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Monetarists were fanning the fear of inflation at the start of quantitative easing 7 years ago. What inflation has happened since? The fact of the matter is th

Monetarists were fanning the fear of inflation at the start of quantitative easing 7 years ago. What inflation has happened since? The fact of the matter is that (1) the inflation fears are far overstated. We are already injecting money into the economy, but we haven't seen inflation. All overt money financing would do is inject money through the people, instead of through banks. (2) A little inflation is good for the economy; that's exactly what we need to ward off a recession (3) The US can export inflation to other countries by virtue of being the reserve currency of the world. | These three points together should address your fear of hyperinflation. I suggest you read Friedman and Keynes, both of whom suggested overt money financing as a mechanism to boost the economy. Your point about the poor dropping out of the work force is based in class bias. Would you say that quantitative easing with banks blowing up asset bubbles would have the rich people dropping out of the work force? No one says that. The poor are not intrinsically different than the rich; the rich continue working when they have basic necessities met, and so will the poor.

lujim 11y ago
There is no inflation because QE money is used to keep up the demand for US Treasuries which keeps long term interest rates low. It jacked up asset prices because baby boomers can't get risk free yield by buying bonds so they are buying stocks. It's non just 1% baby boomers, it's all baby boomers. Had QE 1 through 4 been dumped directly into circulation there would have been large scale inflation. I don't know anyone that would dispute that. A little inflation (about 2%) is good because it means demand is outpacing supply. That means the economy is growing. That is different that inflation caused by the raw printing of money which is destructive. In WW2 Germany had considered the possibility of printing counterfeit British pounds and dropping them on Britain to destroy the currency and economy.

lujim 11y ago

There is no inflation because QE money is used to keep up the demand for US Treasuries which keeps long term interest rates low. It jacked up asset prices because baby boomers can't get risk free yield by buying bonds so they are buying stocks. It's non just 1% baby boomers, it's all baby boomers. Had QE 1 through 4 been dumped directly into circulation there would have been large scale inflation. I don't know anyone that would dispute that. A little inflation (about 2%) is good because it means demand is outpacing supply. That means the economy is growing. That is different that inflation caused by the raw printing of money which is destructive. In WW2 Germany had considered the possibility of printing counterfeit British pounds and dropping them on Britain to destroy the currency and economy.