3 ms·

I don't fully understand QE but I believe there is a balance sheet. It's not like money was created out of thin air as such. It did not increase M1. I'm gues

I don't fully understand QE but I believe there is a balance sheet. It's not like money was created out of thin air as such. It did not increase M1. I'm guessing it did increase MB but I don't know. Of course my perception may be completely wrong.

nostromo 12y ago
> It's not like money was created out of thin air as such. No, it was. Literally. The Fed can and does create money and then buy assets with that new money.
CyberDildonics 12y ago
It is the Fed creating money out of thin air buying treasuries and it does increase M1. Here is the fed's own graph of M1. http://research.stlouisfed.org/fred2/series/M1 http://research.stlouisfed.org/fred2/series/M1 You can see where is starts to really skyrocket, which is where 16 trillion was given to the banks in the bailouts (or $53,000 for every person in the USA for scale). This money hasn't even made it into M2 yet.