Shorting a stock would remove cash from the system which is essentially the opposite of QE. To short a stock the short seller first "borrows" the stock from an

Shorting a stock would remove cash from the system which is essentially the opposite of QE. To short a stock the short seller first "borrows" the stock from another stock holder and then sells that stock on the open market. In most cases the investor who the stock is borrowed from won't even be aware that his stock has been loaned out to a short seller. The effect is that there are now two individuals who believe that they own the same share. From the perspective of the market the short seller has effectively created shares out of thin air, sold the shares and is now sitting on the cash. When a central bank is the one shorting the market the effect is to pull cash onto it's balance sheet which removes it from the economy which is deflationary. Interesting idea though! One that I hadn't considered as a tool for central banks to constrain inflation.