can prevent yields from rising through another round of QE. The tradeoff being that it will have to push even more money into the system, undermining confidence in the US economy's ability to operate healthily without serious Fed & government intervention. I never mentioned hyperinflation because I don't think that's a realistic outcome of more QE. I don't think something, something hyperinflation is a good way to summarize my argument, but it is sure is patronizing, I'll give you that. Can you provide an argument that explains why we would want more QE at this point?
- Steko 11y ago> Can you provide an argument that explains why we would want more QE at this point? http://www.ft.com/cms/s/0/8a5cb030-4b38-11e5-9b5d-89a026fda5c9.html#axzz3k3X7Mr6U http://www.ft.com/cms/s/0/8a5cb030-4b38-11e5-9b5d-89a026fda5... Larry Summers and Ray Dalio flag return of quantitative easing
- graedus 11y agoThanks for the link. Here's Ray Dalio's note on linkedin: https://www.linkedin.com/pulse/dangerous-long-bias-end-supercycle-ray-dalio https://www.linkedin.com/pulse/dangerous-long-bias-end-super...