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Central banks printing money to acquire bad assets from collapsing commercial banks would not cause any inflation.
by hocuspocus 7y ago
Central banks printing money to acquire bad assets from collapsing commercial banks would not cause any inflation.
- treypitt 7y agoSome would argue it causes "inflation" in financial markets like the US equities market
- Spooky23 7y agoIt’s blowing up the cost of many equities as borrowing has been so cheap for so long. I live in a boring small city with awful schools and mediocre economy. My house value went up in real dollars about 3x from 1999-2018z The apartment complex that I rented from in 1998 is about 2x more expensive in real terms since that time. The supply of capital is inflating real property values even without growth in demand. Given that most consumer product manufacturing has completed its move offshore, I’d expect increasing consumer prices as there isn’t much room left to shrink by lowering labor costs.
- hocuspocus 7y agoYou're describing the effects of QE (not in its original sense, but the way it has been implemented) and I couldn't agree more. But this is very different from a central bank taking over bad assets after a catastrophic collapse of the private banking sector.