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(I assume you're referring to QE1, QE2 and QE3) It's say a supermarket advertises bread for $1. Anyone who reads the ad, will consciously or unconsciously beli
by nroets 12y ago
(I assume you're referring to QE1, QE2 and QE3)
It's say a supermarket advertises bread for $1. Anyone who reads the ad, will consciously or unconsciously believe that the dollar has value. Now multiply this effect by all the similar advertising over many years and you'll see that the dollar is the strongest brand ever.
When the financial crisis hit in 2008, the public starting saving and they choose the most stable brand they could find (the dollar) and the brand was well on it's way to get even stronger.
The way to counter act it was by flooding the market with money (lowering interest rates and later printing money).
Bitcount does not derive it's value in the same way and printing bitcoins is fixed by the block chain rules.
- judk 12y agoAnd to close the point, the US Government doesn't go bankrupt, because they never actually get called out to show their accounts of (fake) money. Their new money is as good as the rest, meaning that their actions dilute all dollars equally, instead of only wiping out accountholders at one institution.
- Tycho 12y agoI wasn't really talking about the dollar, I was talking about the effect on the assets being purchased (MBS securities, and indirectly other assets on the financial markets). Notice how much the stock market and house prices have gone up in the last few years.